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                                 UNITED STATES
                     SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                                  FORM 10-KSB

[X] Annual Report Under Section 13 or 15(d) of the Securities Exchange Act
    of 1934
    For the Fiscal Year Ended December 31, 2003.

[ ] Transition Report Under Section 13 or 15(d) of the Securities Exchange
    Act of 1934

                        Commission File Number: 0-31152

                                 CRDENTIA CORP.
                 (Name of Small Business Issuer in Its Charter)

           Delaware                                   76-0585701
(State or Other Jurisdiction of        (I.R.S. Employer Identification No.)
Incorporation or Organization)

           14114 Dallas Parkway, Suite 600, Dallas, Texas 75254
(Address of Principal Executive Offices)                (Zip Code)

                                 (972)850-0780
                          (Issuer's Telephone Number)

  Securities registered under Section 12(b) of the Exchange Act:  None

  Securities registered under Section 12(g) of the Exchange Act:
       Title of class:                   Name of each exchange on which
       Common Stock, $.0001 par value    registered:          None

  Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Yes [X]  No [  ]

  Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-B is not contained herein, and will not be
contained, to the best of the registrant's knowledge, in definitive proxy
or information statements incorporated by reference in Part III of this
Form 10-KSB or any amendment to this Form 10-KSB.  [  ]

  Registrant had revenues for its most recent fiscal year of  $4,711,972.

  Indicate the number of shares outstanding of each issuer's classes of
Common Stock, as of the latest practicable date.  At March 23, 2004,
18,838,057 shares of Common Stock, $.0001 par value, were outstanding.

  The aggregate market value of the voting and non-voting common equity
held by non-affiliates of Registrant on March 23, 2004, was $19,254,500.
[as of date within 60 days]

Transitional Small Business Disclosure Format (check one): Yes [ ]  No [X]

                    DOCUMENTS INCORPORATED BY REFERENCE:

Portions of the definitive Proxy Statement for Registrant's 2004 Annual
Meeting of Stockholder to be filed pursuant to Regulation 14A within 120 days
after Registrant's fiscal year end, December 31, 2003 and incorporated by
reference into Part III of this Report.

----------------------------------------------------------------------------

<PAGE>

                              CRDENTIA CORP.
                               FORM 10-KSB
                            December 31, 2003


                            TABLE OF CONTENTS

PART I

    ITEM 1.  Description of Business                                 1
    ITEM 2.  Description of Properties                               11
    ITEM 3.  Legal Proceedings                                       11
    ITEM 4.  Submission of Matters to a Vote of Security Holders     11

PART II

    ITEM 5.  Market for Equity and Related Stockholder Matters       12
    ITEM 6.  Management's Discussion and Analysis of  Operations     13
    ITEM 7.  Financial Statements                                    16
    ITEM 8.  Changes in and Disagreements with Accountants           17
    ITEM 8A. Controls and Procedures                                 17

PART III

    ITEM 9.  Directors and Executive Officers of the Registrant      18
    ITEM 10. Executive Compensation                                  18
    ITEM 11. Security Ownership of Certain Beneficial Owners
             and Management                                          18
    ITEM 12. Certain Relationships and Related Transactions          18
    ITEM 13. Exhibits, Lists and Reports on Form 8-K                 18
    ITEM 14. Principal Accountant Fees and Services                  22

    Signatures                                                       23
    Certifications Pursuant to Section 906 of
      Sarbanes-Oxley Act of 2002                                     24


PART F/S

    Financial Statements                                    F-1 to F-24

    Exhibits


<PAGE>

                                 PART I

ITEM 1.  BUSINESS

Company Overview and History

    We are a provider of healthcare staffing services, focusing on the areas
of travel nursing, per diem staffing, contractual clinical services, and
private duty home care.  Our travel nurses are recruited domestically as
well as internationally and placed on temporary assignments at healthcare
facilities across the United States. Our per diem nurses are local nurses
placed at healthcare facilities on short-term assignments.  Our contractual
clinical services group provides complete clinical management and staffing
for healthcare facilities and our private duty home care group provides
nursing case management and staffing for skilled and non-skilled care in
the home.

    At the beginning of the reporting period covered by this report, we were
a development stage company with no commercial operations. We did not have
any revenue in 2002 and did not have any revenue in 2003 until we completed
our first acquisition in August  2003. During the year, we pursued our
operational plan of acquiring companies in the healthcare staffing field and
completed acquisitions of four companies. As a result, we are now providing
temporary healthcare workers in 25 states and have contracts with
approximately 150 healthcare facilities. We anticipate continuing our plan
to acquire specialized companies in the healthcare staffing field for the
foreseeable future.

    In August 2003, we completed our acquisition of Baker Anderson Christie,
Inc., a California corporation, which operated a healthcare staffing
business in Northern California. The transaction, for which we paid 480,000
shares of our common stock, was consummated pursuant to the terms of the
Agreement and Plan of Reorganization dated June 19, 2003, as amended on July
31, 2003.

    In September 2003, we completed our acquisition of New Age Staffing,
Inc., a Delaware corporation, which operated healthcare staffing operations
in Louisiana, Alabama and Tennessee. The transaction, for which we paid
6,884,614 shares of our common stock, was consummated pursuant to the terms
of the Agreement and Plan of Reorganization dated September 15, 2003. This
acquisition provided us entry into the area of travel nursing and resulted
in our first significant revenue.

    In October 2003, we completed our acquisition of Nurses Network, Inc, a
California corporation, which operated a healthcare staffing operation in
Northern California. The transaction, for which we paid 118,084 shares of
our common stock, was consummated pursuant to the terms of the Agreement and
Plan of Reorganization dated July 16, 2003, as amended on September 9, 2003.

    In December 2003, we completed our acquisition of PSR Nurse Recruiting,
Inc., a Texas corporation, and PSR Nurses Holdings Corp., a Texas
corporation, which hold the limited partner and general partner interests in
PSR Nurses, Ltd., which operated a healthcare staffing business in Texas.
The transactions, for which we paid 3,418,789 shares of our common stock,
were consummated pursuant to the terms of the Agreement and Plan of
Reorganization dated November 4, 2003. This acquisition expanded our
presence in travel nursing and provided us with a complete back-office
operation.

    We were incorporated under the laws of the State of Delaware on November
10, 1997 under the name of Digivision International, Ltd. Our name was
changed to Lifen, Inc. on June 22, 2000 and to Crdentia Corp. on May 28,
2003.  Our principal executive offices are located at 14114 Dallas Parkway,
Suite 600, Dallas, Texas 75254 and our telephone number is 972/850-0780

Industry Overview

    The Staffing Industry Report, an independent staffing industry
publication, estimates that the healthcare segment of the temporary staffing
industry was $10.6 billion in 2002, an increase of 25% from $8.5 billion in
2001. Nurse staffing represents over 70% of the revenue generated in the
temporary medical staffing industry.

                                     1
<PAGE>

    The most common temporary nurse staffing alternatives available to
hospital administrators are travel nurses and per diem nurses.

    - Travel nurse staffing involves placement of registered nurses on a
      contracted, fixed-term basis. Assignments may range from several weeks
      to one year, but are typically 13 weeks long and involve temporary
      relocation to the geographic area of the assignment. The staffing
      company generally is responsible for providing travel nurses with
      customary employment benefits and for coordinating and providing
      travel and housing arrangements.

    - Per diem staffing involves placement of locally based healthcare
      professionals on very short-term assignments, often for daily shift
      work, with little advance notice of assignments by the client.

Supply and Demand Factors

    Beginning in the mid-1990s, changes in the healthcare industry prompted
a fundamental shift in staffing models that led to an increased usage of
temporary staffing at hospitals and other healthcare facilities. We believe
that these changes in the healthcare industry will continue over the long-
term because of the following factors:

    Shortage of Nurses.    There is a pronounced shortage of registered
nurses, especially experienced acute care specialty nurses, who staff
operating rooms, emergency rooms, intensive care and pediatric units. This
shortage is expected to grow over the coming decades to an estimated 20%
below requirements by the year 2015 and 29% below requirements by the year
2020, according to a July 2002 report by the U.S. Department of Health and
Human Services (HHS). Similarly, a 2002 report to the Joint Commission on
Accreditation of Healthcare Organizations (JCAHO) titled "Health Care at
the Crossroads-Strategies for Addressing the Evolving Nursing Shortage,"
quantified this shortage by stating that by the year 2020 there will be at
least 400,000 fewer nurses available to provide care than will be needed.

    Several factors have contributed to the decline in the supply of nurses:

    - The nurse pool is getting older and approaching retirement age.
      Several factors contribute to the aging of the registered nurse
      workforce: (1) the decline in number of nursing school graduates, (2)
      the higher age of recent graduates, and (3) the aging of the existing
      pool of licensed nurses. The largest source of new registered nurses,
      associate-degreed nurses, are on average 33 years old when they
      graduate , which is considerably older than in 1980 when the average
      age was 28. The JCAHO report outlined the average age of a working
      registered nurse at 43.3 and increasing at a rate more than twice
      that of other workforces in this country. By the year 2010, it is
      projected that the average age of working registered nurses will
      be 50.

    - Approximately 60% of nurses work in hospitals. Many registered nurses
      are leaving the hospital workforce through retirement, death or by
      choosing careers outside of acute care hospitals or in professions
      other than direct patient care. There are currently more than 500,000
      licensed nurses not employed in nursing. Generally, the primary
      reasons nurses leave patient care, besides retirement, is to seek a
      job that is less stressful and less physically demanding, to seek
      more regular hours and more compensation.

    - Enrollment levels in nursing schools declined in the last half of the
      1990s, resulting in 26% fewer registered nurse graduates in 2000 than
      in 1995. Similarly, the number of domestically educated candidates
      taking the registered nurse licensing examination (NCLEX) for the
      first time has declined at an average of 5.5% for each of the past
      six years, as reported by the National Council of State Boards of
      Nursing, Inc.

    - There is an increasing shortage of nursing faculty. As a result of the
      faculty shortage, nursing schools turned away 5,000 qualified
      baccalaureate program applicants in 2001.

    We believe the shortage of nurses increases demand for our services.
Hospitals are increasingly turning to temporary nurses as a flexible way to
manage changes in demand of their permanent staff and make up for budgeted
shortfalls in staffing.

    Increasing Demand for Healthcare Services.  There are a number of
factors driving an increase in the demand for healthcare services, including:

    - A projected 18% increase in population in the United States between
      the year 2000 and 2020, resulting in

                                    2
<PAGE>

an additional 50 million people who will require health care -19 million
of which will be in the 65-and-over age group (according to the July 2002
Report by U.S. Department of Health and Human Services).

    - The aging of America. Baby boomers are just entering the 55 to 64 age
      group, where inpatient days per thousand are 58% higher than in the
      45 to 54 age group, and 121% higher than in the 35 to 44 age group.

    - Advances in medical technology and healthcare treatment methods that
      attract a greater number of patients with complex medical conditions
      requiring higher intensity of care.

    Legislative Changes that will Increase Demand.    In response to
concerns by consumer groups over the quality of care provided in healthcare
facilities and concerns by nursing organizations about the increased
workloads and pressures on nurses, a number of states have either passed or
introduced legislation related to prohibiting mandatory overtime and
addressing nurse-to-patient ratios. The passage of such legislation is
expected to increase the demand for nurses. California, in particular, has
passed legislation requiring minimum nurse-to-patient ratios at all
hospitals. Maine, New Jersey and Oregon have passed legislation limiting
mandatory overtime for nurses. Several states are considering, or have
already introduced similar legislation.

Business Overview

    We are primarily a provider of healthcare staffing services to hospitals
and other healthcare facilities throughout the United States. The majority
of our assignments are at acute care hospitals in major metropolitan areas.
In 2003, approximately 61% of our revenue was derived from the placement of
travel nurses on assignment, typically 13 weeks in length. Such assignments
generally involve temporary relocation to the geographic area of the
assignment. In 2003, we also provided per diem nurses to satisfy the very
short-term needs of healthcare facilities. While per diem services provided
less than 11% of our revenue in 2003, we believe this market presents a
significant growth opportunity. The balance of our revenue in 2003 came from
providing clinical management and staffing to healthcare facilities and
private duty home care. We anticipate there are growth opportunities in
these areas as well and intend to pursue such opportunities as they arise.

    With the existing and growing shortage of nurses in the United States,
we believe there is an opportunity to build a significant company in the
field of healthcare staffing services. We intend to pursue this opportunity
through organic growth of our existing businesses and through the continued
acquisition of complementary companies in this sector. We believe that
temporary staffing companies must consolidate in order to survive. The
success of the large industry leaders is indicative of the efficiency, both
in operations as well as capital formation, of this strategy. Smaller
companies in this sector will increasingly be at a competitive disadvantage
in the marketplace because technology, operating efficiency and breadth of
service will soon be the key to survival.

Growth Strategy

    Our goal is to expand our position within the temporary healthcare
staffing sector in the United States. The key components of our business
strategy include:

    - Expanding Our Network of Qualified Temporary Healthcare Professionals.
      Through our recruiting efforts both in the United States and
      internationally, we continue to expand our network of qualified
      temporary healthcare professionals. We have a staff of professional
      recruiters who establish contact with qualified healthcare
      professionals by phone, by email and through the internet. Our best
      source, however, is by referals from satisfied healthcare
      professionals already associated with our company.

    - Strengthening and Expanding Our Relationships with Hospitals and
      Healthcare Facilities.    We continue to strengthen and expand our
      relationships with our hospital and healthcare facility clients, and
      to develop new relationships. Hospitals and healthcare facilities are
      seeking a strong business partner for outsourcing who can fulfill the
      quantity and quality of their staffing needs and help them develop
      strategies for the most cost-effective staffing methods. We believe
      we are well positioned to offer our hospital and healthcare facility
      clients effective solutions to meet their staffing needs.

                                    3
<PAGE>

    - Increasing Our Market Presence in the Per Diem Staffing Market.  We
      intend to expand our per diem services to the acute care hospital
      market by opening or acquiring new per diem staffing offices in
      selected markets . While we have not historically had a significant
      presence in per diem staffing services, we believe that this market
      presents a substantial growth opportunity.

    - Acquiring Complementary Businesses.  We continually evaluate
      opportunities to acquire complementary businesses to strengthen and
      broaden our market presence and suite of products.

    - Expanding Service Offerings Through New Staffing Solutions. In order
      to further enhance the growth in our business and improve our
      competitive position in the healthcare staffing sector, we continue
      to explore new service offerings. In addition, we believe there are
      opportunities for growth in allied health (technicians and therapists)
      and we have begun to pursue new initiatives in this area as well.

Competition

    The healthcare staffing industry is highly competitive, with low barrier
s to entry. We compete with both national firms as well as local and
regional firms to attract nurses and other healthcare professionals as
temporary healthcare professionals and to attract hospital and healthcare
facility clients. We compete for temporary healthcare professionals on the
basis of service and expertise, the quantity, diversity and quality of
assignments available, compensation packages, and the benefits that we
provide to a temporary healthcare professional while they are on an
assignment. We compete for hospital and healthcare facility clients on the
basis of the quality of our temporary healthcare professionals, the timely
availability of our professionals with requisite skills, the quality, scope
and price of our services, our recruitment expertise and the geographic
reach of our services. Although we believe we compete favorably with respect
to these factors, we expect competition to continue to increase.

    We also compete with national, regional and local firms who also seek to
acquire temporary healthcare companies. Many of these firms have greater
financial resources and market recognition than we do. However, we believe
that the combination of our management team and the growth plan that we
have established will be attractive to many of the acquisition candidates
that we encounter and that we will compete favorably in this environment.

Regulatory Issues

    The healthcare industry is subject to extensive and complex federal and
state laws and regulations related to professional licensure, conduct of
operations, payment for services and payment for referrals. Our business,
however, is not generally impacted because we provide services on a
contract basis and are paid directly by our hospital and healthcare facility
clients.

    Some states require state licensure for businesses that employ and/or
assign healthcare personnel to provide healthcare services on-site at
hospitals and other healthcare facilities. We have applied for or are
currently licensed in all states in which we do business that require such
licenses.

    Most of the temporary healthcare professionals that we employ are
required to be individually licensed or certified under applicable state
laws. We take reasonable steps to ensure that our employees possess all
necessary licenses and certifications in all material respects.

    With respect to our recruitment of international temporary healthcare
professionals, we must comply with certain United States immigration law
requirements, including the Illegal Immigration Reform and Immigrant
Responsibility Act of 1996.

Employees

    At December 31, 2003, we employed 41 full-time employees, including
corporate office and field office employees. During the year ended December
31, 2003, we employed approximately 400 temporary healthcare professionals.
None of our employees, including our temporary healthcare professionals,
are represented by a labor union. We believe we have excellent relations
with our employees.

                                    4
<PAGE>


Available Information

   We maintain a corporate website at www.crdentia.com. Our annual reports
on Form 10-KSB, quarterly reports on Form 10-QSB, current reports on Form
8-K, and amendments to these reports, are made available, free of charge,
through this website as soon as reasonably practicable after being filed
with or furnished to the Securities and Exchange Commission. In addition,
on or before the date of our annual stockholders meeting in 2004, our Code
of Business Conduct, charters of the Audit Committee and Compensation
Committee will each be available on our website.  We will provide
reasonable quantities of electronic or paper copies of filings free of
charge upon request.  In addition, we will provide a copy of the above
referenced charters to stockholders upon request.

Forward Looking Statements

    This Annual Report on Form 10-KSB contains forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended.  Such
statements include statements regarding our expectations, hopes, beliefs or
intentions regarding the future, including but not limited to statements
regarding our market, strategy, competition, development plans (including
acquisitions and expansion), availability of temporary professionals,
financing, revenue, operations, and compliance with applicable laws.
Forward-looking statements involve certain risks and uncertainties, and
actual results may differ materially from those discussed in any such
statement.  Factors that could cause actual results to differ materially
from such forward-looking statements include the risks described in greater
detail in the following paragraphs.  All forward-looking statements in this
document are made as of the date hereof, based on information available to
us as of the date hereof, and we assume no obligation to update any forward-
looking statement.  Market data used throughout this report, including
information relating to our relative position in the independent staffing
industry, is based on published third party reports or the good faith
estimates of management, which estimates are based upon their review of
internal surveys, independent industry publications and other publicly
available information. Although we believe that such sources are reliable,
we do not guarantee the accuracy or completeness of this information, and
we have not independently verified such information.

Risk Factors

    We were formed in November, 1997, and commenced operations on August 7,
2003 following our acquisition of Baker Anderson Christie, Inc.  Any
investment in our common stock involves a high degree of risk.  You should
consider carefully the following information about these risks, together
with the other information contained in this report, before you decide to
buy our common stock.  The risks and uncertainties described below are not
the only ones we face.  Additional risks and uncertainties not presently
known to us or that we currently deem immaterial may also impair our
operations.  If any of the following risks actually occur, our business
would likely suffer and our results could differ materially from those
expressed in any forward-looking statements contained in this report
including those contained in the section captioned "Management's Discussion
and Analysis of Operations" under Item 6.  In such case, the trading price
of our common stock could decline, and you may lose all or part of the money
you paid to buy our common stock.

    The ability to attract and retain highly qualified personnel to operate
and manage our operations is extremely important and our failure to do so
could adversely affect us.

    Presently, we are dependent upon the personal efforts of our management
team.  The loss of any of our officers or directors could have a material
adverse effect upon our business and future prospects.  We do not presently
have key-person life insurance upon the life of any of our officers or
directors. Additionally, as we continue our planned expansion of commercial
operations, we will require the services of additional skilled personnel.
There can be no assurance that we can attract persons with the requisite
skills and training to meet our future needs or, even if such persons are
available, that they can be hired on terms favorable to us.

                                     5
<PAGE>

    Our ability to execute upon our strategy of acquiring companies will
require us to obtain additional working capital.

    Our business strategy will require substantial capital investment and
adequate financing for the completion of acquisitions, development and
integration of operations and technology as needed.  In the event that we
cannot obtain the necessary capital to fund our operations as planned, we
may need to limit our operations and development activities.  We cannot
guarantee that such capital investment will be available to us at all or
on terms that are acceptable to us.  Our failure to obtain the necessary
amount of working capital to fund our operations as currently anticipated
could have a material, adverse effect upon our capacity to grow our
operations.

    The means by which we raise additional working capital could cause
substantial dilution to stockholders or result in significant interest
expense or restrictive covenants.

    Our ability to fund our planned operations will require that we obtain
substantial capital investment and financing.  We may raise these funds
through public or private debt or equity offerings.  Depending on the terms
negotiated with potential investors, such securities may be issued at a
price per share significantly less than the trading prices listed for our
common stock on the OTC Bulletin Board and thus may be significantly
dilutive to our current stockholders.  In addition, such dilution could
likely have a depressive effect on the market price of our common stock,
should a public market continue for our shares of common stock.  In
addition, any debt financing that we are able to obtain, if any, may
involve significant interest expense or restrictive covenants that may
limit our operations.

    We may face difficulties integrating our acquisitions into our
operations and our acquisitions may be unsuccessful, involve significant
cash expenditures or expose us to unforeseen liabilities.

    We continually evaluate opportunities to acquire healthcare staffing
companies that complement or enhance our business and frequently have
preliminary acquisition discussions with some of these companies. In
addition, last year we acquired four businesses.

    These acquisitions involve numerous risks, including:

    - potential loss of key employees or clients of acquired companies;

    - difficulties integrating acquired personnel and distinct cultures
      into our business;

    - difficulties integrating acquired companies into our operating,
      financial planning and financial reporting systems;

    - diversion of management attention from existing operations; and

    - assumption of liabilities and exposure to unforeseen liabilities of
      acquired companies, including liabilities for their failure to comply
      with healthcare regulations.

    - These acquisitions may also involve significant cash expenditures,
      debt incurrence and integration expenses that could seriously harm
      our financial condition and results of operations. We may fail to
      achieve expected efficiencies and synergies. Any acquisition may
      ultimately have a negative impact on our business and financial
      condition.

    We have had a short operating history and no earnings.

    We were formed in November, 1997 and commenced operations on August 7,
2003 with our acquisition of Baker Anderson Christie, Inc.  Although we
acquired three more companies during the balance of the year, we only
operated each of those companies for a portion of the year. Therefore, we
are a "start-up" operation and subject to all the risks inherent in a new
business venture, many of which are beyond our control, including the
ability to implement successful operations, lack of capital to finance
acquisitions and failure to achieve market acceptance.  In

                                   6
<PAGE>

addition, as a start-up venture we will face significant competition from
many companies virtually all of which are larger, better financed and have
significantly greater market recognition than us.

    The successful implementation of our business strategy depends upon the
ability of our management to monitor and control costs.

    With respect to our planned operations, management cannot accurately
roject or give any assurance with respect to our ability to control
development and operating costs and/or expenses in the future.  Consequently,
as we expand our commercial operations, management may not be able to
control costs and expenses adequately, and such operations may generate
losses.

    We may become subject to governmental regulations and oversight, which
could adversely affect our ability to continue or expand our business
strategy.

    Although our operations are currently not subject to any significant
government regulations, it is possible that, in the future, such regulations
may be legislated. Although we cannot predict the extent of any such future
regulations, a possibility exists that future or unforeseen changes may
have an adverse impact upon our ability to continue or expand our operations
as presently planned.

    There is a lack of an active public market for our common stock.

    We received approval to list our common stock on the OTC Bulletin Board
and trading of shares began on February 24, 2003.  There can be no
assurances, however, that a market will develop or continue for our common
stock.  Our common stock may be thinly traded, if traded at all, even if we
achieve full operation and generate significant revenue and is likely to
experience significant price fluctuations.  In addition, our stock is
defined as a "penny stock" under Rule 3a51-1 adopted by the Securities and
Exchange Commission under the Securities Exchange Act of 1934, as amended.
In general, a "penny stock" includes securities of companies which are not
listed on the principal stock exchanges or the National Association of
Securities Dealers Automated Quotation System ("NASDAQ") or National Market
System ("NASDAQ NMS") and have a bid price in the market of less than $5.00;
and companies with net tangible assets of less than $2,000,000 ($5,000,000
if the issuer has been in continuous operation for less than three years),
or which have recorded revenues of less than $6,000,000 in the last three
years.  "Penny stocks" are subject to rule 15g-9, which imposes additional
sales practice requirements on broker-dealers that sell such securities to
persons other than established customers and "accredited investors"
(generally, individuals with net worth in excess of $1,000,000 or annual
incomes exceeding $200,000, or $300,000 together with their spouses, or
individuals who are officers or directors of the issuer of the securities).
For transactions covered by Rule 15g-9, a broker-dealer must make a special
suitability determination for the purchaser and have received the
purchaser's written consent to the transaction prior to sale. Consequently,
this rule may adversely affect the ability of broker-dealers to sell our
common stock, and therefore, may adversely affect the ability of our
stockholders to sell common stock in the public market.

    Purchases of additional shares of common stock by our Chief Executive
Officer could cause significant dilution to our stockholders and cause our
stock price to decline.

    Subject to the terms and conditions of a Common Stock Purchase Agreement
dated May 15, 2002 with James Durham, Mr. Durham had the right to purchase
at a purchase price of $0.0001 per share, up to a number of additional
shares of our common stock equal to twenty-five (25%) of the aggregate
number of additional shares of our common stock and other securities
convertible into common stock issued or issuable in connection with any
acquisitions we complete on or before August 7, 2004.  We have issued an
aggregate of 11,069,110 shares as consideration for our four completed
acquisitions of Baker Anderson Christie, Inc., New Age Staffing, Inc.,
Nurses Network, Inc. and PSR Nurse Recruiting, Inc. and PSR Nurses Holdings
Corp. As a result of the completion of these acquisitions, Mr. Durham has
the right to purchase up to 2,767,278 shares of our common stock at $0.0001
per share. On December 31, 2003 the Common Stock Purchase Agreement dated
May 15, 2002 was modified such that Mr. Durham relinquished his rights to
purchase additional shares of common stock that were to accrue to him in
connection with acquisitions that occurred either before or after December
31, 2003. In consideration for this modification and based on extensive
analysis and review of our planned acquisition program, with the assistance
of a third-party compensation specialist, our board of directors granted
Mr. Durham an option to purchase up to

                                        7
<PAGE>

7,000,000 shares of common stock at an exercise price of $.10 per share.
Mr. Durham is fully vested in the option, which expires December 31, 2018.
One hundred percent (100%) of the shares of our common stock subject to the
option shall be exercisable by Mr. Durham on December 31, 2008.
Notwithstanding the foregoing, a certain number of shares subject to the
option may be exercised prior to December 31, 2008 upon the closing of
certain acquisitions by us.  The difference between the purchase price of
the common stock and option ($0.0001 and $0.10 per share, respectively) and
the closing price of our common stock on the respective grant date, as
quoted on the OTC Bulletin Board, has been accounted for as a non-cash
compensation expense.  The exercise by Mr. Durham of his right to purchase
our common stock per the Common Stock Purchase Agreement or to exercise the
option issued on December 31, 2003 may cause substantial dilution to our
stockholders and may have a depressive effect on the market price of our
securities, should a public market continue for our shares of common stock.
The effect of these purchase rights and options may also serve to make
financings or acquisitions more difficult to consummate or to make the
terms of such financings or acquisitions more onerous.

    If we are unable to attract qualified nurses and healthcare
professionals for our healthcare staffing business, our business could be
negatively impacted.

    We rely significantly on our ability to attract and retain nurses and
healthcare professionals who possess the skills, experience and licenses
necessary to meet the requirements of our hospital and healthcare facility
clients. We compete for healthcare staffing personnel with other temporary
healthcare staffing companies and with hospitals and healthcare facilities.
We must continually evaluate and expand our temporary healthcare
professional network to keep pace with our hospital and healthcare facility
clients' needs. Currently, there is a shortage of qualified nurses in most
areas of the United States, competition for nursing personnel is increasing,
and salaries and benefits have risen. We may be unable to continue to
increase the number of temporary healthcare professionals that we recruit,
decreasing the potential for growth of our business. Our ability to attract
and retain temporary healthcare professionals depends on several factors,
including our ability to provide temporary healthcare professionals with
assignments that they view as attractive and to provide them with
competitive benefits and wages. We cannot assure you that we will be
successful in any of these areas. The cost of attracting temporary
healthcare professionals and providing them with attractive benefit packages
may be higher than we anticipate and, as a result, if we are unable to pass
these costs on to our hospital and healthcare facility clients, our
profitability could decline. Moreover, if we are unable to attract and
retain temporary healthcare professionals, the quality of our services to
our hospital and healthcare facility clients may decline and, as a result,
we could lose clients.

    The temporary staffing industry is highly competitive and the success
and future growth of our business depend upon our ability to remain
competitive in obtaining and retaining temporary staffing clients.

    The temporary staffing industry is highly competitive and fragmented,
with limited barriers to entry. We compete in national, regional and local
markets with full-service agencies and in regional and local markets with
specialized temporary staffing agencies. Some of our competitors include
AMN Healthcare Services, Inc., Cross Country, Inc., Medical Staffing
Network Holdings, Inc. and On Assignment, Inc. All of these companies have
significantly greater marketing and financial resources than we do. Our
ability to attract and retain clients is based on the value of the service
we deliver, which in turns depends principally on the speed with which we
fill assignments and the appropriateness of the match based on clients'
requirements and the skills and experience of our temporary employees. Our
ability to attract skilled, experienced temporary professionals is based on
our ability to pay competitive wages, to provide competitive benefits, to
provide multiple, continuous assignments and thereby increase the retention
rate of these employees. To the extent that competitors seek to gain or
retain market share by reducing prices or increasing marketing expenditures,
we could lose revenues and our margins could decline, which could seriously
harm our operating results and cause the trading price of our stock to
decline. As we expand into new geographic markets, our success will depend
in part on our ability to gain market share from competitors. We expect
competition for clients to increase in the future, and the success and
growth of our business depend on our ability to remain competitive.

    Our business depends upon our continued ability to secure and fill new
orders from our hospital and healthcare facility clients, because we do not
have long-term agreements or exclusive contracts with them.

                                     8
<PAGE>

    We generally do not have long-term agreements or exclusive guaranteed
order contracts with our hospital and healthcare facility clients. The
success of our business depends upon our ability to continually secure new
orders from hospitals and other healthcare facilities and to fill those
orders with our temporary healthcare professionals. Our hospital and
healthcare facility clients are free to place orders with our competitors
and may choose to use temporary healthcare professionals that our
competitors offer them. Therefore, we must maintain positive relationships
with our hospital and healthcare facility clients. If we fail to maintain
positive relationships with our hospital and healthcare facility clients,
we may be unable to generate new temporary healthcare professional orders
and our business may be adversely affected.

    Fluctuations in patient occupancy at our clients' hospitals and
healthcare facilities may adversely affect the demand for our services and
therefore the profitability of our business.

    Demand for our temporary healthcare staffing services is significantly
affected by the general level of patient occupancy at our hospital and
healthcare clients' facilities. When occupancy increases, hospitals and
other healthcare facilities often add temporary employees before full-time
employees are hired. As occupancy decreases, hospitals and other healthcare
facilities typically reduce their use of temporary employees before
undertaking layoffs of their regular employees. In addition, we may
experience more competitive pricing pressure during periods of occupancy
downturn. Occupancy at our clients' hospitals and healthcare facilities
also fluctuates due to the seasonality of some elective procedures. We are
unable to predict the level of patient occupancy at any particular time and
its effect on our revenues and earnings.

    Healthcare reform could negatively impact our business opportunities,
revenues and margins.

    The U.S. government has undertaken efforts to control increasing
healthcare costs through legislation, regulation and voluntary agreements
with medical care providers and drug companies. In the recent past, the U.S.
Congress has considered several comprehensive healthcare reform proposals.
The proposals were generally intended to expand healthcare coverage for the
uninsured and reduce the growth of total healthcare expenditures. While the
U.S. Congress did not adopt any comprehensive reform proposals, members of
Congress may raise similar proposals in the future. If any of these
proposals are approved, hospitals and other healthcare facilities may react
by spending less on healthcare staffing, including nurses. If this were to
occur, we would have fewer business opportunities, which could seriously
harm our business.

    State governments have also attempted to control increasing healthcare
costs. For example, the state of Massachusetts has recently implemented a
regulation that limits the hourly rate payable to temporary nursing agencies
for registered nurses, licensed practical nurses and certified nurses'
aides. The state of Minnesota has also implemented a statute that limits
the amount that nursing agencies may charge nursing homes. Other states have
also proposed legislation that would limit the amounts that temporary
staffing companies may charge. Any such current or proposed laws could
seriously harm our business, revenues and margins.

    Furthermore, third party payers, such as health maintenance
organizations, increasingly challenge the prices charged for medical care.
Failure by hospitals and other healthcare facilities to obtain full
reimbursement from those third party payers could reduce the demand or the
price paid for our staffing services.

    We operate in a regulated industry and changes in regulations or
violations of regulations may result in increased costs or sanctions that
could reduce our revenues and profitability.

    The healthcare industry is subject to extensive and complex federal and
state laws and regulations related to professional licensure, conduct of
operations, payment for services and payment for referrals. If we fail to
comply with the laws and regulations that are directly applicable to our
business, we could suffer civil and/or criminal penalties or be subject to
injunctions or cease and desist orders.

    Our business is generally not subject to the extensive and complex laws
that apply to our hospital and healthcare facility clients, including laws
related to Medicare, Medicaid and other federal and state healthcare
programs. However, these laws and regulations could indirectly affect the
demand or the prices paid for our services. For example, our hospital and
healthcare facility clients could suffer civil or criminal penalties or be
excluded from participating in Medicare, Medicaid and other healthcare
programs if they fail to comply with the laws and regulations applicable to
their businesses. In addition, our hospital and healthcare facility clients
could receive reduced reimbursements, or be excluded from coverage, because
of a change in the rates or conditions set by

                                     9
<PAGE>

federal or state governments. In turn, violations of or changes to these
laws and regulations that adversely affect our hospital and healthcare
facility clients could also adversely affect the prices that these clients
are willing or able to pay for our services.

    Competition for acquisition opportunities may restrict our future growth
by limiting our ability to make acquisitions at reasonable valuations

    Our business strategy includes increasing our market share and presence
in the temporary healthcare staffing industry through strategic acquisitions
of companies that complement or enhance our business. We have historically
faced competition for acquisitions. In the future, such competition could
limit our ability to grow by acquisitions or could raise the prices of
acquisitions and make them less attractive to us.

    Significant legal actions could subject us to substantial uninsured
liabilities.

    In recent years, healthcare providers have become subject to an
increasing number of legal actions alleging malpractice, product liability
or related legal theories. Many of these actions involve large claims and
significant defense costs. In addition, we may be subject to claims related
to torts or crimes committed by our employees or temporary healthcare
professionals. In some instances, we are required to indemnify our clients
against some or all of these risks. A failure of any of our employees or
healthcare professionals to observe our policies and guidelines intended to
reduce these risks, relevant client policies and guidelines or applicable
federal, state or local laws, rules and regulations could result in
negative publicity, payment of fines or other damages. Our professional
malpractice liability insurance and general liability insurance coverage
may not cover all claims against us or continue to be available to us at a
reasonable cost. If we are unable to maintain adequate insurance coverage
or if our insurers deny coverage we may be exposed to substantial
liabilities.

    We may be legally liable for damages resulting from our hospital and
healthcare facility clients' mistreatment of our healthcare personnel.

    Because we are in the business of placing our temporary healthcare
professionals in the workplaces of other companies, we are subject to
possible claims by our temporary healthcare professionals alleging
discrimination, sexual harassment, negligence and other similar activities
by our hospital and healthcare facility clients. The cost of defending such
claims, even if groundless, could be substantial and the associated
negative publicity could adversely affect our ability to attract and retain
qualified healthcare professionals in the future.

    Execution of our business strategy and growth of our business are
substantially dependent upon our ability to attract, develop and retain
qualified and skilled sales personnel.

    Execution of our business strategy and continued growth of our business
are substantially dependent upon our ability to attract, develop and retain
qualified and skilled sales personnel who engage in selling and business
development for our services. The available pool of qualified sales
personnel candidates is limited. We commit substantial resources to the
recruitment, training, development and operational support of our sales
personnel. There can be no assurance that we will be able to recruit,
develop and retain qualified sales personnel in sufficient numbers or that
our sales personnel will achieve productivity levels sufficient to enable
growth of our business. Failure to attract and retain productive sales
personnel could adversely affect our business, financial condition and
results of operations.

    We have a substantial amount of goodwill and other intangible assets on
our balance sheet. Our level of goodwill and other intangible assets may
have the effect of decreasing our earnings or increasing our losses.

    As of December 31, 2003, we had $11.9 million of unamortized goodwill
and other intangible assets on our balance sheet, which represents the
excess of the total purchase price of our acquisitions over the fair value
of the net assets acquired. At December 31, 2003, goodwill and other
intangible assets represented 68% of our total assets.

                                    10
<PAGE>

    In July 2001, the Financial Accounting Standards Board issued SFAS No.
141, Business Combinations, and SFAS No. 142, Goodwill and Other Intangible
Assets. SFAS No. 141 requires that the purchase method of accounting be used
for all business combinations initiated after June 30, 2001, as well as all
purchase method business combinations completed after June 30, 2001. SFAS
No. 142 requires that, subsequent to January 1, 2002, goodwill not be
amortized but rather that it be reviewed annually for impairment. In the
event impairment is identified, a charge to earnings would be recorded. We
have adopted the provisions of SFAS No. 141 and SFAS No. 142. Although it
does not affect our cash flow, amortization of goodwill or an impairment
charge to earnings has the effect of decreasing our earnings or increasing
our losses, as the case may be. If we are required to write down a
substantial amount of goodwill, our stock price could be adversely affected.

    Demand for medical staffing services is significantly affected by the
general level of economic activity and unemployment in the United States.

    When economic activity increases, temporary employees are often added
before full-time employees are hired. However, as economic activity slows,
many companies, including our hospital and healthcare facility clients,
reduce their use of temporary employees before laying off full-time
employees. In addition, we may experience more competitive pricing pressure
during periods of economic downturn. Therefore, any significant economic
downturn could have a material adverse impact on our financial position and
results of operations.

ITEM 2.  PROPERTIES

    We believe that our properties are adequate for our current needs. In
addition, we believe that adequate space can be obtained to meet our
foreseeable business needs. We currently lease office space in four
locations, as identified in the chart below:

Location                                                         Square Feet
-----------                                                        ---------
Dallas, Texas (corporate headquarters and staffing administration)    16,522
San Francisco, California (staffing administration)                    2,487
Birmingham, Alabama (staffing administration)                          1,100
Newport, Rhode Island (staffing administration)                          300
                                                                   ---------

Total                                                                 20,409
                                                                   ---------

ITEM 3.  LEGAL PROCEEDINGS

    We are parties to various legal proceedings arising in the ordinary
course of business.  We believe that all pending claims, if adversely
decided, would not have a material adverse effect on our business,
financial position or results of operations.



ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

    None.

                                      11
<PAGE>


                                   PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
         STOCKHOLDER MATTERS

    There is no organized or established trading market for our company
stock. We received approval to list our common stock on the OTC Bulletin
Board, and trading of such shares began on February 24, 2003 under the
symbol "LFEN". On June 3, 2003, we changed our name from Lifen, Inc. to
Crdentia Corp. and began trading under the symbol "CRNC". There currently
is a very limited public market for our common stock and no assurance can
be given that a large public market will develop in the future.   The
trading market for the common stock is extremely thin. In view of the lack
of an organized or established trading market for the common stock and the
extreme thinness of whatever trading market may exist, the prices reflected
on the chart as reported on the OTC Bulletin Board may not be indicative of
the price at which any prior or future transactions were or may be effected
in the common stock. Stockholders are cautioned against drawing any
conclusions from the data contained herein, as past results are not
necessarily indicative of future stock performance.

  The following table sets forth the high and low bid price for our common
stock for each quarter for the period from inception of trading under the
symbol "CRNC" on June 3, 2003 through December 31, 2003, as quoted on the
OTC Bulletin Board. Such over-the-counter market quotations reflect inter-
dealer prices, without retail mark-up, mark-down or commission and may not
necessarily represent actual transactions.

                                                   High        Low
    Year Ended December 31, 2003                   ------      ------
    ----------------------------

    Quarter ended June 30, 2003                    $5.10       $5.00
    Quarter ended September 30, 2003               $5.05       $4.75
    Quarter ended December 31, 2003                $5.30       $2.00

    As of the date of this report, there were approximately 130 record
holders of our common stock. Since inception, we have not paid and do not
expect to pay any dividends on our shares of common stock for the
foreseeable future as all earnings will be retained for use in the business.

    Subject to the terms and conditions of a Common Stock Purchase
Agreement, executed effective May 15, 2002 and modified on December 31, 2003,
James Durham was granted the right, in 2003, to purchase up to 2,767,278
shares of our common stock at $0.0001 per share. On December 31, 2003, Mr.
Durham was granted an option to purchase up to 7,000,000 shares of common
stock at an exercise price of $0.10 per share. In 2003, we granted options
to purchase up to 818,224 shares of common stock at a weighted average
exercise price of approximately $.96 per share to various directors and
certain senior managers.

    On December 3 and December 12, 2003, we issued $90,000 in principal
amount of Convertible Subordinated Promissory Notes (the "Notes") to four
investors. This issuance was in addition to the issuance of $820,000 of
Notes discussed in our Form 10-QSB filed on November 14, 2003. Subject to
the conversion provisions set forth in the Notes, the unpaid principal
together with all accrued interest on the Notes is due and payable in full
one year following the issuance date of each such Note. Interest accrues on
the unpaid principal balance at a rate of ten percent (10%) per year and is
payable in quarterly payments. The Notes are convertible into shares of our
common stock at the holder's option, prior to the maturity date, at an
initial conversion price of $1.50 per share. The conversion price was
subsequently adjusted to $1.00 per share upon the issuance of the Series A
Convertible Preferred Stock discussed below.

    On December 17, 2003, we issued an aggregate of 1,750,000 shares of
Series A Convertible Preferred Stock at a per share price of $1.00 to two
investors. The holders of the Series A Convertible Preferred Stock are
entitled to receive a quarterly dividend in an amount equal to .025 shares
of common stock for each share of outstanding Series A Convertible
Preferred Stock held by them. Unless previously voluntarily converted prior
to such time, the Series A Convertible Preferred Stock will automatically
convert into shares of our common stock at

                                      12
<PAGE>

an initial conversion ratio of one-to-one, one year from the date of
issuance of such shares, subject to certain conversion price adjustments.

    On December 2, 2003, we completed the acquisition of PSR Nurse
Recruiting, Inc. and PSR Nurses Holdings Corp., pursuant to an Agreement and
Plan of Reorganization dated November 4, 2003. The aggregate merger
consideration is an amount equal to 0.55 multiplied by the sum of the gross
revenues for PSR Nurses, Ltd., a Texas limited partnership, for the three
year fiscal period ending September 30, 2005 and will be payable solely in
shares of our common stock in up to three installments. At the closing, we
issued an aggregate of 3,418,789 shares of our common stock to the former
stockholders of PSR Nurse Recruiting, Inc. and PSR Nurses Holdings Corp. as
the initial installment of the merger consideration. We also issued an
additional 167,623 shares of our common stock in exchange for the
cancellation of some prior indebtedness of PSR Nurses, Ltd.

    With respect to equity compensation plans as of December 31, 2003, see
table below:


<TABLE>
<CAPTION>

                                                                               Number of securities
                                                                               remaining available for
                     Number of securities to be                                future issuance under
                     issued upon exercise of     Weighted-average exercise     equity compensation plans
                     outstanding options,        price of outstanding options  (excluding securities
                     warrants and rights         warrants and rights           reflected in column (a))
Plan Category                (a)                          (b)                             (c)
-------------------  --------------------------  ----------------------------  --------------------------
<S>                  <C>                         <C>                           <C>

Equity compensation
plans approved by
security holders            None                          N/A                            None

Equity compensation
plans not approved
by security holders       10,585,502                     $ .14                           N/A
-------------------  --------------------------  ----------------------------  --------------------------
     Total                10,585,502                     $ .14                           None
-------------------  --------------------------  ----------------------------  --------------------------
</TABLE>

    The unregistered securities set forth above were sold or granted in
reliance on an exemption in the registration requirements of the Securities
Act of 1933, as amended (the "Securities Act") under Section 4(2) of the
Securities Act and/or Regulation D promulgated under the Securities Act.

ITEM 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS

GENERAL

    We are a provider of healthcare staffing services, focusing on the
areas of travel nursing, per diem staffing, contractual clinical services,
and private duty home care.  Our travel nurses are recruited domestically
as well as internationally, and placed on temporary assignments at
healthcare facilities across the United States.  Our per diem nurses are
local nurses placed at healthcare facilities on short-term assignments.
Our contractual clinical services group provides complete clinical
management and staffing for healthcare facilities and our private duty home
care group provides nursing case management and staffing for skilled and
non-skilled care in the home. We consider the different services described
above to be one segment as each of these services relate solely to providing
healthcare staffing to customers that are healthcare providers and utilize
similar distribution methods, common systems, databases, procedures,
processes and similar methods of identifying and serving these customers.

    At the beginning of 2003, we were a development stage company with no
commercial operations.  During the year, we pursued our operational plan of
acquiring companies in the healthcare staffing field and completed the
acquisition of four companies.  As a result, we are now providing temporary
healthcare in 25 states and have contracts with approximately 150 healthcare
facilities. Approximately 61% of our revenue in 2003 was derived from the
placement of travel nurses and approximately 11% from per diem services.
The balance came from a mix

                                   13
<PAGE>


of private duty nursing and complete clinical management. We anticipate
continuing our plan to acquire specialized companies in the healthcare
staffing field for the foreseeable future.

    The companies we acquired in 2003 -- Baker Anderson Christie, Inc., New
Age Nurses, Inc., Nurses Network, Inc., and PSR Nurse Recruiting, Inc. and
PSR Nurses Holdings Corp., which hold the limited partner and general
partner interests in PSR Nurses, Ltd. -- provide the foundation for our
continued growth.  During the year we began operating the acquired
companies, combining the various back offices and support staff into a
central location and began streamlining the operations.  By the end of 2003
we were recording revenue at a monthly rate that is equivalent to $24
million per year.


PLAN OF OPERATIONS

    Our success in achieving profitability will depend on our ability to
consummate acquisitions of healthcare companies, to implement our marketing
strategy and to achieve a revenue stream from the sale of services, while
not exceeding budgeted expenses.  During the implementation of our business
plan, we will be subject to all of the risks inherent in an emerging
business, including the need to provide reliable and effective services, to
develop marketing expertise, and to generate sales.  In the event that our
market declines significantly or fails to grow as anticipated, our business,
financial condition and results of operations could be materially adversely
affected.

    During 2003, most of our customers were acute care hospitals located
throughout the continental United States. As we grow, we anticipate that
acute care facilities will continue to be the majority of our customer base
but that the overall percentage will decline as we increase our presence in
the home health and nursing home areas.

    Our overall gross profit margin in 2003 was approximately 24.2%, which
we anticipate will increase in 2004. Our gross margin is the difference
between the revenue we realize when we bill our customers for the services
of our healthcare professionals and our direct operating costs, which
include the cost of the healthcare professionals and the related housing
and travel costs, certain employment related taxes and workers compensation
insurance coverage. Any increase in margin will be the result of our
continuing efforts to enhance our margins by increasing the number of
international nurses under contract and to slightly alter our overall
product mix to include more home health and allied health services, which
generally have higher margins.

    In 2003, our selling, general and administrative expense was comprised,
primarily, of personnel costs, legal and audit fees related to being a
public company, the long-term bonus payable to our Chief Executive Officer
and various other office and administrative expenses. Approximately 17.5%
or $595,000 of the selling, general and administrative expense in 2003 was
incurred when the company was still in its formative stage, prior to the
completion of our first acquisition. We consider the long-term payable to
be a one-time event that is unlikely to be repeated.

    In 2003, we incurred significant non-cash compensation expense primarily
from a compensation agreement with our Chairman and Chief Executive Officer,
related to our initial acquisitions. For a more extensive explanation of
this agreement, see Item 5. Market for Registrants Common Equity and Related
Stockholders Matters. In the future we intend to use stock options as an
incentive to our employees and, therefore, could incur additional non-cash
compensation expense. However, we do not believe that such additional
expense will be at the level incurred in 2003.

    During the next twelve months, we intend to continue growing the
businesses acquired in 2003 and to further expand our operations through
acquisitions.  Our goal is to acquire at least four additional companies in
2004, generally in the areas of travel nursing, per diem staffing and
private duty home care.  We are also exploring opportunities in the allied
health and home health areas. As we acquire companies, we expect to realize
immediate savings in their operations as we integrate them into our
operations and as we decrease their general and administrative costs by
merging their back office and support operation into ours. We have engaged
an independent consulting firm to assist us in identifying acquisition
targets that meet general guidelines with regard to revenue, gross profit
margin and projected earnings. We have begun the process of contacting the
companies that have been so identified.

                                      14
<PAGE>

    In 2003 the cash flow generated by our operations was not sufficient to
fund our operations and was supplemented by $910,000 of convertible debt
raised in September through December 2003 and by $1.75 million of
convertible preferred stock sold in December 2003.  We currently utilize
several factoring relationships and one banking relationship to fund our
cash needs on a short-term basis. We intend to consolidate these into a
single relationship that we have identified, early in the second quarter of
2004, to simplify the record keeping and decrease the overall cost. At
December 31, 2003, we owed approximately $5.4 million to the selling
shareholders of several of the companies we acquired in 2003, of which
approximately $1.8 million will be repaid in 2004. Although at December 31,
2003 we had negative working capital of $1,220,865, several mitigating
factors should be considered: (i) in February 2004 we raised an additional
$1 million of Series A Convertible Preferred Stock, and (ii) of the $910,000
convertible debt outstanding, we believe that the holders of a majority of
this debt will convert to equity in 2004, even though we cannot compel such
conversion. At December 31, 2003, our cash balance was $1,469,076. We
believe that these funds plus the anticipated cash flow from operations in
2004, the sale of additional Series A Convertible Preferred Stock and the
anticipated conversion of at least a portion of the convertible debt will
be sufficient to service the selling shareholder debt and fund our
operations for the foreseeable future, except for the cash required to
prospect for and complete the anticipated acquisitions discussed above.

    Based on our current acquisition pipeline, we believe that additional
capital will be required to acquire additional companies.  We are currently
exploring various debt and equity options for raising this capital.  While
we believe we will be successful in raising additional capital, there is no
assurance that we will be able to raise the amount of capital required to
meet our objectives.  If additional capital is not readily available, we
will be forced to scale back our acquisition activities and our operations
until our income exceeds our expenses.  This would result in an overall
slowdown of our development.

    As a result of certain account collection issues, we are currently
working to end the relationship with one of our hospital group customers.
As of March 23, 2004, this customer owed us approximately $459,198, all
within the payment terms of the contract. We anticipate that this contract
will terminate by the end of May, 2004 and we have a signed agreement from
the customer to pay a set amount each week until the balance is paid in
full. We will be monitoring these payments closely and will take appropriate
action if payments become delinquent.

    Our capital commitments for the next twelve months are minimal as our
business does not require the purchase of plants, factories, extensive
capital equipment or inventory.

CRITICAL ACCOUNTING POLICIES AND MANAGEMENT JUDGEMENT

    The preparation of the financial statements in accordance with
accounting principles generally accepted in the United States of America
requires us to make judgments, estimates, and assumptions regarding
uncertainties that affect the reported amounts of assets and liabilities,
disclosure of contingent assets and liabilities, and the reported amounts
of revenues and expenses. Areas that require significant judgments,
estimates, and assumptions include the assignment of fair values upon
acquisition of goodwill and other intangible assets, testing for impairment
and valuation of the stock used to consummate our acquisitions. We use
historical experience, qualified independent consultants and all available
information to make these judgments and estimates, and actual results will
inevitably differ from those estimates and assumptions that are used to
prepare the company's financial statements at any given time.

    Accounts Receivable

    Accounts receivable are reduced by an allowance for doubtful accounts
that provides a reserve with respect to those accounts for which revenue
was recognized but with respect to which management subsequently determines
that payment is not expected to be received.  We analyze the balances of
accounts receivable to ensure that the recorded amounts properly reflect
the amounts expected to be collected.  This analysis involves the
application of varying percentages to each accounts receivable category
based on the age of the uncollectible accounts receivable.  The amount
ultimately recorded as the reserve is determined after management also
analyzes the collectibility of specific large or problematic accounts on an
individual basis, as well as the overall business climate and other

                                    15
<PAGE>

factors.  Our estimate of the percentage of uncollectible accounts may
change from time to time and any such change could have a material impact
on our financial condition and results of operations.

    Accounting for Stock Options

    We have used stock grants and stock options to attract and retain
directors and key executives and intend to use stock options in the future
to attract, retain and reward employees for long-term service. In 2003 the
grant prices were significantly under the publicly traded market value per
share of our stock. Therefore, we calculated the intrinsic value of the
stock and options granted and recorded non-cash compensation expense for
the difference between the grant price and the market value at issuance.
In the future, we may issue additional shares under market, at which time
we would incur additional non-cash compensation expense, but we anticipate
that the preponderance of future issues will be at the prevailing market
price of our stock.

    Purchase Accounting, Goodwill and Intangible Assets

    All business acquisitions have been accounted for using the purchase
method of accounting and, accordingly, the statements of operations include
the results of each acquired business since the date of acquisition.  The
assets acquired and liabilities assumed are recorded at their estimated
fair value as determined by management based on an independent third-party
valuation.  We determined to use third-party valuations because in 2003 our
common stock had just begun to trade and it was thinly traded throughout
the year.  We finalize the  allocation of the  purchase price to the fair
value of the  assets  acquired  and  liabilities  assumed  when we obtain
information sufficient to complete the  allocation,  but in any case,
within one year after acquisition. In 2003, this allocation was also based
on an independent third-party valuation.

    Goodwill arising from the acquisitions of businesses is recorded as the
excess of the purchase price over the estimated fair value of the net
assets of the businesses acquired.  Statement of Financial Accounting
Standards No. 142 ("Goodwill and Other Intangible Assets") provides that
goodwill is to be tested for impairment annually or more frequently if
circumstances indicate potential impairment.  Consistent with this standard, we
will review goodwill, as well as other intangible assets and long-term assets,
for impairment annually or more frequently as warranted, and if circumstances
indicate that the recorded value of any such other asset is impaired, such asset
is written down to its new, lower fair value.

The Company currently does not believe any impairment of its goodwill or
any such other asset existed at December 31, 2003.  Nevertheless, future
conditions or events could adversely affect the recorded value of goodwill
or such other assets.  If any item of goodwill or such other asset is
determined to be impaired, an impairment loss would be recognized equal to
the amount by which the recorded value exceeds the estimated fair market
value.

ITEM 7.  FINANCIAL STATEMENTS

    Audited financial statements for the year ended December 31, 2003 and
2002 are submitted herein as PART F/S on Pages F-1 to F-24.

                                   16
<PAGE>


ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS

    At our Annual Meeting on May 28, 2003, our shareholders ratified the
recommendation of our Board of Directors to dismiss our independent
accountant, Sanford H. Feibusch, CPA, PC and to appoint BDO Seidman, LLP
("BDO") as our independent accountants, effective May 28, 2003, for the
fiscal year ended December 31, 2003.

    In connection with his services to us in the fiscal year ended December
31, 2002, Mr. Feibusch prepared a report dated February 5, 2003 on our
consolidated financial statements for the four months ended December 31,
2002 and 2001, and for the period from November 10, 1997 (date of inception)
to December 31, 2002.  The report did not contain an adverse opinion or
disclaimer of opinion nor was it qualified to audit scope, or accounting
principles. The opinion was qualified, however, as to our ability to
sustain ourselves as a going concern without securing additional funding.
In addition, with respect to the report and the subsequent interim period
ended May 28, 2003, there were no disagreements with Mr. Feibusch on any
matters of accounting principles or practices, financial statement
disclosure, or auditing scope or procedures, which disagreements if not
resolved to the satisfaction of Mr. Feibusch would have caused him to make
reference thereto in his report on the financial statements for such
periods. From February 5, 2003 through May 28, 2003, Mr. Feibusch did not
perform any services or provide any advice, either verbally or in writing,
to our officers or directors.

    We provided Mr. Feibusch with a copy of the foregoing disclosures and
requested that he furnish a letter addressed to the Securities and Exchange
Commission stating whether or not he agrees with the above statements. A
copy of such letter, dated May 28, 2003 (as amended June 4, 2003) was filed
as Exhibit 16 to the Form 8-K/A filed on June 4, 2003.

    In March, 2003, we engaged BDO to perform an audit of New Age Staffing,
Inc. ("New Age") which we had proposed to acquire. New Age was a privately
owned company and was not subject to the reporting requirements of the
Securities Exchange Act of 1934.

    In the course of our relationship with BDO, we decided to engage BDO as
our new independent accountants as of May 28, 2003, subject to the signing
of a definitive engagement letter.

    During the two most recent fiscal years and through May 28, 2003, we
have not consulted with BDO regarding either (i) the application of
accounting principles to a specified transaction, either completed or
proposed; or the type of audit opinion that might be rendered on our
financial statements, and neither a written report was provided to us or
oral advice was provided that BDO concluded was an important factor
considered by us in reaching a decision as to the accounting, auditing or
financial reporting issue; or (ii) any matter that was either the subject
of a disagreement, or a reportable event.

ITEM 8A.  CONTROLS AND PROCEDURES

    Subsequent to December 31, 2003 and prior to the filing of this Report,
we conducted an evaluation of the effectiveness of the design and operation
of its disclosure controls and procedures under the supervision of, and
with the participation of, our management, including the Chief Executive
Officer and Chief Financial Officer.  Based on that evaluation, our
management, including the Chief Executive Officer and Chief Financial
Officer, concluded that its disclosure controls and procedures were
effective at December 31, 2003, and during the period prior to the
execution of this Report.  There have been no changes in our internal
controls over financial reporting during our most recent fiscal year that
have materially affected or are likely to materially affect our internal
control over financial reporting.

                                      17
<PAGE>


                                   PART III

ITEM 9.   DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

    Information required by this item is incorporated by reference to the
Proxy Statement to be distributed in connection with our 2004 annual
meeting of stockholders.

ITEM 10.  EXECUTIVE COMPENSATION

    Information required by this item is incorporated by reference to the
Proxy Statement to be distributed in connection with our 2004 annual
meeting of stockholders.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

    Information required by this item is incorporated by reference to the
Proxy Statement to be distributed in connection with our 2004 annual
meeting of stockholders.

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

    Information required by this item is incorporated by reference to the
Proxy Statement to be distributed in connection with our 2004 annual
meeting of stockholders.

ITEM 13.  EXHIBITS, LISTS AND REPORTS ON FORM 8-K

(a)    Exhibits

Exhibit No.   Description
-----------   ------------
2.1(1)        Agreement and Plan of Reorganization, dated as of June 19,
              2003, by and among Crdentia Corp., Baker Anderson Christie,
              Inc., BAC Acquisition Corporation and certain stockholders of
              Baker Anderson Christie, Inc. (the "BAC Merger Agreement").
              Certain schedules and exhibits referenced in the BAC Merger
              Agreement have been omitted in accordance with Item 601(b)(2)
              of Regulation S-K. A copy of any omitted schedule and/or
              exhibit will be furnished supplementally to the Securities
              and Exchange Commission upon request.

2.2(2)        Amendment No. 1 to the BAC Merger Agreement made and entered
              into effective as of July 31, 2003.

2.3(3)        Letter of Intent dated March 13, 2003 by and between Crdentia
              Corp. and New Age Staffing, Inc., as amended on May 5, 2003.

2.4(4)        Agreement and Plan of Reorganization, dated as of July 16,
              2003, by and among Crdentia Corp., Nurses Network, Inc., NNI
              Acquisition Corporation and certain shareholders of Nurses
              Network, Inc. (the "NNI Merger Agreement").  Certain
              schedules and exhibits referenced in the NNI Merger Agreement
              have been omitted in accordance with Item 601(b)(2) of
              Regulation S-K. A copy of any omitted schedule and/or exhibit
              will be furnished supplementally to the Securities and
              Exchange Commission upon request.

2.5(5)        Agreement and Plan of Reorganization, dated as of September
              15, 2003, by and among Crdentia Corp., New Age Staffing, Inc.,
              NAS Acquisition Corporation and the shareholders of New Age
              Staffing, Inc. (the "NAS Merger Agreement").  Certain
              schedules and exhibits referenced in the NAS Merger Agreement
              have been omitted in accordance with Item 601(b)(2) of
              Regulation S-K. A copy of any omitted schedule and/or exhibit
              will be furnished supplementally to the Securities and
              Exchange Commission upon request.

2.6(6)        Amendment No. 1 to the NNI Merger Agreement made and entered
              into effective as of September 9, 2003.

                                     18
<PAGE>

2.7(7)        Agreement and Plan of Reorganization, dated as of November 4,
              2003, by and among Crdentia Corp., PSR Acquisition
              Corporation, PSR Holdings Acquisition Corporation, PSR Nurse
              Recruiting, Inc. and PSR Nurses Holdings Corp. (the "Merger
              Agreement").  Certain schedules and exhibits referenced in
              the Merger Agreement have been omitted in accordance with
              Item 601(b)(2) of Regulation S-K.  A copy of any omitted
              schedule and/or exhibit will be furnished supplementally to
              the Securities and Exchange Commission upon request.

3.1(8)        Restated Certificate of Incorporation.

3.2(9)        Certificate of Amendment to Restated Certificate of
              Incorporation.

3.3(10)       Restated Bylaws.

4.1           Registration Rights Agreement dated September 22, 2003 by and
              among Crdentia Corp. and the investors listed on Schedule A
              attached thereto.

4.2           Registration Rights Agreement dated December 2, 2003 by and
              among Crdentia Corp. and the investors listed on Schedule A
              attached thereto.

4.2(11)       Certificate of Designations, Preferences and Rights of Series
              A Preferred Stock of Crdentia Corp.

4.3(12)       Registration Rights Agreement by and among Crdentia Corp. and
              the investors listed on Schedule A attached thereto.

4.4(13)       Specimen Stock Certificate.

4.5           Specimen Series A Preferred Stock Certificate

10.1(14)      Form Convertible Subordinated Promissory Note.

10.2(15)      Agreement to Purchase Accounts and Security Agreement dated
              February 8, 2002 between New Age Staffing, Inc. and Katz
              Factoring, Inc.

10.3(16)      Amendment to Agreement to Purchase Accounts and Security
              Agreement, dated effective as of August 8, 2003, made by and
              between New Age Staffing, Inc. and Katz Factoring, Inc.

10.5(17)      Variable Rate Installment Note dated August 18, 2003 in the
              principal amount of $250,000 made payable by Crdentia Corp.
              to Comerica Bank-California.

10.6(18)      Subordinated Promissory Note dated September 22, 2003 in the
              principal amount of $1,650,000 made payable by Crdentia Corp.
              to Nick Luizza, Jr.

10.7          Convertible Subordinated Promissory Note dated December 2,
              2003 in the principal amount of $1,200,000 made payable by
              Crdentia Corp. to Robin Riddle.

10.8          Convertible Subordinated Promissory Note dated December 2,
              2003 in the principal amount of $2,525,000 made payable by
              Crdentia Corp. to Professional Staffing Resources, Inc. and
              Nursing Services Registry of Savannah, Inc.

10.9          Convertible Subordinated Promissory Note dated December 2,
              2003 in the principal amount of $200,000 made payable by
              Crdentia Corp. to Professional Staffing Resources, Inc. and
              Nursing Services Registry of Savannah, Inc.

10.10#        Notice of Stock Option Award and Stock Option Award Agreement
              dated December 16, 2003 by and between Crdentia Corp. and
              Thomas H. Herman.

                                      19
<PAGE>

10.11#        Notice of Stock Option Award and Stock Option Award Agreement
              dated December 16, 2003 by and between Crdentia Corp. and C.
              Fred Toney.

10.12#        Executive Employment Agreement dated December 22, 2003 by and
              between Crdentia Corp. and Pamela Atherton.

10.13#        Notice of Stock Option Award and Stock Option Award Agreement
              dated December 22, 2003 by and between Crdentia Corp. and
              Pamela Atherton.

10.14(19)#    Notice of Stock Option Award dated December 31, 2003 by and
              between Crdentia Corp. and James Durham.

10.15(20)#    Stock Option Plan and Award Agreement dated December 31, 2003
              by and between Crdentia Corp. and James Durham.

10.16(21)#    Bonus and Other Agreement dated December 31, 2003 by and
              between Crdentia Corp. and James Durham.

10.17#        Employment Agreement dated November 7, 2003 by and between
              Crdentia Corp. and William S. Leftwich.

10.18         Commercial Receivables Sale Agreement dated November 8, 2001
              by and between Alamo Capital Corporation and PSR Nurses, Ltd.

10.19         Office Lease Agreement dated February 1, 2002 by and between
              Merit 99 Office Portfolio, L.P. and PSR Nurses, Ltd.

10.20(22)     Amendment to Agreement with Health Care Investment Visions,
              LLC dated April 29, 2003, terminating the original Agreement
              dated January 2, 2003.

14.1          Crdentia Corp. Code of Business Conduct and Ethics.

16.1(23)      Letter dated May 28, 2003 from Sanford H. Feibusch, CPA, PC
              to the U.S. Securities and Exchange Commission.

22.1          List of subsidiaries of Crdentia Corp.

31.1          Certification of Chief Executive Officer pursuant to Rules
              13a-14(a) and 15d-14(a) promulgated pursuant to the
              Securities Exchange Act of 1934, as amended.

31.2          Certification of Chief Financial Officer pursuant to Rules
              13a-14(a) and 15d-14(a) promulgated pursuant to the
              Securities Exchange Act of 1934, as amended.

32.1          Certification of Chief Executive Officer pursuant to Section
              906 of the Sarbanes-Oxley Act of 2002.

32.2          Certification of Chief Financial Officer pursuant to Section
              906 of the Sarbanes-Oxley Act of 2002.

--------------------------------------------

#      Indicates management contract or compensatory plan.
(1)    Previously filed as Exhibit 2.1 to the Form 8-K filed with the
       Securities and Exchange Commission on June 20, 2003 and incorporated
       herein by reference.
(2)    Previously filed as Exhibit 2.3 to the Form 10-QSB filed with the
       Securities and Exchange Commission on

                                    20
<PAGE>

       August 12, 2003 and
       incorporated herein by reference.
(3)    Previously filed as Exhibit 1.0 to the Form 8-K filed with the
       Securities and Exchange Commission on March 19, 2003 and
       incorporated herein by reference.
(4)    Previously filed as Exhibit 2.1 to the Form 8-K filed with the
       Securities and Exchange Commission on July 18, 2003 and incorporated
       herein by reference.
(5)    Previously filed as Exhibit 2.1 to the Form 8-K filed with the
       Securities and Exchange Commission on September 16, 2003 and
       incorporated herein by reference.
(6)    Previously filed as Exhibit 2.2 to the Form 8-K filed with the
       Securities and Exchange Commission on October 8, 2003 and
       incorporated herein by reference.
(7)    Previously filed as Exhibit 2.1 to the Form 8-K filed with the
       Securities and Exchange Commission on November 6, 2003 and
       incorporated herein by reference.
(8)    Previously filed as Exhibit 3.1 to the Form 8-K filed with the
       Securities and Exchange Commission on August 22, 2002 and
       incorporated herein by reference.
(9)    Previously filed as Exhibit 3.2 to the Form 10-QSB filed with the
       Securities and Exchange Commission on August 12, 2003 and
       incorporated herein by reference.
(10)   Previously filed as Exhibit 3.2 to the Form 8-K filed with the
       Securities and Exchange Commission on August 22, 2002 and
       incorporated herein by reference.
(11)   Previously filed as Exhibit 4.1 to the Form 8-K filed with the
       Securities and Exchange Commission on December 30, 2003 and
       incorporated herein by reference.
(12)   Previously filed as Exhibit 4.2 to the Form 8-K filed with the
       Securities and Exchange Commission on December 30, 2003 and
       incorporated herein by reference.
(13)   Previously filed as Exhibit 4.0 to the Form 10-QSB filed with the
       Securities and Exchange Commission on May 5, 2003 and incorporated
       herein by reference.
(14)   Previously filed as Exhibit 10.1 to the Form 8-K filed with the
       Securities and Exchange Commission on September 3, 2003 and
       incorporated herein by reference.
(15)   Previously filed as Exhibit 10.2 to the Form 10-QSB filed with the
       Securities and Exchange Commission on November 14, 2003 and
       incorporated herein by reference.
(16)   Previously filed as Exhibit 10.3 to the Form 10-QSB filed with the
       Securities and Exchange Commission on November 14, 2003 and
       incorporated herein by reference.
(17)   Previously filed as Exhibit 10.5 to the Form 10-QSB filed with the
       Securities and Exchange Commission on November 14, 2003 and
       incorporated herein by reference.
(18)   Previously filed as Exhibit 10.6 to the Form 10-QSB filed with the
       Securities and Exchange Commission on November 14, 2003 and
       incorporated herein by reference.
(19)   Previously filed as Exhibit 10.1 to the Form 8-K filed with the
       Securities and Exchange Commission on January 12, 2004 and
       incorporated herein by reference.
(20)   Previously filed as Exhibit 10.2 to the Form 8-K filed with the
       Securities and Exchange Commission on January 12, 2004 and
       incorporated herein by reference.
(21)   Previously filed as Exhibit 10.3 to the Form 8-K filed with the
       Securities and Exchange Commission on January 12, 2004 and
       incorporated herein by reference.
(22)   Previously filed as Exhibit 10.12 to the Form 10-QSB filed with the
       Securities and Exchange Commission on May 5, 2003 and incorporated
       herein by reference.
(23)   Previously filed as Exhibit 16.1 to the Form 8-K filed with the
       Securities and Exchange Commission on May 30, 2003 and incorporated
       herein by reference.


ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES

    Information required by this item is incorporated by reference to the
Proxy Statement to be distributed in connection with our 2004 annual meeting
of stockholders.


                                    21

<PAGE>

                                 SIGNATURES

    Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be
signed on its behalf by the undersigned, thereunto duly authorized.


                                            CRDENTIA CORP.

    Dated: March 30, 2004               By:  /s/ James D. Durham
                                            -------------------------------
                                                 James D. Durham
                                                 Chief Executive Officer and
                                                 Chairman of the Board
                                                 (Principal Executive Officer)

    Dated: March 30, 2004               By:  /s/ Pamela G. Atherton
                                            -------------------------------
                                                 Pamela G. Atherton
                                                 President

    Dated: March 30, 2004               By:  /s/ William S. Leftwich
                                            -------------------------------
                                                 William S. Leftwich
                                                 Chief Financial Officer and
                                                 Secretary
                                                 (Principal Financial Officer)

    Pursuant to the requirements of the Securities Exchange Act of 1934,
this Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.

    Dated: March 30, 2004               By:  /s/ Robert J. Kenneth
                                            -------------------------------
                                                 Robert J. Kenneth
                                                 Director

    Dated: March 30, 2004               By:  /s/ Robert P. Oliver
                                            -------------------------------
                                                 Robert P. Oliver
                                                 Director

    Dated: March 30, 2004               By:  /s/ Joseph M. DeLuca
                                            -------------------------------
                                                 Joseph M. DeLuca
                                                 Director

    Dated: March 30, 2004               By:  /s/ Thomas Herman
                                            -------------------------------
                                                 Thomas Herman
                                                 Director

    Dated: March 30, 2004               By:  /s/ C. Fred Toney
                                            -------------------------------
                                                 C. Fred Toney
                                                 Director

                                       22

<PAGE>

                               EXHIBIT 31.1
                               ------------

             CERTIFICATION PURSUANT TO RULE 13a-14 AND 15d-14
             ------------------------------------------------
           UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
           -----------------------------------------------------

    I, James D. Durham, Chief Executive Officer and Chairman of Board of
Crdentia Corp., certify that:

    1. I have reviewed this annual report on Form 10-KSB of Crdentia Corp.;

    2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this report;

    3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects
the financial condition, results of operations and cash flows of the
Registrant as of, and for, the periods presented in this report;

    4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:


    (a) designed such disclosure controls and procedures, or caused such
        disclosure controls and procedure to be designed under our
        supervision,  to ensure that material information relating to the
        registrant, including its consolidated subsidiaries, is made known
        to us by others within those entities, particularly during the
        period in which this annual report is being prepared;

    (b) evaluated the effectiveness of the registrant's disclosure controls
        and procedures and presented in this report our conclusions about
        the effectiveness of the disclosure controls and procedures, as of
        the end of the period covered by this report based on such
        evaluation; and

    (c) disclosed in this report any change in the registrant's internal
        control over financial reporting that occurred during the
        registrant's most recent fiscal quarter (the registrant's fourth
        fiscal quarter in the case of an annual report) that has materially
        affected, or is reasonably likely to materially affect, the
        registrant's internal control over financial reporting; and;

    5. The registrant's other certifying officer and I have disclosed, based
on our most recent evaluation of internal control over financial reporting,
to the registrant's auditors and the audit committee of the registrant's
board of directors (or persons performing the equivalent function):

    (a) all significant deficiencies and material weaknesses in the design
        or operation of internal control over financial reporting which are
        reasonably likely to adversely affect the registrant's ability to
        record, process, summarize and report financial information; and

    (b) any fraud, whether or not material, that involves management or
        other employees who have a significant role in the registrant's
        internal controls over financial reporting.

Dated: March 30, 2004                 By: /s/ James D. Durham
                                          -------------------------------
                                              James D. Durham
                                              Chief Executive Officer and
                                              Chairman of the Board


                                       23

<PAGE>

                               EXHIBIT 31.2
                               ------------

             CERTIFICATION PURSUANT TO RULE 13a-14 AND 15d-14
             ------------------------------------------------
          UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
          -----------------------------------------------------

I, William S. Leftwich, Chief Financial Officer and Secretary of Crdentia
Corp., certify that:

    1. I have reviewed this annual report on Form 10-KSB of Crdentia Corp.;

    2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this report;

    3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the Registrant as of, and for, the periods presented in this report;

    4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

    (a) designed such disclosure controls and procedures, or caused such
        disclosure controls and procedure to be designed under our
        supervision,  to ensure that material information relating to the
        registrant, including its consolidated subsidiaries, is made known
        to us by others within those entities, particularly during the
        period in which this annual report is being prepared;

    (b) evaluated the effectiveness of the registrant's disclosure controls
        and procedures and presented in this report our conclusions about
        the effectiveness of the disclosure controls and procedures, as of
        the end of the period covered by this report based on such
        evaluation; and

    (c) disclosed in this report any change in the registrant's internal
        control over financial reporting that occurred during the
        registrant's most recent fiscal quarter (the registrant's fourth
        fiscal quarter in the case of an annual report) that has materially
        affected, or is reasonably likely to materially affect, the
        registrant's internal control over financial reporting; and;

    5. The registrant's other certifying officer and I have disclosed,
based on our most recent evaluation of internal control over financial
reporting, to the registrant's auditors and the audit committee of the
registrant's board of directors (or persons performing the equivalent
function):

    (a) all significant deficiencies and material weaknesses in the design
        or operation of internal control over financial reporting which
        are reasonably likely to adversely affect the registrant's ability
        to record, process, summarize and report financial information; and

    (b) any fraud, whether or not material, that involves management or
        other employees who have a significant role in the registrant's
        internal controls over financial reporting.

Dated: March 30, 2004                 By: /s/  William S. Leftwich
                                          -------------------------------
                                               William S. Leftwich
                                               Chief Financial Officer
                                               and Secretary

                                       24

<PAGE>

                              EXHIBITS 32.1 and 32.2
                              ----------------------
                              CERTIFICATE PURSUANT TO
                              -----------------------
                              18 U.S.C. SECTION 1350,
                              -----------------------
                              AS ADOPTED PURSUANT TO
                              -----------------------
                    SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
                    ---------------------------------------------

    In connection with the Annual Report of Crdentia Corp. (the "Company")
on Form 10-KSB for the year ended December 31, 2003, as filed with the
Securities and Exchange Commission (the "Report"), each of the undersigned,
in the capacities and on the dates indicated below, hereby certifies
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002, that:

    1. the Report fully complies with the requirements of Section 13(a) or
       15(d), as applicable, of the Securities Exchange Act of 1934; and

    2. the information contained in the Report fairly presents, in all
       material respects, the financial condition and result of operations
       of the Company at the dates and for the period indicated.

This Certificate has not been, and shall not be deemed, "filed" with the
Securities and Exchange Commission.


    Dated: March 30, 2004                By:  /s/ James D. Durham
                                            -------------------------------
                                             James D. Durham
                                             Chief Executive Officer and
                                             Chairman of the Board


    Dated: March 30, 2004                By:  /s/ William S. Leftwich
                                            -------------------------------
                                             William S. Leftwich
                                             Chief Financial Officer and
                                             Secretary

                                       25

<PAGE>




Report of Independent Certified Public Accountants

Board of Directors
Crdentia Corp.
Dallas, Texas


We have audited the accompanying consolidated balance sheet of Crdentia Corp. as
of December 31, 2003 and the related consolidated statements of operations,
stockholders' equity, and cash flows for the year then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Crdentia Corp. at
December 31, 2003, and the results of its operations and its cash flows for the
year then ended in conformity with accounting principles generally accepted in
the United States of America.


/s/ BDO Seidman, LLP


March 24, 2004
San Francisco, California


                                     F-1
<PAGE>

                        INDEPENDENT AUDITOR'S REPORT

To the Board of Directors
Crdentia Corp.

I have audited the accompanying balance sheet of Crdentia Corp. (formerly known
as Lifen, Inc.) as of December 31, 2002 and the related statement of operations,
stockholders' equity and cash flow for the year then ended.  These Financial
Statements are the responsibility of the Company's management.  My
responsibility is to express an opinion on these financial statements based on
my audit.

I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the Financial Statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the balance sheet.  An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.

In my opinion, the financial statements referred to above present fairly in all
material respects, the financial position of Crdentia Corp. (formerly Lifen,
Inc.) as of December 31, 2002 and results of operations, changes in
stockholders' equity and cash flows for the year then ended, in conformity with
generally accepted accounting principles.

The accompanying Financial Statements have been prepared assuming the Company
will continue as a going concern.  As discussed in the Liquidity section of Note
1 to the Financial Statements, as of December 31, 2002 conditions existed that
raised substantial doubt about its ability to continue as a going concern.
Management's actions and plans regarding this matter are also described in Note
1.  The Financial Statements as of December 31, 2002 do not include any
adjustments that might result from the outcome of this uncertainty.


						/s/ Sanford H. Feibusch
                                                ----------------------------
						Certified Public Accountant

Monsey, New York
February 5, 2003 (except for
the Liquidity section of
Note 1, which is dated
as of March 29, 2004)

                                     F-2


<PAGE>
                                 CRDENTIA CORP.
                          Consolidated Balance Sheets

                                                           December 31,
                                                 -------------------------------
                                                      2003             2002
                                                 --------------   --------------
Current assets:
  Cash and cash equivalents                      $   1,469,076    $     125,463
  Accounts receivable, net of allowance              3,058,086                -
    for doubtful accounts of $195,465
  Unbilled receivables                                 268,590                -
  Other current assets                                 333,379           33,126
                                                 --------------   --------------
Total current assets                                 5,129,131          158,589

Property and equipment, net                            363,815            6,418
Goodwill                                             8,519,821                -
Intangible assets, net                               3,485,334                -
Other assets                                            98,297           48,803
                                                 --------------   --------------
Total assets                                     $  17,596,398    $     213,810
                                                 ==============   ==============

Current liabilities:
  Accounts payable and accrued expenses          $     756,686    $      53,713
  Accrued employee compensation and benefits           828,884                -
  Revolving lines of credit                          2,871,890                -
  Current portion of notes payable to lenders          191,667                -
  Subordinated convertible notes, net of discount      250,833                -
  Current portion of notes payable to sellers        1,435,115                -
  Other current liabilities                             14,921                -
                                                 --------------   --------------
Total current liabilities                            6,349,996           53,713

Note payable to lender, less current portion            27,777                -
Long term bonus payable                                801,000                -
Notes payable to sellers, less current portion       3,925,983                -
                                                 --------------   --------------
Total liabilities                                   11,104,756           53,713

Commitments and contingencies

Series A Convertible Preferred Stock
  $0.0001 par value, 10,000,000 shares
    authorized, 1,750,000 issued and
    outstanding (liquidation preference
    of $1,750,000)                                   1,750,000                -
                                                 --------------   --------------

Stockholders' equity:
  Common stock, par value $0.0001,                       2,207            1,100
  50,000,000 shares authorized in
    2003 and 2002,
    22,067,276 shares issued and
    18,838,057 shares outstanding in 2003
    10,998,166 shares issued and
    outstanding in 2002
  Additional paid in capital                        60,545,887          821,344
  Treasury Stock                                             -                -
  Deferred non-cash stock compensation                (828,000)               -
  Accumulated deficit                              (54,978,452)        (662,347)
                                                 --------------   --------------
Total stockholders' equity                           4,741,642          160,097
                                                 --------------   --------------

Total liabilities and stockholders' equity       $  17,596,398    $     213,810
                                                 ==============   ==============

The accompanying notes are an integral part of these consolidated financial
statements.

                                     F-3

<PAGE>

                                 CRDENTIA CORP.
                    Consolidated Statements of Operations


		                                     Year Ended December 31,
                                                 -------------------------------
                                                      2003             2002
                                                 --------------   --------------
Revenue from services                            $   4,711,972    $           -
Direct operating expenses                            3,571,281                -
                                                 --------------   --------------
  Gross profit                                       1,140,691                -
                                                 --------------   --------------
Operating expenses:
  Selling, general, and administrative expenses      3,409,707          433,773
  Non-cash stock based compensation                 51,638,254                -
                                                 --------------   --------------
Total operating expenses                            55,047,961          433,773
                                                 --------------   --------------

Loss from operations                               (53,907,270)        (433,773)

  Interest expense, net                                408,835                -
                                                 --------------   --------------
Loss from operations before income taxes           (54,316,105)        (433,773)

Income tax expense                                           -                -
                                                 --------------   --------------
Net loss                                         $ (54,316,105)   $    (433,773)
                                                 ==============   ==============


Deemed dividend related to beneficial conversion
  feature on Series A convertible preferred stock    1,750,000                -
                                                 --------------   --------------

Net loss attributable to common stockholders     $ (56,066,105)   $    (433,773)
                                                 ==============   ==============

Basic and diluted loss per common share
  attributable to common stockholders            $       (4.32)   $       (0.05)
                                                 ==============   ==============
Weighted average number of common
  shares outstanding                                12,992,111        8,562,822
                                                 ==============   ==============

The accompanying notes are an integral part of these consolidated financial
statements.

                                     F-4

<PAGE>

                                 CRDENTIA CORP.
                        STATEMENT OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                   Common Stock
                                 Par Value $.0001     Additional                 Deferred
                               -------------------      Paid-In     Treasury     Non-cash      Accumulated
                                 Shares     Amount      Capital      Stock     Compensation      Deficit         Total
                               -----------  ------   ------------   --------   ------------   -------------   ------------
<S>                            <C>          <C>      <C>            <C>        <C>            <C>             <C>
Balance December 31, 2001       7,424,000   $  743   $   367,239    $      -   $         -    $   (228,574)   $   139,408

Restricted stock issued in
  Private Placement net of
  issuance costs of $54,455     2,574,286      257       447,438                                                  447,695

Restricted stock issued to
  officers and directors for
  services                        999,880      100         6,667                                                    6,767

Net Loss                                                                                          (433,773)      (433,773)
                               -----------  ------   ------------   --------   ------------   -------------   ------------
Balance December 31, 2002      10,998,166    1,100       821,344           -             -        (662,347)       160,097



Restricted stock issued in
  acquistion of Baker,
  Anderson, Christie, Inc.        480,000       48       172,752                                                  172,800

Restricted stock issued in
  acquistion of New Age
  Staffing, Inc.                6,884,614      688     2,477,773                                                2,478,461

Restricted stock issued in
  acquistion of Nurses
  Network, Inc.                   118,084       12        42,498                                                   42,510

Restricted stock issued in
  acquistion of PSR Nurses
  Recruiting, Inc. and
  PSR Nurses Holdings Corp.     3,418,789      342     3,247,491                                                3,247,833

Restricted stock issued in
  conversion of debt              167,623       17       408,983                                                  409,000

</TABLE>

                                     F-5

<PAGE>

                                 CRDENTIA CORP.
                        STATEMENT OF STOCKHOLDERS' EQUITY
                                  (Continued)

<TABLE>
<CAPTION>
                                   Common Stock
                                 Par Value $.0001     Additional                 Deferred
                               -------------------      Paid-In     Treasury     Non-cash      Accumulated
                                 Shares     Amount      Capital      Stock     Compensation      Deficit         Total
                               -----------  ------   ------------   --------   ------------   -------------   ------------
<S>                            <C>          <C>      <C>            <C>        <C>            <C>             <C>
Restricted stock repurchased
  from terminated employee       (181,219)                (1,208)          -                                       (1,208)

Beneficial conversion feature
  of subordinated convertible
  notes                                                  910,000                                                  910,000

Common stock returned to
  company and related
  compensation expense         (3,048,000)             5,750,593           -                                    5,750,593

Compensation expense related
  to restricted stock and
  options issued to directors
  and employees                                        2,770,176                  (828,000)                     1,942,176

Compensation expense related
  to restricted stock purchase
  rights issued	to Chief
  Executive Officer                                   13,495,485                                               13,495,485

Compensation expense related
  to stock options issued
  to Chief Executive Officer                          30,450,000                                              30,450,000

Benefit and deemed dividend
  of beneficial conversion price
  of Series A convertible                              1,750,000                                                1,750,000
  preferred stock                                     (1,750,000)                                              (1,750,000)

Net loss                                                                                       (54,316,105)   (54,316,105)
                               -----------  ------   ------------   --------   ------------   -------------   ------------

Balance December 31, 2003      18,838,057   $2,207   $60,545,887    $     -    $  (828,000)   $(54,978,452)   $ 4,741,642
                               ===========  ======   ============   ========   ============   =============   ============
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

                                     F-6

<PAGE>

                                 CRDENTIA CORP.
                     Consolidated Statement of Cash Flows

		                                     Year Ended December 31,
                                                 -------------------------------
                                                      2003             2002
                                                 --------------   --------------
Operating activities
Net loss                                         $ (54,316,105)   $    (433,773)
Adjustments to reconcile net loss to
  net cash used in operating activities:
  Amortization of subordinated convertible
    note discounts                                     250,833                -
  Depreciation and amortization                        111,827                -
  Bad debt expense                                     195,465                -
  Non-cash stock based compensation                 51,638,254                -
  Changes in operating assets and liabilities,
  net of effects of
     purchases of subsidiaries:
     Accounts receivable                               313,254                -
     Unbilled receivables                             (268,590)               -
     Other current assets                              398,597           61,274
     Accounts payable and accrued expenses            (388,773)          48,848
     Accrued employee compensation and benefits        107,354                -
     Long term bonus payable                           801,000                -
                                                 --------------   --------------
Net cash used in operating activities               (1,156,884)        (323,651)
                                                 --------------   --------------

Investing activities
Purchases of property and equipment                   (50,435)		 (5,554)
Cash paid for acquisition of subsidiaries,
  net of cash received                                (13,700)                -
                                                 --------------   --------------
Net cash used in investing activities                 (64,135)           (5,554)
                                                 --------------   --------------

Financing activities
Issuance of preferred stock                          1,750,000                -
(Repurchase)/Issuance of common stock                   (1,208)         454,462
Net increase in revolving lines of credit               39,404                -
Proceeds from notes payable to lenders                 275,000                -
Repayment of notes payable to lenders                  (60,328)               -
Proceeds from subordinated convertible notes           910,000                -
Repayment of notes to sellers                         (325,638)               -
Debt issuance costs                                    (22,598)               -
                                                 --------------   --------------
Net cash provided by financing activities            2,564,632          454,462
                                                 --------------   --------------

Net increase in cash                                 1,343,613          125,257
Cash and cash equivalents at beginning of year         125,463              206
                                                 --------------   --------------
Cash and cash equivalents at end of year         $   1,469,076    $     125,463
                                                 ==============   ==============

Supplemental disclosures:
Stock issued to effect business acquisitions
  10,901,487 shares of common stock              $   5,941,604    $           -
Stock issued on the conversion of note payable
  167,623 shares of common stock                 $     409,000    $           -
Notes payable issued and assumed in acquisitions $   5,683,173    $           -

The accompanying notes are an integral part of these consolidated financial
statements.

                                     F-7

<PAGE>

                                 CRDENTIA CORP.

                         NOTES TO FINANCIAL STATEMENTS
                               DECEMBER 31, 2003


Note 1. Summary of Significant Accounting Policies
--------------------------------------------------

Organization
------------
Crdentia Corp. (the "Company") was incorporated under the laws of the State of
Delaware on November 10, 1997 under the name Digivision International, Ltd. The
Company's name was changed to Lifen, Inc. on June 22, 2000 and changed to
Crdentia Corp. on May 28, 2003.  The Company commenced commercial operations on
August 7, 2003 with the first of four acquisitions:

     .  On August 7, 2003, Baker Anderson Christie, Inc., a San Francisco based
        home health care agency
     .  On September 22, 2003, New Age Staffing, Inc., a Nashville, TN,
        Birmingham, AL, and New Orleans, LA based travel nurse and per diem
        staffing company
     .  On October 2, 2003, Nurses Network, Inc., a San Francisco based clinical
        staffing company
     .  On December 2, 2003, PSR Nurse Recruiting, Inc. and PSR Nurses Holdings
        Corp. the general and limited partner to PSR Nurses, Ltd., a Dallas, TX
        based travel nurse operation.

With the operational integration of these acquisitions, Crdentia Corp. provides
healthcare staffing services in the area of travel nursing, per diem staffing,
contractual clinical services, and private duty home care.  Our healthcare
employees are recruited domestically as well as internationally and placed in
assignments in local markets and in facilities across the United States.

Basis of Presentation
---------------------
The accompanying financial statements include the results of operations of the
wholly owned subsidiaries listed above from their respective dates of
acquisition through the end of this reporting period.  All material intercompany
transactions have been eliminated in consolidation.    The Company has only one
operating segment.

Use of Estimates
----------------
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the amount of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the reporting
period. The most significant estimates relate to the allowance for doubtful
accounts, the valuation and allocation of acquired intangible assets and
goodwill, the stock valuation of the shares used to consummate the company's
acquisitions, and analysis of impairment of goodwill and other intangible
assets. Actual results could differ from those estimates.

Liquidity
---------
The audit report for the year ended December 31, 2002 contained an opinion that
was qualified as to the Company's ability to sustain itself as a going concern
without securing additional funding. During 2003 the Company was able to secure
additional funding to fund its operations as it began executing its business
plan to acquire and grow companies involved in healthcare staffing. Although the
Company ended 2003 with negative working capital of $1,220,865, the following
are considered to be mitigating factors: (i) in February 2004 the Company raised
an additional $1 million of Series A Convertible Preferred Stock, and (ii) of
the $910,000 convertible debt outstanding, the Company believes that the holders
of a majority of this debt will convert to equity in 2004. The Company believes
that these two factors, coupled with its cash on hand at December 31, 2003 and
its anticipated cash flow from operations in 2004, will be sufficient to service
its debt and fund its operations for the foreseeable future.

Fair Value of Financial Instruments
-----------------------------------
The Company's financial instruments at December 31, 2003, consist of cash and
cash equivalents, accounts receivable, accounts payable, revolving lines of
credit, notes payable, and long term bonus payable.  The Company believes the
reported carrying amounts of its cash and cash equivalents, accounts receivable,
and accounts payable approximates fair value, based upon the maturities and
short-term nature of those instruments.  The Company believes that the fair
value of the revolving lines of credit and notes payable approximates the fair
value based on the terms and conditions the Company feels could be attained from
other institutions.

                                     F-8
<PAGE>

                                 CRDENTIA CORP.

                         NOTES TO FINANCIAL STATEMENTS
                               DECEMBER 31, 2003


Cash and Cash Equivalents
-------------------------
The Company considers all highly liquid investments with an original maturity of
three months or less at the date of maturity to be cash equivalents. At times,
the Company's cash balances may exceed the Federal Deposit Insurance Corporation
(FDIC) insured limit of $100,000.  However, management presently believes that
the risk of loss is not significant.  To date, the Company has not experienced
any losses in such accounts.

Property and Equipment
----------------------
Property and equipment is stated at cost. Depreciation is provided by utilizing
the straight-line method over the estimated useful life of the assets (generally
three to ten years). Amortization of leasehold improvements is being provided on
the straight-line method over the various lease terms or estimated useful lives,
if shorter. The cost of maintenance and repairs is charged to operations as
incurred.

Goodwill and Intangible Assets
------------------------------
Intangible assets other than goodwill consist of customer relationships and
international nurse contracts and are presented net of accumulated amortization.
Intangibles are amortized over their respective useful lives estimated to be 5
years.  Goodwill will be assessed for impairment at least annually. The
valuation of these intangibles is determined based upon valuations performed by
third-party specialists and management's best estimates of fair value.  As a
result the ultimate value and recoverability of these assets is subject to the
validity of the assumptions used.

Long-Lived Assets
-----------------
Long-lived assets, including property and equipment, are assessed for possible
impairment whenever events or changes in circumstances indicate that the
carrying amounts may not be recoverable or whenever management has committed to
a plan to dispose of the assets. Such assets are carried at the lower of book
value or fair value as estimated by management based on appraisals, current
market value, and comparable sales value, as appropriate. Long-lived assets
affected by such impairment loss are depreciated or amortized at their new
carrying amount over the remaining estimated life.  Assets to be sold or
otherwise disposed are not subject to further depreciation or amortization.

Income Taxes
------------
The Company accounts for income taxes under an asset and liability approach that
requires the recognition of deferred tax assets and liabilities for the expected
future tax consequences of events that have been recognized in the Company's
financial statements or tax return. A valuation allowance is recorded, based on
currently available information, when it is more likely than not that any or all
of a deferred tax asset will not be realized. The Company files a consolidated
Federal income tax return with its subsidiaries.

Stock Based Compensation
------------------------
As permitted under the provisions of SFAS 123, Accounting for Stock-Based
Compensation, the Company continues to account for employee stock-based
transactions under Accounting Principles Board Opinion ("APB") No. 25,
Accounting for Stock Issued to Employees.  However, SFAS 123 requires the
Company to disclose pro forma net income and earnings per share as if the fair
value method had been adopted.  Under the fair value method, compensation cost
is measured at the grant date based on the fair value of the award and is
recognized over the service period, which is usually the vesting period.  For
non-employees, cost is also measured at the grant date, using the fair value
method, but is actually recognized in the financial statements over the vesting
period, or immediately if no further services are required.

If the Company had elected the fair value method of accounting for employee
stock-based compensation, compensation cost would be accrued at the estimated
fair value of the stock award grants over the service period, regardless of
later changes in stock prices and price volatility.  The date of grant fair
values for options granted in 2003 have been estimated based on a Black-
Scholes pricing model with the assumptions identified in the following
table.

                                     F-9
<PAGE>

                                 CRDENTIA CORP.

                         NOTES TO FINANCIAL STATEMENTS
                               DECEMBER 31, 2003


                                                                 2003
                                                              ----------

Dividend Yield                                                         -

Volatility                                                           60%

Risk-Free Interest Rates                                            4.5%

Expected Lives in Years                                        0-5 years


The table below shows net income per share for 2003 as if the Company had
elected the fair value method of accounting for stock options.


                                                                 2003
                                                            --------------
Net loss as reported                                        $ (56,066,105)

Add: stock-based employee compensation included in
reported net income, net of related tax effects                51,638,254

Deduct: total stock-based employee compensation
determined under fair value method for all awards,
net of related tax effects                                    (51,974,747)

Proforma net loss, as adjusted                              $ (56,402,598)

Earnings per share:

Basic and diluted, as reported                              $       (4.32)
Basic and diluted, as adjusted                              $       (4.34)
                                                            --------------

Revenue Recognition and Allowances
----------------------------------
The Company recognizes revenue generally on the date the Company's healthcare
staff provides services to healthcare facilities or individuals in their home.
The Company recognizes revenue at the gross amounts billed, as our healthcare
staff are employees of the Company.

Accounts receivable are uncollateralized customer obligations due under normal
trade terms. The Company provides services to various public and private medical
facilities such as hospitals, nursing care facilities, etc. Management performs
continuing credit evaluations of the customers' financial condition.  In
addition, the Company provides home healthcare to individuals on a private pay
arrangement.  The Company collects one week of services in advance for this type
of service.

Senior management reviews accounts receivable on a regular basis to determine if
any receivables will potentially be uncollectible. An allowance for possible
doubtful accounts is recorded based upon management's evaluation of current
industry conditions, historical collection experience and other relevant factors
which, in the opinion of management, require recognition in estimating the
allowance.  After all attempts to collect a receivable have failed, the
receivable is written off against the allowance.

Earnings Per Share
------------------
The Company adopted the standards set by the Financial Accounting Standards
Board and computes earnings per share data in accordance with SFAS No. 128
"Earning per Share." The basis per share data has been computed on the loss for
the period divided by the historic weighted average number of shares of common
stock outstanding.

                                     F-10
<PAGE>

                                 CRDENTIA CORP.

                         NOTES TO FINANCIAL STATEMENTS
                               DECEMBER 31, 2003


Excluded from basic earning per share data is the unvested portion of restricted
stock grants totaling 466,617 shares.  The Company does not report fully diluted
loss per share as to do so would be anti-dilutive as a result of the net loss
for each of the respective periods included herein.

Reclassifications
-----------------
Certain of the prior year financial statement amounts have been reclassified to
conform to the current year presentation.  These reclassifications had no impact
on previously reported net loss or accumulated deficit.

New Accounting Pronouncements
-----------------------------
In November 2002, the FASB issued FASB Interpretation ("FIN") No. 45,
Guarantor's Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others. FIN 45 requires a guarantor to
recognize, at the inception of a qualified guarantee, a liability for the fair
value of the obligation undertaken in issuing the guarantee. FIN 45 is effective
on a prospective basis for qualified guarantees issued or modified after
December 31, 2002.  The adoption of this Interpretation did not have a material
impact on the Company's financial condition or results of operations.

In January 2003, the FASB issued Interpretation No. 46, Consolidation of
Variable Interest Entities, which requires the consolidation of certain special
purpose or variable interest entities. FIN 46 is applicable to financial
statements issued after 2002, however, disclosures are required currently if
the Company expects to consolidate any variable interest entities. The Company
has no variable interest entities and therefore, there are no entities that will
be consolidated with the Company's financial statements as a result of FIN 46.

In May 2003, the FASB issued SFAS 150, Accounting For Certain Financial
Instruments with Characteristics of Both Liabilities and Equity, which
establishes standards for how an issuer of financial instruments classifies and
measures certain financial instruments with characteristics of both liabilities
and equity. It requires that an issuer classify a financial instrument that is
within its scope as a liability (or an asset in some circumstances) if, at
inception, the monetary value of the obligation is based solely or predominantly
on a fixed monetary amount known at inception, variations in something other
than the fair value of the issuer's equity shares or variations inversely
related to changes in the fair value of the issuer's equity shares. SFAS 150 is
effective for financial instruments entered into or modified after May 31, 2003,
and otherwise is effective at the beginning of the first interim period
beginning after June 15, 2003. The adoption of SFAS 150 did not have a material
impact on the Company's financial position or results of operations.


Note 2.  Acquisitions
---------------------

During the year ended December 31, 2003, the Company commenced commercial
operations by acquiring four companies.


Baker Anderson Christie, Inc.
-----------------------------

On August 7, 2003, the Company acquired Baker Anderson Christie, Inc. ("BAC") in
exchange for 480,000 shares of its common stock, which was valued based upon an
appraisal performed by an independent, third-party professional valuation firm.
The primary purpose of the acquisition was to enable the Company to enter the
home health care segment of the nurse staffing industry.  The following table
summarizes the assets acquired and liabilities assumed as of the closing date:

Cash acquired                                               $       77,257
Tangible assets acquired                                           171,395
Customer related intangible assets                                   5,000
Goodwill                                                            45,444
                                                            --------------
     Total assets acquired                                         299,096
Liabilities assumed                                                126,296
                                                            --------------
     Net assets acquired                                    $      172,800
                                                            ==============

                                     F-11
<PAGE>

                                 CRDENTIA CORP.

                         NOTES TO FINANCIAL STATEMENTS
                               DECEMBER 31, 2003


The acquisition was accounted for using the purchase method of accounting.
Customer related intangible assets will be amortized over their useful life of
five years.  Allocation of the excess of merger consideration over the net book
value of assets acquired between goodwill and customer relationships was
determined by management's estimate.  As the merger consideration was paid
entirely in shares of the Company's common stock, the goodwill acquired may not
be amortized for federal income tax purposes.  The Company may issue additional
shares of its common stock to the former stockholders of BAC should its results
of operations exceed performance standards established in the merger agreement.


New Age Staffing, Inc.
----------------------

On September 22, 2003, the Company acquired New Age Staffing, Inc. ("NAS") in
exchange for $400,000 in cash, $265,000 in notes payable maturing during the
current year, $1,025,000 in notes payable maturing during the next year, a
$360,000 note payable maturing in two years, and 6,884,614 shares of the
Company's common stock, which was valued based upon an appraisal performed by
an independent, third-party professional valuation firm.  The notes due in 2004
and 2005, totaling $1,385,000, were amended in January, 2004.  Beginning January
31, 2004, the revised note is paid in equal installments for 21 months at 4%
interest. The primary purpose of the acquisition was to enable the Company to
enter the travel nurse segment of the nurse staffing industry.  The following
table summarizes the assets acquired and liabilities assumed as of the closing
date:


Cash acquired                                               $       61,887
Tangible assets acquired                                         1,410,491
Customer related intangible assets                                 460,000
Goodwill                                                         3,592,287
                                                            --------------
     Total assets acquired                                       5,524,665
Liabilities assumed                                                877,615
                                                            --------------
     Net assets acquired                                    $    4,647,050
                                                            ==============

The acquisition was accounted for using the purchase method of accounting.
Customer related intangible assets will be amortized over their useful life of
five years.  Allocation of the excess of merger consideration over the net book
value of assets acquired between goodwill and customer relationships was
determined by an independent, third-party professional valuation firm.  As a
material portion of the merger consideration was paid in shares of the Company's
common stock, the goodwill acquired may not be amortized for federal income tax
purposes.


Nurses Network, Inc.
--------------------

On October 2, 2003, the Company acquired Nurses Network, Inc. in exchange for
$114,432 in notes payable due in 2004 and 118,084 shares of its common stock,
which was valued based upon an appraisal performed by an independent, third-
party professional valuation firm.  The primary purpose of the acquisition was
to enhance the Company's presence in the San Francisco market by combining the
Nurses Network operations of per diem clinical staffing with Baker Anderson
Christie, Inc.  The following table summarizes the assets acquired and
liabilities assumed as of the closing date:

Tangible assets acquired                                    $       11,081
Goodwill                                                           113,414
                                                            --------------
     Total assets acquired                                         124,495
Liabilities assumed                                                 22,211
                                                            --------------
     Net assets acquired                                    $      102,284
                                                            ==============

                                     F-12
<PAGE>

                                 CRDENTIA CORP.

                         NOTES TO FINANCIAL STATEMENTS
                               DECEMBER 31, 2003


The acquisition was accounted for using the purchase method of accounting. As a
material portion of the merger consideration was paid in shares of the Company's
common stock, the goodwill acquired may not be amortized for federal income tax
purposes. The excess of merger consideration over the net book value of assets
acquired was allocated in entirety to goodwill based on the estimate of the
Company's management.  The Company may issue additional shares of its common
stock to the former stockholders of Nurses Network, Inc. should its results of
operations exceed performance standards established in the merger agreement.


PSR Nurse Recruiting, Inc. and PSR Nurses Holdings Corp.
--------------------------------------------------------

On December 2, 2003, the Company acquired PSR Nurse Recruiting, Inc. and PSR
Nurses Holdings Corp., which held the general and limited partnership interests
in PSR Nurses, Ltd., in exchange for 3,418,789 shares of the Company's common
stock, which was valued based upon an appraisal performed by an independent,
third-party professional valuation firm.  The primary purpose of the acquisition
was to expand the Company's presence in the travel nurse segment of the nurse
staffing industry.  The following table summarizes the assets acquired and
liabilities assumed as of the closing date:


Cash acquired                                               $      262,721
Tangible assets acquired                                         2,995,043
Customer related intangible assets                               1,260,000
International nurse intangible assets                            1,820,000
Goodwill                                                         4,549,239
                                                            --------------
     Total assets acquired                                      10,887,003
Liabilities assumed                                              6,854,039
                                                            --------------
     Net assets acquired                                    $    4,032,964
                                                            ==============

The acquisition was accounted for using the purchase method of accounting.
Customer related and international nurse contract intangible assets will be
amortized over their useful life of five years.  Allocation of the excess of
merger consideration over the net book value of assets acquired between
goodwill, customer relationships, and international nurse contracts was
determined by an independent, third-party professional valuation firm.  As the
merger consideration was paid entirely in shares of the Company's common stock,
the goodwill acquired may not be amortized for federal income tax purposes. The
Company may issue additional shares of its common stock to the former
stockholders of PSR Nurse Recruiting, Inc. and PSR Nurses Holdings Corp. should
the results of operations exceed performance standards established in the merger
agreement.

The following unaudited pro forma summary approximates the consolidated results
of operations as if the Baker Anderson Christie, Inc., New Age Staffing, Inc,
Nurses Network, Inc., PSR Nurse Recruiting, Inc., and PSR Nurses Holdings Corp.
acquisitions had occurred as of the beginning of each period presented, after
giving effect to certain adjustments, including amortization of specifically
identifiable intangibles, and non-cash stock compensation.  The pro forma
financial information does not purport to be indicative of the results of
operations that would have occurred had the transactions taken place at the
beginning of the periods presented or of future results of operations.


                                     F-13
<PAGE>

                                 CRDENTIA CORP.

                         NOTES TO FINANCIAL STATEMENTS
                               DECEMBER 31, 2003


                                               Year ended      Year ended
                                              December 31,    December 31,
                                                  2003            2002
                                              ------------    ------------
Revenue                                       $26,239,927     $26,163,881

Net Loss                                      (43,098,069)    (17,664,278)

Basic and diluted loss per common share            ($2.00)         ($0.90)

Weighted average number of common shares       21,540,435      19,631,932



Note 3. Accounts Receivable and Concentration of Credit Risk
------------------------------------------------------------

During 2003, one hospital accounted 32.8% of the total revenue.  The large
percentage is based on the date of acquisitions and the relationship to total
revenue for 2003. At December 31, 2003 this same hospital and one hospital group
have a concentration of accounts receivable of 13.9% and 21.7%, respectively.

Because of management's assessment of the risk of collection from two of the
above mentioned hospitals, the Company has provided for an additional allowance
of $120,085. Based on the information currently available, the Company believes
the allowance for doubtful accounts as of December 31, 2003 is adequate.
However, actual write-offs might exceed the recorded allowance.


Note 4. Property and Equipment
------------------------------

Property and equipment consisted of the following:

                                                  2003            2002
                                              ------------    ------------
Leasehold improvements                        $    21,688     $         0

Computers, office furniture and equipment         371,691           6,795
                                              ------------    ------------
                                                  393,379           6,795
Less accumulated depreciation and amortization    (29,564)           (377)
                                              ------------    ------------
                                                  363,815           6,418
                                              ============    ============


                                     F-14
<PAGE>

                                 CRDENTIA CORP.

                         NOTES TO FINANCIAL STATEMENTS
                               DECEMBER 31, 2003


Note 5. Goodwill and Other Intangible Assets
--------------------------------------------

Goodwill and other intangible assets were all acquired in 2003 and consist of:

                                                                 2003
                                                            --------------
Goodwill                                                    $   8,519,821
                                                            ==============
                                                            --------------
Customer relationships                                          1,725,000
International nurse contracts                                   1,820,000
Other intangibles                                                  22,598
                                                            --------------
                                                            $   3,567,598
Less accumulated amortization                                     (82,264)
                                                            --------------
Net other intangible assets                                 $   3,485,334
                                                            ==============

All of the Company's business combinations were accounted for using the purchase
method. There were no intangible assets as of December 31, 2002.


Following is a table of estimated amortization expense for the next five years:

          Year                         Estimated Amortization Expense
          ----                         ------------------------------
          2004                                   $ 724,084
          2005                                     709,000
          2006                                     709,000
          2007                                     709,000
          2008                                     634,250


Note 6. Revolving Lines of Credit
---------------------------------

The Company has a line of credit with a financial institution secured by the
accounts receivable and fixed assets of the Company.  Interest accrues at the
financial institution's Base Rate plus 1% (5% at December 31, 2003) and is
payable monthly. The Company may, at its option and within the covenants of the
loan agreement, repay principal at its discretion.  On a quarterly basis, the
Company must comply with certain financial and operating covenants.  As of
December 31, 2003, the Company failed to comply with certain financial and
operating covenants of the line of credit and the financial institution has
waived all such non-compliance. At December 31, 2003, the outstanding balance
was $86,272. The entire line of credit was paid in full on March 12, 2004.

In addition, the Company has credit facilities with two commercial financing
institutions for the financing of eligible accounts receivable. These accounts
receivables serve as security for the lines of credit. The Company pays interest
monthly at 24% per annum on one obligation and approximately 10.% on the other,
based on daily outstanding balance. Customer payments are used to repay the
advances from the financing institutions after deducting charges for bad debts,
reserves for chargebacks, and interest expense. At December 31, 2003, $2,146,617
was payable by the Company on these two credit facilities.

The Company assumed a note in connection with the PSR acquisition from a
commercial finance entity, which holds a second secured position on the
Company's accounts receivable, in the amount of $689,001 with an interest rate
of 20% per annum. Interest is accrued and payable monthly on the outstanding
balance. The Company paid $50,000 of principal at the acquisition closing.  The
Company was further obligated to make a principal payment in the amount of
$139,000 on December 31, 2003.  The payment was made on January 1, 2004.  An
additional principal payment in the amount of $161,000 is due February 29, 2004
with the balance paid over 10 months.

                                     F-15
<PAGE>

                                 CRDENTIA CORP.

                         NOTES TO FINANCIAL STATEMENTS
                               DECEMBER 31, 2003


Note 7. Notes Payable
---------------------

On August 18, 2003, the Company executed a variable rate installment note with
the same financial institution as the line of credit in the amount of $250,000.
The note is subject to the same security and covenants as the line of credit.
On September 12, 2003, the Company received a loan for this amount.  Under the
terms of the note, the Company is required to make monthly payments of $13,889
plus accrued interest on the unpaid principal at the institution's Base Rate
plus 2% (6% at December 31, 2003).  The principal balance at December 31, 2003
is $194,444.

On June 30, 2003, the Company executed a Promissory Note in favor of one of its
stockholders, Atlantic International Capital Holdings, Ltd., in the principal
amount of $25,000 in exchange for cash in the same amount.  This Promissory Note
accrued interest at 12% per annum and matured on August 13, 2003 at which time
the principal plus accrued interest would have been payable in full.  On
September 29, 2003, the scheduled repayment date was extended by the maker until
November 30, 2003.  The maker further extended the repayment until January 31,
2004. The note, plus accrued interest, was paid in full on February 2, 2004.


Note 8. Subordinated Notes
--------------------------

On September 2, 2003, the Company issued $675,000 in principal amount of
Convertible Subordinated Promissory Notes (the "Notes") to six investors.  On
September 29, 2003 and October 16, 2003, the Company issued additional Notes in
the principal amounts of $25,000 and $120,000, respectively, to two additional
investors.  On December 3 and December 12, 2003, the Company issued additional
Notes in the principal amount of $90,000 to four additional investors. Subject
to the conversion provisions set forth in the Notes, the unpaid principal
together with all accrued interest on the Notes is due and payable in full one
year following the issuance date of each such Note. Interest accrues on the
unpaid principal balance at a rate of ten percent (10%) per annum, simple
interest, and is payable in quarterly payments. The notes are convertible to our
common stock at the holder's option, prior to the due date, at an initial
conversion price of $1.50 per share.  The conversion price was subsequently
adjusted to $1.00 per share upon the issuance of the Series A Convertible
Preferred Stock discussed in Note 12. Stockholders' Equity and Preferred Stock.
The Company recorded a beneficial conversion charge of $910,000, which
represents the lesser of the proceeds or benefit conversion feature of $3.4
million.  The conversion was calculated as the difference between the conversion
price and the Company's common stock market price at the date note proceeds were
received. However, the charge is limited to the total proceeds of the
subordinated convertible notes.  The beneficial conversion charge is amortized
over the one year life of the notes, resulting in interest expense of $250,833.


Note 9. Notes to Sellers
------------------------

As partial consideration for the acquisition of New Age Staffing, Inc. on
September 22, 2003, the Company issued unsecured subordinated notes to the
former stockholders as more fully described below:

     $265,000 payable upon the earlier of the closing of additional financing or
     October 15, 2003.  The Company rendered a payment of approximately $97,000
     on October 15, 2003, and the holders of the note agreed to defer the
     remaining balance of $168,000 until such time as the Company secured
     additional financing.  The $168,000 principal plus interest at 10% was paid
     on December 22, 2003.

     A note, with a total principal amount of $1,385,000, was established with
     $665,000 payable in equal installments on March 19, 2004 and September 22,
     2004 with interest accruing at a rate of 5% per annum, and payable semi-
     annually and $720,000 payable in equal installments on September 22, 2004
     and 2005, respectively, which was non-interest bearing.  The former
     stockholders and the Company agreed to a new note with the principal amount
     of $1,385,000 payable in equal installments of $65,952, beginning January
     31, 2004, for 21 months plus interest at 4%.


                                     F-16
<PAGE>

                                 CRDENTIA CORP.

                         NOTES TO FINANCIAL STATEMENTS
                               DECEMBER 31, 2003

As partial consideration for the acquisition of Nurses Network, Inc. on October
2, 2003, the Company issued unsecured subordinated notes to the former
stockholders as more fully described below:

     A note was issued in the amount of $64,000 due in three equal installments
     on the first, second and third anniversary of the date of acquisition.
     Interest is accrued at a financial institution's Base Rate plus 1% (5% at
     December 31, 2003).

     A second note in the amount of $50,432 plus interest accrued at a financial
     institution's Base Rate plus 1% (5% at December 31, 2003) due and payable
     on July 2, 2004.

The Company assumed the following debt in the acquisition of  PSR Nurse
Recruiting, Inc. and PSR Nurses Holdings Corp. on December 2, 2003:

     The Company assumed notes to the original seller of assets to the PSR
     entities.  The first note, with an approximate balance of $195,000, is
     based on outstanding credit card balances owed by the original seller.  The
     Company will make at least minimum payments on the credit card balances
     until they are paid in full.  The second note is in the principal amount of
     $2,525,000.  Interest only payments are payable each month at a rate of 8%.
     Principal and interest payments begin on December 1, 2004 for 8 years. The
     outstanding balance at December 31, 2003 on the first note was $192,659.

     In connection with the acquisition of the PSR entities, the Company assumed
     a debt obligation to a stockholder.  As noted in Note 12. Stockholders
     Equity and Preferred Stock, $409,000 of the principal amount was converted
     to 167,623 shares of common stock.  The balance of the debt obligation,
     after conversion of the $409,000, was comprised of a note payable with a
     principal amount of $1,200,000.  Payments of interest, at a rate of 12%,
     and principal began on November 30, 2003 and will continue for 3 years.
     The outstanding balance at December 31, 2003 was $1,144,007.

At December 31, 2003, the long-term debt discussed in Notes 7, 8, and 9 consists
of the following:

                                                                        2003
                                                                    ------------
Variable Rate Installment Note, maturity date March 1, 2005         $    194,444
Promissory Note, 12% interest, maturity date January 31, 2004             25,000
Subordinated Convertible Notes                                           910,000
Seller Note - New Age Staffing                                         1,385,000
Seller Note - Nurses Network                                             114,432
Seller Note - PSR Nurses original seller                               2,717,659
Seller Note - PSR Nurses                                               1,144,007
                                                                    ------------
                                                                       6,490,542
Less subordinated convertible notes discount                             659,167
Less current portion                                                   1,877,615
                                                                    ------------
                                                                    $  3,953,760
                                                                    ============

                                     F-17
<PAGE>

                                 CRDENTIA CORP.

                         NOTES TO FINANCIAL STATEMENTS
                               DECEMBER 31, 2003

Amounts reconcile to the financial statements as follows:

                                                                        2003
                                                                    ------------
Current portion of notes payable to lenders                         $    191,667
Subordinated convertible notes, net of discount                          250,833
Current portion of notes payable to sellers                            1,435,115
Note payable to lender, less current portion                              27,777
Note payable to sellers, less current portion                          3,925,983
Discount                                                                 659,167
                                                                    ------------
                                                                    $  6,490,542
                                                                    ============

The aggregate scheduled maturities of long-term debt and notes payable as of
December 31, 2003 are as follows:

Year ending December 31:
                                                                    ------------
   2004                                                             $  2,536,782
   2005                                                                1,306,516
   2006                                                                  633,513
   2007                                                                  277,263
   2008                                                                  300,276
Thereafter                                                             1,436,192
                                                                    ------------
                                                                    $  6,490,542
                                                                    ============

Note 10. Long Term Bonus Payable
--------------------------------

On December 16, 2003, the board of directors granted the Chief Executive Officer
two cash bonuses in the amount of $540,000 each.  The bonuses are to be paid on
December 31, 2006 and January 4, 2007.  The present value of bonuses has been
recorded at our estimated incremental cost of borrowing of 10%.


Note 11. Income Taxes
---------------------

The Company did not record an income tax provision or benefit for 2002 or 2003.
The difference between the recorded amount and the income tax benefit that would
result based on statutory rates is caused primarily by the valuation allowance
increase in each year.

At December 31, 2003, the Company had net operating loss carryfowards for
federal and state income tax purposes of approximately $2,067,000, which expire
in varying amounts beginning in 2019 through 2023.  The Company has undergone an
ownership change as defined in Section 382 of the Internal Revenue Code.
Therefore, utilization of its tax net operating loss carryforwards incurred
prior to August 2003 will be limited.


                                     F-18
<PAGE>

                                 CRDENTIA CORP.

                         NOTES TO FINANCIAL STATEMENTS
                               DECEMBER 31, 2003


Deferred taxes comprise the following (in thousands):

                                                      2003            2002
                                                  ------------    ------------
Net operating loss carryforwards                  $   765,000     $   245,000
Deferred compensation stock options and rights     19,413,000               -
Accrued Bonuses                                       296,000               -
Other                                                  78,000               -
                                                  ------------    ------------
Total deferred tax assets                          20,552,000         245,000
Less: Valuation allowance                         (20,552,000)       (245,000)
                                                  ------------    ------------
Net deferred tax assets                                     0               0


The Company believes that, based on a number of factors, the available objective
evidence creates sufficient uncertainty regarding the realizability of the
deferred tax assets such that a full valuation allowance has been recorded.
These factors include the Company's history of losses, and relatively high
expense levels, the fact that the market in which the Company competes is
intensely competitive and the lack of carryback capacity to realize deferred
tax assets.  The Company will continue to assess the realizability of the
deferred tax assets based on actual and forecasted operating results.


Note 12. Stockholders' Equity and Preferred Stock
-------------------------------------------------

Preferred Stock
---------------
The Company is authorized to issue 10,000,000 shares of preferred stock at a par
value of $0.0001. Currently there are 1,750,000 shares issued and outstanding.

On December 17, 2003, the Company issued an aggregate of 1,750,000 shares of
Series A Convertible Preferred Stock at a per share price of $1.00 to two
investors. The holders of the Series A Convertible Preferred Stock are entitled
to receive a quarterly dividend in an amount equal to .025 shares of common
stock for each share of outstanding Series A Convertible Preferred Stock held
by them. Unless previously voluntarily converted prior to such time, the Series
A Convertible Preferred Stock will automatically convert into common stock at an
initial conversion ratio of one-to-one, one year from the date of issuance of
such shares. The holders of the Series A Convertible Preferred Stock have been
granted registration rights by the Company. Once the Preferred Stock has been
converted into Common Stock, the Company is obligated to register the Common
Stock on a "best efforts" basis.  In the event of any liquidation or winding up
of the Company, the holders of the Series A Convertible Preferred Stock will be
entitled to receive in preference to the holders of Common Stock an amount equal
to their initial purchase price plus any declared but unpaid dividends.  The
Company recorded a beneficial conversion charge of $1,750,000 as a result of
this issuance.  The Company recorded a deemed dividend due to the beneficial
conversion price of $1,750,000, which represents the lesser of the proceeds or
the beneficial conversion of $5.2 million.

Common Stock
------------
The Company is authorized to issue 50,000,000 shares of common stock at a par
value of $0.0001.  Currently there are 22,067,276 shares issued with 18,838,057
outstanding. The difference of 3,229,219 shares is discussed in detail below.
These shares are held by the Company in treasury.

In August, 2002 the Company sold 2,000,000 shares of its common stock to two
investors at a price of $0.05 per share and received total proceeds of $100,000,
pursuant to a Common Stock Purchase Agreement, executed effective May 15, 2002.

In August, 2002 the Company sold 574,286 shares of its common stock to one
foreign investor at a price of $0.70 per share and received total proceeds of
$402,000. The shares were sold pursuant to Regulation S promulgated under the
Securities Act of 1933, as amended.


                                     F-19
<PAGE>

                                 CRDENTIA CORP.

                         NOTES TO FINANCIAL STATEMENTS
                               DECEMBER 31, 2003

On August 6, 2003, a number of the Company's stockholders agreed to return an
aggregate of 3,048,000 shares of the Company's common stock to treasury for no
consideration, thus reducing the total number of the Company's then issued and
outstanding shares of common stock from 10,998,166 to 7,950,166.  These
stockholders determined in consultation with the Company's management that, in
connection with the Company's acquisition program and on-going financing
efforts, it would be in the Company's best interests to reduce the overall
number of shares of the Company's issued and outstanding common stock.  In
accordance with the provisions of APB Statement No. 25, the effect of this
return of shares to the Company's treasury was to generate non-cash compensation
expense of $5,750,593 due to the imputed increase in ownership percentage of the
Company's stock held by its officers and directors at the date of return.

On August 7, 2003, the Company completed the acquisition of Baker Anderson
Christie, Inc. pursuant to which 480,000 shares of the Company's common stock
were issued to the stockholders of Baker Anderson Christie, Inc. as an advance
payment of the merger consideration. The Company may be obligated to issue
additional shares of its common stock as merger consideration in subsequent
fiscal quarters.

On September 22, 2003, the Company completed the acquisition of New Age
Staffing, Inc. pursuant to which 6,884,614 shares of the Company's common stock
were issued to the stockholders of New Age Staffing, Inc.

On October 2, 2003, the Company completed the acquisition of Nurses Network,
Inc. pursuant to which 118,084 shares of the Company's common stock were issued
to the stockholders of Nurses Network, Inc. as an advance payment of the merger
consideration.  The Company may be obligated to issue additional shares of its
common stock as merger consideration in subsequent fiscal quarters.

On December 2, 2003, the Company completed the acquisition of PSR Nurse
Recruiting, Inc. and PSR Nurses Holdings Corp. pursuant to which 3,418,789
shares of the Company's common stock were issued to the stockholders of PSR
Nurse Recruiting, Inc. and PSR Nurses Holdings Corp. as an advance payment of
the merger consideration. The Company may be obligated to issue additional
shares of its common stock as merger consideration in subsequent fiscal years.

The Company granted the holder of a debt obligation of the Company, the right to
convert outstanding principal debt to common stock. The conversion agreement is
based on the per share price of $2.44.  The debt holder elected, on December 2,
2003, to exchange $409,000 of principal note balance for 167,623 shares of
common stock.

On September 2, September 29, October 16, December 3, and December 12, 2003,
the Company issued convertible subordinated notes in the aggregate amount of
$910,000 to twelve investors.  The conversion privilege enables the holders of
the note to exchange their notes for the Company's common stock at an initial
price of $1.50 per share.  As a result of the issuance of the Series A
Convertible Preferred Stock discussed below, the conversion price, per the terms
of the note agreement, was reduced to $1.00 per share. To date, none of the
holders has exercised its conversion privileges, but should all of the note
holders elect to do so, a total of at least 910,000 shares of the Company's
common stock would be issued.

Stock Based Awards
------------------
In October, 2002 the Company authorized the issuance of 100,000 restricted
shares of its common stock to three directors for a total of 300,000 shares in
exchange for providing services to the Company.  The shares were valued at $700
($0.007 per share) for each of the three directors for a total value of $2,100,
and are subject to a three year vesting period commencing at the date of
issuance.  The Company recorded a non-cash stock based compensation expense in
the amount of  $22,165.

In November, 2002 the Company authorized the issuance of 399,931 restricted
shares of its common stock to its President and 299,949 restricted shares of its
common stock to its then Chief Financial Officer and Secretary for $0.0067 per
share. The Company recorded $71,521 in expense in connection these grants.  With
the resignation of the Chief Financial Officer and Secretary, the Company
reached an agreement for full vesting of 118,730 shares as of the date of
termination. The remaining shares were repurchased by the Company.

                                     F-20
<PAGE>

                                 CRDENTIA CORP.

                         NOTES TO FINANCIAL STATEMENTS
                               DECEMBER 31, 2003


Subject to the terms and conditions of a Common Stock Purchase Agreement dated
May 15, 2002 with the Chief Executive Officer, the Company granted the right to
purchase, at a purchase price of $0.0001 per share, up to a number of additional
shares of our common stock equal to twenty-five (25%) of the aggregate number of
additional shares of our common stock and other securities convertible into
common stock issued or issuable in connection with any acquisitions we complete
on or before August 7, 2004.  The Company has issued an aggregate of 11,069,110
shares as consideration for our four completed acquisitions of Baker Anderson
Christie, Inc., New Age Staffing, Inc., Nurses Network, Inc., PSR Nurse
Recruiting, Inc. and PSR Nurses Holdings Corp.  As a result of the completion of
these acquisitions, the Chief Executive Officer has the right to purchase up to
2,767,278 shares of our common stock at $0.0001 per share. On December 31, 2003
the Common Stock Purchase Agreement dated May 15, 2002 was modified such that
the Chief Executive Officer relinquished his rights to purchase additional
shares of common stock that were to accrue to him in connection with
acquisitions that occurred either before or after December 31, 2003. In
consideration for this modification and based on extensive analysis and review
of the Company's planned acquisition program by the Board of Directors and with
the assistance of a third-party compensation specialist, the Chief Executive
Officer was granted an option to purchase up to 7,000,000 shares of common stock
at an exercise price of $.10 per share. The options are fully vested and expire
December 31, 2018. One hundred percent (100%) of the shares of our common stock
subject to the option shall be exercisable by the Chief Executive Officer on
December 31, 2008. Notwithstanding the foregoing, a certain number of shares
subject to the option may be exercised prior to December 31, 2008 upon the
closing of certain acquisitions by us.  The difference between the purchase
price of the common stock and option ($0.0001 and $0.10 per share, respectively)
and the closing price of our common stock on the respective grant date, as
quoted on the OTC Bulletin Board, has been accounted for as a non-cash
compensation expense. The total amount of expense recorded by the Company at
December 31, 2003 is $43,945,485.

The Company's President has the option to purchase shares at the fair market
value of common stock from the Company equal to 4.167% of the number of shares
of the Company's common stock issued or issuable in connection with certain
acquisitions completed by the Company on or before August 7, 2004. The
difference between the purchase price of the option ($.96 per share) and the
closing price of our common stock on the grant date, has been accounted for as
a non-cash compensation expense totaling $1,848,490.

On December 16, 2003, the Company issued options to purchase shares to two
directors in exchange for providing services to the Company.  The options vest
over a three year period.  The difference between the purchase price of the
option ($0.96 per share) and the closing price of our common stock on the grant
date, has been accounted for as a non-cash compensation expense of $828,000.


                                     F-21
<PAGE>

                                 CRDENTIA CORP.

                         NOTES TO FINANCIAL STATEMENTS
                               DECEMBER 31, 2003


The following table shows activity in outstanding options during 2003:

                                                2003
                                     ------------------------
                                                    Weighted
                                                    Average
                                                    Exercise
                                       Shares       Price
                                     ----------    ----------
Outstanding at beginning of year             -     $       -

Granted                              7,818,224          0.19

Exercised                                    -             -

Canceled or expired                          -             -
                                     ----------    ----------
Outstanding at end of year           7,818,224     $    0.19
                                     ----------    ----------
Options exercisable at year end        167,436     $    0.96
                                     ----------    ----------
Weighted average fair value of
options granted during the year                    $    4.43
                                                   ----------


The following table shows information for options outstanding or exercisable as
of December 31, 2003

                 Options Outstanding               Options Exercisable
           --------------------------------  --------------------------------
                      Weighted                          Weighted
                      Average      Weighted             Average      Weighted
                      Remaining    Average              Remaining    Average
Exercise   Number of  Contractual  Exercise  Number of  Contractual  Exercise
Prices     Shares     Life         Price     Shares     Life         Price
---------  ---------  -----------  --------  ---------  -----------  --------

$0.10      7,000,000    15 years     $0.10       -           -          -

$0.96        818,224    10 years     $0.96    167,436    10 years     $0.96

           ---------  -----------  --------  ---------  -----------  --------
           7,818,224   14.5 years    $0.19    167,436    10 years     $0.96



Note 13. Commitments and Contingencies
--------------------------------------

Employment Agreement
--------------------
On August 14, 2002, the Company entered into an Agreement for a period of two
years with its Chairman and Chief Executive Officer, which provided for
compensation of $200,000 per year. The agreement also provided for severance
benefits upon termination other than for cause of a payment equal to two times
his then current base salary and an automatic acceleration of all unvested
options and stock grants. On December 16, 2003, the board of directors adjusted
the compensation to $320,000 per year beginning January 1, 2004.  In addition on
December 31, 2003, the board of directors granted two cash bonuses of $540,000
payable on December 31, 2006 and January 4, 2007. The Company has recorded the
two cash bonuses at their present value in the amount of $801,000.

Operating Leases
----------------
In 2002, the Company entered into a sublease as successor in interest to
premises in San Francisco, California. This sublease expires on July 31, 2004.


                                     F-22
<PAGE>

                                 CRDENTIA CORP.

                         NOTES TO FINANCIAL STATEMENTS
                               DECEMBER 31, 2003


The Company assumed several operation leases in connection to the acquisition of
Baker, Anderson, Christie, Inc., New Age Staffing, Inc., and PSR Nurses Holdings
Corp. The Company moved the corporate headquarters to Dallas, Texas.  This lease
expires on November 30, 2004.


Minimum lease payments are as follows:


                                                      2004            2005
                                                  ------------    ------------
Corporate Office - Dallas, Texas                  $    219,604    $          -
Other locations                                        106,620          44,240
                                                  ------------    ------------
Total                                             $    326,224    $     44,240
                                                  ============    ============

Indemnification
---------------
Pursuant to its bylaws, the Company has agreed to indemnify its officers and
directors for certain events or occurrences arising as a result of the officer
or director serving in such capacity. The term of the indemnification period is
for the officer's or director's lifetime. To date, the Company has not incurred
any costs as there have been no lawsuits or claims that would invoke these
indemnification agreements. Accordingly, the Company has no liabilities recorded
for these agreements as of December 31, 2003.

The Company enters into indemnification provisions under (i) its agreements with
other companies in its ordinary course of business, typically with business
partners, contractors and customers, its sublandlord and (ii) its agreements
with investors. Under these provisions the Company has agreed to generally
indemnify and hold harmless the indemnified party for losses suffered or
incurred by the indemnified party as a result of the Company's activities or, in
some cases, as a result of the indemnified party's activities under the
agreement. These indemnification provisions often include indemnifications
relating to representations made by the Company with regard to intellectual
property rights. These indemnification provisions generally survive termination
of the underlying agreement. The maximum potential amount of future payments the
Company could be required to make under these indemnification provisions is
unlimited. To date, the Company has not incurred any costs as there have been no
lawsuits or claims related to these indemnification agreements. Accordingly, the
Company has no liabilities recorded for these agreements as of December 31,
2003.


Note 14. Related Party Transactions
-----------------------------------

Ameristar Group Incorporated ("Ameristar") is a corporation that is an affiliate
of a corporate stockholder of the Company's common stock and is considered to be
a related party. During the year ended December 31, 2003, the Company paid
Ameristar financial consulting fees totaling $50,000, with an additional $10,000
accrued but unpaid at year end.

On November 1, 2001, the Company reached an agreement with Ameristar to provide
the Company with management services needed for its continuing development.  A
Management Services Agreement was executed on that date with Ameristar to
provide consulting services, office space, and administrative services for a
two-year period. The monthly cost of these services was $5,500, consisting of
$2,500 for consulting services, $1,000 for rent, and $2,000 for administrative
services. The consulting services included such activities as business plans;
introductions to financial community; strategic planning; evaluation of
potential business relationships, such as joint ventures, mergers and
acquisitions; business projections; review of marketing plans; and general
advisory and management services as required.  Effective August 15, 2002, the
Management Services Agreement with Ameristar was terminated in accordance with a
Termination Agreement executed between the Company and Ameristar on that date.
As part of the Termination Agreement, the debt owed to the Company by Ameristar
in the amount of $94,165 was cancelled in full payment of compensation owed to
Ameristar for additional services provided to the Company.


                                     F-23
<PAGE>

                                 CRDENTIA CORP.

                         NOTES TO FINANCIAL STATEMENTS
                               DECEMBER 31, 2003

On September 9, 2003, the audit committee of the Company's board of directors
approved a Consulting Agreement with Ameristar pursuant to which they will
provide the Company with assistance relating to the Company's filing
requirements with the Securities and Exchange Commission in exchange for a fee
of $5,000 per month.  This Agreement expires on March 31, 2004 and continues on
a month-to-month basis thereafter.

On June 30, 2003, the Company executed a Promissory Note in favor of one of its
stockholders, Atlantic International Capital Holdings, Ltd., in the principal
amount of $25,000 in exchange for cash in the same amount.  This Promissory Note
accrued interest at 12% per annum and matured on August 13, 2003 at which time
the principal plus accrued interest would have been payable in full.  On
September 29, 2003, the scheduled repayment date was extended by the maker until
November 30, 2003.  The maker further extended the repayment until January 31,
2004. The note, plus accrued interest, was paid in full on February 2, 2004.

On July 21, 2003, the Company executed a Promissory Note in favor of one of its
stockholders, Gable International Holdings, Ltd., in the principal amount of
$25,000 in exchange for cash in the same amount.  This Promissory Note accrued
interest at 12% per annum and matured on September 3, 2003 at which time the
principal plus accrued interest would have been payable in full.  On September
29, 2003, the scheduled repayment date was extended by the maker until November
30, 2003.  The note, plus accrued interest, was paid in full on December 12,
2003.

On September 2, 2003, the Company issued $675,000 in principal amount of
Convertible Subordinated Promissory Notes (the "Notes") to six investors.  The
Company issued additional Notes in the principal amounts of $25,000 and $120,000
on September 29 and October 16, 2003, respectively.  Subject to the conversion
provisions set forth in the Notes, the unpaid principal together with all
accrued interest on the Notes is due and payable in full one year following the
issuance date of each such Note. Interest accrues on the unpaid principal
balance at a rate of ten percent (10%) per annum, simple interest, and is
payable in quarterly payments. Three of the investors included Joseph M. DeLuca,
Robert P. Oliver and James D. Durham. Messrs. DeLuca and Oliver are current
members of the Company's board of directors and its audit committee.  Each of
them purchased, together with an affiliate of Mr. DeLuca's, Notes in the
aggregate principal amount of $125,000. James D. Durham, a member of the
Company's board of directors and its Chairman and Chief Executive Officer,
purchased a Note in the principal amount of $50,000.

The Company currently sub-leases 1,980 square feet of office space at Dallas,
Texas to Rison Management Services for $2,392.50 per month. The principal of
Rison Management Services is a stockholder of the Company. The monthly rental
amount is based on the Company's rental obligation to the landlord.


Note 15. Employee Benefits
--------------------------

The Company has maintained the established 401(k) plans of Baker, Anderson,
Christie, Inc. and PSR Nurses, Ltd.  The Baker, Anderson, Christie, Inc. plan
is maintained only for those who were participating on the acquisition date of
August 7, 2003.  The plan allows for voluntary contribution of up to the maximum
dollar amount allowable by the Internal Revenue Service or $12,000 in 2003.  Any
matching contribution is discretionary and none were made during 2003.  All
other employees are eligible to participant in the PSR Nurses, Ltd. plan once
they have completed one year or 1,000 hours of service.  Participants may
contribute from 1% to 20% of pretax annual compensation, as defined in the Plan
with a maximum deferral determined annually by the Internal Revenue Service.
The maximum dollar limit allowable in 2003 was $12,000.  The Company may
contribute a discretionary matching contribution and none were made during 2003.


Note 16. Subsequent Events
--------------------------

On February 4, 2004, the Company issued an aggregate of 1,000,000 shares of
Series A Convertible Preferred Stock at a per share price of $1.00 to one
investor. The holder of the Series A Convertible Preferred Stock is entitled to
receive a quarterly dividend in an amount equal to .025 shares of common stock
for each share of outstanding Series A Convertible Preferred Stock held by them.
Unless previously voluntarily converted prior to such time, the Series A
Convertible Preferred Stock will automatically convert into common stock at an
initial conversion ratio of one-to-one, one year from the date of issuance of
such shares.

                                     F-24


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4
<SEQUENCE>3
<FILENAME>exhibit_41.txt
<TEXT>
EXHIBIT 4.1

                      REGISTRATION RIGHTS AGREEMENT

     THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made as of
September 22, 2003 by and among Crdentia Corp., a Delaware corporation (the
"Company"), and the investors listed on Schedule A hereto (individually, an
"Investor" and collectively, the "Investors").

                                RECITALS:

     A. The Company, NAS Acquisition Corporation, a Delaware corporation
and a wholly-owned subsidiary of the Company, and New Age Staffing, Inc., a
Texas corporation, are parties to an Agreement and Plan of Reorganization
dated September 15, 2003 (the "Merger Agreement"); and

     B. In order to induce the parties to the Merger Agreement to consummate
the transactions contemplated thereby, the Investors and the Company hereby
agree that this Agreement, among other things, shall govern the rights of
the Investors to cause the Company to register shares of Common Stock of
the Company issuable to the Investors.

                                 AGREEMENT

     NOW, THEREFORE, in consideration of the mutual promises,
representations, warranties, covenants and conditions set forth in this
Agreement and the Merger Agreement, the parties hereto agree as follows:

     1. Registration Rights.  The Company covenants and agrees as follows:

        1.1 Definitions.  For purposes of this Agreement:

            (a) The term "Act" means the Securities Act of 1933, as amended.

            (b) The term "Form S 3" means such form under the Act as in
effect on the date hereof or any registration form under the Act
subsequently adopted by the SEC which permits inclusion or incorporation of
substantial information by reference to other documents filed by the
Company with the SEC.

            (c) The term "Holder" means any person owning or having the
right to acquire Registrable Securities or any assignee thereof in
accordance with Section 1.10 hereof.

            (d) The term "1934 Act" shall mean the Securities Exchange Act
of 1934, as amended.

            (e) The term "register," "registered," and "registration" refer
to a registration effected by preparing and filing a registration statement
or similar document in compliance with the Act, and the declaration or
ordering of effectiveness of such registration statement or document.

                                    1
<PAGE>

            (f) The term "Registrable Securities" means (i) the Common Stock
of the Company issued to the Investors as a result of the consummation of
the transactions contemplated by the Merger Agreement and (ii) any Common
Stock of the Company issued as (or issuable upon the conversion or exercise
of any warrant, right or other security which is issued as) a dividend or
other distribution with respect to, or in exchange for or in replacement of
the shares referenced in (i) above, excluding in all cases, however, any
Registrable Securities sold by a person in a transaction in which his rights
under this Section 1 are not assigned pursuant to the terms of this
Agreement.

            (g) The number of shares of "Registrable Securities then
outstanding" shall be determined by the number of shares of Common Stock
outstanding which are, and the number of shares of Common Stock issuable
pursuant to then exercisable or convertible securities which are,
Registrable Securities.

            (h) The term "SEC" shall mean the Securities and Exchange
Commission.

        1.2 Company Registration.  If (but without any obligation to do so)
the Company proposes to register any of its stock or other securities under
the Act in connection with the public offering of such securities solely
for cash (other than a registration under Section 1.3 or relating solely to
the sale of securities to participants in a Company employee benefit plan
or corporate reorganization or other transaction covered by Rule 145
promulgated under the Act, or a registration on any form which does not
permit secondary sales or include substantially the same information as
would be required to be included in a registration statement covering the
sale of the Registrable Securities), the Company shall, at such time,
promptly give each Holder written notice of such registration.  Upon the
written request of each Holder given within twenty (20) days after mailing
of such notice by the Company in accordance with Section 2.6 hereof, the
Company shall, subject to the provisions of Section 1.7 hereof, cause to
be registered under the Act all of the Registrable Securities that each
such Holder has requested to be registered.

        1.3 Form S-3 Registration.  In case the Company shall receive from
any Holder or Holders a written request or requests that the Company effect
a registration on Form S-3 and any related qualification or compliance with
respect to all or a part of the Registrable Securities owned by such Holder
or Holders, the Company will:

            (a) promptly give written notice of the proposed registration,
and any related qualification or compliance, to all other Holders; and

            (b) as soon as practicable, effect such registration and all
such qualifications and compliances as may be so requested and as would
permit or facilitate the sale and distribution of all or such portion of
such Holder's or Holders' Registrable Securities as are specified in such
request, together with all or such portion of the Registrable Securities of
any other Holder or Holders joining in such request as are specified in a
written request given within fifteen (15) days after receipt of such written
notice from the Company; provided, however, that the Company shall not be
obligated to effect any such registration, qualification or compliance,
pursuant to this Section 1.3: (i) if Form S-3 is not available for such
offering by the Holders; (ii)

                                       2
<PAGE>

if the Holders propose to sell Registrable Securities and such other
securities (if any) at an aggregate price to the public (net of any
underwriters' discounts or commissions) of less than $2,000,000; (iii) if
the Company shall furnish to the Holders a certificate signed by the
President or Chief Executive Officer of the Company stating that in the
good faith judgment of the Board of Directors of the Company, it would be
seriously detrimental to the Company and its stockholders for such Form S-3
Registration to be effected at such time, in which event the Company shall
have the right to defer the filing of the Form S-3 registration statement
for a period of not more than ninety (90) days after receipt of the request
of the Holder under this Section 1.3; provided, however, that (a) the
Company shall not utilize this right more than once in any twelve (12)
month period and (b) downward pressure on the Company's stock price
resulting from the filing of the Form S-3 registration statement shall not
be deemed to be seriously detrimental to the Company and its stockholders
for purposes of this Section 1.3; or (iv) in any particular jurisdiction in
which the Company would be required to qualify to do business or to execute
a general consent to service of process in effecting such registration,
qualification or compliance.

            (c) Subject to the foregoing, the Company shall file a
registration statement covering the Registrable Securities and other
securities so requested to be registered as soon as practicable after
receipt of the request or requests of the Holders.

        1.4 Obligations of the Company.  Whenever required under this
Section 1 to effect the registration of any Registrable Securities, the
Company shall, as expeditiously as reasonably possible:

            (a) Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its reasonable best efforts
to cause such registration statement to become effective, and, upon the
request of the Holders of a majority of the Registrable Securities
registered thereunder, keep such registration statement effective for up to
one hundred twenty (120) days or, if earlier, the date on which the
distribution contemplated in the registration statement has been completed.

            (b) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in
connection with such registration statement as may be necessary to comply
with the provisions of the Act with respect to the disposition of all
securities covered by such registration statement.

            (c) Furnish to the Holders such number of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Act, and such other documents as they may reasonably
request in order to facilitate the disposition of Registrable Securities
owned by them that are included in such registration.

            (d)	Use its reasonable best efforts to register and qualify the
securities covered by such registration statement under such other
securities or Blue Sky laws of such jurisdictions as shall be reasonably
requested by the Holders; provided, however, that the Company shall not be
required in connection therewith or as a condition thereto to qualify to do
business or to file a general consent to service of process in any such
states or jurisdictions.

                                    3
<PAGE>

            (e) In the event of any underwritten public offering, enter into
and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter of such offering.  Each
Holder participating in such underwriting shall also enter into and perform
its obligations under such agreement.

            (f) Notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Act of the happening of any event the
result of which causes the prospectus included in such registration
statement, as then in effect, to include 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 not misleading in light of the
circumstances then existing; and thereafter, the Company will use reasonable
efforts to amend or supplement such prospectus in order to cause such
prospectus not to include any 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 not misleading in light of circumstances then
existing; provided, however, that upon such notification by the Company,
the Holders will not offer or sell Registrable Securities until the Company
has notified the Holders that it has prepared a supplement or amendment to
such prospectus and delivered copies of such supplement or amendment to the
Holders (it being understood and agreed by the Company that the foregoing
proviso shall in no way diminish or otherwise impair the Company's
obligations to prepare a prospectus amendment or supplement as above
provided in this Section 1.4(f)).

            (g) Cause all such Registrable Securities registered pursuant
hereunder to be listed on each securities exchange on which similar
securities issued by the Company are then listed.

            (h) Provide a transfer agent and registrar for all Registrable
Securities registered pursuant hereunder and a CUSIP number for all such
Registrable Securities, in each case not later than the effective date of
such registration.

            (i) Use its reasonable best efforts to furnish, at the request
of any Holder requesting registration of Registrable Securities pursuant to
this Section 1, on the date that such Registrable Securities are delivered
to the underwriters for sale in connection with a registration statement
pursuant to this Section 1, if such securities are being sold through
underwriters, or, if such securities are not being sold through
underwriters, on the date that the registration statement with respect to
such securities becomes effective, (i) an opinion, dated such date, of the
counsel representing the Company for the purposes of such registration, in
form and substance as is customarily given to underwriters in an
underwritten public offering, addressed to the underwriters, if any, and to
the Holders requesting registration of the Registrable Securities, and (ii)
a letter dated such date, from the independent certified public accountants
of the Company, in form and substance as is customarily given by independent
certified public accountants to underwriters in an underwritten public
offering, addressed to the underwriters, if any, and to the Holders
requesting registration of Registrable Securities.

            (j) Notify each seller of Registrable Securities under such
registration statement of (i) the effectiveness of such registration
statement, (ii) the filing of any post-

                                   4
<PAGE>

effective amendments to such registration statement, or (iii) the filing of
a supplement to such registration statement.

        1.5 Furnish Information.

            (a) It shall be a condition precedent to the obligations of the
Company to take any action pursuant to this Section 1 with respect to the
Registrable Securities of any selling Holder that such Holder shall furnish
to the Company such information regarding itself, the Registrable Securities
held by it, and the intended method of disposition of such securities as
shall be required to effect the registration of such Holder's Registrable
Securities.

            (b) The Company shall have no obligation with respect to any
registration requested pursuant to Section 1.3 hereof if, as a result of
the application of subsection 1.5(a), the number of shares or the
anticipated aggregate offering price of the Registrable Securities to be
included in the registration does not equal or exceed the number of shares
or the anticipated aggregate offering price required to originally trigger
the Company's obligation to initiate such registration as specified in
Section 1.3 hereof.

        1.6 Expenses of Registration.  All expenses (other than underwriting
discounts and commissions) incurred in connection with any registrations,
filings or qualifications of Registrable Securities pursuant to Sections 1.2
or 1.3, including (without limitation) all federal or state registration,
filing and qualification fees, printers' and accounting fees and fees and
disbursements of counsel for the Company shall be borne by the Company.
Notwithstanding the foregoing, the Company shall not be required to pay for
any expenses of any registration proceeding begun pursuant to Section 1.3
if the registration request is subsequently withdrawn at the request of the
Holders of a majority of the Registrable Securities to be registered, unless
the withdrawal is based upon a material adverse development concerning the
Company and the Holders have withdrawn the request with reasonable
promptness following disclosure by the Company of such material adverse
change.

        1.7 Underwriting Requirements.  In connection with any offering
involving an underwriting of shares of the Company's capital stock, the
Company shall not be required under Section 1.2 hereof to include any of
the Holders' securities in such underwriting unless they accept the terms
of the underwriting as agreed upon between the Company and the underwriters
selected by it (or by other persons entitled to select the underwriters),
and then only in such quantity as the underwriters determine in their sole
discretion will not jeopardize the success of the offering by the Company.
If the total amount of securities, including Registrable Securities,
requested by stockholders to be included in such offering exceeds the amount
of securities sold other than by the Company that the underwriters
determine in their sole discretion is compatible with the success of the
offering, then the Company shall be required to include in the offering only
that number of such securities, including Registrable Securities, which the
underwriters determine in their sole discretion will not jeopardize the
success of the offering (the securities so included to be apportioned pro
rata among the selling stockholders according to the total amount of
securities entitled to be included therein owned by each selling stockholder,
or in such other proportions as shall mutually be agreed to by such selling
stockholders).  For purposes of the preceding parenthetical concerning
apportionment, for any selling stockholder which is a holder of Registrable
Securities and which is a limited liability company, partnership or
corporation, the members, partners, retired partners and stockholders of
such holder, or the estates and family members of any such members, partners
and retired partners and any trusts for the benefit of any of the foregoing
persons shall be deemed to be a single "selling stockholder," and any pro-
rata reduction with respect to such "selling stockholder" shall be based
upon the aggregate amount of shares carrying registration rights owned by
all entities and individuals included in such "selling stockholder," as
defined in this sentence.

        1.8 Delay of Registration.  No Holder shall have any right to
obtain or seek an injunction restraining or otherwise delaying any such
registration as the result of any controversy that might arise with respect
to the interpretation or implementation of this Section 1.

        1.9 Indemnification.  In the event any Registrable Securities are
included in a registration statement under this Section 1:

            (a) To the maximum extent permitted by law, the Company will
indemnify and hold harmless each Holder, the partners, officers, and
directors of each Holder, any underwriter (as defined in the Act) for such
Holder and each person, if any, who controls such Holder or underwriter
within the meaning of the Act or the 1934 Act, against any losses, claims,
damages or liabilities (joint or several) to which they may become subject
under the Act, the 1934 Act or any state securities law, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any of the following statements, omissions
or violations (collectively a "Violation"): (i) any untrue statement or
alleged untrue statement of a material fact contained in such registration
statement, including any preliminary prospectus or final prospectus
contained therein or any amendments or supplements thereto, (ii) the
omission or alleged omission to state therein a material fact required to
be stated therein, or necessary to make the statements therein not
misleading, or (iii) any violation or alleged violation by the Company of
the Act, the 1934 Act, or any rule or regulation promulgated under the Act
or the 1934 Act or any state securities law in connection with the offering
covered by such Registration Statement; and the Company will pay to each
such Holder, partner, officer, director, underwriter or controlling person,
as incurred, any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the indemnity agreement
contained in this subsection 1.9(a) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability, or action if such
settlement is effected without the consent of the Company (which consent
shall not be unreasonably withheld or delayed), nor shall the Company be
liable to any Holder, underwriter or controlling person for any such loss,
claim, damage, liability or action to the extent that it arises out of or
is based upon a Violation which occurs in reliance upon and in conformity
with written information furnished expressly for use in connection with
such registration by any such Holder, partner, officer, director,
underwriter or controlling person.

            (b) To the maximum extent permitted by law, each selling Holder
will, if Registrable Securities held by such Holder are included in the
applicable registration statement, indemnify and hold harmless the Company,
each of its directors, each of its officers who has signed the registration
statement, each person, if any, who controls the Company within the meaning
of the Act, any underwriter, any other Holder selling securities in such
registration statement and any controlling person of any such underwriter
or other Holder, against any losses, claims, damages or liabilities (joint
or several) to which any of the foregoing persons may

                                   6
<PAGE>

become subject under the Act or the 1934 Act or any state securities law in
connection with the offering covered by such registration statement
insofar as such losses, claims, damages or liabilities (or actions in
respect thereto) arise out of or are based upon any Violation, in each
case to the extent (and only to the extent) that such Violation occurs in
reliance upon and in conformity with written information furnished by such
Holder expressly for use in connection with such registration; and each
such Holder will pay any legal or other expenses reasonably incurred by any
person intended to be indemnified pursuant to this subsection 1.9(b), in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the indemnity agreement
contained in this subsection 1.9(b) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Holder (which consent
shall not be unreasonably withheld or delayed); provided further, that in
no event shall any indemnity under this subsection 1.9(b) exceed the net
proceeds from the offering received by such Holder, except in the case of
willful misconduct or fraud by such Holder.

            (c) Promptly after receipt by an indemnified party under this
Section 1.9 of notice of the commencement of any action (including any
governmental action) as to which indemnity may be sought hereunder, such
indemnified party will, if a claim in respect thereof is to be made against
any indemnifying party under this Section 1.9, deliver to the indemnifying
party a written notice of the commencement thereof.  The indemnifying party
shall have the right to participate in, and, to the extent the indemnifying
party so desires, jointly with any other indemnifying party similarly
noticed, to assume the defense thereof with counsel mutually satisfactory
to the parties; provided, however, that an indemnified party (together with
all other indemnified parties which may be represented without conflict by
one counsel) shall have the right to retain one separate counsel, with the
reasonable fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential
differing interests between such indemnified party and any other party
represented by such counsel in such proceeding.  The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action, if materially prejudicial to its ability
to defend such action, shall relieve such indemnifying party of any
liability to the indemnified party under this Section 1.9, but the omission
to so deliver written notice to the indemnifying party will not relieve the
indemnifying party of any liability that it may have to any indemnified
party otherwise than under this Section 1.9.  No indemnifying party, in the
defense of any such claim or litigation, shall, except upon the consent of
each indemnified party, consent to entry of any judgment or enter into any
settlement that does not include as an unconditional term thereof the giving
by the claimant or plaintiff to such indemnified party of a full and
unconditional release from all liability in respect to such claim or
litigation.

            (d) The foregoing indemnity agreements of the Company and
Holders are subject to the condition that, insofar as they related to any
Violation made in a preliminary prospectus but eliminated or remedied in
the amended prospectus on file with the SEC at the time the registration
statement in question becomes effective or the amended prospectus filed
with the SEC pursuant to SEC Rule 424(b) (the "Final Prospectus"), such
indemnity agreement shall not inure to the benefit of any person if a copy
of the Final Prospectus was furnished to the indemnified party and was not
furnished to the person asserting the loss, liability, claim or damage at
or prior to the time such action is required by the Act.  If the
indemnification provided

                                 7
<PAGE>

for in this Section 1.9 is held by a court of competent jurisdiction to be
unavailable to an indemnified party with respect to any loss, claim, damage
or liability referred to herein, then the indemnifying party, in lieu of
indemnifying such indemnified party hereunder, shall contribute to the
amount paid or payable by such indemnified party as a result of such loss,
claim, damage or liability in such proportion as is appropriate to reflect
the relative fault of the indemnifying party on the one hand and of the
indemnified party on the other in connection with the statements or
omissions that resulted in such loss, claim, damage or liability, as well
as any other relevant equitable considerations; provided, however, that in
no event shall (i) any contribution by a Holder under this subsection 1.9(d)
exceed the net proceeds from the offering received by such Holder, except
in the case of willful fraud by such Holder, and (ii) any person or entity
guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
of the Act) be entitled to contribution from any person or entity who was
not guilty of such fraudulent misrepresentation.  The relative fault of the
indemnifying party and of the indemnified party shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission to state a material fact
relates to information supplied by the indemnifying party or by the
indemnified party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission.

            (e) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the underwriting
agreement entered into in connection with the underwritten public offering
are in conflict with the foregoing provisions, the provisions in the
underwriting agreement shall control.

            (f) The obligations of the Company and Holders under this
Section 1.9 shall survive the completion of any offering of Registrable
Securities in a registration statement under this Section 1, and otherwise.

       1.10 Assignment of Registration Rights.  The rights to cause the
Company to register Registrable Securities pursuant to this Section 1 may
be assigned (but only with all related obligations) by a Holder to a
transferee or assignee of such securities who, is approved in writing by
the Company or who, after such assignment or transfer, holds at least fifty
percent (50%) of the then outstanding shares of Registrable Securities,
provided: (a) the Company is, within a reasonable time after such transfer,
furnished with written notice of the name and address of such transferee or
assignee and the securities with respect to which such registration rights
are being assigned; (b) such transferee or assignee agrees in writing to be
bound by and subject to the terms and conditions of this Agreement; and (c)
such assignment of rights hereunder shall be effective only if immediately
following such transfer the further disposition of such securities by the
transferee or assignee is restricted under the Act.

        1.11 Reports Under the 1934 Act.  The Company agrees to (a) use
commercially reasonable efforts to make and keep public information
available, as those terms are understood and defined in the General
Instructions to Form S-3, or any successor or substitute form, and in Rule
144, (b) to use commercially reasonable efforts to file with the SEC in a
timely manner all reports and other documents required to be filed by an
issuer of securities registered under the Securities Act or the Exchange
Act, (c) as long as any Holder owns any Registrable Securities, to furnish
in writing upon such Holder's request a written statement by the Company
that it has complied with the reporting requirements of Rule 144 and of
the Act and

                                    8
<PAGE>

the 1934 Act, and to furnish to such Holder a copy of the most recent
annual or quarterly report of the Company, and such other reports and
documents so filed by the Company with the SEC as may be reasonably
requested.

        1.12 Deferral.  Notwithstanding anything in this Agreement to the
contrary, if the Company shall furnish to the Holders a certificate signed
by the President or Chief Executive Officer of the Company stating that the
Board of Directors of the Company has made the good faith determination (a)
that continued use by the Holders of an effective registration statement
for purposes of effecting offers or sales of Registrable Securities pursuant
thereto would require, under the Act, premature disclosure in the
registration statement (or the prospectus relating thereto) of material,
nonpublic information concerning the Company, its business or prospects or
any proposed material transaction involving the Company, (b) that such
premature disclosure would be materially adverse to the Company, its
business or prospects or any such proposed material transaction or would
make the successful consummation by the Company of any such material
transaction significantly less likely and (c) that it is therefore
essential to suspend the use by the Holders of any such registration
statement (and the prospectus relating thereto) for purposes of effecting
offers or sales of Registrable Securities pursuant thereto, then the right
of the Holders to use any such registration statement (and the prospectus
relating thereto) for purposes of effecting offers or sales of Registrable
Securities pursuant thereto shall be suspended until further notice by the
Company (the "Suspension Period"); provided, however, that (i) the
Suspension Period shall not exceed ninety (90) days following the delivery
by the Company of the certificate referred to above in this Section 1.12
and (ii) the Company will use its reasonable best efforts to notify the
Holders at such time that it is no longer essential to suspend the use by
the Holders of any such registration statement (and the prospectus relating
thereto) pursuant to this Section 1.12.  During the Suspension Period, none
of the Holders shall offer or sell any Registrable Securities pursuant to
or in reliance upon any such registration statement (or the prospectus
relating thereto).

     2. Miscellaneous.

        2.1 Successors and Assigns.  Except as otherwise provided herein,
the terms and conditions of this Agreement shall inure to the benefit of
and be binding upon the respective successors and assigns of the parties
(including transferees of any shares of Registrable Securities).  Nothing
in this Agreement, express or implied, is intended to confer upon any party
other than the parties hereto or their respective successors and assigns
any rights, remedies, obligations, or liabilities under or by reason of
this Agreement, except as expressly provided in this Agreement.

        2.2 Governing Law.  This Agreement shall be governed by and
construed under the laws of the State of Delaware as applied to agreements
among Delaware residents entered into and to be performed entirely within
Delaware.

        2.3 Submission to Jurisdiction; Waivers.   Each of the parties
hereto irrevocably agrees that any legal action or proceeding with respect
to this Agreement or for the recognition and enforcement of any judgment in
respect hereof brought by the other party hereto or its successors or assigns
will be brought and determined in the Chancery or other courts of the State
of Delaware, and each of the parties hereby irrevocably submits with regard
to any such

                                   9
<PAGE>

action or proceeding for itself and in respect to its property, generally
and unconditionally, to the exclusive jurisdiction of the aforesaid courts.
Each of the parties hereto hereby irrevocably waives, and agrees not to
assert, by way of motion, as a defense, counterclaim or otherwise, in any
action or proceeding with respect to this Agreement, (a) any claim that it
is not personally subject to the jurisdiction of the above-named courts for
any reason other than the failure to lawfully serve process, (b) that it or
its property is exempt or immune from jurisdiction of any such court or
from any legal process commenced in such courts (whether through service of
notice, attachment prior to judgment, attachment in aid of execution of
judgement, execution of judgment or otherwise), (c) to the fullest extent
permitted by applicable law, that (i) the suit, action or proceeding in any
such court is brought in an inconvenient forum, (ii) the venue of such suit,
action, or proceeding is improper and (iii) this Agreement, or the subject
matter hereof, may not be enforced in or by such courts and (d) any right
to trial by jury.

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

        2.5 Titles and Subtitles.  The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.

        2.6 Notices.  All notices and other communications required or
permitted hereunder shall be in writing and shall be deemed effectively
given: (a) upon personal delivery to the party to be notified, (b) when sent
by confirmed facsimile if sent during normal business hours of the
recipient or, if not sent during normal business hours, then on the next
business day, (c)  three days after having been sent by registered or
certified mail, return receipt requested, postage prepaid, or (d) one day
after deposit with a nationally recognized overnight courier, specifying
next day delivery, with written verification of receipt.  All communications
shall be sent to the address as set forth on the signature page hereof or
at such other address as such party may designate by 10 days advance written
notice to the other parties hereto.

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

        2.8 Amendments and Waivers.  Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived
(either generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the holders
of a majority of the Registrable Securities then outstanding.  Any amendment
or waiver effected in accordance with this paragraph shall be binding upon
each holder of any Registrable Securities then outstanding, each future
holder of all such Registrable Securities, and the Company.

        2.9 Severability.  If one or more provisions of this Agreement are
held to be unenforceable under applicable law, such provision shall be
excluded from this Agreement and

                                   10
<PAGE>

the balance of the Agreement shall be interpreted as if such provision were
so excluded and shall be enforceable in accordance with its terms.

        2.10 Aggregation of Stock.  All shares of Registrable Securities
held or acquired by affiliated entities or persons shall be aggregated
together for the purpose of determining the availability of any rights
under this Agreement.

        2.11 Entire Agreement; Amendment; Waiver.  This Agreement (including
Schedule A hereto) constitutes the full and entire understanding and
agreement between the parties with regard to the subjects hereof and thereof.


              [Remainder of page intentionally left blank.]

                                    11
<PAGE>

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

                                   CRDENTIA CORP.,
                                   a Delaware corporation
                                   By: /s/  James D. Durham
                                   Name: James D. Durham
                                   Title: Chief Executive Officer
                                   Address:  455 Market Street, Suite 1220
                                             San Francisco, CA 92105

                                   INVESTORS:


                                   By: /s/  Nick Liuzza, Jr.
                                   Name: Nick Liuzza, Jr.
                                   Address: 2416 21st Avenue, Suite 302
                                            Nashville, TN 37212



                                   By: /s/  Nick Liuzza, Sr.
                                   Name: Nick Liuzza, Sr.
                                   Address:  2416 21st Avenue, Suite 302
                                             Nashville, TN 37212


           (SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT)

                                 12
<PAGE>

                             SCHEDULE A

                       SCHEDULE OF INVESTORS

Nick Liuzza, Jr.
Nick Liuzza, Sr.


                                  A-1

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4
<SEQUENCE>4
<FILENAME>exhibit_42.txt
<TEXT>
EXHIBIT 4.2

                        REGISTRATION RIGHTS AGREEMENT

     THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made as of
December 2, 2003 by and among Crdentia Corp., a Delaware corporation (the
"Company"), and the investors listed on Schedule A hereto (individually, an
"Investor" and collectively, the "Investors").

                                 RECITALS:

     A. The Company, PSR Acquisition Corporation, a Delaware corporation and
a wholly-owned subsidiary of the Company, PSR Holdings Acquisition
Corporation, a Delaware corporation and a wholly-owned subsidiary of the
Company, PSR Nurse Recruiting, Inc., a Texas corporation ("PSR Recruiting"),
PSR Nurses Holdings Corp., a Texas corporation ("PSR Holdings"), Robin
Riddle as the sole shareholder of PSR Recruiting, and each of the
shareholders of PSR Holdings are parties to an Agreement and Plan of
Reorganization dated November 4, 2003 (the "Merger Agreement"); and

     B. In order to induce the parties to the Merger Agreement to
consummate the transactions contemplated thereby, the Investors and the
Company hereby agree that this Agreement, among other things, shall govern
the rights of the Investors to cause the Company to register shares of
Common Stock of the Company issuable to the Investors.

                                 AGREEMENT

     NOW, THEREFORE, in consideration of the mutual promises,
representations, warranties, covenants and conditions set forth in this
Agreement and the Merger Agreement, the parties hereto agree as follows:

     1. Registration Rights.  The Company covenants and agrees as follows:

        1.1 Definitions.  For purposes of this Agreement:

            (a) The term "Act" means the Securities Act of 1933, as amended.

            (b) The term "Holder" means any person owning or having the
right to acquire Registrable Securities or any assignee thereof in
accordance with Section 1.10 hereof.

            (c) The term "1934 Act" shall mean the Securities Exchange Act
of 1934, as amended.

            (d) The term "register," "registered," and "registration" refer
to a registration effected by preparing and filing a registration statement
or similar document in compliance with the Act, and the declaration or
ordering of effectiveness of such registration statement or document.

            (e) The term "Registrable Securities" means (i) the Common Stock
of the Company issued to the Investors as a result of the consummation of
the transactions

                                   1
<PAGE>

contemplated by the Merger Agreement and (ii) any Common Stock of the
Company issued as (or issuable upon the conversion or exercise of any
warrant, right or other security which is issued as) a dividend or other
distribution with respect to, or in exchange for or in replacement of the
shares referenced in (i) above, excluding in all cases, however, any
Registrable Securities sold by a person in a transaction in which his rights
under this Section 1 are not assigned pursuant to the terms of this
Agreement.

            (f) The number of shares of "Registrable Securities then
outstanding" shall be determined by the number of shares of Common Stock
outstanding which are, and the number of shares of Common Stock issuable
pursuant to then exercisable or convertible securities which are,
Registrable Securities.

            (g) The term "SEC" shall mean the Securities and Exchange
Commission.

        1.2 Company Registration.  If, at any time or from time to time (but
without any obligation to do so) the Company proposes to register any of its
stock or other securities under the Act in connection with the public
offering of such securities solely for cash (other than a registration
effected on Form S-3 at the request of one or more stockholders of the
Company or relating solely to the sale of securities to participants in a
Company employee benefit plan or corporate reorganization or other
transaction covered by Rule 145 promulgated under the Act, or a registration
on any form which does not permit secondary sales or include substantially
the same information as would be required to be included in a registration
statement covering the sale of the Registrable Securities), the Company
shall, at such time, promptly give each Holder written notice of such
registration.  Upon the written request of each Holder given within twenty
(20) days after mailing of such notice by the Company in accordance with
Section 2.6 hereof, the Company shall, subject to the provisions of Section
1.6 hereof, cause to be registered under the Act all of the Registrable
Securities that each such Holder has requested to be registered.

        1.3 Obligations of the Company.  Whenever required under this
Section 1 to effect the registration of any Registrable Securities, the
Company shall, as expeditiously as reasonably possible:

            (a) Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its reasonable best efforts
to cause such registration statement to become effective.

            (b) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in
connection with such registration statement as may be necessary to comply
with the provisions of the Act with respect to the disposition of all
securities covered by such registration statement.

            (c) Furnish to the Holders such number of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Act, and such other documents as they may reasonably
request in order to facilitate the disposition of Registrable Securities
owned by them that are included in such registration.

            (d) Use its reasonable best efforts to register and qualify the
securities

                                 2
<PAGE>

covered by such registration statement under such other securities or Blue
Sky laws of such jurisdictions as shall be reasonably requested by the
Holders; provided, however, that the Company shall not be required in
connection therewith or as a condition thereto to qualify to do business or
to file a general consent to service of process in any such states or
jurisdictions, unless the Company already is subject to service in such
jurisdiction and except as may be required by the Act.

            (e) In the event of any underwritten public offering, enter
into and perform its obligations under an underwriting agreement, in usual
and customary form, with the managing underwriter of such offering.  Each
Holder participating in such underwriting shall also enter into and perform
its obligations under such agreement.

            (f) Notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Act of the happening of any event the
result of which causes the prospectus included in such registration
statement, as then in effect, to include 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 not misleading in light of the
circumstances then existing; and thereafter the Company will use reasonable
efforts to amend or supplement such prospectus in order to cause such
prospectus not to include any 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 not misleading in light of circumstances then
existing; provided, however, that upon such notification by the Company,
the Holders will not offer or sell Registrable Securities until the Company
has notified the Holders that it has prepared a supplement or amendment to
such prospectus and delivered copies of such supplement or amendment to the
Holders (it being understood and agreed by the Company that the foregoing
proviso shall in no way diminish or otherwise impair the Company's
obligations to prepare a prospectus amendment or supplement as above
provided in this Section 1.3(f)).

            (g)	Cause all such Registrable Securities registered pursuant
hereunder to be listed on each securities exchange on which similar
securities issued by the Company are then listed.

            (h) Provide a transfer agent and registrar for all Registrable
Securities registered pursuant hereunder and a CUSIP number for all such
Registrable Securities, in each case not later than the effective date of
such registration.

        1.4 Furnish Information.  It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Section 1
with respect to the Registrable Securities of any selling Holder that such
Holder shall furnish to the Company such information regarding itself, the
Registrable Securities held by it, and the intended method of disposition
of such securities as shall be required to effect the registration of such
Holder's Registrable Securities.

        1.5 Expenses of Registration.  All expenses (other than underwriting
discounts and commissions) incurred in connection with any registrations,
filings or qualifications of Registrable Securities pursuant to Section 1.2,
including (without limitation) all registration,

                                     3
<PAGE>

filing and qualification fees, printers' and accounting fees and fees and
disbursements of counsel for the Company shall be borne by the Company.

        1.6 Underwriting Requirements.  In connection with any offering
involving an underwriting of shares of the Company's capital stock, the
Company shall not be required under Section 1.2 hereof to include any of
the Holders' securities in such underwriting unless they accept the terms
of the underwriting as agreed upon between the Company and the underwriters
selected by it (or by other persons entitled to select the underwriters),
and then only in such quantity as the underwriters determine in their sole
discretion will not jeopardize the success of the offering by the Company.
If the total amount of securities, including Registrable Securities,
requested by stockholders to be included in such offering exceeds the
amount of securities sold other than by the Company that the underwriters
determine in their sole discretion is compatible with the success of the
offering, then the Company shall be required to include in the offering only
that number of such securities, including Registrable Securities, which the
underwriters determine in their sole discretion will not jeopardize the
success of the offering (the securities so included to be apportioned pro
rata among the selling stockholders according to the total amount of
securities entitled to be included therein owned by each selling
stockholder, or in such other proportions as shall mutually be agreed to by
such selling stockholders).  For purposes of the preceding parenthetical
concerning apportionment, for any selling stockholder which is a holder of
Registrable Securities and which is a limited liability company,
partnership or corporation, the members, partners, retired partners and
stockholders of such holder, or the estates and family members of any such
members, partners and retired partners and any trusts for the benefit of
any of the foregoing persons shall be deemed to be a single "selling
stockholder," and any pro-rata reduction with respect to such "selling
stockholder" shall be based upon the aggregate amount of shares carrying
registration rights owned by all entities and individuals included in such
"selling stockholder," as defined in this sentence.

        1.7 Delay of Registration.  No Holder shall have any right to
obtain or seek an injunction restraining or otherwise delaying any such
registration as the result of any controversy that might arise with respect
to the interpretation or implementation of this Section 1.

        1.8 Indemnification.  In the event any Registrable Securities are
included in a registration statement under this Section 1:

            (a) To the extent permitted by law, the Company will indemnify
and hold harmless each Holder, the partners, officers, and directors of
each Holder, any underwriter (as defined in the Act) for such Holder and
each person, if any, who controls such Holder or underwriter within the
meaning of the Act or the 1934 Act, against any losses, claims, damages or
liabilities (joint or several) to which they may become subject under the
Act, the 1934 Act or any state securities law, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of
or are based upon any of the following statements, omissions or violations
(collectively a "Violation"): (i) any untrue statement or alleged untrue
statement of a material fact contained in such registration statement,
including any preliminary prospectus or final prospectus contained therein
or any amendments or supplements thereto, (ii) the omission or alleged
omission to state therein a material fact required to be stated therein, or
necessary to make the statements therein not misleading, or (iii) any
violation or alleged violation by the Company of the Act, the 1934 Act, or
any rule or regulation promulgated under the Act or the

                                   4
<PAGE>

1934 Act or any state securities law in connection with the offering
covered by such Registration Statement; and the Company will pay to each
such Holder, partner, officer, director, underwriter or controlling person,
as incurred, any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the indemnity agreement
contained in this subsection 1.8(a) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability, or action if such
settlement is effected without the consent of the Company (which consent
shall not be unreasonably withheld or delayed), nor shall the Company be
liable to any Holder, underwriter or controlling person for any such loss,
claim, damage, liability or action to the extent that it arises out of or
is based upon a Violation which occurs in reliance upon and in conformity
with written information furnished expressly for use in connection with
such registration by any such Holder, partner, officer, director,
underwriter or controlling person.

            (b) To the extent permitted by law, each selling Holder will, if
Registrable Securities held by such Holder are included in the applicable
registration statement, indemnify and hold harmless the Company, each of its
directors, each of its officers who has signed the registration statement,
each person, if any, who controls the Company within the meaning of the Act,
any underwriter, any other Holder selling securities in such registration
statement and any controlling person of any such underwriter or other
Holder, against any losses, claims, damages or liabilities (joint or
several) to which any of the foregoing persons may become subject under the
Act or the 1934 Act or any state securities law in connection with the
offering covered by such registration statement insofar as such losses,
claims, damages or liabilities (or actions in respect thereto) arise out of
or are based upon any Violation, in each case to the extent (and only to
the extent) that such Violation occurs in reliance upon and in conformity
with written information furnished by such Holder expressly for use in
connection with such registration; and each such Holder will pay any legal
or other expenses reasonably incurred by any person intended to be
indemnified pursuant to this subsection 1.8(b), in connection with
investigating or defending any such loss, claim, damage, liability or
action; provided, however, that the indemnity agreement contained in this
subsection 1.8(b) shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability or action if such settlement is effected with
out the consent of the Holder (which consent shall not be unreasonably
withheld or delayed); provided further, that in no event shall any indemnity
under this subsection 1.8(b) exceed the net proceeds from the offering
received by such Holder, except in the case of willful misconduct or fraud
by such Holder.

            (c) Promptly after receipt by an indemnified party under this
Section 1.8 of notice of the commencement of any action (including any
governmental action) as to which indemnity may be sought hereunder, such
indemnified party will, if a claim in respect thereof is to be made against
any indemnifying party under this Section 1.8, deliver to the indemnifying
party a written notice of the commencement thereof.  The indemnifying party
shall have the right to participate in, and, to the extent the indemnifying
party so desires, jointly with any other indemnifying party similarly
noticed, to assume the defense thereof with counsel mutually satisfactory
to the parties; provided, however, that an indemnified party (together with
all other indemnified parties which may be represented without conflict by
one counsel) shall have the right to retain one separate counsel, with the
reasonable fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential
differing interests between

                                    5
<PAGE>

such indemnified party and any other party represented by such counsel in
such proceeding.  The failure to deliver written notice to the indemnifying
party within a reasonable time of the commencement of any such action, if
prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this
Section 1.8, but the omission to so deliver written notice to the
indemnifying party will not relieve the indemnifying party of any liability
 that it may have to any indemnified party otherwise than under this
Section 1.8.

            (d) The foregoing indemnity agreements of the Company and
Holders are subject to the condition that, insofar as they related to any
Violation made in a preliminary prospectus but eliminated or remedied in
the amended prospectus on file with the SEC at the time the registration
statement in question becomes effective or the amended prospectus filed
with the SEC pursuant to SEC Rule 424(b) (the "Final Prospectus"), such
indemnity agreement shall not inure to the benefit of any person if a copy
of the Final Prospectus was furnished to the indemnified party and was not
furnished to the person asserting the loss, liability, claim or damage at
or prior to the time such action is required by the Act.  If the
indemnification provided for in this Section 1.8 is held by a court of
competent jurisdiction to be unavailable to an indemnified party with
respect to any loss, claim, damage or liability referred to herein, then
the indemnifying party, in lieu of indemnifying such indemnified party
hereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such loss, claim, damage or liability in
such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and of the indemnified party on the
other in connection with the statements or omissions that resulted in such
loss, claim, damage or liability, as well as any other relevant equitable
considerations; provided, however, that in no event shall (i) any
contribution by a Holder under this subsection 1.8(d) exceed the net
proceeds from the offering received by such Holder, except in the case of
willful fraud by such Holder, and (ii) any person or entity guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Act) be entitled to contribution from any person or entity who was not
guilty of such fraudulent misrepresentation.  The relative fault of the
indemnifying party and of the indemnified party shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission to state a material fact
relates to information supplied by the indemnifying party or by the
indemnified party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission.

            (e) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the
underwriting agreement entered into in connection with the underwritten
public offering are in conflict with the foregoing provisions, the
provisions in the underwriting agreement shall control.

            (f) The obligations of the Company and Holders under this
Section 1.8 shall survive the completion of any offering of Registrable
Securities in a registration statement under this Section 1, and otherwise.

        1.9 Assignment of Registration Rights.  The rights to cause the
Company to register Registrable Securities pursuant to this Section 1 may
be assigned (but only with all related obligations) by a Holder to a
transferee or assignee of such securities who, is approved in writing by
the Company or who, after such assignment or transfer, holds all of the
then

                                    6
<PAGE>

outstanding shares of Registrable Securities held by such Holder, provided:
(a) the Company is, within a reasonable time after such transfer, furnished
with written notice of the name and address of such transferee or assignee
and the securities with respect to which such registration rights are being
assigned; (b) such transferee or assignee agrees in writing to be bound by
and subject to the terms and conditions of this Agreement; and (c) such
assignment of rights hereunder shall be effective only if immediately
following such transfer the further disposition of such securities by the
transferee or assignee is restricted under the Act.

        1.10 Deferral.  Notwithstanding anything in this Agreement to the
contrary, if the Company shall furnish to the Holders a certificate signed
by the President or Chief Executive Officer of the Company stating that the
Board of Directors of the Company has made the good faith determination (a)
that continued use by the Holders of a registration statement for purposes
of effecting offers or sales of Registrable Securities pursuant thereto
ould require, under the Act, premature disclosure in the registration
statement (or the prospectus relating thereto) of material, nonpublic
information concerning the Company, its business or prospects or any
proposed material transaction involving the Company, (b) that such
premature disclosure would be materially adverse to the Company, its
business or prospects or any such proposed material transaction or would
make the successful consummation by the Company of any such material
transaction significantly less likely and (c) that it is therefore
essential to suspend the use by the Holders of any such registration
statement (and the prospectus relating thereto) for purposes of effecting
offers or sales of Registrable Securities pursuant thereto, then the right
of the Holders to use any such registration statement (and the prospectus
relating thereto) for purposes of effecting offers or sales of Registrable
Securities pursuant thereto shall be suspended until further notice by the
Company (the "Suspension Period").  During the Suspension Period, none of
the Holders shall offer or sell any Registrable Securities pursuant to or
in reliance upon any such registration statement (or the prospectus relating
thereto).

        1.11 Reports Under Securities Exchange Act of 1934.  With a view to
making available to the Holders the benefits of Rule 144 promulgated under
the Act and any other rule or regulation of the SEC that may at any time
permit a Holder to sell securities of the Company to the public without
registration or pursuant to a registration on Form S-3, the Company agrees,
after the earliest of the closing of the sale of securities by the Company
pursuant to a registration statement, the registration by the Company of a
class of securities under Section 12 of the 1934 Act, or the issuance by
the Company of an offering circular pursuant to Regulation A under the Act,
to use commercially reasonable efforts:

            (a) to make and keep current public information about the
Company available (as those terms are understood and defined in Rule 144
under the Act), at all times after the date the Company becomes subject to
the reporting requirements of the 1934 Act;

            (b) to take such action, including the voluntary registration
of its Common Stock under Section 12 of the 1934 Act, as is necessary to
enable the Holders to utilize Form S-3 for the resale of their Registrable
Securities;

            (c) to file with the SEC in a timely manner all reports and
other documents required of the Company under the Act and the 1934 Act; and

                                     7
<PAGE>

            (d) to furnish to any Holder, so long as the Holder owns any
Registrable Securities, forthwith upon request a copy of the most recent
annual or quarterly report of the Company filed by the Company under the
1934 Act and (iii) such other information as such Holder may reasonably
request in order to avail itself of any similar rule or regulation of the
SEC that permits the selling of any such securities without registration or
pursuant to such form.

     No Holder will be entitled to exercise any right provided for in this
Section 1 after the time at which all Registrable Securities held by such
Holder (and any affiliate of the Holder with whom such Holder must aggregate
its sales under Rule 144) can be sold in any ninety (90) day period without
registration in compliance with Rule 144 of the Act.

     2. Miscellaneous.

        2.1 Successors and Assigns.  Except as otherwise provided
herein, the terms and conditions of this Agreement shall inure to the
benefit of and be binding upon the respective successors and assigns of
the parties (including transferees of any shares of Registrable Securities).
Nothing in this Agreement, express or implied, is intended to confer upon
any party other than the parties hereto or their respective successors and
assigns any rights, remedies, obligations, or liabilities under or by
reason of this Agreement, except as expressly provided in this Agreement.

        2.2 Governing Law.  This Agreement shall be governed by and
construed under the laws of the State of Delaware as applied to agreements
among Delaware residents entered into and to be performed entirely within
Delaware.

        2.3 Submission to Jurisdiction; Waivers.  Each of the parties
irrevocably agrees that any legal action or proceeding with respect to this
Agreement or for the recognition and enforcement of any judgment in respect
hereof brought by the other party hereto or its successors or assigns will
be brought and determined in either a state court having jurisdiction in
Dallas County, Texas or the United States District Court for the North
District of Texas, and each of the parties hereby irrevocably submits with
regard to any such action or proceeding for itself and in respect to its
property, generally and unconditionally, to the exclusive jurisdiction of
the aforesaid courts.  Each of the parties hereby irrevocably waives, and
agrees not to assert, by way of motion, as a defense, counterclaim or
otherwise, in any action or proceeding with respect to this Agreement, (a)
any claim that it is not personally subject to the jurisdiction of the
above-named courts for any reason other than the failure to lawfully serve
process, (b) that it or its property is exempt or immune from jurisdiction
of any such court or from any legal process commenced in such courts
(whether through service of notice, attachment prior to judgment, attachment
in aid of execution of judgment, execution of judgment or otherwise), (c)
to the fullest extent permitted by applicable law, that (i) the suit,
action or proceeding in any such court is brought in an inconvenient forum,
(ii) the venue of such suit, action, or proceeding is improper and (iii)
this Agreement, or the subject matter hereof, may not be enforced in or by
such courts.

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

                                   8
<PAGE>


        2.5 Titles and Subtitles.  The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.

        2.6 Notices.  All notices and other communications required or
permitted hereunder shall be in writing and shall be deemed effectively
given: (a) upon personal delivery to the party to be notified, (b) when
sent by confirmed facsimile if sent during normal business hours of the
recipient or, if not sent during normal business hours, then on the next
business day, (c)  three days after having been sent by registered or
certified mail, return receipt requested, postage prepaid, or (d) one day
after deposit with a nationally recognized overnight courier, specifying
next day delivery, with written verification of receipt.  All communications
shall be sent to the address as set forth on the signature page hereof or
at such other address as such party may designate by 10 days advance written
notice to the other parties hereto.

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

        2.8 Amendments and Waivers.  Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived
(either generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the holders
of a majority of the Registrable Securities then outstanding.  Any amendment
or waiver effected in accordance with this paragraph shall be binding upon
each holder of any Registrable Securities then outstanding, each future
holder of all such Registrable Securities, and the Company.

        2.9 Severability.  If one or more provisions of this Agreement are
held to be unenforceable under applicable law, such provision shall be
excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable
in accordance with its terms.

        2.10 Aggregation of Stock.  All shares of Registrable Securities
held or acquired by affiliated entities or persons shall be aggregated
together for the purpose of determining the availability of any rights
under this Agreement.

        2.11 Entire Agreement; Amendment; Waiver.  This Agreement (including
Schedule A hereto) constitutes the full and entire understanding and
agreement between the parties with regard to the subjects hereof and thereof.

                                     9

<PAGE>

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.

                                    CRDENTIA CORP.,
                                    a Delaware corporation
                                    By: /s/  James D. Durham
                                        James D. Durham
                                        Chief Executive Officer


                                    INVESTORS:

                                    PSR INVESTORS, LLC
                                        /s/  Scott H. Richison
                                    By: Scott H. Richison
                                    Its: Member
                                    Address: 2401 Tee Circle, Suite 103,
                                    Norman, OK  73069


                                    VARIETY EXCURSIONS


                                       /s/  William W. Riddle, Jr.
                                    By: William W. Riddle, Jr.
                                    Its:  Manager
                                    Address: 14114 Dallas Parkway, Suite 220
                                             Dallas, Texas 75240


                                      /s/  Cynthia Permenter
                                    Cynthia Permenter
                                    Address:  12107 Lueders Lane
                                              Dallas, TX  75230


                                      /s/  Robin DeAnne Riddle
                                     By: Robin DeAnne Riddle
                                     Address: 6404 Sudbury Road,
                                              Plano, Texas  75024

                                      /s/  Brian F. Wilson
                                     By: Brian F. Wilson
                                     Address:

             (SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT)

                                    10
<PAGE>

                                SCHEDULE A
                                ----------

                          SCHEDULE OF INVESTORS



PSR Investors, LLC
Variety Excursions
Cynthia Permenter
Robin DeAnne Riddle
Brian F. Wilson


                                   A-1

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4
<SEQUENCE>5
<FILENAME>exhibit_45.txt
<TEXT>
EXHIBIT 4.5

THIS CERTIFICATE BEARS A LEGEND ON THE REVERSE SIDE

                   Incorporated under the Laws of Delaware
                              November 10, 1997

     Certificate No.                                      **No. of Shares**

                               CRDENTIA CORP.
           50,000,000 Shares Common Stock, $0.0001 Par Value Each
          10,000,000 Shares Preferred Stock, $0.0001 Par Value Each


THIS CERTIFIES THAT ____________________SPECIMEN________________________ IS THE
REGISTERED HOLDER OF  ************************************************** SHARES
OF SERIES A PREFERRED STOCK OF CRDENTIA CORP.

HEREINAFTER DESIGNATED "THE CORPORATION", TRANSFERABLE THE SHARE REGISTER OF THE
CORPORATION UPON SURRENDER OF THIS CERTIFICATE PROPERLY endorsed OR ASSIGNED.

This certificate and the shares represented thereby shall be held subject to all
the provisions of the Certificate of Incorporation and the Bylaws of said
Corporation, a copy of each of which is on file at the office of the
Corporation, and made a part hereof as fully as though the provisions of said
Certificate of Incorporation and Bylaws were imprinted in full on this
certificate, to all of which the holder of this certificate, by acceptance
hereof, assents and agrees to be bound.

Any stockholder may obtain from the principal office of the Corporation, upon
request and without charge, a statement of the number of shares constituting
each class or series of stock and the designation thereof; and a copy of the
powers, designations, preferences and relative, participating, optional or other
special rights of each class of stock or series thereof and the qualifications,
limitations or restriction of such preferences and/or rights and the Bylaws.

THE ADDRESS OF THE PRINCIPAL OFFICE OF THE CORPORATION IS:  14114 Dallas
Parkway, Suite 600, Dallas, TX 75254

       Dated:

___________________________________          ___________________________________
William S. Leftwich, Chief Financial Officer	   Pamela G. Atherton, President

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>6
<FILENAME>exhibit_107.txt
<TEXT>
EXHIBIT 10.7


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

                 CONVERTIBLE SUBORDINATED PROMISSORY NOTE
                 ----------------------------------------

$2,525,000 - Principal Amount	               Issue Date - December 2, 2003

     FOR VALUE RECEIVED, Crdentia Corp., a Delaware corporation ("Obligor"),
hereby promises to pay jointly to the order of Professional Staffing
Resources, Inc., a Georgia corporation and Nursing Services Registry of
Savannah, Inc, a Georgia corporation (collectively with any successors or
assigns, "Holder"), in lawful money of the United States at the address of
Holder set forth below, the principal sum of Two Million Five Hundred
Twenty-Five Thousand Dollars ($2,525,000), together with interest thereon
from the date of this Promissory Note (the "Note") on the unpaid principal
balance.  Interest shall accrue at a rate of eight percent (8%) per annum,
simple interest, until paid in full.

     Subject to the conversion provisions set forth herein, unpaid principal
under this Note together with all accrued and unpaid interest shall be paid
to Holder as follows:  (a) Obligor shall pay to Holder interest only accrued
on this Note as of the last day of each month, commencing with the month
ending November 30, 2003 and continuing through the month ending November
30, 2004, within ten (10) business days of the first day of the following
month; and (b) beginning on December 1, 2004 and continuing through November
1, 2012, Obligor shall make a total of ninety six (96) equal, consecutive
monthly payments to Holder consisting of principal and interest amortized
from the period beginning December 1, 2004, which such payments shall be
made within ten (10) business days of the first date of such month.

     This Note may be prepaid, in whole or in part, at any time without
premium or penalty.  All prepayments on this Note shall be applied first to
the payments of the accrued and unpaid interest and then to the reduction
of the principal balance hereof (applied equally among all remaining
principal installments hereunder).

<PAGE>

     The outstanding principal balance (plus accrued and unpaid interest on
the date thereon) on this Note shall be converted at Holder's option and in
Holder's sole discretion into shares of Obligor's Common Stock (the "Common
Stock") upon delivery of written notice by Holder to Obligor.  The number of
shares of Common Stock shall be equal to the quotient obtained by dividing
(a) the aggregate outstanding principal due, plus accrued and unpaid interest
on this Note on the date of conversion by (b) the Conversion Price.  For
purposes of this Note, the "Conversion Price" shall mean the closing price
of the Common Stock as reported on the National Association of Securities
Dealers, Inc. Over the Counter Bulletin Board (the "OTCBB") or other
national stock exchange on the date of such conversion.  Notwithstanding the
foregoing, in the event that Obligor's Common Stock is not traded on the
OTCBB or other national stock exchange on the date of such conversion, the
"Conversion Price" shall be the fair market value of Obligor's Common Stock
as determined in good faith by Obligor's board of directors, which
Conversion Price so determined shall be delivered in writing to Holder, who
shall have 10 business days after receipt thereof to withdraw the notice of
conversion.  In the event of any such withdrawal, the notice of conversion
shall be void ab initio.

     No fractional shares will be issued upon conversion of this Note.  In
lieu of any fractional share to which Holder would otherwise be entitled,
Obligor will pay to Holder in cash that amount of the unconverted principal
and interest balance of this Note.  Upon conversion of this Note into such
equity securities, Holder shall surrender this Note, duly endorsed, at the
principal offices of Obligor or any transfer agent for Obligor.  At its
expense, Obligor will, as soon as practicable thereafter, issue and deliver
to Holder a certificate for the number of shares of equity securities to
which Holder is entitled upon such conversion, together with any other
securities and property to which Holder is entitled upon such conversion
under the terms of this Note, including a check payable to Holder for any
cash amounts payable as described above.  Upon conversion of this Note into
such equity securities, Obligor will be forever released from all its
obligations and liabilities under this Note, including without limitation
the obligation to pay the principal and interest amounts.

     If any payment of principal or interest on this Note shall become due
on a Saturday, Sunday, or a public holiday under the laws of the State of
California, such payment shall be made on the next succeeding business day.

     The indebtedness evidenced by this Note is hereby expressly
subordinated, to the extent and in the manner hereinafter set forth, in
right of payment to the prior payment in full of all Obligor's Senior Debt.
For purposes of this Note, "Senior Debt" shall mean, except as otherwise
provided herein:  (a) any indebtedness of Obligor (plus interest, premium
and penalties due from or arising out of such indebtedness, or any
refinancing thereof): (i) for borrowed funds; (ii) due to the sellers or
lessors of any real or personal property to Obligor; or (iii) for
reimbursement obligations with respect to letters of credit; (b) any other
indebtedness of Obligor, except to the extent that the holder of such
indebtedness otherwise agrees in writing; and (c) any debentures, notes or
other evidences of indebtedness issued in exchange for any of the foregoing
indebtedness, or any indebtedness arising from the satisfaction of such
indebtedness by a guarantor.  Notwithstanding anything herein to the
contrary, Senior Debt shall not include any indebtedness of Obligor (or of
any subsidiary of Obligor ) incurred as seller financing in connection with
acquisitions of temporary nurses staffing companies or travel nurse
companies consummated prior to or following the date hereof.
Notwithstanding anything herein to the

<PAGE>

contrary, no payment of principal or interest shall be made on this Note if,
but only as long as, there exists any default, or the existence of any
event which, with the giving of notice, would constitute a default, in the
payment of Senior Debt, as determined by the terms of any such Senior Debt.
Holder shall execute, at or following the date hereof, as the case may be,
all subordination documents required by the holders of Senior Debt necessary
to effectuate the terms of the foregoing.

     In the event that Obligor (a) fails to make payment on any date for
payment herein above specified of any principal and/or interest due
hereunder on such date, (b) admits in writing its inability to pay its
debts as they become due, or makes a general assignment for the benefit of
creditors or files any petition or action for relief under any bankruptcy,
reorganization, insolvency or moratorium law, or any other law or laws for
the relief of, or relating to, debtors or (c) an involuntary petition is
filed against Obligor under any bankruptcy, reorganization, insolvency or
moratorium law, or any other law or laws for the relief of, or relating to,
debtors unless such petition shall be dismissed or vacated within sixty (60)
days of the date thereof, Obligor shall be deemed to be in default
hereunder.  In the event of such default, Holder may, at Holder's option
and in Holder's sole discretion, ten (10) business days after giving notice
of default to Obligor, accelerate the maturity of all amounts due under
this Note by giving notice of such acceleration.

     The acceptance by Holder of any payment hereunder which is less than
the payment in full of all amounts due and payable at the time of such
payment shall not constitute a waiver of the right to accelerate at that
time or any subsequent time or nullify any prior acceleration without the
express consent of Holder except as and to the extent otherwise provided by
law.

     Obligor waives presentment, demand for performance, notice of
nonperformance, protest, notice of protest, and notice of dishonor (but not
notice of default).  No delay on the part of Holder in exercising any right
hereunder shall operate as a waiver of such right under this Note.  This
Note is being delivered in and shall be construed in accordance with the
laws of the State of California as applied to contracts entered into by
California residents within the State of California, which contracts are to
be performed entirely within the State of California.

     The right to plead any and all statutes of limitations as a defense to
any demand on this Note, or any guaranty hereof, or any agreement to the
same, or any instrument securing this Note, or any and all obligations or
liabilities arising out of or in connection with this Note, is expressly
waived by Obligor and each and every endorser or guarantor if any, to the
fullest extent permitted by law.

     Notwithstanding anything to the contrary contained herein, the total
liability for payments hereunder in the nature of interest shall not exceed
the limits imposed by applicable interest rate limitation laws.

     The provisions of this Note are intended by Obligor to be severable and
divisible and the invalidity or unenforceability of a provision or term
herein shall not invalidate or render unenforceable the remainder of this
Note or any part thereof.

<PAGE>

     If the indebtedness represented by this Note or any part thereof is
collected at law or in equity or in bankruptcy, receivership or other
judicial proceedings or if this Note is placed in the hands of attorneys
for collection after default, Obligor agrees to pay, in addition to the
principal and interest payable hereon, reasonable attorneys' fees and costs
incurred by Holder.

     Any notice or other communication (except payment) required or
permitted hereunder shall be in writing and shall be deemed to have been
given upon delivery if personally delivered or one day after deposit if
deposited in the United States mail for mailing by certified mail, postage
prepaid, and addressed as follows:

     If to Holder:     12107 Leuders Lane
                       Dallas, Texas  75230
                       Attention:  Cynthia Permenter

     If to Obligor:    Crdentia Corp.
                       Attention: James D. Durham
                       455 Market Street, Suite 1220
                       San Francisco, California  94105

     with a copy to:   Steven G. Rowles, Esq.
                       Morrison & Foerster LLP
                       3811 Valley Centre Drive, Suite 500
                       San Diego, California  92130

Any payment shall be deemed made upon receipt by Holder.  Each of Holder or
Obligor may change her or its address for purposes of this paragraph by
giving to the other party notice in conformance with this paragraph of such
new address.

     This Note is a renewal, extension and restatement of those certain
Long-Term Promissory Notes executed by PSR Nurses, Ltd. (the "Partnership")
in favor of Holder on July 1, 2003 (the "Prior Notes").  Upon Holder's
acceptance of this Note, each of the Prior Notes shall be concurrently
surrendered to Obligor for cancellation and neither Obligor, the Partnership
nor Holder shall have any continuing rights or obligations thereunder.

OBLIGOR:                         CRDENTIA CORP.,
                                 a Delaware corporation
                                 By: /s/ James D. Durham
                                 Name:  James D. Durham
                                 Title:  Chief Executive Officer

<PAGE>

HOLDER:                          PROFESSIONAL STAFFING RESOURCES, INC.,
                                 a Georgia corporation
                                 By: /s/ Cynthia Permenter
                                 Name:  Cynthia Permenter
                                 Title:  President


                                 NURSING SERVICES REGISTRY OF SAVANNAH, INC.,
	                         a Georgia corporation
                                 By: /s/ Cynthia Permenter
                                 Name:  Cynthia Permenter
                                 Title:  President

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>7
<FILENAME>exhibit_108.txt
<TEXT>
EXHIBIT 10.8

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

                  CONVERTIBLE SUBORDINATED PROMISSORY NOTE
                  ----------------------------------------

$1,200,000 - Principal Amount                  Issue Date - December 2, 2003

     FOR VALUE RECEIVED, Crdentia Corp., a Delaware corporation ("Obligor"),
hereby promises to pay to the order of Robin Riddle or her assigns
("Holder"), in lawful money of the United States at the address of Holder
set forth below, the principal sum of One Million Two Hundred Thousand
Dollars ($1,200,000), together with interest thereon as provided in this
Promissory Note (the "Note") on the unpaid principal balance.  Interest
shall accrue at a rate of twelve percent (12%) per annum, simple interest,
until paid in full.

     Subject to the conversion provisions set forth herein, unpaid principal
under this Note together with all accrued and unpaid interest shall be paid
to Holder as follows:  Beginning on December 2, 2003 and continuing through
November 1, 2006, Obligor shall make a total of thirty-six (36) equal,
consecutive monthly payments to Holder each in the amount of Thirty-Nine
Thousand Eight Hundred Fifty-Seven and 81/100 Dollars ($39,857.81)
consisting of principal and interest amortized from the period beginning
October 31, 2003, which such payments shall be made within ten (10) business
days of the first date of such month.  Notwithstanding the foregoing, this
Note may be prepaid, in whole or in part, at any time without premium or
penalty.

     The outstanding principal balance (plus accrued and unpaid interest on
the date thereon) on this Note shall be converted at Holder's option and in
Holder's sole discretion into shares of Obligor's Common Stock (the "Common
Stock") upon delivery of written notice by Holder to Obligor.  The number of
shares of Common Stock shall be equal to the quotient obtained by dividing
(a) the aggregate outstanding principal due, plus accrued and unpaid
interest on this Note on the date of conversion by (b) the Conversion Price.
For purposes of this Note, the "Conversion Price" shall mean the closing
price of the Common Stock as reported on the

<PAGE>

National Association of Securities Dealers, Inc. Over the Counter Bulletin
Board (the "OTCBB") or other national stock exchange on the date of such
conversion.  Notwithstanding the foregoing, in the event that Obligor's
Common Stock is not traded on the OTCBB or other national stock exchange on
the date of such conversion, the "Conversion Price" shall be the fair market
value of Obligor's Common Stock as determined in good faith by Obligor's
board of directors, which Conversion Price so determined shall be delivered
in writing to Holder, who shall have 10 business days after receipt thereof
to withdraw the notice of conversion.  In the event of any such withdrawal,
the notice of conversion shall be void ab initio.

     No fractional shares will be issued upon conversion of this Note.  In
lieu of any fractional share to which Holder would otherwise be entitled,
Obligor will pay to Holder in cash that amount of the unconverted principal
and interest balance of this Note. Upon conversion of this Note into such
equity securities, Holder shall surrender this Note, duly endorsed, at the
principal offices of Obligor or any transfer agent for Obligor.  At its
expense, Obligor will, as soon as practicable thereafter, issue and
deliver to Holder a certificate for the number of shares of equity
securities to which Holder is entitled upon such conversion, together with
any other securities and property to which Holder is entitled upon such
conversion under the terms of this Note, including a check payable to
Holder for any cash amounts payable as described above.  Upon conversion of
this Note into such equity securities, Obligor will be forever released
from all its obligations and liabilities under this Note, including without
limitation the obligation to pay the principal and interest amounts.

     If any payment of principal or interest on this Note shall become due
on a Saturday, Sunday, or a public holiday under the laws of the State of
California, such payment shall be made on the next succeeding business day.

     The indebtedness evidenced by this Note is hereby expressly
subordinated, to the extent and in the manner hereinafter set forth, in
right of payment to the prior payment in full of all Obligor's Senior Debt.
For purposes of this Note, "Senior Debt" shall mean, except as otherwise
provided herein: (a) any indebtedness of Obligor (plus interest, premium and
penalties due from or arising out of such indebtedness, or any refinancing
thereof): (i) for borrowed funds; (ii) due to the sellers or lessors of any
real or personal property to Obligor; or (iii) for reimbursement obligations
with respect to letters of credit; (b) any other indebtedness of Obligor,
except to the extent that the holder of such indebtedness otherwise agrees
in writing; and (c) any debentures, notes or other evidences of indebtedness
issued in exchange for any of the foregoing indebtedness, or any
indebtedness arising from the satisfaction of such indebtedness by a
guarantor.  Notwithstanding anything herein to the contrary, Senior Debt
shall not include any indebtedness of Obligor (or of any subsidiary of
Obligor ) incurred as seller financing in connection with acquisitions of
temporary nurses staffing companies or travel nurse companies consummated
prior to or following the date hereof.  Notwithstanding anything herein to
the contrary, no payment of principal or interest shall be made on this
Note if, but only as long as, there exists any default, or the existence of
any event which, with the giving of notice, would constitute a default, in
the payment of Senior Debt, as determined by the terms of any such Senior
Debt. Holder shall execute, at or following the date hereof, as the case may
be, all subordination documents required by the holders of Senior Debt
necessary to effectuate the terms of the foregoing.


<PAGE>

     In the event that Obligor (a) fails to make payment on any date for
payment herein above specified of any principal and/or interest due
hereunder on such date, (b) admits in writing its inability to pay its
debts as they become due, or makes a general assignment for the benefit of
creditors or files any petition or action for relief under any bankruptcy,
reorganization, insolvency or moratorium law, or any other law or laws for
the relief of, or relating to, debtors or (c) an involuntary petition is
filed against Obligor under any bankruptcy, reorganization, insolvency or
moratorium law, or any other law or laws for the relief of, or relating to,
debtors unless such petition shall be dismissed or vacated within sixty (60)
days of the date thereof, Obligor shall be deemed to be in default
hereunder.  In the event of such default, Holder may, at Holder's option and
in Holder's sole discretion, ten (10) business days after giving notice of
default to Obligor, accelerate the maturity of all amounts due under this
Note by giving notice of such acceleration.

     The acceptance by Holder of any payment hereunder which is less than
the payment in full of all amounts due and payable at the time of such
payment shall not constitute a waiver of the right to accelerate at that
time or any subsequent time or nullify any prior acceleration without the
express consent of Holder except as and to the extent otherwise provided by
law.

     Obligor waives presentment, demand for performance, notice of
nonperformance, protest, notice of protest, and notice of dishonor (but not
notice of default).  No delay on the part of Holder in exercising any right
hereunder shall operate as a waiver of such right under this Note.  This
Note is being delivered in and shall be construed in accordance with the
laws of the State of California as applied to contracts entered into by
California residents within the State of California, which contracts are to
be performed entirely within the State of California.

     The right to plead any and all statutes of limitations as a defense to
any demand on this Note, or any guaranty hereof, or any agreement to the
same, or any instrument securing this Note, or any and all obligations or
liabilities arising out of or in connection with this Note, is expressly
waived by Obligor and each and every endorser or guarantor if any, to the
fullest extent permitted by law.

     Notwithstanding anything to the contrary contained herein, the total
liability for payments hereunder in the nature of interest shall not exceed
the limits imposed by applicable interest rate limitation laws.

     The provisions of this Note are intended by Obligor to be severable and
divisible and the invalidity or unenforceability of a provision or term
herein shall not invalidate or render unenforceable the remainder of this
Note or any part thereof.

     If the indebtedness represented by this Note or any part thereof is
collected at law or in equity or in bankruptcy, receivership or other
judicial proceedings or if this Note is placed in the hands of attorneys
for collection after default, Obligor agrees to pay, in addition to the
principal and interest payable hereon, reasonable attorneys' fees and costs
incurred by Holder.

     Any notice or other communication (except payment) required or
permitted hereunder shall be in writing and shall be deemed to have been
given upon delivery if personally delivered

<PAGE>

or one day after deposit if deposited in the United States mail for mailing
by certified mail, postage prepaid, and addressed as follows:

     If to Holder:     Rison Management Services, L.P.
                       14114 Dallas Parkway, Suite 220
                       Dallas, Texas  75240
                       Attention:  Robin D. Riddle

     If to Obligor:    Crdentia Corp.
                       455 Market Street, Suite 1220
                       San Francisco, California  94105
                       Attention: James D. Durham

     with a copy to:   Steven G. Rowles, Esq.
                       Morrison & Foerster LLP
                       3811 Valley Centre Drive, Suite 500
                       San Diego, California  92130

Any payment shall be deemed made upon receipt by Holder.  Each of Holder or
Obligor may change her or its address for purposes of this paragraph by
giving to the other party notice in conformance with this paragraph of such
new address.

     This Note is a renewal, extension and restatement of that certain
Amended and Restated Line of Credit Promissory Note executed by PSR Nurses,
Ltd. (the "Partnership") in favor of Holder on April 1, 2003 (the "Prior
Note").  Upon Holder's acceptance of this Note, the Prior Note shall be
concurrently surrendered to Obligor for cancellation and neither Obligor,
the Partnership nor Holder shall have any continuing rights or obligations
thereunder.  In addition, upon acceptance of this Note, Holder agrees to
release certain security interests she may have with respect to certain
assets of the Partnership pursuant to that certain Amended Third Lien
Security Agreement dated April 1, 2003 and authorizes the filing of any
necessary filings and releases to effect the intent of the foregoing.

OBLIGOR:	                       CRDENTIA CORP.,
                                       a Delaware corporation
                                       By:  /s/ James D. Durham
                                       Name:  James D. Durham
                                       Title:  Chief Executive Officer


HOLDER:	                               ROBIN D. RIDDLE
	                               /s/ Robin D. Riddle
	                               Robin D. Riddle

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>8
<FILENAME>exhibit_109.txt
<TEXT>
EXHIBIT 10.9


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

                     CONVERTIBLE SUBORDINATED PROMISSORY NOTE

$200,000 - Principal Amount                    Issue Date - December 2, 2003

    FOR VALUE RECEIVED, Crdentia Corp., a Delaware corporation ("Obligor"),
hereby promises to pay jointly to the order of Professional Staffing
Resources, Inc., a Georgia corporation and Nursing Services Registry of
Savannah, Inc, a Georgia corporation (collectively with any successors or
assigns, "Holder"), in lawful money of the United States, the principal sum
of Two Hundred Thousand Dollars ($200,000), together with interest thereon
from the date of this Promissory Note (the "Note") on the unpaid principal
balance from time to time, as set forth below.

    Subject to the conversion provisions set forth herein, in satisfaction
of its obligations hereunder, Obligor shall make monthly payments to the
credit card companies listed on Exhibit A ("Third Party Holders") in
connection with certain indebtedness incurred by Holder prior to the date
hereof (the "Credit Card Indebtedness").  Obligor shall make such monthly
payments in an amount equal to the total minimum monthly payments due to
the Third Party Holders with respect to the Credit Card Indebtedness (the
"Minimum Payments") when such Minimum Payments are due and shall continue
to make such Minimum Payments until the Credit Card Indebtedness is
satisfied in full.  Any part of the Minimum Payments that constitutes
interest on the Credit Card Indebtedness shall constitute an interest
payment on this Note and any part of any Minimum Payment in excess of the
interest payments on the Credit Card Indebtedness shall constitute a
prepayment on the principal on this Note.  Any payments made by Holder or
affiliates on the Credit Card Indebtedness shall not offset or reduce any
payments owed by Obligor to Holder.  Payments on this Note shall be deemed
delinquent if the Minimum Payments are not made by Obligor to the Third
Party Holders within thirty (30) days of their respective due dates.

<PAGE>

    This Note may be prepaid, in whole or in part, at any time without
premium or penalty.  All prepayments on this Note shall be applied first to
the payments of the accrued and unpaid interest and then to the reduction
of the principal balance hereof (applied equally among all remaining
principal installments hereunder).  Any principal prepayments made by
Obligor may be made directly to Holder or to the Third Party Holders on
behalf of Holder.

    In the event that Holder or its affiliates pays off all or any portion
of the Credit Card Indebtedness, the interest rate on this Note shall be
adjusted to a simple rate of eight percent (8%) per annum, simple interest
and calculated on the basis of the number of days actually elapsed, and the
payment terms shall be adjusted so that principal and interest with respect
to such amount of the Credit Card Indebtedness shall be due and payable in
sixty (60) consecutive equal monthly installments, commencing one (1) month
following the payoff of the Credit Card Indebtedness; provided, if such
Credit Card Indebtedness payoff occurs prior to December 1, 2004, monthly
payments of interest only on the outstanding principal balance shall be due
and payable for each month until December 1, 2004, and commencing January
1, 2005, payments of interest and principal shall ratably be due and
payable over the remaining term.  Further, the adjusted principal and
interest payments shall be delinquent if not received by Holder within ten
(10) business days following the due date thereof.

    The outstanding principal balance (plus any accrued and unpaid interest
on the date thereon, if any) on this Note shall be converted at Holder's
option and in Holder's sole discretion into shares of Obligor's Common Stock
(the "Common Stock") upon delivery of written notice by Holder to Obligor.
The number of shares of Common Stock shall be equal to the quotient obtained
by dividing (a) the aggregate outstanding principal due, plus any accrued
and unpaid interest on this Note on the date of conversion, if any by (b)
the Conversion Price.  For purposes of this Note, the "Conversion Price"
shall mean the closing price of the Common Stock as reported on the National
Association of Securities Dealers, Inc. Over the Counter Bulletin Board
(the "OTCBB") or other national stock exchange on the date of such
conversion.  Notwithstanding the foregoing, in the event that Obligor's
Common Stock is not traded on the OTCBB or other national stock exchange on
the date of such conversion, the "Conversion Price" shall be the fair
market value of Obligor's Common Stock as determined in good faith by
Obligor's board of directors, which Conversion Price so determined shall be
delivered in writing to Holder, who shall have 10 business days after
receipt thereof to withdraw the notice of conversion.  In the event of any
such withdrawal, the notice of conversion shall be void ab initio.

    No fractional shares will be issued upon conversion of this Note.  In
lieu of any fractional share to which Holder would otherwise be entitled,
Obligor will pay to Holder in cash that amount of the unconverted principal
and interest balance of this Note.  Upon conversion of this Note into such
equity securities, Holder shall surrender this Note, duly endorsed, at the
principal offices of Obligor or any transfer agent for Obligor.  At its
expense, Obligor will, as soon as practicable thereafter, issue and deliver
to Holder a certificate for the number of shares of equity securities to
which Holder is entitled upon such conversion, together with any other
securities and property to which Holder is entitled upon such conversion
under the terms of this Note, including a check payable to Holder for any
cash amounts payable as described above.  Upon conversion of this Note into
such equity securities, Obligor will be forever released from all its
obligations and liabilities under this Note, including without limitation
the obligation to pay the principal and interest amounts.

<PAGE>

    If any payment of principal or interest on this Note shall become due
on a Saturday, Sunday, or a public holiday under the laws of the State of
California, such payment shall be made on the next succeeding business day.

    The indebtedness evidenced by this Note is hereby expressly
subordinated, to the extent and in the manner hereinafter set forth, in
right of payment to the prior payment in full of all Obligor's Senior Debt.
For purposes of this Note, "Senior Debt" shall mean, except as otherwise
provided herein:  (a) any indebtedness of Obligor (plus interest, premium
and penalties due from or arising out of such indebtedness, or any
refinancing thereof): (i) for borrowed funds; (ii) due to the sellers or
lessors of any real or personal property to Obligor; or (iii) for
reimbursement obligations with respect to letters of credit; (b) any other
indebtedness of Obligor, except to the extent that the holder of such
indebtedness otherwise agrees in writing; and (c) any debentures, notes or
other evidences of indebtedness issued in exchange for any of the foregoing
indebtedness, or any indebtedness arising from the satisfaction of such
indebtedness by a guarantor.  Notwithstanding anything herein to the
contrary, Senior Debt shall not include any indebtedness of Obligor (or of
any subsidiary of Obligor ) incurred as seller financing in connection with
acquisitions of temporary nurses staffing companies or travel nurse
companies consummated prior to or following the date hereof.
Notwithstanding anything herein to the contrary, no payment of principal or
interest shall be made on this Note if, but only as long as, there exists
any default, or the existence of any event which, with the giving of notice,
would constitute a default, in the payment of Senior Debt, as determined by
the terms of any such Senior Debt.  Holder shall execute, at or following
the date hereof, as the case may be, all subordination documents required
by the holders of Senior Debt necessary to effectuate the terms of the
foregoing.

    In the event that Obligor (a) fails to make payment on any date for
payment herein above specified of any principal and/or interest due
hereunder on such date, (b) admits in writing its inability to pay its
debts as they become due, or makes a general assignment for the benefit of
creditors or files any petition or action for relief under any bankruptcy,
reorganization, insolvency or moratorium law, or any other law or laws for
the relief of, or relating to, debtors or (c) an involuntary petition is
filed against Obligor under any bankruptcy, reorganization, insolvency or
moratorium law, or any other law or laws for the relief of, or relating to,
debtors unless such petition shall be dismissed or vacated within sixty (60)
days of the date thereof, Obligor shall be deemed to be in default
hereunder.  In the event of such default, Holder may, at Holder's option
and in Holder's sole discretion, ten (10) business days after giving notice
of default to Obligor, accelerate the maturity of all amounts due under
this Note by giving notice of such acceleration.

    The acceptance by Holder of any payment hereunder which is less than
the payment in full of all amounts due and payable at the time of such
payment shall not constitute a waiver of the right to accelerate at that
time or any subsequent time or nullify any prior acceleration without the
express consent of Holder except as and to the extent otherwise provided by
law.

    Obligor waives presentment, demand for performance, notice of
nonperformance, protest, notice of protest, and notice of dishonor (but not
notice of default).  No delay on the part of Holder in exercising any right
hereunder shall operate as a waiver of such right under this Note.  This
Note is being delivered in and shall be construed in accordance with the
laws of the State of California as applied to contracts entered into by
California residents within the State of California, which contracts are to
be performed entirely within the State of California.

<PAGE>

    The right to plead any and all statutes of limitations as a defense to
any demand on this Note, or any guaranty hereof, or any agreement to the
same, or any instrument securing this Note, or any and all obligations or
liabilities arising out of or in connection with this Note, is expressly
waived by Obligor and each and every endorser or guarantor if any, to the
fullest extent permitted by law.

    Notwithstanding anything to the contrary contained herein, the total
liability for payments hereunder in the nature of interest shall not exceed
the limits imposed by applicable interest rate limitation laws.

    The provisions of this Note are intended by Obligor to be severable and
divisible and the invalidity or unenforceability of a provision or term
herein shall not invalidate or render unenforceable the remainder of this
Note or any part thereof.

    If the indebtedness represented by this Note or any part thereof is
collected at law or in equity or in bankruptcy, receivership or other
judicial proceedings or if this Note is placed in the hands of attorneys
for collection after default, Obligor agrees to pay, in addition to the
principal and interest payable hereon, reasonable attorneys' fees and costs
incurred by Holder.

    Any notice or other communication (except payment) required or
permitted hereunder shall be in writing and shall be deemed to have been
given upon delivery if personally delivered or one day after deposit if
deposited in the United States mail for mailing by certified mail, postage
prepaid, and addressed as follows:

    If to Holder:     12107 Leuders Lane
                      Dallas, Texas  75230
                      Attention:  Cynthia Permenter

    If to Obligor:    Crdentia Corp.
                      Attention: James D. Durham
                      455 Market Street, Suite 1220
                      San Francisco, California  94105

    with a copy to:   Steven G. Rowles, Esq.
                      Morrison & Foerster LLP
                      3811 Valley Centre Drive, Suite 500
                      San Diego, California  92130

Any payment shall be deemed made upon receipt by Holder.  Each of Holder or
Obligor may change her or its address for purposes of this paragraph by
giving to the other party notice in conformance with this paragraph of such
new address.

    This Note is a renewal, extension and restatement of that certain
Amended and Restated Short-Term Promissory Note executed by PSR Nurses, Ltd.
(the "Partnership") in favor of Holder on July 1, 2003 (the "Prior Note").
Upon Holder's acceptance of this Note, the Prior

<PAGE>


Note shall be concurrently surrendered to Obligor for cancellation and
neither Obligor, the Partnership nor Holder shall have any continuing
rights or obligations thereunder.

OBLIGOR:	                CRDENTIA CORP.,
                                a Delaware corporation
                                By:	/s/ James D. Durham
                                   James D. Durham
                                   Chief Executive Officer


HOLDER:	                        PROFESSIONAL STAFFING RESOURCES, INC.,
	                        a Georgia corporation
                                By:	/s/ Cynthia Permenter
                                Name:	Cynthia Permenter
                                Title:	President


	                        NURSING SERVICES REGISTRY OF SAVANNAH, INC.,
                                a Georgia corporation
                                By:	/s/ Cynthia Permenter
                                Name:	Cynthia Permenter
                                Title:	President

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>9
<FILENAME>exhibit_1010.txt
<TEXT>
EXHIBIT 10.10

                              CRDENTIA CORP.

                        NOTICE OF STOCK OPTION AWARD
                        ----------------------------

Grantee's Name and Address:     Thomas H. Herman

                                436 14th Street, Suite 1005

                                Oakland, CA  94612

     You (the "Grantee") have been granted an option to purchase shares of
Common Stock, subject to the terms and conditions of this Notice of Stock
Option Award (the "Notice") and the Stock Option Award Agreement (the
"Option Agreement") attached hereto, as follows.  Unless otherwise defined
herein, the terms defined in the Option Agreement shall have the same
defined meanings in this Notice.

     Award Number                         1

     Date of Award                        December 16, 2003

     Vesting Commencement Date            September 9, 2003

     Exercise Price per Share             $0.96

     Total Number of Shares Subject
     to the Option (the "Shares")         100,000

     Total Exercise Price                 $96,000

     Type of Option 	                  Non-Qualified Stock Option

     Expiration Date:                     December 16, 2013

     Post-Termination Exercise Period:    Three (3) Months

Vesting Schedule:
-----------------

     Subject to the Grantee's Continuous Service and other limitations set
forth in this Notice and the Option Agreement, the Option may be exercised,
in whole or in part, in accordance with the following schedule:

     1/3rd of the Total Number of Shares Subject to the Option shall vest
upon the first anniversary of the Vesting Commencement Date, and 1/36th of
the Total Number of Shares Subject to the Option shall vest on each monthly
anniversary of the Vesting Commencement Date thereafter such that the
Option will be fully vested three years after the Vesting Commencement Date.

     During any authorized leave of absence, the vesting of the Option as
provided in this schedule shall be suspended after the leave of absence
exceeds a period of ninety (90) days.  Vesting of the Option shall resume
upon the Grantee's termination of the leave of absence and return to
service to the Company or a Related Entity.  The Vesting Schedule of the
Option shall be extended by the length of the suspension.

<PAGE>

IN WITNESS WHEREOF, the Company and the Grantee have executed this Notice
and agree that the Option is to be governed by the terms and conditions of
this Notice and the Option Agreement.

                                        Crdentia Corp.,
                                        a Delaware corporation
                                        By: /s/  James D. Durham
                                           ------------------------
                                        Title: CEO
                                              ---------------------

THE GRANTEE ACKNOWLEDGES AND AGREES THAT THE SHARES SUBJECT TO THE OPTION
SHALL VEST, IF AT ALL, ONLY DURING THE PERIOD OF THE GRANTEE'S CONTINUOUS
SERVICE (NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THE OPTION OR
ACQUIRING SHARES HEREUNDER).  THE GRANTEE FURTHER ACKNOWLEDGES AND AGREES
THAT NOTHING IN THIS NOTICE OR THE OPTION AGREEMENT SHALL CONFER UPON THE
GRANTEE ANY RIGHT WITH RESPECT TO FUTURE AWARDS OR CONTINUATION OF THE
GRANTEE'S CONTINUOUS SERVICE, NOR SHALL IT INTERFERE IN ANY WAY WITH THE
GRANTEE'S RIGHT OR THE RIGHT OF THE COMPANY OR RELATED ENTITY TO WHICH THE
GRANTEE PROVIDES SERVICES TO TERMINATE THE GRANTEE'S CONTINUOUS SERVICE,
WITH OR WITHOUT CAUSE, AND WITH OR WITHOUT NOTICE.  THE GRANTEE
ACKNOWLEDGES THAT UNLESS THE GRANTEE HAS A WRITTEN EMPLOYMENT AGREEMENT
WITH THE COMPANY TO THE CONTRARY, THE GRANTEE'S STATUS IS AT WILL.

     The Grantee acknowledges receipt of a copy of the Option Agreement, and
represents that he or she is familiar with the terms and provisions thereof,
and hereby accepts the Option subject to all of the terms and provisions
hereof and thereof.  The Grantee has reviewed this Notice and the Option
Agreement in their entirety, has had an opportunity to obtain the advice of
counsel prior to executing this Notice, and fully understands all provisions
of this Notice and the Option Agreement.  The Grantee hereby agrees that
all disputes arising out of or relating to this Notice and the Option
Agreement shall be resolved in accordance with Section 17 of the Option
Agreement.  The Grantee further agrees to notify the Company upon any
change in the residence address indicated in this Notice.

Dated: 12/16/2003		Signed: /s/ T H Herman
                                        --------------------
                                        Grantee

                                    2
<PAGE>

                                                          Award Number:  1

                              CRDENTIA CORP.

                       STOCK OPTION AWARD AGREEMENT
                       ----------------------------

     1. Grant of Option.  Crdentia Corp., a Delaware corporation (the
"Company"), hereby grants to the Grantee (the "Grantee") named in the
Notice of Stock Option Award (the "Notice"), an option (the "Option") to
purchase the Total Number of Shares of Common Stock subject to the Option
(the "Shares") set forth in the Notice, at the Exercise Price per Share set
forth in the Notice (the "Exercise Price") subject to the terms and
provisions of this Stock Option Award Agreement (the "Option Agreement") and
the Notice which are incorporated herein by reference.

     2. Exercise of Option.

       (a) Right to Exercise.  The Option shall be exercisable during its
term in accordance with the Vesting Schedule set out in the Notice and with
the applicable provisions of this Option Agreement.  The Option shall be
subject to the provisions of Section 20 of this Option Agreement relating
to the exercisability or termination of the Option in the event of a
Corporate Transaction.  The Grantee shall be subject to reasonable
limitations on the number of requested exercises during any monthly or
weekly period as determined by the Board.  In no event shall the Company
issue fractional Shares.

       (b) Method of Exercise.  The Option shall be exercisable by delivery
of an exercise notice (a form of which is attached as Exhibit A) or by such
other procedure as specified from time to time by the Board which shall
state the election to exercise the Option, the whole number of Shares in
respect of which the Option is being exercised, and such other provisions
as may be required by the Board.  The exercise notice shall be delivered in
person, by certified mail, or by such other method (including electronic
transmission) as determined from time to time by the Board to the Company
accompanied by payment of the Exercise Price.  The Option shall be deemed
to be exercised upon receipt by the Company of such notice accompanied by
the Exercise Price, which, to the extent selected, shall be deemed to be
satisfied by use of the broker-dealer sale and remittance procedure to pay
the Exercise Price provided in Section 4(d), below.

       (c) Taxes.  No Shares will be delivered to the Grantee or other
person pursuant to the exercise of the Option until the Grantee or other
person has made arrangements acceptable to the Board for the satisfaction
of applicable income tax and employment tax withholding obligations,
including, without limitation, obligations incident to the receipt of
Shares.  Upon exercise of the Option, the Company or the Grantee's employer
may offset or withhold (from any amount owed by the Company or the Grantee's
employer to the Grantee) or collect from the Grantee or other person an
amount sufficient to satisfy such tax obligations and/or the employer's
withholding obligations.

     3. Grantee's Representations.  The Grantee understands that neither
the Option nor the Shares exercisable pursuant to the Option have been
registered under the Securities Act of 1933, as amended, or any United
States securities laws.  In the event the Shares purchasable

                                   1
<PAGE>

pursuant to the exercise of the Option have not been registered under the
Securities Act of 1933, as amended, at the time the Option is exercised,
the Grantee shall, if requested by the Company, concurrently with the
exercise of all or any portion of the Option, deliver to the Company his
or her Investment Representation Statement in the form attached hereto as
Exhibit B.

     4. Method of Payment.  Payment of the Exercise Price shall be made by
any of the following, or a combination thereof, at the election of the
Grantee; provided, however, that such exercise method does not then violate
any Applicable Law and, provided further, that the portion of the Exercise
Price equal to the par value of the Shares must be paid in cash or other
legal consideration permitted by the Delaware General Corporation Law:

       (a) cash;

       (b) check;

       (c) surrender of Shares or delivery of a properly executed form of
attestation of ownership of Shares as the Board may require which have a
Fair Market Value on the date of surrender or attestation equal to the
aggregate Exercise Price of the Shares as to which the Option is being
exercised, provided, however, that Shares acquired under the Option or any
other equity compensation plan or agreement of the Company must have been
held by the Grantee for a period of more than six (6) months; or

       (d) payment through a broker-dealer sale and remittance procedure
pursuant to which the Grantee (i) shall provide written instructions to a
Company-designated brokerage firm to effect the immediate sale of some or
all of the purchased Shares and remit to the Company sufficient funds to
cover the aggregate exercise price payable for the purchased Shares and
(ii) shall provide written directives to the Company to deliver the
certificates for the purchased Shares directly to such brokerage firm in
order to complete the sale transaction.

     5. Restrictions on Exercise.  The Option may not be exercised if the
issuance of the Shares subject to the Option upon such exercise would
constitute a violation of any Applicable Laws.

     6. Termination or Change of Continuous Service.  In the event the
Grantee's Continuous Service terminates, the Grantee may, but only during
the Post-Termination Exercise Period, exercise the portion of the Option
that was vested at the date of such termination (the "Termination Date").
In no event shall the Option be exercised later than the Expiration Date
set forth in the Notice.  In the event of the Grantee's change in status
from Employee, Director or Consultant to any other status of Employee,
Director or Consultant, the Option shall remain in effect and vesting of
the Option shall continue only to the extent determined by the Board as of
such change in status.  Except as provided in Sections 7 and 8 below, to
the extent that the Option was unvested on the Termination Date, or if the
Grantee does not exercise the vested portion of the Option within the Post-
Termination Exercise Period, the Option shall terminate.

     7. Disability of Grantee.  In the event the Grantee's Continuous
Service terminates as a result of his or her Disability, the Grantee may,
but only within twelve (12) months from the Termination Date (and in no
event later than the Expiration Date), exercise the portion of the Option
that was vested on the Termination Date.  To the extent that the Option was
unvested on

                                    2
<PAGE>

the Termination Date, or if the Grantee does not exercise the vested portion
of the Option within the time specified herein, the Option shall terminate.

     8. Death of Grantee.  In the event of the termination of the Grantee's
Continuous Service as a result of his or her death, or in the event of the
Grantee's death during the Post-Termination Exercise Period or during the
twelve (12) month period following the Grantee's termination of Continuous
Service as a result of his or her Disability, the Grantee's estate, or a
person who acquired the right to exercise the Option by bequest or
inheritance, may exercise the portion of the Option that was vested at the
date of termination within twelve (12) months from the date of death (but
in no event later than the Expiration Date).  To the extent that the Option
was unvested on the date of death, or if the vested portion of the Option
is not exercised within the time specified herein, the Option shall
terminate.

     9. Transferability of Option.  The Option may not be transferred in any
manner other than by will or by the laws of descent and distribution,
provided, however, that the Option may be transferred to members of the
Grantee's Immediate Family to the extent and in the manner authorized by
the Board.  Notwithstanding the foregoing, the Grantee may designate
members of the Grantee's Immediate Family as beneficiaries of the Grantee's
Option in the event of the Grantee's death on a beneficiary designation form
provided by the Board.  The terms of the Option shall be binding upon the
executors, administrators, heirs and successors of the Grantee.

     10. Term of Option.  The Option must be exercised no later than the
Expiration Date set forth in the Notice or such earlier date as otherwise
provided herein.  After the Expiration Date or such earlier date, the
Option shall be of no further force or effect and may not be exercised.

     11. Stop Transfer Notices.  In order to ensure compliance with the
restrictions on transfer set forth in this Option Agreement or the Notice,
the Company may issue appropriate "stop transfer" instructions to its
transfer agent, if any, and, if the Company transfers its own securities,
it may make appropriate notations to the same effect in its own records.

     12. Refusal to Transfer.  The Company shall not be required (i) to
transfer on its books any Shares that have been sold or otherwise
transferred in violation of any of the provisions of this Option Agreement
or (ii) to treat as owner of such Shares or to accord the right to vote or
pay dividends to any purchaser or other transferee to whom such Shares
shall have been so transferred.

     13. Tax Consequences.  Set forth below is a brief summary as of the
date of this Option Agreement of some of the federal tax consequences of
exercise of the Option and disposition of the Shares.  THIS SUMMARY IS
NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO
CHANGE.  THE GRANTEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THE
OPTION OR DISPOSING OF THE SHARES.

       (a) Exercise of Non-Qualified Stock Option.  On exercise of a Non-
Qualified Stock Option, the Grantee will be treated as having received
compensation income (taxable at ordinary income tax rates) equal to the
excess, if any, of the Fair Market Value of the Shares on

                                    3

<PAGE>

the date of exercise over the Exercise Price.  If the Grantee is an
Employee or a former Employee, the Company will be required to withhold
from the Grantee's compensation or collect from the Grantee and pay to the
applicable taxing authorities an amount in cash equal to a percentage of
this compensation income at the time of exercise, and may refuse to honor
the exercise and refuse to deliver Shares if such withholding amounts are
not delivered at the time of exercise.

       (b) Disposition of Shares.  If Shares are held for more than one
year, any gain realized on disposition of the Shares will be treated as
long term capital gain for federal income tax purposes.

     14. Lock-Up Agreement.

       (a) Agreement.  The Grantee, if requested by the Company and the
lead underwriter of any public offering of the Common Stock (the "Lead
Underwriter"), hereby irrevocably agrees not to sell, contract to sell,
grant any option to purchase, transfer the economic risk of ownership in,
make any short sale of, pledge or otherwise transfer or dispose of any
interest in any Common Stock or any securities convertible into or
exchangeable or exercisable for or any other rights to purchase or acquire
Common Stock (except Common Stock included in such public offering or
acquired on the public market after such offering) during the 180 day
period following the effective date of a registration statement of the
Company filed under the Securities Act of 1933, as amended, or such shorter
period of time as the Lead Underwriter shall specify.  The Grantee further
agrees to sign such documents as may be requested by the Lead Underwriter
to effect the foregoing and agrees that the Company may impose stop-transfer
instructions with respect to such Common Stock subject to the lock-up
period until the end of such period.  The Company and the Grantee
acknowledge that each Lead Underwriter of a public offering of the Company's
stock, during the period of such offering and for the 180 day period
thereafter, is an intended beneficiary of this Section 14.

       (b) No Amendment Without Consent of Underwriter.  During the period
from identification of a Lead Underwriter in connection with any public
offering of the Company's Common Stock until the earlier of (i) the
expiration of the lock-up period specified in Section 14(a) in connection
with such offering or (ii) the abandonment of such offering by the Company
and the Lead Underwriter, the provisions of this Section 14 may not be
amended or waived except with the consent of the Lead Underwriter.

     15. Entire Agreement: Governing Law.  The Notice and this Option
Agreement constitute the entire agreement of the parties with respect to
the subject matter hereof and supersede in their entirety all prior
undertakings and agreements of the Company and the Grantee with respect to
the subject matter hereof, and may not be modified adversely to the
Grantee's interest except by means of a writing signed by the Company and
the Grantee.  Nothing in the Notice and this Option Agreement (except as
expressly provided therein) is intended to confer any rights or remedies on
any persons other than the parties.  The Notice and this Option Agreement
are to be construed in accordance with and governed by the internal laws of
the State of Texas 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 Texas to the rights and duties of the parties.
Should any provision of the Notice or this Option Agreement be determined
by a

                                   4
<PAGE>

court of law to be illegal or unenforceable, such provision shall be
enforced to the fullest extent allowed by law and the other provisions shall
nevertheless remain effective and shall remain enforceable.

     16. Headings.  The captions used in the Notice and this Option
Agreement are inserted for convenience and shall not be deemed a part of
the Option for construction or interpretation.

     17. Dispute Resolution.  The provisions of this Section 17 shall be
the exclusive means of resolving disputes arising out of or relating to the
Notice and this Option Agreement.  The Company, the Grantee, and the
Grantee's assignees (the "parties") shall attempt in good faith to resolve
any disputes arising out of or relating to the Notice and this Option
Agreement by negotiation between individuals who have authority to settle
the controversy.  Negotiations shall be commenced by either party by notice
of a written statement of the party's position and the name and title of
the individual who will represent the party.  Within thirty (30) days of
the written notification, the parties shall meet at a mutually acceptable
time and place, and thereafter as often as they reasonably deem necessary,
to resolve the dispute.  If the dispute has not been resolved by
negotiation, the parties agree that any suit, action, or proceeding arising
out of or relating to the Notice or this Option Agreement shall be brought
in the United States District Court for the Northern District of Texas (or
should such court lack jurisdiction to hear such action, suit or proceeding,
in a Texas state court in the County of Dallas) and that the parties shall
submit to the jurisdiction of such court.  The parties irrevocably waive,
to the fullest extent permitted by law, any objection the party may have to
the laying of venue for any such suit, action or proceeding brought in such
court.  THE PARTIES ALSO EXPRESSLY WAIVE ANY RIGHT THEY HAVE OR MAY HAVE TO
A JURY TRIAL OF ANY SUCH SUIT, ACTION OR PROCEEDING.  If any one or more
provisions of this Section 17 shall for any reason be held invalid or
unenforceable, it is the specific intent of the parties that such provisions
shall be modified to the minimum extent necessary to make it or its
application valid and enforceable.

     18. Notices.  Any notice required or permitted hereunder shall be given
in writing and shall be deemed effectively given upon personal delivery,
upon deposit for delivery by an internationally recognized express mail
courier service or upon deposit in the United States mail by certified mail
(if the parties are within the United States), with postage and fees
prepaid, addressed to the other party at its address as shown in these
instruments, or to such other address as such party may designate in writing
from time to time to the other party.

     19. Adjustments Upon Changes in Capitalization.  Subject to any
required action by the stockholders of the Company, the number of Shares
covered by the Option, the exercise price of the Option, as well as any
other terms that the Board determines require adjustment shall be
proportionately adjusted for (i) any increase or decrease in the number of
issued Shares resulting from a stock split, reverse stock split, stock
dividend, combination or reclassification of the Shares, or similar
transaction affecting the Shares, (ii) any other increase or decrease in
the number of issued Shares effected without receipt of consideration by
the Company, or (iii) as the Board may determine in its discretion, any
other transaction with respect to Common Stock including a corporate merger,
consolidation, acquisition of property or stock, separation (including a
spin-off or other distribution of stock or property), reorganization,
liquidation (whether partial or complete) or any similar transaction;
provided, however that conversion of

                                    5
<PAGE>

any convertible securities of the Company shall not be deemed to have been
"effected without receipt of consideration."  Such adjustment shall be made
by the Board and its determination shall be final, binding and conclusive.
Except as the Board determines, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any
class, shall affect, and no adjustment by reason hereof shall be made with
respect to, the number or price of Shares subject to the Option.

     20. Corporate Transactions.

       (a) Termination of Option to Extent Not Assumed in Corporate
Transaction.  Effective upon the consummation of a Corporate Transaction,
the Option shall terminate.  However, the Option shall not terminate to the
extent it is Assumed in connection with the Corporate Transaction.

       (b) Acceleration of Option Upon Corporate Transaction.  In the event
of a Corporate Transaction, for the portion of the Option that is neither
Assumed nor Replaced, such portion of the Option shall automatically become
fully vested and exercisable for all of the Shares at the time represented
by such portion of the Option, immediately prior to the specified effective
date of such Corporate Transaction.

     21. Definitions.  As used herein, the following definitions shall apply:

       (a) "Applicable Laws" means the legal requirements applicable to the
Option under applicable provisions of federal securities laws, state
corporate and securities laws, the Code, the rules of any applicable stock
exchange or national market system, and the rules of any non-U.S.
jurisdiction applicable to Options granted to residents therein.

       (b) "Assumed" means that pursuant to a Corporate Transaction either
(i) the Option is expressly affirmed by the Company or (ii) the contractual
obligations represented by the Option are expressly assumed (and not simply
by operation of law) by the successor entity or its Parent in connection
with the Corporate Transaction with appropriate adjustments to the number
and type of securities of the successor entity or its Parent subject to the
Option and the exercise or purchase price thereof which at least preserves
the compensation element of the Option existing at the time of the
Corporate Transaction as determined in accordance with the instruments
evidencing the agreement to assume the Option.

       (c) "Board" means the Board of Directors of the Company and shall
include any committee of the Board or Officer of the Company to which the
Board has delegated its authority under this Agreement.

       (d) "Cause" means, with respect to the termination by the Company or
a Related Entity of the Grantee's Continuous Service, that such termination
is for "Cause" as such term is expressly defined in a then-effective written
agreement between the Grantee and the Company or such Related Entity, or in
the absence of such then-effective written agreement and definition, is
based on, in the determination of the Board, the Grantee's:  (i)
performance of any act or failure to perform any act in bad faith and to
the detriment of the Company or a Related Entity; (ii) dishonesty,
intentional misconduct or material breach of any agreement with the

                                    6
<PAGE>

Company or a Related Entity; or (iii) commission of a crime involving
dishonesty, breach of trust, or physical or emotional harm to any person.

       (e) "Code" means the Internal Revenue Code of 1986, as amended.

       (f) "Common Stock" means the common stock of the Company.

       (g) "Company" means Crdentia Corp., a Delaware corporation.

       (h) "Consultant" means any person (other than an Employee or a
Director, solely with respect to rendering services in such person's
capacity as a Director) who is engaged by the Company or any Related Entity
to render consulting or advisory services to the Company or such Related
Entity.

       (i) "Continuous Service" means that the provision of services to the
Company or a Related Entity in any capacity of Employee, Director or
Consultant is not interrupted or terminated.  In jurisdictions requiring
notice in advance of an effective termination as an Employee, Director or
Consultant, Continuous Service shall be deemed terminated upon the actual
cessation of providing services to the Company or a Related Entity
notwithstanding any required notice period that must be fulfilled before a
termination as an Employee, Director or Consultant can be effective under
Applicable Laws.  Continuous Service shall not be considered interrupted in
the case of (i) any approved leave of absence, (ii) transfers among the
Company, any Related Entity, or any successor, in any capacity of Employee,
Director or Consultant, or (iii) any change in status as long as the
individual remains in the service of the Company or a Related Entity in any
capacity of Employee, Director or Consultant (except as otherwise provided
in the Option Agreement).  An approved leave of absence shall include sick
leave, military leave, or any other authorized personal leave.

       (j) "Corporate Transaction" means any of the following transactions:

         (i) a merger or consolidation in which the Company is not the
surviving entity, except for a transaction the principal purpose of which
is to change the state in which the Company is incorporated;

         (ii) the sale, transfer or other disposition of all or substantially
all of the assets of the Company (including the capital stock of the
Company's subsidiary corporations);

         (iii) the complete liquidation or dissolution of the Company;

         (iv) any reverse merger or series of related transactions
culminating in a reverse merger (including, but not limited to, a tender
offer followed by a reverse merger) in which the Company is the surviving
entity but in which securities possessing more than fifty percent (50%) of
the total combined voting power of the Company's outstanding securities are
transferred to a person or persons different from those who held such
securities immediately prior to such merger or the initial transaction
culminating in such merger but excluding any such transaction or series of
related transactions that the Board determines shall not be a Corporate
Transaction; or

                                   7
<PAGE>

          (v) acquisition in a single or series of related transactions by
any person or related group of persons (other than the Company or by a
Company-sponsored employee benefit plan) of beneficial ownership (within
the meaning of Rule 13d-3 of the Exchange Act) of securities possessing
more than fifty percent (50%) of the total combined voting power of the
Company's outstanding securities but excluding any such transaction or
series of related transactions that the Board determines shall not be a
Corporate Transaction.

       (k) "Director" means a member of the Board or the board of directors
of any Related Entity.

       (l) "Disability" shall have the same meaning as defined under the
long-term disability policy of the Company or the Related Entity to which
the Grantee provides services regardless of whether the Grantee is covered
by such policy.  If the Company or the Related Entity to which the Grantee
provides service does not have a long-term disability plan in place,
"Disability" means that the Grantee is unable to carry out the
responsibilities and functions of the position held by the Grantee by
reason of any medically determinable physical or mental impairment for a
period of not less than ninety (90) consecutive days.  The Grantee will not
be considered to have incurred a Disability unless he or she furnishes
proof of such impairment sufficient to satisfy the Board in its discretion.

       (m) "Employee" means any person, including an Officer or Director,
who is in the employ of the Company or any Related Entity, subject to the
control and direction of the Company or any Related Entity as to both the
work to be performed and the manner and method of performance.  The payment
of a director's fee by the Company or a Related Entity shall not be
sufficient to constitute "employment" by the Company.

       (n) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

       (o) "Fair Market Value" means, as of any date, the value of Common
Stock determined as follows:

          (i) If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation The
Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq Stock
Market, its Fair Market Value shall be the closing sales price for such
stock (or the closing bid, if no sales were reported) as quoted on such
exchange or system on the date of determination (or, if no closing sales
price or closing bid was reported on that date, as applicable, on the last
trading date such closing sales price or closing bid was reported), as
reported in The Wall Street Journal or such other source as the Board deems
reliable;

          (ii) If the Common Stock is regularly quoted on an automated
quotation system (including the OTC Bulletin Board) or by a recognized
securities dealer, but selling prices are not reported, the Fair Market
Value of a Share of Common Stock shall be the mean between the high bid and
low asked prices for the Common Stock on date of determination (or, if no
such prices were reported on that date, on the last date such prices were
reported), as reported in The Wall Street Journal or such other source as
the Board deems reliable; or

                                      8
<PAGE>

          (iii) In the absence of an established market for the Common
Stock of the type described in (i) and (ii), above, the Fair Market Value
thereof shall be determined by the Board in good faith.

       (p) "Good Reason" means the occurrence after a Corporate Transaction
of any of the following events or conditions unless consented to by the
Grantee (and the Grantee shall be deemed to have consented to any such event
or condition unless the Grantee provides written notice of the Grantee's
non-acquiescence within 30 days of the effective time of such event or
condition):

          (i) a reduction in the Grantee's base salary to a level more than
fifteen  percent (15%) below that in effect at any time within six (6)
months preceding the consummation of a Corporate Transaction or at any time
thereafter (not including a similar reduction with respect to all of the
Company's management); or

          (ii) requiring the Grantee to be based at any place outside a
50-mile radius from the Grantee's job location prior to the Corporate
Transaction except for reasonably required travel on business which is not
materially greater than such travel requirements prior to the Corporate
Transaction

       (q) "Immediate Family" means any child, stepchild, grandchild,
parent, stepparent, grandparent, spouse, former spouse, sibling, niece,
nephew, mother-in-law, father-in-law, son-in law, daughter-in-law, brother-
in-law, or sister-in-law, including adoptive relationships, any person
sharing the Grantee's household (other than a tenant or employee), a trust
in which these persons (or the Grantee) have more than fifty percent (50%)
of the beneficial interest, a foundation in which these persons (or the
Grantee) control the management of assets, and any other entity in which
these persons (or the Grantee) own more than fifty percent (50%) of the
voting interests.

       (r) "Non-Qualified Stock Option" means an Option not intended to
qualify as an incentive stock option within the meaning of Section 422 of
the Code.

       (s) "Officer" means a person who is an officer of the Company or a
Related Entity within the meaning of Section 16 of the Exchange Act and the
rules and regulations promulgated thereunder.

       (t) "Parent" means a "parent corporation," whether now or hereafter
existing, as defined in Section 424(e) of the Code.

       (u) "Related Entity" means any Parent or Subsidiary of the Company
and any business, corporation, partnership, limited liability company or
other entity in which the Company or a Parent or a Subsidiary of the
Company holds a substantial ownership interest, directly or indirectly.

       (v) "Replaced" means that pursuant to a Corporate Transaction the
Option is replaced with a comparable stock award or a cash incentive
program of the Company, the successor entity (if applicable) or Parent of
either of them which preserves the compensation element of such Option
existing at the time of the Corporate Transaction and provides for
subsequent payout in accordance with the same (or a more favorable) vesting
schedule applicable to such Option.  The determination of Option
comparability shall be made by the Board and its determination shall be
final, binding and conclusive.

                                     9
<PAGE>

       (w) "Share" means a share of the Common Stock.

       (x) "Subsidiary" means a "subsidiary corporation," whether now or
hereafter existing, as defined in Section 424(f) of the Code.

                                END OF AGREEMENT

                                      10
<PAGE>


                                   EXHIBIT A
                                   ---------

                                EXERCISE NOTICE
                                ---------------

Crdentia Corp.
14114 Dallas Parkway, Suite 600
Dallas, Texas  75254
Attention:  Secretary

     1. Effective as of today,               ,    the undersigned (the "
Grantee") hereby elects to exercise the Grantee's option to purchase
          shares of the Common Stock (the "Shares") of Crdentia Corp. (the
"Company") under and pursuant to the Stock Option Award Agreement (the
"Option Agreement") and Notice of Stock Option Award (the "Notice") dated
December 16, 2003.  Unless otherwise defined herein, the terms defined in
the Option Agreement shall have the same defined meanings in this Exercise
Notice.

     2. Representations of the Grantee.  The Grantee acknowledges that the
Grantee has received, read and understood the Notice and the Option
Agreement and agrees to abide by and be bound by their terms and conditions.

     3. Rights as Stockholder.  Until the stock certificate evidencing such
Shares is issued (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company), no right to
vote or receive dividends or any other rights as a stockholder shall exist
with respect to the Shares, notwithstanding the exercise of the Option.
The Company shall issue (or cause to be issued) such stock certificate
promptly after the Option is exercised.  No adjustment will be made for a
dividend or other right for which the record date is prior to the date the
stock certificate is issued, except as provided in Section 19 of the Option
Agreement.

     4. Delivery of Payment.  The Grantee herewith delivers to the Company
the full Exercise Price for the Shares, which, to the extent selected, shall
be deemed to be satisfied by use of the broker-dealer sale and remittance
procedure to pay the Exercise Price provided in Section 4(d) of the Option
Agreement.

     5. Tax Consultation.  The Grantee understands that the Grantee may
suffer adverse tax consequences as a result of the Grantee's purchase or
disposition of the Shares.  The Grantee represents that the Grantee has
consulted with any tax consultants the Grantee deems advisable in connection
with the purchase or disposition of the Shares and that the Grantee is not
relying on the Company for any tax advice.

     6. Taxes.  The Grantee agrees to satisfy all applicable non-U.S.,
federal, state and local income and employment tax withholding obligations
and herewith delivers to the Company the full amount of such obligations or
has made arrangements acceptable to the Company to satisfy such obligations.
If the Company is required to satisfy any non-U.S., federal, state or local
income or employment tax withholding obligations as a result of such an
early disposition, the Grantee agrees to satisfy the amount of such
withholding in a manner that the Board prescribes.

                                    1
<PAGE>

     7. Successors and Assigns.  The Company may assign any of its rights
under this Exercise Notice to single or multiple assignees, and this
agreement shall inure to the benefit of the successors and assigns of the
Company.  Subject to the restrictions on transfer herein set forth, this
Exercise Notice shall be binding upon the Grantee and his or her heirs,
executors, administrators, successors and assigns.

     8. Headings.  The captions used in this Exercise Notice are inserted
for convenience and shall not be deemed a part of this agreement for
construction or interpretation.

     9. Dispute Resolution.  The provisions of Section 17 of the Option
Agreement shall be the exclusive means of resolving disputes arising out of
or relating to this Exercise Notice.

     10. Governing Law; Severability.  This Exercise Notice is to be
construed in accordance with and governed by the internal laws of the State
of Texas 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 Texas to the rights and duties of the parties.  Should
any provision of this Exercise Notice be determined by a court of law to be
illegal or unenforceable, such provision shall be enforced to the fullest
extent allowed by law and the other provisions shall nevertheless remain
effective and shall remain enforceable.

     11. Notices.  Any notice required or permitted hereunder shall be
given in writing and shall be deemed effectively given upon personal
delivery, upon deposit for delivery by an internationally recognized
express mail courier service or upon deposit in the United States mail by
certified mail (if the parties are within the United States), with postage
and fees prepaid, addressed to the other party at its address as shown below
beneath its signature, or to such other address as such party may
designate in writing from time to time to the other party.

     12. Further Instruments.  The parties agree to execute such further
instruments and to take such further action as may be reasonably necessary
to carry out the purposes and intent of this agreement.

     13. Entire Agreement.  The Notice and the Option Agreement are
incorporated herein by reference and together with this Exercise Notice
constitute the entire agreement of the parties with respect to the subject
matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and the Grantee with respect to the subject
matter hereof, and may not be modified adversely to the Grantee's interest
except by means of a writing signed by the Company and the Grantee.
Nothing in the Notice the Option Agreement and this Exercise Notice (except
as expressly provided therein) is intended to confer any rights or remedies
on any persons other than the parties.

                                      2
<PAGE>

Submitted by:	                      Accepted by:

GRANTEE:	                      CRDENTIA CORP.

                                      By:
                                         ---------------------------
-----------------------------
(Signature)	                      Title:
                                             -----------------------
Address:	                      Address:

436 14th Street, Suite 1005
Oakland, CA  94612	              14114 Dallas Parkway, Suite 600
                                      Dallas, Texas  75254


                                     3
<PAGE>


                                 EXHIBIT B
                                 ---------

                    INVESTMENT REPRESENTATION STATEMENT
                    -----------------------------------

GRANTEE:                        Thomas F. Herman

COMPANY:                        CRDENTIA CORP.

SECURITY:                       COMMON STOCK

AMOUNT:
                                -------------------------
DATE:
                                -------------------------

In connection with the purchase of the above listed Securities, the
undersigned Grantee represents to the Company the following:

     (a) Grantee is aware of the Company's business affairs and financial
condition and has acquired sufficient information about the Company to
reach an informed and knowledgeable decision to acquire the Securities.
Grantee is acquiring these Securities for investment for Grantee's own
account only and not with a view to, or for resale in connection with, any
"distribution" thereof within the meaning of the Securities Act of 1933, as
amended (the "Securities Act").

     (b) Grantee acknowledges and understands that the Securities
constitute "restricted securities" under the Securities Act and have not
been registered under the Securities Act in reliance upon a specific
exemption therefrom, which exemption depends upon among other things, the
bona fide nature of Grantee's investment intent as expressed herein.
Grantee further understands that the Securities must be held indefinitely
unless they are subsequently registered under the Securities Act or an
exemption from such registration is available.  Grantee further
acknowledges and understands that the Company is under no obligation to
register the Securities.  Grantee understands that the certificate
evidencing the Securities will be imprinted with a legend which prohibits
the transfer of the Securities unless they are registered or such
registration is not required in the opinion of counsel satisfactory to the
Company.

     (c) Grantee is familiar with the provisions of Rule 701 and Rule 144,
each promulgated under the Securities Act, which, in substance, permit
limited public resale of "restricted securities" acquired, directly or
indirectly from the issuer thereof, in a non public offering subject to the
satisfaction of certain conditions.  Rule 701 provides that if the issuer
qualifies under Rule 701 at the time of the grant of the Option to the
Grantee, the exercise will be exempt from registration under the Securities
Act.  In the event the Company becomes subject to the reporting requirements
of Section 13 or 15(d) of the Securities Exchange Act of 1934, ninety (90)
days thereafter (or such longer period as any market stand off agreement may
require) the Securities exempt under Rule 701 may be resold, subject to the
satisfaction of certain of the conditions specified by Rule 144, including:
(1) the resale being made through a broker in an unsolicited "broker's
transaction" or in transactions directly with a market maker (as said term
is defined under the Securities Exchange Act of 1934); and, in the case of
an affiliate, (2) the availability of certain public information about the
Company, (3) the amount of Securities being

                                     1
<PAGE>

sold during any three month period not exceeding the limitations specified
in Rule 144(e), and (4) the timely filing of a Form 144, if applicable.

     In the event that the Company does not qualify under Rule 701 at the
time of grant of the Option, then the Securities may be resold in certain
limited circumstances subject to the provisions of Rule 144, which requires
the resale to occur not less than one year after the later of the date the
Securities were sold by the Company or the date the Securities were sold by
an affiliate of the Company, within the meaning of Rule 144; and, in the
case of acquisition of the Securities by an affiliate, or by a non
affiliate who subsequently holds the Securities less than two years, the
satisfaction of the conditions set forth in sections (1), (2), (3) and (4)
of the paragraph immediately above.

     (d) Grantee further understands that in the event all of the applicable
requirements of Rule 701 or 144 are not satisfied, registration under the
Securities Act, compliance with Regulation A, or some other registration
exemption will be required; and that, notwithstanding the fact that Rules
144 and 701 are not exclusive, the Staff of the Securities and Exchange
Commission has expressed its opinion that persons proposing to sell private
placement securities other than in a registered offering and otherwise than
pursuant to Rules 144 or 701 will have a substantial burden of proof in
establishing that an exemption from registration is available for such
offers or sales, and that such persons and their respective brokers who
participate in such transactions do so at their own risk.  Grantee
understands that no assurances can be given that any such other registration
exemption will be available in such event.

     (e) Grantee represents that he or she is a resident of the state of
                      .
----------------------

                                      Signature of Grantee:

                                      -----------------------------

                                      Date: 	          ,
                                           ---------------  -------

                                       2

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>10
<FILENAME>exhibit_1011.txt
<TEXT>
EXHIBIT 10.11

                               CRDENTIA CORP.

                        NOTICE OF STOCK OPTION AWARD
                        ----------------------------

Grantee's Name and Address:	C. Fred Toney
	                        500 Third Street, Suite 535
	                        San Francisco, CA  94107

     You (the "Grantee") have been granted an option to purchase shares of
Common Stock, subject to the terms and conditions of this Notice of Stock
Option Award (the "Notice") and the Stock Option Award Agreement (the
"Option Agreement") attached hereto, as follows.  Unless otherwise defined
herein, the terms defined in the Option Agreement shall have the same
defined meanings in this Notice.

     Award Number 	                   2

     Date of Award 	                   December 16, 2003

     Vesting Commencement Date 	           December 16, 2003

     Exercise Price per Share 	           $0.96

     Total Number of Shares Subject
     to the Option (the "Shares")          100,000

     Total Exercise Price                  $96,000

     Type of Option                        Non-Qualified Stock Option

     Expiration Date:                      December 16, 2013

     Post-Termination Exercise Period:     Three (3) Months

Vesting Schedule:
-----------------

     Subject to the Grantee's Continuous Service and other limitations set
forth in this Notice and the Option Agreement, the Option may be exercised,
in whole or in part, in accordance with the following schedule:

     1/3rd of the Total Number of Shares Subject to the Option shall vest
upon the first anniversary of the Vesting Commencement Date, and 1/36th of
the Total Number of Shares Subject to the Option shall vest on each monthly
anniversary of the Vesting Commencement Date thereafter such that the
Option will be fully vested three years after the Vesting Commencement Date.

     During any authorized leave of absence, the vesting of the Option as
provided in this schedule shall be suspended after the leave of absence
exceeds a period of ninety (90) days.  Vesting of the Option shall resume
upon the Grantee's termination of the leave of absence and return to
service to the Company or a Related Entity.  The Vesting Schedule of the
Option shall be extended by the length of the suspension.

     IN WITNESS WHEREOF, the Company and the Grantee have executed this
Notice and agree that the Option is to be governed by the terms and
conditions of this Notice and the Option Agreement.

                                       Crdentia Corp.,
                                       a Delaware corporation

                                       By: /s/  James D. Durham
                                       Title: CEO

THE GRANTEE ACKNOWLEDGES AND AGREES THAT THE SHARES SUBJECT TO THE OPTION
SHALL VEST, IF AT ALL, ONLY DURING THE PERIOD OF THE GRANTEE'S CONTINUOUS
SERVICE (NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THE OPTION OR
ACQUIRING SHARES HEREUNDER).  THE GRANTEE FURTHER ACKNOWLEDGES AND AGREES
THAT NOTHING IN THIS NOTICE OR THE OPTION AGREEMENT SHALL CONFER UPON THE
GRANTEE ANY RIGHT WITH RESPECT TO FUTURE AWARDS OR CONTINUATION OF THE
GRANTEE'S CONTINUOUS SERVICE, NOR SHALL IT INTERFERE IN ANY WAY WITH THE
GRANTEE'S RIGHT OR THE RIGHT OF THE COMPANY OR RELATED ENTITY TO WHICH THE
GRANTEE PROVIDES SERVICES TO TERMINATE THE GRANTEE'S CONTINUOUS SERVICE,
WITH OR WITHOUT CAUSE, AND WITH OR WITHOUT NOTICE.  THE GRANTEE
ACKNOWLEDGES THAT UNLESS THE GRANTEE HAS A WRITTEN EMPLOYMENT AGREEMENT
WITH THE COMPANY TO THE CONTRARY, THE GRANTEE'S STATUS IS AT WILL.

     The Grantee acknowledges receipt of a copy of the Option Agreement,
and represents that he or she is familiar with the terms and provisions
thereof, and hereby accepts the Option subject to all of the terms and
provisions hereof and thereof.  The Grantee has reviewed this Notice and
the Option Agreement in their entirety, has had an opportunity to obtain
the advice of counsel prior to executing this Notice, and fully understands
all provisions of this Notice and the Option Agreement.  The Grantee hereby
agrees that all disputes arising out of or relating to this Notice and the
Option Agreement shall be resolved in accordance with Section 17 of the
Option Agreement.  The Grantee further agrees to notify the Company upon
any change in the residence address indicated in this Notice.

Dated: 12/16/03		                 Signed:/s/  C. Fred Toney
                                                -------------------------
                                                Grantee

                                     2
<PAGE>

                                                          Award Number:  2

                               CRDENTIA CORP.

                        STOCK OPTION AWARD AGREEMENT
                        ----------------------------

     1. Grant of Option.  Crdentia Corp., a Delaware corporation (the
"Company"), hereby grants to the Grantee (the "Grantee") named in the
Notice of Stock Option Award (the "Notice"), an option (the "Option") to
purchase the Total Number of Shares of Common Stock subject to the Option
(the "Shares") set forth in the Notice, at the Exercise Price per Share set
forth in the Notice (the "Exercise Price") subject to the terms and
provisions of this Stock Option Award Agreement (the "Option Agreement") and
the Notice which are incorporated herein by reference.

     2. Exercise of Option.

       (a) Right to Exercise.  The Option shall be exercisable during its
term in accordance with the Vesting Schedule set out in the Notice and with
the applicable provisions of this Option Agreement.  The Option shall be
subject to the provisions of Section 20 of this Option Agreement relating
to the exercisability or termination of the Option in the event of a
Corporate Transaction.  The Grantee shall be subject to reasonable
limitations on the number of requested exercises during any monthly or
weekly period as determined by the Board.  In no event shall the Company
issue fractional Shares.

       (b) Method of Exercise.  The Option shall be exercisable by delivery
of an exercise notice (a form of which is attached as Exhibit A) or by such
other procedure as specified from time to time by the Board which shall
state the election to exercise the Option, the whole number of Shares in
respect of which the Option is being exercised, and such other provisions
as may be required by the Board.  The exercise notice shall be delivered in
person, by certified mail, or by such other method (including electronic
transmission) as determined from time to time by the Board to the Company
accompanied by payment of the Exercise Price.  The Option shall be deemed
to be exercised upon receipt by the Company of such notice accompanied by
the Exercise Price, which, to the extent selected, shall be deemed to be
satisfied by use of the broker-dealer sale and remittance procedure to pay
the Exercise Price provided in Section 4(d), below.

       (c) Taxes.  No Shares will be delivered to the Grantee or other
person pursuant to the exercise of the Option until the Grantee or other
person has made arrangements acceptable to the Board for the satisfaction
of applicable income tax and employment tax withholding obligations,
including, without limitation, obligations incident to the receipt of
Shares.  Upon exercise of the Option, the Company or the Grantee's employer
may offset or withhold (from any amount owed by the Company or the Grantee's
employer to the Grantee) or collect from the Grantee or other person an
amount sufficient to satisfy such tax obligations and/or the employer's
withholding obligations.

     3. Grantee's Representations.  The Grantee understands that neither the
Option nor the Shares exercisable pursuant to the Option have been
registered under the Securities Act of 1933, as amended, or any United
States securities laws.  In the event the Shares purchasable

                                      1
<PAGE>

pursuant to the exercise of the Option have not been registered under the
Securities Act of 1933, as amended, at the time the Option is exercised,
the Grantee shall, if requested by the Company, concurrently with the
exercise of all or any portion of the Option, deliver to the Company his
or her Investment Representation Statement in the form attached hereto as
Exhibit B.

     4. Method of Payment.  Payment of the Exercise Price shall be made by
any of the following, or a combination thereof, at the election of the
Grantee; provided, however, that such exercise method does not then violate
any Applicable Law and, provided further, that the portion of the Exercise
Price equal to the par value of the Shares must be paid in cash or other
legal consideration permitted by the Delaware General Corporation Law:

       (a) cash;

       (b) check;

       (c) surrender of Shares or delivery of a properly executed form of
attestation of ownership of Shares as the Board may require which have a
Fair Market Value on the date of surrender or attestation equal to the
aggregate Exercise Price of the Shares as to which the Option is being
exercised, provided, however, that Shares acquired under the Option or any
other equity compensation plan or agreement of the Company must have been
held by the Grantee for a period of more than six (6) months; or

       (d) payment through a broker-dealer sale and remittance procedure
pursuant to which the Grantee (i) shall provide written instructions to a
Company-designated brokerage firm to effect the immediate sale of some or
all of the purchased Shares and remit to the Company sufficient funds to
cover the aggregate exercise price payable for the purchased Shares and (ii)
shall provide written directives to the Company to deliver the certificates
for the purchased Shares directly to such brokerage firm in order to
complete the sale transaction.

     5. Restrictions on Exercise.  The Option may not be exercised if the
issuance of the Shares subject to the Option upon such exercise would
constitute a violation of any Applicable Laws.

     6. Termination or Change of Continuous Service.  In the event the
Grantee's Continuous Service terminates, the Grantee may, but only during
the Post-Termination Exercise Period, exercise the portion of the Option
that was vested at the date of such termination (the "Termination Date").
In no event shall the Option be exercised later than the Expiration Date
set forth in the Notice.  In the event of the Grantee's change in status
from Employee, Director or Consultant to any other status of Employee,
Director or Consultant, the Option shall remain in effect and vesting of
the Option shall continue only to the extent determined by the Board as of
such change in status.  Except as provided in Sections 7 and 8 below, to
the extent that the Option was unvested on the Termination Date, or if the
Grantee does not exercise the vested portion of the Option within the Post-
Termination Exercise Period, the Option shall terminate.

     7. Disability of Grantee.  In the event the Grantee's Continuous
Service terminates as a result of his or her Disability, the Grantee may,
but only within twelve (12) months from the Termination Date (and in no
event later than the Expiration Date), exercise the portion of the Option
that was vested on the Termination Date.  To the extent that the Option was
unvested on

                                  2
<PGAE>

the Termination Date, or if the Grantee does not exercise the vested
portion of the Option within the time specified herein, the Option shall
terminate.

     8. Death of Grantee.  In the event of the termination of the Grantee's
Continuous Service as a result of his or her death, or in the event of the
Grantee's death during the Post-Termination Exercise Period or during the
twelve (12) month period following the Grantee's termination of Continuous
Service as a result of his or her Disability, the Grantee's estate, or a
person who acquired the right to exercise the Option by bequest or
inheritance, may exercise the portion of the Option that was vested at the
date of termination within twelve (12) months from the date of death (but
in no event later than the Expiration Date).  To the extent that the Option
was unvested on the date of death, or if the vested portion of the Option
is not exercised within the time specified herein, the Option shall
terminate.

     9. Transferability of Option.  The Option may not be transferred in any
manner other than by will or by the laws of descent and distribution,
provided, however, that the Option may be transferred to members of the
Grantee's Immediate Family to the extent and in the manner authorized by
the Board.  Notwithstanding the foregoing, the Grantee may designate members
of the Grantee's Immediate Family as beneficiaries of the Grantee's Option
in the event of the Grantee's death on a beneficiary designation form
provided by the Board.  The terms of the Option shall be binding upon the
executors, administrators, heirs and successors of the Grantee.

     10. Term of Option.  The Option must be exercised no later than the
Expiration Date set forth in the Notice or such earlier date as otherwise
provided herein.  After the Expiration Date or such earlier date, the
Option shall be of no further force or effect and may not be exercised.

     11. Stop Transfer Notices.  In order to ensure compliance with the
restrictions on transfer set forth in this Option Agreement or the Notice,
the Company may issue appropriate "stop transfer" instructions to its
transfer agent, if any, and, if the Company transfers its own securities,
it may make appropriate notations to the same effect in its own records.

     12. Refusal to Transfer.  The Company shall not be required (i) to
transfer on its books any Shares that have been sold or otherwise
transferred in violation of any of the provisions of this Option Agreement
or (ii) to treat as owner of such Shares or to accord the right to vote or
pay dividends to any purchaser or other transferee to whom such Shares
shall have been so transferred.

     13. Tax Consequences.  Set forth below is a brief summary as of the
date of this Option Agreement of some of the federal tax consequences of
exercise of the Option and disposition of the Shares.  THIS SUMMARY IS
NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO
CHANGE.  THE GRANTEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THE
OPTION OR DISPOSING OF THE SHARES.

       (a) Exercise of Non-Qualified Stock Option.  On exercise of a Non-
Qualified Stock Option, the Grantee will be treated as having received
compensation income (taxable at ordinary income tax rates) equal to the
excess, if any, of the Fair Market Value of the Shares on

                                   3
<PAGE>

the date of exercise over the Exercise Price.  If the Grantee is an
Employee or a former Employee, the Company will be required to withhold
from the Grantee's compensation or collect from the Grantee and pay to the
applicable taxing authorities an amount in cash equal to a percentage of
this compensation income at the time of exercise, and may refuse to honor
the exercise and refuse to deliver Shares if such withholding amounts are
not delivered at the time of exercise.

       (b) Disposition of Shares.  If Shares are held for more than one
year, any gain realized on disposition of the Shares will be treated as
long term capital gain for federal income tax purposes.

     14. Lock-Up Agreement.

       (a) Agreement.  The Grantee, if requested by the Company and the
lead underwriter of any public offering of the Common Stock (the "Lead
Underwriter"), hereby irrevocably agrees not to sell, contract to sell,
grant any option to purchase, transfer the economic risk of ownership in,
make any short sale of, pledge or otherwise transfer or dispose of any
interest in any Common Stock or any securities convertible into or
exchangeable or exercisable for or any other rights to purchase or acquire
Common Stock (except Common Stock included in such public offering or
acquired on the public market after such offering) during the 180 day
period following the effective date of a registration statement of the
Company filed under the Securities Act of 1933, as amended, or such shorter
period of time as the Lead Underwriter shall specify.  The Grantee further
agrees to sign such documents as may be requested by the Lead Underwriter
to effect the foregoing and agrees that the Company may impose stop-
transfer instructions with respect to such Common Stock subject to the
lock-up period until the end of such period.  The Company and the Grantee
acknowledge that each Lead Underwriter of a public offering of the Company's
stock, during the period of such offering and for the 180 day period
thereafter, is an intended beneficiary of this Section 14.

       (b) No Amendment Without Consent of Underwriter.  During the period
from identification of a Lead Underwriter in connection with any public
offering of the Company's Common Stock until the earlier of (i) the
expiration of the lock-up period specified in Section 14(a) in connection
with such offering or (ii) the abandonment of such offering by the Company
and the Lead Underwriter, the provisions of this Section 14 may not be
amended or waived except with the consent of the Lead Underwriter.

     15. Entire Agreement: Governing Law.  The Notice and this Option
Agreement constitute the entire agreement of the parties with respect to
the subject matter hereof and supersede in their entirety all prior
undertakings and agreements of the Company and the Grantee with respect to
the subject matter hereof, and may not be modified adversely to the
Grantee's interest except by means of a writing signed by the Company and
the Grantee.  Nothing in the Notice and this Option Agreement (except as
expressly provided therein) is intended to confer any rights or remedies
on any persons other than the parties.  The Notice and this Option
Agreement are to be construed in accordance with and governed by the
internal laws of the State of Texas 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 Texas to the rights and duties
of the parties.  Should any provision of the Notice or this Option
Agreement be determined by a

                                   4
<PAGE>

court of law to be illegal or unenforceable, such provision shall be
enforced to the fullest extent allowed by law and the other provisions
shall nevertheless remain effective and shall remain enforceable.

     16. Headings.  The captions used in the Notice and this Option
Agreement are inserted for convenience and shall not be deemed a part of
the Option for construction or interpretation.

     17. Dispute Resolution.  The provisions of this Section 17 shall be
the exclusive means of resolving disputes arising out of or relating to the
Notice and this Option Agreement.  The Company, the Grantee, and the
Grantee's assignees (the "parties") shall attempt in good faith to resolve
any disputes arising out of or relating to the Notice and this Option
Agreement by negotiation between individuals who have authority to settle
the controversy.  Negotiations shall be commenced by either party by notice
of a written statement of the party's position and the name and title of
the individual who will represent the party.  Within thirty (30) days of
the written notification, the parties shall meet at a mutually acceptable
time and place, and thereafter as often as they reasonably deem necessary,
to resolve the dispute.  If the dispute has not been resolved by
negotiation, the parties agree that any suit, action, or proceeding arising
out of or relating to the Notice or this Option Agreement shall be brought
in the United States District Court for the Northern District of Texas (or
should such court lack jurisdiction to hear such action, suit or proceeding,
in a Texas state court in the County of Dallas) and that the parties shall
submit to the jurisdiction of such court.  The parties irrevocably waive,
to the fullest extent permitted by law, any objection the party may have
to the laying of venue for any such suit, action or proceeding brought in
such court.  THE PARTIES ALSO EXPRESSLY WAIVE ANY RIGHT THEY HAVE OR MAY
HAVE TO A JURY TRIAL OF ANY SUCH SUIT, ACTION OR PROCEEDING.  If any one or
more provisions of this Section 17 shall for any reason be held invalid or
unenforceable, it is the specific intent of the parties that such provisions
shall be modified to the minimum extent necessary to make it or its
application valid and enforceable.

     18. Notices.  Any notice required or permitted hereunder shall be given
in writing and shall be deemed effectively given upon personal delivery,
upon deposit for delivery by an internationally recognized express mail
courier service or upon deposit in the United States mail by certified mail
(if the parties are within the United States), with postage and fees
prepaid, addressed to the other party at its address as shown in these
instruments, or to such other address as such party may designate in
writing from time to time to the other party.

     19. Adjustments Upon Changes in Capitalization.  Subject to any
required action by the stockholders of the Company, the number of Shares
covered by the Option, the exercise price of the Option, as well as any
other terms that the Board determines require adjustment shall be
proportionately adjusted for (i) any increase or decrease in the number of
issued Shares resulting from a stock split, reverse stock split, stock
dividend, combination or reclassification of the Shares, or similar
transaction affecting the Shares, (ii) any other increase or decrease in
the number of issued Shares effected without receipt of consideration by
the Company, or (iii) as the Board may determine in its discretion, any
other transaction with respect to Common Stock including a corporate merger,
consolidation, acquisition of property or stock, separation (including a
spin-off or other distribution of stock or property), reorganization,
liquidation (whether partial or complete) or any similar transaction;
provided, however that conversion of

                                     5
<PAGE>

any convertible securities of the Company shall not be deemed to have been
"effected without receipt of consideration." Such adjustment shall be made
by the Board and its determination shall be final, binding and conclusive.
Except as the Board determines, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any
class, shall affect, and no adjustment by reason hereof shall be made with
respect to, the number or price of Shares subject to the Option.

     20. Corporate Transactions.

       (a) Termination of Option to Extent Not Assumed in Corporate
Transaction.  Effective upon the consummation of a Corporate Transaction,
the Option shall terminate.  However, the Option shall not terminate to the
extent it is Assumed in connection with the Corporate Transaction.

       (b) Acceleration of Option Upon Corporate Transaction.  In the event
of a Corporate Transaction, for the portion of the Option that is neither
Assumed nor Replaced, such portion of the Option shall automatically become
fully vested and exercisable for all of the Shares at the time represented
by such portion of the Option, immediately prior to the specified effective
date of such Corporate Transaction.

     21. Definitions.  As used herein, the following definitions shall
apply:

       (a) "Applicable Laws" means the legal requirements applicable to the
Option under applicable provisions of federal securities laws, state
corporate and securities laws, the Code, the rules of any applicable stock
exchange or national market system, and the rules of any non-U.S.
jurisdiction applicable to Options granted to residents therein.

       (b) "Assumed" means that pursuant to a Corporate Transaction either
(i) the Option is expressly affirmed by the Company or (ii) the contractual
obligations represented by the Option are expressly assumed (and not simply
by operation of law) by the successor entity or its Parent in connection
with the Corporate Transaction with appropriate adjustments to the number
and type of securities of the successor entity or its Parent subject to the
Option and the exercise or purchase price thereof which at least preserves
the compensation element of the Option existing at the time of the
Corporate Transaction as determined in accordance with the instruments
evidencing the agreement to assume the Option.

       (c) "Board" means the Board of Directors of the Company and shall
include any committee of the Board or Officer of the Company to which the
Board has delegated its authority under this Agreement.

       (d) "Cause" means, with respect to the termination by the Company or a
Related Entity of the Grantee's Continuous Service, that such termination
is for "Cause" as such term is expressly defined in a then-effective written
agreement between the Grantee and the Company or such Related Entity, or in
the absence of such then-effective written agreement and definition, is
based on, in the determination of the Board, the Grantee's:  (i) performance
of any act or failure to perform any act in bad faith and to the detriment
of the Company or a Related Entity; (ii) dishonesty, intentional misconduct
or material breach of any agreement with the

                                    6
<PAGE>

Company or a Related Entity; or (iii) commission of a crime involving
dishonesty, breach of trust, or
physical or emotional harm to any person.

       (e) "Code" means the Internal Revenue Code of 1986, as amended.

       (f) "Common Stock" means the common stock of the Company.

       (g) "Company" means Crdentia Corp., a Delaware corporation.

       (h) "Consultant" means any person (other than an Employee or a
Director, solely with respect to rendering services in such person's
capacity as a Director) who is engaged by the Company or any Related Entity
to render consulting or advisory services to the Company or such Related
Entity.

       (i) "Continuous Service" means that the provision of services to the
Company or a Related Entity in any capacity of Employee, Director or
Consultant is not interrupted or terminated.  In jurisdictions requiring
notice in advance of an effective termination as an Employee, Director or
Consultant, Continuous Service shall be deemed terminated upon the actual
cessation of providing services to the Company or a Related Entity
notwithstanding any required notice period that must be fulfilled before a
termination as an Employee, Director or Consultant can be effective under
Applicable Laws.  Continuous Service shall not be considered interrupted in
the case of (i) any approved leave of absence, (ii) transfers among the
Company, any Related Entity, or any successor, in any capacity of Employee,
Director or Consultant, or (iii) any change in status as long as the
individual remains in the service of the Company or a Related Entity in any
capacity of Employee, Director or Consultant (except as otherwise provided
in the Option Agreement).  An approved leave of absence shall include sick
leave, military leave, or any other authorized personal leave.

       (j) "Corporate Transaction" means any of the following transactions:

          (i) a merger or consolidation in which the Company is not the
surviving entity, except for a transaction the principal purpose of which
is to change the state in which the Company is incorporated;

          (ii) the sale, transfer or other disposition of all or
substantially all of the assets of the Company (including the capital stock
of the Company's subsidiary corporations);

          (iii) the complete liquidation or dissolution of the Company;

          (iv) any reverse merger or series of related transactions
culminating in a reverse merger (including, but not limited to, a tender
offer followed by a reverse merger) in which the Company is the surviving
entity but in which securities possessing more than fifty percent (50%) of
the total combined voting power of the Company's outstanding securities are
transferred to a person or persons different from those who held such
securities immediately prior to such merger or the initial transaction
culminating in such merger but excluding any such transaction or series of
related transactions that the Board determines shall not be a Corporate
Transaction; or

                                   7

<PAGE>

          (v) acquisition in a single or series of related transactions by
any person or related group of persons (other than the Company or by a
Company-sponsored employee benefit plan) of beneficial ownership (within
the meaning of Rule 13d-3 of the Exchange Act) of securities possessing
more than fifty percent (50%) of the total combined voting power of the
Company's outstanding securities but excluding any such transaction or
series of related transactions that the Board determines shall not be a
Corporate Transaction.

       (k) "Director" means a member of the Board or the board of directors
of any Related Entity.

       (l) "Disability" shall have the same meaning as defined under the
long-term disability policy of the Company or the Related Entity to which
the Grantee provides services regardless of whether the Grantee is covered
by such policy.  If the Company or the Related Entity to which the Grantee
provides service does not have a long-term disability plan in place,
"Disability" means that the Grantee is unable to carry out the
responsibilities and functions of the position held by the Grantee by
reason of any medically determinable physical or mental impairment for a
period of not less than ninety (90) consecutive days.  The Grantee will not
be considered to have incurred a Disability unless he or she furnishes
proof of such impairment sufficient to satisfy the Board in its discretion.

       (m) "Employee" means any person, including an Officer or Director,
who is in the employ of the Company or any Related Entity, subject to the
control and direction of the Company or any Related Entity as to both the
work to be performed and the manner and method of performance.  The payment
of a director's fee by the Company or a Related Entity shall not be
sufficient to constitute "employment" by the Company.

       (n) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

       (o) "Fair Market Value" means, as of any date, the value of Common
Stock determined as follows:

          (i) If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation The
Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq Stock
Market, its Fair Market Value shall be the closing sales price for such
stock (or the closing bid, if no sales were reported) as quoted on such
exchange or system on the date of determination (or, if no closing sales
price or closing bid was reported on that date, as applicable, on the last
trading date such closing sales price or closing bid was reported), as
reported in The Wall Street Journal or such other source as the Board deems
reliable;

          (ii) If the Common Stock is regularly quoted on an automated
quotation system (including the OTC Bulletin Board) or by a recognized
securities dealer, but selling prices are not reported, the Fair Market
Value of a Share of Common Stock shall be the mean between the high bid
and low asked prices for the Common Stock on date of determination (or, if
no such prices were reported on that date, on the last date such prices
were reported), as reported in The Wall Street Journal or such other source
as the Board deems reliable; or

                                       8
<PAGE>

          (iii) In the absence of an established market for the Common
Stock of the type described in (i) and (ii), above, the Fair Market Value
thereof shall be determined by the Board in good faith.

       (p) "Good Reason" means the occurrence after a Corporate Transaction
of any of the following events or conditions unless consented to by the
Grantee (and the Grantee shall be deemed to have consented to any such event
or condition unless the Grantee provides written notice of the Grantee's
non-acquiescence within 30 days of the effective time of such event or
condition):

          (i) a reduction in the Grantee's base salary to a level more than
fifteen  percent (15%) below that in effect at any time within six (6)
months preceding the consummation of a Corporate Transaction or at any time
thereafter (not including a similar reduction with respect to all of the
Company's management); or

          (ii) requiring the Grantee to be based at any place outside a
50-mile radius from the Grantee's job location prior to the Corporate
Transaction except for reasonably required travel on business which is not
materially greater than such travel requirements prior to the Corporate
Transaction

       (q) "Immediate Family" means any child, stepchild, grandchild,
parent, stepparent, grandparent, spouse, former spouse, sibling, niece,
nephew, mother-in-law, father-in-law, son-in law, daughter-in-law, brother-
in-law, or sister-in-law, including adoptive relationships, any person s
haring the Grantee's household (other than a tenant or employee), a trust
in which these persons (or the Grantee) have more than fifty percent (50%)
of the beneficial interest, a foundation in which these persons (or the
Grantee) control the management of assets, and any other entity in which
these persons (or the Grantee) own more than fifty percent (50%) of the
voting interests.

       (r) "Non-Qualified Stock Option" means an Option not intended to
qualify as an incentive stock option within the meaning of Section 422 of
the Code.

       (s) "Officer" means a person who is an officer of the Company or a
Related Entity within the meaning of Section 16 of the Exchange Act and the
rules and regulations promulgated thereunder.

       (t) "Parent" means a "parent corporation," whether now or hereafter
existing, as defined in Section 424(e) of the Code.

       (u) "Related Entity" means any Parent or Subsidiary of the Company
and any business, corporation, partnership, limited liability company or
other entity in which the Company or a Parent or a Subsidiary of the Company
holds a substantial ownership interest, directly or indirectly.

       (v) "Replaced" means that pursuant to a Corporate Transaction the
Option is replaced with a comparable stock award or a cash incentive
program of the Company, the successor entity (if applicable) or Parent of
either of them which preserves the compensation element of such Option
existing at the time of the Corporate Transaction and provides for
subsequent payout in accordance with the same (or a more favorable) vesting
schedule applicable to such Option.  The determination of Option
comparability shall be made by the Board and its determination shall be
final, binding and conclusive.

                                    9
<PAGE>

       (w) "Share" means a share of the Common Stock.

       (x) "Subsidiary" means a "subsidiary corporation," whether now or
hereafter existing, as defined in Section 424(f) of the Code.

                           END OF AGREEMENT

                                   10
<PAGE>



                               EXHIBIT A
                               ---------

                            EXERCISE NOTICE
                            ---------------

Crdentia Corp.
14114 Dallas Parkway, Suite 600
Dallas, Texas  75254
Attention:  Secretary

     1. Effective as of today,            ,     the undersigned (the
"Grantee") hereby elects to exercise the Grantee's option to purchase
            shares of the Common Stock (the "Shares") of Crdentia Corp.
(the "Company") under and pursuant to the Stock Option Award Agreement
(the "Option Agreement") and Notice of Stock Option Award (the "Notice")
dated December 16, 2003.  Unless otherwise defined herein, the terms defined
in the Option Agreement shall have the same defined meanings in this
Exercise Notice.

     2. Representations of the Grantee.  The Grantee acknowledges that the
Grantee has received, read and understood the Notice and the Option
Agreement and agrees to abide by and be bound by their terms and conditions.

     3. Rights as Stockholder.  Until the stock certificate evidencing such
Shares is issued (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company), no right to
vote or receive dividends or any other rights as a stockholder shall exist
with respect to the Shares, notwithstanding the exercise of the Option.
The Company shall issue (or cause to be issued) such stock certificate
promptly after the Option is exercised.  No adjustment will be made for a
dividend or other right for which the record date is prior to the date the
stock certificate is issued, except as provided in Section 19 of the Option
Agreement.

     4. Delivery of Payment.  The Grantee herewith delivers to the Company
the full Exercise Price for the Shares, which, to the extent selected, shall
be deemed to be satisfied by use of the broker-dealer sale and remittance
procedure to pay the Exercise Price provided in Section 4(d) of the Option
Agreement.

     5. Tax Consultation.  The Grantee understands that the Grantee may
suffer adverse tax consequences as a result of the Grantee's purchase or
disposition of the Shares.  The Grantee represents that the Grantee has
consulted with any tax consultants the Grantee deems advisable in
connection with the purchase or disposition of the Shares and that the
Grantee is not relying on the Company for any tax advice.

     6. Taxes.  The Grantee agrees to satisfy all applicable non-U.S.,
federal, state and local income and employment tax withholding obligations
and herewith delivers to the Company the full amount of such obligations or
has made arrangements acceptable to the Company to satisfy such obligations.
If the Company is required to satisfy any non-U.S., federal, state or local
income or employment tax withholding obligations as a result of such an
early disposition, the Grantee agrees to satisfy the amount of such
withholding in a manner that the Board prescribes.

                                      1
<PAGE>

     7. Successors and Assigns.  The Company may assign any of its rights
under this Exercise Notice to single or multiple assignees, and this
agreement shall inure to the benefit of the successors and assigns of the
Company.  Subject to the restrictions on transfer herein set forth, this
Exercise Notice shall be binding upon the Grantee and his or her heirs,
executors, administrators, successors and assigns.

     8. Headings.  The captions used in this Exercise Notice are inserted
for convenience and shall not be deemed a part of this agreement for
construction or interpretation.

     9. Dispute Resolution.  The provisions of Section 17 of the Option
Agreement shall be the exclusive means of resolving disputes arising out of
or relating to this Exercise Notice.

     10. Governing Law; Severability.  This Exercise Notice is to be
construed in accordance with and governed by the internal laws of the State
of Texas 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 Texas to the rights and duties of the parties.  Should
any provision of this Exercise Notice be determined by a court of law to be
illegal or unenforceable, such provision shall be enforced to the fullest
extent allowed by law and the other provisions shall nevertheless remain
effective and shall remain enforceable.

     11. Notices.  Any notice required or permitted hereunder shall be
given in writing and shall be deemed effectively given upon personal
delivery, upon deposit for delivery by an internationally recognized
express mail courier service or upon deposit in the United States mail by
certified mail (if the parties are within the United States), with postage
and fees prepaid, addressed to the other party at its address as shown
below beneath its signature, or to such other address as such party may
designate in writing from time to time to the other party.

     12. Further Instruments.  The parties agree to execute such further
instruments and to take such further action as may be reasonably necessary
to carry out the purposes and intent of this agreement.

     13. Entire Agreement.  The Notice and the Option Agreement are
incorporated herein by reference and together with this Exercise Notice
constitute the entire agreement of the parties with respect to the subject
matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and the Grantee with respect to the subject matter
hereof, and may not be modified adversely to the Grantee's interest except
by means of a writing signed by the Company and the Grantee.  Nothing in
the Notice the Option Agreement and this Exercise Notice (except as
expressly provided therein) is intended to confer any rights or remedies
on any persons other than the parties.

                                      2
<PAGE>

Submitted by:	                      Accepted by:

GRANTEE:	                      CRDENTIA CORP.

                                      By:
                                         --------------------------------
------------------------------
(Signature)	                      Title:
                                            -----------------------------
Address:	                      Address:

------------------------------        14114 Dallas Parkway, Suite 600
                                      Dallas, Texas  75254
------------------------------

                                     3
<PAGE>


                                 EXHIBIT B
                                 ---------

                    INVESTMENT REPRESENTATION STATEMENT
                    -----------------------------------

GRANTEE:		C. Fred Toney

COMPANY:		CRDENTIA CORP.

SECURITY:		COMMON STOCK

AMOUNT:
                        --------------------------
DATE:
                        --------------------------

In connection with the purchase of the above listed Securities, the
undersigned Grantee represents to the Company the following:

     (a) Grantee is aware of the Company's business affairs and financial
condition and has acquired sufficient information about the Company to
reach an informed and knowledgeable decision to acquire the Securities.
Grantee is acquiring these Securities for investment for Grantee's own
account only and not with a view to, or for resale in connection with, any
"distribution" thereof within the meaning of the Securities Act of 1933, as
amended (the "Securities Act").

     (b) Grantee acknowledges and understands that the Securities
constitute "restricted securities" under the Securities Act and have not
been registered under the Securities Act in reliance upon a specific
exemption therefrom, which exemption depends upon among other things, the
bona fide nature of Grantee's investment intent as expressed herein.
Grantee further understands that the Securities must be held indefinitely
unless they are subsequently registered under the Securities Act or an
exemption from such registration is available.  Grantee further
acknowledges and understands that the Company is under no obligation to
register the Securities.  Grantee understands that the certificate
evidencing the Securities will be imprinted with a legend which prohibits
the transfer of the Securities unless they are registered or such
registration is not required in the opinion of counsel satisfactory to the
Company.

     (c) Grantee is familiar with the provisions of Rule 701 and Rule 144,
each promulgated under the Securities Act, which, in substance, permit
limited public resale of "restricted securities" acquired, directly or
indirectly from the issuer thereof, in a non public offering subject to the
 satisfaction of certain conditions.  Rule 701 provides that if the issuer
qualifies under Rule 701 at the time of the grant of the Option to the
Grantee, the exercise will be exempt from registration under the Securities
Act.  In the event the Company becomes subject to the reporting requirements
of Section 13 or 15(d) of the Securities Exchange Act of 1934, ninety (90)
days thereafter (or such longer period as any market stand off agreement
may require) the Securities exempt under Rule 701 may be resold, subject to
the satisfaction of certain of the conditions specified by Rule 144,
including:  (1) the resale being made through a broker in an unsolicited
"broker's transaction" or in transactions directly with a market maker (as
said term is defined under the Securities Exchange Act of 1934); and, in the
case of an affiliate, (2) the availability of certain public information
about the Company, (3) the amount of Securities being

                                   1
<PAGE>

sold during any three month period not exceeding the limitations specified
in Rule 144(e), and (4) the timely filing of a Form 144, if applicable.

In the event that the Company does not qualify under Rule 701 at the time
of grant of the Option, then the Securities may be resold in certain
limited circumstances subject to the provisions of Rule 144, which requires
the resale to occur not less than one year after the later of the date the
Securities were sold by the Company or the date the Securities were sold by
an affiliate of the Company, within the meaning of Rule 144; and, in the
case of acquisition of the Securities by an affiliate, or by a non
affiliate who subsequently holds the Securities less than two years, the
satisfaction of the conditions set forth in sections (1), (2), (3) and (4)
of the paragraph immediately above.

     (d) Grantee further understands that in the event all of the
applicable requirements of Rule 701 or 144 are not satisfied, registration
under the Securities Act, compliance with Regulation A, or some other
registration exemption will be required; and that, notwithstanding the fact
that Rules 144 and 701 are not exclusive, the Staff of the Securities and
Exchange Commission has expressed its opinion that persons proposing to
sell private placement securities other than in a registered offering and
otherwise than pursuant to Rules 144 or 701 will have a substantial burden
of proof in establishing that an exemption from registration is available
for such offers or sales, and that such persons and their respective
brokers who participate in such transactions do so at their own risk.
Grantee understands that no assurances can be given that any such other
registration exemption will be available in such event.

     (e) Grantee represents that he or she is a resident of the state of

-------------------------.

                                   Signature of Grantee:

                                   ----------------------------------

                                   Date: 	       ,
                                        -------------    -------

                                      2

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>11
<FILENAME>exhibit_1012.txt
<TEXT>
Exhibit 10.12

                              CRDENTIA CORP.

                     EXECUTIVE EMPLOYMENT AGREEMENT


This Executive Employment Agreement (the "Agreement"), dated December 22,
2003, is between Crdentia Corp., a Delaware corporation (the "Company") and
Pamela Atherton, an individual residing at 3700 Legacy Drive, Apartment
20206, Frisco, Texas 75034 ("Executive").

1. POSITION AND RESPONSIBILITIES

     a.	Position.  Executive is employed by the Company to render services
to the Company in the position of President.  Executive shall perform such
duties and responsibilities as are normally related to such position in
accordance with the standards of the industry and any additional duties now
or hereafter assigned to Executive by the Company.  To the extent not
inconsistent with the express terms of this Agreement, Executive shall
abide by the rules, regulations, and practices for the Company's senior
management as adopted or modified from time to time in the Company's sole
discretion.

     b.	Other Activities.  Except upon the prior written consent of the
Company, Executive will not, during the term of this Agreement, (i) accept
any other employment, or (ii) engage, directly or indirectly, in any other
business activity (whether or not pursued for pecuniary advantage) that
interferes with Executive's duties and responsibilities hereunder or create
a conflict of interest with the Company.  Notwithstanding the foregoing,
the parties acknowledge and agree that Executive shall be permitted to
provide certain consulting services for Norton Healthcare that are
consistent in scope and duration with consulting services provided by
Executive to Norton Healthcare to date.

     c.	No Conflict.  Executive represents and warrants that Executive's
execution of this Agreement, Executive's employment with the Company, and
the performance of Executive's proposed duties under this Agreement shall
not violate any obligations Executive may have to any other employer,
person or entity, including any obligations with respect to proprietary or
confidential information of any other person or entity.

2. COMPENSATION AND BENEFITS

     a.	Base Salary.  In consideration of the services to be rendered under
this Agreement, the Company shall pay Executive a salary at the rate of One
Hundred Seventy Five Thousand Dollars ($175,000) per year ("Base Salary").
The Base Salary shall be paid in accordance with the Company's regularly
established payroll practice.  Executive's Base Salary will be reviewed from
time to time in accordance with the established procedures of the Company
for adjusting salaries for similarly situated employees and may be adjusted
in the sole discretion of the Company; provided, however, that the Company
may not reduce Executive's Base Salary unless the base salaries of all
executive employees holding the position of vice president or above are
reduced by the same percentage as Executive's Base Salary.

                                   1
<PAGE>

     b.	Stock Option(s).

       (i) In consideration of the services to be rendered hereunder, upon
the requisite approval of the Company's board of directors, Executive shall
be granted one or more options to purchase a number of shares of the
Company's common stock ("Common Stock") equal to five and two hundred and
ninths percent (5.209%) of that aggregate number of (a) additional shares
of Common Stock issued in connection with any Acquisition (as defined below),
plus (b) subject to the limitations below, the aggregate maximum number of
additional shares of Common Stock issuable pursuant to any security
convertible or exchangeable into Common Stock, or any warrant, option,
purchase right or similar agreement or arrangement granted in connection
with such Acquisition (whether or not such shares are ever issued but
excluding any compensatory options or other equity-based incentives granted
to service providers on or after the closing date of such Acquisition).
Notwithstanding the foregoing, any shares of Common Stock which are issuable
in connection with the Acquisition (i) upon exercise or conversion of any
convertible debt instrument, (ii) in connection with any subsequent earnout
of shares of Common Stock or similar arrangement or (iii) upon the
occurrence of some contingent future event, milestone or condition such that
the actual number of shares of Common Stock which are issuable thereby is
not otherwise determinable at the closing date of such Acquisition, shall
not be included for purposes of calculating the number of shares of Common
Stock which are subject to the option on the closing date of the Acquisition;
provided, however, that Executive shall be subsequently be granted an option
exercisable for an additional number of shares of Common Stock in an amount
equal to five and two hundred and ninths percent (5.209%) of the aggregate
number of any such excluded shares of Common Stock which are in fact issued
following the closing date of such Acquisition.  Any such option to be
granted to Executive with respect to such shares shall be presented to the
Company's board of directors for approval at its regularly-scheduled meeting
occurring following (i) the closing of such Acquisition or (ii) with
respect to shares of Common Stock issued after the closing of the
Acquisition, the date of issuance of such shares of Common Stock.  In
determining the number of shares of Common Stock issuable upon the exercise
of any such option(s), any such fractional shares shall be rounded up to
the nearest whole share.  Any such option(s) shall have an exercise price
equal to the then current fair market value of the Company's Common Stock
on the date of the issuance of such option(s), as determined in good faith
by the Company's board of directors, and shall be evidenced by, and subject
to the terms and conditions set forth in, the form of Stock Option Agreement
which is attached hereto as Exhibit A (the "Stock Option Agreement").

       (ii) For purposes of this Agreement, an "Acquisition" shall mean any
business combination consummated on or after August 7, 2003 and on or prior
to August 7, 2004 in which the Company issues or may issue shares of Common
Stock for the consideration thereof, including, without limitation, a stock
purchase, sale, merger, joint venture or otherwise and whether in one or
more transactions for the purchase of an organization's equity, debt
securities or assets, or by means of a merger, consolidation, reorganization,
spin-off, joint venture, partnership, tender offer, exchange offer,
purchase, lease, licensing arrangement, strategic alliance or any other
transaction of a like nature, regardless of form.

     c.	Benefits.  Executive shall be eligible to participate in the benefits
made generally available by the Company to similarly-situated Executives,
in accordance with

                                   2
<PAGE>

the benefit plans established by the Company, and as may be amended from
time to time in the Company's sole discretion.

     d.	Bonus Program.  Executive shall be eligible to participate in the
Bonus Program made generally available to the Company's Executives ("Bonus
Program"), such participation to be at a level consistent with similarly-
situated Executives and in accordance with the terms of the Bonus Program
established by the Company, and as may be amended from time to time in the
Company's sole discretion.

     e.	Expenses.  The Company shall reimburse Executive for reasonable
business expenses incurred in the performance of Executive's duties hereunder
in accordance with the Company's expense reimbursement guidelines.

3. AT-WILL EMPLOYMENT; TERMINATION BY COMPANY

     a.	At-Will Termination by Company.  The employment of Executive shall
be "at-will" at all times.  The Company may terminate Executive's employment
with the Company at any time, without any advance notice, for any reason or
no reason at all, notwithstanding anything to the contrary contained in or
arising from any statements, policies or practices of the Company relating
to the employment, discipline or termination of its employees.  Upon and
after such termination by the Company, all obligations of the Company under
this Agreement shall cease, unless Executive's employment is terminated with
out Cause, in which case the Company shall provide Executive with the
severance benefits described in Section 3(b) below.

     b.	Severance.  Except in situations where the employment of Executive
is terminated For Cause or By Disability (as defined in Section 4 below),
in the event that the Company terminates the employment of Executive at any
time, or upon Executive's death, Executive will be eligible to receive an
amount, payable in a lump sum, equal to (i) six (6) months of the Base
Salary of the Executive plus (ii) one (1) month of the Base Salary of the
Executive for each month of employment beginning on August 7, 2003 in
excess of six (6) months but not to exceed twelve (12) months.  For
purposes of such calculation, "Base Salary" shall refer to the greater of
(i) $175,000 per year or (ii) Executive's then current base salary on the
termination date (plus the amount of any cash bonus received by Executive
for the prior year, if any).  Executive's eligibility for severance is
conditioned on Executive having first signed a release agreement in the
form attached as Exhibit B.  Executive shall not be entitled to any
severance payments if Executive's employment is terminated For Cause, By
Death or By Disability (as defined in Section 4 below) or if Executive's
employment is terminated by Executive without Good Reason (in accordance
with Section 5 below).

4. OTHER TERMINATIONS BY COMPANY

     a. Termination for Cause.  For purposes of this Agreement, "For Cause"
shall mean:  (i) Executive is indicted for or charged with a crime involving
dishonesty, breach of trust, or physical harm to any person (provided,
however, that the foregoing shall not include any misdemeanor resulting
from harm caused by Executive to another person through the operation of a
motor vehicle); (ii) Executive willfully engages in conduct that is in bad
faith and materially injurious to the Company, including but not

                                   3
<PAGE>

limited to, misappropriation of trade secrets, fraud or embezzlement; (iii)
Executive commits a material breach of this Agreement, which breach (if
curable) is not cured within thirty days after written notice to Executive
from the Company; (iv) Executive willfully refuses to implement or follow a
lawful policy or directive of the Company that is consistent with the terms
of this Agreement, which breach is not cured within sixty (60) days after
written notice to Executive from the Company; or (v) Executive engages in
misfeasance or malfeasance demonstrated by a pattern of failure to perform
job duties diligently and professionally, which failure (if curable) is not
cured within sixty (60) days after written notice to Executive from the
Company.  Except for the notices required above, the Company may terminate
Executive's employment For Cause at any time, without any advance notice.
The Company shall pay to Executive all compensation to which Executive is
entitled up through the date of termination, subject to any other rights or
remedies of the Company under law; and thereafter all obligations of the
Company under this Agreement shall cease.

     b. By Death.  Executive's employment shall terminate automatically upon
Executive's death.  The Company shall pay to Executive's beneficiaries or
estate, as appropriate, any compensation then due and owing.  Thereafter all
obligations of the Company under this Agreement shall cease.  Nothing in
this Section shall affect any entitlement of Executive's heirs or devisees
to the benefits of any life insurance plan or other applicable benefits.

     c. By Disability.  If Executive becomes eligible for the Company's long
term disability benefits or if, in the sole opinion of a qualified medical
doctor in Executive's municipality of residence selected by the Company but
otherwise not affiliated with the Company or its senior management,
Executive is unable to carry out the responsibilities and functions of the
position held by Executive by reason of any physical or mental impairment
for more than ninety (90) consecutive days or more than one hundred and
twenty (120) days in any twelve-month period, then, to the extent permitted
by law, the Company may terminate Executive's employment.  The Company shall
pay to Executive all compensation to which Executive is entitled through the
date of termination, and thereafter all obligations of the Company under
this Agreement shall cease.  Nothing in this Section shall affect
Executive's rights under any disability plan in which Executive is a
participant.

5. TERMINATION BY EXECUTIVE

     a. At-Will Termination by Executive.  Executive may terminate
employment with the Company at any time for any reason or no reason at all,
upon ninety (90) days' advance written notice.  During such notice period
Executive shall continue to diligently perform all of Executive's duties
hereunder.  The Company shall have the option, in its sole discretion, to
make Executive's termination effective at any time prior to the end of such
notice period as long as the Company pays Executive all compensation to
which Executive is entitled up through the last day of the ninety (90) day
notice period.  Thereafter all obligations of the Company shall cease.

     b. Termination for Good Reason.  Executive's termination shall be for
"Good Reason" if Executive provides written notice to the Company of the
Good Reason within thirty (30) days of the event constituting Good Reason
and provides the Company with a period of thirty (30) days to cure the
event constituting Good Reason and

                                   4
<PAGE>

the Company fails to cure the Good Reason within that period.  For purposes
of this Agreement, "Good Reason" shall mean any of the following events, if
such event is effected by the Company without the consent of Executive:
(i) a change in Executive's position with the Company which materially
reduces Executive's level of responsibility; (ii) a reduction in Executive's
Base Salary, except for reductions in accordance with Section 2(a) hereof;
(iii) a relocation of Executive's principal place of employment by more
than fifty (50) miles (excluding Executive's relocation to Dallas, Texas);
or (iv) a material breach of this Agreement by the Company.  In such event
Executive may terminate her employment for Good Reason, in which case
Executive will be eligible to receive an amount, payable in the form of a
lump sum, equal to (i) six (6) months of the Base Salary of the Executive
plus (ii) one (1) month of the then-current Base Salary of the Executive
for each month of employment beginning on August 7, 2003 in excess of six
(6) months but not to exceed twelve (12) months.  For purposes of such
calculation, "Base Salary" shall refer to the greater of (i) $175,000 per
year or (ii) Executive's Base Salary on the termination date (plus the
amount of any cash bonus received by Executive for the prior year, if any).
Executive's eligibility for severance is conditioned on Executive having
first signed a release agreement in the form attached as Exhibit B.
Thereafter all obligations of the Company or its successor under this
Agreement shall cease.

6. TERMINATION OBLIGATIONS

     a.	Return of Property.  Executive agrees that all property (including,
without limitation, all equipment, tangible proprietary information,
documents, records, notes, contracts and computer-generated materials)
furnished to or created or prepared by Executive incident to Executive's
employment belongs to the Company and shall be promptly returned to the
Company upon termination of Executive's employment.

     b. Resignation and Cooperation.  Upon termination of Executive's
employment, Executive shall be deemed to have resigned from all offices and
directorships then held with the Company.  Following any termination of
employment, subject to Executive's receiving reasonable and customary
compensation, Executive shall cooperate with the Company in the winding up
of pending work on behalf of the Company and the orderly transfer of work
to other employees.  Executive shall also cooperate with the Company, at
the Company's expense, in the defense of any action brought by any third
party against the Company that relates to Executive's employment by the
Company.

     c. Continuing Obligations.  Executive understands and agrees that
Executive's obligations under Sections 6, 7, and 8 herein (including
Exhibits C and D) shall survive the termination of Executive's employment
for any reason and the termination of this Agreement.

7. INVENTIONS AND PROPRIETARY INFORMATION; NON COMPETITION; PROHIBITION
ON THIRD PARTY INFORMATION

     a. Proprietary Information Agreement.  Executive agrees to sign and be
bound by the terms of the Proprietary Information and Inventions Agreement,
which is attached as Exhibit C ("Proprietary Information Agreement").

                                      5
<PAGE>

     b. Non-Competition.  As an inducement for the Company's entering into
this Agreement and in consideration of the Company's agreement to furnish
Executive with certain confidential and proprietary information regarding
the Company pursuant to Exhibit C, Executive covenants that commencing on
the date hereof (the "Effective Date") and for a period ending eighteen (18)
months following the termination of Executive's employment with the Company
(the "Term"), Executive shall not, directly or indirectly, manage, engage
in, operate or conduct, prepare to or plan to conduct or assist any person
or entity to conduct any business, or have any controlling interest in any
business, person, firm, corporation or other entity (as a principal, owner,
agent, employee, shareholder, officer, director, joint venturer, partner,
member, security holder, creditor, consultant or in any other capacity)
whose revenue is generated principally from a business which is competitive
with the Business anywhere in the United States (the "Territory").   As used
herein, the term "Business" shall refer to the business of the company and
its subsidiaries of operating a temporary nurse staffing company, including,
without limitation, the provision of travel and per diem temporary nurse
staffing services; provided, however, that the term "Business" shall not
include the business of operating a temporary nurse staffing company which
is directly reimbursed by Medicare, Medicaid or any successor federal
program, which such business and its operations shall not be considered
competitive with the Business for the purpose of this Section 7(b).  The
covenants set forth in this Section 7(b) shall be construed as a series of
separate covenants covering their subject matter in each of the separate
states within the Territory, and except for geographic coverage, each such
separate covenant shall be deemed identical in terms to the covenant set
forth above in this Section 7(b).  To the extent that any such covenant
shall be judicially unenforceable in any one or more states in the United
States, such covenant shall not be affected with respect to each of such
other states in the Territory.  Each covenant with respect to such state in
the Territory shall be construed as severable and independent.

c.	Non-Solicitation; Non-Disparagement.  Executive acknowledges that
because of Executive's position in the Company, Executive will have access
to material intellectual property and confidential information.  During the
Term (as previously defined), in addition to Executive's other obligations
hereunder or under the Proprietary Information Agreement, Executive shall
not, for Executive or any third party, directly or indirectly (a) divert or
attempt to divert from the Company or its subsidiaries any business of any
kind, including without limitation the solicitation of or interference with
any of its customers, clients, members, business partners or suppliers, or
(b) solicit or otherwise induce any person engaged by the Company or any of
its subsidiaries (as an agent, employee, consultant, or in any other
capacity) to terminate his or her employment, consultancy or other
relationship with the Company or its subsidiaries.  In addition, Executive
will not disparage the Company or any of its stockholders, directors,
employees or agents (collectively the "Company Representatives"), and
neither the Company nor the Company Representatives will disparage
Executive.

     d. Non-Disclosure of Third Party Information.  Executive represents
and warrants and covenants that Executive shall not disclose to the Company,
or use, or induce the Company to use, any proprietary information or trade
secrets of others at any time, including but not limited to any proprietary
information or trade secrets of any former employer, if any; and Executive
acknowledges and agrees that any violation of this provision shall be
grounds for Executive's immediate termination and could subject Executive
to substantial civil liabilities and criminal penalties.  Executive further
specifically and expressly acknowledges that no officer or other employee or

                                    6
<PAGE>

representative of the Company has requested or instructed Executive to
disclose or use any such third party proprietary information or trade
secrets.

     e. Reasonableness of Restrictions.  EXECUTIVE HAS CAREFULLY READ AND
CONSIDERED THE PROVISIONS OF SECTION 7 HEREOF AND, HAVING DONE SO, HEREBY
AGREES THAT THE RESTRICTIONS SET FORTH IN SUCH SECTIONS ARE FAIR AND
REASONABLE AND ARE REASONABLY REQUIRED FOR THE PROTECTION OF THE INTERESTS
OF THE COMPANY AND ITS ASSETS AND PROPERTIES, INCLUDING, WITHOUT LIMITATION,
THE BUSINESS.  IF ANY COVENANT IN SECTION 7 IS HELD TO BE UNREASONABLE,
ARBITRARY, OR AGAINST PUBLIC POLICY, SUCH COVENANT WILL BE CONSIDERED TO BE
DIVISIBLE WITH RESPECT TO SCOPE, TIME, AND GEOGRAPHIC AREA, AND SUCH LESSER
SCOPE, TIME, OR GEOGRAPHIC AREA, OR ALL OF THEM, AS A COURT OF COMPETENT
JURISDICTION MAY DETERMINE TO BE REASONABLE, NOT ARBITRARY, AND NOT AGAINST
PUBLIC POLICY, WILL BE EFFECTIVE, BINDING AND ENFORCEABLE AGAINST THE
EXECUTIVE.

8. ARBITRATION

Executive agrees to sign and be bound by the terms of the Arbitration
Agreement, which is attached as Exhibit D.

9. AMENDMENTS; WAIVERS; REMEDIES

This Agreement may not be amended or waived except by a writing signed by
Executive and by a duly authorized representative of the Company other than
Executive.  Failure to exercise any right under this Agreement shall not
constitute a waiver of such right.  Any waiver of any breach of this
Agreement shall not operate as a waiver of any subsequent breaches.  All
rights or remedies specified for a party herein shall be cumulative and in
addition to all other rights and remedies of the party hereunder or under
applicable law.

10. ASSIGNMENT; BINDING EFFECT

     a. Assignment.  The performance of Executive is personal hereunder, and
Executive agrees that Executive shall have no right to assign and shall not
assign or purport to assign any rights or obligations under this Agreement.
This Agreement may be assigned or transferred by the Company; and nothing
in this Agreement shall prevent the consolidation, merger or sale of the
Company or a sale of any or all or substantially all of its assets.

     b. Binding Effect.  Subject to the foregoing restriction on assignment
by Executive, this Agreement shall inure to the benefit of and be binding
upon each of the parties; the affiliates, officers, directors, agents,
successors and assigns of the Company; and the heirs, devisees, spouses,
legal representatives and successors of Executive.

                                     7
<PAGE>

11. NOTICES

All notices or other communications required or permitted hereunder shall
be made in writing and shall be deemed to have been duly given if delivered:
(a) by hand; (b) by a nationally recognized overnight courier service; or (c) by
United States first class registered or certified mail, return receipt
requested, to the principal address of the other party, as set forth below.  The
date of notice shall be deemed to be the earlier of (i) actual receipt of notice
by any permitted means, or (ii) five business days following dispatch by
overnight delivery service or the United States Mail.  Executive shall be notify
the Company in writing of any change in Executive's address.  Notice of change
of address shall be effective only when done in accordance with this paragraph.

Company's Notice Address:

14111 Dallas Parkway, Suite 600
Dallas, Texas  75240
Attention:  Chief Executive Officer

Executive's Notice Address:

3700 Legacy Drive, Apartment 20206
Frisco, Texas  75034

12. SEVERABILITY

If any provision of this Agreement shall be held by a court or arbitrator
to be invalid, unenforceable, or void, such provision shall be enforced to
the fullest extent permitted by law, and the remainder of this Agreement
shall remain in full force and effect.  In the event that the time period
or scope of any provision is declared by a court or arbitrator of competent
jurisdiction to exceed the maximum time period or scope that such court or
arbitrator deems enforceable, then such court or arbitrator shall reduce
the time period or scope to the maximum time period or scope permitted by
law.

13. TAXES

All amounts payable to Executive under this Agreement (including, without
limitation, Executive's Base Salary and any bonuses and severance pay) shall
be paid less all applicable state and federal tax withholdings and any
other withholdings required by any applicable jurisdiction.

14. GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the
laws of the State of Texas.

                                      8
<PAGE>

15. INTERPRETATION

This Agreement shall be construed as a whole, according to its fair meaning,
and not in favor of or against any party.  Sections and section headings
contained in this Agreement are for reference purposes only, and shall not
affect in any manner the meaning or interpretation of this Agreement.
Whenever the context requires, references to the singular shall include
the plural and the plural the singular.

16. COUNTERPARTS

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

17. AUTHORITY

Each party represents and warrants that such party has the right, power and
authority to enter into and execute this Agreement and to perform and
discharge all of the obligations hereunder; and that this Agreement
constitutes the valid and legally binding agreement and obligation of such
party and is enforceable in accordance with its terms.

18. ENTIRE AGREEMENT

This Agreement is intended to be the final, complete, and exclusive
statement of the terms of Executive's employment by the Company and may not
be contradicted by evidence of any prior or contemporaneous statements or
agreements, except for agreements specifically referenced herein (including
the Stock Option Agreement attached as Exhibit A, the Proprietary
Information Agreement attached as Exhibit C and the Arbitration Agreement
attached as Exhibit D).  To the extent that the practices, policies or
procedures of the Company, now or in the future, apply to Executive and
are inconsistent with the terms of this Agreement, the provisions of this
Agreement shall control.  Any subsequent change in Executive's duties,
position, or compensation will not affect the validity or scope of this
Agreement.

19. INJUNCTIVE RELIEF AND TERMINATION.

     a. General.  Executive acknowledges and agrees that (i) the covenants
and restrictions contained in Section 7 of this Agreement are necessary,
fundamental and required for the protection of the Business, (ii) such
covenants relate to matters which are of a special, unique and extraordinary
character that gives each of such covenants a special, unique and
extraordinary value; and (iii) the Company will suffer irreparable harm in
the event that Executive breaches any of her obligations under Section 7
hereof, and that monetary damages shall be inadequate to compensate the
Company for any such breach.  Executive agrees that in the event of any
breach or threatened breach by Executive of any of the provisions of
Section 7 hereof, the Company shall be entitled to a temporary restraining
order, preliminary injunction and/or permanent injunction in order to
revent or restrain any such breach or threatened breach by Executive, or by
any or all

                                    9
<PAGE>

of Executive's agents, representatives or other persons directly or
indirectly acting for, on behalf of or with Executive, and the Company will
not be obligated to post bond or other security in seeking such relief.

     b. No Limitation of Remedies.  Notwithstanding the provisions set forth
in Section 19(a) above, or any other provision contained in this Agreement,
the parties hereby agree that no remedy conferred by any of the specific
provisions of this Agreement, including, without limitation, this Section
19, is intended to be exclusive of any other remedy, and each and every
remedy shall be cumulative and shall be in addition to every other remedy
given hereunder or now or hereafter existing at law or in equity or by
statute or otherwise.

20. EXECUTIVE ACKNOWLEDGEMENT

EXECUTIVE ACKNOWLEDGES THAT EXECUTIVE HAS HAD THE OPPORTUNITY TO CONSULT
LEGAL COUNSEL CONCERNING THIS AGREEMENT, THAT EXECUTIVE HAS READ AND
UNDERSTANDS THIS AGREEMENT, THAT EXECUTIVE IS FULLY AWARE OF ITS LEGAL
EFFECT, AND THAT EXECUTIVE HAS ENTERED INTO THIS AGREEMENT FREELY BASED ON
EXECUTIVE'S OWN JUDGMENT AND NOT ON ANY REPRESENTATIONS OR PROMISES OTHER
THAN THOSE CONTAINED IN THIS AGREEMENT.


              [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                     10
<PAGE>

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

CRDENTIA CORP.:                        EXECUTIVE:

By: /s/ James D. Durham                By: /s/ Pamera Atherton
    --------------------------             -------------------------
Name: James D. Durham                      Pamela Atherton
Title: Chief Executive Officer

                                     11

<PAGE>



                                  EXHIBIT A
                                  ---------


                       Form of Stock Option Agreement


(See Exhibit 10.13 as filed with this Form 10-KSB and incorporated herein
by reference)

<PAGE>

                                  EXHIBIT B
                                  ---------

                       FORM OF GENERAL RELEASE OF CLAIMS

	This General Release of Claims (hereinafter "Release") is entered
into this       day of               ,     ,  by and between Pamela Atherton
(hereinafter "Releasor") and Crdentia Corp. (hereinafter "Releasee").

                                   RECITALS
                                   --------


        A.  On December 16, 2003, Releasor became employed by Releasee
according to the terms and conditions of an employment agreement
("Employment Agreement").

        B.  On or about           ,       , Releasee terminated the
employment of Releasor without "Cause" as that term is defined in the
Employment Agreement.

        C.  According to the terms and conditions of the Employment
Agreement, Releasor is entitled to certain severance payments so long as
Releasor executes this General Release of any and all claims.  By execution
hereof, Releasor understands and agrees that this Release is a compromise
of doubtful and disputed claims, if any, which remain untested; that there
has not been a trial or adjudication of any issue of law or fact herein;
that the terms and conditions of this Release are in no way to be construed
as an admission of liability on the part of Releasee and that Releasee
denies liability and intends merely to avoid litigation with this Release.

                                 AGREEMENT
                                 ---------

NOW THEREFORE FOR MUTUAL CONSIDERATION, the receipt and sufficiency of which
the parties hereto acknowledge, the parties agree as follows:

     1. Except for claims arising under any Stock Option Agreements between
Releasor and Releasee ("Stock Option Agreements"), Releasor does hereby
unconditionally, irrevocably and absolutely release and discharge Releasee,
and its affiliates, owners, directors, officers, employees, agents,
attorneys, heir, representatives, legatees, stockholders, insurers,
divisions, successors and/or assigns and any related holding, parent or
subsidiary corporations, from any and all loss, liability, claims, costs
(including, without limitation, attorneys' fees), demands, causes of action,
or suits of any type, whether in law and/or in equity, related directly or
indirectly or in any way connected with any transaction, affairs or
occurrences between them and arising on or prior to the date hereof,
including, but not limited to, Releasor's employment with Releasee, the
termination of said employment and claims of emotional or physical distress
related to such employment or termination.  This Release specifically
applies to any claims for age discrimination in employment, including any
claims arising under the Age Discrimination In Employment Act or any other
statutes or laws that govern discrimination in employment.

     2. Releasor irrevocably and absolutely agrees that she will not
prosecute nor allow to be prosecuted on her behalf in any administrative
agency, whether federal or state, or in any court, whether federal or state,
any claim or demand of any type related to the matter released above, it
being an intention of the parties that with the execution by Releasor of
this Release, Releasee, its owners, officers, directors, employees, agents,
attorneys, heirs, representatives,

<PAGE>

legatees, successors and/or assigns and any related holding, parent and
subsidiary corporations will be absolutely, unconditionally and forever
discharged of and from all obligations to or on behalf of Releasor related
in any way to the matter discharged herein.

     3. Releasor agrees that all matters relative to this Release and
compromise in relation thereto shall remain confidential.  Accordingly,
Releasor hereby agrees that, with the exception of Releasor's counsel,
spouse and tax advisor, Releasor shall not discuss, disclose or reveal to
any other persons, entities or organizations, whether within or outside of
the State of Texas, the fact of settlement and/or terms and conditions of
settlement and of this Release, including the amount paid to settle
Releasor's claims.  Similarly, Releasor shall not make, issue, disseminate,
publish, print or announce any news release, public statement or
announcement with respect to these matters, or any aspect thereof, the
reasons therefore and the terms of this Release.  Further, in keeping with
the spirit of this Release, Releasor shall, upon the execution of this
Release, cease and desist from taking any further action in opposition to
Releasee, respecting its past employment policies and practices and shall
never reapply for employment with Releasor; provided, however, that nothing
herein shall be deemed to preclude Releasor from giving statements,
affidavits, depositions, testimony, declarations or other disclosures
required by or pursuant to legal process.

     4. Releasor does expressly waive all of the benefits and rights granted
 to him pursuant to any applicable law or regulation to the effect that:

        A general release does not extend to claims which the creditor does
        not know of or suspect to exist in his favor at the time of
        executing the release, which if known by her must have materially
        affected her settlement with the debtor.

     5. Releasor does certify that she has read all of this Release, and
that she fully understands all of the same.  Except for claims under the
Stock Option Agreements, Releasor hereby expressly agrees that this Release
shall extend and apply to all unknown, unsuspected and unanticipated
injuries and damages, as well as those that are now known.

     6. Releasor further declares and represents that no promise, inducement
or agreement not herein expressed has been made to him and that this
Release contains the full and entire agreement between and among the parties,
and that the terms of this Release are contractual and not a mere recital.

     7. The validity, interpretation, and performance of this Release shall
be construed and interpreted according to the laws of the State of Texas.

     8. This Release may be pleaded as a full and complete defense and may
be used as the basis for an injunction against any action, suit or
proceeding that may be prosecuted, instituted or attempted by either party
in breach thereof.

     9. If any provision of this Release, or part thereof, is held invalid,
void or voidable as against the public policy or otherwise, the invalidity
shall not affect other provisions, or parts

                                        2
<PAGE>

thereof, which may be given effect without the invalid provision or part.
To this extent, the provisions, and parts thereof, of this Release are
declared to be severable.

     10. As part of this Release, Releasor agrees to indemnify and hold
harmless Releasee against any claim by any state or the Internal Revenue
Service for Releasor's income and other taxes payable as a result of the
consideration being paid by Releasee pursuant to this Release or the
Employment Agreement.  It is understood that the extent of Releasor's
obligation would be to pay all sums due to either agency as income tax and
his/her portion of social security taxes related to this Release, plus any
applicable penalty and/or interest relating to failure to timely pay the
tax.  It is the intention of all parties to this Release that the severance
payments made to Releasor are proper and in accordance with all laws.
However, should there be a different determination by any state or the
Internal Revenue Service, Releasor will be obligated based on the terms of
this paragraph.

     11. It is understood that this Release is not an admission of any
liability by any person, firm association or corporation but is in
compromise of any disputed claim.

     12. Releasor represents, acknowledges and agrees that Releasee has
advised her, in writing, to discuss this Release with an attorney, and that
to the extent, if any, that Releasor has desired, Releasor has done so;
that Releasee has given Releasor twenty-one (21) days to review and
consider this Release before signing it, and Releasor understands that she
may use as much of this twenty-one (21) day period as she wishes prior to
signing; that no promise, representation, warranty or agreements not
contained herein have been made by or with anyone to cause her to sign this
Release; that she has read this Release in its entirety, and fully
understands and is aware of its meaning, intent, contents and legal effect;
and that she is executing this Release voluntarily, and free of any duress
or coercion.

     13. The parties acknowledge that for a period of seven (7) days
following the execution of this Release, Releasor may revoke the Release,
and the Release shall not become effective or enforceable until the
revocation period has expired.

     14. This Release shall become effective eight (8) days after it is
signed by Releasor and Releasee, and in the event the parties do not sign
on the same date, then this Release shall become effective eight (8) days
after the date it is signed by Releasor.

     15. Releasor has read the foregoing Release and knows its contents and
fully understands it.  Releasor acknowledges that she has fully discussed
this Release with her attorney.

     16. Releasor has read the foregoing Release and knows its contents and
fully understands it.  Releasor further acknowledges that she has been
offered the opportunity to discuss this Release and its contents with her
attorney.  Releasor acknowledges that she has fully discussed this Release
with her attorney or has voluntarily chosen to sign this Release without
consulting her attorney, fully understanding the consequences of this
Release.

                                   3
<PAGE>

     IN WITNESS WHEREOF, the undersigned have executed this Release on the
dates shown below at  14111 Dallas Parkway, Suite 600, Dallas, Texas 75240.

RELEASOR:



----------------------------------
Pamela Atherton

Dated:
      ----------------------------


RELEASEE:


CRDENTIA CORP.


----------------------------------
By:	James D. Durham
Its:  	Chief Executive Officer

Dated:
      ----------------------------

                                    4
<PAGE>

                                EXHIBIT C
                                ---------

     In consideration of my employment by Crdentia Corp. (the "Company") and
the mutual covenants hereof, I and the Company hereby agree to the terms and
conditions set forth in this Proprietary Rights and Information Agreement
(the "Agreement").

                                RECITALS

     Whereas, my responsibilities as an employee of the Company may include
creating, making, conceiving, inventing, discovering, developing, reducing
to practice or suggesting Technology (as defined below) that relates in any
manner to the actual or reasonably anticipated business, research,
development or other activities of the Company; and

     Whereas, my compensation as an employee of the Company takes into
account, among other things, the value of such Technology and the potential
economic benefit that may be derived therefrom by the Company;

     Now therefore, I and the Company hereby agree as follows:

1. PROPRIETARY INFORMATION

     a. Restrictions on Proprietary Information.  I agree that, during my
employment and, as long as such information and materials constitute
Proprietary Information (as defined below) thereafter, I will hold the
Proprietary Information of the Company and its affiliates in strict
confidence and will neither use the information for the benefit of myself
or any third party nor disclose it to any third party, except to the extent
necessary to carry out my responsibilities as an employee of the Company
or as specifically authorized in writing by a duly authorized officer of
the Company other than me.  "Proprietary Information" means any and all
information and materials, in whatever form, whether tangible or intangible,
pertaining in any manner to the business of the Company or its affiliates,
consultants, customers, business associates or members (including its and
their officers, directors, agents and employees), or any person or entity
to which the Company owes a duty of confidentiality, whether or not labeled
or identified as proprietary or confidential, and including any copies,
portions, extracts and derivatives thereof, except to the extent that I
can prove that such information or materials (i) are or become generally
known to the public through lawful means and through no act or omission of
mine; (ii) were part of my general knowledge prior to my employment by the
Company; or (iii) are disclosed to me without restriction by a third party
who rightfully possesses the information and is under no duty of
confidentiality with respect thereto.  "Proprietary Information" includes
but is not limited to any and all (a) Creations and other Technology (as
defined below) and related records; (b) financial information and other
information about costs, budgets, profits, margins markets, sales, pricing,
payment terms, discounts, rebates and other concessions or incentives,
forecasts, customers, subscribers, members, and bids; (c) strategies and
other plans for business, marketing, advertisement, future development and
new products, services and concepts; (d) employee and personnel information,
including, without limitation, files and information about employee
compensation and benefits.

     b. Location and Reproduction.  I agree to maintain at my work station
and/or any other place under my control only such Proprietary Information
that, and only as long as such Proprietary Information, is necessary to
carry out my responsibilities as an employee of the Company.  I agree to
return to the appropriate person or location or otherwise properly dispose
of Proprietary Information once that necessity


<PAGE>

no longer exists.  I also agree not to make copies or otherwise reproduce
Proprietary Information except to the extent necessary to carry out my
responsibilities as an employee of the Company.

     c. Prior Actions and Knowledge.  Except as disclosed on Schedule A to
this Agreement, I have no knowledge of the Company's business or
Proprietary Information, other than information I have learned from the
Company in the course of being hired and employed.

     d. Third Party Information.  I recognize that the Company has received
and will receive confidential or proprietary information and materials from
third parties.  Such information and materials shall be deemed "Proprietary
Information" for all purposes of this Agreement and I will be subject to all
limitations on use and disclosure set forth in this Agreement with respect
thereto.  In addition, I shall not use or disclose any such information and
materials in any manner inconsistent with any of Company's obligations
towards such third party.

     e. Interference with Business.  I acknowledge that because of my position
in the Company, I will have access to the Company's Proprietary Information.  I
agree that during my employment with the Company and for a period of one (1)
year after termination of my employment with the Company, I shall not directly
or indirectly (i) divert or attempt to divert from the Company (or any
affiliate) any business of any kind, including without limitation the
solicitation of or interference with any of its customers, clients, members,
business partners or suppliers or (ii) solicit, induce, recruit or encourage
any person employed by the Company to terminate his or her employment.

2. CREATIONS

     a. Definitions.

     b. (1) "Technology" comprises all materials, information, ideas and
other subject matter, including, without limitation, works of authorship
and other creations; inventions, invention disclosures, discoveries,
developments and patent applications; know-how and trade secrets; plans,
designs and concepts; drawings, diagrams and schematics; writings, reports,
notebooks, and other information; specifications, formulas, structures and
other technical or engineering information; prototypes, systems,
compositions, hardware, tools, equipment, instruments and other devices,
products and technology; processes, methods, techniques, procedures and
work in process; computer programs (in source code, object code or any
other format), applications, algorithms, protocols, data and databases,
programmable logic and documentation; and any copies, extracts, portions,
derivatives, improvements and enhancements thereof and modifications
thereto.

        (2) "Creations" means any and all Technology that (i) is created,
made, conceived, invented, discovered, developed, reduced to practice or
suggested by me, alone or together with others, at any time during my
employment by the Company or, whether during or within a reasonable time
after my employment with the Company, otherwise in connection with my
activities as an employee of, or based upon any Proprietary Information or
Proprietary Rights of, the Company, and (ii) relates in any manner to the
actual or reasonably anticipated business, research, development or other
activities of the Company, or were created, made, conceived, invented,
discovered, developed, reduced to practice or suggested using the Company's
equipment, supplies, facilities, or Proprietary Information.  "Creations"
shall not include (a) Technology

                                     2
<PAGE>

expressly set forth on Schedule A, and (b) other Technology to the extent
that any mandatory and non-waivable applicable law prohibits the assignment
thereof as set forth herein (such Technology described in the foregoing
subclauses (a) and (b) being the "Excluded Technology").  I acknowledge
that I have read and understand the law(s) set forth in Appendix 1 hereto.

        (3) "Proprietary Rights" means, throughout the world, any and all
(i) copyrights, moral rights and other personal author's rights (including,
without limitation any and all rights of paternity or attribution,
integrity, publication, withdrawal or retraction or rights to receive
additional remuneration) ("Moral Rights"), related rights (including
without limitation so called "neighboring rights" and "sui generis" rights),
database rights and all other rights associated with works of authorship
(including computer programs), creations or performances, whether published
or unpublished, (ii) rights with respect to trade secrets and know-how,
(iii) patents and related rights, inventor's certificates, design rights,
industrial design rights, utility model rights, (iv) trademark, service
mark and trade dress rights and other rights relating to source or indicia
of origin, and (v) any and all other intellectual property, industrial
property, and other proprietary rights, together with (a) all rights
related to any of the foregoing, including, without limitation, rights with
respect to applications and filings for any of the foregoing, rights with
respect to registrations or renewals of any of the foregoing, and rights to
apply for, file, register, establish, maintain, extend or renew any of the
foregoing, (b) all benefits, privileges, causes of action and remedies
relating to any of the foregoing, whether before or hereafter accrued,
including, without limitation, the right to enforce and protect any of the
foregoing, including to bring legal actions against any party for all past,
present and future infringements, misappropriations or other violations of
or relating to any of the foregoing and to settle, and collect and retain
the proceeds from, any such actions, and (c) all rights to transfer and
grant licenses and other rights with respect to any and all of the foregoing
in Company's sole discretion.

     c. Ownership of Creations and Proprietary Rights.  I agree and
acknowledge that all right, title and interest with respect to all Creations
and any and all related Proprietary Rights (including all Rights to Use, as
defined below) shall solely vest in, inure to the sole benefit of, and be
the sole property of, the Company without any limitations.  I agree and
acknowledge that all Creations shall be considered works made for hire and
works produced in the service of the Company within the scope of my
employment.

     d. Assignment of Creations and Proprietary Rights.  If, notwithstanding
the foregoing, I retain any right, title or interest with respect to any
Creations or any related Proprietary Rights, I hereby assign, transfer and
convey, and agree to assign, transfer and convey, to the Company, without
any limitations or any additional remuneration, all such right, title and
interest.  The rights assigned, transferred and conveyed hereunder shall
include, without limitation, (i) all rights to publish, copy, reproduce,
adapt, modify, translate, prepare derivatives based upon, distribute, rent,
lease, lend, transmit, broadcast, publicly perform, publicly display,
otherwise communicate or make available to the public, record, store on any
medium, make, sell, offer to sell, import, practice any method in connection
with and otherwise use or exploit for any purpose, throughout the world, by
any and all means and in any form or medium whatsoever, the Creations and
any other Technology that is the subject of, embodies or uses, or is made
using, any Proprietary Rights relating to the Creations, and (ii) all
rights to transfer and grant licenses and other rights with respect to any
and all of the foregoing rights, and to authorize any third party to
exercise any of the foregoing rights, in the Company's sole discretion (all
such rights described in subclauses (i) and (ii) above being "Rights to
Use").

                                   3
<PAGE>

     e. License of Rights.  If, notwithstanding the foregoing, I retain any
right, title or interest with respect to any Creations or any related
Proprietary Rights, I hereby grant, and agree to grant, to the Company,
without any limitations or any additional remuneration, the worldwide,
exclusive, perpetual, irrevocable, transferable, freely sublicenseable,
right and license under all my right, title and interest with respect to
such Creations, any other Technology that is the subject of, embodies or
uses, or is made using, any Proprietary Rights relating to such Creations,
and any and all related Proprietary Rights, including all Rights to Use.

     f. Moral Rights.  If, notwithstanding the foregoing, I retain any Moral
Rights with respect to any Creations or any other Technology that is the
subject of, embodies or uses, or is made using, any Proprietary Rights
relating to the Creations, I hereby waive all such Moral Rights.  I
acknowledge that the Creations and the related Proprietary Rights may have
substantial economic value, that any and all proceeds resulting from use
and exploitation thereof shall solely belong to the Company, and that the
salary and other compensation I receive from the Company for my employment
with the Company includes fair and adequate consideration for all
assignments, licenses and waivers hereunder.  To the extent, if any, that
any Moral Rights are not waivable under applicable law, I hereby promise
and covenant not to institute, support, maintain or permit any action or
proceeding on the basis of, or otherwise assert any Moral Rights with
respect to, any Creations or any other Technology that is the subject of,
embodies or uses, or is made using, any Proprietary Rights relating to the
Creations, or any Moral Rights relating thereto in any forum.  I hereby
authorize the Company to publish the Creations and any other Technology
that is the subject of, embodies or uses, or is made using, any Proprietary
Rights relating to the Creations, in the Company's sole discretion with or
without attributing any of the foregoing to me or identifying me in
connection therewith and regardless of the effect on such Creations and
such other Technology or my relationship thereto.

     g. Excluded Technology.  I hereby grant and agree to grant to the
Company a first right to negotiate a license with respect to all Excluded
Technology and all related Proprietary Rights and to negotiate in good
faith such a license if the Company so requests within ninety (90) days
after my disclosure of such Excluded Technology or related Proprietary
Rights.

     h. Cooperation.  At the Company's request and expense, I will, during
the term of my employment and thereafter, cooperate with and assist the
Company, and perform such further acts and execute, acknowledge and deliver
to the Company such further documents, as the Company may deem necessary or
advisable in order to obtain, establish, perfect, maintain, evidence,
enforce or otherwise protect any of the rights, title and interests
assigned, transferred, conveyed, or licensed (or intended to be assigned,
transferred, conveyed, or licensed) to the Company under this Agreement,
or otherwise carry out the intent and accomplish the purposes of this
Agreement.  Such cooperation and assistance shall include, without
limitation, any execution of an assignment, transfer, conveyance, license
or waiver of, or any covenant not to institute, support, maintain or permit
any action or assert any, rights, and cooperation and assistance in any
proceedings before any government authorities or other legal proceedings, i
ncluding being named a party for purposes thereof.  Without limiting the
generality of the foregoing, to the extent permitted by applicable law, I
hereby appoint the Company as my attorney-in-fact (which appointment is
coupled with an interest), with full power of substitution and delegation,
with the right (but not the obligation) to perform any such acts and to
execute, acknowledge and deliver any such documents on my behalf, provided
that the Company shall not exercise such right unless I fail to perform
such act or execute, acknowledge or deliver such document within five (5)
business days after the Company's written request therefor.  In addition,
I agree to maintain adequate

                                      4
<PAGE>

and current written records regarding all Creations, and the creation,
making, conception, invention, discovery, development, reduction to
practice or suggestion thereof.  Such records shall be the sole property of
the Company and hereby assign, and agree to assign, all my right, title
and interest, if any, with respect to such records to the Company.

     i. Disclosure.  I agree to maintain current and accurate written
records with respect to all Creations and to disclose to the Company,
promptly after the earliest of their creation, making, conception,
invention, discovery, development, reduction to practice or suggestion,
all Creations and pertinent records.  I will further promptly notify the
Company, in confidence, of any and all Technology created, made, conceived,
invented, discovered, developed, reduced to practice or suggested by me (i)
that I believe to be Excluded Technology, and/or (ii) during the one-year
period following termination of my employment, so as to enable the Company
to determine whether such Technology is a Creation subject to this
Agreement.

     j. Post Termination Period.  I agree that any Technology created,
conceived, invented, discovered, developed, reduced to practice or
suggested by me (alone or together with others) within one (1) year after
my termination of employment with the Company shall be deemed a Creation
based upon any Proprietary Information or Proprietary Rights of the Company.
I can rebut the above presumption if I prove that such Technology is not
based upon any Proprietary Information or Proprietary Rights of the Company.

3.  FORMER OR CONFLICTING AGREEMENTS; NO USE OF THIRD PARTY TECHNOLOGY

     a. Former Agreements.  I represent and warrant that my performance of
the terms of this Agreement will not breach any agreement to keep in
confidence proprietary information acquired by me prior to my employment
by the Company.  I have listed in Schedule A all other agreements
concerning proprietary information, proprietary rights, inventions or other
 creations to which I am a party and (i) attached copies of any such
agreements in my possession, or (ii), to the extent that I am bound by
legal obligations prohibiting the disclosure of copies of such agreements
to the Company, summarized the relevant terms thereof.  To the best of my
knowledge, there is no other contract between me and any other person or
entity that is in conflict with this Agreement or concerns proprietary
information, proprietary rights, inventions or other creations.

     b. Prohibition on Use of Third Party Information.  I represent and
warrant and covenant that I will not disclose to the Company, or use in
connection with my activities as an employee of the Company, or induce the
Company to use, any proprietary or confidential information or trade
secrets, or any other Technology that is the subject of Proprietary Rights,
of myself or any third party at any time, including but not limited to any
proprietary or confidential information or trade secrets or such Technology
of any former employer, if any.  I acknowledge and agree that any violation
of this provision may be grounds for my termination and could subject me to
substantial civil liabilities and criminal penalties.  I further
specifically and expressly acknowledge that no officer or other employee or
representative of the Company has requested or instructed me to disclose or
use any such third party proprietary or confidential information or trade
secrets.  Without limiting the generality of the foregoing, in the event
that I disclose or use in connection with my activities as an employee of
the Company, or induce the Company to use, any proprietary or confidential
information or trade secrets, or any other Technology that is the subject
of Proprietary Rights, with respect to which I have any right, title or
interest, I hereby grant, and agree to grant, to the Company, without any

                                     5
<PAGE>

limitations or any additional remuneration, the worldwide, non-exclusive,
perpetual, irrevocable, transferable, freely sublicenseable, right and
license under all such right, title and interest with respect thereto,
including all Rights to Use.

4.  TERMINATION

     a. Return of the Company's Property.  I agree to promptly return to
the Company upon termination of my employment all Proprietary Information
and all personal property furnished to or prepared by me in the course of
or incident to my employment.  Following my termination, I will not retain
any written or other tangible material containing any Proprietary
Information or other information pertaining to any Creations.

     b. Termination Certificate.  In the event of the termination of my
employment, I agree, if requested by the Company, to sign and deliver the
Termination Certificate attached as Schedule B.

     c. Subsequent Employers.  I agree that after the termination of my
employment with the Company, I will not enter into any agreement that would
cause me to violate any of my obligations under this Agreement and will
inform any subsequent employers of my obligations under this Agreement.

     d. Survival.  The terms and conditions of this Agreement and my
obligations hereunder shall survive any termination of my employment with
the company and any expiration or termination of any employment or other
agreement between the Company and me, and such terms and conditions shall
remain in full force and effect as set forth herein.

5.  NO IMPLIED EMPLOYMENT RIGHTS

     I recognize that nothing in this Agreement shall be construed to imply
that my employment is guaranteed for any period of time.  Unless stated in
a written agreement signed by a duly authorized officer of the Company, my
employment is for an indefinite duration and at-will, and either the
Company or I can terminate our employment relationship at any time, without
notice (except where required in my employment agreement with the Company)
and for any reason or no reason, with or without cause.

6.  REMEDIES

     I recognize that nothing in this Agreement is intended to limit any
remedy of the Company under any law concerning trade secrets or other
Proprietary Rights.  I recognize that my violation of this Agreement could
cause the Company irreparable harm and acknowledge that the Company may
have the right to apply to any court of competent jurisdiction for an order
restraining any breach or threatened breach of this Agreement.

7.  ASSIGNMENT

     I acknowledge and agree that my obligations hereunder are personal, and
that I shall have no right to assign, transfer or delegate and shall not
assign, transfer or delegate or purport to assign, transfer or delegate
this Agreement or any of my rights or obligations hereunder.  This
Agreement and any rights and obligations of the Company hereunder may be
freely assigned, transferred or delegated by the Company.

                                  6
<PAGE>

Any assignment, transfer or delegation in violation of this Article 7. shall
be null and void.  Subject to the foregoing restrictions on assignments,
transfers and delegations, this Agreement shall inure to the benefit of the
Company and its affiliates, officers, directors, agents, successors and
assigns; and shall be binding on me and my heirs, devisees, spouses, agents,
legal representatives and successors.

8.  GOVERNING LAW

     This Agreement is to be governed by and construed in accordance with
the internal laws of the State of Texas 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 Texas to the
rights and obligations of the parties hereunder, and, to the extent federal
law is applicable, the laws of the United States of America without giving
effect to any choice of law rule that would cause the application of the
laws of any other country.

9.  SEVERABILITY

     If any provision of this Agreement, or the application thereof to any
person, place or circumstance, shall be held by a court of competent
jurisdiction to be invalid, void or otherwise unenforceable, such provision
shall be enforced to the maximum extent possible so as to effect the intent
of the parties, or, if incapable of such enforcement, shall be deemed to
be deleted from this Agreement, and the remainder of this Agreement and
such provisions as applied to other persons, places and circumstances shall
remain in full force and effect.

10. AMENDMENT; WAIVERS

     This Agreement may not be amended or waived except by a writing signed
by me and by a duly authorized representative of the Company other than me.
Failure to exercise any right under this Agreement shall not constitute a
waiver of such right.  Any waiver of any breach of this Agreement shall not
operate as a waiver of any subsequent breaches.  All rights or remedies
specified for a party herein shall be cumulative and in addition to all
other rights and remedies of the party hereunder or under applicable law.

11.  INTERPRETATION AND LANGUAGE

     This Agreement shall be construed as a whole, according to its fair
meaning, and not in favor of or against any party.  Sections and section
headings contained in this Agreement are for reference purposes only, and
shall not affect in any manner the meaning of interpretation of this
Agreement.  Whenever the context requires, references to the singular shall
include the plural and the plural the singular and any gender shall include
any other gender.  This Agreement is in the English language only, which
language shall be controlling in all respects, and all versions hereof in
any other language shall be for accommodation only and shall not be binding
upon the parties.  I ACKNOWLEDGE THAT I UNDERSTAND ALL THE TERMS AND
CONDITIONS OF THIS AGREEMENT.

12.  ENTIRE AGREEMENT

This Agreement, including all exhibits hereto, constitutes the entire
agreement and understanding of the parties with respect to the subject
matter hereof, and supersedes all prior and contemporaneous

                                   7
<PAGE>

correspondence, negotiations, agreements and understandings among the
parties, both oral and written, regarding such subject matter.  I
acknowledge that the Company has not made, and that I have not relied on,
any representations or warranties concerning the subject matter of this
Agreement other than those expressly set forth herein, if any.

               [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                     8
<PAGE>

     I HAVE READ THIS AGREEMENT CAREFULLY AND UNDERSTAND ITS TERMS.  I HAVE
COMPLETELY NOTED ON SCHEDULE A TO THIS AGREEMENT (1) ANY PROPRIETARY
INFORMATION AND TECHNOLOGY, AND (2) ANY PROPRIETARY RIGHTS AND ANY RELATED
RIGHTS THAT I DESIRE TO EXCLUDE FROM THIS AGREEMENT.

Employee                                    CRDENTIA CORP.

   /s/ Pamela Atherton                      /s/ James D. Durham
Name:  Pamela Atherton                   By:    James D. Durham
                                         Title: Chief Executive Officer
Date:  December 22, 2003                 Date:  Dece,ber 22, 2003

	CRDENTIA CORP.

                                     9
<PAGE>




                               APPENDIX 1

     I acknowledge and understand that nothing in this Agreement shall be
construed to assign or offer to assign any of my rights in any invention
which qualifies fully under the following provisions:

     Any provision in an employment agreement which provides that an
employee shall assign, or offer to assign, any of his or her rights in an
invention to his or her employer shall not apply to an invention that the
employee developed entirely on his or her own time without using the
employer's equipment, supplies, facilities, or trade secret information
except for those inventions that either:  (1) relate at the time of
conception or reduction to practice of the invention to the employer's
business, or actual or demonstrably anticipated research or development of
the employer; or (2) result from any work performed by the employee for the
employer.

     I further acknowledge and understand that the foregoing exclusion
shall not apply to the extent that full title to certain patents and
inventions is required to be in the United States, as required by contracts
between the employer and the United States or any of its agencies.


Pamela Atherton
----------------------------
Name of Employee

/s/ Pamela Atherton
----------------------------
Signature

                                    10

<PAGE>

                                SCHEDULE A

                           EMPLOYEE'S DISCLOSURE

     1. Proprietary Information.  Except as set forth below, I acknowledge
that at this time I know nothing about the business or Proprietary
Information of the Company, other than information I have learned from the
Company in the course of being hired:

----------------------------------------------------------------------------

----------------------------------------------------------------------------

----------------------------------------------------------------------------

     2. Previously Created Technology.  Except as set forth below, there are
no (i) materials, information, ideas and other subject matter, including,
without limitation, works of authorship and other creations; inventions,
invention disclosures, discoveries, developments and patent applications;
know-how and trade secrets; plans, designs and concepts; drawings, diagrams
and schematics; writings, reports, notebooks, and other information;
specifications, formulas, structures and other technical or engineering
information; prototypes, systems, compositions, hardware, tools, equipment,
instruments and other devices, products and technology; processes, methods,
techniques, procedures and work in process; computer programs (in source
code, object code or any other format), applications, algorithms, protocols,
data and databases, programmable logic and documentation; and any copies,
extracts, portions, derivatives, improvements and enhancements thereof and
modifications thereto, created, made, conceived, invented, discovered,
developed, reduced to practice or suggested by me, alone or together with
others; and (ii) copyrights, moral rights and other personal author's
rights (including, without limitation any and all rights of paternity or
attribution, integrity, publication, withdrawal or retraction or rights to
receive additional remuneration), related rights (including without
limitation so called "neighboring rights" and "sui generis" rights),
database rights and all other rights associated with works of authorship
(including computer programs), creations or performances, whether published
or unpublished; rights with respect to trade secrets and know-how; patents
and related rights, inventor's certificates, design rights, industrial
design rights, utility model rights; trademark, service mark and trade
dress rights and other rights relating to source or indicia of origin; and
any and all other intellectual property, industrial property, and other
proprietary rights; that I wish to exclude from the operation of this
Agreement:

----------------------------------------------------------------------------

----------------------------------------------------------------------------

----------------------------------------------------------------------------

----------------------------------------------------------------------------

                                     11
<PAGE>

     3. Prior Agreements.  Except as set forth below, I am aware of no
prior agreements between me and any other person or entity concerning
proprietary information, technology or proprietary rights (of the nature
described in Section 2 above) (attach copies, or summary of terms, of all
agreements in your possession):

----------------------------------------------------------------------------

----------------------------------------------------------------------------

----------------------------------------------------------------------------

----------------------------------------------------------------------------

Date:
                                              Pamela Atherton
                                              ------------------------------
                                              Employee Name

                                              /s/ Pamela Atherton
                                              ------------------------------
	                                      Employee Signature

                                     12
<PAGE>

                                 SCHEDULE B

                      TERMINATION CERTIFICATE CONCERNING

                       COMPANY PROPRIETARY INFORMATION
                      ---------------------------------

     This is to certify that I have returned all property of Crdentia Corp.,
(the "Company"), including, without limitation, all materials, information,
ideas and other subject matter, including, without limitation, works of
authorship and other creations; inventions, invention disclosures,
discoveries, developments and patent applications; know-how and trade
secrets; plans, designs and concepts; drawings, diagrams and schematics;
writings, reports, notebooks, and other information; specifications,
formulas, structures and other technical or engineering information;
prototypes, systems, compositions, hardware, tools, equipment, instruments
and other devices, products and technology; processes, methods, techniques,
procedures and work in process; computer programs (in source code, object
code or any other format), applications, algorithms, protocols, data and
databases, programmable logic and documentation; and any copies, extracts,
portions, derivatives, improvements and enhancements thereof and
modifications thereto, and any other Proprietary Information, furnished to
or created, made, conceived, invented, discovered, developed, reduced to
practice or suggested by me, alone or together with others in the course of
or incident to my employment with the Company, and that I did not make or
distribute any copies of the foregoing.

     I further certify that I have reviewed the Company's Proprietary
Information and Rights Agreement ("Agreement") signed by me and that I have
complied with and will continue to comply with each and all of its terms and
conditions, including without limitation: (i) materials, information, ideas
and other subject matter, including, without limitation, works of
authorship and other creations; inventions, invention disclosures,
discoveries, developments and patent applications; know-how and trade
secrets; plans, designs and concepts; drawings, diagrams and schematics;
writings, reports, notebooks, and other information; specifications,
formulas, structures and other technical or engineering information;
prototypes, systems, compositions, hardware, tools, equipment, instruments
and other devices, products and technology; processes, methods, techniques,
procedures and work in process; computer programs (in source code, object
code or any other format), applications, algorithms, protocols, data and
databases, programmable logic and documentation; and any copies, extracts,
portions, derivatives, improvements and enhancements thereof and
modifications thereto, created, made, conceived, invented, discovered,
developed, reduced to practice or suggested by me, alone or together with
others, created, made, conceived, invented, discovered, developed, reduced
to practice or suggested by me, alone or together with others, and covered
by the Agreement and (ii) the restrictions on use and disclosure of all
Proprietary Information (as defined in the Agreement) of the Company.  This
certificate in no manner limits my responsibilities or the Company's rights
under the Agreement.

     On termination of my employment with the Company, I will be employed by
                      [Name of New Employer] [in the               division]
----------------------                               --------------
and I will be working in connection with the following projects:

                                     13
<PAGE>

     [generally describe the projects]


     Date:
	                              -----------------------------------
                                      Employee Name

                                      -----------------------------------
	                              Employee Signature

                                    14
<PAGE>

                                EXHIBIT D

                         ARBITRATION AGREEMENT


The Company and Employee hereby agree that, to the fullest extent permitted
by law, any and all claims or controversies between them (or between
Employee and any present or former officer, director, agent, or employee of
the Company or any parent, subsidiary, or other entity affiliated with the
Company) relating in any manner to the employment or the termination of
employment of Employee shall be resolved by final and binding arbitration.
Except as specifically provided herein, any arbitration proceeding shall
be conducted in accordance with the National Rules for the Resolution of
Employment Disputes of the American Arbitration Association ("the AAA Rules").

Claims subject to arbitration shall include, without limitation: contract
claims, tort claims, claims relating to compensation and stock options, as
well as claims based on any federal, state, or local law, statute, or
regulation, including but not limited to any claims arising under Title VII
of the Civil Rights Act of 1964, the Age Discrimination in Employment Act,
the Americans with Disabilities Act, and the California Fair Employment and
Housing Act.  However, claims for unemployment benefits, workers'
compensation claims, and claims under the National Labor Relations Act
shall not be subject to arbitration.

A neutral and impartial arbitrator shall be chosen by mutual agreement of
the parties; however, if the parties are unable to agree upon an arbitrator
within a reasonable period of time, then a neutral and impartial arbitrator
shall be appointed in accordance with the arbitrator nomination and
selection procedure set forth in the AAA Rules.  The arbitrator shall
prepare a written decision containing the essential findings and
conclusions on which the award is based so as to ensure meaningful judicial
review of the decision.  The arbitrator shall apply the same substantive
law, with the same statutes of limitations and same remedies, that would
apply if the claims were brought in a court of law.

Either the Company or Employee may bring an action in court to compel
arbitration under this Agreement and to enforce an arbitration award.
Otherwise, neither party shall initiate or prosecute any lawsuit of claim
in any way related to any arbitrable claim.  Nothing in this Agreement,
however, precludes a party from filing an administrative charge before an
agency that has jurisdiction over an arbitrable claim.  Moreover, nothing
in this Agreement prohibits either party from seeking provisional relief.

All arbitration hearings under this Agreement shall be conducted in Dallas,
Texas, unless otherwise agreed by the parties.  The arbitration provisions
of this  Arbitration Agreement shall be governed by the Federal Arbitration
Act.   In all other respects, this Arbitration Agreement shall be construed
in accordance with the laws of the State of Texas, without reference to
conflicts of law principles.

Each party shall pay its own costs and attorney's fees, unless a party
prevails on a statutory claim, and the statute provides that the prevailing
party is entitled to payment of its attorneys' fees.  In that case, the
arbitrator may award reasonable attorneys' fees and costs to the prevailing
party as provided by law.

This Agreement does not alter Employee's at-will employment status.
Accordingly, Employee understands that the Company may terminate Employee's
employment, as well as discipline or demote Employee, at any time, with or
without prior notice, and with or without cause.  The parties also
understand that Employee is

<PAGE>

free to leave the Company at any time and for any reason, with or without
cause and with or without advance notice.

If any provision of this Agreement shall be held by a court or the
arbitrator to be invalid, unenforceable, or void, such provision shall be
enforced to the fullest extent permitted by law, and the remainder of this
Agreement shall remain in full force and effect.  The parties' obligations
under this Agreement shall survive the termination of Employee's employment
with the Company and the expiration of this Agreement.

The Company and Employee understand and agree that this Arbitration
Agreement contains a full and complete statement of any agreements and
understandings regarding resolution of disputes between the parties, and
the parties agree that this Arbitration Agreement supersedes all previous
agreements, whether written or oral, express or implied, relating to the
subjects covered in this agreement.  The parties also agree that the terms
of this Arbitration Agreement cannot be revoked or modified except in a
written document signed by both Employee and an officer of the Company.

THE PARTIES ALSO UNDERSTAND AND AGREE THAT THIS AGREEMENT  CONSTITUTES A
WAIVER OF THEIR RIGHT TO A TRIAL BY JURY OF ANY CLAIMS OR CONTROVERSIES
COVERED BY THIS AGREEMENT.  THE PARTIES AGREE THAT NONE OF THOSE CLAIMS OR
CONTROVERSIES SHALL BE RESOLVED BY A JURY TRIAL.

                                     2
<PAGE>

THE PARTIES FURTHER ACKNOWLEDGE THAT THEY HAVE BEEN GIVEN THE OPPORTUNITY
TO DISCUSS THIS AGREEMENT WITH THEIR LEGAL COUNSEL AND HAVE AVAILED
THEMSELVES OF THAT OPPORTUNITY TO THE EXTENT THEY WISH TO DO SO.

Employee:  Pamela Atherton

         /s/ Pamela Atherton
        ----------------------

Date:  December 22, 2003

Crdentia Corp.

        /s/ James D. Durham
       ---------------------
By:  James D. Durham
Its:  Chief Executive Officer

Date:  December 22, 2003

                                   3

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>12
<FILENAME>exhibit_1013.txt
<TEXT>
Exhibit 10.13

                               CRDENTIA CORP.

                        NOTICE OF STOCK OPTION AWARD
                        ----------------------------

    Grantee's Name and Address:	         Pamela Atherton
	                                 3700 Legacy Drive, Apartment 20206
	                                 Frisco, Texas 75034

    You (the "Grantee") have been granted an option to purchase shares of
Common Stock, subject to the terms and conditions of this Notice of Stock
Option Award (the "Notice") and the Stock Option Award Agreement (the
"Option Agreement") attached hereto, as follows.  Unless otherwise defined
herein, the terms defined in the Option Agreement shall have the same
defined meanings in this Notice.

    Award Number 	                 3

    Date of Award 	                 December 22, 2003

    Vesting Commencement Date 	         November 1, 2003

    Exercise Price per Share 	         $0.96

    Total Number of Shares Subject
    to the Option (the "Shares")	 618,224

    Total Exercise Price 	         $593,495.04

    Type of Option 	                 Non-Qualified Stock Option

    Expiration Date: 	                 December 22, 2013

    Post-Termination Exercise Period:    Three (3) Months

Vesting Schedule:
-----------------

    Subject to the Grantee's Continuous Service and other limitations set
forth in this Notice and the Option Agreement, the Option may be exercised,
in whole or in part, in accordance with the following schedule:

    25% of the Shares subject to the Option shall vest upon the Date of
Award, and 1/36 of the remaining Shares subject to the Option shall vest on
each monthly anniversary of the Vesting Commencement Date.

    During any authorized leave of absence, the vesting of the Option as
provided in this schedule shall be suspended after the leave of absence
exceeds a period of ninety (90) days.  Vesting of the Option shall resume
upon the Grantee's termination of the leave of absence and return to service
to the Company or a Related Entity.  The Vesting Schedule of the Option
shall be extended by the length of the suspension.

    In the event of termination of the Grantee's Continuous Service for
Cause, the Grantee's right to exercise the Option shall terminate
concurrently with the termination of the Grantee's Continuous Service,
except as otherwise determined by the Board.

<PAGE>

    In the event of the Grantee's change in status from Employee to
Consultant or from an Employee whose customary employment is 20 hours or
more per week to an Employee whose customary employment is fewer than 20
hours per week, vesting of the Option shall continue only to the extent
determined by the Board as of such change in status.

    IN WITNESS WHEREOF, the Company and the Grantee have executed this
Notice and agree that the Option is to be governed by the terms and
conditions of this Notice and the Option Agreement.

                                        Crdentia Corp.,
                                        a Delaware corporation
                                        By: /s/  James D. Durham
                                        Title: CEO

THE GRANTEE ACKNOWLEDGES AND AGREES THAT THE SHARES SUBJECT TO THE OPTION
SHALL VEST, IF AT ALL, ONLY DURING THE PERIOD OF THE GRANTEE'S CONTINUOUS
SERVICE (NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THE OPTION OR
ACQUIRING SHARES HEREUNDER).  THE GRANTEE FURTHER ACKNOWLEDGES AND AGREES
THAT NOTHING IN THIS NOTICE OR THE OPTION AGREEMENT SHALL CONFER UPON THE
GRANTEE ANY RIGHT WITH RESPECT TO FUTURE AWARDS OR CONTINUATION OF THE
GRANTEE'S CONTINUOUS SERVICE, NOR SHALL IT INTERFERE IN ANY WAY WITH THE
GRANTEE'S RIGHT OR THE RIGHT OF THE COMPANY OR RELATED ENTITY TO WHICH THE
GRANTEE PROVIDES SERVICES TO TERMINATE THE GRANTEE'S CONTINUOUS SERVICE,
WITH OR WITHOUT CAUSE, AND WITH OR WITHOUT NOTICE.  THE GRANTEE ACKNOWLEDGES
THAT UNLESS THE GRANTEE HAS A WRITTEN EMPLOYMENT AGREEMENT WITH THE COMPANY
TO THE CONTRARY, THE GRANTEE'S STATUS IS AT WILL.

    The Grantee acknowledges receipt of a copy of the Option Agreement, and
represents that he or she is familiar with the terms and provisions thereof,
and hereby accepts the Option subject to all of the terms and provisions
hereof and thereof.  The Grantee has reviewed this Notice and the Option
Agreement in their entirety, has had an opportunity to obtain the advice of
counsel prior to executing this Notice, and fully understands all provisions
of this Notice and the Option Agreement.  The Grantee hereby agrees that all
disputes arising out of or relating to this Notice and the Option Agreement
shall be resolved in accordance with Section 17 of the Option Agreement.
The Grantee further agrees to notify the Company upon any change in the
residence address indicated in this Notice.

Dated: 12/22/03		                    Signed: /s/  Pamela Atherton
                                                    Grantee

<PAGE>

                                                         Award Number:  3

                               CRDENTIA CORP.

                       STOCK OPTION AWARD AGREEMENT
                       ----------------------------

     1.	Grant of Option.  Crdentia Corp., a Delaware corporation (the
"Company"), hereby grants to the Grantee (the "Grantee") named in the Notice
of Stock Option Award (the "Notice"), an option (the "Option") to purchase
the Total Number of Shares of Common Stock subject to the Option (the
"Shares") set forth in the Notice, at the Exercise Price per Share set forth
in the Notice (the "Exercise Price") subject to the terms and provisions of
this Stock Option Award Agreement (the "Option Agreement") and the Notice
which are incorporated herein by reference.

     2.	Exercise of Option.
        (a)	Right to Exercise.  The Option shall be exercisable during
its term in accordance with the Vesting Schedule set out in the Notice and
with the applicable provisions of this Option Agreement.  The Option shall
be subject to the provisions of Section 20 of this Option Agreement relating
to the exercisability or termination of the Option in the event of a
Corporate Transaction.  The Grantee shall be subject to reasonable
limitations on the number of requested exercises during any monthly or
weekly period as determined by the Board.  In no event shall the Company
issue fractional Shares.

        (b)	Method of Exercise.  The Option shall be exercisable by
delivery of an exercise notice (a form of which is attached as Exhibit A)
or by such other procedure as specified from time to time by the Board
which shall state the election to exercise the Option, the whole number of
Shares in respect of which the Option is being exercised, and such other
provisions as may be required by the Board.  The exercise notice shall be
delivered in person, by certified mail, or by such other method (including
electronic transmission) as determined from time to time by the Board to the
Company accompanied by payment of the Exercise Price.  The Option shall be
deemed to be exercised upon receipt by the Company of such notice
accompanied by the Exercise Price, which, to the extent selected, shall be
deemed to be satisfied by use of the broker-dealer sale and remittance
procedure to pay the Exercise Price provided in Section 4(d), below.

        (c)	Taxes.  No Shares will be delivered to the Grantee or other
person pursuant to the exercise of the Option until the Grantee or other
person has made arrangements acceptable to the Board for the satisfaction of
applicable income tax and employment tax withholding obligations, including,
without limitation, obligations incident to the receipt of Shares.  Upon
exercise of the Option, the Company or the Grantee's employer may offset or
withhold (from any amount owed by the Company or the Grantee's employer to
the Grantee) or collect from the Grantee or other person an amount
sufficient to satisfy such tax obligations and/or the employer's withholding
obligations.

     3.	Grantee's Representations.  The Grantee understands that neither the
Option nor the Shares exercisable pursuant to the Option have been
registered under the Securities Act of 1933, as amended, or any United
States securities laws.  In the event the Shares purchasable

<PAGE>

pursuant to the exercise of the Option have not been registered under the
Securities Act of 1933, as amended, at the time the Option is exercised, the
Grantee shall, if requested by the Company, concurrently with the exercise
of all or any portion of the Option, deliver to the Company his or her
Investment Representation Statement in the form attached hereto as Exhibit
B.

    4.	Method of Payment.  Payment of the Exercise Price shall be made by
any of the following, or a combination thereof, at the election of the
Grantee; provided, however, that such exercise method does not then violate
any Applicable Law and, provided further, that the portion of the Exercise
Price equal to the par value of the Shares must be paid in cash or other
legal consideration permitted by the Delaware General Corporation Law:

        (a)   cash;

        (b)   check;

        (c)   surrender of Shares or delivery of a properly executed form
of attestation of ownership of Shares as the Board may require which have a
Fair Market Value on the date of surrender or attestation equal to the
aggregate Exercise Price of the Shares as to which the Option is being
exercised, provided, however, that Shares acquired under the Option or any
other equity compensation plan or agreement of the Company must have been
held by the Grantee for a period of more than six (6) months; or

        (d)   payment through a broker-dealer sale and remittance procedure
pursuant to which the Grantee (i) shall provide written instructions to a
Company-designated brokerage firm to effect the immediate sale of some or
all of the purchased Shares and remit to the Company sufficient funds to
cover the aggregate exercise price payable for the purchased Shares and (ii)
shall provide written directives to the Company to deliver the certificates
for the purchased Shares directly to such brokerage firm in order to
complete the sale transaction.

    5.	Restrictions on Exercise.  The Option may not be exercised if the
issuance of the Shares subject to the Option upon such exercise would
constitute a violation of any Applicable Laws.

     6.	Termination or Change of Continuous Service.  In the event the
Grantee's Continuous Service terminates, other than for Cause, the Grantee
may, but only during the Post-Termination Exercise Period, exercise the
portion of the Option that was vested at the date of such termination (the
"Termination Date").  In the event of termination of the Grantee's
Continuous Service for Cause, the Grantee's right to exercise the Option
shall, except as otherwise determined by the Board, terminate concurrently
with the termination of the Grantee's Continuous Service (also the
"Termination Date").  In no event shall the Option be exercised later than
the Expiration Date set forth in the Notice.  In the event of the Grantee's
change in status from Employee, Director or Consultant to any other status
of Employee, Director or Consultant, the Option shall remain in effect and
vesting of the Option shall continue only to the extent determined by the
Board as of such change in status.  Except as provided in Sections 7 and 8
below, to the extent that the Option was unvested on the Termination Date,
or if the Grantee does not exercise the vested portion of the Option within
the Post-Termination Exercise Period, the Option shall terminate.

                                    2

<PAGE>

     7.	Disability of Grantee.  In the event the Grantee's Continuous
Service terminates as a result of his or her Disability, the Grantee may,
but only within twelve (12) months from the Termination Date (and in no
event later than the Expiration Date), exercise the portion of the Option
that was vested on the Termination Date.  To the extent that the Option was
unvested on the Termination Date, or if the Grantee does not exercise the
vested portion of the Option within the time specified herein, the Option
shall terminate.

     8.	Death of Grantee.  In the event of the termination of the Grantee's
Continuous Service as a result of his or her death, or in the event of the
Grantee's death during the Post-Termination Exercise Period or during the
twelve (12) month period following the Grantee's termination of Continuous
Service as a result of his or her Disability, the Grantee's estate, or a
person who acquired the right to exercise the Option by bequest or
inheritance, may exercise the portion of the Option that was vested at the
date of termination within twelve (12) months from the date of death (but
in no event later than the Expiration Date).  To the extent that the Option
was unvested on the date of death, or if the vested portion of the Option is
not exercised within the time specified herein, the Option shall terminate.

     9.	Transferability of Option.  The Option may not be transferred in any
manner other than by will or by the laws of descent and distribution,
provided, however, that the Option may be transferred to members of the
Grantee's Immediate Family to the extent and in the manner authorized by
the Board.  Notwithstanding the foregoing, the Grantee may designate
members of the Grantee's Immediate Family as beneficiaries of the Grantee's
Option in the event of the Grantee's death on a beneficiary designation form
provided by the Board.  The terms of the Option shall be binding upon the
executors, administrators, heirs and successors of the Grantee.

     10. Term of Option.  The Option must be exercised no later than the
Expiration Date set forth in the Notice or such earlier date as otherwise
provided herein.  After the Expiration Date or such earlier date, the
Option shall be of no further force or effect and may not be exercised.

     11. Stop Transfer Notices.  In order to ensure compliance with the
restrictions on transfer set forth in this Option Agreement or the Notice,
the Company may issue appropriate "stop transfer" instructions to its
transfer agent, if any, and, if the Company transfers its own securities,
it may make appropriate notations to the same effect in its own records.

     12. Refusal to Transfer.  The Company shall not be required (i) to
transfer on its books any Shares that have been sold or otherwise
transferred in violation of any of the provisions of this Option Agreement
or (ii) to treat as owner of such Shares or to accord the right to vote or
pay dividends to any purchaser or other transferee to whom such Shares shall
have been so transferred.

     13. Tax Consequences.  Set forth below is a brief summary as of the
date of this Option Agreement of some of the federal tax consequences of
exercise of the Option and disposition of the Shares.  THIS SUMMARY IS
NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO
CHANGE.  THE GRANTEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THE
OPTION OR DISPOSING OF THE SHARES.

                                      3
<PAGE>

       (a) Exercise of Non-Qualified Stock Option.  On exercise of a Non-
Qualified Stock Option, the Grantee will be treated as having received
compensation income (taxable at ordinary income tax rates) equal to the
excess, if any, of the Fair Market Value of the Shares on the date of
exercise over the Exercise Price.  If the Grantee is an Employee or a
former Employee, the Company will be required to withhold from the Grantee's
compensation or collect from the Grantee and pay to the applicable taxing
authorities an amount in cash equal to a percentage of this compensation
income at the time of exercise, and may refuse to honor the exercise and
refuse to deliver Shares if such withholding amounts are not delivered at
the time of exercise.

       (b) Disposition of Shares.  If Shares are held for more than one
year, any gain realized on disposition of the Shares will be treated as long
term capital gain for federal income tax purposes.

     14. Lock-Up Agreement.

       (a) Agreement.  The Grantee, if requested by the Company and the lead
underwriter of any public offering of the Common Stock (the "Lead
Underwriter"), hereby irrevocably agrees not to sell, contract to sell,
grant any option to purchase, transfer the economic risk of ownership in,
make any short sale of, pledge or otherwise transfer or dispose of any
interest in any Common Stock or any securities convertible into or
exchangeable or exercisable for or any other rights to purchase or acquire
Common Stock (except Common Stock included in such public offering or
acquired on the public market after such offering) during the 180 day
period following the effective date of a registration statement of the
Company filed under the Securities Act of 1933, as amended, or such shorter
period of time as the Lead Underwriter shall specify.  The Grantee further
agrees to sign such documents as may be requested by the Lead Underwriter
to effect the foregoing and agrees that the Company may impose stop-transfer
instructions with respect to such Common Stock subject to the lock-up period
until the end of such period.  The Company and the Grantee acknowledge that
each Lead Underwriter of a public offering of the Company's stock, during
the period of such offering and for the 180 day period thereafter, is an
intended beneficiary of this Section 14.

       (b) No Amendment Without Consent of Underwriter.  During the period
from identification of a Lead Underwriter in connection with any public
offering of the Company's Common Stock until the earlier of (i) the
expiration of the lock-up period specified in Section 14(a) in connection
with such offering or (ii) the abandonment of such offering by the Company
and the Lead Underwriter, the provisions of this Section 14 may not be
amended or waived except with the consent of the Lead Underwriter.

     15. Entire Agreement: Governing Law.  The Notice and this Option
Agreement constitute the entire agreement of the parties with respect to
the subject matter hereof and supersede in their entirety all prior
undertakings and agreements of the Company and the Grantee with respect to
the subject matter hereof, and may not be modified adversely to the
Grantee's interest except by means of a writing signed by the Company and
the Grantee.  Nothing in the Notice and this Option Agreement (except as
expressly provided therein) is intended to confer any rights or remedies on
any persons other than the parties.  The Notice and this Option Agreement
are to be construed in accordance with and governed by the internal laws of
the State
                                    4

<PAGE>

of Texas 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 Texas to the rights and duties of the parties. Should
any provision of the Notice or this Option Agreement be determined by a
court of law to be illegal or unenforceable, such provision shall be
enforced to the fullest extent allowed by law and the other provisions
shall nevertheless remain effective and shall remain enforceable.

     16. Headings.  The captions used in the Notice and this Option Agreement
are inserted for convenience and shall not be deemed a part of the Option
for construction or interpretation.

     17. Dispute Resolution.  The provisions of this Section 17 shall be
the exclusive means of resolving disputes arising out of or relating to the
Notice and this Option Agreement.  The Company, the Grantee, and the
Grantee's assignees (the "parties") shall attempt in good faith to resolve
any disputes arising out of or relating to the Notice and this Option
Agreement by negotiation between individuals who have authority to settle
the controversy.  Negotiations shall be commenced by either party by notice
of a written statement of the party's position and the name and title of the
individual who will represent the party.  Within thirty (30) days of the written
notification, the parties shall meet at a mutually acceptable time and place,
and thereafter as often as they reasonably deem necessary, to resolve the
dispute.  If the dispute has not been resolved by negotiation, the parties agree
that any suit, action, or proceeding arising out of or relating to the Notice or
this Option Agreement shall be brought in the United States District Court for
the Northern District of Texas (or should such court lack jurisdiction to hear
such action, suit or proceeding, in a Texas state court in the County of Dallas)
and that the parties shall submit to the jurisdiction of such court.  The
parties irrevocably waive, to the fullest extent permitted by law, any
objection the party may have to the laying of venue for any such suit, action
or proceeding brought in such court.  THE PARTIES ALSO EXPRESSLY WAIVE ANY
RIGHT THEY HAVE OR MAY HAVE TO A JURY TRIAL OF ANY SUCH SUIT, ACTION OR
PROCEEDING.  If any one or more provisions of this Section 17 shall for any
reason be held invalid or unenforceable, it is the specific intent of the
parties that such provisions shall be modified to the minimum extent necessary
to make it or its application valid and enforceable.

     18. Notices.  Any notice required or permitted hereunder shall be given
in writing and shall be deemed effectively given upon personal delivery,
upon deposit for delivery by an internationally recognized express mail
courier service or upon deposit in the United States mail by certified mail
(if the parties are within the United States), with postage and fees
prepaid, addressed to the other party at its address as shown in these
instruments, or to such other address as such party may designate in writing
from time to time to the other party.

     19. Adjustments Upon Changes in Capitalization.  Subject to any
required action by the stockholders of the Company, the number of Shares
covered by the Option, the exercise price of the Option, as well as any
other terms that the Board determines require adjustment shall be
proportionately adjusted for (i) any increase or decrease in the number of
issued Shares resulting from a stock split, reverse stock split, stock
dividend, combination or reclassification of the Shares, or similar
transaction affecting the Shares, (ii) any other increase or decrease in
the number of issued Shares effected without receipt of consideration by
the Company, or (iii) as the Board may determine in its discretion, any
other transaction with respect to Common Stock

                                      5
<PAGE>

including a corporate merger, consolidation, acquisition of property or
stock, separation (including a spin-off or other distribution of stock or
property), reorganization, liquidation (whether partial or complete) or
any similar transaction; provided, however that conversion of any
convertible securities of the Company shall not be deemed to have been
"effected without receipt of consideration."  Such adjustment shall be made
by the Board and its determination shall be final, binding and conclusive.
Except as the Board determines, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any
class, shall affect, and no adjustment by reason hereof shall be made with
respect to, the number or price of Shares subject to the Option.

     20. Corporate Transactions.

       (a) Termination of Option to Extent Not Assumed in Corporate
Transaction.  Effective upon the consummation of a Corporate Transaction,
the Option shall terminate.  However, the Option shall not terminate to the
extent it is Assumed in connection with the Corporate Transaction.

       (b) Acceleration of Option Upon Corporate Transaction.  In the event
of a Corporate Transaction and:

           (i) for the portion of the Option that is Assumed or Replaced,
then the Option (if Assumed), the replacement award (if Replaced), or the
cash incentive program (if Replaced) automatically shall become fully vested,
exercisable and payable for all of the Shares at the time represented by
such Assumed or Replaced portion of the Option, immediately upon termination
of the Grantee's Continuous Service if such Continuous Service is terminated
by the successor company, the Company or a Related Entity without Cause or
voluntarily by the Grantee with Good Reason within eighteen (18) months
after the Corporate Transaction; and

          (ii) for the portion of the Option that is neither Assumed nor
Replaced, such portion of the Option shall automatically become fully vested
and exercisable for all of the Shares at the time represented by such
portion of the Option, immediately prior to the specified effective date of
such Corporate Transaction.

     21. Definitions.  As used herein, the following definitions shall apply:

       (a) "Applicable Laws" means the legal requirements applicable to the
Option under applicable provisions of federal securities laws, state
corporate and securities laws, the Code, the rules of any applicable stock
exchange or national market system, and the rules of any non-U.S.
jurisdiction applicable to Options granted to residents therein.

       (b) "Assumed" means that pursuant to a Corporate Transaction either
(i) the Option is expressly affirmed by the Company or (ii) the contractual
obligations represented by the Option are expressly assumed (and not simply
by operation of law) by the successor entity or its Parent in connection
with the Corporate Transaction with appropriate adjustments to the number
and type of securities of the successor entity or its Parent subject to the
Option and the exercise or purchase price thereof which at least preserves
the compensation element of the Option existing at the time of the
Corporate Transaction as determined in accordance with the instruments
evidencing the agreement to assume the Option.

                                     6
<PAGE>

       (c) "Board" means the Board of Directors of the Company and shall
include any committee of the Board or Officer of the Company to which the
Board has delegated its authority under this Agreement.

       (d) "Cause" means, with respect to the termination by the Company or
a Related Entity of the Grantee's Continuous Service, that such termination
is for "Cause" as such term is expressly defined in a then-effective written
agreement between the Grantee and the Company or such Related Entity, or in
the absence of such then-effective written agreement and definition, is
based on, in the determination of the Board, the Grantee's:  (i) performance
of any act or failure to perform any act in bad faith and to the detriment
of the Company or a Related Entity; (ii) dishonesty, intentional misconduct
or material breach of any agreement with the Company or a Related Entity; or
(iii) commission of a crime involving dishonesty, breach of trust, or
physical or emotional harm to any person.

       (e) "Code" means the Internal Revenue Code of 1986, as amended.

       (f) "Common Stock" means the common stock of the Company.

       (g) "Company" means Crdentia Corp., a Delaware corporation.

       (h) "Consultant" means any person (other than an Employee or a
Director, solely with respect to rendering services in such person's
capacity as a Director) who is engaged by the Company or any Related Entity
to render consulting or advisory services to the Company or such Related
Entity.

       (i) "Continuous Service" means that the provision of services to the
Company or a Related Entity in any capacity of Employee, Director or
Consultant is not interrupted or terminated.  In jurisdictions requiring
notice in advance of an effective termination as an Employee, Director or
Consultant, Continuous Service shall be deemed terminated upon the actual
cessation of providing services to the Company or a Related Entity
notwithstanding any required notice period that must be fulfilled before a
termination as an Employee, Director or Consultant can be effective under
Applicable Laws.  Continuous Service shall not be considered interrupted in
the case of (i) any approved leave of absence, (ii) transfers among the
Company, any Related Entity, or any successor, in any capacity of Employee,
Director or Consultant, or (iii) any change in status as long as the
individual remains in the service of the Company or a Related Entity in any
capacity of Employee, Director or Consultant (except as otherwise provided
in the Option Agreement).  An approved leave of absence shall include sick
leave, military leave, or any other authorized personal leave.

       (j) "Corporate Transaction" means any of the following transactions:

          (i) a merger or consolidation in which the Company is not the
surviving entity, except for a transaction the principal purpose of which
is to change the state in which the Company is incorporated;

          (ii) the sale, transfer or other disposition of all or
substantially all of the assets of the Company (including the capital stock
of the Company's subsidiary corporations);

                                      7
<PAGE>

          (iii) the complete liquidation or dissolution of the Company;

          (iv) any reverse merger or series of related transactions
culminating in a reverse merger (including, but not limited to, a tender
offer followed by a reverse merger) in which the Company is the surviving
entity but in which securities possessing more than fifty percent (50%) of
the total combined voting power of the Company's outstanding securities are
transferred to a person or persons different from those who held such
securities immediately prior to such merger or the initial transaction
culminating in such merger but excluding any such transaction or series of
related transactions that the Board determines shall not be a Corporate
Transaction; or

           (v) acquisition in a single or series of related transactions by
any person or related group of persons (other than the Company or by a
Company-sponsored employee benefit plan) of beneficial ownership (within
the meaning of Rule 13d-3 of the Exchange Act) of securities possessing
more than fifty percent (50%) of the total combined voting power of the
Company's outstanding securities but excluding any such transaction or
series of related transactions that the Board determines shall not be a
Corporate Transaction.

       (k) "Director" means a member of the Board or the board of directors
of any Related Entity.

       (l) "Disability" shall have the same meaning as defined under the
long-term disability policy of the Company or the Related Entity to which
the Grantee provides services regardless of whether the Grantee is covered
by such policy.  If the Company or the Related Entity to which the Grantee
provides service does not have a long-term disability plan in place,
"Disability" means that the Grantee is unable to carry out the
responsibilities and functions of the position held by the Grantee by
reason of any medically determinable physical or mental impairment for a
period of not less than ninety (90) consecutive days.  The Grantee will not
be considered to have incurred a Disability unless he or she furnishes proof
of such impairment sufficient to satisfy the Board in its discretion.

       (m) "Employee" means any person, including an Officer or Director,
who is in the employ of the Company or any Related Entity, subject to the
control and direction of the Company or any Related Entity as to both the
work to be performed and the manner and method of performance.  The payment
of a director's fee by the Company or a Related Entity shall not be
sufficient to constitute "employment" by the Company.

       (n) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

       (o) "Fair Market Value" means, as of any date, the value of Common
Stock determined as follows:

          (i) If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation The
Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq Stock
Market, its Fair Market Value shall be the closing sales price for such
stock (or the closing bid, if no sales were reported) as quoted on such
exchange or system on the date of determination (or, if no closing sales
price or closing bid was reported on that date, as applicable, on the last
trading date such closing sales price or closing bid

                                     8

<PAGE>

was reported), as reported in The Wall Street Journal or such other source
as the Board deems reliable;

          (ii) If the Common Stock is regularly quoted on an automated
quotation system (including the OTC Bulletin Board) or by a recognized
securities dealer, but selling prices are not reported, the Fair Market
Value of a Share of Common Stock shall be the mean between the high bid
and low asked prices for the Common Stock on date of determination (or,
if no such prices were reported on that date, on the last date such prices
were reported), as reported in The Wall Street Journal or such other source
as the Board deems reliable; or

          (iii) In the absence of an established market for the Common Stock
of the type described in (i) and (ii), above, the Fair Market Value thereof
shall be determined by the Board in good faith.

       (p) "Good Reason" means the occurrence after a Corporate Transaction
of any of the following events or conditions unless consented to by the
Grantee (and the Grantee shall be deemed to have consented to any such event
or condition unless the Grantee provides written notice of the Grantee's
non-acquiescence within 30 days of the effective time of such event or
condition):

         (i) a reduction in the Grantee's base salary to a level more than
fifteen percent (15%) below that in effect at any time within six (6) months
preceding the consummation of a Corporate Transaction or at any time
thereafter (not including a similar reduction with respect to all of the
Company's management); or

         (ii) requiring the Grantee to be based at any place outside a 50-
mile radius from the Grantee's job location prior to the Corporate
Transaction except for reasonably required travel on business which is not
materially greater than such travel requirements prior to the Corporate
Transaction

       (q) "Immediate Family" means any child, stepchild, grandchild,
parent, stepparent, grandparent, spouse, former spouse, sibling, niece,
nephew, mother-in-law, father-in-law, son-in law, daughter-in-law, brother-
in-law, or sister-in-law, including adoptive relationships, any person
sharing the Grantee's household (other than a tenant or employee), a trust
in which these persons (or the Grantee) have more than fifty percent (50%)
of the beneficial interest, a foundation in which these persons (or the
Grantee) control the management of assets, and any other entity in which
these persons (or the Grantee) own more than fifty percent (50%) of the
voting interests.

       (r) "Non-Qualified Stock Option" means an Option not intended to
qualify as an incentive stock option within the meaning of Section 422 of
the Code.

       (s) "Officer" means a person who is an officer of the Company or a
Related Entity within the meaning of Section 16 of the Exchange Act and the
rules and regulations promulgated thereunder.

       (t) "Parent" means a "parent corporation," whether now or hereafter
existing, as defined in Section 424(e) of the Code.

                                       9

<PAGE>

       (u) "Related Entity" means any Parent or Subsidiary of the Company
and any business, corporation, partnership, limited liability company or
other entity in which the Company or a Parent or a Subsidiary of the
Company holds a substantial ownership interest, directly or indirectly.

       (v) "Replaced" means that pursuant to a Corporate Transaction the
Option is replaced with a comparable stock award or a cash incentive
program of the Company, the successor entity (if applicable) or Parent of
either of them which preserves the compensation element of such Option
existing at the time of the Corporate Transaction and provides for
subsequent payout in accordance with the same (or a more favorable) vesting
schedule applicable to such Option.  The determination of Option
comparability shall be made by the Board and its determination shall be
final, binding and conclusive.

       (w) "Share" means a share of the Common Stock.

       (x) "Subsidiary" means a "subsidiary corporation," whether now or
hereafter existing, as defined in Section 424(f) of the Code.

                             END OF AGREEMENT

                                     10
<PAGE>


                                 EXHIBIT A
                                 ---------

                              EXERCISE NOTICE
                              ---------------

Crdentia Corp.
14111 Dallas Parkway, Suite 600
Dallas, Texas 75240
Attention: Chief Financial Officer

     1. Effective as of today, ______________, ___ the undersigned (the
"Grantee") hereby elects to exercise the Grantee's option to purchase
___________ shares of the Common Stock (the "Shares") of Crdentia Corp.
(the "Company") under and pursuant to the Stock Option Award Agreement (the
"Option Agreement") and Notice of Stock Option Award (the "Notice") dated
December 22, 2003.  Unless otherwise defined herein, the terms defined in
the Option Agreement shall have the same defined meanings in this Exercise
Notice.

     2. Representations of the Grantee.  The Grantee acknowledges that the
Grantee has received, read and understood the Notice and the Option
Agreement and agrees to abide by and be bound by their terms and conditions.

     3. Rights as Stockholder.  Until the stock certificate evidencing such
Shares is issued (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company), no right to
vote or receive dividends or any other rights as a stockholder shall exist
with respect to the Shares, notwithstanding the exercise of the Option.
The Company shall issue (or cause to be issued) such stock certificate
promptly after the Option is exercised.  No adjustment will be made for a
dividend or other right for which the record date is prior to the date the
stock certificate is issued, except as provided in Section 19 of the Option
Agreement.

     4. Delivery of Payment.  The Grantee herewith delivers to the Company
the full Exercise Price for the Shares, which, to the extent selected, shall
be deemed to be satisfied by use of the broker-dealer sale and remittance
procedure to pay the Exercise Price provided in Section 4(d) of the Option
Agreement.

     5. Tax Consultation.  The Grantee understands that the Grantee may
suffer adverse tax consequences as a result of the Grantee's purchase or
disposition of the Shares.  The Grantee represents that the Grantee has
consulted with any tax consultants the Grantee deems advisable in
connection with the purchase or disposition of the Shares and that the
Grantee is not relying on the Company for any tax advice.

     6. Taxes.  The Grantee agrees to satisfy all applicable non-U.S.,
federal, state and local income and employment tax withholding obligations
and herewith delivers to the Company the full amount of such obligations or
has made arrangements acceptable to the Company to satisfy such obligations.
If the Company is required to satisfy any non-U.S., federal, state or local
income or employment tax withholding obligations as a result of such an
early disposition, the Grantee agrees to satisfy the amount of such
withholding in a manner that the Board prescribes.

                                      1

<PAGE>

     7. Successors and Assigns.  The Company may assign any of its rights
under this Exercise Notice to single or multiple assignees, and this
agreement shall inure to the benefit of the successors and assigns of the
Company.  Subject to the restrictions on transfer herein set forth, this
Exercise Notice shall be binding upon the Grantee and his or her heirs,
executors, administrators, successors and assigns.

     8. Headings.  The captions used in this Exercise Notice are inserted
for convenience and shall not be deemed a part of this agreement for
construction or interpretation.

     9. Dispute Resolution.  The provisions of Section 17 of the Option
Agreement shall be the exclusive means of resolving disputes arising out of
or relating to this Exercise Notice.

     10. Governing Law; Severability.  This Exercise Notice is to be
construed in accordance with and governed by the internal laws of the State
of Texas 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 Texas to the rights and duties of the parties.  Should
any provision of this Exercise Notice be determined by a court of law to
be illegal or unenforceable, such provision shall be enforced to the fullest
extent allowed by law and the other provisions shall nevertheless remain
effective and shall remain enforceable.

     11. Notices.  Any notice required or permitted hereunder shall be given
in writing and shall be deemed effectively given upon personal delivery,
upon deposit for delivery by an internationally recognized express mail
courier service or upon deposit in the United States mail by certified mail
(if the parties are within the United States), with postage and fees
prepaid, addressed to the other party at its address as shown below beneath
its signature, or to such other address as such party may designate in
writing from time to time to the other party.

     12. Further Instruments.  The parties agree to execute such further
instruments and to take such further action as may be reasonably necessary
to carry out the purposes and intent of this agreement.

     13. Entire Agreement.  The Notice and the Option Agreement are
incorporated herein by reference and together with this Exercise Notice
constitute the entire agreement of the parties with respect to the subject
matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and the Grantee with respect to the subject matter
hereof, and may not be modified adversely to the Grantee's interest except
by means of a writing signed by the Company and the Grantee.  Nothing in
the Notice the Option Agreement and this Exercise Notice (except as
expressly provided therein) is intended to confer any rights or remedies on
any persons other than the parties.

                                   2

<PAGE>
Submitted by:	                     Accepted by:
GRANTEE:	                     CRDENTIA CORP.

   	                             By:
------------------------- 	        ---------------------------
(Signature)	                     Title:
	                                   ------------------------
Address:	                     Address:
        -----------------                    Crdentia Corp.
                                             14111 Dallas Parkway, Suite 600
                                             Dallas, Texas 75240
                                             Attention: Chief Financial Officer

                                    3
<PAGE>


                                EXHIBIT B
                                ---------

                   INVESTMENT REPRESENTATION STATEMENT
                   -----------------------------------

GRANTEE:		PAMELA ATHERTON

COMPANY:		CRDENTIA CORP.

SECURITY:		COMMON STOCK

AMOUNT:
                        ----------------------
DATE:
                        ----------------------

In connection with the purchase of the above listed Securities, the
undersigned Grantee represents to the Company the following:

   (a)	Grantee is aware of the Company's business affairs and financial
condition and has acquired sufficient information about the Company to reach
an informed and knowledgeable decision to acquire the Securities.  Grantee
is acquiring these Securities for investment for Grantee's own account only
and not with a view to, or for resale in connection with, any "distribution"
thereof within the meaning of the Securities Act of 1933, as amended (the
"Securities Act").

   (b)	Grantee acknowledges and understands that the Securities constitute
"restricted securities" under the Securities Act and have not been registered
under the Securities Act in reliance upon a specific exemption therefrom,
which exemption depends upon among other things, the bona fide nature of
Grantee's investment intent as expressed herein.  Grantee further understands
that the Securities must be held indefinitely unless they are subsequently
registered under the Securities Act or an exemption from such registration
is available.  Grantee further acknowledges and understands that the Company
is under no obligation to register the Securities.  Grantee understands that
the certificate evidencing the Securities will be imprinted with a legend
which prohibits the transfer of the Securities unless they are registered
or such registration is not required in the opinion of counsel satisfactory
to the Company.
    (c)	Grantee is familiar with the provisions of Rule 701 and Rule 144,
each promulgated under the Securities Act, which, in substance, permit
limited public resale of "restricted securities" acquired, directly or
indirectly from the issuer thereof, in a non public offering subject to the
satisfaction of certain conditions.  Rule 701 provides that if the issuer
qualifies under Rule 701 at the time of the grant of the Option to the
Grantee, the exercise will be exempt from registration under the Securities
Act.  In the event the Company becomes subject to the reporting requirements
of Section 13 or 15(d) of the Securities Exchange Act of 1934, ninety (90)
days thereafter (or such longer period as any market stand off agreement
may require) the Securities exempt under Rule 701 may be resold, subject to
the satisfaction of certain of the conditions specified by Rule 144,
including:  (1) the resale being made through a broker in an unsolicited
"broker's transaction" or in transactions directly with a market maker (as
said term is defined under the Securities Exchange Act of 1934); and, in the
case of an affiliate, (2) the availability of certain public information
about the Company, (3) the amount of Securities being

                                     1
<PAGE>

sold during any three month period not exceeding the limitations specified
in Rule 144(e), and (4) the timely filing of a Form 144, if applicable.

    In the event that the Company does not qualify under Rule 701 at the
time of grant of the Option, then the Securities may be resold in certain
limited circumstances subject to the provisions of Rule 144, which requires
the resale to occur not less than one year after the later of the date the
Securities were sold by the Company or the date the Securities were sold by
an affiliate of the Company, within the meaning of Rule 144; and, in the
case of acquisition of the Securities by an affiliate, or by a non
affiliate who subsequently holds the Securities less than two years, the
satisfaction of the conditions set forth in sections (1), (2), (3) and (4)
of the paragraph immediately above.

    (d)	Grantee further understands that in the event all of the applicable
requirements of Rule 701 or 144 are not satisfied, registration under the
Securities Act, compliance with Regulation A, or some other registration
exemption will be required; and that, notwithstanding the fact that Rules
144 and 701 are not exclusive, the Staff of the Securities and Exchange
Commission has expressed its opinion that persons proposing to sell private
placement securities other than in a registered offering and otherwise than
pursuant to Rules 144 or 701 will have a substantial burden of proof in
establishing that an exemption from registration is available for such
offers or sales, and that such persons and their respective brokers who
participate in such transactions do so at their own risk.  Grantee
understands that no assurances can be given that any such other
registration exemption will be available in such event.

    (e)	Grantee represents that he or she is a resident of the state of
_________________.

                                       Signature of Grantee:

                                       ------------------------------------

                                       Date:
                                            -------------------------------


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>13
<FILENAME>exhibit_1017.txt
<TEXT>
EXHIBIT 10.17

                           TUTUM CFO PARTNERS, LLP
                                   (LOGO)

                            Employment Agreement

                              November 7, 2003


William S. Leftwich
521 Spinner Rd
DeSoto, Texas 75115

Dear Bill:

This letter will serve as the entire agreement between Crdentia Corporation
 (the "Company") and you, William S. Leftwich (the "Employee"), with
respect to your employment with the Company.

1.  Term

The Employee will work 3 days per week, beginning on November 7, 2003 (the
"Beginning Date").  As an employee of the Company you will serve as its
Chief Financial Officer and perform such services as are customary for an
individual having such title and holding such position.

2.  Salary

The Employee will be paid a bi-weekly salary (the "Salary") of $7,200.
Salary for any portion of a month will be prorated based upon the number of
normal workdays remaining in the month.  The Salary rate for each additional
day beyond the designated number of days per week is $1,200.  The Salary
will be subject to increase by the Company from time to time.  The Salary
will be processed through payroll and paid at the same time as other
employees.

3.  Incentive Bonus and Equity Participation

This section is not applicable.

4.  Tatum Resources

The Company acknowledges and agrees that the Employee is and will remain a
partner of, and has and will retain an interest in, Tatum CPO Partners, LLP
("Tatum"), which will benefit the Company in that the Employee will have
access to certain Tatum resources.  The Company further acknowledges and
agrees that the Employee has requested that a portion of his or her Salary
and bonuses be allocated to Tatum as compensation for Tatum's provision of
resources to the Employee as provided in the Resources Agreement between
the Company and Tatum, dated on or about the date of this agreement (the
"Resources Agreement").  After allocation of a portion of the Salary to
Tatum, the Employee will be paid $6,000 bi-weekly.  The Company and the
Employee agree that any payments made to Tatum will reduce the Employee's
compensation for purposes of determining taxable income and should not be
reflected as compensation in the Employee's W-2 report.

<PAGE>

                           TUTUM CFO PARTNERS, LLP
                                   (LOGO)
5.  Employee Benefits

The Employee will be eligible for vacation and holidays consistent with the
Company's policy as it applies to senior management.

The Company will reimburse the Employee for all out-of-pocket business
expenses promptly after they are incurred.

The Employee may elect to participate in the Company's employee retirement
plan and/or 401 (k) plan, and the Employee will be exempt from any delay
periods required for eligibility.

In lieu of the Employee participating in the Company-sponsored employee
medical insurance benefit and disability plans, the Employee will
participate in Tatum's group plans as a partner of Tatum, and the Company
will pay the Employee an amount equal to the costs that would normally be
incurred by the Company for the Employee's participation in the Company's
plans.  Such payment will be made at least monthly as an expense
reimbursement and not part of employee compensation.  Notwithstanding the
above, the Company may include the Employee as a participant in the
Company's own disability plan or other benefit plans if such plans are not
provided by Tatum.

The Employee must receive written evidence that the Company maintains
adequate director and officer insurance to cover the Employee at no
additional cost to the Employee, and the Company will maintain such
insurance at all times while this agreement remains in effect.

The Company agrees to indemnify the Employee to the full extent permitted
by law for any losses, costs, damages, and expenses, including reasonable
attorneys' fees, as they are incurred, in connection with any cause of
action, suit, or other proceeding arising in connection with Employee's
employment with the Company including, but not limited to, indemnification
for deductibles on insurance policies

6.  Confidentiality

The Employee acknowledges that, in the course of the Employee's employment
with the Company, the Employee will be making use of, acquiring, and adding
to the Company's confidential and proprietary information, including without
limitation any of the following:  trade secrets, information about the
business of the Company, manufacturing and engineering processes, actual and
proposed product information and processes, information concerning product
development, manufacture, marketing, distribution, customer, and customer
requirements, financial requirements, future business plans, confidential
records, and costs and pricing information of the Company or any of its
subsidiaries (hereinafter referred to as the "Proprietary Information");
provided, however, that Proprietary Information will not include information
(i) that was in the public domain at the time it was disclosed to the
Employee or subsequently becomes in the public domain other than as a result
of a disclosure by the Employee in violation of this agreement; (ii) that
was received by the Employee from a third party not known by the Employee
to have acquired it in violation of a confidentiality agreement with the
Company or its employees or agents, or from a third party not known by the
Employee to have otherwise been prohibited from transmitting the information
to the Employee by a contractual, legal, or fiduciary obligation of
confidence to the Company; (iii) that the Employee and the Company agree in
writing prior to its disclosure is not confidential; (iv) disclosed in
response to a valid order by a court or other governmental body, provided
the Employee furnished the Company with prior written notice of the
disclosure in order to permit the Company to seek confidential treatment of
such information; or (v) that consists of material provided by Tatum
pursuant to the Resources Agreement.

                                      2
<PAGE>

                           TUTUM CFO PARTNERS, LLP
                                   (LOGO)

The Employee will not, for any purpose whatsoever, other than to the extent
necessary to render services to the Company in connection with Tatum's
services under the Resources Agreement, or as required by law, directly or
indirectly divulge or disclose to any individual or entity any of the
Proprietary Information that was obtained by the Employee as a result of
the Employee's employment with the Company but will hold all of the same
confidential and inviolate for a period of five (5) years following the
termination or expiration of this agreement.

The Employee agrees that all Proprietary Information consisting of records,
reports, notes, compilations, or other recorded matter, and copies or
reproductions thereof made or received by the Employee, are and will be the
Company's exclusive property, and the Employee will surrender the same to
the Company within five (5) business days of receiving a request therefor
or certify that the same have been destroyed.

The Employee acknowledges that a breach by the Employee of the provisions
of Sections 6 of this agreement cannot reasonably or adequately be
compensated in damages in an action at law; and that such a breach by the
Employee will cause the Company irreparable injury and damage.  By reason
thereof, the Company will be entitled to seek preliminary and permanent
injunctive and other equitable relief to prevent or curtail any breach by
the Employee of Section 6.

7.  Termination

The Company may terminate the Employee's employment for any reason upon at
least 30 days' prior written notice to the Employee, such termination to be
effective on the date specified in the notice, provided that such date is
no earlier than 30 days from the date of delivery of the notice.  Likewise,
the Employee may terminate his or her employment for any reason upon at
least 30 days' prior written notice to the Company, such termination to be
effective on the date 30 days following the date of the notice.  The
Employee will continue to render services and to be paid during such 30-day
period, regardless of who gives such notice.  The Employee may terminate
this letter agreement immediately if the Company has not remained current
in its obligations under this letter or if the Company engages in or asks
the Employee to engage in or to ignore any illegal or unethical conduct.

This agreement will terminate immediately upon the death of the Employee.

The Salary will be prorated for the final pay period based on the number of
days in the final pay period up to the effective date of termination or
expiration.

8.  Miscellaneous

This agreement contains the entire agreement between the parties,
superseding any prior oral or written statements or agreements.

Neither the Employee nor the Company will be deemed to have waived any
rights or remedies accruing under this agreement unless such waiver is in
writing and signed by the party electing to waive the right or remedy.
This agreement binds and benefits the successors of the parties.

The provisions in this agreement concerning the payment of Salary and
Bonuses and confidentiality will survive any termination or expiration of
this agreement.

Neither party will be liable for any delay or failure to perform under this
Agreement (other than with respect to payment obligations) if and to the
extent such delay or failure is a result of an act of God, war,

                                    3
<PAGE>

                           TUTUM CFO PARTNERS, LLP
                                   (LOGO)

earthquake, civil disobedience, court order, labor dispute, or other cause
beyond such party's reasonable control.

The terms of this letter agreement are severable and may not be amended
except in a writing signed by the parties. If any portion of this agreement
is found to be unenforceable, the rest of this agreement will be
enforceable except to the extent that the severed provision deprives either
party of a substantial portion of its bargain.

This agreement will be governed by and construed in all respects in
accordance with the laws of the State of Texas, without giving effect to
conflicts-of-laws principles.

Each person signing below is authorized to sign on behalf of the party
indicated, and in each case such signature is the only one necessary.

Please sign below and return a signed copy of this letter to indicate your
agreement with its terms and conditions.

Sincerely yours,

Crdentia Corporation

By:  /s/ Pam Atherton
   -------------------
Signature

Name:  Pam Atherton
Title:  President

Acknowledged and agreed by:

            /s/ William S. Leftwich
           ------------------------
           (Signature)

           William S. Leftwich
	   ------------------------
           (Print name)

           Date:   11/7/03
                -------------------

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>14
<FILENAME>exhibit_1018.txt
<TEXT>
EXHIBIT 10.18

                     COMMERCIAL RECEIVABLES AGREEMENT

1.  INTRODUCTION

    COMMERCIAL RECEIVABLE AGREEMENT (this "Agreement") is entered into this
8th day of November, 2001 by and between ALAMO CAPITAL CORPORATION ("ACC")
and PSR NURSES, LTD (the "Seller").  Subject to the terms and conditions of
this Agreement, ACC wishes to purchase from the Seller and the Seller
wishes to sell, assign and transfer to ACC certain of its Commercial
Receivables, as defined herein, during the term of this Agreement.
Capitalized terms used herein, unless otherwise defined, shall have the
meanings set forth in Appendix I to this Agreement.

    Commercial Receivables, as used in this Agreement, means only those
Commercial Receivables accepted by ACC for purchase from the Seller and
which constitute the amounts due the Seller from Obligors. Commercial
Receivables includes accounts receivable billed to both Governmental
Obligors and Non-Governmental Obligors.

    THIS IS NOT A FINANCING ARRANGEMENT OR AGREEMENT. SELLER IS AGREEING TO
A SALE OF THE COMMERCIAL RECEIVABLES AS SPECIFICALLY PROVIDED HEREIN.

2.  SALE TRANSFER AND ASSIGNMENT TO ACC

    (a) The Seller hereby sells, transfers, conveys and assigns to ACC all
of the Seller's right, title and interest in and to all Commercial
Receivables as are accepted by ACC for purchase hereunder, together with
all replacements and proceeds thereof, and all right, title and interest of
the Seller to the proceeds represented by such Commercial Receivables and
all rights available to the Seller under all applicable agreements, laws,
rules, regulations, orders and/or ordinances with respect to such
Commercial Receivables.

(b)	ACC's rights with respect to the Commercial Receivables purchased
hereunder include, but are not limited to, the right to: (i) sell, assign,
transfer, pledge, encumber, settle, and/or compromise any or all of such
Commercial Receivables; (ii) do all acts necessary or advisable in
furtherance of any rights of ACC hereunder; (iii) demand, receive and sue,
in the Seller's name at ACC's option, for any monies due or which may
become due under such Commercial Receivables or for enforcement of any
rights afforded the Seller with respect thereto; (iv) substitute one or
more Persons with like powers; and (v) sign and endorse on behalf of the
Seller all checks and instruments received in connection with Collections
on the Commercial Receivables and the Seller hereby irrevocably appoints
ACC the attorney-in-fact of the Seller for such purpose; and the Seller
hereby specifically authorizes, ratifies and confirms all that ACC or its
substitutes shall do by virtue hereof. The Seller specifically agrees to
execute and/or prepare, and file or publish, all at the request and
direction of ACC, any and all documentation and/or notice of ACC's rights
herein as may be necessary or advisable, in ACC's discretion, to effect the
terms hereof or protect ACC's interest herein described. In no event shall
ACC be responsible, in whole or in part, for any duties, performance or
obligations of the Seller nor shall the Seller be relieved thereof by
reason of this Agreement.

    (c) This Agreement is intended to, and does, evidence a seller and
purchase relationship between ACC, as purchaser, and the Seller, as seller,
and shall be interpreted to accomplish such in all events.  Both parties
hereto agree to modification and reformation of their rights and/or duties
hereunder to the extent necessary, but only to such extent, to avoid
classification of the Agreement, and the relationship between ACC and the
Seller created hereby, as a mere financing arrangement.

    (d) As a condition precedent to the first purchase of Commercial
Receivables by ACC from the Seller, the following actions shall have been
taken to the satisfaction of ACC:

        (1) acknowledgment copies of proper financing statements (Form
UCC-1) naming the Seller as the debtor/seller and naming ACC as the secured
party/purchaser or other similar documents or instruments as may be
necessary, or in the opinion of ACC, desirable under the UCC of all
appropriate jurisdictions or any comparable law to perfect ACC's interest
in all Commercial Receivables which may be sold to ACC hereunder;

        (2) certified copies (or copies otherwise satisfactory to ACC) of
Requests for Information or Copies (Form UCC-11) (or a similar search
report certified by a Person acceptable to ACC) listing all effective
financing statements (including those referred to in (1) above) which name
the Seller (under its present name and any previous name) as debtor or
seller and which are filed in the jurisdictions in which filings were made
pursuant to (1) above, together with copies of such financing statements
and searches of applicable federal and state court and agency dockets and
lien records showing all judgment, tax and ERISA liens affecting the Seller
or its Commercial Receivables, none of which (except those filed pursuant
to (1) above) shall cover any Commercial Receivables to be purchased by ACC
or any related Contracts unless the documents referred to in (3) below
cover such financing statements;

        (3) releases of and acknowledgment copies of proper termination
statements (Form UCC-3), if any, necessary to evidence the release of all
security interests, ownership and other rights of any Person in Commercial
Receivables previously granted by the Seller;

        (4) notices to each Obligor substantially in the form of Exhibit
H-1, and

        (5) such other documents, opinions or certificates as ACC may
reasonably request including but not limited to, legal opinions from
counsel to the Seller.

    (e) As a condition precedent to the continuing obligation of ACC to
purchase Commercial Receivables after the first purchase of Commercial
Receivables by ACC from the Seller, the following conditions (in addition
to those enumerated under Section 2(d) herein above) shall be satisfied by
the Seller:

        (1) All representations and warranties of the Seller contained
herein and in each other Seller Agreement shall be true and complete in all
material respects (determined for this purpose as if all qualifications to
such representations and warranties based on knowledge or materiality were
omitted) at all times during the term of this Agreement;

                                    2
<PAGE>

        (2) The Seller shall have performed and complied in all material
respects with all obligations and agreements and all covenants and
conditions contained in this Agreement and in each other Seller Agreement
to which it is a party to be performed or complied with by it at all tunes
(such performance or compliance to be determined for this purpose as if all
qualifications to such obligations, agreements, covenants and conditions
based on the use of diligent efforts or best efforts were omitted) and ACC
shall have received evidence, in form and substance reasonably satisfactory
to it, of such performance and compliance; and

        (3) All corporate actions necessary to authorize (i) the execution,
delivery and continuing performance by the Seller of this Agreement and of
each other Seller Agreement to which it is a party and (ii) the
consummation of the transactions contemplated hereby and thereby shall have
been and shall continue to be duly and validly taken by the Seller and shall
be in full force and effect. All such actions and all other actions,
proceedings, instruments and documents required to carry out the
transactions contemplated hereby or incidental hereto and all other related
easonably satisfactory to and approved by counsel for ACC and such counsel
shall be furnished with such certified copies of such corporate actions and
proceedings and such other instruments and documents as it shall have
reasonably requested from time to time.

        (4) The Seller covenants and agrees that, on and after the date
hereof, all invoices to be sent to Obligors (and return envelopes, if
provided by the Seller) shall set forth-only the address of ACC as a return
address for payment of Commercial Receivables.  The Seller hereby further
covenants and agrees to instruct and notify each of the members of the
Seller's accounting an collections staff and of ACC's accounting and
collection staff to provide identical information in communications with
Obligors with respect to collections. The Seller shall not change such
return address or the instructions in any Obligor Notice without the
express prior written consent of ACC.

     (5) All deliveries and notifications referred to in this Section shall
be made promptly upon the Seller's receipt of any such amount or
information and delivery to ACC no later than 10:00 a.m. Central Time on
the first Business Day after the day any such amount is received or
collected by the Seller.

3.  SECURITY INTEREST

    The Seller and ACC intend that the transfers of Commercial Receivables
effected pursuant to this Agreement and the applicable Assignments
constitute true sales of such Commercial Receivables by the Seller to ACC,
providing ACC with the full benefits of ownership thereof, and neither the
Seller nor ACC intends the transactions contemplated hereby to be, or for
any purpose to be characterized as, a mere financing arrangement or as a
loan from ACC to the Seller.  However, as a precautionary matter, (i) to
secure the prompt payment and performance of all of the Seller's
obligations (whether monetary or otherwise) under or in connection with
this Agreement including, but not limited to, the Seller's liability to
ACC for Damages and the Seller's obligation to pay amounts which may
become due and owing under Section 12 hereof, the Seller hereby assigns,
pledges and grants to ACC a first priority security

                                  3
<PAGE>

interest in, and to and under all of the following, whether now or
hereafter existing or acquired: the Commercial Receivables purchased by ACC,
all related Contracts and all Collections with regard thereto, any and all
amounts now or hereafter due to the Seller from the Reserve Account and
replacements and proceeds thereof, any and all amounts which may become due
to the Seller from ACC with respect to the balance of the Purchase Price
due with respect to any Commercial Receivable purchased by ACC hereunder,
all funds on deposit in any lockbox, each of the foregoing and all
certificates and instruments, if any, from time to time evidencing the
Reserve Account and the Lockbox Accounts, if any, and funds on deposit
therein, all claims thereunder or in connection therewith all interest
dividends, moneys, instruments, securities and other property from time to
time received, receivable or otherwise distributed in respect of or in
exchange for any or all of the foregoing and all proceeds and amounts
received or receivable under any or all of the foregoing and (ii) this
Agreement shall constitute a security agreement under the UCC as amended
from time to time.

4.  ACC PURCHASE PRICE

     The Purchase Price payable by ACC upon the purchase of Commercial
Receivables under this Agreement shall be paid as follows:

        (i) an amount equal to the aggregate Initial Payment with respect
to Commercial Receivables purchased on an Acquisition Date shall be paid by
ACC to the Seller upon notice by ACC to the Seller of the purchase by ACC
of those specific Commercial Receivables;

        (ii) when the Asset Value of all Commercial Receivables having the
same Acquisition Date has been reduced to zero, as determined by ACC, an
amount equal to the balance of the Purchase Price for such Commercial
Receivables;

    It is specifically agreed that Commercial Receivables will be purchased
hereunder in groups and identified by reference to the written Assignment
or Schedule on which such Commercial Receivables constituting a group are
listed.  Each such group will be identified by a designated Assignment or
Schedule Number (Contract Number) and designated Acquisition Date.

5.  ACC PERFORMANCE

    (a) In consideration for the Seller's performance as described above
and elsewhere herein, which performance shall be a condition precedent to
any duties of ACC hereunder, ACC covenants and agrees to purchase all
Commercial Receivables specifically identified by ACC as acceptable to ACC,
in ACC's sole discretion, subject to the Maximum Purchase Ceiling
identified by ACC in Exhibit B attached hereto and incorporated herein.
ACC's Maximum Purchase Ceiling is identified as the maximum Net Value, as
of any date of determination, on Commercial Receivables purchased from the
Seller.

    (b) The Seller shall offer, in writing, all Commercial Receivables
created by it to ACC for purchase from time to time throughout the term
hereof under the terms and conditions of this Agreement, with specific
identification of such Commercial Receivables and the terms

                                   4
<PAGE>

thereof. ACC shall notify the Seller, within a reasonable time, of those
proffered Commercial Receivables which are acceptable to ACC for purchase.

6.  RESERVE ACCOUNT

    (a) ACC agrees to maintain the Reserve Account to which ACC shall
credit all Collections on the Commercial Receivables received by ACC less
all amounts payable to ACC hereunder or deductible from the Purchase Price,
including amounts due ACC with respect to the Asset Value of purchased
Commercial Receivable, and subject to application for amounts due ACC as
described herein.  The Reserve Account shall be administered and controlled
solely by ACC.

        (1) The Net Purchase Price, if any, owed the Seller under Section 4
with respect to a specific Schedule and amounts representing payments on or
proceeds of Commercial Receivables of the Seller not owned by ACC ("Non-
purchased Receivables Collections") shall be payable by ACC from the
Reserve Account.  Such Net Purchase Price shall be paid only after: (i)
ACC shall have recovered the Asset Value of all Commercial Receivables in
the applicable Schedule, in full; (ii) ACC shall have been paid in full for
all Fees and Reimbursable Expenses associated with each Commercial
Receivable in the applicable Schedule purchased from the Seller on the
related Acquisition Date; and (iii) the Seller shall be in full compliance
hereunder with regard to all Commercial Receivables purchased from the
Seller at any Acquisition Date.  Nonpurchased Receivables Collections from
time to time on deposit in the Reserve Account shall be applied by ACC (i)
to the payment of any amounts due ACC for Damages hereunder and (ii) to the
 payment of any other amounts due ACC hereunder.  If there is no then
continuing event of default hereunder and no amounts described in the
immediately preceding sentence are then due to ACC, amounts representing
Nonpurchased Receivables Collections on deposit in the Reserve Account, as
determined by ACC, shall be distributed to the Seller weekly.

        (2) ACC shall be entitled, in its sole discretion and without
notice to the Seller, to apply any balance in the Reserve Account to: (i)
subject to the terms of this Agreement, to payment of any amounts due and
owing to ACC with respect to Damages, (ii) the payment of any sums which
shall have become owing to ACC by the Seller under the provisions of this
Agreement; and (iii) the liquidation of any Commercial Receivables or the
payment of any obligations which shall have become owing or which will
become owing to ACC under this Agreement or any guaranty given in
connection with this Agreement in the event of and at the time of filing
or institution of a proceeding in receivership or insolvency by or against
the Seller or any guarantor of the Seller's obligations under this
Agreement.

    (b)	If ACC determines that a Commercial Receivable purchased by or
assigned to ACC is a Rejected Receivable, the Seller shall have five (5)
calendar days after receipt of notice of such determination from ACC in
which to take such action as may be necessary to cause that Commercial
Receivable not to be a Rejected Receivable. If such corrective action is
not completed by the Seller to the satisfaction of ACC by the end of such
five (5) day period, (i) the Seller shall be required, if directed to do so
by ACC, to substitute for that Rejected Receivable one or more Commercial
Receivables representing amounts billed to an Obligor within forty (40)
days of the Seller's rendering the related services and which Commercial
Receivables have an aggregate Asset Value equal to or greater than the
Asset Value of the Rejected Receivable or (ii),

                                     5
<PAGE>

if substitution is directed by ACC but not completed within five (5) days
of such direction or if substitution is not directed by ACC, there shall be
immediately due and owing to ACC from the Seller, as the mutually agreed to
damages for the breach of the representation and warranty causing such
Commercial Receivable to be a Rejected Receivable, an amount equal to the
then Asset Value of that Rejected Receivable (such amount, the "Damages"
for that Rejected Receivable).

    Damages, if any, shall be an obligation of the Seller to ACC until paid
or provided for in accordance with this Agreement. The Seller hereby
authorizes and directs ACC to deduct, for the account of the Seller, the
amount of any unpaid Damages from (i) the Initial Payments due the Seller
on any Acquisition Date, (ii) any other amounts due to the Seller under
this Agreement or (iii) any amounts from time to time and at any time,
without regard to the source thereof, in the Reserve Account and any Net
Purchase Price due the Seller. Any such deductions shall be made at the
direction of ACC and on such dates as determined by ACC. ACC shall provide
notice of any unpaid Damages to the Seller, which notice shall be deemed
demand by the Seller for immediate payment of the unpaid Damages listed
therein.

    (c) In addition to all other rights and remedies available to ACC at
law or in equity with respect to a Rejected Receivable, ACC shall have the
immediate right without notice to the Seller except as required by statute,
at law, in equity or otherwise, to set off and otherwise apply any Damages
owing to it with respect to a Rejected Receivable against any amounts
payable or distributable to the Seller pursuant to this Agreement or
otherwise.

    (d) Any direct payments by the Seller of Damages shall be effective
only if paid to ACC.

    (e) All Receivables purchased by ACC hereunder that are not paid by an
Obligor within 90 days of date of purchase by ACC shall be paid to ACC from
Seller's reserve account.

7.  REASSIGNMENT OF REJECTED RECEIVABLES

    If the Seller has taken the corrective actions specified under Section
6(b) with respect to a Rejected Receivable, the full amount of the Damages
with respect to a Rejected Receivable has been recovered by ACC from the
deductions and transfers specified in accordance with Section 6(b) or the
Seller has otherwise paid the full amount of the Damages with )respect to a
Rejected Receivable, then such Rejected Receivable shall be reassigned by
ACC to the Seller without recourse or warranty and ACC shall, upon such
reassignment to the Seller, have no further ownership interest or rights
in such Rejected Receivable or Collections thereon, and such Rejected
Receivable shall no longer be deemed to be purchased hereunder.

8.  REPRESENTATIONS AND WARRANTIES OF THE Seller

    The Seller represents and warrants to ACC that, as of the date hereof,
and shall be deemed to represent and warrant to ACC as of each Acquisition
Date, as follows:

    (a) if a corporation, limited liability company, or partnership, the
Seller has been duly organized and is validly existing and in good standing
as a corporation, limited liability

                                       6
<PAGE>

company, or partnership, as the case may be, under the laws of the
jurisdiction of its organization and is duly qualified to conduct business
in each State in which it conducts business;

    (b) the Seller has full power and authority to own or lease its
properties and to conduct its business as presently conducted and to
execute, deliver and perform the Seller Agreements to which it is a party
and to consummate the transactions contemplated hereby and thereby;

    (c) the execution, delivery and performance by the Seller of the Seller
Agreements and all other instruments and documents to be delivered
hereunder and the consummation of the transactions contemplated hereby are
within the Seller's powers, have been duly and validly authorized by all
requisite action and will not conflict with or result in a breach of any of
the terms or provisions of, or constitute a default under, or result in the
creation or imposition of any lien, charge or encumbrances upon any of its
property or assets pursuant to the terms of, any indenture, mortgage, deed
or trust, loan agreement or other agreement or instrument by which it is
bound or to which any of its property or assets is subject, nor will such
action result in any violation of the provisions of its organizational
documents (including its articles of incorporation and bylaws or
partnership agreement, as the case may be) or of any statute or any order,
rule or regulation of any court or governmental agency or body of the
United States, any state or any political subdivision of either having
jurisdiction over it or any of its properties or assets, and no consent,
approval, authorization, order, registration, filing, qualification,
license, or permit of or with any such court or any such regulatory
authority or other such governmental agency or body is required to be
obtained by or with respect to the Seller in connection with the execution,
delivery and performance by the Seller of the Seller Agreements, all other
instruments and documents to be delivered hereunder and the consummation of
the transactions contemplated hereby, and no transaction contemplated
hereby requires compliance with any bulk sales act or similar law;

    (d) no authorization or approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body or other
Person is required for the due execution, delivery and performance by the
Seller of the Seller Agreements except for the filing of the UCC financing
statements and the giving of notices referred to in Section 2(d), all of
which, at the time required in Section 2(d), shall have been duly made and
shall be in full force and effect;

    (e) each of the Seller Agreements has been duly and validly authorized,
executed and delivered by the Seller and constitutes a valid and legally
binding obligation of the Seller, enforceable against the Seller in
accordance with its terms, subject to applicable bankruptcy, reorganization,
insolvency, moratorium or. other similar laws affecting the enforcement of
creditors' rights generally, and subject as to enforceability to general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law);

    (f) there are no actions, suits, proceedings or investigations pending
or, to the knowledge of the Seller, threatened, before any court,
administrative agency, arbitrator, governmental body or other tribunal, (i)
which, if determined adversely to the Seller, could have a material adverse
effect on the business, operations, properties, assets or financial
condition of the Seller, (ii) asserting the invalidity of any of the Seller
Agreements, (iii) questioning the consummation by the Seller of any of the
transactions contemplated by any of the Seller

                                    7
<PAGE>

Agreements or (iv) which, if determined adversely, could materially and
adversely affect the ability of the Seller to perform its obligations under,
or the validity or enforceability of, any of the Seller Agreements or the
Commercial Receivables;

    (g) the Seller has all necessary permits, licenses, agreements,
accreditation, certifications and Governmental consents to operate and
conduct its business, including the provision of all services reflected in
and giving rise to each Commercial Receivable, as it is presently being
conducted, subject to minor exceptions and deficiencies which are not
material and do not affect the conduct of its business and its ability to
own, collect and sell or grant a security interest in any Commercial
Receivables;

    (h) Exhibit C lists (i) the address of the chief executive office of
the Seller and (ii) the location(s) of the office(s) where the Seller keeps
all of its Commercial Receivables files. The Seller does not have an office
in the States of Colorado, Kansas, New Mexico, Oklahoma, Utah or Wyoming:

    (i) there has been filed in proper form, or a filing extension from the
appropriate governmental authority has been obtained with respect to, all
federal, state, an local income, franchise, sales, use, property, excise,
payroll and other tax returns and all other reports (whether. or not
relating to taxes) required by law to be filed by or on behalf of the
Seller with any governmental authority. All taxes, fees, assessments and
charges of whatsoever nature due or payable by the Seller on or before the
date hereof pursuant to said returns or reports or otherwise (including,
without limitation, payments of estimated taxes and deposits of taxes
withheld by or on behalf of the Seller) have been paid. There is no unpaid
interest, penalty or addition to tax due or claimed to be due from, nor any
unpaid tax deficiency determination or assessment outstanding against the
Seller, nor any basis therefor known to the Seller. No governmental audits
or investigations with respect to taxes are, to the Seller's knowledge, in
progress with respect to the Seller, and no governmental authority has
given notice that it will begin any such audit or investigation. All
returns and reports required to be filed, and all taxes, fees, assessments
and charges required to be paid, of whatsoever nature, have been so filed
and paid. The Seller has complied in all material respects with all
applicable laws relating to the employment of labor, including, without
limitation, ERISA, and those relating to wages, hours, collective
bargaining, unemployment insurance, workers' compensation, equal employment
opportunity and the payment and withholding of taxes, including income and
social security taxes, and has withheld (and duly segregated, deposited or
paid over to the appropriate authorities) all amounts required by law or
agreement to be withheld from the wages or salaries of its employees and
is not liable for any arrears of wages or benefits or any taxes or
penalties for the Seller's failure to comply with any of the foregoing;

    (j) the information furnished by or on behalf of the Seller to ACC and
to agents and employees of ACC prior to the date of this Agreement and
during the term of this Agreement or in connection with any transaction
contemplated by the Seller Agreements is and will be true and correct in
all material respects and does not and will not omit to state a material
fact necessary to make the statements contained therein not misleading;

    (k) the Seller is solvent and will not become insolvent after giving
effect to the transactions contemplated by the Seller Agreements; the
Seller has not incurred debts or

                                      8
<PAGE>

liabilities beyond its ability to pay; the Seller will, after giving effect
to the transactions contemplated by the Seller Agreements, have an adequate
amount of capital to conduct its business in the foreseeable future; the
sales of Commercial Receivables hereunder are made in good faith and
without intent to hinder, delay or defraud present or future creditors of
the Seller; and the Seller has valid business reasons for selling its
interest in the Commercial Receivables rather than using the Commercial
Receivables as collateral for a loan;

    (l) the legal name of the Seller is as set forth in Section 1 to this
Agreement. Except as set forth in the Exhibit C, the Seller has not changed
its name in the last six years and, during such period, the Seller did not
use, and the Seller does not now use, any trade names, fictitious names,
assumed names or "doing business as" names;

    (m) each pension plan or profit sharing plan to which the Seller is a
party has been fully funded in accordance with the obligations of the
Seller set forth in such plan;

    (n) the Seller is not a party to any unresolved disputes with any
Obligor on a Commercial Receivable, without regard to whether the dispute
with an Obligor involves a Commercial Receivable of the Seller which is
offered for sale, or sold, to ACC under this Agreement, except as disclosed
in writing to ACC;

    (o) there are no pending civil or criminal investigations involving the
Seller or its officers and directors and neither the Seller nor any of its
officers or directors has been involved in, or the subject of, any civil or
criminal investigation within the past five (5) years;

    (p) the Seller has executed and delivered the applicable Obligor Notice
to each Obligor, with executed copies thereof also delivered to ACC, of a
Commercial Receivable sold to ACC hereunder;

    (q) neither the federal government nor any other Person has asserted
any claim or right to offset any liability or debt against any Governmental
Receivable. The Seller has no overdue or delinquent liabilities or debt
which could give rise to a right of the federal government or any other
Person to offset such liabilities or debt against Governmental Receivables;

    (r) the Seller has heretofore delivered to ACC true and complete copies
of the financial statements each of which fairly presents the financial
position of the Seller as of the date thereof and the results of operations
and changes in financial condition of the Seller for the period then ended
and has been prepared in accordance with generally accepted accounting
principles consistently applied. The books of account and records of the
Seller are true and complete in all material respects and fairly reflect
all the material properties, assets, liabilities and transactions of the
Seller in accordance with generally accepted accounting principles
consistently applied. All fees, charges, costs and expenses of any nature
whatsoever associated with the ownership, operation and management of the
business and the assets have been in all material respects fully and
properly charged and reflected in the books and records of the Seller and
in the Seller's financial statements, and such books and records and
financial statements do not, because of the provision of services or the
bearing of costs and expenses by any other person

                                   9
<PAGE>

or for any other reason, understate in any material respect the true costs
and expenses of conducting the Seller's business; and

    (s) all documents which have been or shall be delivered to ACC or filed
with any governmental authority by or on behalf of the Seller pursuant to
this Agreement or any other Seller Agreement or in connection with the
transactions contemplated hereby are, of when so delivered or filed shall
be, correct and complete in all material respects and, if applicable, in
full force and effect.

9.  REPRESENTATIONS AND WARRANTIES CONCERNING COMMERCIAL RECEIVABLES SOLD
    TO ACC

    The Seller represents and warrants to ACC that, as of the date hereof,
and shall be deemed to represent and warrant to ACC as of each Acquisition
Date, as follows with respect to each Commercial Receivable purchased by
ACC hereunder:

    (a) the Net Value of such Commercial Receivable is payable in full by
an Eligible Obligor;

    (b) all Commercial Receivable Information and all information regarding
such Commercial Receivable contained in the related Assignment is true and
correct;

    (c) such Commercial Receivable has not been paid in whole or part;

    (d) the Seller has submitted all necessary documentation and supplied
all necessary information for payment of such Commercial Receivable to the
Obligor thereof and has fulfilled all of its other obligations in respect
thereof, including verification of the eligibility of the Commercial
Receivable for payment by such Obligor;

    (e) the Net Value of such Commercial Receivable is net of contractual
allowances or other modifications;

    (f) neither such Commercial Receivable nor any related Contract has
been compromised, adjusted, extended, satisfied, subordinated, rescinded,
setoff or modified by the Seller and is not subject to compromise,
adjustment, extension, satisfaction, subordination, rescission, setoff,
counterclaim, defense or modification, whether arising out of transactions
concerning the Contract or otherwise, except as disclosed in writing to
ACC;

    (g) true and correct copies of all invoices, agreements and other
documents relating to the creation of such Commercial Receivable have been
delivered to ACC or the ACC Servicer;

    (h)	such Commercial Receivable was owned, prior to its sale to ACC, by
the Seller free and clear of any claim of ownership of any other Person and
is not subject to any sale, lien, security interest, financing statement or
other charge or encumbrance, or other type of preferential arrangement
having the effect of a lien or security interest, in favor of any Person
other than as contemplated by this Agreement;

                                  10
<PAGE>

    (i) no action, other than the execution and delivery of this Agreement
and the related Assignment, the filing of ACC financing statements in the
state in which the Seller's chief executive office is located, the
execution and delivery of the appropriate Obligor Notices and the payment
of the Initial Payment by ACC is required to perfect the interest of ACC,
as a purchaser, assignee and transferee of accounts receivable, in such
Commercial Receivable and all such actions have been or will be
accomplished no later than the Acquisition Date therefor;

    (j) such Commercial Receivable complies with all laws and regulations
applicable thereto;

    (k) such Commercial Receivable is in full force and effect and
represents and constitutes a legal, valid and binding obligation of the
related Obligor enforceable against such Obligor in accordance with its
terms and constitutes an "account" under the UCC, as amended from time to
time;

    (1) such Commercial Receivable does not constitute or has not
constituted an obligation of any subsidiary, parent or other Person which
is an affiliate of the Seller;

    (m) such Commercial Receivable (i) is payable, in an amount equal to
not less than its Net Value, by the Eligible Obligor identified by the
Seller as being obligated to do so, and is recognized as such by the
applicable Eligible Obligor, (ii) is based on an actual and bona fide
rendition of services to, or the furnishing of goods by the Seller in the
ordinary course of its, business, (iii) is denominated and payable only in
lawful currency of the United States, and (iv) is an account and is not
evidenced by instruments or chattel paper within the meaning of the UCC;

    (n) such Commercial Receivable (i) is not subject to any setoff,
counterclaim, defense, abatement, suspension, deferment, deductible,
reduction or termination by its Obligor, or (ii) is past, or within 120
days of, the statutory limit for collection applicable to its Obligor;

    (o) the goods and services provided and reflected in such Commercial
Receivable, were ordered by the Obligor and the Obligor has received such
goods or services.

    (p) the fees charged for the services or goods constituting the basis
for such Commercial Receivable were reasonable fees charged in the Seller's
community for the same or similar services or goods or, if the fees for
services or goods were subject to limitations imposed by contracts for
reimbursement from the related Obligor, such fees did not exceed the
limitations so imposed, and such Commercial Receivable for which the fees
are so restricted has been clearly identified to ACC as being subject to
such restriction;

    (q) the only Obligor primarily liable on such Commercial Receivable is
the Obligor identified in the applicable Commercial Receivable Information;

    (r) the Seller has the right to sell, assign and transfer such
Commercial Receivable pursuant to this Agreement, no consent from the
related Obligor or any other Person is required to effect the sale of such
Commercial Receivable to ACC and this Agreement and each applicable
Assignment vests and thereafter at all times will vest in ACC full right
and title in such Commercial Receivable purported to be conveyed hereby and
thereby, and such

<PAGE>

conveyance of such Commercial Receivable will constitute a valid assignment
in such Commercial Receivable enforceable against the Seller and all
creditors of and purchasers from the Seller;

    (s) the Seller has made all payments to any Obligor necessary to
prevent the Obligor from offsetting an earlier overpayment to the Seller
against any amount the Obligor owes on such Commercial Receivable;

    (t) the Seller has treated the assignment of such Commercial Receivable
as a sale for all purposes, including without limitation tax and accounting,
it being understood that it is the intention of the parties hereto that
the assignment of any Commercial Receivable pursuant to this Agreement and
any Assignment be treated as a sale for all purposes.

    (u) there are no procedures or investigations pending or threatened
before any Governmental authority (i) asserting the invalidity of such
Commercial Receivable or any Contract related thereto, (ii) relating to the
bankruptcy or insolvency of the related Obligor, (iii) seeking the payment
of such Commercial Receivable or payment and performance of such Contract
or (iv) seeking any determination or ruling that might materially and
adversely affect the validity or enforceability of such Commercial
Receivable or any Contract related thereto;

    (v) neither such Commercial Receivable nor Contract related thereto
contravenes in any material respect any federal, state or local laws, rules
or regulations applicable thereto (including, without limitation, rules and
regulations relating to usury, consumer protection, truth in lending, fair
credit billing, fair credit reporting, equal credit opportunity, fair debt
collection practices and privacy), and no party to such related Contract is
in violation of any such law, rule or regulation in any material respect;
and	.

    (w) such Commercial Receivable complies with such additional criteria
and requirements (other than those relating to the collectibility of such
Commercial Receivable). as ACC may from time to time specify to the Seller
following 30 days' written notice.

It is understood that the representations and warranties of the Seller set
forth herein do not constitute representations and warranties as to (i) the
ultimate collectibility of any Commercial Receivable from its Obligor or
for whom the services specified therein were rendered or (ii) the
continuing financial solvency of any Obligor. Although some of the
foregoing representations and warranties may have been made to the best of
the Seller's knowledge, the Seller's lack of knowledge with respect to an
inaccuracy in a particular representation or warranty shall still
constitute a breach of the inaccurate representation or warranty. The
performance or compliance by Seller as to all representations and
warranties shall be determined for this purpose as if all qualifications to
such warranties and representations based on knowledge or materiality were
omitted.

    The Seller and ACC agree that, in the event that a breach of any of the
foregoing representations or warranties with respect to a Commercial
Receivable purchased by and/or assigned to ACC under this Agreement occurs,
the obligations and liabilities of the Seller with respect to such breach
shall be as set forth in Section 10(b) and the actions of ACC or its
assigns against the Seller with respect to such breach shall be limited to
recovery of Damages.

                                    12

<PAGE>

10. COVENANTS OF THE SELLER

    The Seller hereby agrees with and covenants to ACC and its successors
and assigns, as follows:

    (a) If the Seller is a corporation, limited liability company or
partnership, the Seller shall preserve and maintain its existence in good
standing under the laws of the state of its organization and qualify and
remain qualified in good standing as a foreign entity in each jurisdiction
where the failure to preserve and maintain such existence, rights,
franchises, privileges and qualification would materially adversely affect
the interests of ACC hereunder or in the Commercial Receivables, or the
ability of ACC, the ACC Servicer or the Seller Servicer to perform its
respective obligations hereunder;

    (b) The Seller shall do nothing to impair ACC's right in any Commercial
Receivable, or impede or interfere with the collection by ACC or any of its
agents of any Commercial Receivable, or compromise, adjust, extend,
satisfy, subordinate, rescind, set off or modify or otherwise permit or
agree to any deviation from the terms or conditions of any Commercial
Receivable;

    (c) The Seller shall comply, in all material respects, with all laws,
acts, rules, regulations, orders, decrees and directions of any federal,
state or local governmental authority Commercial Receivables or any part
thereof or any related Contracts and with respect to the Seller and its
business and properties; provided, however, that the Seller may contest any
act, law, rule, regulation, order, decree or direction in any reasonable
manner which shall not, in the judgment of the Purchaser, materially and
adversely affect the rights of ACC in the Commercial Receivables. The
Seller shall comply, in all material respects, with its obligations under
the Contracts relating to Commercial Receivables;

    (d) The Seller shall not create, permit or suffer to exist, and shall
defend ACC's rights to and interest in the Commercial Receivables against,
"d take such other actions as are necessary to remove, any lien, claim or
right in, to or on the Commercial Receivables, shall defend the right,
title and interest of ACC in and to the Commercial Receivables against the
claims and demands of all Persons whomsoever;

    (e) The Seller shall keep its books and accounts in accordance with
generally accepted accounting principles, shall not include a Commercial
Receivable on its books and records, and shall make a notation on its
computer files and other physical books and records to indicate which of
its Commercial Receivables have been sold to ACC. The Seller also shall
maintain and implement administrative and operating procedures (including,
without limitation, an ability to recreate records evidencing Commercial
Receivables and related Contracts in the event of the destruction of the
originals thereof), and keep and maintain all documents, books, records and
other information reasonably necessary or advisable for collecting all
Commercial Receivables (including, without limitation, records adequate to
permit the daily identification of each Commercial Receivable and all
Collections of and adjustments to each existing Commercial Receivable) and
for providing the Commercial Receivables files;

                                   13
<PAGE>

    (f) The Seller shall advise ACC immediately (and in no event later than
one Business Day following actual knowledge thereof), in reasonable detail,
(i) of any lien asserted or claim made against any of the Commercial
Receivables purchased by or assigned to ACC and (ii) of the occurrence of
any other event which would have a material adverse effect on the aggregate
Net Value of such Commercial Receivables;

    (g) ACC and its representatives shall at all times have full and free
access during normal business hours to all the books, correspondence and
records of the Seller and ACC and its representatives may examine the same,
take extracts therefrom and make photocopies thereof, and the Seller agrees
to render to ACC or its representatives, at the Seller's cost and expense,
such clerical and other assistance as may be reasonably requested with
regard thereto; provided, however, that ACC acknowledges that, in
exercising the rights and privileges conferred in this Section 10(7), it or
its representatives may, from time to time, obtain knowledge of
information, practices, books, correspondence and records of a confidential
nature and in which the Seller has a proprietary interest. ACC agrees (and
shall obtain a similar agreement from each of its representatives) that all
such information, practices, books, correspondence and records are to be
regarded as confidential information and that such information may be
subject to laws, rules and regulations regarding patient confidentiality
and agrees that (i) it shall retain in strict confidence and shall use its
best efforts to ensure that its representatives retain in strict confidence
and will not disclose without the prior written consent of the Seller any
or all of such information, practices, books, correspondence and records
furnished to them and (ii) that it will not, and will use its best efforts
to ensure that its representatives will not, make any use whatsoever (other
 than for the purposes contemplated by this Agreement) of any of such
information, practices, books, correspondence and records without the prior
 written consent of the Seller, unless such information is generally
available to the public or is required by law to be disclosed. The Seller
shall, from time to time during regular business hours as requested ACC,
permit ACC, or its agents or representatives, to discuss matters relating
to its Commercial Receivables or the Seller's performance hereunder or
under the Contracts with any of the officers or employees of the Seller
having knowledge of such matters;

    (h) From time to time, at its expense, promptly execute and deliver all
further instruments and documents, and take all further action that ACC may
reasonably request in order to perfect, protect or more fully evidence the
sale and transfer of the Commercial Receivables. Without limiting the
generality of the foregoing, the Seller will upon the request of ACC
execute and file such financing or continuation statements, or amendments
thereto or assignments thereof, and such other instruments or notices, as
may be, in the opinion of ACC, necessary or appropriate. The Seller hereby
authorizes ACC, upon two Business Days' notice, to file one or more
financing or continuation statements, and amendments thereto and
assignments thereof, relative to all or any of the Commercial Receivables
purchased by or assigned to ACC now existing or hereafter arising without
the signature of the Seller where permitted by law;

    (i) The Seller shall not, without providing 60 days' notice to ACC and
without filing such amendments to any previously filed financing statements
as ACC may require, (i) change the location of its chief executive office
or the location of the offices where the records relating to the Commercial
Receivables are kept or (ii) change its name, identity or corporate
structure in any manner which would, could or might make any financing
statement or continuation

                                   14
<PAGE>

statement filed by the Seller in accordance with this Agreement seriously
misleading within the meaning of Section 9-402(7) of the UCC;

    (j) The Seller shall make all payments to an Obligor necessary to
prevent such Obligor from offsetting an earlier overpayment to the Seller
against any amount which such Obligor owes with respect to a Commercial
Receivable, and the Seller shall immediately notify ACC in the event of any
action, proceeding, dispute, offset, deduction, defense or counterclaim
that is or may be asserted by an Obligor relating to a Commercial
Receivable;

    (k) The Seller and its agents and representatives are hereby
irrevocably constituted and designated as the Sellers attorney-in-fact,
which irrevocable power of attorney is coupled with an interest (i) to
endorse or sign the Seller's name to financing statements, remittances,
invoices, assignments, checks, drafts or other instruments or documents in
respect of the Commercial Receivables, (ii) to notify Obligors to make
payments on the Commercial Receivables directly to ACC and (iii) to bring
suit in the Seller's name and to settle or compromise such Commercial
Receivables (other than Governmental Receivables) as ACC may, in its sole
discretion, deem appropriate;

    (l) The Seller shall not take any action to cause any Commercial
Receivable to be evidenced by an "instrument" (as defined in the UCC),
except to the extent that (i) causing a Commercial Receivable to be
evidenced by such an instrument is required for the collection of such
Commercial Receivable or for the enforcement of any rights therein and (ii)
the original copy of such instrument has been delivered to ACC;

    (m) The Seller shall pay any taxes relating to the transfer of
Commercial Receivables purchased by or assigned to ACC;

    (n) The Seller shall treat the transactions contemplated by the Seller
Agreements, including the assignment of each Commercial Receivable
purchased by or assigned to ACC, as a sale for all purposes including,
without limitation, tax and accounting, and shall reflect such sale
treatment in all books, records, computer files, tax returns, financial
statements and regulatory and governmental filings;

    (o) The Seller shall, at its expense, timely and fully perform and
comply with all material provisions, covenants and other promises required
to be observed by it under any Contracts related to the Commercial
Receivables;

    (p) Until the termination of this Agreement, the Seller shall not,
without the prior written consent of ACC:

        (1) except as otherwise provided herein, sell, assign (by operation
of law or otherwise) or otherwise dispose of, or create or suffer to exist
any adverse claim upon or with respect to, any Commercial Receivable or
related Contract or assign any right to receive income in respect thereof,
or take any action that could give rise to, or omit to 	take any action
that could preclude or limit, a right of any other Person to set off any
amount against any Commercial Receivables;

                                    15
<PAGE>

        (2) extend, amend or otherwise modify the terms of any Commercial
Receivable, or amend, modify or waive any term or condition of any Contract
related thereto;

        (3) make any change in the character of its business or in its
credit and collection 	policy (except for changes required by state or
federal statutes, rules or regulations or for 	continued participation in
third-party payment programs), which change would, in either case, (x)
impair the timing of collection or ultimate collectibility of any
Commercial Receivable or (y) affect the ability of ACC, as appropriate, to
perform its duties with respect to the Commercial Receivables;

        (4) prepare any financial statements which shall account for the
transactions contemplated hereby in a manner which is, or in any other
respect account for the transactions contemplated hereby in a manner which
is, inconsistent with ACC's ownership of the Commercial Receivables; or

        (5) (x) amend, modify, supplement or delete in any way or to any
extent any provision for uncollectible accounts and free care applicable
to any Eligible Commercial Receivable or (y) amend, modify or supplement in
any way or to any extent any financial 	class or change in any way or to
any extent the manner in which any financial class is 	treated or
reflected in the Seller's records (including, but not limited to, the
Commercial Receivables files), without the express written consent of ACC;

    (q) The Seller agrees to indemnify, hold harmless and forever defend
ACC from any and all liability and expenses arising out of the sale of
goods, wares, merchandise, or services evidenced by the Commercial
Receivables, whether asserted by the Seller, the Obligor on such Commercial
Receivables or by any other Person;

    (r) In no event shall ACC be obligated to pursue, on the Seller's
behalf, collection of the Commercial Receivables through use of litigation
or otherwise; and

    (s) No provision hereof shall obligate ACC in any manner or to any
degree, to the Seller or to any third party whether such third party is
with or without notice of this Agreement, to perform for the Seller in
regard to the underlying contract which gave rise to any Commercial
Receivable. The Seller covenants and agrees to indemnify and hold ACC
harmless for any and all performance, responsibility or duty owed by the
Seller to any obligor for a Commercial Receivable or third party. The
Seller also covenants and agrees to fully comply, in an acceptable manner,
with the terms of any and all agreements with obligors for the Commercial
Receivables to the extent such might affect the Commercial Receivables.

    (t) Seller covenants to provide, on a periodic basis, that financial
information shown on Exhibit E attached hereto, and as described in Section
14(e) herein.

11. DEFAULT BY THE SELLER

    (a) Any of the following acts, omissions and/or events, shall be and
are hereby defined as events of default by the Seller, in addition to any
further events defined elsewhere as events of default by the Seller:

                                     16
<PAGE>

        (1) breach by the Seller of its agreements with any Obligor for a
Commercial Receivable;

        (2) breach by the Seller of any obligation, covenant,
representation or warranty of the Seller in any Seller Agreement (including
this Agreement) or obligations with respect to substitution or payment of
Damages with respect to Rejected Receivables and/or the Seller's obligation
to make payments under Section 16; or

        (3) the insolvency or business failure of the Seller or Seller's
Servicer or the Seller's assignment for the preference of certain creditors
of the Commercial Receivables or placing the same in the custody of any
court or the filing by or against the Seller or the Seller's Servicer of a
petition for bankruptcy protection.

    (b) Upon the occurrence of an event of default, and at any time
thereafter, ACC may elect, the Seller hereby expressly waiving notice,
demand and presentment, to foreclose on the security interest granted by
the Seller in Section 3 to secure amounts due and owing from the Seller;
provided, however, that it is specifically agreed in all events, that upon
such foreclosure, ACC must first proceed against the Reserve Account
balance, and exhaust such, prior to any further action in regard to any
other claims, including but not limited to claims for Damages, it may have
against the Seller and, provided further, that nothing in this Section 11(b)
shall be construed as granting ACC general recourse against the Seller for
(0i) amounts not collected on a Commercial Receivable purchased by ACC
which is not a Rejected Receivable or (ii) amounts in excess of Damages
with respect to a Rejected Receivable.

    (c) In the event of default and action by ACC pursuant to Section 11(b),
ACC shall have the right to retain the balance of the Net Purchase Price
held in the Reserve Account and to set off against amounts then held in the
Reserve Account any and all Damages and further set off against any funds
received by ACC, ACC Servicer or the Seller Servicer on behalf of the
Seller. ACC shall have and may exercise any and all rights provided by the
Uniform Commercial Code of the State of Texas and/or the State of Seller,
to the maximum extent provided by said Code. ACC shall be entitled to avail
itself of at such rights and remedies as may now or hereafter exist at law
or in equity for the enforcement of the covenants herein and the
foreclosure of the security interest created hereby and the resort to any
remedy provided hereunder or provided by the Uniform Commercial Code of
Texas and/or State of Seller or by any other law of the State of the Seller,
shall not prevent the concurrent or subsequent employment of any other
appropriate remedy or remedies.

    (d) ACC may remedy any default, without waiving same, or may waive any
default without waiving any prior or subsequent default.

    (e) The security interest herein granted shall not be affected by nor
affect any other security taken for the indebtedness hereby secured, or any
part thereof; and any extensions may be made of ACC's rights and this
security interest and any releases may be executed or herein conveyed
without affecting the priority of this security interest or the validity
thereof with reference to any third person, and the holder of said rights
shall not be limited by any election of remedies if he chooses to foreclose
this security interest by suit.

                                   17
<PAGE>

    (f) Any requirement of reasonable notice to the Seller of the time and
place of any sale of the collateral, or any other intended disposition
thereof to be made, shall be met if such notice is mailed, postage prepaid,
to the Seller at the last known business address of the Seller, as required
by law.

    (g) The Seller hereby expressly acknowledges that, except with respect
to a breach of a representation and warranty with respect to a purchased
Commercial Receivable which causes such purchased Commercial Receivable to
be a Rejected Receivable, the Seller's breach of any of the other covenants,
obligations, representations or warranties contained in any Seller
Agreement or any Contract would cause irreparable injury and damage to ACC
in a manner that could not be adequately compensated by monetary damages
alone. The parties specifically agree that the breach or threatened breach
by the Seller of any Seller Agreement or any Contract could cause ACC to
suffer irreparable injury if injunctive relief is not granted and,
therefore, ACC shall have the right, at its election and in addition to any
and all other remedies available to it, upon any such breach or threatened
breach, to seek immediate injunctive relief from a court of competent
jurisdiction,  requesting such orders and restraining the Seller from all
actions which such court deems necessary to adequately protect ACC from
further damage or injury. In any instance of a breach or threatened breach
for which injunctive relief is deemed necessary by ACC, the Seller hereby
waives demand or notice of default and waives the requirements, if any, for
posting bond in connection with the granting of injunctive relief.
Notwithstanding the foregoing, the remedy of ACC with respect to breach of
a representation and warranty by the Seller contained in Section 8 which
results in a purchased Commercial Receivable becoming a Rejected Receivable
 shall be limited to the right to the immediate receipt of the Damages with
 respect thereto and action, including equitable action and injunctive
relief determined necessary by ACC to secure and obtain payment of such
Damages.

12.  INDEMNIFICATION

    (a) Without limiting any other rights which ACC may have hereunder or
under applicable law, the Seller hereby agrees to indemnify ACC from and
against any and all amounts awarded against or incurred by it arising out
of or as a result of this Agreement or ACC's interest in any Commercial
Receivables, excluding, however, indemnified amounts resulting from gross
negligence or willful misconduct on the part of ACC to which such
indemnified amount would otherwise be due. Nothing in this Section 12(a)
shall be construed as the Seller's guarantee of the ultimate collectibility
of any Commercial Receivables. Without limiting the generality of the
foregoing, the Seller shall indemnify ACC, its officers, directors and
agents for indemnified amounts relating to or resulting from:

        (1) reliance on any representation or warranty made by the Seller
(or any of its authorized officers) under or in connection with this
Agreement, any information or report delivered by the Seller pursuant
hereto which shall have been false or incorrect in any material respect
when made or deemed made;

        (2) the failure by the Seller to comply with any applicable law,
rule or regulation with respect to any Commercial Receivable or the
nonconformity of any Commercial Receivable with any such applicable law,
rule or regulation;


                                18
<PAGE>

        (3) the failure to vest and maintain vested in ACC, as the
purchaser, assignee and transferee of Commercial Receivables, a valid,
perfected, exclusive ownership 	interest in the Commercial Receivables sold,
assigned and transferred to ACC, together with all Collections related to
such Commercial Receivables, free and clear of any lien, whether existing
at the date of purchase by ACC or at any time thereafter;

        (4) the failure to file, in a timely manner, financing statements
or other similar instruments or documents under the UCC or other applicable
laws with respect to any Commercial Receivables sold, assigned and
transferred to ACC, whether at the time of any purchase, assignment or
transfer or at any subsequent time;

        (5) any dispute, claim, offset or defense of the Obligor to the
payment of any 	Commercial Receivables sold, assigned and transferred to
ACC (including, without limitation, a defense based on such Commercial
Receivables not being a legal, valid and binding obligation of such
Obligor enforceable against it in accordance with its terms); or

        (6) any failure of the Seller to perform its duties or obligations
in accordance with the provisions of this Agreement.

    (b) Any Indemnified Amounts due hereunder shall be payable on demand.

13.  TERMINATION

    This Agreement shall continue in full force and effect until terminated
by any party.  Any party to this Agreement may, after the expiration of 365
from the date of this Agreement, terminate this Agreement upon giving to
the other at least 30 days' prior written notice of termination by
registered or certified mail given as provided in Section 14(h).  ACC shall
have the right to terminate this Agreement, by written notice to the
Seller, at any time during which an event of default hereunder has occurred
and is continuing. Termination, however, shall not relieve or discharge
the Seller of its duties, obligations or covenants hereunder until all of
the Seller's obligations to the Purchaser have been satisfied or paid in
full, and all of the terms, provisions and conditions of this Agreement
shall remain in effect. If, after receipt of any payment of all or any part
of the Seller's obligations hereunder, the Purchaser is for any reason
compelled to surrender such payment to any person or entity because such
payment is determined to be void or voidable as a preference, impermissible
setoff or a diversion of trust funds, or for any other reason, this
Agreement shall continue in full force and the Seller shall be liable to
the Purchaser for, and shall indemnify and hold the Purchaser harmless for,
the amount of such payment surrendered. The provisions of this Section 17
shall be and remain effective notwithstanding any contrary action which may
have been taken by the Purchaser in reliance upon such payment, and any
such contrary action so taken shall be without prejudice to the Purchaser's
rights under this Agreement and shall be deemed to have been conditioned
upon such payment having become final and irrevocable. The provisions of
this Section 13 shall survive the termination of the Agreement.

                                    19
<PAGE>

14.  MISCELLANEOUS

    (a) This Agreement has been made and is performable in San Antonio,
Texas, and the legal relations between the parties hereto shall be governed
by and construed in accordance with the laws of the State of Texas, without
regard to the conflict of laws rules thereof.

    The jurisdiction and venue for any suit instituted by any party (except
for the enforcement of an equitable remedy by ACC under the provisions of
Section 11(g) hereof) arising in connection with the terms and conditions
of this Agreement, its enforcement, breach or construction shall be
instituted in the State of Texas, Bexar County, in a court of general
subject matter jurisdiction and in no other venue or jurisdiction.

    THE SELLER AND ACC HEREBY CONSENT TO AND SUBMIT TO THE JURISDICTION AND
VENUE OF THE COURT OF GENERAL SUBJECT MATTER JURISDICTION LOCATED IN BEXAR
COUNTY, STATE OF TEXAS.

    (b) The Seller shall be liable for the full amount of attorneys' fees
and other costs incurred by ACC in enforcing its rights hereunder and/or in
taking any legal action to settle, collect or defend the Commercial
Receivables or any part thereof or security interest therein, together with
interest on unpaid amounts at the maximum rate permitted by law.

    (c) This Agreement, and the Exhibits and Appendices attached hereto
from time to time, set forth the complete and entire understanding between
the Seller and ACC as to the terms hereof. Such Agreement shall only be
modified by a written instrument signed by all parties to be bound thereby.

    (d) Failure or delay by ACC in exercising any right hereunder shall not
waive the later assertion of that right nor waive the Seller's future
performance.

    (e) ACC shall at all times have access to the Seller's financial
records and to those of any Seller's Servicer to the extent necessary to
protect ACC's position hereunder and/or its ownership interest in purchased
Commercial Receivables. The Seller shall furnish all financial data to ACC,
immediately upon request for such from ACC, and from time to time; such
financial data to include but not be limited to receipts for all required
tax payments, proof of payment of all insurance, including workers'
compensation payments, proof of payment of all current payables, Seller
hereby agrees that he will provide to ACC that periodic financial
information as shown on Exhibit E attached hereto, at such intervals as
shown on Exhibit E.

    (f) All rights of ACC against the Seller, in the event of the
nonperformance or breach by the Seller or the Seller's Servicer, shall
survive the termination of this Agreement.

    (g) This Agreement shall be binding on and inure to the benefit of the
parties hereto and their legal representatives, heirs, executors,
administrators, successors and assigns.

    (h) Any notice to be given hereunder shall be sufficient if in writing
and personally delivered or mailed, postage prepaid, by U. S. registered or
certified mail, return receipt requested, to the parties' addresses as set
forth below. Notice shall be deemed given two (2) Business Days following
dispatch as set forth above.

                                       20
<PAGE>

    (i) The representations and warranties made by the Seller shall be true
on the date of execution of this Agreement and the Seller shall reaffirm
the truth of the representations and warranties on each day thereafter
during the term of this Agreement. The representations and warranties made
by the Seller shall survive the termination of this Agreement until the
expiration of the statute of limitations period applicable to the claims
that may be asserted against the Seller or the assets of the Seller.

    (k) Notwithstanding any term or provision hereof which expressly or
impliedly indicates otherwise, no amount payable hereunder is payable as
interest, for the use, forbearance or detention of monies, and the Seller
covenants warrants and represents the truth thereof. All amounts payable
hereunder are fees for services rendered and discounts. In the event any
term or provision hereof is finally construed by any applicable governing
authority to constitute interest, then in such event, but only in such
event, such provision shall be modified without further notice or approval
so that it is in compliance with the applicable governing usury laws. All
amounts specifically designated as interest shall be forgiven to the extent
they cannot be restructured so as to constitute legally imposed charges.
In no event shall this Agreement be interpreted or enforced to contract
for, charge or authorize receipt of any interest in excess of the maximum
nonusurious rate of interest chargeable under applicable law in regard to
which no claim or defense of usury could successfully be asserted. Any
amount determined by a court of proper jurisdiction as usurious interest
shall be deemed a mistake and shall be refunded to the payor. Provided that
nothing hereinabove shall limit any fees or expenses payable to ACC where
such do not constitute "interest".

    Executed to be effective this 8th day of November, 2001.

                                        "ACC"
                                        ALAMO CAPITAL CORPORATION

                                        By: /s/  Phil Hooker
                                           Phil Hooker, President

                                        Address: 20655 IH 10 West
                                                 San Antonio, TX  78257

                                        "Seller"
                                        PSR NURSES, LTD

                                        /s/  William W. Riddle, Jr.
                                           William W. Riddle, Jr.
                                           President of the General Partner

                                        Address:  14114 Dallas Parkway,
                                                  Ste. 220
                                                  Dallas, TX 75040


BEFORE ME, the undersigned authority, on this day personally appeared
William W. Riddle, Jr., President of the General Partner, of PSR NURSES,
LTD, a Texas corporation, known to me to be the person whose name is
subscribed to the foregoing instrument, and acknowledged to me

                                  21
<PAGE>

that he signed the foregoing instrument and acknowledged to me that he
executed the same for the purposes and consideration therein expressed, in
the capacities therein stated and as the act and deed of said corporation.

                                         Given under my hand and seal of
                                         office on this 8th, day of
                                         November,  2001.

	                                 /s/  Julia R. Routon
	                                 Notary Public, State of Georgia

                                         JULIA R. ROUTON
                                         Notary Public, Chatham County, GA
                                         My Commission Expires May 17, 2004

THE STATE OF GEORGIA

COUNTY OF CHATHAM

By signature below, and in exchange for sufficient, good and valuable
consideration, the receipt of which is hereby acknowledged, the undersigned
"Guarantor" does personally, jointly and severally, guaranty the Seller's
representations and warranties in Sections 8, 9 and I0, and the Seller's
payment of any amounts owed as Damages in the above Agreement by party
identified therein as Seller.

                                          Guarantor

                                         /s/  William W. Riddle, Jr.
                                         William W. Riddle, Jr.
                                         Date:    11/8/01


THE STATE OF GEORGIA

COUNTY OF CHATHAM

    BEFORE ME, the undersigned authority, on this day personally appeared
William W. Riddle, Jr., Guarantor, known to me to be the person whose name
is subscribed to the foregoing instrument, and acknowledged to me that he
signed the foregoing instrument and acknowledged to me that he executed the
same for the purposes and consideration therein expressed.

    Given under my hand and seal of office on this 8th day of November, 2001.

                                /s/  Julia R. Routon
                                Notary Public, State of GEORGIA

                                JULIA R. ROUTON
                                Notary Public, Chatham County, GA
                                My Commission Expires May 17, 2004

                                   22
<PAGE>

                               APPENDIX I

                              DEFINITIONS

    Except as otherwise specified or as the context of this Agreement may
otherwise require, the following terms have the respective meanings set
forth below for all purposes of this Agreement and the definitions of such
terms are applicable to the singular as well as the plural forms of such
terms and to the masculine as well as to the feminine and neuter genders of
such terms. Terms which are defined in the UCC and used in this Agreement
without definition shall have the meanings assigned thereto in the UCC.

    "ACC" has the meaning set forth in Section 1 of this Agreement.

    "Acquisition Date" means, with respect to an individual Commercial
Receivable, the Business Day as of which such Commercial Receivable is
purchased by ACC under this Agreement, which date shall be the Business
Day on which the Initial Payment for such Commercial Receivable is deemed
paid to the Seller under this Agreement.

    "Agreement" has the meaning set forth in Section 1 of this Agreement.

    "Asset Value" means, as of any date with respect to a Commercial
Receivable purchased by ACC hereunder, an amount equal to (i) the Initial
Payment for that Commercial Receivable plus (ii) the Unpaid Fee, referred
to in Exhibit A, with respect thereto minus (iii) all Collections applied
against such Commercial Receivable; provided, however, that in no event
shall the Asset Value of any Commercial Receivable ever be deemed to be
less than zero nor more than its Net Value as of its Acquisition Date.

    "Assignment" means an agreement substantially in the form of Exhibit D
hereto by which the Seller sells and assigns to ACC, as absolute owner, and
ACC purchases from the Seller, all of the Seller's right, title and
interest in and to Commercial Receivables accepted for purchase by ACC
under this Agreement and listed in the schedule to such agreement.

    "Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in the State of
Texas generally and the City of San Antonio, Texas, are authorized or
obligated by law or executive order to close.

    "Collected Receivable" means a Commercial Receivable or Group of
Commercial Receivables on which the Collections received by ACC equaled not
less than that Commercial Receivables or Group of Commercial Receivables'
Asset Value. For purposes of determining whether a Commercial Receivable
is a Collected Receivable, amounts applied from the Reserve Account to that
Commercial Receivables' Asset Value shall not be deemed to be Collections
with respect to that Commercial Receivable.

    "Collections" means the amounts received or deemed received by ACC with
respect to a Commercial Receivable.

    "Contract" means an agreement pursuant to or under which an Obligor is
obligated to pay for services rendered or goods sold from time to time.

                                    23
<PAGE>

    "Commercial Receivable Information" means all documents, records, (and
Records), and information of any nature whatsoever maintained by or
available to Seller which is related to the Commercial Receivables.

    "Commercial Receivables" means accounts receivable billed to Obligors
representing amounts due and owing to the Seller arising from the sale,
rental or lease of goods or the provision of services (and services and
sales ancillary thereto), including all rights and remedies of the Seller
relating thereto, together with any and all proceeds in any way derived,
directly or indirectly, therefrom. Commercial Receivables means both
governmental and non-governmental receivables.

    "Damages" has the meaning set forth in Section 10(b).

    "Governmental Entity" or "Governmental Obligor" means the United States,
any State, any political subdivision of a State and any agency or
instrumentality of the United States or any State, political subdivision or
fiscal intermediary thereof which is obligated to make any payments with
respect to Commercial Receivables representing amounts owing under any
other program established by federal or state law which provides for
payments for Commercial goods or services to be made the Sellers of such
goods or services.

    "Governmental Receivable" means a Commercial Receivable that is payable
by a Governmental Obligor.

    "Initial Payment" means, with respect to a Commercial Receivable
purchased by ACC under this Agreement, an amount equal to (i) the then
applicable Purchase Factor times (ii) that Commercial Receivable's Net
Value.

    "Net Purchase Price" means the difference, if any (but not less than
zero), between (i) the Purchase Price with respect to a Commercial
Receivable and (ii) the Initial Payment therefor.

    "Net Value" means, with respect to a Commercial Receivable, the amount,
determined by ACC as of the date of ACC's purchase of such Commercial
Receivable, as collectible from the Obligor on such Commercial Receivable
after giving effect to contractual allowances with respect thereto and any
amounts determined by ACC to be not collectible from the Obligor on that
Commercial Receivable.

    "Non-Governmental Obligor" means an Obligor that is not a Governmental
Entity.

    "Non-Governmental Receivable" means any Commercial Receivable that is
payable by an Obligor other than a Governmental Entity.

    "Nonpurchased Receivables Collection"  has the meaning set forth in
Section 6(a) (1).

    "Obligor" means an Eligible Obligor which is identified by the Seller
as being obligated to make payment of all or a portion of a Purchased
Receivable.

    "Obligor Notice" means a notice to an Obligor of the assignment of
Commercial Receivables from the Seller to ACC pursuant to this Agreement in
the form of Exhibit H-1.
                                    24
<PAGE>

    "Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof (including,
without limitation, any Governmental Entity) whether acting in an
individual, fiduciary or other capacity.

    "Seller Agreement" means this Agreement, each Assignment, the Servicing
Agreement, if any, each certificate, document or agreement executed or
delivered by the Seller pursuant to any of the foregoing.

    "Purchase Contract" shall mean this Agreement.

    "Purchaser" means ACC.

    "Purchase Factor" means Eighty (80%) Percent unless ACC determines, in
its sole discretion, to increase or decrease such decimal, in which event
"Purchase Factor" means the decimal set forth by ACC by written notice to
the Seller, which revised Purchase Factor shall be used, unless thereafter
changed by ACC, for determining the Initial Payment due for Commercial
Receivables purchased by ACC hereunder on each Acquisition Date following
the effective date of such change in the Purchase Factor.

    "Purchase Price" means, with respect to a Commercial Receivable
purchased by ACC under this Agreement, an amount equal to the Initial
Payment therefor plus Collections thereon from and after the Asset Value
thereof has been reduced to zero.

    "Records" means all Contracts and other documents, information, books
and other records maintained by the Seller, the Seller Servicer or the ACC
Servicer with respect to Commercial Receivables, and the related Obligors.
"Records" shall include, but not be limited to, computer programs, tapes,
disks, punch cards, data processing software and related property and
rights.

    "Reimbursable Expenses" means those expenses, and only those expenses,
which are incurred in connection with the following activities performed in
regard to the Commercial Receivables: (i) twenty dollars ($20.00) for each
wire transfer, (ii) twelve dollars ($12.00) per package for overnight mail
delivery; (iii) fifteen dollars ($15.00) per check for check certification;
(iv) three dollars ($3.00) per debtor for debtor notification; (v) ACC's
cost for any performed credit inquiries,  UCC searches, filing fees, and
closing costs; (vi) any amount billed by any professional, including
attorneys and accountants, ACC hires to assist in protecting or asserting
ACC's rights hereunder or under any guaranties; and (vii) any amounts
payable under Section 16 hereof.

    "Rejected Receivable" means a Commercial Receivable (i) with respect to
which a material breach of a representation and warranty or a covenant
contained in this Agreement has occurred and remains unremedied or (ii) on
which payment has been denied in whole or in part by the Obligor thereon.
"Rejected Receivable" shall include, without limitation, any Commercial
Receivable having a Governmental Obligor and the payment on which has been
diverted by the Seller away from the ACC Lockbox Account.

    "Reserve Account" means the account established by ACC as provided in
Section 10.

                                  25
<PAGE>

    "State" means any state of the United States of America, the District
of Columbia and the Commonwealth of Puerto Rico.

    "Uniform Commercial Code" or "UCC" means the Uniform Commercial Code as
in effect in the specified jurisdiction or, if no other jurisdiction is
specified, in the state in which the Seller is located. For purposes of
this Agreement, the Seller shall be deemed located at its place of business
if it has only one place of business and at its chief executive office if
it has more than one place of business.

    "United States" means the United States of America, its territories and
possessions.

    "Unpaid Fees" means the sum of all Fees due with respect to a
Commercial Receivable purchased by ACC under this Agreement, such Fees
calculated in accordance with Exhibit A hereto.

                                   26
<PAGE>


                               EXHIBIT A

                            ACC FEE SCHEDULE

    1. The fee earned by ACC for purchasing Commercial Receivables is based
upon the following percentage of the Net Value of the Commercial
Receivables purchased (Base Rate);

    Two and nine point four seven one-hundredths (.0002947) of One Percent
    per day

    The Base Rate is based upon the current Prime rate plus Eight point two
five (8.25%) percent, as published in the Wall Street Journal. At such time
as the Prime rate in increased or decreased as evidenced by the Wall Street
Journal, the discount fee for the fast batch of invoices purchased
subsequent to the increase shall be adjusted accordingly.

                                     27
<PAGE>


                                 EXHIBIT B

                 ACC'S MAXIMUM PURCHASE CEILING - [ADJUSTABLE]
                 PROSPECTIVELY, BY ACC IN ITS SOLE DISCRETION

     Two point Five Million ($2,500,000.00) Dollars


                                    28
<PAGE>


                                 EXHIBIT C

                            Seller INFORMATION

Seller Address for Notices:

    14114 Dallas Parkway, Ste. 220
    Dallas, TX 75040

Address of Seller's Chief Executive Office:

    14114 Dallas Parkway, Ste. 220
    Dallas, TX 75040

Location of Seller's Commercial Receivable File and Records:

    14114 Dallas Parkway, Ste. 220
    Dallas, TX 75040

Name and Address of Seller Bank and the Account Officer:

    Darby Bank & Trust
    602 Mall Blvd.
    Savannah, GA 31406
    Account Officer: Brad Hunnings / Salita Hill


                                    29
<PAGE>


            AMENDMENT TO EXHIBIT A, ACC FEE SCHEDULE ATTACHED TO
           HEALTHCARE RECEIVABLES SALE AGREEMENT ("SALE AGREEMENT")
       DATED NOVEMBER 8, 2001 BY AND BETWEEN PSR NURSES, LTD AND ALAMO
                           CAPITAL CORPORATION

    WHEREAS, PSR NURSES, LTD and Alamo Capital Corporation executed and
entered into a Health Care Receivables Sale Agreement ("Sale Agreement")
dated November 8, 2001 for the consideration and purposes therein stated;

    WHEREAS, PSR NURSES, LTD and Medical Claims Services, Inc. executed and
entered into a Government Medical Claims Servicing Agency Agreement
("Servicing Agreement") dated November 8, 2001 for the consideration and
purposes therein stated;

    WHEREAS, PSR NURSES, LTD and Alamo Capital Corporation desire to amend
the original Exhibit A, ACC Fee Schedule attached to Health Care
Receivables Sale Agreement ("Sale Agreement") dated November 8, 2001 by and
between PSR NURSES, LTD and Alamo Capital Corporation as set forth herein.

    NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements hereinafter contained and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged and confessed,
the parties hereto agree and hereby enter this Amendment to Exhibit A, ACC
Fee Schedule Attached to Health Care Receivables Sale Agreement ("Sale
Agreement") dated November 8, 2001 by and between PSR NURSES, LTD and
Alamo Capital Corporation ("Amendment") and Exhibit A, ACC Fee Schedule
Attached to Health Care Receivables Sale Agreement ("Sale Agreement") shall
be amended as follows:

                                 EXHIBIT A
                             ACC FEE SCHEDULE

    The Fee earned by ACC for purchasing Healthcare Receivables effective
November 8, 2002 on any claims purchased with the dates of service after
November 8, 2002, shall be as follows:

    Two and seven point seven eight one hundredths (.0002778%) Percent per
day

    The fee is based upon the current Prime rate as published in the Wall
Street Journal.  At such time as the Prime rate is increased as evidenced
by the Wall Street Journal, the fee for the first batch of claims purchased
subsequent to the Increase shall be as follows:  For each One quarter of a
point of Prime rate increase, the fee shall be increased Two One-hundredths
of One percent per day.

    Should any term, condition, or provision of the Sale Agreement or
Servicing Agreement be in conflict with any term, condition, or provision
contained in the Amendment, the terms, conditions, and provisions of this
Amendment shall govern and control.  All other provisions contained in the
Sale Agreement and Servicing Agreement shall remain in full force and
effect,

<PAGE>

unless modified or amended herein.  This Amendment along with the
respective Sale Agreement and Servicing Agreement and any previous
amendments and/or addendum agreements to the same two agreements,
constitute the entire agreement between the parties hereto and supersedes
any prior agreements, written or oral, between the parties, other than as
specified herein.
                                        "ACC"
                                        ALAMO CAPITAL CORPORATION

                                        By: /s/  Phil Hooker
                                        Phil Hooker, President

                                        "MCS"
                                        MEDICAL CLAIMS SERVICES, INC.

                                        By: /s/  Phil Hooker
                                        Phil Hooker, President

                                        "SELLER"
                                        PSR NURSES, LTD

                                        By: /s/  William W. Riddle
                                        Bill Riddle,
                                        President of the General Partner

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-14
<SEQUENCE>15
<FILENAME>exhibit_141.txt
<TEXT>
EXHIBIT 14.1










                              CRDENTIA CORP.


                                 CODE OF

                       BUSINESS CONDUCT AND ETHICS



<PAGE>





                            TABLE OF CONTENTS


CRDENTIA CORP. CODE OF BUSINESS CONDUCT AND ETHICS	             2
POLICY STATEMENT	                                             2
APPROVALS AND WAIVERS	                                             3
CONFLICTS OF INTEREST	                                             3
BUSINESS RELATIONSHIPS	                                             3
FAIR COMPETITION	                                             4
GIFTS, GRATUITIES, ENTERTAINMENT AND OTHER CONSIDERATIONS            4
DOING BUSINESS INTERNATIONALLY	                                     4
GOVERNMENT CONTRACTING	                                             5
POLITICAL CONTRIBUTIONS AND LOBBYING	                             6
ACCURACY OF REPORTS, RECORDS AND ACCOUNTS	                     6
GOVERNMENT INVESTIGATIONS	                                     6
REGULATORY COMPLIANCE	                                             7
INSIDER TRADING; COMMUNICATIONS WITH THIRD PARTIES	             7
COMPLIANCE AND REPORTING	                                     8


                                      1
<PAGE>


             CRDENTIA CORP. CODE OF BUSINESS CONDUCT AND ETHICS


POLICY STATEMENT

    It is the policy of Crdentia Corp. (the "Company"or "Crdentia") to
conduct its affairs in accordance with all applicable laws, rules and
regulations of the jurisdictions in which it does business.  This Code of
Business Conduct and Ethics ("Code") applies to the Company's employees,
officers and non-employee directors, including the Company's principal
executive officer, principal financial officer, principal accounting
officer or controller, and persons performing similar functions ("Designated
Executives").  This Code is the Company's "code of ethics" as defined in
Item 406 of Regulation S-K.  This Code is designed to promote:

    - honest and ethical conduct, including the ethical handling of actual
      or apparent conflicts of interest between personal and professional
      relationships;

    - full, fair, accurate, timely and understandable disclosure in the
      reports and documents the Company files with, or submits to, the
      Securities and Exchange Commission and in other public communications
      made by the Company;

    - compliance with applicable governmental laws, rules and regulations;

    - the prompt internal reporting to the appropriate person of violations
      of this Code; and

    - accountability for adherence to this Code.

    Crdentia has established standards for behavior that affects the Company,
and employees, officers and directors must comply with those standards.
The Company promotes ethical behavior and encourages employees to talk to
supervisors, managers, the Crdentia Compliance Team, or other appropriate
personnel when in doubt about the best course of action in a particular
situation.  Non-employee directors are encouraged to talk to the Company's
Chief Executive Officer, President or Chief Financial Officer in such
situations.  Anyone aware of a situation that he or she believes may
violate or lead to a violation of this Code should follow the guidelines
under "Compliance and Reporting" below.

    The Code covers a wide range of business practices and procedures.  It
does not cover every issue that may arise, but it sets out basic principles
to guide you.  Specific Company policies and procedures provide details
pertinent to many of the provisions of the Code.  Many of these policies
and procedures can be found at http://www.crdentia.com.  These policies and
procedures are not a part of the Code or incorporated herein.  Although
there can be no better course of action than to apply common sense and sound
judgment, do not hesitate to use the resources available whenever it is
necessary to seek clarification.

                                   2
<PAGE>

APPROVALS AND WAIVERS

    Certain provisions of this Code require you to act, or refrain from
acting, unless prior approval is received from the appropriate person.
Employees requesting approval pursuant to this Code should request such
approval from the Company's Chief Executive Officer, President or Chief
Financial Officer.  Approvals relating to executive officers and directors
must be obtained from the Company's Board of Directors.  All other
approvals may be granted by the Company's Chief Executive Officer,
President or Chief Financial Officer or their designees.

    Other provisions of this Code require you to act, or refrain from
acting, in a particular manner and do not permit exceptions based on
obtaining an approval.  Waiver of those provisions relating to executive
officers and directors may only be granted by the Company's Board of
Directors and must be promptly disclosed to shareholders.  All other
waivers may be granted by the Company's Chief Executive Officer, President
or Chief Financial Officer or their designees.  Changes in this Code may
only be made by the Board of Directors and must be promptly disclosed to
shareholders.

CONFLICTS OF INTEREST

    A conflict of interest arises when your personal interests interfere
with your ability to act in the best interests of the Company.  Employees
must discharge their responsibilities on the basis of what is in the best
interest of the Company independent of personal consideration or
relationships.  Non-employee directors must discharge their fiduciary
duties as directors of the Company.

    Employees should disclose any potential conflicts of interest to the
Company's Chief Executive Officer, President or Chief Financial Officer or
their designees, who can advise the employee as to whether or not the
Company believes a conflict of interest exists.  An employee should also
disclose potential conflicts of interest involving the employee's spouse,
siblings, parents, in-laws, children and members of the employee's
household.  Non-employee directors may discuss any concerns with the
Company's Chief Executive Officer, President or Chief Financial Officer.

BUSINESS RELATIONSHIPS

    Crdentia seeks to outperform its competition fairly and honesty.  The
Company seeks competitive advantages through superior performance, not
unethical or illegal business practices.  Each employee must endeavor to
deal fairly with the Company's customers, suppliers, competitors and
employees and must not take advantage of them through manipulation,
concealment, abuse of privileged information, misrepresentation of material
facts, or any unfair-dealing practice.

    Our customers are of the utmost importance to us.  Crdentia employees
must always treat customers and potential customers according to the
highest standards of business conduct.

    Crdentia's suppliers - companies and individuals that sell products and
services to Crdentia - are important to our business.  Crdentia employees
should always treat suppliers and potential suppliers in accordance with
the highest standards of business conduct.

                                   3
<PAGE>

FAIR COMPETITION

Fair competition laws, including the U.S. antitrust rules, limit what
Crdentia can do with another company and what Crdentia can do on its own.
Generally, the laws are designed to prohibit agreements or actions that
reduce competition and harm consumers.  You may not enter into agreements
or discussions with competitors that have the effect of fixing or
controlling prices, dividing and allocating markets or territories, or
boycotting suppliers or customers.  U.S. and foreign antitrust laws also
apply to imports and exports.

GIFTS, GRATUITIES, ENTERTAINMENT AND OTHER CONSIDERATIONS

    Use of Company funds or other Company property for illegal, unethical or
otherwise improper purposes is prohibited.  The purpose of business
entertainment and gifts in a commercial setting is to create goodwill and a
sound working relationship, not to gain personal advantage with customers
or suppliers.

    Loans

    Employees may not accept loans from any person or entities having or
seeking business with the Company.  Designated Executives and directors may
not receive loans from the Company, nor may the Company arrange for any
loan.

    Bribes and Kickbacks

    The use of Company funds, facilities or property for any illegal or
unethical purpose is strictly prohibited, provided, however, that certain
facilitating payments discussed in "Doing Business Internationally" may be
permitted.

    - You are not permitted to offer, give or cause others to give, any
      payments or anything of value for the purpose of influencing the
      recipient's business judgment or conduct in dealing with the Company
      other than facilitating payments.

    - You may not solicit or accept a kickback or bribe, in any form, for
      any reason.

DOING BUSINESS INTERNATIONALLY

    Crdentia is committed to the highest business conduct standards
wherever it operates.  Crdentia observes these standards worldwide, even at
the risk of losing business.  While no one can anticipate all the
situations that may present challenges to Crdentia employees doing business
in the worldwide marketplace, the following guidelines always apply:

    - Observe all laws and regulations, both U.S. and non-U.S., that apply
      to business abroad.

    - Paying bribes to government officials is absolutely prohibited, even
      if those bribes are common practice, except for facilitating payments.
      You may not give, promise to give or authorize the giving to a
      foreign official, a foreign political

                                     4
<PAGE>

      party, or official thereof or any candidate for foreign political
      office any money or offer, gift, promise to give or authorize the
      giving of anything of value to influence any act or decision, to
      induce such official, party or candidate to do or omit to do any act
      in violation of the lawful duty of such official, party or candidate,
      or to induce such official, party or candidate to use his or her
      influence with a foreign government or agency to affect or influence
      any act or decision of such foreign government or agency.

    - Do not cooperate with illegal boycotts.

    - Observe all licensing requirements and the requirements of applicable
      import and export control laws.

    - Do not enter into an agreement with an agent or consultant that
      relates to Crdentia's business outside the United States unless it
      has been approved by the Company.

    The laws governing Crdentia's business in foreign countries are
extensive and complex, and may be different from those in the United States.

    Facilitating Payments to Low-Level Non-U.S. Governmental Employees and
Officials for Non-Discretionary Action

    Crdentia is committed to complying with the laws of the countries where
it operates.  In some countries, a very limited category of small payments
to facilitate or expedite routine nondiscretionary governmental actions may
be permitted as exceptions to antibribery laws, including the U.S. Foreign
Corrupt Practices Act ("FCPA").  The requirements pertaining to such
payments are complex.  Crdentia employees engaged in international business
activities must obtain prior approval of the Company's Chief Executive
Officer, President or Chief Financial Officer before making any such
payment.

    These "facilitating payments" to non-U.S. governmental officials are
distinguished from payments made to influence a discretionary decision or
to cause violation of, or an act in conflict with, the interests of an
individual's employer, which are strictly prohibited.

GOVERNMENT CONTRACTING

    Detailed laws and regulations govern virtually every aspect of doing
business with the U.S. government and its agencies.  Activities that might
be permitted when working with the private sector may be improper or even
illegal when a national or local government is the customer.

    Crdentia employees who deal with government representatives are
responsible for knowing and obeying the laws and regulations applicable to
doing business with the U.S. government.

                                   5
<PAGE>

POLITICAL CONTRIBUTIONS AND LOBBYING

    No political contributions are to be made using Crdentia funds or
assets, or the funds or assets of any Crdentia subsidiary, to any political
party, political campaign, political candidate or public official in the
United States or any foreign country, unless the contribution is lawful and
expressly authorized.  In addition, you may not make a political
contribution on behalf of Crdentia or its subsidiaries, or with the
appearance that such contribution is being made on behalf of Crdentia or
its subsidiaries, unless expressly authorized.  A "contribution" is any
direct or indirect payment, distribution, loan, advance, deposit, or gift
of money, services or anything of value in connection with an election or
to an organization or group formed to support or defend a referendum or
ballot issue.

    Employees must obtain approval to hire outside counsel or a public
affairs firm to contact government officials regarding legislation,
regulatory policy, or rule making.  This includes grassroots lobbying
contacts.

ACCURACY OF REPORTS, RECORDS AND ACCOUNTS

    You are responsible for the accuracy of your records, time sheets and
reports.  Accurate information is essential to Crdentia's ability to meet
legal and regulatory obligations and to compete effectively.  The records
and books of account of Crdentia must meet the highest standards and
accurately reflect the true nature of the transactions they record.
Destruction of any records, books of account or other documents except in
accordance with Crdentia's document retention policy is strictly prohibited.

    You must not create false or misleading documents or accounting,
financial or electronic records for any purpose relating to Crdentia, and
no one may direct an employee to do so.  For example, expense reports must
accurately document expenses actually incurred in accordance with Crdentia
policies.  You must not obtain or create "false" invoices or other
misleading documentation or invent or use fictitious entities, sales,
purchases, services, loans or other financial arrangements for any purpose
relating to Crdentia.  Employees are also responsible for accurately
reporting time worked.

    No undisclosed or unrecorded account or fund may be established for any
purpose.  No false or misleading entries may be made in the Company's books
or records for any reason.  No disbursement of corporate funds or other
corporate property may be made without adequate supporting documentation or
for any purpose other than as described in the documents.  All employees
must comply with generally accepted accounting principles and the Company's
internal controls at all times.

GOVERNMENT INVESTIGATIONS

    You must promptly notify counsel of any government investigation or
inquiries from government agencies concerning Crdentia.  You may not
destroy any record, books of account, or other documents relating to
Crdentia except in accordance with the Company's document retention policy.
If you are aware of a government investigation or inquiry you may not
destroy any record, books of account, or other documents relating to
Crdentia unless advised by the

                                    6
<PAGE>

Company's Chief Executive Officer, President or Chief Financial Officer or
their designees, that you may continue to follow the Company's normal
document retention policy.

    You must not obstruct the collection of information, data or records
relating to Crdentia.  The Company provides information to the government
that it is entitled to during an inspection, investigation, or request for
information.  You must not lie to government investigators or making
misleading statements in any investigation relating to Crdentia.  You must
not attempt to cause any employee to fail to provide accurate information
to government investigators.

REGULATORY COMPLIANCE

    The Company operates in a highly regulated environment.  The agencies
that regulate its business include the U.S. Department of Health and Human
Services, plus many other federal, state and local agencies.  The Company
and its employees must comply with the regulatory requirements of these
agencies.  Employees are expected to take an active role by being
knowledgeable about all applicable laws and regulations, attending
trainings and requesting information.  Employees are required to
immediately report regulatory violations, suspected regulatory violations,
or potentially harmful or dangerous conditions to a supervisor.


INSIDER TRADING; COMMUNICATIONS WITH THIRD PARTIES

    Employees, officers and directors who have access to the Company's
confidential information are not permitted to use or share that information
for stock trading purposes or for any other purpose except the conduct of
our business.

    Insider Trading

    Inside information is material information about a publicly traded
company that is not known by the public.  Information is deemed "material"
if it could affect the market price of a security or if a reasonable
investor would attach importance to the information in deciding whether to
buy, sell or hold a security.  Inside information typically relates to
financial conditions, such as progress toward achieving revenue and
earnings targets or projections of future earnings or losses of the Company.
Inside information also includes changes in strategy regarding a proposed
merger, acquisition or tender offer, new products or services, contract
awards and other similar information.  Inside information is not limited
to information about Crdentia.  It also includes material non-public
information about others, including the Company's customers, suppliers, and
competitors.

    Insider trading is prohibited by law.  It occurs when an individual
with material, non-public information trades securities or communicates
such information to others who trade.  The person who trades or "tips"
information violates the law if he or she has a duty or relationship of
trust and confidence not to use the information.

    Trading or helping others trade while aware of inside information has
serious legal consequences, even if the Insider does not receive any
personal financial benefit.  Insiders may also have an obligation to take
appropriate steps to prevent insider trading by others.

                                  7
<PAGE>

    Confidential Information

    You must maintain the confidentiality of information entrusted to you
by the Company or its customers, except when disclosure is authorized or
legally mandated.  Confidential information includes all non-public
information, including information that might be of use to competitors or
harmful to the Company or its customers if disclosed.


COMPLIANCE AND REPORTING

    Compliance

    Any employee who violates the provisions of this Code will be subject
to disciplinary action, up to and including termination.  Willful disregard
of criminal statutes underlying this Code may require the Company to refer
such violation for criminal prosecution or civil action.

    Reporting Procedures and Other Inquiries

    Questions regarding the policies in this Code may be directed to
Crdentia's Compliance Team.  Managers and supervisors are also resources
who can provide timely advice and guidance to employees on ethics and
compliance concerns.  Any employee having knowledge of, or questions or
concerns about, an actual or possible violation of the provisions of this
Code is encouraged to promptly report the matter to his or her immediate
supervisor or to a member of the Compliance Team.  The names and contact
information for the members of the Compliance Team are set out below.
Directors are encouraged to discuss any issues or concerns with the
Company's Chief Executive Officer, President or Chief Financial Officer.

    If you have concerns relating to Crdentia's accounting, internal
controls or auditing matters, you may also confidentially, and anonymously
if you desire, submit the information in writing to the Company's Audit
Committee of the Directors [at                      .]
                               ---------------------

    When submitting concerns, you are asked to provide as much detailed
information as possible.  Providing detailed, rather than general,
information will assist us in effectively investigating complaints.  This
is particularly important when you submit a complaint on an anonymous basis,
since we will be unable to contact you with requests for additional
information or clarification.

    We are providing these anonymous reporting procedures so that you may
disclose genuine concerns without feeling threatened.  Employees who choose
to identify themselves when submitting a report may be contacted in order
to gain additional information.

    All conversations, calls and reports made under this policy in good
faith will be taken seriously.  Any allegations that are knowingly false or
 without a reasonable belief in the truth and accuracy of such information
will be viewed as a serious disciplinary offense.

                                    8
<PAGE>

    Policy Prohibiting Unlawful Retaliation or Discrimination

    Neither the Company nor any of its employees may discharge, demote,
suspend, threaten, harass or in any manner discriminate against any
employee in the terms and conditions of employment based upon any lawful
actions of such employee who in good faith:

    - provides information or assists in an investigation relating
      regarding any conduct which the employee reasonably believes
      constitutes a violation of Fraud Laws (as defined below); or

    - files, testifies participates or otherwise assists in a proceeding
      that is filed or about to be filed (with any knowledge of the Company)
      relating to an alleged violation of a Fraud Law.

    This policy applies in any instance where such information or
assistance provided to, or the investigation is conducted by, a federal
regulatory or law enforcement agency, any member or committee of Congress,
or any person with supervisory authority over the employee or the authority
to investigate misconduct relating to potential securities violations by
the Company or its employees.  For purposes of this policy, a "Fraud Law"
is a violation of federal criminal law involving:

    - securities fraud, mail fraud, bank fraud or wire, radio or television
      fraud;

    - violations of SEC rules or regulations; or

    - violations of any federal law relating to fraud against shareholders.

    The Crdentia Compliance Team:

    James Durham, Chief Executive Officer

    Pamela Atherton, President

    William Leftwich, Chief Financial Officer

    This document is not an employment contract between Crdentia and its
employees, nor does it modify their employment relationship with the
Company.

    This Code is intended to clarify your existing obligation for proper
conduct.  The standards and the supporting policies and procedures may
change from time to time in the Company's discretion.  You are responsible
for knowing and complying with the current laws, regulations, standards,
policies and procedures that apply to the Company's work.  The most current
version of this document can be found at www.crdentia.com.

                                   9
<PAGE>

                            ACKNOWLEDGEMENT

    I acknowledge that I have received and read a copy of the Crdentia Corp.
Code of Business Conduct and Ethics (the "Code").  I understand that I am
responsible for knowing and complying with the policies set forth in the
Code during my employment with the Company.

    I also acknowledge my responsibility to report any violation of this
Code to my supervisor or to a member of the Compliance Team.

    I further understand that the policies contained in the Code are not
intended to create any contractual rights or obligations, express or
implied.  I also understand that, consistent with applicable law, the
Company has the right to amend, interpret, modify or withdraw any of the
provisions of the Code at any time in its sole discretion, with or without
notice.

    I understand and agree that my relationship with the Company is "at-
will," which means that my employment is for no definite period and may be
terminated by me or by the Company at any time and for any reason, with or
without cause or advance notice.  I also understand that the Company may
demote or discipline me, or otherwise alter the terms of my employment, at
any time with or without cause or advance notice.

    Finally, I understand and agree that the terms of this Acknowledgement,
and my at-will relationship with the Company, may not be modified or
superseded except by a written agreement signed by an officer of the
Company; that no other employee or representative of the  Company has the
authority to enter into any such agreement; and that any agreement
inconsistent with this Acknowledgement or agreeing to employ me for a
specified term will be unenforceable unless in writing and signed by an
officer of the Company.

Employee Name:
              -------------------------------------------------------------
              (please print)

---------------------------------------------------------------------------
         Signature	                                  Date

Title:  	                 Dept.:
      --------------------------        -----------------------------------

Please return this completed form to_______________________________ within
one week from the date of your review of these documents.  Thank you!

                                     10

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-22
<SEQUENCE>16
<FILENAME>exhibit_221.txt
<TEXT>
Exhibit 22.1

                      Subsidiaries of the Registrant
                      ------------------------------

Name	                            State of Incorporation
-----                               -----------------------

Baker Anderson & Christie, Inc.	    California
Nurses Network, Inc.	            California
New Age Staffing, Inc.	            Delaware
PSR Nurse Recruiting, Inc.	    Texas
PSR Nurses Holding Corp.	    Texas


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31
<SEQUENCE>17
<FILENAME>exhibit_311.txt
<TEXT>
EXHIBIT 31.1

             CERTIFICATION PURSUANT TO RULE 13a-14 AND 15d-14
             ------------------------------------------------
           UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
           -----------------------------------------------------

    I, James D. Durham, Chief Executive Officer and Chairman of Board of
Crdentia Corp., certify that:

    1. I have reviewed this annual report on Form 10-KSB of Crdentia Corp.;

    2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this report;

    3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects
the financial condition, results of operations and cash flows of the
Registrant as of, and for, the periods presented in this report;

    4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:


    (a) designed such disclosure controls and procedures, or caused such
        disclosure controls and procedure to be designed under our
        supervision,  to ensure that material information relating to the
        registrant, including its consolidated subsidiaries, is made known
        to us by others within those entities, particularly during the
        period in which this annual report is being prepared;

    (b) evaluated the effectiveness of the registrant's disclosure controls
        and procedures and presented in this report our conclusions about
        the effectiveness of the disclosure controls and procedures, as of
        the end of the period covered by this report based on such
        evaluation; and

    (c) disclosed in this report any change in the registrant's internal
        control over financial reporting that occurred during the
        registrant's most recent fiscal quarter (the registrant's fourth
        fiscal quarter in the case of an annual report) that has materially
        affected, or is reasonably likely to materially affect, the
        registrant's internal control over financial reporting; and;

    5. The registrant's other certifying officer and I have disclosed, based
on our most recent evaluation of internal control over financial reporting,
to the registrant's auditors and the audit committee of the registrant's
board of directors (or persons performing the equivalent function):

    (a) all significant deficiencies and material weaknesses in the design
        or operation of internal control over financial reporting which are
        reasonably likely to adversely affect the registrant's ability to
        record, process, summarize and report financial information; and

    (b) any fraud, whether or not material, that involves management or
        other employees who have a significant role in the registrant's
        internal controls over financial reporting.

Dated: March 30, 2004                 By: /s/ James D. Durham
                                          -------------------------------
                                              James D. Durham
                                              Chief Executive Officer and
                                              Chairman of the Board


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31
<SEQUENCE>18
<FILENAME>exhibit_312.txt
<TEXT>
EXHIBIT 31.2

             CERTIFICATION PURSUANT TO RULE 13a-14 AND 15d-14
             ------------------------------------------------
          UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
          -----------------------------------------------------

I, William S. Leftwich, Chief Financial Officer and Secretary of Crdentia
Corp., certify that:

    1. I have reviewed this annual report on Form 10-KSB of Crdentia Corp.;

    2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this report;

    3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the Registrant as of, and for, the periods presented in this report;

    4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

    (a) designed such disclosure controls and procedures, or caused such
        disclosure controls and procedure to be designed under our
        supervision,  to ensure that material information relating to the
        registrant, including its consolidated subsidiaries, is made known
        to us by others within those entities, particularly during the
        period in which this annual report is being prepared;

    (b) evaluated the effectiveness of the registrant's disclosure controls
        and procedures and presented in this report our conclusions about
        the effectiveness of the disclosure controls and procedures, as of
        the end of the period covered by this report based on such
        evaluation; and

    (c) disclosed in this report any change in the registrant's internal
        control over financial reporting that occurred during the
        registrant's most recent fiscal quarter (the registrant's fourth
        fiscal quarter in the case of an annual report) that has materially
        affected, or is reasonably likely to materially affect, the
        registrant's internal control over financial reporting; and;

    5. The registrant's other certifying officer and I have disclosed,
based on our most recent evaluation of internal control over financial
reporting, to the registrant's auditors and the audit committee of the
registrant's board of directors (or persons performing the equivalent
function):

    (a) all significant deficiencies and material weaknesses in the design
        or operation of internal control over financial reporting which
        are reasonably likely to adversely affect the registrant's ability
        to record, process, summarize and report financial information; and

    (b) any fraud, whether or not material, that involves management or
        other employees who have a significant role in the registrant's
        internal controls over financial reporting.

Dated: March 30, 2004                 By: /s/  William S. Leftwich
                                          -------------------------------
                                               William S. Leftwich
                                               Chief Financial Officer
                                               and Secretary

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32
<SEQUENCE>19
<FILENAME>exhibit_32.txt
<TEXT>
EXHIBITS 32.1 and 32.2

                              CERTIFICATE PURSUANT TO
                              -----------------------
                              18 U.S.C. SECTION 1350,
                              -----------------------
                              AS ADOPTED PURSUANT TO
                              -----------------------
                    SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
                    ---------------------------------------------

    In connection with the Annual Report of Crdentia Corp. (the "Company")
on Form 10-KSB for the year ended December 31, 2003, as filed with the
Securities and Exchange Commission (the "Report"), each of the undersigned,
in the capacities and on the dates indicated below, hereby certifies
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002, that:

    1. the Report fully complies with the requirements of Section 13(a) or
       15(d), as applicable, of the Securities Exchange Act of 1934; and

    2. the information contained in the Report fairly presents, in all
       material respects, the financial condition and result of operations
       of the Company at the dates and for the period indicated.

This Certificate has not been, and shall not be deemed, "filed" with the
Securities and Exchange Commission.


    Dated: March 30, 2004                By:  /s/ James D. Durham
                                            -------------------------------
                                             James D. Durham
                                             Chief Executive Officer and
                                             Chairman of the Board


    Dated: March 30, 2004                By:  /s/ William S. Leftwich
                                            -------------------------------
                                             William S. Leftwich
                                             Chief Financial Officer and
                                             Secretary


</TEXT>
</DOCUMENT>
</SUBMISSION>
