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<PAGE>
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

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

                                    FORM 8-K

                                 CURRENT REPORT
                       PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

        Date of Report (Date of earliest event reported): AUGUST 31, 2004


                                 CRDENTIA CORP.
                                 --------------
             (Exact name of registrant as specified in its charter)

           DELAWARE                                             76-0585701
           --------                                             ----------
(State or Other Jurisdiction of                              (I.R.S. Employer
        Incorporation)                                    Identification Number)

                                    000-31152
                                    ---------
                                   (Commission
                                  File Number)


                         14114 DALLAS PARKWAY, SUITE 600
                               DALLAS, TEXAS 75254
               (Address of Principal Executive Offices) (Zip Code)

                                 (972) 850-0780
              (Registrant's telephone number, including area code)


         (Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (SEE General Instruction A.2. below):

|_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)

|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)

|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))

|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))




<PAGE>


ITEM 1.01     ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.

LOAN AND SECURITY AGREEMENT

         On August 31, 2004, Crdentia Corp. (the "Company"), Baker Anderson
Christie, Inc. ("Baker"), New Age Staffing, Inc. ("New Age"), Nurses Network,
Inc. ("Nurses"), PSR Nurses, Ltd. ("PSR, Ltd."), PSR Nurse Recruiting, Inc.
("PSR Recruiting"), PSR Nurses Holdings Corp. ("PSR Holdings"), CRDE Corp.
("CRDE"), AHHC Acquisition Corporation ("AHHC"), CPS Acquisition Corporation
("CPS"), and Bridge Opportunity Finance, LLC ("Bridge") entered into a Loan and
Security Agreement (the "Loan Agreement"). Baker, New Age, Nurses, PSR
Recruiting, PSR Holdings and CRDE are wholly-owned subsidiaries of the Company.
PSR Recruiting is the sole general partner of PSR Ltd. and PSR Nurses is the
sole limited partner of PSR Ltd. AHHC and CPS are wholly-owned subsidiaries of
CRDE.

         Pursuant to the Loan Agreement, the Company obtained a term loan credit
facility in the amount of up to $10,000,000 from Bridge. The Company may obtain
loans under the Loan Agreement to fund Permitted Acquisitions (as defined in the
Loan Agreement). Any loans obtained under the Loan Agreement are due and payable
in full on August 31, 2007 and bear interest at the rate of fifteen and
one-quarter percent (15.25%) per annum. On August 31, 2004 the Company obtained
a loan under the Loan Agreement in an amount equal to approximately $2,700,000
(the "Loan").

         The Loan Agreement imposes various restrictions on the activities of
the Company without the consent of Bridge, including a prohibition on
fundamental changes to the Company or its direct or indirect subsidiaries
(including certain consolidations, mergers and sales and transfers of assets,
and limitations on the ability of the Company or any of its direct or indirect
subsidiaries to grant liens upon their property or assets). In addition, under
the Loan Agreement the Company must meet certain continuing net worth, EBITDA
(as defined in the Loan Agreement) and debt service coverage requirements. The
Loan Agreement includes events of default (with grace periods, as applicable)
and provides that, upon the occurrence of certain events of default, payment of
all amounts payable under the Loan Agreement, including the principal amount of,
and accrued interest on, the Loan may be accelerated. In addition, upon the
occurrence of certain insolvency or bankruptcy related events of default, all
amounts payable under the Loan Agreement, including the principal amount of, and
accrued interest on, the Loan shall automatically become immediately due and
payable.

         The description of the Loan Agreement and Loan set forth herein is
qualified in its entirety by reference to the Loan Agreement filed with this
report on Form 8-K as Exhibit 10.1

         On August 31, 2004, the Company issued a press release regarding the
Loan Agreement which is attached as Exhibit 99.1 to this report on Form 8-K.

WARRANT AGREEMENT

         In addition to the Loan Agreement, as described in further detail below
under ITEM 3.02, UNREGISTERED SALES OF EQUITY SECURITIES, on August 31, 2004 the
Company entered a warrant agreement (the "Warrant Agreement") with Bridge,
pursuant to which the Company granted to Bridge a warrant to purchase 905,758
shares of its Common Stock (the "Bridge Warrant").

ISSUANCE OF SERIES C PREFERRED STOCK AND WARRANTS TO PURCHASE SERIES C PREFERRED
STOCK

         As described in further detail below under ITEM 3.02, UNREGISTERED
SALES OF EQUITY SECURITIES, on August 31, 2004 the Company issued 35,834 shares
of Series C Convertible Preferred Stock (the "Series C Shares") pursuant to
certain Subscription Agreements. In connection with the Company's issuance of
the Series C Shares, the purchasers of the Series C Shares were granted warrants
(the "Series C Warrants") to purchase an aggregate of 89,585 Series C Shares.
The disclosures made below regarding the Series C Shares and the Series C
Warrants are incorporated herein to the extent applicable.



<PAGE>

ITEM 2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN
OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT.

         As described in further detail above under ITEM 1.01, ENTRY INTO A
MATERIAL DEFINITIVE AGREEMENT, on August 31, 2004, the Company entered the Loan
Agreement with Bridge and obtained the Loan. The disclosures made above
regarding the Loan Agreement and the Loan are incorporated herein to the extent
applicable.

ITEM 3.02     UNREGISTERED SALES OF EQUITY SECURITIES.

SERIES C PREFERRED STOCK

         On August 31, 2004, the Company issued 35,834 Series C Shares at a cash
price per Series C Share of $60.00 to certain investors, including MedCap
Partners LP ("MedCap") and James D. Durham, the Company's Chairman and Chief
Executive Officer. As explained in greater detail below, such Series C Shares
issued are convertible into 3,583,400 shares of the Company's Common Stock,
which is approximately 9% of the Company's fully-diluted issued and outstanding
common stock.

         The holders of the Series C Shares will be entitled to receive a
dividend on each of September 30, 2004, December 31, 2004, March 31, 2005, June
30, 2005, September 30, 2005 and December 31, 2005 in an amount equal to 1.5
shares of Common Stock for each outstanding Series C Share held by them. In the
event of any liquidation or winding up of the Company, the holders of the Series
C Shares will be entitled to receive in preference to the holders of the
Company's Series A Preferred Stock, Series B Preferred Stock, Series B-1
Preferred Stock and Common Stock an amount equal to five times (5x) their
initial purchase price plus any declared but unpaid dividends and any remaining
liquidation proceeds will thereafter be distributed on a pro rata basis to the
holders of the Company's Common Stock and any other series of Preferred Stock
expressly entitled to participate in such distribution. Unless previously
voluntarily converted prior to such time, the Series C Shares will be
automatically converted into Common Stock at an initial conversion ratio of one
hundred shares of Common Stock for each Series C Share upon the earlier of (i)
the closing of an underwritten public offering of the Company's Common Stock
pursuant to a registration statement under the Securities Act of 1933, as
amended, with aggregate net proceeds of at least $25 million, or (ii) the date
specified by written consent or agreement of the holders of a majority of the
then outstanding Series C Shares.

         The description of the foregoing rights, preferences and privileges of
the Series C Shares is qualified in its entirety by the Certificate of
Designations, Preferences and Rights of Series C Preferred Stock (the "Series C
Certificate") filed with the Secretary of State of the State of Delaware on
August 31, 2004 and filed as Exhibit 4.1 to this report on Form 8-K. In
addition, the holders of the Series C Shares will be entitled to the
registration rights set forth in the Amended and Restated Registration Rights
Agreement dated August 31, 2004 by and among the Company and the investors
listed on Schedule A thereto, a copy of which is filed as Exhibit 4.2 to this
report on Form 8-K.

         In connection with the Company's issuance of the Series C Shares, the
purchasers of Series C Shares were granted the Series C Warrants. The Series C
Warrants are exercisable for a period of five years at a price per Series C
Share of $60.00. The Series C Shares issuable upon exercise of the Series C
Warrants are convertible into 8,958,500 shares of the Company's common stock,
which is approximately 23% of the Company's fully-diluted issued and outstanding
common stock. The foregoing description of the Series C Warrants is qualified in
its entirety by the form of Warrant to Purchase Shares of Series C Preferred
Stock of Crdentia Corp. filed as Exhibit 4.3 to this report on Form 8-K.

WARRANT TO PURCHASE SERIES B-1 PREFERRED STOCK

         On August 31, 2004, the Company granted a warrant to purchase up to
6,000 shares of Series B-1 Preferred Stock to MedCap (the "MedCap Warrant") to
settle a dispute regarding certain representations and warranties made in
connection with the Company's Series B Preferred Stock financing, which was
consummated in June 2004. The MedCap Warrant is exercisable for a period of five
years at a price of $60.00 per share of Series B-1 Preferred Stock. The rights,
preferences and privileges of the Series B-1 Preferred Stock are described in
the report on Form 8-K filed by the Company on August 24, 2004. The foregoing
description of the MedCap Warrant is qualified in its entirety by the form of
Warrant to Purchase Shares of Series B-1 Preferred Stock of Crdentia Corp. filed
as Exhibit 4.4 to this report on Form 8-K.


<PAGE>

WARRANT AGREEMENT AND BRIDGE WARRANT

         On August 31, 2004, the Company entered the Warrant Agreement with
Bridge, pursuant to which the Company granted to Bridge the Bridge Warrant. The
Bridge Warrant is exercisable for a period of ten years at a price per share of
$3.15. Under the Warrant Agreement, Bridge is entitled to certain anti-dilution
adjustments and registration rights with respect to the shares of the Company's
Common Stock issuable upon exercise of the Bridge Warrant. The foregoing
description of the Warrant Agreement and the Bridge Warrant is qualified in its
entirety by the Warrant Agreement and Bridge Warrant filed as Exhibits 4.5 and
4.6, respectively, to this report on Form 8-K.

EXEMPTION FROM REGISTRATION

         The Series C Shares, the Series C Warrants, the MedCap Warrant and the
Bridge Warrant (collectively, with any shares of capital stock issuable upon
conversion or exercise of the Series C Shares, the Series C Warrants, the MedCap
Warrant and the Bridge Warrant, as the case may be, the "Securities") were
issued pursuant to an exemption from registration provided by Section 4(2) of
the Securities Act of 1933, as amended and/or Regulation D promulgated under the
Securities Act of 1933. The issuances were made without general solicitation or
advertising. Each purchaser of Securities represented to the Company that such
individual or entity is an accredited investor as defined in Rule 501(a) of the
Securities Act of 1933, that the Securities were being acquired for investment
and that such purchaser had access to all relevant information necessary to
evaluate the investment.

ITEM 3.03     MATERIAL MODIFICATION TO RIGHTS OF SECURITY HOLDERS.

         As described in further detail above under ITEM 1.01, ENTRY INTO A
MATERIAL DEFINITIVE AGREEMENT, on August 31, 2004, the Company entered the Loan
Agreement with Bridge. The Loan Agreement restricts the Company's ability to
declare or pay any dividend or other distribution (whether in cash or in kind)
on any class of its capital stock, except for the payment of stock dividends to
the holders of the Company's Series A Preferred Stock, Series B Preferred Stock,
Series B-1 Preferred Stock and Series C Preferred Stock. The description of the
Loan Agreement set forth herein is qualified in its entirety by reference to the
Loan Agreement filed with this report on Form 8-K as Exhibit 10.1

ITEM 5.03     AMENDMENTS TO ARTICLES OF INCORPORATION OR BYLAWS; CHANGE IN
              FISCAL YEAR.

         In connection with the issuance of Series C Shares described in further
detail above under ITEM 3.02, UNREGISTERED SALES OF EQUITY SECURITIES, on August
31, 2004 the Company filed the Series C Certificate with the Secretary of State
of the State of Delaware.

ITEM 9.01     FINANCIAL STATEMENTS AND EXHIBITS.

         (c)      EXHIBITS.

         EXHIBIT NO.       DESCRIPTION
         -----------       -----------

         4.1               Certificate of Designations, Preferences and Rights
                           of Series C Preferred Stock of Crdentia Corp.

         4.2               Amended and Restated Registration Rights Agreement
                           dated August 31, 2004 by and among Crdentia Corp. and
                           the investors listed on Schedule A thereto.

         4.3               Warrant to Purchase Shares of Series C Preferred
                           Stock of Crdentia Corp. granted to the holders listed
                           on Schedule A thereto.

         4.4               Warrant to Purchase Shares of Series B-1 Preferred
                           Stock of Crdentia Corp. granted to MedCap Partners
                           L.P.

         4.5               Warrant Agreement dated August 31, 2004 by and among
                           Crdentia Corp. and Bridge Opportunity Finance, LLC.

         4.6               Warrant to Purchase Shares of Common Stock of
                           Crdentia Corp. granted to Bridge Opportunity Finance,
                           LLC.

         10.1              Loan and Security Agreement dated August 31, 2004 by
                           and among Crdentia Corp., Baker Anderson Christie,
                           Inc., Nurses Network, Inc., New Age Staffing, Inc.,
                           PSR Nurses, Ltd., PSR Nurse Recruiting, Inc., PSR
                           Nurses Holdings Corp., CRDE Corp., AHHC Acquisition
                           Corporation, CPS Acquisition Corporation and Bridge
                           Opportunity Finance, LLC.

         99.1              Press Release of Crdentia Corp. dated August 31,
                           2004.


<PAGE>



                                   SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.


                                             CRDENTIA CORP.


September 7, 2004                            By: /s/ James D. Durham
                                                 -------------------------------
                                                 James D. Durham
                                                 Chief Executive Officer



<PAGE>

                                  EXHIBIT INDEX



EXHIBIT NO.       DESCRIPTION
-----------       -----------

4.1               Certificate of Designations, Preferences and Rights of Series
                  C Preferred Stock of Crdentia Corp.

4.2               Amended and Restated Registration Rights Agreement dated
                  August 31, 2004 by and among Crdentia Corp. and the investors
                  listed on Schedule A thereto.

4.3               Warrant to Purchase Shares of Series C Preferred Stock of
                  Crdentia Corp. granted to the holders listed on Schedule A
                  thereto.

4.4               Warrant to Purchase Shares of Series B-1 Preferred Stock of
                  Crdentia Corp. granted to MedCap Partners L.P.

4.5               Warrant Agreement dated August 31, 2004 by and among Crdentia
                  Corp. and Bridge Opportunity Finance, LLC.

4.6               Warrant to Purchase Shares of Common Stock of Crdentia Corp.
                  granted to Bridge Opportunity Finance, LLC.

10.1              Loan and Security Agreement dated August 31, 2004 by and among
                  Crdentia Corp., Baker Anderson Christie, Inc., Nurses Network,
                  Inc., New Age Staffing, Inc., PSR Nurses, Ltd., PSR Nurse
                  Recruiting, Inc., PSR Nurses Holdings Corp., CRDE Corp., AHHC
                  Acquisition Corporation, CPS Acquisition Corporation and
                  Bridge Opportunity Finance, LLC.

99.1              Press release of Crdentia Corp. dated August 31, 2004.




</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.1
<SEQUENCE>2
<FILENAME>crdentia_ex4-1.txt
<TEXT>
<PAGE>

                                                                     EXHIBIT 4.1



               CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS

                                       OF

                            SERIES C PREFERRED STOCK

                                       OF

                                 CRDENTIA CORP.

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

                             Pursuant to Section 151
             of the General Corporation Law of the State of Delaware

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


         Crdentia Corp. (the "CORPORATION"), a corporation organized and
existing under the General Corporation Law of the State of Delaware (the
"DGCL"), does hereby certify that pursuant to the provisions of Section 151 of
the DGCL, the Board of Directors of the Corporation, by an action by unanimous
written consent dated as of August 26, 2004, adopted the following resolution,
which resolution remains in full force and effect as of the date hereof:

         WHEREAS, the Board of Directors of the Corporation is authorized,
within the limitations and restrictions stated in the Corporation's Amended and
Restated Certificate of Incorporation (the "CHARTER"), to fix by resolution or
resolutions the designation of each class or series of Preferred Stock (the
"PREFERRED Stock") and the voting powers, and any designations, preferences, and
relative, participating, optional or other special rights of any such class or
series of Preferred Stock, as well as such other provisions with regard to
redemption, dividends, conversion or exchange, and any qualifications or
restrictions thereof or such other subjects or matters as shall be stated and
expressed in the resolution or resolutions providing for the issue of such stock
adopted by the Board of Directors; and

         WHEREAS, it is the desire of the Board of Directors of the Corporation,
pursuant to such authority, to authorize and fix the terms of the series of
Preferred Stock designated as Series C Preferred Stock (the "SERIES C PREFERRED
STOCK").

         NOW, THEREFORE, BE IT RESOLVED, that the terms and provisions of such
series and all other right or preferences granted to or imposed upon such series
or the holders thereof are as herein set forth:

         Section 1. DESIGNATION AND AMOUNT. The shares of such series shall be
designated as "Series C Preferred Stock" (the "SERIES C PREFERRED STOCK") and
the number of shares constituting the Series C Preferred Stock shall be One
Hundred Seventy-Five Thousand (175,000), $0.0001 par value. Such number may be
increased or decreased by resolution of the Board of Directors of the
Corporation; provided, however, that no decrease shall reduce the number of
shares of Series C Preferred Stock to a number less than the number of shares
then outstanding plus the number of shares reserved for issuance upon the
exercise of outstanding options, rights or warrants or upon the conversion of
any outstanding securities issued by the Corporation convertible or exercisable
into Series C Preferred Stock.


<PAGE>

         Section 2. DIVIDENDS AND DISTRIBUTIONS. Subject to the rights of the
holders of any shares of any series of Preferred Stock (or any similar stock)
expressly ranking senior to, or PARI PASSU with, the Series C Preferred Stock
with respect to dividends, each holder of a share of Series C Preferred Stock,
in preference to the holders of shares of Common Stock, par value $0.0001 per
share (the "COMMON STOCK"), of the Corporation, and of any other junior stock,
shall be entitled to receive, when declared by the Board of Directors out of
funds legally available for the purpose, a dividend of 1.5 shares of Common
Stock (subject to adjustment as described below) on each of September 30, 2004,
December 31, 2004, March 31, 2005, June 30, 2005, September 30, 2005 and
December 31, 2005 (each, a "DESIGNATED DIVIDEND DATE"). In the event of an
automatic conversion of the Series C Preferred Stock pursuant to Section 4(b)
below prior to the next scheduled Designated Dividend Date, if any, the Company
shall immediately prior to such automatic conversion pay a dividend on each
share of Series C Preferred Stock of 1.5 shares of Common Stock (subject to
adjustment as described below). In addition, if any cash dividend is declared on
shares of Common Stock, a dividend shall be paid out of legally available funds
on each share of Series C Preferred Stock equal to the consideration that each
such share would have received had such share been converted into Common Stock
immediately prior to the record date fixed for such dividend. The dividend of
1.5 shares of Common Stock described herein shall be (i) increased or decreased
in proportion to the increase or decrease in the Conversion Ratio (as defined in
Section 4(a)) effected pursuant to Sections 4(d)(iii) or (iv) and (ii) adjusted
for stock splits, dividends, recapitalizations and the like of the Series C
Preferred Stock.

         Section 3. LIQUIDATION PREFERENCE.

                  (a) Upon any voluntary or involuntary liquidation, dissolution
or winding up of the affairs of the Corporation, the holder of each share of the
Series C Preferred Stock then outstanding shall be entitled to be paid out of
the assets of the Corporation available for distribution to its stockholders,
prior to and in preference to any distribution of any assets of the Corporation
to the holders of the Common Stock, Series A Preferred Stock, Series B Preferred
Stock, Series B-1 Preferred Stock or any other junior stock by reason of their
ownership thereof, an amount equal to the sum of (A) (i) 5.0 times (ii) $60.00
(as adjusted for stock splits, stock dividends, recapitalizations and the like
of the Series C Preferred Stock) for each outstanding share of Series C
Preferred Stock, plus (B) declared but unpaid dividends on such share. If the
assets of the Corporation are not sufficient to pay in full the payments payable
to the holders of outstanding shares of Series C Preferred Stock upon the
liquidation, dissolution or winding up of the affairs of the Corporation, then
the holders of all such shares shall share ratably with all other holders of
shares of Series C Preferred Stock in such distribution of assets in proportion
to the Liquidation Preference of the respective shares.



<PAGE>

                  (b) Upon completion of the distribution required by subsection
(a) of this Section 3 and any other distribution that may be required with
respect to series of Preferred Stock that may from time to time come into
existence, all of the remaining assets of this Corporation available for
distribution to stockholders shall be distributed among the holders of Common
Stock and any other series of Preferred Stock expressly entitled to participate,
pro rata based on the number of shares of Common Stock held by each.

                  (c) The merger, consolidation or acquisition of the
Corporation into or with or by another entity or person which results in the
exchange of outstanding shares of the Corporation for securities or other
consideration issued or paid or caused to be issued or paid by such other person
or entity or affiliate of such entity (except if such merger, consolidation or
acquisition does not result in the transfer of more than fifty percent (50%) of
the voting securities of the Corporation's stock or in which the holders of the
voting securities of the Corporation immediately prior to the transaction
continue to hold not less than 50% of the voting securities of the resulting
entity after the transaction) or the sale of all or substantially all the assets
of the Corporation shall be deemed to be a liquidation, dissolution or winding
up of the Corporation for purposes of this section. The amount deemed
distributed to the holders of Series C Preferred Stock upon any such merger or
consolidation shall be the cash or the value of the property, rights and/or
securities distributed to such holders by the acquiring person, firm or other
entity. The value of such property, rights or other securities shall be
determined in good faith by the Board of Directors of the Corporation.

         Section 4. CONVERSION. The holders of the Series C Preferred Stock
shall have conversion rights as follows (the "CONVERSION RIGHTS"):

                  (a) RIGHT TO CONVERT. Each share of Series C Preferred Stock
shall be convertible, at the option of the holder thereof, at any time after the
date of issuance of such share into such number of fully paid and nonassessable
shares of Common Stock as is determined by dividing (i) $60.00 (as adjusted
proportionally for stock splits, stock dividends, recapitalizations and the like
of the Series C Preferred Stock, the "ORIGINAL SERIES C ISSUANCE PRICE") by (ii)
the Conversion Price for the Series C Preferred Stock (the "SERIES C CONVERSION
PRICE") (such ratio being referred to as the "CONVERSION RATIO"). The initial
Series C Conversion Price shall be $0.60; PROVIDED, HOWEVER, that the Series C
Conversion Price shall be subject to adjustment as set forth in Section 4(d).
Such conversion shall be deemed to have been made immediately prior to the close
of business on the date of delivery of notice by the holder to the Corporation
stating that such holder desires to convert the Series C Preferred Stock as
contemplated by this Section 4(a), and the person or persons entitled to receive
the shares of Common Stock issuable upon such conversion shall be treated for
all purposes as the record holder or holders of such shares of Common Stock as
of such date.

                  (b) AUTOMATIC CONVERSION. Each share of Series C Preferred
Stock shall automatically be converted into shares of Common Stock at the
Conversion Ratio at the time in effect for such Series C Preferred Stock upon
the earlier of (i) the closing of an underwritten public offering of the
Corporation's Common Stock pursuant to a registration statement under the
Securities Act of 1933, as amended, with aggregate net proceeds to the
Corporation in excess of twenty-five million dollars ($25,000,000) or (ii) the
date specified by written consent or agreement of the holders of a majority of
the then outstanding shares of Series C Preferred Stock, voting together as a
class.. All holders of record of shares of Series C Preferred Stock will be


<PAGE>

given written notice of an automatic conversion of all shares of Series C
Preferred Stock pursuant to this Section 4(b) (the "CONVERSION NOTICE"). Within
ten (10) days following receipt of such Conversion Notice, each holder of Series
C Preferred Stock shall surrender the certificate or certificates representing
all of such holder's Series C Preferred Stock, duly endorsed, at the office of
this Corporation or of any transfer agent for the Series C Preferred Stock. This
Corporation shall, as soon as practicable thereafter, issue and deliver at such
office to such holder of Series C Preferred Stock, or to the nominee or nominees
of such holder, a certificate or certificates for the number of shares of Common
Stock to which such holder shall be entitled as aforesaid. Such conversion shall
be deemed to have been made immediately prior to the close of business on the
date of delivery of the Conversion Notice, and the person or persons entitled to
receive the shares of Common Stock issuable upon such conversion shall be
treated for all purposes as the record holder or holders of such shares of
Common Stock as of such date.

                  (c) MECHANISM OF CONVERSION. Before any holder of Series C
Preferred Stock pursuant to Section 4(a) above, shall be entitled to convert the
same into shares of Common Stock, the holder shall surrender the certificate or
certificates therefor, duly endorsed, at the office of this Corporation or of
any transfer agent for the Series C Preferred Stock, and shall give written
notice to this Corporation at its principal corporate office, of the election to
convert the same and shall state therein the name or names in which the
certificate or certificates for shares of Common Stock are to be issued. Upon
conversion of only a portion of the number of shares covered by a certificate
representing shares of Series C Preferred Stock surrendered for conversion, the
Corporation shall issue and deliver to or upon the written order of the holder
of the certificate so surrendered for conversion, at the expense of the
Corporation, a new certificate covering the number of shares of Series C
Preferred Stock representing the unconverted portion of the certificate so
surrendered. This Corporation shall, as soon as practicable thereafter, issue
and deliver at such office to such holder of Series C Preferred Stock, or to the
nominee or nominees of such holder, a certificate or certificates for the number
of shares of Common Stock to which such holder shall be entitled as aforesaid.
Such conversion shall be deemed to have been made immediately prior to the close
of business on the date of such surrender of the shares of Series C Preferred
Stock to be converted, and the person or persons entitled to receive the shares
of Common Stock issuable upon such conversion shall be treated for all purposes
as the record holder or holders of such shares of Common Stock as of such date.

                  (d) CONVERSION PRICE ADJUSTMENTS OF PREFERRED STOCK. The
Series C Conversion Price shall be subject to adjustment from time to time as
follows:

                           (i) (A) If this Corporation shall issue, after the
date upon which any shares of Series C Preferred Stock were first issued (the
"PURCHASE DATE" with respect to such series), any Additional Stock (as defined
below) without consideration or for a consideration per share less than the
Series C Conversion Price in effect immediately prior to the issuance of such
Additional Stock, the Series C Conversion Price in effect immediately prior to
each such issuance shall forthwith (except as otherwise provided in this Section
4(d)(i)) be adjusted to a price equal to the price paid per share for such
Additional Stock. Any adjustment of the Series C Conversion Price shall apply to
shares of Series C Preferred Stock issued after the date of any such adjustment.


<PAGE>

                           (B) No adjustment of the Series C Conversion Price
shall be made in an amount less than one cent per share, provided that any
adjustments that are not required to be made by reason of this sentence shall be
carried forward and shall be either taken into account in any subsequent
adjustment. Except to the limited extent provided for in Sections 4(d)(i)(E)(3)
and 4(d)(i)(E)(4), no adjustment of such Series C Conversion Price pursuant to
this Section 4(d)(i) shall have the effect of increasing the Series C Conversion
Price above the Series C Conversion Price in effect immediately prior to such
adjustment.

                           (C) In the case of the issuance of Additional Stock
for cash, the consideration shall be deemed to be the amount of cash paid
therefor before deducting any reasonable discounts, commissions or other
expenses allowed, paid or incurred by this Corporation for any underwriting or
otherwise in connection with the issuance and sale thereof.

                           (D) In the case of the issuance of the Additional
Stock for a consideration in whole or in part other than cash, the consideration
other than cash shall be deemed to be the fair value thereof as determined by
the Board of Directors irrespective of any accounting treatment.

                           (E) In the case of the issuance (whether before, on
or after the applicable Purchase Date) of options to purchase or rights to
subscribe for Common Stock, securities by their terms convertible into or
exchangeable for Common Stock or options to purchase or rights to subscribe for
such convertible or exchangeable securities, the following provisions shall
apply for all purposes of this Section 4(d)(i) and Section 4(d)(ii):

                                    (1) The aggregate maximum number of shares
of Common Stock deliverable upon exercise (assuming the satisfaction of any
conditions to exercisability, including, without limitation, the passage of
time) of such options to purchase or rights to subscribe for Common Stock shall
be deemed to have been issued at the time such options or rights were issued and
for a consideration equal to the consideration (determined in the manner
provided in Sections 4(d)(i)(C) and 4(d)(i)(D)), if any, received by this
Corporation upon the issuance of such options or rights plus the minimum
exercise price provided in such options or rights for the Common Stock covered
thereby.

                                    (2) The aggregate maximum number of shares
of Common Stock deliverable upon conversion of, or in exchange (assuming the
satisfaction of any conditions to convertibility or exchangeability, including,
without limitation, the passage of time) for any such convertible or
exchangeable securities or upon the exercise of options to purchase or rights to
subscribe for such convertible or exchangeable securities and subsequent
conversion or exchange thereof shall be deemed to have been issued at the time
such securities were issued or such options or rights were issued and for a
consideration equal to the consideration, if any, received by this Corporation
for any such securities and related options or rights (excluding any cash
received on account of accrued interest or accrued dividends), plus the minimum
additional consideration, if any, to be received by this Corporation upon the
conversion or exchange of such securities or the exercise of any related options
or rights (the consideration in each case to be determined in the manner
provided in Sections 4(d)(i)(C) and 4(d)(i)(D)).


<PAGE>

                                    (3) In the event of any change in the number
of shares of Common Stock deliverable or in the consideration payable to this
Corporation upon exercise of such options or rights or upon conversion of or in
exchange for such convertible or exchangeable securities, including, but not
limited to, a change resulting from the antidilution provisions thereof, the
Series C Conversion Price, to the extent in any way affected by or computed
using such options, rights or securities, shall be recomputed to reflect such
change, but no further adjustment shall be made for the actual issuance of
Common Stock or any payment of such consideration upon the exercise of any such
options or rights or the conversion or exchange of such securities.

                                    (4) Upon the expiration of any such options
or rights, the termination of any such rights to convert or exchange or the
expiration of any options or rights related to such convertible or exchangeable
securities, the Series C Conversion Price, to the extent in any way affected by
or computed using such options, rights or securities or options or rights
related to such securities, shall be recomputed to reflect the issuance of only
the number of shares of Common Stock (and convertible or exchangeable securities
that remain in effect) actually issued upon the exercise of such options or
rights, upon the conversion or exchange of such securities or upon the exercise
of the options or rights related to such securities.

                                    (5) The number of shares of Common Stock
deemed issued and the consideration deemed paid therefor pursuant to Sections
4(d)(i)(E)(1) and 4(d)(i)(E)(2) shall be appropriately adjusted to reflect any
change, termination or expiration of the type described in either Section
4(d)(i)(E)(3) or 4(d)(i)(E)(4).

                           (ii) "Additional Stock" shall mean any shares of
Common Stock issued (or deemed to have been issued pursuant to Section
4(d)(i)(E)) by this Corporation after the applicable Purchase Date other than:

                               (A) shares of Common Stock issued pursuant to a
transaction described in Section 4(d)(iii) hereof;

                               (B) shares of Common Stock issued or deemed
issued to employees, consultants, officers, directors or vendors of this
Corporation directly or pursuant to a stock option plan and/or agreement,
restricted stock purchase plan or other agreement approved by the Board of
Directors of this Corporation;

                               (C) shares of Common Stock issued or issuable (I)
in a bona fide public offering under the Act or (II) upon exercise of warrants
or rights granted to underwriters in connection with such a public offering;

                               (D) shares of Common Stock issued pursuant to the
conversion or exercise of convertible or exercisable securities outstanding as
of the date hereof or subsequently issued pursuant to this Section 4(d)(ii);


<PAGE>

                               (E) shares of Common Stock issued or issuable in
connection with a bona fide business acquisition of or by this Corporation,
whether by merger, consolidation, sale of assets, sale or exchange of stock or
otherwise, each as approved by the Board of Directors of this Corporation; or

                               (F) shares of Common Stock issued or issuable to
persons or entities in connection with strategic alliances or to strategic
corporate partners or to parties that are providing the Corporation with
equipment loans, real property leases, loans, credit lines, guarantees of
indebtedness, licensing agreements, consulting agreements, cash price reductions
or similar transactions.

                           (iii) In the event this Corporation should at any
time or from time to time after the Purchase Date fix a record date for the
effectuation of a split or subdivision of the outstanding shares of Common Stock
or the determination of holders of Common Stock entitled to receive a dividend
or other distribution payable in additional shares of Common Stock or other
securities or rights convertible into, or entitling the holder thereof to
receive directly or indirectly, additional shares of Common Stock (hereinafter
referred to as "COMMON STOCK EQUIVALENTS") without payment of any consideration
by such holder for the additional shares of Common Stock or the Common Stock
Equivalents (including the additional shares of Common Stock issuable upon
conversion or exercise thereof), then, as of such record date (or the date of
such dividend distribution, split or subdivision if no record date is fixed),
the Series C Conversion Price shall be appropriately decreased so that the
number of shares of Common Stock issuable on conversion of each share of such
series shall be increased in proportion to such increase in the aggregate number
of shares of Common Stock outstanding and those issuable with respect to such
Common Stock Equivalents.

                           (iv) If the number of shares of Common Stock
outstanding at any time after the Purchase Date is decreased by a combination of
the outstanding shares of Common Stock, then, following the record date of such
combination, the Series C Conversion Price shall be appropriately increased so
that the number of shares of Common Stock issuable on conversion of each share
of such series shall be decreased in proportion to such decrease in outstanding
shares.

                  (e) OTHER DISTRIBUTIONS. In the event this Corporation shall
declare a distribution payable in securities of other persons, evidences of
indebtedness issued by this Corporation or other persons, assets (excluding cash
dividends) or options or rights not referred to in Section 4(d)(iii), then, in
each such case for the purpose of this Section 4(e), the holders of the Series C
Preferred Stock shall be entitled to a proportionate share of any such
distribution as though they were the holders of the number of shares of Common
Stock of this Corporation into which their shares of the Series C Preferred
Stock are convertible as of the record date fixed for the determination of the
holders of Common Stock of this Corporation entitled to receive such
distribution.


<PAGE>

                  (f) RECAPITALIZATIONS. If at any time or from time to time
there shall be a recapitalization of the Common Stock (other than a subdivision,
combination or merger or sale of assets transaction provided for elsewhere in
Section 3 or this Section 4) provision shall be made so that the holders of the
Series C Preferred Stock shall thereafter be entitled to receive upon conversion
of the Series C Preferred Stock the number of shares of stock or other
securities or property of this Corporation or otherwise, to which a holder of
the number of shares of Common Stock deliverable upon conversion of the Series C
Preferred Stock held by such holder would have been entitled on such
recapitalization. In any such case, appropriate adjustment shall be made in the
application of the provisions of this Section 4 with respect to the rights of
the holders of each series of Preferred Stock after the recapitalization to the
end that the provisions of this Section 4 (including adjustment of the Series C
Conversion Price then in effect and the number of shares purchasable upon
conversion of the Series C Preferred Stock) shall be applicable after that event
as nearly equivalent as may be practicable.

                  (g) NO IMPAIRMENT. This Corporation will not, by amendment of
its Amended and Restated Certificate of Incorporation or through any
reorganization, recapitalization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary action, avoid or
seek to avoid the observance or performance of any of the terms to be observed
or performed hereunder by this Corporation, but will at all times in good faith
assist in the carrying out of all the provisions of this Section 4 and in the
taking of all such action as may be necessary or appropriate in order to protect
the Conversion Rights of the holders of the Series C Preferred Stock against
impairment.

                  (h) NO FRACTIONAL SHARES. No fractional shares shall be issued
upon the conversion of any share or shares of the Series C Preferred Stock. In
lieu of any fractional shares to which the holder would otherwise be entitled,
this Corporation shall pay cash equal to such fraction multiplied by the then
fair market value of a share of Common Stock as determined in good faith by the
Board of Directors. The number of shares of Common Stock to be issued upon such
conversion shall be determined on the basis of the total number of the Series C
Preferred Stock the holder is at the time converting into Common Stock and the
number of shares of Common Stock issuable upon such aggregate conversion.

                  (i) NOTICES OF RECORD DATE. In the event of any taking by this
Corporation of a record of the holders of any class of securities for the
purpose of determining the holders thereof who are entitled to receive any
dividend (other than a cash dividend) or other distribution, any right to
subscribe for, purchase or otherwise acquire any shares of stock of any class or
any other securities or property, or to receive any other right, this
Corporation shall mail to each holder of the Series C Preferred Stock, at least
twenty (20) days prior to the date specified therein, a notice specifying the
date on which any such record is to be taken for the purpose of such dividend,
distribution or right, and the amount and character of such dividend,
distribution or right.

                  (j) RESERVATION OF STOCK ISSUABLE UPON CONVERSION. This
Corporation shall at all times reserve and keep available out of its authorized
but unissued shares of Common Stock, solely for the purpose of effecting the
conversion of the shares of Series C Preferred Stock, such number of its shares
of Common Stock as shall from time to time be sufficient to effect the
conversion of all outstanding shares of the Series C Preferred Stock; and if at
any time the number of authorized but unissued shares of Common Stock shall not
be sufficient to effect the conversion of all then outstanding shares of the
Series C Preferred Stock, in addition to such other remedies as shall be
available to the holder of such Preferred Stock, this Corporation will take such
corporate action as may, in the opinion of its counsel, be necessary to increase
its authorized but unissued shares of Common Stock to such number of shares as
shall be sufficient for such purposes, including, without limitation, engaging
in best efforts to obtain the requisite stockholder approval of any necessary
amendment to this Certificate.

<PAGE>

                  (k) NOTICES. Any notice required by the provisions of this
Section 4 to be given to the holders of shares of the Series C Preferred Stock
shall be deemed given if deposited in the United States mail, postage prepaid,
and addressed to each holder of record at his address appearing on the books of
this Corporation.

         Section 5. REDEMPTION. Neither the Corporation nor the holders of
Series C Preferred Stock, shall have the unilateral right to call or redeem or
cause to have called or redeemed any shares of the Series C Preferred Stock.

         Section 6. VOTING RIGHTS. The holder of each share of Series C
Preferred Stock shall have the right to one vote for each share of Common Stock
into which such Series C Preferred Stock could then be converted; provided that,
in determining the number of votes represented by each share, the Series C
Conversion Price shall not be adjusted for any shares of Common Stock for which
a record date for their distribution has been fixed, but as to which the
distribution had not been made at the time of the vote, and with respect to such
vote, such holder shall have full voting rights and powers equal to the voting
rights and powers of the holders of Common Stock, and shall be entitled,
notwithstanding any provision hereof, to notice of any stockholders' meeting in
accordance with the Bylaws of this Corporation, and shall be entitled to vote,
together with holders of Common Stock, with respect to any question upon which
holders of Common Stock have the right to vote. Fractional votes shall not,
however, be permitted and any fractional voting rights available on an
as-converted basis (after aggregating all shares into which shares of Series C
Preferred Stock held by each holder could be converted) shall be rounded to the
nearest whole number (with one-half being rounded upward). In addition, no
series of Preferred Stock ranking prior to or superior to the Series C Preferred
Stock with respect to dividends, voting rights or liquidation preference shall
be created by this Corporation without the prior approval of a majority of the
outstanding interests of the Series C Preferred Stock voting as a single class.

         Section 7. STATUS OF CONVERTED STOCK. In the event any shares of Series
C Preferred Stock shall be converted pursuant to Section 4 hereof, the shares so
converted shall be canceled and shall not be issuable by the Corporation, and
the Corporation may take such appropriate corporate action as may be necessary
to reduce the number of authorized shares of the Corporation's capital stock.

         Section 8. RANK. Except as otherwise provided in the terms of any other
class of the Corporation's Preferred Stock, the Series C Preferred Stock shall
rank, (a) with respect to the payment of dividends, PARI PASSU with the
Corporation's Series A Preferred Stock, Series B Preferred Stock and Series B-1
Preferred Stock and junior to all other series of any other class of the
Corporation's Preferred Stock; and (b) with respect to the distribution of
assets, senior to the Corporation's Series A Preferred Stock, Series B Preferred
Stock, Series B-1 Preferred Stock and all other series of any other class of the
Corporation's Preferred Stock.

<PAGE>

         Section 9. GENERAL PROVISIONS.

                  (a) AMENDMENT. This Certificate of Designation constitutes an
agreement between the Corporation and the holders of the Series C Preferred
Stock. Except as otherwise set forth herein, it may be amended by vote of the
Board of Directors of the Corporation and the holders of a majority of the
outstanding shares of Series C Preferred Stock.

                  (b) HEADINGS. The headings of the paragraphs, subparagraphs,
clauses, and sub-clauses of this Certificate of Designation are for convenience
of reference only and shall not define, limit, or affect any of the provisions
hereof.


<PAGE>



         IN WITNESS WHEREOF, the undersigned has caused this Certificate of
Designation to be signed by its Chief Executive Officer, this 31st day of August
2004.

                                      CRDENTIA CORP.


                                      By: /S/ JAMES D. DURHAM
                                          ----------------------------
                                      Name:    James D. Durham
                                      Title:   Chief Executive Officer



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.2
<SEQUENCE>3
<FILENAME>crdentia_ex4-2.txt
<TEXT>
<PAGE>
                                                                     EXHIBIT 4.2


               AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT


         THIS AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this
"AGREEMENT") is made as of August 31, 2004 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. Certain of the Investors are parties to that certain Amended and
Restated Registration Rights Agreement dated June 16, 2004 by and among the
Company and such Investors (the "ORIGINAL AGREEMENT").

         B. The Company and the Investors are parties to certain Subscription
Agreements (the "SUBSCRIPTION AGREEMENTS"), dated beginning August 31, 2004,
regarding the proposed sale and issuance of shares of the Company's Series C
Preferred Stock (the "SERIES C PREFERRED") to the Investors (the "PREFERRED
STOCK FINANCING");

         C. The Company and the Investors who are parties to the Original
Agreement, and who hold at least a sixty-six and two-thirds percent (66 2/3%) of
the Registrable Securities then outstanding (as such term is defined in the
Original Agreement), desire to amend and restate the Original Agreement pursuant
to Section 2.8 thereof and accept the rights created pursuant hereto in lieu of
the rights granted to them under the Original Agreement.

                                    AGREEMENT
                                    ---------

         NOW, THEREFORE, in consideration of the mutual promises,
representations, warranties, covenants and conditions set forth in this
Agreement and the Subscription 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 "EFFECTIVE DATE" means August 31, 2004.

                  (c) 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.

                                      -1-
<PAGE>

                  (d) The term "HOLDER" means any person owning or having the
right to acquire Registrable Securities or any assignee thereof in accordance
with SECTION 1.11 hereof.

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

                  (f) 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.

                  (g) The term "REGISTRABLE SECURITIES" means (i) the Common
Stock of the Company (the "COMMON STOCK") issued to the Investors listed on
SCHEDULE A attached hereto pursuant to conversion of the Series C Preferred
(including any Series C Preferred acquired upon exercise of the Warrants), the
Company's Series B Preferred Stock of the Company and/or the Company's Series A
Preferred Stock, as the case may be, (ii) the Common Stock issued upon exercise
of the Warrants, and (iii) any Common Stock 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) or (ii) 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.

                  (h) 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.

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

                  (j) The term "WARRANTS" shall mean (i) the Warrant to Purchase
Shares of Series B-1 Preferred Stock granted to MedCap Partners L.P. and (ii)
the Warrants to Purchase Shares of Series C Preferred Stock granted to the
Investors pursuant to the terms of the Subscription Agreements.

              1.2 REQUESTED REGISTRATION.

                  (a) REQUEST FOR REGISTRATION. If, at any time after the
Effective Date, the Company shall receive from the Holders of thirty-three and
one-third percent (33 1/3%) or more of the Registrable Securities then
outstanding (the "INITIATING HOLDERS") a written request that the Company file a
registration statement in accordance with the Act covering the registration on a
continuous basis pursuant to Rule 415 under the Act, or any successor rule or
regulation ("RULE 415") of all or part of the Registrable Securities then held
by such Holders, the Company shall:


                                      -2-
<PAGE>

                           (i) within ten (10) days of the receipt thereof, give
written notice of the proposed registration, qualification or compliance to all
other Holders; and

                           (ii) within forty-five (45) days of the receipt
thereof, file a registration statement with the SEC and use its reasonable and
diligent efforts to effect as soon as practicable, the registration under the
Act of all such Holders' Registrable Securities as are specified in such
request, together with such portion of the Registrable Securities of any other
Holder or Holders joining in such request as are specified in a written notice
given within fifteen (15) days after receipt of written notice from the Company;
PROVIDED, HOWEVER, that the Company shall not be obligated to take any action to
effect any such registration pursuant to this SECTION 1.2, (A) after the Company
has effected one (1) registration under this SECTION 1.2 or (B) if less than
thirty-three and one-third percent (33 1/3%) of the then outstanding Registrable
Securities will be registered.

                  (b) REGISTRATION STATEMENTS. Any registration statement filed
pursuant to this SECTION 1.2 shall be on Form S-3, or if Form S-3 is not
available, Form S-1 or other appropriate form permitting registration of the
Registrable Securities for resale by the Holders.

                  (c) UNDERWRITING. If the Holders at any time intend to
distribute all or a part of the Registrable Securities covered by the
registration statement filed pursuant to this SECTION 1.2 by means of an
underwriting, they shall so advise the Company and the Company shall promptly
notify the other Holders of such underwriting. The Company (together with all
Holders proposing to distribute their securities pursuant to the underwriting)
shall enter into an underwriting agreement in customary form with the
underwriter or underwriters selected by the Company. Notwithstanding any other
provision of this SECTION 1.2, if the underwriter advises the Holders in writing
that marketing factors require a limitation of the number of shares to be
underwritten, then the Holders requesting the underwriting shall so advise all
Holders of Registrable Securities, and the number of shares included in the
underwriting shall be allocated among the Holders of Registrable Securities
requesting registration in proportion, as nearly as practicable, to the total
number of Registrable Securities held by such Holders at the time of the request
for an underwriting. If any Holder disapproves of the terms of the underwriting,
such Holder may elect to withdraw from such underwritten offering by written
notice to the Company, the underwriter and the other Holders whose shares are
being included in the underwriting. The Company agrees to file any amendments or
supplements to the registration statement necessary in order to permit any
underwritten offering.

                  (d) RIGHTS IN ADDITION TO OTHER RIGHTS. The rights under this
SECTION 1.2 are in addition to, and not affected by, the Holders' exercise of
any registration rights contained in SECTION 1.3.

              1.3 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 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


                                      -3-
<PAGE>

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.

              1.4 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 and diligent
efforts to cause such registration statement to become effective, and keep such
registration statement effective (i) in the case of a registration statement
filed pursuant to SECTION 1.2, during the Effectiveness Period (as hereinafter
defined) or (ii) in the case of a registration statement filed pursuant to
SECTION 1.3, upon the request of the Holders of a majority of the Registrable
Securities registered thereunder, for up to three hundred sixty-five (365) days
or, if earlier, the date on which the distribution contemplated in the
registration statement has been completed. As used herein, the term
"EFFECTIVENESS PERIOD" shall mean until the earlier of (i) the termination of
the rights set forth in this Agreement in accordance with Section 1.14 or (ii)
all of the Registrable Securities covered by the registration having been sold
or a subsequent registration statement covering any unsold Registrable
Securities having been declared effective.

                  (b) Provide, at least three (3) business days prior to filing,
any registration statement and included prospectus (including each preliminary
prospectus and any amendments or supplements thereto) prepared in conformity
with the requirements of the Act in connection with SECTIONS 1.2 and 1.3 (the
"REGISTRATION MATERIALS") to the Holders and their respective counsel for review
and comment, if any.

                  (c) 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.

                  (d) 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 and Registration Materials as
they may reasonably request in order to facilitate the disposition of
Registrable Securities owned by them that are included in such registration.

                  (e) Use its reasonable and diligent 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.


                                      -4-
<PAGE>

                  (f) 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.

                  (g) 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(g)).

                  (h) Use its reasonable and diligent efforts, if a registration
statement under SECTION 1.2 ceases to be effective for any reason at any time
during the Effectiveness Period (other than because of the sale of all of the
Registrable Securities registered thereunder or pursuant to the Company's
exercise of the Suspension Right (as hereinafter defined)), to (i) obtain the
prompt withdrawal of any order suspending the effectiveness thereof, and (ii)
amend the registration statement in a manner reasonably expected to obtain the
withdrawal of the order suspending the effectiveness of the shelf registration
or file an additional registration statement covering all of the unsold
Registrable Securities (a "Subsequent Registration Statement"). If a Subsequent
Registration Statement is filed, the Company will use its reasonable and
diligent efforts to cause the Subsequent Registration Statement to be declared
effective as soon as practicable and to keep such Subsequent Registration
Statement continuously effective until the end of the Effectiveness Period. The
requirements of this SECTION 1.4(H) that the Company file additional
registration statements shall not be affected by the provisions set forth in
SECTION 1.2 that the Company is only required to file one registration statement
under SECTION 1.2.

                  (i) 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.

                  (j) 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.


                                      -5-
<PAGE>

                  (k) Use its reasonable and diligent 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.

                  (l) Notify each seller of Registrable Securities under such
registration statement of (i) the effectiveness of such registration statement,
(ii) the filing of any post-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 1.2 hereof if, as a result of the
application of subsection 1.5(a), the number of shares of the Registrable
Securities to be included in the registration does not equal or exceed the
number of shares required to originally trigger the Company's obligation to
initiate such registration as specified in SECTION 1.2 hereof.

              1.6 EXPENSES OF REGISTRATION. All expenses (other than
underwriting discounts and commissions, stock transfer taxes and fees of counsel
to the stockholders in excess of $15,000) 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.
The Company shall pay up to an aggregate of $15,000 of the selling stockholders'
legal fees in connection with one (1) registration. Notwithstanding the
foregoing, the Company shall not be required to pay for any expenses of any
registration proceeding begun pursuant to SECTION 1.2 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.


                                      -6-
<PAGE>

              1.7 UNDERWRITING REQUIREMENTS. In connection with any offering
pursuant to SECTION 1.3 involving an underwriting of shares of the Company's
capital stock by the Company, the Company shall not be required 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

                                      -7-
<PAGE>

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 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 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


                                      -8-
<PAGE>

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 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, including a subsidiary, affiliate, partner, limited
partner, retired partner or stockholder of a Holder, provided in each case that
(i) the Company is, within a reasonable time after such transfer, furnished with


                                      -9-
<PAGE>

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;
(ii) such transferee or assignee agrees in writing to be bound by and subject to
the terms and conditions of this Agreement; and (iii) such assignment 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 use
commercially reasonable efforts: (a) 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 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 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 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 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"). 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). In the event the Company exercises the
suspension rights set forth herein (the "SUSPENSION RIGHT"), such suspension
will continue for such period of time reasonably necessary for disclosure to
occur at a time that is not materially detrimental to the Company or until such
time as the registration statement does not include any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading in light of the
circumstances under which they were made, each as determined in good faith by
the Company. The Company agrees to notify the Holders promptly upon termination
of the Suspension Right. Notwithstanding the foregoing, under no circumstances
shall the Company be entitled to exercise the Suspension Right for a period of
more than thirty (30) days during any twelve (12) month period.


                                      -10-
<PAGE>

              1.13 LIMITATION OF LIABILITY. The Company shall not be liable to
the Holder for a failure to effect, or a delay in effecting, a registration
hereunder or a default in any other obligations under this Agreement arising out
of or relating to any failure to receive necessary consents from its independent
auditors or any internal review, investigation or similar activity by the
Company's Audit Committee.

              1.14 TERMINATION OF REGISTRATION RIGHTS. The rights granted under
this Section 1 shall terminate upon the fourth anniversary of the date of this
Agreement. In addition, a Holder's registration rights shall terminate if all
Registrable Securities held by and issuable to such Holder may be sold under
Rule 144 during any ninety (90) day period.

         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
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 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 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.


                                      -11-
<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
sixty-six and two-thirds percent (66 2/3%) 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.



                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]




                                      -12-
<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: 14114 Dallas Parkway, Suite 600
                                                 Dallas, Texas  75254


<PAGE>


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

                                        INVESTORS:



                                        By:
                                            -----------------------------------
                                            Name:
                                            Title:

                                            Address:



<PAGE>




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

                              SCHEDULE OF INVESTORS

MedCap Partners L.P.
SF Capital Partners, Ltd.
Durham Properties, LLC
Hornthal Investment Partners, L.P.
Scott H. Richison
BBW Investments LP





</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.3
<SEQUENCE>4
<FILENAME>crdentia_ex4-3.txt
<TEXT>
<PAGE>


                                                                     Exhibit 4.3


         THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE
         NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
         "ACT"), OR ANY STATE SECURITIES LAWS. THEY MAY NOT BE SOLD, OFFERED FOR
         SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF
         A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER
         SUCH ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
         COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT
         TO AN EXEMPTION TO SUCH ACT.


                                                                      Void after
                                                            ___________ __, 2009


                           WARRANT TO PURCHASE SHARES
                           OF SERIES C PREFERRED STOCK
                                       OF
                                 CRDENTIA CORP.

         This certifies that, for value received, _______________, together with
its successors and assigns (the "Holder") is entitled to subscribe for and
purchase, on the terms hereof, shares of Series C Preferred Stock (the "Stock")
of Crdentia Corp., a Delaware corporation (the "Company"), which is convertible
into shares of Common Stock of the Company (the "Common Stock"), subject to
adjustment as provided herein.

         This Warrant is subject to the following terms and conditions:

         1. EXERCISE OF WARRANT. The terms and conditions upon which this
Warrant may be exercised, and the Stock covered hereby may be purchased, are as
follows:

                  1.1 TERM. Subject to the terms hereof, this Warrant may be
exercised at any time after the date hereof, or from time to time, in whole or
in part; provided, however, that in no event may this Warrant be exercised (the
"Exercise Date") later than 5:00 p.m. (Pacific Time) on the earlier of (a) the
close of business on _________ __, 2009 or (b) the closing of a Corporate
Transaction (as defined below) (the "Exercise Period"); provided that at least
twenty (20) days prior to the occurrence of the closing of a Corporate
Transaction, the Company shall have sent to the Holder notice of such event.

                  For purposes hereof, the term "Corporate Transaction" shall
mean (a) the sale, conveyance or disposal of all or substantially all of the
Company's property or business; (b) the Company's merger into or consolidation
with any other corporation (other than a a merger effected exclusively for the
purpose of changing the domicile of the Company or a merger in which the owners
of the voting stock of the Company prior to the merger own at least 50% of the
voting interests in the surviving entity) or any other transaction or series of


<PAGE>

transactions, in which more than fifty percent (50%) of the voting power of the
Company is disposed of (other than a sale by the Company of shares of its
capital stock in an equity financing); or (c) the closing of an underwritten
public offering of the Company's Common Stock pursuant to a registration
statement under the Securities Act of 1933, as amended (the "Securities Act"),
with aggregate net proceeds to the Company in excess of twenty-five million
dollars ($25,000,000).

                  1.2 NUMBER OF SHARES. This Warrant may be exercised for
_________ shares of Stock, subject to adjustment as provided herein.

                  1.3 EXERCISE PRICE. The per share exercise price for the
shares of Stock to be issued upon exercise of this Warrant shall be $60.00,
subject to adjustment as provided herein (such price as adjusted from time to
time as provided herein is called the "Exercise Price").

                  1.4 METHOD OF EXERCISE. The exercise of the purchase rights
evidenced by this Warrant shall be effected by (a) the surrender of the Warrant,
together with a duly executed copy of the form of a subscription attached hereto
as Schedule 1, to the Company at its principal offices and (b) except as set
forth in Section 1.5, the delivery of the aggregate Exercise Price by check or
bank draft payable to the Company's order or by wire transfer to the Company's
account for the number of shares for which the purchase rights hereunder are
being exercised or any other form of consideration approved by the Company's
Board of Directors (the "Board"). Each exercise of this Warrant shall be deemed
to have been effected immediately prior to the close of business on the day on
which this Warrant shall have been surrendered to the Company as provided herein
or at such later date as may be specified in the executed form of subscription,
and at such time the person or persons in whose name or names any certificate or
certificates for shares of Stock shall be issuable upon such exercise as
provided herein shall be deemed to have become the holder or holders of record
thereof.

                  1.5 NET ISSUANCE.

                           (a) RIGHT TO CONVERT. In addition to and without
limiting the rights of the Holder under the terms of this Warrant, the Holder
shall have the right to convert this Warrant or any portion thereof (the
"Conversion Right") into shares of Stock as provided in this Section 1.5 at any
time or from time to time during the Exercise Period. Upon exercise of the
Conversion Right with respect to a particular number of shares subject to the
Warrant (the "Converted Warrant Shares"), the Company shall deliver to the
Holder (without payment by the Holder of any exercise price or any cash or other
consideration) that number of shares of fully paid and nonassessable Stock
computed using the following formula:

                    X =     Y (A - B)
                            ---------
                                A
          Where     X =     the number of shares of Stock to be delivered to the
                            Holder
                    Y =     the number of Converted Warrant Shares
                    A =     the fair market value of the total number of shares
                            of Common Stock into which one share of Stock can be
                            converted on the Conversion Date (as defined below)
                    B =     the Exercise Price (as adjusted to the Conversion
                            Date)


                                      -2-
<PAGE>

         The Conversion Right may only be exercised with respect to a whole
number of shares subject to the Warrant. No fractional shares shall be issuable
upon exercise of the Conversion Right, and if the number of shares to be issued
determined in accordance with the foregoing formula is other than a whole
number, the Company shall pay to the Holder an amount in cash equal to the fair
market value of the resulting fractional share on the Conversion Date (as
defined below). Shares issued pursuant to the Conversion Right shall be treated
as if they were issued upon the exercise of the Warrant.

                           (b) METHOD OF EXERCISE. The Conversion Right may be
exercised by the Holder by the surrender of the Warrant at the principal office
of the Company together with a notice in the form attached hereto as Schedule 2
specifying that the Holder thereby intends to exercise the Conversion Right and
indicating the total number of shares under the Warrant that the Holder is
exercising through the Conversion Right. Such conversion shall be effective upon
receipt by the Company of the Warrant together with the aforesaid written
statement, or on such later date as is specified therein (the "Conversion
Date"). Certificates for the shares issuable upon exercise of the Conversion
Right and, if applicable, a new warrant evidencing the balance of the shares
remaining subject to the Warrant, shall be issued as of the Conversion Date and
shall be delivered to the Holder promptly following the Conversion Date.

                           (c) DETERMINATION OF FAIR MARKET VALUE. For purposes
of this Section 1.5, the fair market value of a share of Common Stock on the
Conversion Date shall be the average of the closing prices of the Common Stock
as reported on a Trading Market (as defined below) for the last fifteen (15)
trading day period ending two (2) days prior to the Conversion Date. For
purposes of this Warrant, "Trading Market" shall mean one of the following which
has been determined by the Company's Board of Directors to be the Company's
principal trading market: NASD OTC Bulletin Board, the Nasdaq SmallCap Market,
the Nasdaq National Market, the American Stock Exchange or the New York Stock
Exchange. Notwithstanding the foregoing, in the event the Common Stock is not
publicly trading on the Conversion Date, the fair market value of a share of
Common Stock on the Conversion Date shall be determined in good faith by the
Company's Board of Directors.

                           (d) LIMIT ON EXERCISE. Notwithstanding any other
provision of this Warrant, the Holder shall not be entitled to exercise the
Conversion Right, in whole or in part, unless the Holder agrees, in writing, to
immediately convert the Shares issued pursuant to the Conversion Right into
shares of the Company's Common Stock (pursuant to the terms of the Company's
Amended and Restated Certificate of Incorporation and Certificate of
Designations, Preferences and Rights of Series C Preferred Stock of the
Company).

         2. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES. The Exercise
Price and the number of shares purchasable upon the exercise of this Warrant
shall be subject to adjustment from time to time upon the occurrence of certain
events described in this Section 2. Upon each adjustment of the Exercise Price,
the Holder of this Warrant shall thereafter be entitled to purchase, at the
Exercise Price resulting from such adjustment, the number of shares obtained by
multiplying the Exercise Price in effect immediately prior to such adjustment by
the number of shares purchasable pursuant hereto immediately prior to such
adjustment, and dividing the product thereof by the Exercise Price resulting
from such adjustment.


                                      -3-
<PAGE>

                  2.1 SUBDIVISION OR COMBINATION OF STOCK. In case the Company
shall at any time subdivide its outstanding shares of Series C Preferred Stock
into a greater number of shares, the Exercise Price in effect immediately prior
to such subdivision shall be proportionately reduced, and conversely, in case
the outstanding shares of Series C Preferred Stock of the Company shall be
combined into a smaller number of shares, the Exercise Price in effect
immediately prior to such combination shall be proportionately increased.

                  2.2 DIVIDENDS IN STOCK, OTHER STOCK, PROPERTY,
RECLASSIFICATION. If at any time or from time to time the holders of the Series
C Preferred Stock (or any shares of stock or other securities at the time
receivable upon the exercise of this Warrant) shall have received or become
entitled to receive, without payment therefor,

                           (a) Series C Preferred Stock, or any shares of stock
or other securities whether or not such securities are at any time directly or
indirectly convertible into or exchangeable for Common Stock, or any rights or
options to subscribe for, purchase or otherwise acquire any of the foregoing by
way of dividend or other distribution, or

                           (b) any cash paid or payable otherwise than as a cash
dividend, or

                           (c) Series C Preferred Stock or other or additional
stock or other securities or property (including cash) by way of spin off,
split-up, reclassification, combination of shares or similar corporate
rearrangement, (other than shares of Stock issued as a stock split, adjustments
in respect of which shall be covered by the terms of Section 2.1 above),

         Then and in each such case, the Holder hereof shall, upon the exercise
of this Warrant, be entitled to receive, in addition to the number of shares of
Stock receivable thereupon, and without payment of any additional consideration
therefore, the amount of stock and other securities and property (including cash
in the cases referred to in clauses (b) and (c) above) which such Holder would
hold on the date of such exercise had he been the holder of record of such Stock
as of the date on which holders of Series C Preferred Stock received or became
entitled to receive such shares and/or all other additional stock and other
securities and property.

                  2.3 RECLASSIFICATION OR REORGANIZATION. If the Stock (or any
shares of stock or other securities which may be) issuable upon the exercise of
this Warrant shall be changed into the same or different number of shares of any
class or classes of stock, whether by capital reorganization, reclassification
or otherwise (other than a subdivision or combination of shares or stock
dividend provided for in Section 2.1 above, or a Corporate Transaction, in which
case this Warrant shall terminate if not exercised), then and in each such event
the Holder shall be entitled to receive upon the exercise of this Warrant the
kind and amount of shares of stock and other securities and property receivable
upon such reorganization, reclassification or other change, to which a holder of
the number of shares of Stock (or any shares of stock or other securities which
may be) issuable upon the exercise of this Warrant would have received if this
Warrant had been exercised immediately prior to such reorganization,
reclassification or other change, all subject to further adjustment as provided
herein.


                                      -4-
<PAGE>

                  2.4 NOTICE OF ADJUSTMENTS AND RECORD DATES. The Company shall
promptly notify the Holder in writing of each adjustment or readjustment of the
exercise price hereunder and the number of shares of Stock (or any shares of
stock or other securities which may be) issuable upon the exercise of this
Warrant. Such notice shall state the adjustment or readjustment and show in
reasonable detail the facts on which that adjustment or readjustment is based.
In the event of any taking by the Company of a record of the holders of Common
Stock for the purpose of determining the holders thereof who are entitled to
receive any dividend or other distribution, the Company shall notify the Holder
in writing of such record date at least twenty (20) days prior to the date
specified therein.

                  2.5 SHARES TO BE FULLY PAID; RESERVATION OF SHARES. The
Company covenants and agrees that all shares of Stock which may be issued upon
the exercise of the rights represented by this Warrant will, upon payment of the
Exercise Price and issuance pursuant to Section 1.4 or a net issuance pursuant
to Section 1.5, be duly authorized, validly issued, fully paid and nonassessable
and free from all preemptive rights of any stockholder and free of all taxes,
liens and charges with respect to the issue thereof. The Company further
covenants and agrees that during the period within which the rights represented
by this Warrant may be exercised, the Company will at all times have authorized
and reserved, for the purpose of issue or transfer upon exercise of the
subscription rights evidenced by this Warrant, a sufficient number of shares of
authorized but unissued Series C Preferred Stock and Common Stock into which
such Series C Preferred Stock may be converted, or other securities and
property, when and as required to provide for the exercise of the rights
represented by this Warrant. The Company will take all such action as may be
necessary to assure that such shares of Series C Preferred Stock and Common
Stock may be issued as provided herein without violation of any applicable law
or regulation.

         3. REPLACEMENT OF WARRANTS. On receipt by the Company of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of this Warrant and, in the case of any such loss, theft or
destruction of this Warrant, on delivery of an indemnity agreement reasonably
satisfactory in form and amount to the Company or, in the case of any such
mutilation, on surrender and cancellation of such Warrant, the Company at its
expense shall execute and deliver to the Holder, in lieu thereof, a new Warrant
of like tenor.

         4. INVESTMENT INTENT. Unless a current registration statement under the
Securities Act, shall be in effect with respect to the securities to be issued
upon exercise of this Warrant, the Holder, by accepting this Warrant, covenants
and agrees that, at the time of exercise hereof, and at the time of any proposed
transfer of any securities acquired upon exercise hereof, the Holder shall
deliver to the Company a written statement that the securities acquired by the
Holder upon exercise hereof are for the own account of the Holder for investment
and are not acquired with a view to, or for sale in connection with, any
distribution thereof (or any portion thereof) and with no present intention (at
any such time) of offering or distributing such securities (or any portion
thereof).

         5. NO RIGHTS OR LIABILITY AS A SHAREHOLDER. This Warrant does not
entitle the Holder hereof to any voting rights or other rights as a shareholder
of the Company. No provisions hereof, in the absence of affirmative action by
the Holder to purchase Stock, and no enumeration herein of the rights or
privileges of the Holder, shall give rise to any liability of the Holder as a
shareholder of the Company.

         6. REPRESENTATIONS OF HOLDER. The Holder hereby represents and
acknowledges to the Company that:


                                      -5-
<PAGE>

                  6.1 this Warrant, the Stock issuable upon exercise of this
Warrant and any securities issued with respect to any of them by way of a stock
dividend or stock split or in connection with a recapitalization, merger,
consolidation or other reorganization will be "restricted securities" as such
term is used in the rules and regulations under the Securities Act, and that
such securities have not been and may not be registered under the Securities Act
or any state securities law, and that such securities must be held indefinitely
unless registration is effected or transfer can be made pursuant to appropriate
exemptions;

                  6.2 the Holder has read, and fully understands, the terms of
this Warrant set forth on its face and the attachments hereto, including the
restrictions on transfer contained herein;

                  6.3 the Holder is purchasing for investment for its own
account and not with a view to or for sale in connection with any distribution
of this Warrant or the Stock of the Company issuable upon exercise of this
Warrant and it has no intention of selling such securities in a public
distribution in violation of the federal securities laws or any applicable state
securities laws;

                  6.4 the Company may affix the following legends (in addition
to any other legend(s), if any, required by applicable state corporate and/or
securities laws) to certificates for shares of Stock (or other securities)
issued upon exercise of this Warrant ("Warrant Shares"):

                  "These securities have not been registered under the
                  Securities Act of 1933, as amended. They may not be sold,
                  offered for sale, pledged or hypothecated in the absence of a
                  registration statement in effect with respect to the
                  securities under such Act or an opinion of counsel
                  satisfactory to the Company that such registration is not
                  required or unless sold pursuant to Rule 144 of such Act."

         7. RESERVED.

         8. RESERVED.

         9. LIMITATIONS ON DISPOSITION. The Holder of this Warrant, by
acceptance hereof, agrees to comply in all respects with the provisions of this
Section 9. Without in any way limiting the representations set forth above, the
Holder of this Warrant agrees not to make any disposition of this Warrant or any
Warrant Shares, unless and until the transferee has agreed in writing for the
benefit of the Company to be bound by this Section 9 and the other provisions of
this Warrant as if such transferee were the original Holder hereof, provided and
to the extent such provisions are then applicable, and

                           (a) There is then in effect a Registration Statement
under the Securities Act covering such proposed disposition and such disposition
is made in accordance with such Registration Statement; or


                                      -6-
<PAGE>

                           (b) (i) the Holder shall have notified the Company of
the proposed disposition and shall have furnished the Company with a detailed
statement of the circumstances surrounding the proposed disposition, and the
Company has given its prior written consent (which consent shall not be
unreasonably withheld), and (ii) if reasonably requested by the Company, the
Holder shall have furnished the Company with an opinion of counsel, reasonably
satisfactory to the Company, that such disposition will not require registration
of the Warrant and/or the Warrant Shares under the Securities Act. It is agreed
that the Company will not require opinions of counsel for transactions made
pursuant to Rule 144 except in unusual circumstances.

         Notwithstanding any other provision of this Section 9, Holder may
transfer this Warrant and/or the Warrant Shares to any investment fund in which
MedCap Management & Research LLC or any of its affiliates is the General Partner
or the manager; provided that, such fund is an "accredited investor" as such
term is then defined in Section 501 of Regulation D promulgated pursuant to the
Securities Act.

         10. MISCELLANEOUS.

                  10.1 TRANSFER OF WARRANT. In addition to the transfer
restrictions set forth in Section 9, this Warrant shall not be transferable or
assignable in any manner and no interest shall be pledged or otherwise
encumbered by the Holder without the express written consent of the Company.

                  10.2 TITLES AND SUBTITLES. The titles and subtitles used in
this Warrant are for convenience only and are not to be considered in construing
or interpreting this Warrant.

                  10.3 NOTICE. Notice or demand pursuant to this Warrant shall
be sufficiently given or made, if sent by first-class mail, postage prepaid,
addressed, if to the Holder of this Warrant, to the Holder at its last known
address as it shall appear in the records of the Company, and if to the Company,
at 14114 Dallas Pkwy., Suite 600, Dallas, TX 75254, Attention: Secretary. The
Company may alter the address to which communications are to be sent by giving
notice of such change of address in conformity with the provisions of this
Section 10.3 for the giving of notice.

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

                  10.5 AMENDMENT. This Warrant may be modified, amended or
terminated by a writing signed by the Company and the Holder.

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


                                      -7-
<PAGE>

                  10.7 GOVERNING LAW. This Warrant shall be governed by and
construed and enforced in accordance with the laws of the State of Delaware,
without giving effect to its conflicts of laws principles.


                                       -8-
<PAGE>



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

Date:  _______ __, 2004                      CRDENTIA CORP.


                                             By:________________________________
                                             Name: James D. Durham
                                             Its: Chief Executive Officer


ACKNOWLEDGED AND AGREED:

__________________________________

By:_______________________________
Name: ____________________________
Its: _____________________________




                  [SIGNATURE PAGE TO WARRANT TO PURCHASE SHARES
                          OF SERIES C PREFERRED STOCK]

<PAGE>


                                   SCHEDULE 1


                               SUBSCRIPTION NOTICE
               (To be signed only on exercise of Warrant for cash)



To: Crdentia Corp.

         The undersigned, the holder of the Warrant attached hereto, hereby
irrevocably elects to exercise the purchase rights represented by such Warrant
for, and to purchase thereunder, __________* shares of Stock of Crdentia Corp.,
and herewith makes payment of $__________ therefor, and requests that the
certificates for such shares be issued in the name of, and delivered to
____________________, whose address is _________________________.



                                   _____________________________________________
                                   (Signature must conform in all respects to
                                   name of the Holder as specified on the face
                                   of the Warrant)


                                   _____________________________________________
                                   (Print Name)


                                   _____________________________________________
                                   (Address)


Dated:  ____________________



_______________
   *Insert here the number of shares as to which the Warrant is being exercised.


                                  Schedule 1-1
<PAGE>

                                   SCHEDULE 2


                         NOTICE OF NET ISSUANCE EXERCISE

             (To be signed only on net issuance exercise of Warrant)



To: Crdentia Corp.:

         Pursuant to Section 1.5 of the Warrant, the undersigned, the holder of
the Warrant attached hereto, hereby irrevocably elects to exercise the net
issuance rights with respect to _____________ shares of such Warrant for that
number of shares of Stock of Crdentia Corp., determined pursuant to the formula
set forth in Section 1.5 of the Warrant, and requests that the certificates for
such shares be issued in the name of, and delivered to ___________________,
whose address is _________________________________________.




                                   _____________________________________________
                                   (Signature must conform in all respects to
                                   name of the Holder as specified on the face
                                   of the Warrant)


                                   _____________________________________________
                                   (Print Name)


                                   _____________________________________________
                                   (Address)


Dated:  ____________________


                                  Schedule 2-1
<PAGE>


                                   SCHEDULE A

                               Schedule of Holders

MedCap Partners L.P.
Durham Properties, LLC
Hornthal Investment Partners, L.P.
Scott H. Richison
BBW Investments LP



                                  Schedule 2-2

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.4
<SEQUENCE>5
<FILENAME>crdentia_ex4-4.txt
<TEXT>
<PAGE>
                                                                     Exhibit 4.4


         THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE
         NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
         "ACT"), OR ANY STATE SECURITIES LAWS. THEY MAY NOT BE SOLD, OFFERED FOR
         SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF
         A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER
         SUCH ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
         COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT
         TO AN EXEMPTION TO SUCH ACT.


                                                                      Void after
                                                                 August 31, 2009


                           WARRANT TO PURCHASE SHARES
                          OF SERIES B-1 PREFERRED STOCK
                                       OF
                                 CRDENTIA CORP.

         This certifies that, for value received, MedCap Partners L.P., together
with its successors and assigns (the "Holder") is entitled to subscribe for and
purchase, on the terms hereof, shares of Series B-1 Preferred Stock (the
"Stock") of Crdentia Corp., a Delaware corporation (the "Company"), which is
convertible into shares of Common Stock of the Company (the "Common Stock"),
subject to adjustment as provided herein.

         This Warrant is subject to the following terms and conditions:

         1. EXERCISE OF WARRANT. The terms and conditions upon which this
Warrant may be exercised, and the Stock covered hereby may be purchased, are as
follows:

                  1.1 TERM. Subject to the terms hereof, this Warrant may be
exercised at any time after the date hereof, or from time to time, in whole or
in part; provided, however, that in no event may this Warrant be exercised (the
"Exercise Date") later than 5:00 p.m. (Pacific Time) on the earlier of (a) the
close of business on August 31, 2009 or (b) the closing of a Corporate
Transaction (as defined below) (the "Exercise Period"); provided that at least
twenty (20) days prior to the occurrence of the closing of a Corporate
Transaction, the Company shall have sent to the Holder notice of such event.

                  For purposes hereof, the term "Corporate Transaction" shall
mean (a) the sale, conveyance or disposal of all or substantially all of the
Company's property or business; (b) the Company's merger into or consolidation
with any other corporation (other than a a merger effected exclusively for the
purpose of changing the domicile of the Company or a merger in which the owners
of the voting stock of the Company prior to the merger own at least 50% of the
voting interests in the surviving entity) or any other transaction or series of
transactions, in which more than fifty percent (50%) of the voting power of the
Company is disposed of (other than a sale by the Company of shares of its
capital stock in an equity financing); or (c) the closing of an underwritten
public offering of the Company's Common Stock pursuant to a registration
statement under the Securities Act of 1933, as amended (the "Securities Act"),
with aggregate net proceeds to the Company in excess of twenty-five million
dollars ($25,000,000).


<PAGE>

                  1.2 NUMBER OF SHARES. This Warrant may be exercised for 6,000
shares of Stock, subject to adjustment as provided herein.

                  1.3 EXERCISE PRICE. The per share exercise price for the
shares of Stock to be issued upon exercise of this Warrant shall be $60.00,
subject to adjustment as provided herein (such price as adjusted from time to
time as provided herein is called the "Exercise Price").

                  1.4 METHOD OF EXERCISE. The exercise of the purchase rights
evidenced by this Warrant shall be effected by (a) the surrender of the Warrant,
together with a duly executed copy of the form of a subscription attached hereto
as Schedule 1, to the Company at its principal offices and (b) except as set
forth in Section 1.5, the delivery of the aggregate Exercise Price by check or
bank draft payable to the Company's order or by wire transfer to the Company's
account for the number of shares for which the purchase rights hereunder are
being exercised or any other form of consideration approved by the Company's
Board of Directors (the "Board"). Each exercise of this Warrant shall be deemed
to have been effected immediately prior to the close of business on the day on
which this Warrant shall have been surrendered to the Company as provided herein
or at such later date as may be specified in the executed form of subscription,
and at such time the person or persons in whose name or names any certificate or
certificates for shares of Stock shall be issuable upon such exercise as
provided herein shall be deemed to have become the holder or holders of record
thereof.

                  1.5 NET ISSUANCE.

                           (a) RIGHT TO CONVERT. In addition to and without
limiting the rights of the Holder under the terms of this Warrant, the Holder
shall have the right to convert this Warrant or any portion thereof (the
"Conversion Right") into shares of Stock as provided in this Section 1.5 at any
time or from time to time during the Exercise Period. Upon exercise of the
Conversion Right with respect to a particular number of shares subject to the
Warrant (the "Converted Warrant Shares"), the Company shall deliver to the
Holder (without payment by the Holder of any exercise price or any cash or other
consideration) that number of shares of fully paid and nonassessable Stock
computed using the following formula:

                       X =     Y (A - B)
                               ---------
                                  A

            Where      X =     the number of shares of Stock to be delivered to
                               the Holder
                       Y =     the number of Converted Warrant Shares
                       A =     the fair market value of the total number of
                               shares of Common Stock into which one share of
                               Stock can be converted on the Conversion Date (as
                               defined below)
                       B =     the Exercise Price (as adjusted to the Conversion
                               Date)

                                      -2-
<PAGE>

         The Conversion Right may only be exercised with respect to a whole
number of shares subject to the Warrant. No fractional shares shall be issuable
upon exercise of the Conversion Right, and if the number of shares to be issued
determined in accordance with the foregoing formula is other than a whole
number, the Company shall pay to the Holder an amount in cash equal to the fair
market value of the resulting fractional share on the Conversion Date (as
defined below). Shares issued pursuant to the Conversion Right shall be treated
as if they were issued upon the exercise of the Warrant.

                           (b) METHOD OF EXERCISE. The Conversion Right may be
exercised by the Holder by the surrender of the Warrant at the principal office
of the Company together with a notice in the form attached hereto as Schedule 2
specifying that the Holder thereby intends to exercise the Conversion Right and
indicating the total number of shares under the Warrant that the Holder is
exercising through the Conversion Right. Such conversion shall be effective upon
receipt by the Company of the Warrant together with the aforesaid written
statement, or on such later date as is specified therein (the "Conversion
Date"). Certificates for the shares issuable upon exercise of the Conversion
Right and, if applicable, a new warrant evidencing the balance of the shares
remaining subject to the Warrant, shall be issued as of the Conversion Date and
shall be delivered to the Holder promptly following the Conversion Date.

                           (c) DETERMINATION OF FAIR MARKET VALUE. For purposes
of this Section 1.5, the fair market value of a share of Common Stock on the
Conversion Date shall be the average of the closing prices of the Common Stock
as reported on a Trading Market (as defined below) for the last fifteen (15)
trading day period ending two (2) days prior to the Conversion Date. For
purposes of this Warrant, "Trading Market" shall mean one of the following which
has been determined by the Company's Board of Directors to be the Company's
principal trading market: NASD OTC Bulletin Board, the Nasdaq SmallCap Market,
the Nasdaq National Market, the American Stock Exchange or the New York Stock
Exchange. Notwithstanding the foregoing, in the event the Common Stock is not
publicly trading on the Conversion Date, the fair market value of a share of
Common Stock on the Conversion Date shall be determined in good faith by the
Company's Board of Directors.

                           (d) LIMIT ON EXERCISE. Notwithstanding any other
provision of this Warrant, the Holder shall not be entitled to exercise the
Conversion Right, in whole or in part, unless the Holder agrees, in writing, to
immediately convert the Shares issued pursuant to the Conversion Right into
shares of the Company's Common Stock (pursuant to the terms of the Company's
Amended and Restated Certificate of Incorporation and Certificate of
Designations, Preferences and Rights of Series B-1 Preferred Stock of the
Company).

         2. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES. The Exercise
Price and the number of shares purchasable upon the exercise of this Warrant
shall be subject to adjustment from time to time upon the occurrence of certain
events described in this Section 2. Upon each adjustment of the Exercise Price,
the Holder of this Warrant shall thereafter be entitled to purchase, at the
Exercise Price resulting from such adjustment, the number of shares obtained by
multiplying the Exercise Price in effect immediately prior to such adjustment by
the number of shares purchasable pursuant hereto immediately prior to such
adjustment, and dividing the product thereof by the Exercise Price resulting
from such adjustment.


                                      -3-
<PAGE>

                  2.1 SUBDIVISION OR COMBINATION OF STOCK. In case the Company
shall at any time subdivide its outstanding shares of Series B-1 Preferred Stock
into a greater number of shares, the Exercise Price in effect immediately prior
to such subdivision shall be proportionately reduced, and conversely, in case
the outstanding shares of Series B-1 Preferred Stock of the Company shall be
combined into a smaller number of shares, the Exercise Price in effect
immediately prior to such combination shall be proportionately increased.

                  2.2 DIVIDENDS IN STOCK, OTHER STOCK, PROPERTY,
RECLASSIFICATION. If at any time or from time to time the holders of the Series
B-1 Preferred Stock (or any shares of stock or other securities at the time
receivable upon the exercise of this Warrant) shall have received or become
entitled to receive, without payment therefor,

                           (a) Series B-1 Preferred Stock, or any shares of
stock or other securities whether or not such securities are at any time
directly or indirectly convertible into or exchangeable for Common Stock, or any
rights or options to subscribe for, purchase or otherwise acquire any of the
foregoing by way of dividend or other distribution, or

                           (b) any cash paid or payable otherwise than as a cash
dividend, or

                           (c) Series B-1 Preferred Stock or other or additional
stock or other securities or property (including cash) by way of spin off,
split-up, reclassification, combination of shares or similar corporate
rearrangement, (other than shares of Stock issued as a stock split, adjustments
in respect of which shall be covered by the terms of Section 2.1 above),

         Then and in each such case, the Holder hereof shall, upon the exercise
of this Warrant, be entitled to receive, in addition to the number of shares of
Stock receivable thereupon, and without payment of any additional consideration
therefore, the amount of stock and other securities and property (including cash
in the cases referred to in clauses (b) and (c) above) which such Holder would
hold on the date of such exercise had he been the holder of record of such Stock
as of the date on which holders of Series B-1 Preferred Stock received or became
entitled to receive such shares and/or all other additional stock and other
securities and property.

                  2.3 RECLASSIFICATION OR REORGANIZATION. If the Stock (or any
shares of stock or other securities which may be) issuable upon the exercise of
this Warrant shall be changed into the same or different number of shares of any
class or classes of stock, whether by capital reorganization, reclassification
or otherwise (other than a subdivision or combination of shares or stock
dividend provided for in Section 2.1 above, or a Corporate Transaction, in which
case this Warrant shall terminate if not exercised), then and in each such event
the Holder shall be entitled to receive upon the exercise of this Warrant the
kind and amount of shares of stock and other securities and property receivable
upon such reorganization, reclassification or other change, to which a holder of
the number of shares of Stock (or any shares of stock or other securities which
may be) issuable upon the exercise of this Warrant would have received if this
Warrant had been exercised immediately prior to such reorganization,
reclassification or other change, all subject to further adjustment as provided
herein.


                                      -4-
<PAGE>

                  2.4 NOTICE OF ADJUSTMENTS AND RECORD DATES. The Company shall
promptly notify the Holder in writing of each adjustment or readjustment of the
exercise price hereunder and the number of shares of Stock (or any shares of
stock or other securities which may be) issuable upon the exercise of this
Warrant. Such notice shall state the adjustment or readjustment and show in
reasonable detail the facts on which that adjustment or readjustment is based.
In the event of any taking by the Company of a record of the holders of Common
Stock for the purpose of determining the holders thereof who are entitled to
receive any dividend or other distribution, the Company shall notify the Holder
in writing of such record date at least twenty (20) days prior to the date
specified therein.

                  2.5 SHARES TO BE FULLY PAID; RESERVATION OF SHARES. The
Company covenants and agrees that all shares of Stock which may be issued upon
the exercise of the rights represented by this Warrant will, upon payment of the
Exercise Price and issuance pursuant to Section 1.4 or a net issuance pursuant
to Section 1.5, be duly authorized, validly issued, fully paid and nonassessable
and free from all preemptive rights of any stockholder and free of all taxes,
liens and charges with respect to the issue thereof. The Company further
covenants and agrees that during the period within which the rights represented
by this Warrant may be exercised, the Company will at all times have authorized
and reserved, for the purpose of issue or transfer upon exercise of the
subscription rights evidenced by this Warrant, a sufficient number of shares of
authorized but unissued Series B-1 Preferred Stock and Common Stock into which
such Series B-1 Preferred Stock may be converted, or other securities and
property, when and as required to provide for the exercise of the rights
represented by this Warrant. The Company will take all such action as may be
necessary to assure that such shares of Series B-1 Preferred Stock and Common
Stock may be issued as provided herein without violation of any applicable law
or regulation.

         3. REPLACEMENT OF WARRANTS. On receipt by the Company of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of this Warrant and, in the case of any such loss, theft or
destruction of this Warrant, on delivery of an indemnity agreement reasonably
satisfactory in form and amount to the Company or, in the case of any such
mutilation, on surrender and cancellation of such Warrant, the Company at its
expense shall execute and deliver to the Holder, in lieu thereof, a new Warrant
of like tenor.

         4. INVESTMENT INTENT. Unless a current registration statement under the
Securities Act, shall be in effect with respect to the securities to be issued
upon exercise of this Warrant, the Holder, by accepting this Warrant, covenants
and agrees that, at the time of exercise hereof, and at the time of any proposed
transfer of any securities acquired upon exercise hereof, the Holder shall
deliver to the Company a written statement that the securities acquired by the
Holder upon exercise hereof are for the own account of the Holder for investment
and are not acquired with a view to, or for sale in connection with, any
distribution thereof (or any portion thereof) and with no present intention (at
any such time) of offering or distributing such securities (or any portion
thereof).

         5. NO RIGHTS OR LIABILITY AS A SHAREHOLDER. This Warrant does not
entitle the Holder hereof to any voting rights or other rights as a shareholder
of the Company. No provisions hereof, in the absence of affirmative action by
the Holder to purchase Stock, and no enumeration herein of the rights or
privileges of the Holder, shall give rise to any liability of the Holder as a
shareholder of the Company.

         6. REPRESENTATIONS OF HOLDER. The Holder hereby represents and
acknowledges to the Company that:


                                      -5-
<PAGE>

                  6.1 this Warrant, the Stock issuable upon exercise of this
Warrant and any securities issued with respect to any of them by way of a stock
dividend or stock split or in connection with a recapitalization, merger,
consolidation or other reorganization will be "restricted securities" as such
term is used in the rules and regulations under the Securities Act, and that
such securities have not been and may not be registered under the Securities Act
or any state securities law, and that such securities must be held indefinitely
unless registration is effected or transfer can be made pursuant to appropriate
exemptions;

                  6.2 the Holder has read, and fully understands, the terms of
this Warrant set forth on its face and the attachments hereto, including the
restrictions on transfer contained herein;

                  6.3 the Holder is purchasing for investment for its own
account and not with a view to or for sale in connection with any distribution
of this Warrant or the Stock of the Company issuable upon exercise of this
Warrant and it has no intention of selling such securities in a public
distribution in violation of the federal securities laws or any applicable state
securities laws;

                  6.4 the Company may affix the following legends (in addition
to any other legend(s), if any, required by applicable state corporate and/or
securities laws) to certificates for shares of Stock (or other securities)
issued upon exercise of this Warrant ("Warrant Shares"):

                  "These securities have not been registered under the
                  Securities Act of 1933, as amended. They may not be sold,
                  offered for sale, pledged or hypothecated in the absence of a
                  registration statement in effect with respect to the
                  securities under such Act or an opinion of counsel
                  satisfactory to the Company that such registration is not
                  required or unless sold pursuant to Rule 144 of such Act."

         7. RESERVED.

         8. RESERVED.

         9. LIMITATIONS ON DISPOSITION. The Holder of this Warrant, by
acceptance hereof, agrees to comply in all respects with the provisions of this
Section 9. Without in any way limiting the representations set forth above, the
Holder of this Warrant agrees not to make any disposition of this Warrant or any
Warrant Shares, unless and until the transferee has agreed in writing for the
benefit of the Company to be bound by this Section 9 and the other provisions of
this Warrant as if such transferee were the original Holder hereof, provided and
to the extent such provisions are then applicable, and

                           (a) There is then in effect a Registration Statement
under the Securities Act covering such proposed disposition and such disposition
is made in accordance with such Registration Statement; or


                                      -6-
<PAGE>

                           (b) (i) the Holder shall have notified the Company of
the proposed disposition and shall have furnished the Company with a detailed
statement of the circumstances surrounding the proposed disposition, and the
Company has given its prior written consent (which consent shall not be
unreasonably withheld), and (ii) if reasonably requested by the Company, the
Holder shall have furnished the Company with an opinion of counsel, reasonably
satisfactory to the Company, that such disposition will not require registration
of the Warrant and/or the Warrant Shares under the Securities Act. It is agreed
that the Company will not require opinions of counsel for transactions made
pursuant to Rule 144 except in unusual circumstances.

         Notwithstanding any other provision of this Section 9, Holder may
transfer this Warrant and/or the Warrant Shares to any investment fund in which
MedCap Management & Research LLC or any of its affiliates is the General Partner
or the manager; provided that, such fund is an "accredited investor" as such
term is then defined in Section 501 of Regulation D promulgated pursuant to the
Securities Act.

         10. MISCELLANEOUS.

                  10.1 TRANSFER OF WARRANT. In addition to the transfer
restrictions set forth in Section 9, this Warrant shall not be transferable or
assignable in any manner and no interest shall be pledged or otherwise
encumbered by the Holder without the express written consent of the Company.

                  10.2 TITLES AND SUBTITLES. The titles and subtitles used in
this Warrant are for convenience only and are not to be considered in construing
or interpreting this Warrant.

                  10.3 NOTICE. Notice or demand pursuant to this Warrant shall
be sufficiently given or made, if sent by first-class mail, postage prepaid,
addressed, if to the Holder of this Warrant, to the Holder at its last known
address as it shall appear in the records of the Company, and if to the Company,
at 14114 Dallas Pkwy., Suite 600, Dallas, TX 75254, Attention: Secretary. The
Company may alter the address to which communications are to be sent by giving
notice of such change of address in conformity with the provisions of this
Section 10.3 for the giving of notice.

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

                  10.5 AMENDMENT. This Warrant may be modified, amended or
terminated by a writing signed by the Company and the Holder.

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


                                      -7-
<PAGE>

                  10.7 GOVERNING LAW. This Warrant shall be governed by and
construed and enforced in accordance with the laws of the State of Delaware,
without giving effect to its conflicts of laws principles.


                                      -8-
<PAGE>



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

Date:  August 31, 2004                       CRDENTIA CORP.


                                             By: /S/ JAMES D. DURHAM
                                                 -------------------------------
                                                 Name:  James D. Durham
                                                 Its:  Chief Executive Officer


ACKNOWLEDGED AND AGREED:

MedCap Partners L.P.

By: C. FRED TONEY
Name: C. FRED TONEY
Its: MANAGING MEMBER OF MEDCAP MANAGEMENT & RESEARCH
LLC, THE GENERAL PARTNER OF MEDCAP PARTNERS L.P.




                  [SIGNATURE PAGE TO WARRANT TO PURCHASE SHARES
                         OF SERIES B-1 PREFERRED STOCK]

<PAGE>

                                   SCHEDULE 1


                               SUBSCRIPTION NOTICE
               (To be signed only on exercise of Warrant for cash)



To:      Crdentia Corp.

         The undersigned, the holder of the Warrant attached hereto, hereby
irrevocably elects to exercise the purchase rights represented by such Warrant
for, and to purchase thereunder, __________* shares of Stock of Crdentia Corp.,
and herewith makes payment of $__________ therefor, and requests that the
certificates for such shares be issued in the name of, and delivered to
____________________, whose address is _________________________.



                                        ________________________________________
                                        (Signature must conform in all respects
                                        to name of the Holder as specified on
                                        the face of the Warrant)


                                        ________________________________________
                                        (Print Name)


                                        ________________________________________
                                        (Address)


Dated:  ____________________

_____________

   *Insert here the number of shares as to which the Warrant is being exercised.


                                  Schedule 1-1
<PAGE>


                                   SCHEDULE 2


                         NOTICE OF NET ISSUANCE EXERCISE

             (To be signed only on net issuance exercise of Warrant)



To:      Crdentia Corp.:

         Pursuant to Section 1.5 of the Warrant, the undersigned, the holder of
the Warrant attached hereto, hereby irrevocably elects to exercise the net
issuance rights with respect to _____________ shares of such Warrant for that
number of shares of Stock of Crdentia Corp., determined pursuant to the formula
set forth in Section 1.5 of the Warrant, and requests that the certificates for
such shares be issued in the name of, and delivered to ___________________,
whose address is _________________________________________.




                                        ________________________________________
                                        (Signature must conform in all respects
                                        to name of the Holder as specified on
                                        the face of the Warrant)


                                        ________________________________________
                                        (Print Name)


                                        ________________________________________
                                        (Address)


Dated:  ____________________




                                  Schedule 2-1

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.5
<SEQUENCE>6
<FILENAME>crdentia_ex4-5.txt
<TEXT>
<PAGE>

                                                                     Exhibit 4.5



                                WARRANT AGREEMENT

         THIS WARRANT AGREEMENT is entered into this 31st day of August, 2004
(as amended, supplemented or modified from time to time, this "WARRANT
AGREEMENT"), by and between Crdentia Corp., a Delaware corporation (together
with its successors and permitted assigns, the "ISSUER"), and Bridge Opportunity
Finance LLC, a Delaware limited liability company (together with its successors
and permitted assigns, the "HOLDER").

                                    RECITALS:

         WHEREAS, pursuant to the terms of that certain Loan and Security
Agreement-Term Loan dated as of the date hereof (as the same may be amended,
supplemented or otherwise modified from time to time, the "TERM LOAN
AGREEMENT"), among the Holder and the Issuer, Baker Anderson Christie, Inc.
("BAKER"), Nurses Network, Inc. ("NURSES NETWORK"), New Age Staffing, Inc. ("NEW
AGE"), PSR Nurses, Ltd. ("PSR LTD."), PSR Nurse Recruiting, Inc. ("PSR
RECRUITING") and PSR Nurses Holdings Corp. ("PSR HOLDING"), CRDE Corp. ("CRDE"),
AHHC Acquisition Corporation ("AHHC"), and CPS Acquisition Corporation ("CPS"),
the Holder has agreed to make term loans to Borrower in an aggregate principal
amount of up to $10,000,000 (the "LOAN"), on the terms and conditions set forth
in the Term Loan Agreement and as further evidenced by the Notes (as defined
below);

         WHEREAS, the Issuer will derive significant benefits as a result of the
Holder making the Loan; and

         WHEREAS, in order to induce the Holder to make the Loan to Borrower,
the Issuer has agreed to issue to the Holder the Warrants hereinafter described.

         NOW, THEREFORE, in consideration of the premises set forth herein, the
parties hereto agree as follows:

         Section 1       DEFINITIONS.


              1.1 DEFINED TERMS. As used in this Warrant Agreement, the
following terms shall have the following meanings, unless the context otherwise
requires:

         "AFFILIATE" shall mean any Person controlling, controlled by or under
common control with another Person. For purposes of this definition, "CONTROL,"
"CONTROLLING" or "CONTROLLED BY" means the possession, directly or indirectly,
by a Person of the power to direct or cause direction of the management and
policies of any other Person, whether through ownership of equity interests, by
contract or otherwise. Without limiting the generality of the foregoing, each of
the following shall be an Affiliate: any officer, director, manager,
stockholder, member or subsidiary of a Person, and any other Person with whom or
which a Person has common stockholders, officers or directors, or equity holders
or managers. Notwithstanding anything to the contrary contained herein, the
Holder shall in no event be deemed an "AFFILIATE" of the Issuer or Borrower for
purposes of this Warrant Agreement.


<PAGE>

         "BORROWER" shall mean, collectively, the Issuer, Baker, Nurses Network,
New Age, PSR Ltd., PSR Recruiting, and PSR Holding.

         "BUSINESS DAY" shall mean any day that is not (i) a Saturday, (ii) a
Sunday or (iii) if applicable, a day on which banks in Chicago, Illinois are
required or permitted to be closed.

         "CHANGE OF CONTROL" shall mean the occurrence, at any time after the
date hereof, of (i) any Person or two or more Persons acting in concert
acquiring beneficial ownership (within the meaning of Rule 13d-3 of the
Commission under the Securities Exchange Act), directly or indirectly, of
securities of the Issuer (or other securities convertible into such securities)
representing more than fifty percent (50%) of the combined voting power of all
securities of the Issuer entitled to vote in the election of directors; or (ii)
commencing after the date hereof, individuals who as of the date hereof were
directors of the Issuer ceasing for any reason to constitute a majority of the
Board of Directors of the Issuer; or (iii) any Person or two or more Persons
acting in concert acquiring by contract or otherwise, or entering into a
contract or arrangement which upon consummation will result in its or their
acquisition of, or control over, securities of the Issuer (or other securities
convertible into such securities) representing more than fifty percent (50%) of
the combined voting power of all securities of the Issuer entitled to vote in
the election of directors; or (iv) the sale of all or substantially all of the
assets of the Issuer or its subsidiaries in one or a series of related
transactions.

         "CHARTER" shall mean the Issuer's Certificate of Incorporation, as
amended from time to time.

         "CLOSING DATE" shall mean the date of the closing of the transactions
contemplated by the Term Loan Agreement.

         "CLOSING DATE CAPITALIZATION" shall mean the capitalization of the
Issuer on the Closing Date, as set forth on Schedule 3 attached hereto.

         "COMMISSION" or "SEC" shall mean the Securities and Exchange Commission
or any successor regulatory body.

         "COMMON STOCK" shall mean the shares of the Issuer's Common Stock,
$.0001 par value per share, and shall include any stock into which such Common
Stock shall have been converted or any stock resulting from any reclassification
of such Common Stock and all other stock of any class or classes (however
designated) of the Issuer, the registered holders of which have the right,
without limitation as to amount, either to all or to a share of the balance of
current dividends and liquidating dividends after the payment of dividends and
distributions on any shares entitled to preference.


                                       2
<PAGE>

         "CONVERTIBLE SECURITIES" means securities convertible into or
exchangeable for Common Stock.

         "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.

         "EXEMPTED SECURITIES" shall mean (i) the Warrants and (ii) the Warrant
Shares.

         "EXPIRATION DATE" shall mean the "EXPIRATION DATE" set forth in any
Warrant Certificate.

         "EXERCISE PRICE" shall mean the exercise price of a Warrant as set
forth in the Warrant Certificate evidencing such Warrant; PROVIDED, HOWEVER,
that the Exercise Price is subject to adjustment pursuant to the provisions of
Section 12 hereof.

         "FAIR MARKET VALUE" of a share of Common Stock on any date shall be
determined in a reasonably prompt manner and shall be calculated under clause
(i) or (ii) below, as applicable:

                  (i) (A) the closing price of the Common Stock as of the date
         of issuance of any Warrants under this Warrant Agreement, as evidenced
         by a Warrant Certificate, or, if no closing price is available on that
         date, then the closing price on the immediately preceding Business Day
         on which there is a closing price, if such security is listed or
         admitted for trading on any domestic national securities exchange, as
         officially reported on the principal securities exchange on which the
         Common Stock is listed; or (B) if not reported as described in CLAUSE
         (A), the closing sale price of the Common Stock as of the date in
         question under this Warrant Agreement, or, if no closing sale price is
         available on that date, then the closing sale price on the immediately
         preceding Business Day on which there is a closing sale price, as
         reported by NASDAQ, or any other system of automated dissemination of
         quotations of securities prices then in common use, if so quoted; or

                  (ii) if the closing price of the Common Stock is neither
         reported as described in CLAUSE (i)(A) above, nor quoted as described
         in CLAUSE (i)(B) above, then the Fair Market Value shall be the higher
         of (A) the Fair Market Value determined by the Issuer's Board of
         Directors in good faith and on a reasonable basis; and (B) the Fair
         Market Value determined in accordance with the appraisal procedure set
         forth in CLAUSE (iii) below.

                  (iii) The Issuer and the Holder shall, acting reasonably and
         in good faith, mutually select a single Qualified Appraiser. Such
         Qualified Appraiser shall determine the value of the Warrant Shares,
         assuming a sale thereof between a willing buyer and a willing seller,
         both of whom have full knowledge of the financial and other affairs of
         the Issuer, and neither of whom is under any compulsion to sell or to
         buy. The decision of the Qualified Appraiser shall be final and binding
         on all parties. The fees and expenses of the Qualified Appraiser shall
         be borne by the Issuer. In the event that the Holder and the Issuer are
         unable to mutually agree on a Qualified Appraiser within thirty (30)
         days following either party's request for a determination of Fair


                                       3
<PAGE>

         Market Value or any event that requires such determination, then Fair
         Market Value shall be determined pursuant to binding arbitration
         commenced in Chicago, Illinois within thirty (30) days following the
         expiration of the aforementioned 30-day period, pursuant to the
         commercial arbitration rules of the American Arbitration Association,
         before a single independent arbitrator mutually selected by the Issuer
         and the Holder; provided, that upon the written notification of either
         party, the arbitration shall be conducted before a panel of three
         arbitrators, one each selected by the Holder and the Issuer,
         respectively, and the third appointed jointly by the two arbitrators
         selected by the parties. All fees, costs and expenses of such
         arbitration shall be borne by the Issuer.

         "FORM S-3" means such form under the Securities Act as in effect on the
date hereof or any registration form under the Securities Act subsequently
adopted by the SEC which permits inclusion or incorporation of substantial
information by reference to other documents filed by the Issuer with the SEC.

         "GAAP" shall mean United States generally accepted accounting
principles as promulgated by the Financial Accounting Standards Board, as in
effect from time to time.

         "HOLDER" shall have the meaning set forth in the introductory paragraph
hereof.

         "ISSUER" shall have the meaning set forth in the introductory paragraph
hereof.

         "LOAN" shall have the meaning set forth in the recitals hereof.

         "NASDAQ" means the Nasdaq Stock Market, Inc.

         "NON-PUBLIC WARRANT SHARES" shall mean Warrant Shares that have not
been sold to the public and bear the legend set forth in SECTION 14.2. This term
shall include any securities into which Non-Public Warrant Shares are converted,
unless such securities are "margin securities" as that term is construed under
federal securities laws.

         "NOTES" shall mean one or more promissory notes issued by Borrower to
Holder evidencing the Loan.

         "OPTIONS" means any grant, issue or sale by the Issuer of any right,
warrant or option to subscribe for or to purchase Common Stock or any
Convertible Securities.

         "PERSON" shall mean an individual or any sole proprietorship,
partnership, joint venture, limited liability company, trust, unincorporated
organization, association, corporation, entity, government or any agency or
political division thereof.

         "PLAN" shall have the meaning set forth in SECTION 2.6.

         "QUALIFIED APPRAISER" shall mean an independent, experienced appraiser
who is employed by a nationally or regionally recognized investment banking,
accounting or similar firm that is experienced in providing equity valuation
services in the Issuer's industry in the ordinary course of its business.

                                       4
<PAGE>

         "REGISTER," "REGISTERED," and "REGISTRATION" refer to a registration
effected by preparing and filing a registration statement or similar document in
compliance with the Securities Act, and the declaration or ordering of
effectiveness of such registration statement or document.

         "REGISTRABLE SECURITIES" shall mean (i) the Common Stock issued to the
Holders pursuant to exercise of the Warrants and (ii) any Common Stock 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 Section 15 are not assigned pursuant to
the terms of this Warrant Agreement.

         "REGISTRABLE SECURITIES THEN OUTSTANDING" shall mean 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.

         "SEC DOCUMENTS" shall mean the reports, schedules, forms, statements
and other documents required to be filed by the Issuer with the Commission
pursuant to the reporting requirements of the Exchange Act after December 31,
2002.

         "SECURITIES ACT" shall mean the Securities Act of 1933, as amended.

         "SUBSIDIARY" shall mean, with respect to a Person, any other Person of
which the outstanding capital stock, membership interest or other equity
interest possessing a majority of the voting power is owned or controlled by
such Person directly or indirectly through one or more Subsidiaries.

         "TERM LOAN AGREEMENT" shall have the meaning set forth in the recitals
hereof.

         "TRADING DAY" shall mean any day on which a Trading Market is open for
trading.

         "TRADING MARKET" shall mean any of the NASD OTC Bulletin Board, NASDAQ
SmallCap Market, the Nasdaq National Market, the American Stock Exchange or the
New York Stock Exchange.

         "VALIDLY ISSUED" shall mean, with respect to any shares of capital
stock, that such stock has been validly issued and is fully paid and
nonassessable.

         "WARRANT AGREEMENT" shall have the meaning set forth in the
introductory paragraph hereof.

                                       5
<PAGE>

         "WARRANT CERTIFICATE" shall mean a certificate evidencing one or more
Warrants, substantially in the form of EXHIBIT A attached hereto, with such
changes therein as may be required to reflect any adjustments made pursuant to
SECTION 12 hereof.

         "WARRANT HOLDER" shall mean the Holder or any permitted transferee of
the Warrants and/or Warrant Shares represented by a Warrant Certificate, and for
purposes of SECTION 15 hereof shall at all times include holders of Non-Public
Warrant Shares.

         "WARRANT OFFICE" shall mean the office or agency of the Issuer at which
the Warrant Register shall be maintained and where the Warrant Certificates may
be presented for exercise, exchange, substitution and transfer of the Warrant,
which office or agency will be the office of the Issuer at 14114 Dallas Parkway,
Suite 600, Dallas, TX 75254, and which office or agency may be changed by the
Issuer pursuant to prompt written notice to the Persons named in the Warrant
Register as the Warrant Holders.

         "WARRANT REGISTER" shall mean the register, substantially in the form
of EXHIBIT B attached hereto, maintained by the Issuer at the Warrant Office.

         "WARRANT SHARES" shall mean the shares of Common Stock issued or
issuable upon exercise of the Warrants, as the number of such shares may be
adjusted from time to time pursuant to the Warrant Certificate or this Warrant
Agreement.

         "WARRANTS" shall mean, collectively, the warrants issued pursuant to
this Warrant Agreement entitling the Warrant Holder(s) to purchase from the
Issuer shares of its Common Stock, which Warrants shall be evidenced by one or
more Warrant Certificates.

              1.2 TERM LOAN DEFINITIONS. As used in this Warrant Agreement,
unless otherwise defined herein, terms defined in the Term Loan Agreement (as in
effect on the date hereof or as thereafter amended, restated or otherwise
modified, whether or not the Term Loan Agreement is thereafter terminated or
expires according to its terms) shall have such defined meanings when used
herein.

         Section 2       REPRESENTATIONS AND WARRANTIES. The Issuer hereby
represents and warrants to the Holder as follows:

              2.1 The Issuer is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware, has the corporate
power and authority to execute and deliver this Warrant Agreement and the
Warrant Certificates, to issue the Warrants and to perform its obligations under
this Warrant Agreement and the Warrant Certificates.

              2.2 The execution, delivery and performance by the Issuer of this
Warrant Agreement and the Warrant Certificates, the issuance of the Warrants and
the issuance of the Warrant Shares upon exercise of the Warrants have been duly
authorized by all necessary corporate action and do not and will not violate, or
result in a breach of, or constitute a default under, or require any consent
under, or result in the creation of any lien, charge or encumbrance upon any of
the assets of the Issuer pursuant to, (a) to the knowledge of the Issuer, any
law, statute, ordinance, rule, regulation, order or decree of any court,
governmental body, regulatory authority or administrative agency having
jurisdiction over the Issuer or its Subsidiaries or (b) the Issuer's Charter or
any material contract, mortgage, loan agreement, note, lease or other instrument
binding upon the Issuer or its Subsidiaries or by which any of their respective
assets or properties are bound.


                                       6
<PAGE>

              2.3 This Warrant Agreement and the Initial Warrant Certificate
have been duly executed and delivered by the Issuer. This Warrant Agreement and
the Initial Warrant Certificate constitute legal, valid, binding and enforceable
obligations of the Issuer. The Warrants, when issued upon execution and delivery
of the Warrant Certificates, will be duly authorized. The Warrant Shares, when
issued upon exercise of a Warrant Certificate in accordance with the terms
hereof and thereof (including payment of the aggregate Exercise Price of such
Warrant Certificate), will be duly authorized and Validly Issued.

              2.4 This Warrant Agreement and the Initial Warrant Certificate
have been duly and validly authorized and are free from all taxes, liens,
claims, encumbrances and charges, in each case arising with respect to the
delivery thereof (other than those imposed through acts or omissions of the
Holder.

              2.5 Based in part upon the representations of the Holder in
Section 14, the offer and issuance of the Warrants are exempt from the
registration requirements under the Securities Act.

              2.6 The capitalization of the Issuer is as described in the SEC
Documents as of the respective dates set forth therein. The authorized capital
stock of the Issuer consists of (i) 50,000,000 shares of Common Stock, of which
approximately 6,343,091 shares were issued and outstanding as of the Closing
Date, and (ii) 10,000,000 shares of preferred stock, $.0001 par value. As of the
Closing Date, 2,750,000 shares of Preferred Stock were designated Series A
Preferred Stock, of which 2,750,000 were outstanding, 6,250,000 shares of
Preferred Stock were designated Series B Preferred Stock, of which 6,250,000
shares were outstanding, and 100,000 shares of Preferred Stock were designated
Series B-1 Preferred Stock, of which approximately 40,403 shares were
outstanding. All of such outstanding shares are duly authorized, Validly Issued.
No shares of capital stock of the Issuer, including the Common Stock, are
subject to preemptive rights or any other similar rights of the stockholders of
the Issuer or any liens or encumbrances imposed through the actions or failure
to act of the Issuer. Except as set forth on Schedule 2.6 attached hereto, and
other than pursuant to this Warrant Agreement, the Warrants and as contemplated
by the Issuer's employee benefit plans or director plans disclosed in the
Issuer's SEC Documents (the "Plans"), there are no outstanding options,
warrants, scrip, convertible securities, rights to subscribe for, puts, calls,
rights of first refusal, agreements, understandings, claims or other commitments
or rights of any character whatsoever that could require the Issuer to issue
additional shares of capital stock of the Issuer. Except as set forth on
SCHEDULE 2.6 attached hereto, there are no agreements or arrangements under
which the Issuer is obligated to register the sale of any of its securities
under the Securities Act.


                                       7
<PAGE>

              2.7 Neither the Issuer nor, to the knowledge of the Issuer, any
Person acting for the Issuer has directly or indirectly made any offers or sales
of any security or solicited any offers to buy any security under circumstances
within the prior six months that would require registration under the Securities
Act of the delivery of this Warrant Agreement or any Warrant Certificate (and
the shares of Common Stock issuable upon exercise of any Warrant Certificate);

              2.8 Neither the Issuer nor, to the knowledge of the Issuer, any
Person acting for the Issuer has conducted any "general solicitation" (as such
term is defined in Regulation D of the Securities Act) with respect to this
Warrant Agreement and the Common Stock issuable upon exercise of any Warrant
Certificate.

              2.9 The Issuer has furnished the Holder and its advisors with all
materials (a) relating to the business, finances and operations of the Issuer
and its Subsidiaries and (b) relating to the offer and sale of the Warrants and
the Warrant Shares that have been requested in writing by the Holder or its
advisors.

         Section 3       ISSUANCE OF WARRANTS. The Issuer hereby agrees to issue
and deliver to the Holder or, at the option of the Holder, an Affiliate thereof
designated by the Holder in writing, (a) on the Closing Date, one or more
Warrant Certificates which shall entitle the Holder to purchase, in the
aggregate, three percent (3%) of the Issuer's Closing Date Capitalization at an
Exercise Price of the lesser of (i) $3.15 per share or (ii) the Fair Market
Value per share (the "Initial Warrant Certificate") and (b) one or more Warrant
Certificates evidencing the Warrants to be issued in accordance with the
provisions of Section 3 of the Term Loan Agreement.

         Section 4       REGISTRATION, TRANSFER AND EXCHANGE OF CERTIFICATES.

              4.1 The Issuer shall maintain at the Warrant Office the Warrant
Register for registration of the Warrants and the Warrant Certificates and
transfers thereof. On the Closing Date, the Issuer shall register the Warrants
and the Warrant Certificates in the Warrant Register in the name of the Holder
or an Affiliate thereof, as the case may be. The Issuer may deem and treat the
registered Warrant Holders as the absolute owners of the Warrant Certificates
and the Warrants represented thereby (notwithstanding any notation of ownership
or other writing on the Warrant Certificates made by any Person) for the purpose
of any exercise thereof or any distribution to the holders thereof, and for all
other purposes, and the Issuer shall not be affected by any notice to the
contrary.

              4.2 Subject to SECTION 14, the Issuer shall register the transfer
of any outstanding Warrants in the Warrant Register upon surrender of the
Warrant Certificates evidencing such Warrants to the Issuer at the Warrant
Office, accompanied (if reasonably required by the Issuer) by a written
instrument or instruments of transfer in form reasonably satisfactory to the
Issuer, duly executed by the Warrant Holder(s) or by the duly appointed legal
representative thereof. Upon any such registration of transfer, new Warrant
Certificates evidencing such transferred Warrants shall be issued to the
transferee and the surrendered Warrant Certificates shall be canceled. If fewer
than all the Warrants evidenced by Warrant Certificates surrendered for transfer
are to be transferred, new Warrant Certificate(s) evidencing such remaining
number of Warrants shall be issued to the holder surrendering such Warrant
Certificates.


                                       8
<PAGE>

              4.3 Warrant Certificates may be exchanged at the option of the
Warrant Holders, when surrendered to the Issuer at the Warrant Office, for
another Warrant Certificate(s) of like tenor and representing in the aggregate a
like number of Warrants. Warrant Certificates surrendered for exchange shall be
canceled.

              4.4 No charge shall be made for any such transfer or exchange
except for any tax or other governmental charge imposed on the Warrant Holder in
connection therewith. Except as provided in SECTION 14, each Warrant Certificate
issued upon transfer or exchange shall bear the legend set forth in SECTION 14.2
if the Warrant Certificate presented for transfer or exchange bore such legend.

         Section 5       MUTILATED OR MISSING WARRANT CERTIFICATES. If any
Warrant Certificate is mutilated, lost, stolen or destroyed, the Issuer shall
issue, in exchange and substitution for and upon cancellation of the mutilated
Warrant Certificate, or in lieu of and substitution for the Warrant Certificate
lost, stolen or destroyed, a new Warrant Certificate of like tenor and
representing an equivalent number of Warrants, but only upon receipt of evidence
reasonably satisfactory to the Issuer of such mutilation, loss, theft or
destruction of such Warrant Certificate and, if requested, indemnity reasonably
satisfactory to the Issuer. The Issuer acknowledges that a written indemnity by
the Holder or, if an Affiliate of the Holder is the holder of such mutilated,
lost, stolen or destroyed Warrant Certificate, by such Affiliate, shall be
satisfactory to the Issuer for such purpose. No service charge shall be made for
any such exchange or substitution, but all expenses and reasonable charges
associated with procuring such indemnity and all stamp, tax and other
governmental duties that may be imposed in relation thereto shall be borne by
the holder of such Warrant Certificate.

         Section 6       DURATION AND EXERCISE OF WARRANTS.

              6.1 The Warrants shall be exercisable in whole or in part by the
registered Warrant Holder on any Business Day after the Closing Date and on or
before 5:00 P.M., Chicago, Illinois time, on the Expiration Date.

              6.2 Subject to the provisions of this Warrant Agreement, the
Warrants may be exercised by the Warrant Holder by the surrender to the Issuer
at the Warrant Office of the Warrant Certificate evidencing the Warrants to be
exercised, with the Form of Election to Purchase (Annex 1 to applicable Warrant
Certificate) attached thereto duly completed and signed, and upon payment of the
aggregate Exercise Price for the number of Warrant Shares in respect of which
such Warrants are being exercised. The Exercise Price shall be paid, at the
option of the Warrant Holder, (a) in lawful money of the United States of
America, (b) by surrender of one or more Notes or a portion thereof having an
outstanding principal balance equal to the Exercise Price (with concurrent
issuance of a replacement note reflecting the remaining principal balance and
accrued but unpaid interest thereon), and/or (c) by surrender to the Issuer of
shares of Common Stock then owned by the Warrant Holder and valued for purposes


                                       9
<PAGE>

hereof at Fair Market Value at the time of exercise. In lieu of exercising
Warrants pursuant to the immediately preceding sentence, the Warrant Holder
shall have the right to require the Issuer to convert the Warrants, in whole or
in part and at any time or times (the "CONVERSION RIGHT"), into Warrant Shares,
as follows: upon exercise of the Conversion Right, the Issuer shall deliver to
the Warrant Holder (without payment by the Warrant Holder of any Exercise Price)
that number of Warrant Shares equal to the quotient obtained by dividing:

                  (a) THE DIFFERENCE OF:

                           (i) the aggregate Fair Market Value immediately prior
                  to the exercise of the Conversion Right for all Warrant Shares
                  issuable upon exercise of the portion of the Warrants being
                  converted, LESS

                           (ii) the aggregate Exercise Price for all such
                  Warrant Shares immediately prior to the exercise of the
                  Conversion Right,

                   BY

                  (b) the Fair Market Value of one (1) share of Common Stock
         immediately prior to the exercise of the Conversion Right.

              6.3 Upon exercise of any Warrants hereunder the Issuer shall issue
and cause to be delivered to or upon the written order of the Warrant Holders of
such Warrants and in such name or names as such Warrant Holders may designate, a
certificate for the Warrant Share or Warrant Shares issued upon the exercise of
such Warrants. Any Persons so designated to be named therein shall be deemed to
have become holders of record of such Warrant Share or Warrant Shares as of the
date of exercise of such Warrants. If fewer than all of the Warrants evidenced
by a Warrant Certificate are exercised at any time, a new Warrant Certificate(s)
shall be issued for the remaining number of Warrants in accordance with the
provisions of SECTION 3.2 hereof.

              6.4 Notwithstanding any other provision of this Warrant Agreement,
unless previously exercised in full, each Warrant shall terminate upon the
earlier to occur of (a) of a Change of Control and (b) the Expiration Date. The
Issuer hereby agrees to provide notice to the Holder at least twenty (20) days
prior to any Change of Control.

         Section 7       FRACTIONAL SHARES. Fractional shares shall not be
issued upon the exercise of the Warrants, but in any case where the Holder
would, except for the provisions of this Section, be entitled under the terms
hereof to receive a fractional share, the Issuer shall, upon the exercise of
this Warrant for the largest number of whole shares then called for, pay a sum
in cash equal to the Fair Market Value of such fractional share over the
proportional part of the Warrant Exercise Price represented by such fractional
share.


                                       10
<PAGE>

         Section 8       PAYMENT OF TAXES. The Issuer will pay all taxes
attributable to the initial issuance of the Warrants and the initial issuance of
Warrant Shares upon the exercise of any Warrants (other than income tax
liability of the Warrant Holders) and any transfer taxes.

         Section 9       STOCKHOLDER RIGHTS. Nothing contained in this Warrant
Agreement or in any of the Warrant Certificates shall be construed as conferring
upon the Warrant Holders the right to vote, consent or receive notice as a
stockholder in respect of the meetings of stockholders or the election of
directors of the Issuer or any other matter, or any rights whatsoever as a
stockholder of the Issuer prior to exercise of Warrants for Warrant Shares,
except as specifically set forth in this Warrant Agreement or the Term Loan
Agreement. Nothing contained in this Warrant Agreement or in any Warrant
Certificate shall be construed as imposing any (a) obligation on the Warrant
Holders to purchase any securities of the Issuer or any of its Affiliates, or
(b) liabilities on the Warrant Holders as stockholders of the Issuer, whether
such obligation or liabilities are asserted by the Issuer or by creditors of the
Issuer.

         Section 10           RESERVATION AND ISSUANCE OF WARRANT SHARES;
CHARTER PROVISIONS. The Issuer will at all times have authorized, and reserve
and keep available and free from liens, encumbrances and preemptive rights, for
the purpose of enabling the Issuer to satisfy any obligation to issue Warrant
Shares upon the exercise of the Warrants, such number of shares of Common Stock
deliverable upon exercise of all outstanding Warrants and will take all actions
necessary to ensure that the Exercise Price at all times remains equal to or
greater than the par value per share of any Common Stock, including, without
limitation, causing the Issuer's Charter to be amended to reduce or eliminate
the par value of any Common Stock.

         Section 11           OBTAINING GOVERNMENTAL APPROVALS. Subject, in the
case of any registration under the Securities Act, to the limitations set forth
in SECTION 15, the Issuer will, at its own expense, from time to time take all
action that may be necessary to obtain and keep effective any and all permits,
consents and approvals of governmental agencies and authorities that are or
become required in connection with (a) the issuance, sale, transfer and delivery
of the Warrants and the Warrant Certificates, (b) the exercise of the Warrants,
and (c) the issuance, sale, transfer and delivery of the Warrant Shares.

         Section 12           ADJUSTMENTS.

              12.1 Prior to the Expiration Date, the Exercise Price payable upon
the exercise of the Warrants is subject to adjustment from time to time as
follows:

                  (a) If the Issuer shall issue any Additional Stock (as defined
         below) without consideration or for a consideration per share less than
         the Exercise Price for any Warrant in effect immediately prior to the
         issuance of such Additional Stock, the Exercise Price for such
         Warrant(s) in effect immediately prior to each such issuance shall
         forthwith (except as otherwise provided in this SECTION 12.1) be
         adjusted to a price determined by multiplying such Exercise Price by a
         fraction, the numerator of which shall be the number of shares of
         Common Stock outstanding and deemed issued pursuant to SECTION 12.1(e)
         immediately prior to such issuance plus the number of shares of Common


                                       11
<PAGE>

         Stock that the aggregate consideration received by the Issuer for such
         issuance would purchase at such Exercise Price; and the denominator of
         which shall be the number of shares of Common Stock outstanding and
         deemed issued pursuant to SECTION 12.1(e) immediately prior to such
         issuance plus the number of shares of such Additional Stock.

                  (b) No adjustment of the Exercise Price for any Warrant(s)
         shall be made in an amount less than one cent per share, provided that
         any adjustments that are not required to be made by reason of this
         sentence shall be carried forward and shall be either taken into
         account in any subsequent adjustment made prior to three (3) years from
         the date of the event giving rise to the adjustment being carried
         forward, or shall be made at the end of three (3) years from the date
         of the event giving rise to the adjustment being carried forward.

                  (c) In the case of the issuance of Additional Stock for cash,
         the consideration shall be deemed to be the amount of cash paid
         therefor before deducting any reasonable discounts, commissions or
         other expenses allowed, paid or incurred by the Issuer for any
         underwriting or otherwise in connection with the issuance and sale
         thereof.

                  (d) In the case of the issuance of the Additional Stock for a
         consideration in whole or in part other than cash, the consideration
         other than cash shall be deemed to be the fair value thereof as
         determined by the Board of Directors irrespective of any accounting
         treatment.

                  (e) In the case of the issuance of options to purchase or
         rights to subscribe for Common Stock, securities by their terms
         convertible into or exchangeable for Common Stock or options to
         purchase or rights to subscribe for such convertible or exchangeable
         securities, the following provisions shall apply for all purposes of
         this Section 12.1:

                           (i) The aggregate maximum number of shares of Common
                  Stock deliverable upon exercise (assuming the satisfaction of
                  any conditions to exercisability, including, without
                  limitation, the passage of time) of such options to purchase
                  or rights to subscribe for Common Stock shall be deemed to
                  have been issued at the time such options or rights were
                  issued and for a consideration equal to the consideration
                  (determined in the manner provided in SECTIONS 12.1(c) and
                  12.1(d)), if any, received by the Issuer upon the issuance of
                  such options or rights plus the minimum exercise price
                  provided in such options or rights for the Common Stock
                  covered thereby.

                           (ii) The aggregate maximum number of shares of Common
                  Stock deliverable upon conversion of, or in exchange (assuming
                  the satisfaction of any conditions to convertibility or
                  exchangeability, including, without limitation, the passage of
                  time) for any such convertible or exchangeable securities or
                  upon the exercise of options to purchase or rights to
                  subscribe for such convertible or exchangeable securities and


                                       12
<PAGE>

                  subsequent conversion or exchange thereof shall be deemed to
                  have been issued at the time such securities were issued or
                  such options or rights were issued and for a consideration
                  equal to the consideration, if any, received by the Issuer for
                  any such securities and related options or rights (excluding
                  any cash received on account of accrued interest or accrued
                  dividends), plus the minimum additional consideration, if any,
                  to be received by the Issuer upon the conversion or exchange
                  of such securities or the exercise of any related options or
                  rights (the consideration in each case to be determined in the
                  manner provided in Sections 12.1(c) and 12.1(d)).

                           (iii) In the event of any change in the number of
                  shares of Common Stock deliverable or in the consideration
                  payable to the Issuer upon exercise of such options or rights
                  or upon conversion of or in exchange for such convertible or
                  exchangeable securities, including, but not limited to, a
                  change resulting from the antidilution provisions thereof, the
                  Exercise Price of any Warrant(s), to the extent in any way
                  affected by or computed using such options, rights or
                  securities, shall be recomputed to reflect such change, but no
                  further adjustment shall be made for the actual issuance of
                  Common Stock or any payment of such consideration upon the
                  exercise of any such options or rights or the conversion or
                  exchange of such securities.

                           (iv) Upon the expiration of any such options or
                  rights, the termination of any such rights to convert or
                  exchange or the expiration of any options or rights related to
                  such convertible or exchangeable securities, the Exercise
                  Price of any Warrant(s), to the extent in any way affected by
                  or computed using such options, rights or securities or
                  options or rights related to such securities, shall be
                  recomputed to reflect the issuance of only the number of
                  shares of Common Stock (and convertible or exchangeable
                  securities that remain in effect) actually issued upon the
                  exercise of such options or rights, upon the conversion or
                  exchange of such securities or upon the exercise of the
                  options or rights related to such securities.

                           (v) The number of shares of Common Stock deemed
                  issued and the consideration deemed paid therefor pursuant to
                  SECTIONS 12.1(e)(i) and 12.1(e)(ii) shall be appropriately
                  adjusted to reflect any change, termination or expiration of
                  the type described in either SECTION 12.1(e)(iii) or
                  12.1(e)(iv).

                  (f) "Additional Stock" shall mean any shares of Common Stock
         issued (or deemed to have been issued pursuant to SECTION 12.1(e)) by
         the Issuer after the applicable Purchase Date other than:

                           (i) shares of Common Stock issued pursuant to a
                  transaction described in SECTION 12.1(g) hereof;

                           (ii) shares of Common Stock issued or deemed issued
                  to employees, consultants, officers or directors (if in
                  transactions with primarily non-financing purposes) of the
                  Issuer in effect on the date hereof pursuant to a stock option
                  plan or restricted stock purchase plan approved by the
                  stockholders and Board of Directors of the Issuer ("Plan
                  Grants").


                                       13
<PAGE>

                           (iii) a number of shares of Common Stock equal to
                  fifteen percent (15%) of the Issuer's Closing Date
                  Capitalization issued or deemed issued to employees,
                  consultants, officers or directors (if in transactions with
                  primarily non-financing purposes) of the Issuer other than
                  pursuant to Plan Grants;

                           (iv) shares of Common Stock issued or deemed issued
                  to the Issuer's current Chief Executive Officer, President
                  and/or Chief Financial Officer (as of the date hereof), or
                  pursuant to options or other Common Stock purchase rights
                  approved by the Board of Directors of the Issuer not in excess
                  of Plan Grants referred to in (ii) above;

                           (v) shares of Common Stock issued or deemed issued
                  following the third anniversary of the Closing Date to
                  employees, consultants, officers or directors of the Issuer
                  directly or pursuant to a stock option plan and/or agreement
                  approved by the Issuer's Board of Directors;

                           (vi) shares of Common Stock issued, issuable or
                  deemed issued upon the sale or conversion of the Issuer's
                  Series A Preferred Stock, Series B Preferred Stock, Series B-1
                  Preferred Stock or Series C Preferred Stock;

                           (vii) shares of Common Stock issued or issuable as a
                  dividend or distribution on the Issuer's Series A Preferred
                  Stock, Series B Preferred Stock, Series B-1 Preferred Stock,
                  or Series C Preferred Stock;

                           (viii) shares of Common Stock issued or issuable (1)
                  in a bona fide, firmly underwritten public offering under the
                  Securities Act or (2) upon exercise of warrants or rights
                  granted to underwriters in connection with such a public
                  offering;

                           (ix) shares of Common Stock issued or issuable
                  pursuant to any rights or agreements, options, warrants or
                  convertible securities outstanding as of the Closing Date; or

                           (x) shares of Common Stock issued or issuable (1) in
                  connection with a bona fide business acquisition of or by the
                  Issuer, whether by merger, consolidation, sale of assets, sale
                  or exchange of stock or otherwise or (2) to persons or
                  entities with which the Issuer has business relationships
                  provided such issuances are for other than primarily equity
                  financing purposes, which shall in no event exceed more than
                  twenty percent (20%) of the Common Stock, on a fully diluted
                  basis, on the date hereof.

                  (g) In the event the Issuer should at any time or from time to
         time prior to the Expiration Date fix a record date for the
         effectuation of a split or subdivision of the outstanding shares of
         Common Stock or the determination of holders of Common Stock entitled
         to receive a dividend or other distribution payable in additional
         shares of Common Stock or other securities or rights convertible into,
         or entitling the holder thereof to receive directly or indirectly,
         additional shares of Common Stock (hereinafter referred to as "Common


                                       14
<PAGE>

         Stock Equivalents") without payment of any consideration by such holder
         for the additional shares of Common Stock or the Common Stock
         Equivalents (including the additional shares of Common Stock issuable
         upon conversion or exercise thereof), then, as of such record date (or
         the date of such dividend distribution, split or subdivision if no
         record date is fixed), the Exercise Prices of each Warrant shall be
         appropriately decreased so that the number of shares of Common Stock
         issuable on conversion of each share of such series shall be increased
         in proportion to such increase in the aggregate number of shares of
         Common Stock outstanding and those issuable with respect to such Common
         Stock Equivalents.

                  (h) If the number of shares of Common Stock outstanding at any
         time prior to the Expiration Date is decreased by a combination of the
         outstanding shares of Common Stock, then, following the record date of
         such combination, the Exercise Prices for the Warrants shall be
         appropriately increased so that the number of shares of Common Stock
         issuable on conversion of each share of such series shall be decreased
         in proportion to such decrease in outstanding shares.

                  (i) If at any time or from time to time there shall be a
         recapitalization of the Common Stock (other than a subdivision,
         combination or merger or sale of assets transaction provided for
         elsewhere in this SECTION 12.1) provision shall be made so that the
         holders of the Warrants shall thereafter be entitled to receive upon
         exercise of such Warrants the number of shares of stock or other
         securities of the Issuer or otherwise, to which a holder of the number
         of shares of Common Stock deliverable upon exercise of the Warrants
         would have been entitled on such recapitalization. In any such case,
         appropriate adjustment shall be made in the application of the
         provisions of this SECTION 12.1 with respect to the rights of the
         Holders after the recapitalization to the end that the provisions of
         this SECTION 12.1 (including adjustment of the Exercise Price then in
         effect and the number of shares purchasable upon exercise of each such
         Warrant) shall be applicable after that event as nearly equivalent as
         may be practicable.

              12.2 Notwithstanding any adjustments in the Exercise Price or kind
of securities or other assets purchasable upon the exercise of any Warrant,
Warrant Certificates heretofore or hereafter issued may continue to express the
same Exercise Price and kind of shares as are stated on the Warrant Certificates
initially issued pursuant to this Warrant Agreement.

              12.3 Any adjustment pursuant to this Section 12, whether to the
kind of Warrant Shares or to the Exercise Price, shall be made successively
whenever an event referred to herein occurs. As a condition precedent to the
taking of any action that would require an adjustment pursuant to this Section
12, the Issuer shall take any and all actions necessary in order that it may
thereafter issue Validly Issued Warrant Shares to the Warrant Holders for all
Warrant Shares that they are entitled to receive after adjustment.


                                       15
<PAGE>

              12.4 No adjustments to the Exercise Price or the number of Warrant
Shares under this Section 12 shall be made in connection with the issuance of
Exempted Securities.

         Section 13      NOTICES TO WARRANT HOLDERS.

              13.1 CERTIFICATES AS TO ADJUSTMENTS. Upon the occurrence of each
adjustment or readjustment of the Exercise Price of any Warrant pursuant to
SECTION 12.1, the Issuer, at its expense, shall promptly compute such adjustment
or readjustment in accordance with the terms hereof and prepare and furnish to
each Holder a certificate setting forth such adjustment or readjustment and
showing in detail the facts upon which such adjustment or readjustment is based.
The Issuer shall, upon the written request at any time of any Holder, furnish or
cause to be furnished to such Holder a like certificate setting forth (i) such
adjustment and readjustment, (ii) the Exercise Price for such Warrant at the
time in effect, and (iii) the number of shares of Common Stock that at the time
would be received upon the exercise of the Warrant.

              13.2 NOTICES OF RECORD DATE. In the event of the taking by the
Issuer of a record of the holders of any class of securities for the purpose of
determining the holders thereof who are entitled to receive a dividend (other
than a cash dividend) or other distribution, any right to sub scribe for,
purchase or otherwise acquire any shares of stock of any class or any other
securities, or to receive any other right, the Issuer shall mail to each Holder,
at least twenty (20) days prior to the date specified therein, a notice
specifying the date on which any such record is to be taken for the purpose of
such dividend, distribution or right.

         Section 14      RESTRICTIONS ON TRANSFER.

              14.1 Each of the Holder and any other Warrant Holders who are
issued Warrants on the Closing Date pursuant to this Warrant Agreement:

                  (a) represents that it is an "ACCREDITED INVESTOR" within the
         meaning of the Securities Act and is acquiring the Warrants for its own
         account for investment and not with a view to any distribution or
         public offering within the meaning of the Securities Act, except in any
         case pursuant to the registration of such Warrants or Warrant Shares
         under the Securities Act or pursuant to a valid exemption from such
         registration requirement;

                  (b) acknowledges that the Warrants and the Warrant Shares
         issuable upon exercise thereof have not been registered under the
         Securities Act;

                  (c) agrees that it will not sell or otherwise transfer any of
         its Warrants or Warrant Shares except upon the terms and conditions
         specified herein and that it will cause any transferee thereof to agree
         to take and hold the same subject to the terms and conditions specified
         herein; PROVIDED, HOWEVER, that the Warrant Holders may sell the
         Warrants or the Warrant Shares purchased upon exercise of the Warrants
         in one or more private transactions not requiring registration under
         the Securities Act; and


                                       16
<PAGE>

                  (d) acknowledges that it has carefully reviewed the SEC
         Documents, including the risk factors contained in the Issuer's Annual
         Reports on Form 10-KSB and Quarterly Reports on Form 10-QSB.

              14.2 Except as provided in SECTION 14.4 hereof, each Warrant
Certificate and each certificate for the Warrant Shares issued to the Holder or
any other Warrant Holder or to a subsequent transferee thereof shall include a
legend in substantially the following form (with such changes therein as may be
appropriate to reflect whether such legend refers to Warrants or Warrant
Shares); PROVIDED THAT such legend shall not be required if such transfer is
being made pursuant to an effective registration statement filed with the
Commission in accordance with the Securities Act, in connection with a sale that
is exempt from registration pursuant to Rule 144 under the Securities Act or if
the opinion of counsel referred to in SECTION 14.3 is to the further effect that
neither such legend nor the restrictions on transfer in this SECTION 14 are
required in order to ensure compliance with the Securities Act:

         THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE SHARES FOR WHICH
         THE WARRANTS ARE EXERCISABLE HAVE NOT BEEN REGISTERED UNDER THE
         SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES
         LAW AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH
         REGISTRATION OR AN EXEMPTION THEREFROM UNDER SUCH ACT OR LAW. SUCH
         WARRANTS AND SHARES MAY BE TRANSFERRED ONLY IN COMPLIANCE WITH THE
         CONDITIONS SPECIFIED IN AND ARE SUBJECT TO OTHER PROVISIONS OF THE
         WARRANT AGREEMENT DATED AS OF AUGUST 31, 2004, BETWEEN THE ISSUER AND
         BRIDGE OPPORTUNITY FINANCE, LLC, A COMPLETE AND CORRECT COPY OF WHICH
         IS AVAILABLE FOR INSPECTION AT THE PRINCIPAL OFFICE OF THE ISSUER AND
         WILL BE FURNISHED TO THE HOLDER HEREOF UPON WRITTEN REQUEST AND WITHOUT
         CHARGE.

              14.3 Prior to any assignment, transfer or sale of any Warrant or
any Warrant Shares, the Warrant Holder shall give written notice to the Issuer
of such Warrant Holder's intention to effect such assignment, transfer or sale,
which notice shall set forth the date of such proposed assignment, transfer or
sale and the identity of the proposed transferee. Each Warrant Holder wishing to
effect such a transfer of any Warrant or Warrant Shares shall also furnish to
the Issuer an agreement by the transferee thereof that it is taking and holding
the same subject to the terms and conditions specified herein and, at the
request of the Issuer, a written opinion of such Warrant Holder's counsel, in
form reasonably satisfactory to the Issuer, to the effect that the proposed
transfer may be effected without registration under the Securities Act.


                                       17
<PAGE>

              14.4 The restrictions set forth in this SECTION 14 shall terminate
and cease to be effective with respect to any Warrants or Warrant Shares
registered under the Securities Act or upon receipt by the Issuer of an opinion
of counsel to the Warrant Holders, in form reasonably satisfactory to the
Issuer, to the effect that compliance with such restrictions is not necessary in
order to comply with the Securities Act with respect to the transfer of the
Warrants and the Warrant Shares. Whenever such restrictions shall so terminate
the Warrant Holder holding such Warrants and/or Warrant Shares shall be entitled
to receive from the Issuer, without expense (other than transfer taxes), Warrant
Certificates or certificates for such Warrant Shares not bearing the legend set
forth in SECTION 14.2 at which time the Issuer will rescind any transfer
restrictions relating thereto.

         Section 15      REGISTRATION RIGHTS. The Issuer covenants and agrees as
follows:

              15.1 REQUESTED REGISTRATION.

                  (a) REQUEST FOR REGISTRATION. If, at any time after January 1,
         2005, the Issuer shall receive from the holders of at least a majority
         of the Registrable Securities then outstanding (the "INITIATING
         HOLDERS") a written request that the Issuer file a registration
         statement in accordance with the Securities Act covering the
         registration of all or part of the Registrable Securities then held by
         such holders, the Issuer shall:

                           (i) within ten (10) days of the receipt thereof, give
                  written notice of the proposed registration, qualification or
                  compliance to all other holders of Registrable Securities; and

                           (ii) use its reasonable and diligent efforts to
                  effect as soon as practicable, the registration under the
                  Securities Act of all such holders' Registrable Securities as
                  are specified in such request, together with such portion of
                  the Registrable Securities of any other holder or holders of
                  Registrable Securities joining in such request as are
                  specified in a written notice given within fifteen (15) days
                  after receipt of written notice from the Issuer; PROVIDED,
                  HOWEVER, that the Issuer shall not be obligated to take any
                  action to effect any such registration pursuant to this
                  SECTION 15.1, (A) after the Issuer has effected one (1)
                  registration under this SECTION 15.1 or (B) if less than a
                  majority of the then outstanding Registrable Securities will
                  be registered.

                  (b) REGISTRATION STATEMENTS. Any registration statement filed
         pursuant to this SECTION 15.1 shall be on Form S-3, or if Form S-3 is
         not available, Form S-1 or other appropriate form permitting
         registration of the Registrable Securities for resale by the Holders.

                  (c) UNDERWRITING. If the holders of Registrable Securities at
         any time intend to distribute all or a part of the Registrable
         Securities covered by the registration statement filed pursuant to this
         SECTION 15.1 by means of an underwriting, they shall so advise the
         Issuer and the Issuer shall promptly notify the other holders of
         Registrable Securities of such underwriting. The Issuer (together with
         all holders of Registrable Securities proposing to distribute their

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<PAGE>

         securities pursuant to the underwriting) shall enter into an
         underwriting agreement in customary form with the underwriter or
         underwriters selected by the Issuer. Notwithstanding any other
         provision of this SECTION 15.1, if the underwriter advises the holders
         of Registrable Securities in writing that marketing factors require a
         limitation of the number of shares to be underwritten, then the Holders
         requesting the underwriting shall so advise all holders of Registrable
         Securities, and the number of shares included in the underwriting shall
         be allocated among the holders of Registrable Securities requesting
         registration in proportion, as nearly as practicable, to the total
         number of Registrable Securities held by such holders at the time of
         the request for an underwriting. If any holder of Registrable
         Securities disapproves of the terms of the underwriting, such holder of
         Registrable Securities may elect to withdraw from such underwritten
         offering by written notice to the Issuer, the underwriter and the other
         holders of Registrable Securities whose shares are being included in
         the underwriting. The Issuer agrees to file any amendments or
         supplements to the registration statement necessary in order to permit
         any underwritten offering.

                  (d) RIGHTS IN ADDITION TO OTHER RIGHTS. The rights under this
         SECTION 15.1 are in addition to, and not affected by, the holders' of
         Registrable Securities exercise of any registration rights contained in
         Section 15.2.

              15.2 COMPANY REGISTRATION. If (but without any obligation to do
so) the Issuer proposes to register any of its stock or other securities under
the Securities Act in connection with the public offering of such securities
solely for cash (other than a registration effected at the request of one or
more stockholders of the Issuer (including, without limitation, any registration
effected pursuant to a contractual right of one or more stockholders to request
a registration) 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 Securities 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 Issuer shall, at such
time, promptly give each holder of Registrable Securities written notice of such
registration. Upon the written request of each holder of Registrable Securities
given within twenty (20) days after mailing of such notice by the Issuer the
Issuer shall, subject to the provisions of SECTION 15.6 hereof, cause to be
registered under the Securities Act all of the Registrable Securities that each
such Holder has requested to be registered.

              15.3 OBLIGATIONS OF THE ISSUER. Whenever required under this
SECTION 15 to effect the registration of any Registrable Securities, the Issuer
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 and
         diligent efforts to cause such registration statement to become
         effective, and keep such registration statement effective (i) in the
         case of a registration statement filed pursuant to SECTION 15.1, during


                                       19
<PAGE>

         the Effectiveness Period (as hereinafter defined) or (ii) in the case
         of a registration statement filed pursuant to SECTION 15.2, upon the
         request of the holders of a majority of the Registrable Securities
         registered thereunder, 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. As used herein, the term
         "EFFECTIVENESS PERIOD" shall mean until the earlier of (i) the
         termination of the rights set forth in this Warrant Agreement in
         accordance with SECTION 15.13 or (ii) all of the Registrable Securities
         covered by the registration having been sold or a subsequent
         registration statement covering any unsold Registrable Securities
         having been declared effective.

                  (b) Provide, at least three (3) business days prior to filing,
         any registration statement and included prospectus (including each
         preliminary prospectus and any amendments or supplements thereto)
         prepared in conformity with the requirements of the Securities Act in
         connection with SECTIONS 15.1 and 15.2 (the "REGISTRATION MATERIALS")
         to the holders of Registrable Securities and their respective counsel
         for review and comment, if any.

                  (c) 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 Securities Act with respect to the
         disposition of all securities covered by such registration statement.

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

                  (e) Use its reasonable and diligent 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 of Registrable Securities;
         PROVIDED, HOWEVER, that the Issuer 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.

                  (f) 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 of Registrable Securities participating in such
         underwriting shall also enter into and perform its obligations under
         such agreement.


                                       20
<PAGE>

                  (g) 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 Securities 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 Issuer 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 Issuer,
         the holders of Registrable Securities will not offer or sell
         Registrable Securities until the Issuer has notified such holders that
         it has prepared a supplement or amendment to such prospectus and
         delivered copies of such supplement or amendment to such holders (it
         being understood and agreed by the Issuer that the foregoing proviso
         shall in no way diminish or otherwise impair the Issuer's obligations
         to prepare a prospectus amendment or supplement as above provided in
         this SECTION 15.3(g)).

                  (h) Use its reasonable and diligent efforts, if a registration
         statement under SECTION 15.1 ceases to be effective for any reason at
         any time during the Effectiveness Period (other than because of the
         sale of all of the Registrable Securities registered thereunder or
         pursuant to the Issuer's exercise of the Suspension Right (as
         hereinafter defined)), to (i) obtain the prompt withdrawal of any order
         suspending the effectiveness thereof, and (ii) amend the registration
         statement in a manner reasonably expected to obtain the withdrawal of
         the order suspending the effectiveness of the shelf registration or
         file an additional registration statement covering all of the unsold
         Registrable Securities (a "SUBSEQUENT REGISTRATION STATEMENT"). If a
         Subsequent Registration Statement is filed, the Issuer will use its
         reasonable and diligent efforts to cause the Subsequent Registration
         Statement to be declared effective as soon as practicable and to keep
         such Subsequent Registration Statement continuously effective until the
         end of the Effectiveness Period. The requirements of this SECTION
         15.3(h) that the Issuer file additional registration statements shall
         not be affected by the provisions set forth in SECTION 15.1 that the
         Issuer is only required to file one registration statement under
         SECTION 15.1.

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

                  (j) 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.


                                       21
<PAGE>

                  (k) Use its reasonable and diligent efforts to furnish, at the
         request of any Holder requesting registration of Registrable Securities
         pursuant to this SECTION 15, on the date that such Registrable
         Securities are delivered to the underwriters for sale in connection
         with a registration statement pursuant to this SECTION 15, 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 Issuer 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 of
         Registrable Securities requesting registration of the Registrable
         Securities, and (ii) a letter dated such date, from the independent
         certified public accountants of the Issuer, 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 of Registrable Securities
         requesting registration of Registrable Securities.

                  (l) Notify each seller of Registrable Securities under such
         registration statement of (i) the effectiveness of such registration
         statement, (ii) the filing of any post-effective amendments to such
         registration statement, or (iii) the filing of a supplement to such
         registration statement.

              15.4 FURNISH INFORMATION.

                  (a) It shall be a condition precedent to the obligations of
         the Issuer to take any action pursuant to this SECTION 15 with respect
         to the Registrable Securities of any selling holder of Registrable
         Securities that such holder shall furnish to the Issuer 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 Issuer shall have no obligation with respect to any
         registration requested pursuant to SECTION 15.1 hereof if, as a result
         of the application of subsection 1.5(a), the number of shares of the
         Registrable Securities to be included in the registration does not
         equal or exceed the number of shares required to originally trigger the
         Issuer's obligation to initiate such registration as specified in
         SECTION 15.1 hereof.

              15.5 EXPENSES OF REGISTRATION. All expenses (other than
underwriting discounts and commissions, stock transfer taxes and fees of counsel
to the stockholders in excess of $15,000) incurred in connection with any
registrations, filings or qualifications of Registrable Securities pursuant to
SECTIONS 15.1 or 15.2 including (without limitation) all federal or state
registration, filing and qualification fees, printers' and accounting fees and
fees and disbursements of counsel for the Issuer shall be borne by the Issuer.
The Issuer shall pay up to an aggregate of $15,000 of the selling stockholders'
legal fees in connection with one (1) registration. Notwithstanding the
foregoing, the Issuer shall not be required to pay for any expenses of any
registration proceeding begun pursuant to SECTION 15.1 if the registration


                                       22
<PAGE>

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 Issuer and the holders of
Registrable Securities have withdrawn the request with reasonable promptness
following disclosure by the Issuer of such material adverse change.

              15.6 UNDERWRITING REQUIREMENTS. In connection with any offering
pursuant to SECTION 15.2 involving an underwriting of shares of the Issuer's
capital stock by the Issuer, the Issuer shall not be required to include any of
the holders' Registrable Securities in such underwriting unless they accept the
terms of the underwriting as agreed upon between the Issuer 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 Issuer. 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 Issuer that the underwriters determine in their sole
discretion is compatible with the success of the offering, then the Issuer 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.

              15.7 DELAY OF REGISTRATION. No holder of Registrable Securities
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 15.

              15.8 INDEMNIFICATION. In the event any Registrable Securities are
included in a registration statement under this SECTION 15:

                  (a) To the maximum extent permitted by law, the Issuer will
         indemnify and hold harmless each holder of Registrable Securities, the
         partners, officers, and directors of each such holder, any underwriter
         (as defined in the Securities Act) for such holder and each person, if
         any, who controls such holder or underwriter within the meaning of the
         Securities Act or the Exchange Act, against any losses, claims, damages
         or liabilities (joint or several) to which they may become subject,
         under the Securities Act, the Exchange Act or any state securities law,
         insofar as such losses, claims, damages or liabilities (or actions in


                                       23
<PAGE>

         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 Issuer of the Securities Act, the Exchange
         Act, or any rule or regulation promulgated under the Securities Act or
         the Exchange Act or any state securities law in connection with the
         offering covered by such Registration Statement; and the Issuer 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 15.8(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 Issuer (which consent shall not be unreasonably withheld or
         delayed), nor shall the Issuer be liable to any such 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 Issuer, each of its directors, each of its officers who has signed
         the registration statement, each person, if any, who controls the
         Issuer within the meaning of the Securities 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 Securities Act or
         the Exchange 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 15.8(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 15.8(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 15.8(b) exceed the net proceeds from the offering received
         by such holder, except in the case of willful misconduct or fraud by
         such holder.


                                       24
<PAGE>

                  (c) Promptly after receipt by an indemnified party under this
         SECTION 15.8 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 15.8, 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 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 15.8, 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 15.8. 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 Issuer and
         holders of Registrable Securities 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 Securities Act. If the
         indemnification provided for in this SECTION 15.8 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

                                       25
<PAGE>

         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 of Registrable Securities under this
         subsection 15.8(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 Securities 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 Issuer and holders of Registrable
         Securities under this SECTION 15.8 shall survive the completion of any
         offering of Registrable Securities in a registration statement under
         this SECTION 15, and otherwise.

              15.9 ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the
Issuer to register Registrable Securities pursuant to this SECTION 1 may be
assigned (but only with all related obligations) by a holder of Registrable
Securities to a transferee or assignee of such securities, including a
subsidiary, affiliate, partner, limited partner, retired partner or stockholder
of a holder of Registrable Securities, provided in each case that (i) the Issuer
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; (ii) such
transferee or assignee agrees in writing to be bound by and subject to the terms
and conditions of this Warrant Agreement; and (iii) such assignment shall be
effective only if immediately following such transfer the further disposition of
such securities by the transferee or assignee is restricted under the Securities
Act.

              15.10 REPORTS UNDER THE EXCHANGE ACT. The Issuer agrees to use
commercially reasonable efforts: (a) 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 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 of Registrable Securities owns any
Registrable Securities, to furnish in writing upon such holder's request a
written statement by the Issuer that it has complied with the reporting
requirements of Rule 144 and of the Securities Act and the Exchange Act, and to
furnish to such holder a copy of the most recent annual or quarterly report of
the Issuer, and such other reports and documents so filed by the Issuer with the
SEC as may be reasonably requested.


                                       26
<PAGE>

              15.11 DEFERRAL. Notwithstanding anything in this Warrant Agreement
to the contrary, if the Issuer shall furnish to the holders of Registrable
Securities a certificate signed by the Chief Executive Officer of the Issuer
stating that the Board of Directors of the Issuer 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 would require, under the Securities Act, premature disclosure in the
registration statement (or the prospectus relating thereto) of material,
nonpublic information concerning the Issuer, its business or prospects or any
proposed material transaction involving the Issuer, (b) that such premature
disclosure would be materially adverse to the Issuer, its business or prospects
or any such proposed material transaction or would make the successful
consummation by the Issuer of any such material transaction significantly less
likely and (c) that it is therefore essential to suspend the use by such 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 such 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 Issuer (the "SUSPENSION PERIOD"). During the Suspension Period,
none of the holders of Registrable Securities shall offer or sell any
Registrable Securities pursuant to or in reliance upon any such registration
statement (or the prospectus relating thereto). In the event the Issuer
exercises the suspension rights set forth herein (the "SUSPENSION RIGHT"), such
suspension will continue for such period of time reasonably necessary for
disclosure to occur at a time that is not materially detrimental to the Issuer
or until such time as the registration statement does not include any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading in
light of the circumstances under which they were made, each as determined in
good faith by the Issuer. The Issuer agrees to notify the holders of Registrable
Securities promptly upon termination of the Suspension Right. Notwithstanding
the foregoing, under no circumstances shall the Issuer be entitled to exercise
the Suspension Right for a period of more than thirty (30) days during any
twelve (12) month period.

              15.12 LIMITATION OF LIABILITY. The Issuer shall not be liable to
the holder of Registrable Securities for a failure to effect, or a delay in
effecting, a registration hereunder or a default in any other obligations under
this Warrant Agreement arising out of or relating to any failure to receive
necessary consents from its independent auditors or any internal review,
investigation or similar activity by the Issuer's Audit Committee.

              15.13 TERMINATION OF REGISTRATION RIGHTS. The rights granted under
this SECTION 15 shall terminate upon the fourth anniversary of the date of this
Warrant Agreement. In addition, a holder of Registrable Securities' registration
rights shall terminate if all Registrable Securities held by and issuable to
such holder may be sold under Rule 144 during any ninety (90) day period.


                                       27
<PAGE>

         Section 16      AMENDMENTS, WAIVERS AND SURVIVAL. Any provision of this
Warrant Agreement may be amended, supplemented, waived, discharged or terminated
by a written instrument signed by the Issuer and the Warrant Holders holding not
less than a majority of the outstanding Warrants and Non-Public Warrant Shares,
voting as a single group.

         Section 17      NOTICES.

              17.1 Any notice or demand to be given or made by the Warrant
Holders or the holders of Warrant Shares to or on the Issuer pursuant to this
Warrant Agreement shall be sufficiently given or made if actually delivered or
sent by registered mail, return receipt requested, postage prepaid, addressed to
the Issuer at the Warrant Office.

              17.2 Any notice to be given by the Issuer to the Warrant Holders
or the holders of Warrant Shares shall be sufficiently given or made if actually
delivered or sent by registered mail, return receipt requested, postage prepaid,
addressed to such holder as such holder's name and address shall appear on the
Warrant Register or the Common Stock registry of the Issuer, as the case may be.

         Section 18      EXPENSES. The Issuer shall pay all costs and expenses
(including, without limitation, reasonable attorneys' fees) incurred by the
Warrant Holders in connection with (a) the preparation, negotiation and exercise
of rights under this Warrant Agreement and the Warrant Certificates, (b) any
amendment, modification or supplement of this Warrant Agreement or the Warrant
Certificates, and (c) any waiver by the Warrant Holders of any provision under
this Warrant Agreement or the Warrant Certificates. If any action at law or in
equity is necessary to enforce or interpret the terms of this Warrant 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.

         Section 19      BINDING AGREEMENT. This Warrant Agreement shall be
binding upon and inure to the benefit of the Issuer and the Holder and their
successors and assigns; PROVIDED, HOWEVER, that the Issuer shall not assign its
rights or obligations under this Warrant Agreement or any Warrant Certificate
without the prior written consent of the Warrant Holders.

         Section 20      COUNTERPARTS. This Warrant Agreement may be executed in
one or more separate counterparts and all of said counterparts taken together
shall be deemed to constitute one and the same instrument. Delivery of an
executed counterpart of this Warrant Agreement by telefacsimile shall be equally
as effective as delivery of a manually executed counterpart of this Warrant
Agreement. Any party delivering an executed counterpart of this Warrant
Agreement by telefacsimile shall also deliver a manually executed counterpart of
this Warrant Agreement, but the failure to deliver a manually executed
counterpart shall not affect the validity, enforceability and binding effect of
this Warrant Agreement.


                                       28
<PAGE>

         Section 21      GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVERS.
This Warrant 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. Each of the parties hereto
irrevocably agrees that any legal action or proceeding with respect to this
Warrant 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 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 Warrant 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 Warrant Agreement, or the subject matter hereof, may not be enforced in or
by such courts and (d) any right to trial by jury.

         Section 22      BENEFITS OF THIS WARRANT AGREEMENT. Nothing in this
Warrant Agreement shall be construed to give to any Person other than the Issuer
and the registered Warrant Holders (and with respect to SECTION 15 the other
indemnitees thereunder) any legal or equitable right, remedy or claim under this
Warrant Agreement.

         Section 23      VOTING AND CONSENTS TO BE ON A FULLY CONVERTED BASIS.
Wherever this Warrant Agreement calls for the written consent or vote of any
combination of the holders of the Warrants and the Non-Public Warrant Shares,
voting as a single group, the Warrants shall be counted as if they had been
exercised for Warrant Shares.

                            [SIGNATURE PAGE FOLLOWS]


                                       29
<PAGE>

                     SIGNATURE PAGE TO WARRANT AGREEMENT

         IN WITNESS WHEREOF the parties hereto have caused this Warrant
Agreement to be duly executed and delivered by their proper and duly authorized
officers, as of the date and year first above written.

                                        CRDENTIA CORP.


                                        By: /S/ JAMES D.DURHAM
                                            -------------------------------
                                            James D. Durham
                                            Chief Executive Officer



<PAGE>


                       SIGNATURE PAGE TO WARRANT AGREEMENT




                                        BRIDGE OPPORTUNITY FINANCE, LLC


                                        By: /S/ RANDY ABRAHMS
                                            -----------------------------
                                            Randy Abrahams
                                            Chief Executive Officer




<PAGE>
                   ------------------------------------------
                                   EXHIBIT A
                              TO WARRANT AGREEMENT
                          FORM OF WARRANT CERTIFICATE
                   ------------------------------------------

                               WARRANT CERTIFICATE

THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE SHARES FOR WHICH THE
WARRANTS ARE EXERCISABLE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAW AND MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER
SUCH ACT OR LAW. SUCH WARRANTS AND SHARES MAY BE TRANSFERRED ONLY IN COMPLIANCE
WITH THE CONDITIONS SPECIFIED IN AND ARE SUBJECT TO OTHER PROVISIONS OF THE
WARRANT AGREEMENT DATED AS OF AUGUST 31, 2004, BETWEEN THE ISSUER AND BRIDGE
OPPORTUNITY FINANCE, LLC, A COMPLETE AND CORRECT COPY OF WHICH IS AVAILABLE FOR
INSPECTION AT THE PRINCIPAL OFFICE OF THE ISSUER AND WILL BE FURNISHED TO THE
HOLDER HEREOF UPON WRITTEN REQUEST AND WITHOUT CHARGE.

THE WARRANTS REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RIGHTS MORE
FULLY SET FORTH IN THE WARRANT AGREEMENT.

                          EXERCISABLE ONLY ON OR BEFORE
                                 AUGUST 31, 2014

This Warrant Certificate is one of the Warrant Certificates referred to in the
Warrant Agreement dated as of August 31, 2004 (the "WARRANT AGREEMENT"), between
CRDENTIA CORP., a Delaware corporation (the "ISSUER") and BRIDGE OPPORTUNITY
FINANCE, LLC. Such Warrant Agreement is hereby incorporated in full by reference
and made a part of this instrument and is hereby referred to for a description
of the rights, limitation of rights, obligations, duties and immunities
thereunder of the Issuer and the holders. All defined terms used in this Warrant
Certificate that are not otherwise defined herein shall have the meanings
ascribed to them in the Warrant Agreement.

This Warrant Certificate certifies that BRIDGE OPPORTUNITY FINANCE, LLC, or its
registered assigns, is the registered holder of 905,758 Warrants (the
"WARRANTS") to purchase shares of Common Stock of the Issuer. Each Warrant
evidenced hereby entitles the holder hereof, subject to the conditions set forth
herein and in the Warrant Agreement, to purchase from the Issuer before the
first to occur of (i) a Change of Control (as defined in the Warrant Agreement,
or (ii) 5:00 P.M., Chicago, Illinois time, on August 31, 2014 (the "EXPIRATION
DATE"), one (1) Validly Issued share of the Common Stock of the Issuer (the
"WARRANT SHARE") to the extent set forth in the Warrant Agreement, at a price of
the lesser of (i) Three Dollars and 15/100 ($3.15) per Warrant, or (ii) the Fair
Market Value per Warrant (such lesser amount per Warrant, the "EXERCISE PRICE"),
upon surrender of this Warrant Certificate, execution of the annexed Form of
Election to Purchase and payment of the Exercise Price at the office of the
Issuer at Warrant Office. The Exercise Price and number of Warrant Shares
purchasable upon exercise of the Warrants are subject to adjustment as set forth
in the Warrant Agreement.

                                   Exhibit A
                                     Page 1
<PAGE>

No Warrant may be exercised after 5:00 P.M., Chicago, Illinois time, on the
Expiration Date and (except as otherwise provided in the Warrant Agreement) all
rights of the registered holders of the Warrants shall cease after 5:00 P.M.,
Chicago, Illinois time, on the Expiration Date.

The Issuer may deem and treat the registered holders of the Warrants evidenced
hereby as the absolute owners thereof (notwithstanding any notation of ownership
or other writing hereon made by anyone), for the purpose of any exercise hereof
and of any distribution to the holders hereof and for all other purposes, and
the Issuer shall not be affected by any notice to the contrary.

Warrant Certificates, when surrendered at the Warrant Office by the registered
holder hereof in person or by a legal representative duly authorized in writing,
may be exchanged, in the manner and subject to the limitations provided in the
Warrant Agreement, but without payment of any service charge, for another
Warrant Certificate or Warrant Certificates of like tenor evidencing in the
aggregate a like number of Warrants.

Upon due presentment for registration of a transfer of this Warrant Certificate
at the Warrant Office, a new Warrant Certificate or Warrant Certificates of like
tenor and evidencing in the aggregate a like number of Warrants shall be issued
in exchange for this Warrant Certificate to the transferee(s) and, if less than
all of the Warrants evidenced hereby are to be transferred thereunder, to the
registered holder hereof, subject to the limitations provided in the Warrant
Agreement, without charge except for any tax or other governmental charge
imposed in connection therewith.



                            [SIGNATURE PAGE FOLLOWS]


                                   Exhibit A
                                     Page 2

<PAGE>


                     (SIGNATURE PAGE TO WARRANT CERTIFICATE)

         IN WITNESS WHEREOF the Issuer has caused this Warrant Certificate to be
signed by its duly authorized officers and has caused its corporate seal to be
affixed hereunto.

                                        CRDENTIA CORP.


                                        By: /S/ JAMES D. DURHAM
                                            -----------------------------
                                            James D. Durham
                                            Chief Executive Officer


                                   Exhibit A
                                     Page 3

<PAGE>
                      ------------------------------------
                                    ANNEX 1
                         TO FORM OF WARRANT CERTIFICATE
                          FORM OF ELECTION TO PURCHASE
                      ------------------------------------


                              ELECTION TO PURCHASE

                    (TO BE EXECUTED UPON EXERCISE OF WARRANT)

         The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to purchase _____ Warrant Shares and
herewith tenders payment for such Warrant Shares to the order of the Issuer in
the amount of $_______________ in accordance with the terms hereof. The
undersigned requests that a certificate for such Warrant Shares be registered in
the name of _______________________________________________ whose address is
_____________________________________ and that such certificate be delivered to
___________________ whose address is ________________________. If said number of
Warrant Shares is less than all of the Warrant Shares purchasable under this
Warrant Certificate, the undersigned requests that a new Warrant Certificate
representing the remaining balance of the Warrant Shares be registered in the
name of ______________________ whose address is ___________________________ and
that such Warrant Certificate be delivered to _________________________ whose
address is ___________________________________.

Signature:


_________________________________________
(Signature must conform in all respects to
name of holder as specified on the
face of the Warrant Certificate.)

Date: ___________________________________



                                    Annex 1
                                     Page 1
<PAGE>

                      ------------------------------------
                                   EXHIBIT B
                              TO WARRANT AGREEMENT
                                WARRANT REGISTER
                      ------------------------------------



                                WARRANT REGISTER


Warrant             Original Number          Number of        Names and
Certificate         of Warrants and          Warrants         Addresses of
Number              Warrant Shares           Exercised        Warrant Holders



                                   Exhibit B
                                     Page 1
<PAGE>



                                  SCHEDULE 2.6
                              TO WARRANT AGREEMENT

                            Capitalization of Issuer


Reference is made to additional shares of Common Stock issuable in connection
with that certain Agreement and Plan of Reorganization, dated as of June 19,
2003, by and among the Issuer, Baker Anderson Christie, Inc., BAC Acquisition
Corporation and certain stockholders of Baker Anderson Christie, Inc., as
amended by that certain Amendment No. 1 made and entered into effective as of
July 31, 2003.

Reference is made to additional shares of Common Stock issuable in connection
with that certain Agreement and Plan of Reorganization, dated as of July 16,
2003, by and among the Issuer, Nurses Network, Inc., NNI Acquisition Corporation
and certain shareholders of Nurses Network, Inc., as amended by Amendment No. 1
made and entered into effective as of September 9, 2003.

Reference is made to certain registration rights granted in connection with that
certain Agreement and Plan of Reorganization, dated as of September 15, 2003, by
and among the Issuer, New Age Staffing, Inc., NAS Acquisition Corporation and
the shareholders of New Age Staffing, Inc.

Reference is made to the $910,000 in original principal amount of certain
Convertible Subordinated Promissory Notes issued by the Issuer.

Reference is made to (i) additional shares of Common Stock issuable in
connection with, (ii) $2,725,000 in original principal amount of certain
Convertible Subordinated Promissory Notes issued in connection with, and (iii)
certain registration rights granted in connection with, that certain Agreement
and Plan of Reorganization, dated as of November 4, 2003, by and among the
Issuer, PSR Acquisition Corporation, PSR Holdings Acquisition Corporation, PSR
Nurse Recruiting, Inc. and PSR Nurses Holdings Corp.

Reference is made to certain purchase rights set forth in that certain Common
Stock Purchase Agreement dated May 15, 2002 by and between the Issuer and the
parties thereto.

Reference is made to options to purchase up to 2,333,333 shares of the Issuer's
Common Stock (as adjusted for the 1-for-3 reverse stock split effected by the
Issuer on June 28, 2004 (the "Reverse Split") granted to the Issuer's Chairman
and Chief Executive Officer, on December 31, 2003 and a bonus agreement executed
in connection therewith.

Reference is made to options to purchase up to 66,666 shares of the Issuer's
Common Stock (as adjusted for the Reverse Split) granted to two members of the
Issuer's Board of Directors.


                                 Schedule 2(d)
                                     Page 1
<PAGE>

Reference is made an option to purchase up to 206,074 shares of the Issuer's
Common Stock (as adjusted for the Reverse Split) granted by the Issuer to its
President, on December 16, 2003. Reference is further made to a certain
Executive Employment Agreement by and between the Issuer and its President dated
on or about December 16, 2003, pursuant to which the Issuer will be grant one or
more options to purchase a number of shares of the Issuer's 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 therein), plus (b) subject to certain limitations, 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).

Reference is made to options to purchase 441,666 shares of Common Stock granted
pursuant to the Issuer's 2004 Stock Incentive Plan, and the remaining 358,334
shares of Common Stock reserved for Issuance under the Issuer's 2004 Stock
Incentive Plan.

Reference is made to certain registration rights granted pursuant to that
certain Amended and Restated Registration Rights Agreement, dated as of June 16,
2004 by and between the Issuer and MedCap Partners L.P.

Reference is made to an option to purchase 110,504 shares of the Issuer's Common
Stock (as adjusted for the Reverse Split) issued by the Issuer to its Chief
Financial Officer.

Reference is made to the dividend rights of the Issuer's Series A Preferred
Stock, the Series B Preferred Stock, Series B-1 Preferred Stock and Series C
Preferred Stock.

Reference is made to the registration rights granted pursuant to that certain
Registration Rights Agreement, dated as of August 9, 2004, by and between the
Issuer and the investors listed on Schedule A thereto.

Reference is made to the option to purchase 866,666 shares of Issuer's common
stock granted to the Issuer's Chief Executive Officer.

Reference is made to the option to purchase 433,333 shares of the Issuer's
common stock granted to the Issuer's President.

Reference is made to shares of Common Stock issued and/or issuable in connection
with that certain Agreement and Plan of Reorganization, dated as of August 31,
2004, by and among the Issuer, CRDE Corp., AHHC Acquisition Corporation, Arizona
Home Health Care/Private Duty, Inc. and certain stockholders of Arizona Home
Health Care/Private Duty, Inc.

Reference is made to 50,000 shares of Series C Preferred Stock issued and/or
issuable in connection with the Issuer's Series C Preferred Stock financing.


                                 Schedule 2(d)
                                     Page 2

<PAGE>

Reference is made to warrants to purchase 125,000 shares of Series C Preferred
Stock issued and/or issuable in connection with the Issuer's Series C Preferred
Stock financing.

References is made to that certain warrant to purchase 6,000 shares of Series
B-1 Preferred Stock granted to MedCap Partners L.P.



                                 Schedule 2(d)
                                     Page 3

<PAGE>


                                   SCHEDULE 3
                              TO WARRANT AGREEMENT

                       ISSUER CLOSING DATE CAPITALIZATION


                                       NO. OF SHARES**
                                       ---------------

Common Stock                                 6,343,091

Series A Preferred Stock                 4,583,333 (1)

Series B Preferred Stock                 2,083,333 (2)

Series B-1 Preferred Stock               4,640,300 (3)

Series C Preferred Stock                12,541,900 (4)

TOTAL                                       30,191,957
_________________________
** Set forth on an as-if-converted to common stock basis.

(1)      Includes 4,583,333 shares of common stock issuable upon conversion of
         2,750,000 shares of Series A Preferred Stock.

(2)      Includes 2,083,333 shares of common stock issuable upon conversion of
         6,250,000 shares of Series B Preferred Stock.

(3)      Includes (i) 4,040,300 shares of common stock issuable upon conversion
         of 40,403 shares of Series B-1 Preferred Stock; and (ii) 600,000 shares
         of common stock issuable upon conversion of 6,000 shares of Series B-1
         Preferred Stock issuable to MedCap Partners L.P. upon the exercise of a
         warrant to purchase shares of Series B-1 Preferred Stock.

(4)      Includes (i) 3,583,400 shares of common stock issuable upon conversion
         of 35,834 shares of Series C Preferred Stock to be issued in connection
         with the Series C Preferred Stock financing; and (ii) 8,958,500 shares
         of common stock issuable upon conversion of 89,585 shares of Series C
         Preferred Stock, which shares are issuable upon the exercise of
         warrants issued in connection with the proposed Series C Preferred
         Stock financing.




                                   Schedule 3
                                     Page 1

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.6
<SEQUENCE>7
<FILENAME>crdentia_ex4-6.txt
<TEXT>
<PAGE>


                                                                     Exhibit 4.6

                               WARRANT CERTIFICATE

THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE SHARES FOR WHICH THE
WARRANTS ARE EXERCISABLE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAW AND MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER
SUCH ACT OR LAW. SUCH WARRANTS AND SHARES MAY BE TRANSFERRED ONLY IN COMPLIANCE
WITH THE CONDITIONS SPECIFIED IN AND ARE SUBJECT TO OTHER PROVISIONS OF THE
WARRANT AGREEMENT DATED AS OF AUGUST 31, 2004, BETWEEN THE ISSUER AND BRIDGE
OPPORTUNITY FINANCE, LLC, A COMPLETE AND CORRECT COPY OF WHICH IS AVAILABLE FOR
INSPECTION AT THE PRINCIPAL OFFICE OF THE ISSUER AND WILL BE FURNISHED TO THE
HOLDER HEREOF UPON WRITTEN REQUEST AND WITHOUT CHARGE.

THE WARRANTS REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RIGHTS MORE
FULLY SET FORTH IN THE WARRANT AGREEMENT.

                          EXERCISABLE ONLY ON OR BEFORE
                                 AUGUST 31, 2014

This Warrant Certificate is one of the Warrant Certificates referred to in the
Warrant Agreement dated as of August 31, 2004 (the "Warrant Agreement"), between
CRDENTIA CORP., a Delaware corporation (the "Issuer") and BRIDGE OPPORTUNITY
FINANCE, LLC. Such Warrant Agreement is hereby incorporated in full by reference
and made a part of this instrument and is hereby referred to for a description
of the rights, limitation of rights, obligations, duties and immunities
thereunder of the Issuer and the holders. All defined terms used in this Warrant
Certificate that are not otherwise defined herein shall have the meanings
ascribed to them in the Warrant Agreement.

This Warrant Certificate certifies that BRIDGE OPPORTUNITY FINANCE, LLC, or its
registered assigns, is the registered holder of 905,758 Warrants (the
"Warrants") to purchase shares of Common Stock of the Issuer. Each Warrant
evidenced hereby entitles the holder hereof, subject to the conditions set forth
herein and in the Warrant Agreement, to purchase from the Issuer before the
first to occur of (i) a Change of Control (as defined in the Warrant Agreement,
or (ii) 5:00 P.M., Chicago, Illinois time, on August 31, 2014 (the "Expiration
Date"), one (1) Validly Issued share of the Common Stock of the Issuer (the
"Warrant Share") to the extent set forth in the Warrant Agreement, at a price of
the lesser of (i) Three Dollars and 15/100 ($3.15) per Warrant, or (ii) the Fair
Market Value per Warrant (such lesser amount per Warrant, the "Exercise Price"),
upon surrender of this Warrant Certificate, execution of the annexed Form of
Election to Purchase and payment of the Exercise Price at the office of the
Issuer at Warrant Office. The Exercise Price and number of Warrant Shares
purchasable upon exercise of the Warrants are subject to adjustment as set forth
in the Warrant Agreement.

                                   Exhibit A
                                     Page 1
<PAGE>

No Warrant may be exercised after 5:00 P.M., Chicago, Illinois time, on the
Expiration Date and (except as otherwise provided in the Warrant Agreement) all
rights of the registered holders of the Warrants shall cease after 5:00 P.M.,
Chicago, Illinois time, on the Expiration Date.

The Issuer may deem and treat the registered holders of the Warrants evidenced
hereby as the absolute owners thereof (notwithstanding any notation of ownership
or other writing hereon made by anyone), for the purpose of any exercise hereof
and of any distribution to the holders hereof and for all other purposes, and
the Issuer shall not be affected by any notice to the contrary.

Warrant Certificates, when surrendered at the Warrant Office by the registered
holder hereof in person or by a legal representative duly authorized in writing,
may be exchanged, in the manner and subject to the limitations provided in the
Warrant Agreement, but without payment of any service charge, for another
Warrant Certificate or Warrant Certificates of like tenor evidencing in the
aggregate a like number of Warrants.

Upon due presentment for registration of a transfer of this Warrant Certificate
at the Warrant Office, a new Warrant Certificate or Warrant Certificates of like
tenor and evidencing in the aggregate a like number of Warrants shall be issued
in exchange for this Warrant Certificate to the transferee(s) and, if less than
all of the Warrants evidenced hereby are to be transferred thereunder, to the
registered holder hereof, subject to the limitations provided in the Warrant
Agreement, without charge except for any tax or other governmental charge
imposed in connection therewith.



                            [SIGNATURE PAGE FOLLOWS]


                                   Exhibit A
                                     Page 2

<PAGE>


                     (SIGNATURE PAGE TO WARRANT CERTIFICATE)

         IN WITNESS WHEREOF the Issuer has caused this Warrant Certificate to be
signed by its duly authorized officers and has caused its corporate seal to be
affixed hereunto.

                                             CRDENTIA CORP.


                                             By: /s/ James D. Durham
                                                 -------------------------------
                                                 James D. Durham
                                                 Chief Executive Officer



                                 Schedule 2(d)
                                     Page 3

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>8
<FILENAME>crdentia_8kex10-1.txt
<TEXT>
<PAGE>

                                                                    Exhibit 10.1

                     LOAN AND SECURITY AGREEMENT - TERM LOAN

                           DATED AS OF AUGUST 31, 2004

                                     BETWEEN

                         BRIDGE OPPORTUNITY FINANCE, LLC

                                   AS LENDER,

                                       AND

                           CRDENTIA CORP. ("CRDENTIA")
                     BAKER ANDERSON CHRISTIE, INC.("BAKER")
                     NURSES NETWORK, INC.("NURSES NETWORK")
                       NEW AGE STAFFING, INC. ("NEW AGE")
                          PSR NURSES, LTD. ("PSR LTD.")
                  PSR NURSE RECRUITING, INC. ("PSR RECRUITING")
                    PSR NURSES HOLDINGS CORP. ("PSR HOLDING")
                      CRDE CORP. ("ACQUISITION SUBSIDIARY")
                      AHHC ACQUISITION CORPORATION ("AHHC")
                       CPS ACQUISITION CORPORATION ("CPS")

                                   AS BORROWER



<PAGE>


                                TABLE OF CONTENTS

                                                                            Page
1.       DEFINITIONS...........................................................1

         (a)      Defined Terms................................................1

         (b)      Accounting Terms.............................................1

         (c)      Terms Defined in UCC.........................................2

         (d)      Other Definitional Provisions; Construction..................2

         (e)      References to Agreements, Enactments, Etc....................3

2.       LOANS.................................................................3

         (a)      Term Loan....................................................3

         (b)      Permitted Acquisitions.......................................3

         (c)      Repayments...................................................4

         (d)      Notes........................................................5

3.       WARRANTS..............................................................5

4.       INTEREST, FEES AND CHARGES............................................6

         (a)      Interest Rate................................................6

         (b)      Fees and Charges.............................................6

         (c)      Maximum Interest.............................................7

5.       COLLATERAL............................................................7

         (a)      Grant of Security Interest to Lender.........................7

         (b)      Other Security...............................................8

         (c)      Possessory Collateral........................................8

         (d)      Electronic Chattel Paper.....................................8

         (e)      Letter-of-Credit Rights......................................9

         (f)      Third-Party Collateral.......................................9

         (g)      Deposit Account..............................................9

         (h)      Insurance Proceeds...........................................9

6.       PRESERVATION OF COLLATERAL AND PERFECTION OF SECURITY INTERESTS
         THEREIN...............................................................9

7.       POSSESSION OF COLLATERAL AND RELATED MATTERS.........................10

8.       COLLECTIONS..........................................................11

                                       i
<PAGE>

                                TABLE OF CONTENTS
                                   (continued)

                                                                            Page

9.       COLLATERAL, AVAILABILITY AND FINANCIAL REPORTS AND SCHEDULES.........12

         (a)      Borrowing Base Reports......................................12

         (b)      Monthly Reports.............................................12

         (c)      Financial Statements........................................12

         (d)      Annual Projections..........................................13

         (e)      Explanation of Budgets and Projections......................13

         (f)      Invoices and Billing Statements.............................13

         (g)      Obligor Financial Statements and Tax Returns................13

         (h)      Other Information...........................................13

         (i)      Post-Closing Review.........................................13

         (j)      Public Reporting............................................13

10.      TERMINATION; AUTOMATIC RENEWAL; EARLY TERMINATION FEE................14

11.      REPRESENTATIONS AND WARRANTIES.......................................15

         (a)      Financial Statements and Other Information..................15

         (b)      Locations; Certain Collateral...............................16

         (c)      Loans by Borrower...........................................16

         (d)      [Left Blank]................................................16

         (e)      Liens.......................................................16

         (f)      Organization, Authority and No Conflict.....................16

         (g)      Litigation..................................................17

         (h)      Compliance with Laws and Maintenance of Permits.............17

         (i)      Affiliate Transactions......................................17

         (j)      Names and Trade Names.......................................17

         (k)      Equipment...................................................17

         (l)      Enforceability..............................................18

         (m)      Solvency....................................................18

         (n)      Indebtedness................................................18

         (o)      Margin Security and Use of Proceeds.........................18

         (p)      Parent, Subsidiaries and Affiliates.........................18

         (q)      No Defaults.................................................18

                                       ii

<PAGE>

                                TABLE OF CONTENTS
                                   (continued)

                                                                            Page

         (r)      Employee Matters............................................18

         (s)      Intellectual Property.......................................18

         (t)      Environmental Matters.......................................19

         (u)      ERISA Matters...............................................19

         (v)      Reimbursement...............................................19

         (w)      Compliance with Healthcare Regulations......................19

         (x)      Immigration Matters.........................................20

         (y)      Licenses, Permits, etc......................................20

         (z)      Collective Enterprise.......................................20

         (aa)     Acquisition.................................................20

         (bb)     Certain Financial Information...............................20

12.      AFFIRMATIVE COVENANTS................................................21

         (a)      Maintenance of Records......................................21

         (b)      Notices.....................................................21

         (c)      Compliance with Laws and Maintenance of Permits.............22

         (d)      Inspection and Audits.......................................22

         (e)      Insurance...................................................23

         (f)      Collateral..................................................24

         (g)      Use of Proceeds.............................................24

         (h)      Taxes.......................................................25

         (i)      Intellectual Property.......................................25

         (j)      Staffing Contracts..........................................25

         (k)      Billing and Collection System Access........................25

         (l)      Integration of Systems......................................25

         (m)      Subordination Agreement.....................................25

13.      NEGATIVE COVENANTS...................................................26

         (a)      Indebtedness................................................26

         (b)      Liens.......................................................26

                                      iii
<PAGE>

                                TABLE OF CONTENTS
                                   (continued)

                                                                            Page

         (c)      Mergers, Sales, Acquisitions, Subsidiaries and Other
                  Transactions Outside the Ordinary Course of Business........26

         (d)      Dividends and Distributions.................................27

         (e)      Investments; Loans..........................................27

         (f)      Fundamental Changes, Line of Business.......................27

         (g)      Equipment...................................................28

         (h)      Affiliate Transactions......................................28

         (i)      Settling of Accounts........................................28

         (j)      Restricted Payments.........................................28

         (k)      Restricted Locations........................................29

14.      FINANCIAL COVENANTS..................................................29

         (a)      Tangible Net Worth..........................................29

         (c)      Minimum EBITDA..............................................30

         (d)      Acquisition Subsidiary Debt Service Coverage Ratio..........31

         (e)      Acquisition Subsidiary Debt Leverage Ratio..................31

         (f)      Acquisition Subsidiary Term Loan Debt Leverage Ratio........32

         (g)      Capital Expenditure Limitations.............................32

         (h)      Operating Lease Obligations.................................32

         (i)      Financial Reporting Consolidation...........................32

15.      DEFAULT..............................................................33

         (a)      Payment.....................................................33

         (b)      Breach of This Agreement, the Other Agreements and the
                  Revolving Loan Agreement....................................33

         (c)      Breach of Subordination Agreement...........................33

         (d)      Breaches of Other Obligations...............................33

         (e)      Breach of Representations and Warranties....................33

         (f)      Loss of Collateral..........................................34

         (g)      Levy, Seizure or Attachment.................................34

         (h)      Bankruptcy or Similar Proceedings...........................34

         (i)      Appointment of Receiver.....................................34

                                       iv
<PAGE>

                                TABLE OF CONTENTS
                                   (continued)

                                                                            Page

         (j)      Judgment....................................................34

         (k)      Default or Revocation of Guaranty...........................34

         (l)      Change of Ownership/Management..............................35

         (m)      Material Adverse Change.....................................35

         (n)      Governmental Authorizations.................................35

         (o)      Failure to Maintain Third-Party Payroll Tax Service
                  Provider....................................................35

         (p)      Failure to Obtain Intercreditor Agreement...................35

16.      REMEDIES UPON AN EVENT OF DEFAULT....................................35

17.      CONDITIONS PRECEDENT.................................................36

18.      JOINT AND SEVERAL LIABILITY..........................................39

19.      RELEASES; INDEMNITIES................................................41

20.      NOTICE...............................................................42

21.      CHOICE OF GOVERNING LAW; CONSTRUCTION; FORUM SELECTION...............42

22.      MODIFICATION AND BENEFIT OF AGREEMENT................................43

23.      HEADINGS OF SUBDIVISIONS.............................................43

24.      POWER OF ATTORNEY....................................................43

25.      CONFIDENTIALITY......................................................43

26.      BROKERAGE FEES.......................................................44

27.      PUBLICITY............................................................44

28.      LIMITATION OF ACTIONS................................................44

29.      LIABILITY............................................................44

30.      COUNTERPARTS.........................................................45

31.      ELECTRONIC SUBMISSIONS...............................................45

32.      WAIVER OF JURY TRIAL; OTHER WAIVERS..................................45

                                       v

<PAGE>

ANNEX 1 - DEFINITIONS

EXHIBIT A - COMPLIANCE CERTIFICATE

EXHIBIT B - CLOSING CHECKLIST

EXHIBIT C - INFORMATION CERTIFICATE

EXHIBIT D - FORM OF SUBORDINATION AGREEMENT

SCHEDULE 1 - PERMITTED LIENS

SCHEDULE 11(b) - BUSINESS AND COLLATERAL LOCATIONS

SCHEDULE 11(b) - CERTAIN COLLATERAL

SCHEDULE 11(g) - LITIGATION

SCHEDULE 11(i) - AFFILIATE TRANSACTIONS

SCHEDULE 11(j) - NAMES & TRADE NAMES

SCHEDULE 11(n) - INDEBTEDNESS

SCHEDULE 11(p) - PARENT, SUBSIDIARIES AND AFFILIATES

SCHEDULE 11(q) - DEFAULTS

SCHEDULE 11(t) - ENVIRONMENTAL MATTERS

SCHEDULE 11(y) - LICENSES AND PERMITS





<PAGE>

                     LOAN AND SECURITY AGREEMENT - TERM LOAN

         THIS LOAN AND SECURITY AGREEMENT - TERM LOAN (as amended, modified or
supplemented from time to time, this "AGREEMENT") made this 31st day of August,
2004 by and between BRIDGE OPPORTUNITY FINANCE, LLC ("LENDER"), and Crdentia
Corp. ("Crdentia"), Baker Anderson Christie, Inc. ("Baker"), Nurses Network,
Inc. ("Nurses Network"), New Age Staffing, Inc. ("New Age"), PSR Nurses, Ltd.
("PSR Ltd."), PSR Nurse Recruiting, Inc. ("PSR Recruiting"), PSR Nurses Holdings
Corp. ("PSR Holding"), CRDE Corp. ("Acquisition Subsidiary"), CPS Acquisition
Corporation ("CPS"), and AHHC Acquisition Corporation ("AHHC"), each having its
principal place of business at 14114 Dallas Parkway, Suite 600, Dallas, Texas
75254 (individually and collectively, "BORROWER").

                              W I T N E S S E T H:
                              - - - - - - - - - -

         WHEREAS, Borrower may, from time to time, request certain Term Loans
from Lender in connection with certain Permitted Acquisitions, and the parties
wish to provide for the terms and conditions upon which such Term Loans or other
financial accommodations, if made by Lender, shall be made, which Term Loans
shall be secured by a second priority security interest in all assets of
Borrower;

         WHEREAS, Borrower as of June 16, 2004, entered into that certain Loan
and Security Agreement - Revolving Loans (as amended, restated, supplemented or
otherwise modified from time to time, the "Revolving Loan Agreement") with
Bridge Healthcare Finance, LLC, which Revolving Loans shall be secured by a
first priority security interest in all assets of Borrower;

         WHEREAS, Acquisition Subsidiary is a wholly owned Subsidiary of
Crdentia. AHHC is a wholly owned Subsidiary of Acquisition Subsidiary. Pursuant
to that certain proposed Agreement and Plan of Reorganization by and among
Crdentia, AHHC and Arizona Home Health Care / Private Duty, Inc., an Arizona
corporation ("Arizona Health"), AHHC will merge with and into Arizona Health
with Arizona Health being the surviving entity. CPS is a wholly owned Subsidiary
of Acquisition Subsidiary. Pursuant to that certain proposed Agreement and Plan
of Reorganization by and among Crdentia, CPS, Care Pros Staffing, Inc., a Texas
corporation ("Care Pros"), and the shareholders of Care Pros, Care Pros will
merge with and into CPS with CPS being the surviving entity and immediately
after such merger CPS will change its name to "Care Pros Staffing, Inc."

         NOW, THEREFORE, in consideration of any Term Loan hereafter made to
Borrower by Lender, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged by Borrower, the parties agree
as follows:

         1. DEFINITIONS.

                  (a) DEFINED TERMS. For the purposes of this Agreement, the
following capitalized words and phrases shall have the meanings set forth in
ANNEX I attached hereto and made a part hereof.

                  (b) ACCOUNTING TERMS. Any accounting terms used in this
Agreement which are not specifically defined herein shall have the meanings
customarily given them in accordance with GAAP. Calculations and determinations
of financial and accounting terms used and not otherwise specifically defined


                                       1
<PAGE>

hereunder and the preparation of financial statements to be furnished to the
Lender pursuant hereto shall be made and prepared, both as to classification of
items and as to amount, in accordance with GAAP as used in the preparation of
the financial statements of the Borrower on the date of this Agreement. If any
changes in accounting principles or practices from those used in the preparation
of the financial statements are hereafter occasioned by the promulgation of
rules, regulations, pronouncements and opinions by or required by the Financial
Accounting Standards Board or the American Institute of Certified Public
Accountants (or any successor thereto or agencies with similar functions), which
results in a material change in the method of accounting in the financial
statements required to be furnished to the Lender hereunder or in the
calculation of financial covenants, standards or terms contained in this
Agreement, the parties hereto agree to enter into good faith negotiations to
amend such provisions so as equitably to reflect such changes to the end that
the criteria for evaluating the financial condition and performance of the
Borrower will be the same after such changes as they were before such changes;
and, if the parties fail to agree on the amendment of such provisions, the
Borrower will furnish financial statements in accordance with such changes but
shall provide calculations for all financial covenants, perform all financial
covenants and otherwise observe all financial standards and terms in accordance
with applicable accounting principles and practices in effect immediately prior
to such changes.

                  (c) TERMS DEFINED IN UCC. The terms "ACCOUNT", "ACCOUNT
DEBTOR", "CERTIFICATED SECURITY", "CHATTEL PAPER", "COMMERCIAL TORT CLAIM",
"DEPOSIT ACCOUNT", "DOCUMENT", "ELECTRONIC CHATTEL PAPER", "EQUIPMENT",
"FINANCIAL ASSET", "FIXTURE", "GENERAL INTANGIBLE", "GOODS",
"HEALTH-CARE-INSURANCE RECEIVABLES", "INSTRUMENT", "INVENTORY", "INVESTMENT
PROPERTY", "LETTER-OF-CREDIT RIGHT", "PAYMENT INTANGIBLE", "PROCEEDS",
"SECURITY", "SECURITIES ACCOUNT", "SECURITY ENTITLEMENT", "SOFTWARE",
"SUPPORTING OBLIGATION", "TANGIBLE CHATTEL PAPER" and "UNCERTIFICATED SECURITY"
shall have the respective meanings assigned to such terms in the UCC. All other
capitalized words and phrases used herein and not otherwise specifically defined
shall have the respective meanings assigned to such terms in the UCC, to the
extent the same are used or defined therein.

                  (d) OTHER DEFINITIONAL PROVISIONS; CONSTRUCTION. Whenever the
context so requires, the neuter gender includes the masculine and feminine, the
single number includes the plural, and vice versa, and in particular the word
"Borrower" shall be so construed. The words "hereof", "herein" and "hereunder"
and words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement, and
references to Article, Section, Subsection, Annex, Schedule, Exhibit and like
references are references to this Agreement unless otherwise specified. The word
"including" shall mean "including, without limitation". An Event of Default
shall "continue" or be "continuing" until such Event of Default has been waived
in accordance with SECTION 32(E) hereof. References in this Agreement to any
party shall include such party's successors and permitted assigns. References to
any "Section" shall be a reference to such Section of this Agreement unless
otherwise stated. To the extent any of the provisions of the Other Agreements
are inconsistent with the terms of this Agreement, the provisions of this
Agreement shall govern. This Agreement and the Other Agreements are the result
of negotiations among and have been reviewed by counsel to the Lender, Borrower
and any other parties thereto, are product of all parties and, accordingly, they
shall not be construed against the Lender.

                                       2
<PAGE>

                  (e) REFERENCES TO AGREEMENTS, ENACTMENTS, ETC. Unless
otherwise expressly provided herein, (i) references to agreements (including
this Agreement) and other contractual instruments shall be deemed to include all
subsequent amendments and other modifications thereto, but only to the extent
such amendments, restatements, supplements and other modifications are not
prohibited by the terms of this Agreement or any Other Agreement, and (ii)
references to any statute or regulation shall be construed as including all
statutory and regulatory provisions amending, replacing, supplementing or
interpreting such statute or regulation.

         2. LOANS.

                  (a) TERM LOAN. Subject to the terms and conditions of this
Agreement and the Other Agreements, Lender shall make one or more term loans to
Borrower (individually and collectively, the "TERM LOAN") PROVIDED that (i) each
Term Loan be for a minimum amount of Five Hundred Thousand Dollars ($500,000),
and (ii) the aggregate principal amount of all Term Loans may not exceed
$10,000,000 in the aggregate outstanding at any time.

                  (b) PERMITTED ACQUISITIONS. In connection with any Acquisition
approved in writing by Lender in its sole discretion, any Term Loan in
connection therewith shall be made subject to the satisfaction of the following
conditions precedent thereto ("PERMITTED ACQUISITION"): (A) the Target shall
have, on a pro forma basis, independent and separate from the existing Borrowers
hereunder: (x) a coverage ratio of Target Pro Forma EBITDA to Target Pro Forma
Debt Service of at least 1.5 to 1.0, (y) a ratio of Target Pro Forma Senior Debt
to Target Pro Forma EBITDA of not more than 4.0 to 1.0, and (z) a ratio of
Target Pro Forma Term Loan Debt to Target Pro Forma EBITDA of not more than 2.5
to 1.0; (B) Borrowers are in compliance, and shall be on the date of the
consummation of such proposed Acquisition, with all financial covenants set
forth in Section 14 hereof; (C) on a pro forma basis, as if the proposed
Acquisition had occurred, the Senior Debt Service Coverage Ratio of the
Borrowers, on a consolidated basis after giving effect to such proposed
Acquisition, equals or exceeds the required level set for the Borrowers in
Section 14(b) hereof; (D) pro forma financial projections, prepared by the
Borrower in good faith for the period from the date of the consummation of such
proposed Acquisition to the date which is one year thereafter, shall reflect
that the Borrowers shall be in compliance with all financial covenants set forth
in SECTION 14 hereof; (E) Excess Availability of Crdentia Proper Borrowers under
the Revolving Loan Agreement or any Replacement Revolving Loan Agreement shall
be an amount mutually agreed upon between Lender and Borrower but in no event
less than $250,000 after giving effect to the proposed Acquisition; (F) the
amount of (i) the revolving borrowing base attributable to Target, as determined
by the Lender in its good faith credit judgment, LESS (ii) the sum of the
outstanding Revolving Loans attributable to Target, shall be an amount mutually
agreed upon between Lender and Borrower; (G) the Target entity to be acquired in
such Acquisition shall be a separate, independent Subsidiary of Acquisition
Subsidiary or merged with and into Acquisition Subsidiary as of the date of such
acquisition; (H) the Target entity to be acquired in such Acquisition shall
become a new Borrower hereunder in accordance with the provisions and
requirements of Section 13(c)(ii) hereof, and Acquisition Subsidiary shall be


                                       3
<PAGE>

subject to a Revolving Borrowing Base Amount calculation (pursuant to the
Revolving Loan Agreement or any Replacement Revolving Loan Agreement) which is
calculated separate and independent from the Crdentia Proper Borrowers with
respect to any Revolving Loans thereafter advanced to such new Borrower; (I) any
Indebtedness to be issued by any Borrower in respect of such Acquisition (other
than Indebtedness under the Revolving Loan Agreement or any Replacement
Revolving Loan Agreement) shall be Subordinated Debt subject to Subordination
Agreements in form and substance satisfactory to Lender and substantially in the
form of EXHIBIT D attached hereto, including, without limitation, payment
blockage rights and indefinite standstill on remedies; (J) Lender shall have
reviewed and found satisfactory all Acquisition Documents in respect thereof
prior to Borrower entering into any such Acquisition Documents; (K) no Default
or Event of Default exists as of the proposed date of the Acquisition or would
result after giving effect thereto; (L) Crdentia shall deliver to Lender a
certificate of an officer of Crdentia certifying compliance with the foregoing;
(M) Borrower shall deliver to Lender any other due diligence reasonably
requested by the Lender in connection with an Acquisition or Target, including,
without limitation collateral, cash-flow, and operational audits, and background
checks on Target's management, in each case to the reasonable satisfaction to
the Lender; and (N) Borrower shall establish and maintain a separate Lockbox
with a Lockbox Bank for receivables from Account Debtors of Acquisition
Subsidiary in accordance with the requirements hereof and under the Revolving
Loan Agreement, and Borrower shall execute with such Lockbox Bank a lockbox
agreement, blocked account agreement, and such other agreements related to the
lockbox arrangements, in each case in form and substance acceptable to the
Lender.

                  (c) REPAYMENTS.

                           (i) The principal outstanding balance of the Term
                  Loan shall be repaid at the end of the Term. If any such
                  payment due date is not a Business Day, then such payment may
                  be made on the next succeeding Business Day and such extension
                  of time shall be included in the computation of the amount of
                  interest and fees due hereunder.

                           (ii) MANDATORY PREPAYMENTS OF THE TERM LOAN.

                                    (1) SALES OF ASSETS. Upon receipt of the
                           proceeds of the sale or other disposition of any
                           Equipment or real property of Borrower which is
                           subject to a mortgage in favor of Lender, or if any
                           of the Equipment or real property subject to such
                           mortgage is damaged, destroyed or taken by
                           condemnation in whole or in part, the proceeds
                           thereof, in any case, in excess of $15,000
                           individually, or in excess of $50,000 in the
                           aggregate, in any Fiscal Year shall be paid by
                           Borrower to Lender as a mandatory prepayment of the
                           Term Loan, such payment to be applied against the
                           remaining installments of principal in the inverse
                           order of their maturities until repaid in full, and
                           then against the other Obligations, as determined by
                           Lender, in its sole discretion.

                                    (2) EXCESS CASH FLOW. Five (5) days after
                           receipt by Lender of Borrower's internally prepared
                           quarterly financial statements pursuant to Section
                           9(c)(ii) hereof, commencing with the calendar quarter
                           ended September 30, 2005, Borrower shall make a
                           mandatory prepayment of the Term Loan in an amount
                           equal to fifty percent (50%) of Borrower's "Excess
                           Cash Flow" (as described below) for the calendar
                           quarter just ended, such prepayment to be applied
                           against the remaining installments of principal in
                           the inverse order of their maturities, such mandatory


                                       4
<PAGE>

                           prepayments to continue until the date on which the
                           Term Loan shall be repaid in full. In addition,
                           within ten (10) days after receipt of Borrower's
                           Fiscal Year-end audited financial statements for each
                           Fiscal Year of Borrower, or required by Section
                           9(c)(iii) hereof, commencing with Borrower's fiscal
                           year ending December 31, 2005, Borrower shall make a
                           mandatory prepayment of the Term Loan in any amount
                           necessary to satisfy any discrepancy between the
                           actual Excess Cash Flow payments received on a
                           quarterly basis for such Fiscal Year, and the amount
                           required herein as calculated pursuant to the audited
                           financial statements for such Fiscal Year. For
                           purposes hereof, "Excess Cash Flow" shall mean for
                           each of Borrower's Fiscal Years, Borrower's EBITDA
                           for such period, MINUS Borrower's cash taxes paid
                           ----- during such period, MINUS actual principal and
                           interest payments made with respect to Borrowed Money
                           during such period, MINUS Borrower's ----- -----
                           legal, consulting and accounting expenses in
                           connection with Permitted Acquisitions, if any, for
                           such period (but only to the extent permitted by
                           Lender and only to the extent not previously deducted
                           from net income in the calculation of EBITDA), MINUS
                           all unfinanced ----- Capital Expenditures by Borrower
                           during such period.

                  (d) NOTES. The Term Loan shall, in Lender's sole discretion,
be evidenced by one or more promissory notes in form and substance satisfactory
to Lender. However, if such Term Loans are not so evidenced, such Term Loans may
be evidenced solely by entries upon the books and records maintained by Lender.

         3. WARRANTS.

         As additional consideration for Lender entering into this Agreement and
making the credit facilities available to Borrower as contemplated hereby,
Crdentia agrees to issue to Lender warrants to purchase shares of common stock
of Crdentia equal to, in the aggregate, twelve percent (12%) of the common stock
of Crdentia in accordance with the provisions of Section 12 to the Warrant
Agreement, as follows:

                  (a) Concurrently with the execution of this Agreement and the
making by Lender of an initial Term Loan to Borrower in the aggregate principal
amount of $2,697,801.75, Crdentia will enter into the Warrant Agreement and,
pursuant thereto, will issue Lender a Warrant Certificate evidencing Lender's
right to purchase three and 24/100 percent (3.24%) of the common stock of
Crdentia, at an exercise price per warrant of an amount provided in the Warrant
Agreement.

                  (b) Concurrently with the funding by Lender of each additional
Term Loan to Borrower, with the aggregate principal amount of such additional
Term Loans not to exceed $7,500,000, Crdentia will issue to Lender one or more
additional Warrant Certificates representing the right to purchase up to an
additional eight and 76/100 percent (8.76%) of the common stock of Crdentia in
accordance with the provisions of Section 12 to the Warrant Agreement. The
Warrant Certificate percentage of each additional Warrant Certificate shall be
determined on a pro rata basis relative to the amount of each such additional
Term Loan. The exercise price for each additional Warrant Certificate shall be
determined as provided in the Warrant Agreement.

                                       5
<PAGE>

         4. INTEREST, FEES AND CHARGES.

                  (a) INTEREST RATE.

                  The Term Loan shall bear interest at the rate of fifteen and
one-quarter percent (15.25%) per annum, all such interest to be payable on the
first Business Day of each month in arrears. Upon the occurrence of an Event of
Default and during the continuance thereof, the Term Loan shall bear interest at
the rate of four percent (4%) per annum in excess of the interest rate otherwise
payable thereon, which interest shall be payable on demand. All interest shall
be calculated on the basis of a 360-day year.

                  (b) FEES AND CHARGES.

                           (i) CLOSING FEE: Borrower shall pay to Lender a
                  closing fee of one and one-half percent (1.5%) of the
                  principal amount of each Term Loan funded hereunder, which
                  fees shall be fully earned and payable on the date of
                  disbursement of such Term Loan hereunder.

                           (ii) COLLATERAL MONITORING FEE: On the first Business
                  Day of each calendar month following the Closing Date,
                  Borrower shall pay Lender a collateral monitoring fee of Three
                  Thousand and No/100 Dollars ($3,000) with respect to the Term
                  Loan (pro rated for the first month, if it is a partial
                  month), which fee shall be deemed earned at the beginning of
                  each month; provided however, that Borrower agrees and
                  acknowledges that such collateral monitoring fee shall be
                  increased, on a pro rata basis, in the event that, at any time
                  or from time to time, the aggregate amount of principal
                  outstanding in respect of the Term Loan exceeds $2,500,000,
                  which increase shall be in the amount of $1,000 per month for
                  each increment or partial increment of $500,000 of Term Loan
                  principal in excess of $2,500,000, which collateral monitoring
                  fee hereunder shall not exceed, in any event, an aggregate of
                  $5,000 per month.

                           (iii) COSTS AND EXPENSES: Borrower shall reimburse
                  Lender for all reasonable costs and expenses, including,
                  without limitation, legal expenses and reasonable attorneys'
                  fees (whether for internal or outside counsel), incurred by
                  Lender in connection with the (i) documentation and
                  consummation of this transaction and any other transactions
                  between Borrower and Lender, including, without limitation,
                  Uniform Commercial Code and other public record searches and
                  filings, overnight courier or other express or messenger
                  delivery, appraisal costs and surveys; (ii) collection,
                  protection or enforcement of any rights in or to the
                  Collateral; (iii) collection of any Obligations; and (iv)
                  administration and enforcement of any of Lender's rights under
                  this Agreement or any Other Agreement. Borrower shall also pay
                  all normal service charges with respect to all accounts
                  maintained by Borrower with Lender and any additional services
                  requested by Borrower from Lender. All such costs, expenses
                  and charges shall, if owed to Lender, be reimbursed by Lender
                  and, in such event or in the event such costs and expenses are
                  owed to Lender, shall constitute Obligations hereunder, shall
                  be payable by Borrower to Lender on demand and, until paid,
                  shall bear interest at the highest rate then applicable to
                  Term Loans hereunder.

                                       6
<PAGE>

                           (iv) CAPITAL ADEQUACY CHARGE. If Lender shall have
                  determined that the adoption of any law, rule or regulation
                  regarding capital adequacy, or any change therein or in the
                  interpretation or application thereof, or compliance by Lender
                  with any request or directive regarding capital adequacy
                  (whether or not having the force of law) from any central bank
                  or governmental authority enacted after the Closing Date, does
                  or shall have the effect of reducing the rate of return on
                  such party's capital as a consequence of its obligations
                  hereunder to a level below that which Lender could have
                  achieved but for such adoption, change or compliance (taking
                  into consideration Lender's policies with respect to capital
                  adequacy) by a material amount, then, from time to time after
                  submission by Lender to Borrower of a written demand therefor
                  ("CAPITAL ADEQUACY DEMAND") together with the certificate
                  described below, Borrower shall pay to Lender such additional
                  amount or amounts ("CAPITAL ADEQUACY CHARGE") as will
                  compensate Lender for such reduction, such Capital Adequacy
                  Demand to be made with reasonable promptness following such
                  determination. A certificate of Lender claiming entitlement to
                  payment as set forth above shall be deemed presumptively
                  correct in the absence of manifest error. Such certificate
                  shall set forth the nature of the occurrence giving rise to
                  such reduction, the amount of the Capital Adequacy Charge to
                  be paid to Lender, and the method by which such amount was
                  determined. In determining such amount, Lender may use any
                  reasonable averaging and attribution method, applied on a
                  non-discriminatory basis.

                  (c) MAXIMUM INTEREST. It is the intent of the parties that the
rate of interest and other charges to Borrower under this Agreement and the
Other Agreements shall be lawful; therefore, if for any reason the interest or
other charges payable under this Agreement are found by a court of competent
jurisdiction, in a final determination, to exceed the limit which Lender may
lawfully charge Borrower, then the obligation to pay interest and other charges
shall automatically be reduced to such limit and, if any amount in excess of
such limit shall have been paid, then such amount shall be refunded to Borrower.

         5. COLLATERAL.

                  (a) GRANT OF SECURITY INTEREST TO LENDER. As security for the
payment of all Term Loans now or in the future made by Lender to Borrower
hereunder and for the payment or other satisfaction of all other Obligations,
Borrower hereby assigns to Lender and grants to Lender a continuing security
interest (subject only to Liens of BHF and other Permitted Liens) in the
following property of Borrower, whether now or hereafter owned, existing,
acquired or arising and wherever now or hereafter located: (i) all Accounts and
all Goods whose sale, lease or other disposition by Borrower has given rise to
Accounts and have been returned to, or repossessed or stopped in transit by,
Borrower; (ii) all Chattel Paper, Instruments, Documents and General Intangibles
(including, without limitation, all Intellectual Property, licenses, software,
franchises, tax refund claims, claims against carriers and shippers, guarantee
claims, contract rights, Payment Intangibles, security interests, security
deposits and rights to indemnification); (iii) all Inventory; (iv) all Goods
(other than Inventory), including, without limitation, Equipment, vehicles and
Fixtures; (v) all Investment Property; (vi) all Deposit Accounts, bank accounts,
deposits and cash; (vii) all Letter-of-Credit Rights; (viii) Commercial Tort
Claims listed on SCHEDULE 11(b) hereto from time to time; (ix) any other
property of Borrower now or hereafter in the possession, custody or control of


                                       7
<PAGE>

Lender or any agent or any parent, affiliate or subsidiary of Lender or any
participant with Lender in the Loans, for any purpose (whether for safekeeping,
deposit, collection, custody, pledge, transmission or otherwise); and (x) all
additions and accessions to, substitutions for, and replacements, products and
Proceeds of the foregoing property, including, without limitation, proceeds of
all insurance policies insuring the foregoing property, and all of Borrower's
books and records relating to any of the foregoing and to Borrower's business.
The foregoing notwithstanding, the Collateral shall not be deemed to include any
right, title, interest, claim or demand of Borrower in and to any agreement,
document, license or instrument which relates to the foregoing Collateral to the
extent such agreement, document, license or instrument is not assignable or
capable of being encumbered as a matter of law or under the terms of the
agreement, document or instrument applicable thereto or such grant would result
in a breach of the terms of such agreement, document, license, or instrument
(but, in each case, solely to the extent that any such restriction shall be
enforceable under applicable law) without the consent of the applicable party
thereto, and, in each case, only to the extent that any such term would not be
rendered ineffective pursuant to Section 9-406, 9-407, 9-408 or 9-409 of the
Uniform Commercial Code of any relevant jurisdiction.

                  (b) OTHER SECURITY. Lender, in its sole discretion, without
waiving or releasing any obligation, liability or duty of Borrower under this
Agreement or the Other Agreements or any Event of Default, may at any time or
times hereafter, but shall not be obligated to, pay, acquire or accept an
assignment of any Lien asserted by any Person in, upon or against the
Collateral, provided, that Lender may take such actions with respect to
Permitted Liens only after the occurrence and during the continuance of an Event
of Default. All sums paid by Lender in respect thereof and all costs, fees and
expenses including, without limitation, reasonable attorney fees, all court
costs and all other charges relating thereto incurred by Lender shall constitute
Obligations payable by Borrower to Lender on demand and, until paid, shall bear
interest at the highest rate then applicable to Term Loans hereunder.

                  (c) POSSESSORY COLLATERAL. Immediately upon Borrower's receipt
of any portion of the Collateral evidenced by an agreement, Instrument or
Document, including, without limitation, any Tangible Chattel Paper and any
Investment Property consisting of Certificated Securities, Borrower shall
deliver the original thereof (i) to BHF, to hold pursuant to the terms of the
Revolving Loan Agreement or any Replacement Revolving Loan Agreement, or (ii) to
the extent both the Revolving Loan Agreement and Replacement Revolving Loan
Agreement have been terminated, to Lender together with an appropriate
endorsement or other specific evidence of assignment thereof to Lender (in form
and substance acceptable to Lender). If an endorsement or assignment of any such
items shall not be made for any reason, Lender is hereby irrevocably authorized,
as Borrower's attorney and agent-in-fact, to endorse or assign the same on
Borrower's behalf.

                  (d) ELECTRONIC CHATTEL PAPER. To the extent that Borrower
obtains or maintains any Electronic Chattel Paper, Borrower shall (i) comply
with Section 5(e) of the Revolving Loan Agreement or the provisions of any
equivalent section of any Replacement Revolving Loan Agreement, or (ii) to the
extent both the Revolving Loan Agreement and Replacement Revolving Loan
Agreement have been terminated, create, store and assign the record or records
comprising the Electronic Chattel Paper in such a manner that (i) a single
authoritative copy of the record or records exists which is unique, identifiable


                                       8
<PAGE>

and, except as otherwise provided in clauses (iv), (v) and (vi) below,
unalterable, (ii) the authoritative copy identifies Lender as the assignee of
the record or records, (iii) the authoritative copy is communicated to and
maintained by the Lender or its designated custodian, (iv) copies or revisions
that add or change an identified assignee of the authoritative copy can only be
made with the participation of Lender, (v) each copy of the authoritative copy
and any copy of a copy is readily identifiable as a copy that is not the
authoritative copy and (vi) any revision of the authoritative copy is readily
identifiable as an authorized or unauthorized revision.

                  (e) LETTER-OF-CREDIT RIGHTS. If Borrower at any time is a
beneficiary under a letter of credit now or hereafter issued in favor of
Borrower, at the request and option of Lender, Borrower shall (i) comply with
Section 5(e) of the Revolving Loan Agreement or the provisions of any equivalent
section of any Replacement Revolving Loan Agreement, or (ii) to the extent the
Revolving Loan Agreement or Replacement Revolving Loan Agreement have been
terminated, pursuant to an agreement in form and substance satisfactory to
Lender, either (i) arrange for the issuer and any confirmer of such letter of
credit to consent to an assignment to Lender of the proceeds of any drawing
under the letter of credit, or (ii) arrange for Lender to become the transferee
beneficiary of the letter of credit, with Lender agreeing, in each case, that
the proceeds of any drawing under the letter to credit are to be applied as
provided in this Agreement.

                  (f) THIRD-PARTY COLLATERAL. If Borrower shall at any time hold
or acquire an interest in Collateral in the possession of a third party (other
than Certificated Securities and Goods covered by a Document), Borrower shall
(subject to the rights of BHF therein) promptly obtain an acknowledgment from
the third party that it is holding such Collateral for the benefit of BHF and
the Lender.

                  (g) DEPOSIT ACCOUNT. Borrower shall upon the request of Lender
deliver to Lender (subject to the rights of BHF therein), with respect to each
Deposit Account maintained by Borrower now or hereafter (other than with Lender)
and that is permitted hereby, upon obtaining an interest in such Deposit
Account, a deposit account control agreement in form and substance satisfactory
to BHF and the Lender, executed by the financial institution at which such
account is maintained, and shall take such other actions as BHF and the Lender
may jointly request to ensure that Lender's security interest in such account is
perfected by control as such term is used in UCC Section 9-104.

                  (h) INSURANCE PROCEEDS. The net proceeds of any casualty
insurance insuring the Collateral, after deducting all costs and expenses
(including attorneys' fees) of collection, shall be applied, at Lender's option
(subject to the rights of BHF or any Replacement Revolving Lender therein and
the use of such proceeds to first repay all Revolving Loan Obligations), either
toward replacing or restoring the Collateral, in a manner and on terms
satisfactory to Lender, or, at Lender's discretion after the occurrence and
during the continuance of an Event of Default, towards payment of the
Obligations. Any proceeds applied to the payment of Obligations shall be applied
in such manner as Lender may elect. In no event shall such application relieve
Borrower from payment in full of all installments of principal and interest
which thereafter become due in the order of maturity thereof.

         6. PRESERVATION OF COLLATERAL AND PERFECTION OF SECURITY INTERESTS
            THEREIN.

                                       9
<PAGE>

         Subject to the rights of BHF therein, Borrower shall, at Lender's
request, at any time and from time to time, authenticate, execute and deliver to
Lender such financing statements, documents and other agreements and instruments
(and pay the cost of filing or recording the same in all public offices deemed
necessary or desirable by Lender) and do such other acts and things or cause
third parties to do such other acts and things as Lender may deem necessary or
desirable in its sole discretion in order to establish and maintain a valid,
attached and perfected security interest in the Collateral in favor of Lender
(free and clear of all other Liens, except the Liens in favor of BHF and other
Permitted Liens) to secure payment of the Obligations, and in order to
facilitate the collection of the Collateral. Subject to the rights of BHF in the
Collateral, Borrower irrevocably hereby makes, constitutes and appoints Lender
(and all Persons designated by Lender for that purpose) as Borrower's true and
lawful attorney and agent-in-fact to execute and file such financing statements,
documents and other agreements and instruments and do such other acts and things
as may be necessary to preserve and perfect Lender's security interest in the
Collateral. Borrower further agrees that a carbon, photographic, photostatic or
other reproduction of this Agreement or of a financing statement shall be
sufficient as a financing statement. Borrower further ratifies and confirms the
prior filing by Lender of any and all financing statements which identify the
Borrower as debtor, Lender as secured party and any or all Collateral as
collateral. Notwithstanding the foregoing, if at any time BHF issues to the
Borrower an instruction with respect to the Collateral or BHF's rights
thereunder, Borrower may, and the Lender hereby authorizes and instructs the
Borrower to, follow such instruction of BHF, notwithstanding any conflict that
may exist with respect to the Lender's rights in such Collateral, the Borrower's
obligations hereunder or the Lender's instructions with respect thereto, and the
Borrower's actions in response to such instructions of BHF shall not constitute
a Default or Event of Default hereunder, so long as such compliance with BHF's
instructions do not constitute a Default or Event of Default under the Revolving
Loan Agreement or Replacement Revolving Loan Agreement, as applicable.

         7. POSSESSION OF COLLATERAL AND RELATED MATTERS.

         Until otherwise notified by Lender following the occurrence of an Event
of Default, Borrower shall have the right, except as otherwise provided in this
Agreement, in the ordinary course of Borrower's business, to (a) sell, lease or
furnish under contracts of service any of Borrower's assets in the ordinary
course of business; (b) use and consume any raw materials, work in process or
other materials normally held by Borrower for such purpose; (c) dispose of
obsolete or unuseful Equipment or other property or assets so long as all of the
proceeds thereof are used for the replacement or substitution of such Equipment
or other property or assets, or, if not so replaced or substituted within ninety
(90) days, paid to Lender for application to the Obligations (except for such
proceeds which are required to be delivered to the holder of a Permitted Lien
which is prior in right of payment); provided, however, that a sale in the
ordinary course of business shall not include any transfer or sale in
satisfaction, partial or complete, of a debt owed by Borrower, other than a debt
secured by a Permitted Lien; (d) transfer assets to any other Borrower or
Subsidiary which is a Borrower; (e) lease or sublease property; (f) sell or
dispose of assets for its fair market value in an amount not to exceed $50,000
in the aggregate in any fiscal year; and (g) sell or dispose of other assets
with a book value of less than $50,000 in any fiscal year.

                                       10
<PAGE>

         8. COLLECTIONS.

                  (a) Upon request of Lender and consent of BHF, and consistent
with the terms of Section 8 of the Revolving Loan Agreement, Borrower shall
establish and maintain a separate lockbox (the "LOCKBOX") with a United States
depository institution designated from time to time by Lender (the "LOCKBOX
BANK"), subject to the provisions of this Agreement for receivables from Account
Debtors of Acquisition Subsidiary. Borrower shall execute with the Lockbox Bank
a lockbox agreement for the Acquisition Subsidiary Account Debtor Collection
Lockbox Account in form and substance acceptable to Lender, and such other
agreements related to such lockbox agreement as Lender may require. Borrower
shall ensure that all collections of Accounts on which Account Debtors of
Acquisition Subsidiary are obligated are paid directly into the Lockbox for
deposit into the Acquisition Subsidiary Account Debtor Collection Lockbox
Account, and that all funds deposited into the Acquisition Subsidiary Account
Debtor Collection Lockbox Account are immediately transferred into the
Concentration Account described in Section 8 of the Revolving Loan Agreement.

                  (b) Intentionally Deleted.

                  (c) Notwithstanding anything in any lockbox agreement to the
contrary, Borrower agrees that it shall be liable for any fees and charges in
effect from time to time and charged by the Lockbox Bank in connection with the
Lockboxes and Lockbox Accounts, and that Lender shall have no liability
therefor. Borrower further acknowledges and agrees that, to the extent such fees
and charges are not paid by Borrower directly but are satisfied using
collections in the Lockbox Accounts, such fees and charges shall be deemed to be
Revolving Loans made by Lender under the Revolving Loan Agreement. Borrower
agrees to indemnify and hold Lender harmless from any and all liabilities,
claims, losses and demands whatsoever, including reasonable attorneys' fees and
expenses, arising from or relating to actions of Lender or the Lockbox Bank
pursuant to this Section 8 or any lockbox agreement, other than if such
liability, claim, loss or demand arises due to the gross negligence or willful
misconduct of Lender or the Lockbox Bank, as determined by a court of competent
jurisdiction.

                  (d) Subject to all applicable law and all rights of BHF,
Lender may, at any time and from time to time after the occurrence and during
the continuance of an Event of Default, whether before or after notification to
any Account Debtor and whether before or after the maturity of any of the
Obligations, (i) enforce collection of any of Borrower's Accounts or other
amounts owed to Borrower by suit or otherwise; (ii) exercise all of Borrower's
rights and remedies with respect to proceedings brought to collect any Accounts
or other amounts owed to Borrower; (iii) surrender, release or exchange all or
any part of any Accounts or other amounts owed to Borrower, or compromise or
extend or renew for any period (whether or not longer than the original period)
any Indebtedness thereunder; (iv) sell or assign any Account of Borrower or
other amount owed to Borrower upon such terms, for such amount and at such time
or times as Lender deems advisable; (v) prepare, file and sign Borrower's name
on any proof of claim in bankruptcy or other similar document against any
Account Debtor or other Person obligated to Borrower; and (vi) do all other acts


                                       11
<PAGE>

and things which are necessary, in Lender's sole discretion, to fulfill
Borrower's obligations under this Agreement and the Other Agreements and to
allow Lender to collect the Accounts or other amounts owed to Borrower. Subject
to the rights of BHF, addition to any other provision hereof, Lender may at any
time, after the occurrence and during the continuance of an Event of Default, at
Borrower's expense, notify Account Debtors to make payment directly to Lender of
any amounts due or to become due thereunder (and once such notice has been given
to an Account Debtor, Borrower shall not give any contrary instructions to such
Account Debtor during the continuance of an Event of Default without Lender's
prior written consent).

                  (e) On a monthly basis, Lender shall deliver to Borrower an
account statement showing all Loans, charges and payments which shall be deemed
final, binding and conclusive upon Borrower unless Borrower notifies Lender in
writing, specifying any error therein, within thirty (30) days of the date such
account statement is sent to Borrower, and any such notice shall only constitute
an objection to the items specifically identified.

         9. COLLATERAL, AVAILABILITY AND FINANCIAL REPORTS AND SCHEDULES.

                  (a) BORROWING BASE REPORTS. To the extent requested by Lender
from time to time Borrower shall deliver to Lender the Borrowing Base
Certificate delivered to BHF in respect of the Revolving Obligations.

                  (b) MONTHLY REPORTS. After the Revolving Loan Agreement has
been terminated, Borrower shall deliver to Lender, in addition to any other
reports, as soon as practicable and in any event within fifteen (15) days after
the end of each month, (A) a detailed trial balance of Borrower's Accounts aged
by Account Debtor or payor per date of invoice, in form and substance reasonably
satisfactory to Lender, including, without limitation, the names and addresses
of all Account Debtors of Borrower, and (B) a summary and detail of accounts
payable (such Accounts and accounts payable divided into such time intervals as
Lender may require in its sole discretion), including a listing of any held
checks. Prior to the termination of the Revolving Loan Agreement, Borrower shall
deliver to Lender any monthly report delivered to BHF in respect of the
Revolving Obligations as requested from time to time by Lender.

                  (c) FINANCIAL STATEMENTS. Borrower shall deliver to Lender the
following financial information, all of which shall be prepared in accordance
with GAAP consistently applied (except where such calculations otherwise
require), and shall be accompanied by a certificate in the form of EXHIBIT A
hereto, which compliance certificate shall include a calculation of all
financial covenants contained in this Agreement, including the financial tests
set forth in Section 13(j)(iii): (i) no later than fifteen (15) days after each
calendar month, copies of internally prepared financial statements, including,
without limitation, balance sheets and statements of income, retained earnings
and cash flow of Borrower and the Acquisition Subsidiary, on a consolidated and
consolidating basis certified by the Chief Financial Officer of Borrower; (ii)
no later than forty-five (45) days after the end of each of the first three
quarters of Borrower's Fiscal Year, copies of internally prepared financial
statements, including, without limitation, balance sheets, statements of income,
retained earnings, cash flows and reconciliation of surplus for Borrower and
Acquisition Subsidiary, on a consolidated and consolidating basis, certified by
the Chief Financial Officer of Borrower; and (iii) no later than ninety (90)


                                       12
<PAGE>

days after the end of each of Borrower's Fiscal Years, audited annual
consolidated and consolidating financial statements of the Borrower and the
Acquisition Subsidiary, with an unqualified opinion as to the audited financial
statements by independent certified public accountants selected by Borrower and
reasonably satisfactory to Lender. The report of such accounts shall be
accompanied by copies of any management letters sent to the Borrower by such
accountants.

                  (d) ANNUAL PROJECTIONS. As soon as practicable and in any
event not less than thirty (30) days prior to the beginning of each Fiscal Year,
Borrower shall deliver to Lender projected balance sheets, statements of income
and cash flow for each of the Borrower and the Acquisition Subsidiary on a
separate basis, for each of the twelve (12) months during such Fiscal Year,
which shall include the assumptions used therein, together with appropriate
supporting details as reasonably requested by Lender.

                  (e) EXPLANATION OF BUDGETS AND PROJECTIONS. In conjunction
with the delivery of the annual presentation of projections or budgets referred
to in SUBSECTION 9(D) above, Borrower shall deliver a letter signed by the
President or a Vice President of Borrower and by the Treasurer or Chief
Financial Officer of Borrower, describing, comparing and analyzing, in detail,
all changes and developments between the anticipated financial results included
in such projections or budgets and the historical financial statements of
Borrower.

                  (f) INVOICES AND BILLING STATEMENTS. After the Revolving Loan
Agreement has been terminated, promptly following request therefor by Lender,
Borrower shall provide copies of sales journals, cash receipt journals, and
deposit slips, copies of service invoices, customer statements and credit
memoranda issued, remittance advices and reports, evidence of billing and copies
of shipping and delivery documents, each as applicable to Borrower.

                  (g) OBLIGOR FINANCIAL STATEMENTS AND TAX RETURNS. Borrower
shall cause each Obligor to deliver to Lender such Obligor's annual financial
statement (in form acceptable to Lender) and a copy of such Obligor's federal
income tax return with respect to the corresponding year, in each case on the
date when such tax return is due or, if earlier, on the date when available.

                  (h) OTHER INFORMATION. Promptly following request therefor by
Lender, such other business or financial data, reports, appraisals and
projections as Lender may reasonably request. This may include, without
limitation, a monthly certificate from the President and Chief Financial Officer
of Borrower showing Borrower's compliance with each of the financial covenants
set forth in this Agreement, and stating whether any Event of Default has
occurred or event that, with giving of notice or the passage of time, or both,
would constitute an Event of Default, and if so, the steps being taken to
prevent or cure such Event of Default.

                  (i) POST-CLOSING REVIEW. Within thirty (30) days after any
Permitted Acquisition, Lender shall conduct (or a firm, consultant, advisor or
other third party hired by the Lender), at Borrower's cost, a post-closing audit
and review, which post-closing review shall include, without limitation, (i) a
review of the books, records and accounting systems of Borrower, (ii) a review
and final verification of all add-backs used in determining the final pro forma
financial statements of Borrower, and (iii) a review of healthcare regulatory
compliance matters ("POST-CLOSING REVIEW").

                  (j) PUBLIC REPORTING. Promptly upon the filing thereof, each
Borrower shall deliver to Lender copies of all registration statements and
annual, quarterly, monthly or other regular reports which such Borrower or any


                                       13
<PAGE>

of its Subsidiaries files with the Securities and Exchange Commission, as well
as promptly providing to Lender copies of any reports and proxy statements
delivered to its shareholders.

         10. TERMINATION; AUTOMATIC RENEWAL; EARLY TERMINATION FEE.

                  (a) This Agreement shall be in effect for a period of three
(3) years from the Closing Date until June 16, 2007 (the "Term"), unless earlier
terminated in accordance with the provisions of this Agreement; provided that
all Obligations shall be due and payable upon the termination, whether by
acceleration or maturity, of the Revolving Loan Agreement with BHF, unless
otherwise provided herein.

                  (b) If this Agreement expires, then (i) Lender shall not make
any additional Loans on or after the date identified as the date on which the
Obligations are to be repaid; and (ii) this Agreement shall terminate on the
date thereafter that the Obligations are paid in full. At such time as Borrower
has repaid all of the Obligations and this Agreement has terminated, Borrower
shall deliver to Lender an indemnification of Lender, in form and substance
satisfactory to Lender, for checks which Lender has credited to Borrower's
account, but which subsequently are dishonored for any reason or for automatic
clearinghouse or wire transfers not yet posted to Borrower's account.

                  (c) Borrower may terminate this Agreement at any time but only
upon sixty (60) days prior written notice and prepayment of all Obligations. In
the event that the Term Loan (other than as a result of a mandatory prepayment
pursuant to SUBSECTION 2(C)) or Revolving Loans (except in respect of the
circumstances described in Section 10(e) of the Revolving Loan Agreement) are
prepaid by Borrower for any reason prior to the expiration of the Term, the
entire principal balance, together with all accrued and unpaid interest on any
Term Loans then outstanding, shall be immediately due and payable on the
effective date of such termination, together with the Make Whole Amount and all
other Obligations of Borrower.

                  (d) Any prepayment of the Term Loan (other than a mandatory
prepayment made pursuant to the prepayment provisions described in Section 2(c)
hereof) shall also be accompanied by a prepayment fee, equal to the Make Whole
Amount. The following definitions shall apply:

                           (i) "MAKE WHOLE AMOUNT" means the positive
                  difference, if any, between (x) the Remaining Payment Amount
                  immediately prior to any prepayment of that portion of the
                  Term Loan which is being prepaid and (y) the principal balance
                  of the Term Loan being prepaid as of the date of any such
                  prepayment; and

                           (ii) "REMAINING PAYMENT AMOUNT" means the sum of (x)
                  amount of each future and unpaid scheduled payment of
                  principal and interest on the Term Loan, that would be due on
                  or after the date of a prepayment of the Term Loan if no
                  payment of the Term Loan were made prior to the end of the
                  Term, PLUS (y) the amount of all Term Loan related fees which
                  would have been earned by Lender from the date of prepayment
                  through the end of the Term if no payment of the Term Loan
                  were made prior to the end of the Term.

                                       14
<PAGE>

                  Lender shall provide Borrower with a written calculation of
the Make Whole Amount due from Borrower hereunder, which calculation shall be
presumptively correct absent manifest error.

                  (e) Borrower may prepay all of the Term Loan Obligations,
without payment of a prepayment fee, upon written notice to Lender within sixty
(60) days after the end of the first year of the Term, if Lender does not fund
any new Term Loan (beyond the initial Term Loan funding) during the first twelve
(12) months of the Term hereof, provided that no Default or Event of Default
then exists.

                  (f) Notwithstanding the foregoing, in the event that Borrower
prepays the Revolving Loan Obligations under the Revolving Loan Agreement solely
as a result of the circumstances described in Section 10(e) of the Revolving
Loan Agreement, and replaces the Revolving Loan Agreement with a Replacement
Revolving Loan Agreement on terms and conditions satisfactory to Lender, the
Term Loan may remain in place hereunder and Lender shall execute any and all
documents reasonably requested by the lender or lenders under such Replacement
Revolving Loan Agreement, which documents shall be satisfactory to the Lender in
its sole discretion, to subordinate Lender's Lien granted pursuant to the Loan
Documents to the Lien to be granted to the lender or lenders (or if a syndicated
facility, agent and the lenders) under such Replacement Revolving Loan
Agreement, and to otherwise place the Lender hereunder in the same position
vis-a-vis such lender or lenders (or if a syndicated facility, agent and the
lenders) under such Replacement Revolving Loan Agreement as the Lender holds
with respect to BHF under the Revolving Loan Agreement; PROVIDED THAT, Borrower
shall be permitted to replace the Revolving Loan Agreement with a Replacement
Revolving Loan Agreement as permitted above only if (i) Borrower prepays the
Revolving Loan Obligations under the Revolving Loan Agreement solely as a result
of the circumstances described in Section 10(e) of the Revolving Loan Agreement,
(ii) no Default or Event of Default exists at the time of such prepayment, and
(iii) such lender or lenders (or if a syndicated facility, agent and the
lenders) under any Replacement Revolving Loan Agreement execute an Intercreditor
Agreement with Lender in form and substance acceptable to the Lender, on or
before the date of such Replacement Revolving Loan Agreement; it being
understood that if a Default or Event of Default exists at the time of such
proposed prepayment of the Revolving Loan Obligation, then the Term Loan
Obligations must be paid in full in cash as of the date of such prepayment.

         11. REPRESENTATIONS AND WARRANTIES.

         Borrower hereby represents and warrants to Lender, which
representations and warranties (whether appearing in this SECTION 11 or
elsewhere) shall be true at the time of Borrower's execution hereof and the
closing of the transactions described herein or related hereto, shall remain
true until the repayment in full and satisfaction of all the Obligations and
termination of this Agreement, and shall be remade by Borrower at the time each
Term Loan is made pursuant to this Agreement, provided, that representations and
warranties made as of a particular date shall be true and correct as of such
date.

                  (a) FINANCIAL STATEMENTS AND OTHER INFORMATION. The financial
statements and other information delivered or to be delivered by Crdentia to
Lender at or prior to the date of this Agreement fairly present in all material
respects the financial condition of Borrowers, and there has been no material


                                       15
<PAGE>

adverse change in the financial condition, the operations or any other status of
Borrowers, taken as a whole, since the date of the financial statements
delivered to Lender most recently prior to the date of this Agreement. All
written information now or heretofore furnished by Borrower to Lender is true
and correct in all material respects as of the date with respect to which such
information was furnished, other than budgets and projections, which represent
Borrowers' good faith estimate of the matters contained therein.

                  (b) LOCATIONS; CERTAIN COLLATERAL. The office where Borrower
keeps its books, records and accounts (or copies thereof) concerning the
Collateral, Borrower's principal place of business and all of Borrower's other
places of business, locations of Collateral and post office boxes and locations
of bank accounts are as set forth in SCHEDULE 11(b) and at other locations
within the continental United States of which Lender has been advised by
Borrower in accordance with SUBSECTION 12(b)(i). The Collateral, including,
without limitation, the Equipment (except any part thereof which Borrower shall
have advised Lender in writing consists of Collateral normally used in more than
one state) is kept, or, in the case of vehicles, based, only at the addresses
set forth on SCHEDULE 11(b), and at other locations within the continental
United States of which Lender has been advised by Borrower in writing in
accordance with SUBSECTION 12(b)(i) hereof. SCHEDULE 11(b) hereto contains a
complete listing of all of the following assets of Borrower as of the Closing
Date: (a) Intellectual Property which is subject to registration statutes and
licenses of Intellectual Property to which Borrower is a party (whether as
licensor or licensee), (b) Instruments (other than Instruments deposited for
collection in the ordinary course of business), (c) Deposit Accounts, (d)
Investment Property, (e) Letter-of-Credit Rights, (f) Chattel Paper, (g)
Documents, (h) Commercial Tort Claims, (i) Collateral which is subject to
certificate of title statutes, and (j) tangible Collateral located with any
bailee, warehousemen or other third parties.

                  (c) LOANS BY BORROWER. Borrower has not made any loans or
advances to any Affiliate or other Person except for advances authorized
hereunder to employees, officers and directors of Borrower for travel and other
expenses arising in the ordinary course of Borrower's business.

                  (d) [LEFT BLANK].

                  (e) LIENS. Borrower is the lawful owner of all Collateral now
purportedly owned or hereafter purportedly acquired by Borrower, free from all
Liens, other than the Liens in favor of BHF and other Permitted Liens.

                  (f) ORGANIZATION, AUTHORITY AND NO CONFLICT. Borrower is a
corporation or limited partnership, duly organized, validly existing and in good
standing in the State of its organization, its state organizational
identification number is as set forth on the Information Certificate and
Borrower is duly qualified and in good standing in all states where the nature
and extent of the business transacted by it or the ownership of its assets makes
such qualification necessary or, if Borrower is not so qualified, Borrower may
cure any such failure without losing any of its rights, incurring any Liens or
material penalties, or otherwise affecting Lender's rights. Borrower has the
right and power and is duly authorized and empowered to enter into, execute and
deliver this Agreement and the Other Agreements and perform its obligations
hereunder and thereunder. Borrower's execution, delivery and performance of this


                                       16
<PAGE>

Agreement and the Other Agreements do not conflict with the provisions of the
organizational documents of Borrower, any statute, regulation, ordinance or rule
of law, or any agreement, contract or other document which may now or hereafter
be binding on Borrower, except for conflicts with agreements, contracts or other
documents which would not have a Material Adverse Effect on Borrower, and
Borrower's execution, delivery and performance of this Agreement and the Other
Agreements shall not result in the imposition of any Lien upon any of Borrower's
property (other than Permitted Liens) under any existing indenture, mortgage,
deed of trust, loan or credit agreement or other agreement or instrument by
which Borrower or any of its property may be bound or affected.

                  (g) LITIGATION. Except as disclosed to Lender on SCHEDULE
11(g) hereto, as of the Closing Date there are no actions or proceedings which
are pending or, to the best of Borrower's knowledge, threatened in writing
against Borrower, which are, reasonably likely to have a Material Adverse Effect
on Borrower.

                  (h) COMPLIANCE WITH LAWS AND MAINTENANCE OF PERMITS. Borrower
has obtained all governmental consents, franchises, certificates, licenses,
authorizations, approvals and permits, the lack of which would have a Material
Adverse Effect on Borrower. Borrower is in compliance in all material respects
with all applicable federal, state, local and foreign statutes, orders,
regulations, rules and ordinances (including, without limitation, Environmental
Laws and statutes, orders, regulations, rules and ordinances relating to taxes,
employer and employee contributions and similar items, securities, ERISA or
employee health and safety) the failure to comply with which would have a
Material Adverse Effect on Borrower.

                  (i) AFFILIATE TRANSACTIONS. Except as set forth on SCHEDULE
11(i) hereto or as permitted pursuant to SUBSECTION 11(c) and SUBSECTION 13(h)
hereof, Borrower is not conducting, permitting or suffering to be conducted,
transactions with any Affiliate other than transactions with Affiliates for the
purchase or sale of Inventory or services in the ordinary course of business
pursuant to terms that are no less favorable to Borrower than the terms upon
which such transactions would have been made had they been made to or with a
Person that is not an Affiliate.

                  (j) NAMES AND TRADE NAMES. Borrower's name, for the past five
years, has always been as set forth on the first page of this Agreement and
Borrower uses no trade names, assumed names, fictitious names or division names
in the operation of its business, except as set forth on SCHEDULE 11(j) hereto.

                  (k) EQUIPMENT. Except for Liens in favor of BHF and other
Permitted Liens, Borrower has good and indefeasible and merchantable title to
and ownership of all Equipment. No Equipment is a Fixture to real estate unless
such real estate is owned by Borrower and is subject to a mortgage in favor of
Lender (subject to the rights of BHF) or, if such real estate is leased, is
subject to a landlord's agreement in favor of (subject to the rights of BHF)
Lender on terms acceptable to Lender, or an accession to other personal property
unless such personal property is subject to a second priority Lien in favor of
Lender (subject to the rights of BHF).

                                       17
<PAGE>

                  (l) ENFORCEABILITY. This Agreement and the Other Agreements to
which Borrower is a party are the legal, valid and binding obligations of
Borrower and are enforceable against Borrower in accordance with their
respective terms.

                  (m) SOLVENCY. Borrowers on a consolidated basis are, after
giving effect to the transactions contemplated hereby, solvent, able to pay
their debts as they become due, have capital sufficient to carry on their
business, now own property having a value both at fair valuation and at present
fair saleable value greater than the amount required to pay their debts, and
will not be rendered insolvent by the execution and delivery of this Agreement
or any of the Other Agreements or by completion of the transactions contemplated
hereunder or thereunder.

                  (n) INDEBTEDNESS. Except as set forth on SCHEDULE 11(n)
hereto, Borrower is not obligated (directly or indirectly) for any Indebtedness
other than the Loans and Indebtedness to BHF, and SCHEDULE 11(n) hereto
describes all Indebtedness of the Borrower existing as of the Closing Date,
including, without limitation, any Indebtedness permitted under Section 13(a)
outstanding as of the Closing Date.

                  (o) MARGIN SECURITY AND USE OF PROCEEDS. Borrower does not own
any margin securities, and none of the proceeds of the Term Loans hereunder
shall be used for the purpose of purchasing or carrying any margin securities or
for the purpose of reducing or retiring any Indebtedness which was originally
incurred to purchase any margin securities or for any other purpose not
permitted by Regulation U of the Board of Governors of the Federal Reserve
System as in effect from time to time.

                  (p) PARENT, SUBSIDIARIES AND AFFILIATES. Except as set forth
on SCHEDULE 11(p) hereto or as otherwise permitted hereunder, including under
Section 13(c) hereof, Borrower has no Parents, Subsidiaries or other Affiliates,
nor is Borrower engaged in any joint venture or partnership with any other
Person.

                  (q) NO DEFAULTS. Except as set forth on Schedule 11(q) hereto,
Borrower is not in default under any material contract, lease or commitment to
which it is a party or by which it is bound, nor does Borrower know of any
dispute regarding any contract, lease or commitment which would have, in either
case, a Material Adverse Effect on Borrower.

                  (r) EMPLOYEE MATTERS. As of the Closing Date, there are no
controversies pending or threatened between Borrower and any of its employees,
agents or independent contractors, other than employee grievances arising in the
ordinary course of business which would not, in the aggregate, have a Material
Adverse Effect on Borrower, and Borrower is in compliance with all federal and
state laws respecting employment and employment terms, conditions and practices
except for such noncompliance which would not have a Material Adverse Effect on
Borrower.

                  (s) INTELLECTUAL PROPERTY. Borrower possesses adequate
licenses, patents, patent applications, copyrights, service marks, trademarks,
trademark applications, tradestyles and trade names to continue to conduct its
business as heretofore conducted by it except to the extent that the failure to
possess such items would not have a Material Adverse Effect on Borrower.

                                       18
<PAGE>

                  (t) ENVIRONMENTAL MATTERS. Except as set forth on SCHEDULE
11(t) hereto, Borrower has not generated, used, stored, treated, transported,
manufactured, handled, produced or disposed of any Hazardous Materials, on or
off its premises (whether or not owned by it) in any manner which at any time
violates in any material respect any Environmental Law, or any license, permit,
certificate, approval or similar authorization thereunder, and the operations of
the Borrower comply in all material respects with all Environmental Laws and all
licenses, permits, certificates, approvals and similar authorizations
thereunder. There has been no investigation, proceeding, complaint, order,
directive, claim, citation or notice by any governmental authority or any other
Person, nor is any pending or, to the best of the Borrower's knowledge,
threatened with respect to any non-compliance with or violation of the
requirements of any Environmental Law by the Borrower or the release, spill or
discharge, threatened or actual, of any Hazardous Materials or the generation,
use, storage, treatment, transportation, manufacture, handling, production or
disposal of any Hazardous Materials or any other environmental, health or safety
matter which would have a Material Adverse Effect on Borrower or its business,
operations or assets or any properties at which the Borrower has transported,
stored or disposed of any Hazardous Materials. Borrower has no material
liability (contingent or otherwise) in connection with a release, spill or
discharge, threatened or actual, of any Hazardous Materials or the generation,
use, storage, treatment, transportation, manufacture, handling, production or
disposal of any Hazardous Materials.

                  (u) ERISA MATTERS. Borrower has paid and discharged all
obligations and liabilities arising under ERISA of a character which, if unpaid
or unperformed, might result in the imposition of a Lien against any of its
properties or assets.

                  (v) REIMBURSEMENT. Borrower has provided to Lender copies of
all service contracts with Account Debtors, to the extent required by the
Lender. Borrower is in compliance in all material respects with such contracts
and is entitled to reimbursement under such contracts.

                  (w) COMPLIANCE WITH HEALTHCARE REGULATIONS.

                           (i) Borrower is not subject to compliance with any
                  Healthcare Regulations, including without limitation, the
                  Federal Anti-Kickback Statute (42 U.S.C. ss. 1320a-7b), the
                  False Claims Act (31 U.S.C. ss.ss. 3729 et seq.), the Health
                  Insurance Portability and Accountability Act of 1996 (Pub. L.
                  No. 104-191, 110 Stat. 1936 (1996)) and the federal physician
                  self-referral laws (42 U.S.C. ss. 1395nn);

                           (ii) Borrower has obtained all necessary licenses and
                  accreditations to operate its business as now conducted, and
                  currently is in compliance with all statutory and regulatory
                  requirements applicable to it, the failure of which would have
                  a Material Adverse Effect upon Borrower; and

                           (iii) All persons providing professional health care
                  services for or on behalf of Borrower (either as an employee
                  or independent contractor) are appropriately licensed in every
                  jurisdiction in which they hold themselves out as professional
                  health care providers.

                                       19
<PAGE>

                  (x) IMMIGRATION MATTERS. Borrower has complied with applicable
United States immigration law requirements, including without limitation the
Illegal Immigration Reform and Immigrant Responsibility Act of 1996 (Pub. L. No.
104-193), as such laws apply to Borrower's recruitment of international
temporary professional health care service providers.

                  (y) LICENSES, PERMITS, ETC. Borrower has all necessary
federal, state and local licenses, permits, registrations, certifications and
other approvals required in order to conduct any healthcare activity in which it
is currently engaged; the failure of Borrower to have such licenses, permits,
registrations, certifications and other approvals would have a Material Adverse
Effect on the Borrower and any Person that provides any healthcare services for
or on behalf of Borrower (either as an employee or independent contractor) holds
the required federal, state and local licenses that are necessary to legally
perform such services and are not suspended or limited in any way; and, except
as set forth on Schedule 11(y) hereto, Borrower is in good standing with the
respective governmental, quasi-governmental and other third party payors and
regulatory agencies that are involved in such healthcare activities.

                  (z) COLLECTIVE ENTERPRISE. Borrowers are engaged in the
businesses of providing staffing in the healthcare industry as of the Closing
Date, as well as in certain other businesses. These operations require financing
on a basis such that the credit supplied can be made available from time to time
to Borrowers, as required for the continued successful operation of Borrowers
taken as a whole. Borrowers have requested the Lender make credit available
hereunder primarily for the purposes of SUBSECTION 12(g) and generally for the
purposes of financing the operations of Borrowers. Each Borrower expects to
derive benefit (and the Board of Directors of each Borrower has determined that
such Borrower may reasonably be expected to derive benefit), directly or
indirectly, from a portion of the credit extended by Lender hereunder, both in
its separate capacity and as a member of the group of companies, since the
successful operation and condition of each Borrower is dependent on the
continued successful performance of the functions of the group as a whole. Each
Borrower acknowledges that, but for the agreement of each of the other Borrowers
to execute and deliver this Agreement, Lender would not have made available the
credit facilities established hereby on the terms set forth herein.

                  (aa) ACQUISITION. The Acquisition has been consummated
pursuant to the terms of the Acquisition Documents and in compliance with all
applicable laws. Borrower has provided to Lender complete copies of the
Acquisition Documents, including all schedules, exhibits and disclosure letters
referred to therein or delivered pursuant thereto, if any, and all amendments
thereto, waivers relating thereto and other side letters or agreements affecting
the term thereof. None of such agreements and documents has been amended or
supplemented, nor have any of the provisions thereof been waived by the parties
thereto, except pursuant to a written agreement or agreement which has
heretofore been delivered to the Lender.

                  (bb) CERTAIN FINANCIAL INFORMATION. The following have been
delivered to Lender as of the Closing Date: (i) internally prepared financial
statements of Borrower for the most recent month end and (ii) projections in
form and detail satisfactory to Lender giving effect to each Permitted
Acquisition.

                                       20
<PAGE>

         12. AFFIRMATIVE COVENANTS.

         Until payment and satisfaction in full of all Obligations and
termination of this Agreement, unless Borrower obtains Lender's prior written
consent waiving or modifying any of Borrower's covenants hereunder in any
specific instance, Borrower covenants and agrees as follows:

                  (a) MAINTENANCE OF RECORDS. Borrower shall at all times keep
accurate and complete books, records and accounts with respect to all of
Borrower's business activities, in accordance with sound accounting practices
and GAAP consistently applied, and shall keep such books, records and accounts,
and any copies thereof, only at the addresses indicated for such purpose on
SCHEDULE 11(b) or such other location that is notified to Lender in writing.

                  (b) NOTICES. Borrower shall:

                           (i) LOCATIONS. Promptly (but in no event less than
                  ten (10) days prior to the occurrence thereof) notify Lender
                  of the proposed opening of any new place of business or new
                  location of Collateral, the closing of any existing place of
                  business or location of Collateral, any change of the location
                  of Borrower's books, records and accounts (or copies thereof),
                  the opening or closing of any post office box, the opening or
                  closing of any bank account or, if any of the Collateral
                  consists of Goods of a type normally used in more than one
                  state, the use of any such Goods in any state other than a
                  state in which Borrower has previously advised Lender that
                  such Goods will be used.

                           (ii) LITIGATION AND PROCEEDINGS. Promptly upon
                  becoming aware thereof (but in no event later than three (3)
                  days after so becoming aware), notify Lender of (i) any
                  actions or proceedings that are greater than $50,000,
                  individually or in the aggregate, which are pending or
                  threatened against Borrower and (ii) any Commercial Tort
                  Claims of Borrower which may arise which involve an amount in
                  controversy in excess of Fifty Thousand and No/100 Dollars
                  ($50,000.00), which notice shall constitute Borrower's
                  authorization to amend SCHEDULE 11(b) to add such Commercial
                  Tort Claim

                           (iii) NAMES AND TRADE NAMES. Notify Lender within ten
                  (10) days of the change of its name or the use of any trade
                  name, assumed name, fictitious name or division name not
                  previously disclosed to Lender in writing.

                           (iv) ERISA MATTERS. Promptly notify Lender of (x) the
                  occurrence of any "reportable event" (as defined in ERISA)
                  which might result in the termination by the Pension Benefit
                  Guaranty Corporation (the "PBGC") of any employee benefit plan
                  ("PLAN") covering any officers or employees of the Borrower,
                  any benefits of which are, or are required to be, guaranteed
                  by the PBGC, (y) receipt of any notice from the PBGC of its
                  intention to seek termination of any Plan or appointment of a
                  trustee therefor or (z) its intention to terminate or withdraw
                  from any Plan.

                           (v) ENVIRONMENTAL MATTERS. Immediately notify Lender
                  upon becoming aware of any investigation, proceeding,
                  complaint, order, directive, claim, citation or notice with
                  respect to any noncompliance with or violation of the
                  requirements of any Environmental Law by Borrower or the


                                       21
<PAGE>

                  generation, use, storage, treatment, transportation,
                  manufacture, handling, production or disposal of any Hazardous
                  Materials or any other environmental, health or safety matter
                  which affects Borrower or its business operations or assets or
                  any properties at which Borrower has transported, stored or
                  disposed of any Hazardous Materials unless the foregoing could
                  not reasonably be expected to have a Material Adverse Effect
                  on Borrower.

                           (vi) DEFAULT; MATERIAL ADVERSE CHANGE. Promptly
                  advise Lender of any material adverse change in the business,
                  property, assets, prospects, operations or condition,
                  financial or otherwise, of Borrower, the occurrence of any
                  Default or Event of Default hereunder or the occurrence of any
                  event which, if uncured, will become an Event of Default after
                  notice or lapse of time (or both).

                           (vii) SUBORDINATED DEBT. Promptly advise Lender of
                  any default or any event which, with the giving of notice or
                  lapse of time, or both, would constitute a default, under any
                  subordination agreement relative to Subordinated Debt, or any
                  agreement, instrument or document evidencing or relating to
                  any Subordinated Debt, and a certificate of a authorized
                  officer of Borrower specifying the nature thereof and
                  Borrower's proposed response thereto, in reasonable detail.

All of the foregoing notices shall be provided by Borrower to Lender in writing.

                  (c) COMPLIANCE WITH LAWS AND MAINTENANCE OF PERMITS. Borrower
shall maintain all governmental consents, franchises, certificates, licenses,
authorizations, approvals and permits, the lack of which would have a Material
Adverse Effect on Borrower, and Borrower shall remain in compliance with all
applicable federal, state, local and foreign statutes, orders, regulations,
rules and ordinances (including, without limitation, Environmental Laws and
statutes, orders, regulations, rules and ordinances relating to taxes, employer
and employee contributions and similar items, securities, ERISA or employee
health and safety) the failure with which to comply would have a Material
Adverse Effect on Borrower. Following any determination by Lender that there is
noncompliance, or any condition which requires any action by or on behalf of
Borrower in order to avoid noncompliance, with any Environmental Law, at
Borrower's expense, cause an independent environmental engineer acceptable to
Lender to conduct such tests of the relevant site(s) as are appropriate and
prepare and deliver a report setting forth the results of such tests, a proposed
plan for remediation and an estimate of the costs thereof.

                  (d) INSPECTION AND AUDITS. Upon five (5) Business Days prior
written notice so long as no Default or Event of Default exists, Borrower shall
permit Lender, or any Persons designated by it, to call at Borrower's places of
business at any reasonable times during normal business hours and, without
hindrance or delay, to inspect the Collateral and to inspect, audit, check and
make extracts from Borrower's books, records, journals, orders, receipts and any
correspondence and other data relating to Borrower's business, the Collateral or
any transactions between the parties hereto, and shall have the right to make
such verification concerning Borrower's business as Lender may consider
reasonable under the circumstances. Borrower shall furnish to Lender such
information relevant to Lender's rights under this Agreement and the Other
Agreements as Lender shall at any time and from time to time request. Lender,
through its officers, employees or agents, shall have the right, at any time and


                                       22
<PAGE>

from time to time, in Lender's name, to verify the validity, amount or any other
matter relating to any of Borrower's Accounts, by mail, telephone, telecopy,
electronic mail or otherwise, provided that, prior to the occurrence of an Event
of Default, Lender shall conduct such verification in the name of a nominee of
Lender or in Borrower's name. Borrower authorizes Lender to discuss the affairs,
finances and business of Borrower with any officers, employees or directors of
Borrower or with its Parent or any Affiliate or the officers, employees or
directors of its Parent or any Affiliate, and to discuss the financial condition
of Borrower with Borrower's independent public accountants, which shall be
attended by a representative of Borrower. Any such discussions shall be without
liability to Lender or to Borrower's independent public accountants. Borrower
shall pay to Lender all customary fees (currently Eight Hundred Fifty and No/100
Dollars ($850.00) per person, per day) and all reasonable costs and
out-of-pocket expenses incurred by Lender in the exercise of its rights
hereunder, and all of such fees, costs and expenses shall constitute Obligations
hereunder, shall be payable on demand and, until paid, shall bear interest at
the highest rate then applicable to Loans hereunder; PROVIDED, HOWEVER, that so
long as no Event of Default has occurred, Borrower shall not pay for more than
four (4) audits in any Fiscal Year, except for (i) a one-time spot check within
60 days of the Closing Date, or (ii) any audits of a Target in connection with a
proposed Acquisition.

                  (e) INSURANCE. Borrower shall:

                           (i) Keep the Collateral properly housed and insured
                  for the full insurable value thereof against loss or damage by
                  fire, theft, explosion, sprinklers, collision (in the case of
                  motor vehicles) and such other risks as are customarily
                  insured against by Persons engaged in businesses similar to
                  that of Borrower, with such companies, in such amounts, with
                  such deductibles and under policies in such form as shall be
                  reasonably satisfactory to BHF and Lender). Certificates of
                  insurance or, if requested by Lender, original (or certified)
                  copies of such policies of insurance have been or shall be,
                  within ninety (90) days after the Closing Date, delivered to
                  Lender, together with evidence of payment of all premiums
                  therefor, and shall contain an endorsement, in form and
                  substance acceptable to Lender, showing loss under such
                  insurance policies payable to BHF and Lender, as their
                  interests appear. Such endorsement, or an independent
                  instrument furnished to Lender, shall provide that the
                  insurance company shall give Lender at least thirty (30) days'
                  written notice before any such policy of insurance is altered
                  or canceled (ten (10) days for non-payment of premiums) and
                  that no act, whether willful or negligent, or default of
                  Borrower or any other Person shall affect the right of Lender
                  to recover under such policy of insurance in case of loss or
                  damage. In addition, Borrower shall cause to be executed and
                  delivered to BHF and the Lender, as their interests may
                  appear, an assignment of proceeds of its business interruption
                  insurance policies. Borrower hereby directs all insurers under
                  all policies of insurance to pay all proceeds payable
                  thereunder directly to BHF and the Lender, as their interests
                  may appear. Subject to the rights of BHF in and to the
                  Collateral and insurance proceeds, Borrower irrevocably makes,
                  constitutes and appoints Lender (and all officers, employees
                  or agents designated by Lender) as Borrower's true and lawful
                  attorney (and agent-in-fact) for the purpose of making,


                                       23
<PAGE>

                  settling and adjusting claims under such policies of
                  insurance, endorsing the name of Borrower on any check, draft,
                  instrument or other item of payment for the proceeds of such
                  policies of insurance and making all determinations and
                  decisions with respect to such policies of insurance, provided
                  however, that if no Event of Default shall have occurred and
                  is continuing, Borrower may make, settle and adjust claims
                  involving less than $100,000.00 in the aggregate without
                  Lender's consent.

                           (ii) Maintain, at its expense, such public liability
                  and third-party property damage insurance as is customary for
                  Persons engaged in businesses similar to that of Borrower with
                  such companies and in such amounts with such deductibles and
                  under policies in such form as shall be reasonably
                  satisfactory to Lender and certificates of insurance or, if
                  requested by Lender, original (or certified) copies of such
                  policies have been or shall be, within ninety (90) days after
                  the Closing Date, delivered to Lender, together with evidence
                  of payment of all premiums therefor; each such policy shall
                  contain an endorsement showing Lender as additional insured
                  thereunder and providing that the insurance company shall give
                  Lender at least thirty (30) days' written notice before any
                  such policy shall be altered or canceled.

If Borrower at any time or times hereafter shall fail to obtain or maintain any
of the policies of insurance required above or to pay any premium relating
thereto, then Lender, without waiving or releasing any obligation or default by
Borrower hereunder, may (but shall be under no obligation to) obtain and
maintain such policies of insurance and pay such premiums and take such other
actions with respect thereto as Lender deems advisable. Such insurance, if
obtained by Lender, may, but need not, protect Borrower's interests or pay any
claim made by or against Borrower with respect to the Collateral. Such insurance
may be more expensive than the cost of insurance Borrower may be able to obtain
on its own and may be cancelled only upon Borrower providing evidence that it
has obtained the insurance as required above. All sums disbursed by Lender in
connection with any such actions, including, without limitation, court costs,
expenses, other charges relating thereto and reasonable attorneys' fees, shall
constitute Loans hereunder, shall be payable on demand by Borrower to Lender
and, until paid, shall bear interest at the highest rate then applicable to Term
Loans hereunder.

                  (f) COLLATERAL. Borrower shall keep the Collateral in good
condition, repair and order and shall make all necessary repairs to the
Equipment and replacements thereof so that the operating efficiency and the
value thereof shall at all times be preserved and maintained in all material
respects. Borrower shall permit Lender to examine any of the Collateral at any
time during normal business hours (so long as no Default or Event of Default
exists) and wherever the Collateral may be located and, Borrower shall, promptly
upon request therefor by Lender, deliver to Lender any and all evidence of
ownership of any of the Collateral. Borrower shall, at the request of Lender,
indicate on its records concerning the Collateral a notation, in form
satisfactory to Lender, of the security interest of BHF and the Lender
hereunder. If, prior to the termination of this Agreement, Borrower shall obtain
rights to any new Collateral of the type described in the last sentence of
SUBSECTION 11(b), Borrower shall notify Lender in writing (with reasonable
detail) of such changes at least once every thirty (30) days. Borrower hereby
authorizes Lender to unilaterally modify this Agreement by amending SCHEDULE
11(b) to include any such Collateral. Notwithstanding the foregoing, Borrower
hereby agrees that Lender's security interest shall extend to all such
Collateral, regardless of whether Lender actually amends SCHEDULE 11(b).

                  (g) USE OF PROCEEDS. All monies and other property obtained by
Borrower from Lender pursuant to this Agreement shall be used solely for (i)
payment of a portion of the purchase price for certain Permitted Acquisitions
plus transaction fees and expenses related thereto, and (ii) business purposes
of Borrower.

                                       24
<PAGE>

                  (h) TAXES. Borrower and any other Obligor shall file all
required tax returns and pay all of its taxes when due, subject to any
extensions granted by the applicable taxing authority, including, without
limitation, taxes imposed by federal, state or municipal agencies, and shall
cause any Liens for taxes to be promptly released; provided, that Obligor shall
have the right to contest the payment of such taxes in good faith by appropriate
proceedings so long as (i) the amount so contested is shown on Obligor's
financial statements; and (ii) the contesting of any such payment does not
impair the enforceability, validity or priority of the Lender's Liens. If
Obligor fails to pay any such taxes and in the absence of any such contest by
Obligor, Lender may (but shall be under no obligation to) advance and pay any
sums required to pay any such taxes and/or to secure the release of any Lien
therefor, and any sums so advanced by Lender shall constitute Term Loans
hereunder, shall be payable by Obligor to Lender on demand and, until paid,
shall bear interest at the highest rate then applicable to Term Loans hereunder.

                  (i) INTELLECTUAL PROPERTY. Borrower shall maintain adequate
licenses, patents, patent applications, copyrights, service marks, trademarks,
trademark applications, tradestyles and trade names to continue its business as
heretofore conducted by it or as hereafter conducted by it unless the failure to
maintain any of the foregoing could not reasonably be expected to have a
Material Adverse Effect on Borrower.

                  (j) STAFFING CONTRACTS. Borrower shall promptly provide true
and complete copies to Lender of all material staffing or similar contracts and,
to the extent requested by Lender, deliver to Lender a collateral assignment
agreement with respect to such contracts.

                  (k) BILLING AND COLLECTION SYSTEM ACCESS. After the Closing
Date and, if feasible based on Borrower's accounting system, Borrower shall
provide electronic access to Lender to its billing and collection system, on a
read-only basis, for purposes of permitting Lender to inspect and verify billing
and collections transactions and related data in connection with the Collateral,
from time to time.

                  (l) INTEGRATION OF SYSTEMS Within thirty (30) days after the
Closing Date, Borrower shall fully integrate the accounting and billing systems
of Care Pros Staffing, Inc. and Arizona Home Health Care / Private Duty, Inc.
onto the Crdentia accounting and billing system. Within sixty (60) days of the
Closing Date, Borrower shall have integrated the Closing Date Permitted
Acquisitions into Borrower's accounting system and general ledger.

                  (m) SUBORDINATION AGREEMENT. On or before October 31, 2004,
Borrower shall deliver to Lender a Subordination Agreement executed by Cindy
Permenter, in form and substance acceptable to Lender, with respect to the
Indebtedness (i) under that certain convertible subordinated promissory note
dated December 2, 2003 in the original principal amount of $2,525,000 made
payable to Professional Staffing Services, Inc. and (ii) under that certain
convertible subordinated promissory note dated December 2, 2003 in the original
principal amount of $200,000 made payable to Professional Staffing Services,
Inc. and Nursing Services Registry of Savannah, Inc.

                                       25
<PAGE>

         13. NEGATIVE COVENANTS.

         Until payment and satisfaction in full of all Obligations and
termination of this Agreement, unless Borrower obtains Lender's prior written
consent waiving or modifying any of Borrower's covenants hereunder in any
specific instance, Borrower agrees as follows:

                  (a) INDEBTEDNESS. Borrower shall not create, incur, assume or
become obligated (directly or indirectly), for any Indebtedness for Borrowed
Money other than the Term Loans and the Revolving Loans, except that Borrower
may (i) maintain its present Indebtedness listed on SCHEDULE 11(n) hereto and,
if the Revolving Loan Agreement is replaced by a Replacement Revolving Loan
Agreement, the Indebtedness thereunder; and (ii) incur purchase money
Indebtedness or Capital Lease Obligations in connection with Capital
Expenditures permitted pursuant to SECTION 14 hereof. Borrower shall not incur
any Subordinated Debt without the prior written consent of Lender (which shall
include an indefinite standstill of remedies and payment blockage rights during
any Event of Default), nor during the existence of an Event of Default, make any
payment of any part or all of any Subordinated Debt or take any other action or
omit to take any other action in respect of any Subordinated Debt, except in
accordance with any subordination agreement relative thereto or the
subordination provisions thereof or hereof, or grant any Liens on any of its
assets to secure such Subordinated Debt, or amend or modify any agreement,
instrument or document evidencing or relating to any Subordinated Debt after
Lender consents thereto.

                  (b) LIENS. Borrower shall not grant or permit to exist
(voluntarily or involuntarily) any Lien on any of its assets, other than
Permitted Liens.

                  (c) MERGERS, SALES, ACQUISITIONS, SUBSIDIARIES AND OTHER
TRANSACTIONS OUTSIDE THE ORDINARY COURSE OF BUSINESS.

                           (i) Borrower shall not, without the prior written
                  consent of Lender: (A) enter into any merger or consolidation;
                  PROVIDED that (i) any Borrower which is a Borrower as of the
                  Closing Date may merge with and into Crdentia so long as
                  Crdentia is the surviving entity, and (ii) any Borrower other
                  than Crdentia which is a Borrower as of the Closing Date may
                  merge with another Borrower other than Crdentia which is a
                  Borrower as of the Closing Date, (B) change the state of
                  Borrower's organization or enter into any transaction which
                  has the effect of changing Borrower's state of organization,
                  except in connection with a merger permitted in clause (A)
                  above; (C) sell, lease or otherwise dispose of any of its
                  assets other than in the ordinary course of business or as
                  permitted under Section 7; (D) purchase the stock, other
                  equity interests or all or a material portion of the assets of
                  any Person or division of such Person; or (E) enter into any
                  other transaction outside the ordinary course of Borrower's
                  business, including, without limitation, any purchase,
                  redemption or retirement of any shares of any class of its
                  stock or any other equity interest, and any issuance of any
                  shares of, or warrants or other rights to receive or purchase
                  any shares of, any class of its stock or any other equity
                  interest, subject to clause (iii) below.

                           (ii) Borrower shall not form any new Subsidiaries or
                  enter into any joint ventures or partnerships with any other
                  Person, without the prior written consent of Lender unless (A)


                                       26
<PAGE>

                  Crdentia (or such other Borrower) pledges all of the equity
                  interests of such new Subsidiary to Lender, and (B) such
                  entity enters into a joinder agreement or similar agreement in
                  which such entity becomes a party to this Agreement, jointly
                  and severally liable for the Obligations and pledges to Lender
                  all of its assets as Collateral hereunder.

                           (iii) Notwithstanding the provisions of Section
                  13(c)(i)(A) above, Crdentia may enter into certain Permitted
                  Acquisitions with the prior written consent of Lender in its
                  sole discretion.

                  (d) DIVIDENDS AND DISTRIBUTIONS. No Borrower shall declare or
pay any dividend or other distribution (whether in cash or in kind) on any class
of its stock (if Borrower is a corporation) or on account of any equity interest
in Borrower (if Borrower is a partnership, limited liability company or other
type of entity) to any Person; PROVIDED, THAT (i) any Borrower may pay a
dividend or other distribution (whether in cash or in kind) on any class of its
stock (if Borrower is a corporation) or on account of any equity interest in
Borrower (if Borrower is a partnership, limited liability company or other type
of entity) to Crdentia to pay professional fees, franchise taxes and other
ordinary course of business operating expenses incurred by Crdentia solely in
its capacity as parent corporation of Borrower, (ii) any Borrower which exists
as of the Closing Date may pay a dividend or other distribution (whether in cash
or in kind) on any class of its stock (if Borrower is a corporation) or on
account of any equity interest in Borrower (if Borrower is a partnership,
limited liability company or other type of entity) to another Borrower, (iii)
any Borrower which is not a Borrower as of the Closing Date may pay a dividend
or other distribution to Borrower (whether in cash or in kind) on any class of
its stock (if Borrower is a corporation) or on account of any equity interest in
Borrower (if Borrower is a partnership, limited liability company or other type
of entity) so long as (x) no Default or Event of Default exists or results from
such dividend or distribution, (y) Borrowers shall be in compliance with all
financial covenants set forth in SECTION 14 hereof, and (z) Borrower has
$250,000 of Excess Availability under the Revolving Loan Agreement or any
Replacement Revolving Loan Agreement after giving effect to such dividend or
other distribution, and (iv) Crdentia may pay customary stock dividends to
holders of its Series A Preferred Stock, Series B Preferred Stock, Series B-1
Preferred Stock and Series C Preferred Stock.

                  (e) INVESTMENTS; LOANS. Borrower shall not purchase or
otherwise acquire, or contract to purchase or otherwise acquire, the obligations
or stock of any Person, other than investments in the stock of a Borrower,
investments in connection with Permitted Acquisitions under SECTIONS 2(b) and
13(c)(iii), direct obligations of the United States or of any State of the
United States or political subdivision thereof, obligations insured by the
Federal Deposit Insurance Corporation and obligations unconditionally guaranteed
by the United States or of any State of the United States or political
subdivision thereof; nor shall Borrower lend or otherwise advance funds to any
Person except for advances made to employees, officers and directors for travel
and other expenses and extensions of credit to customers arising in the ordinary
course of business.

                  (f) FUNDAMENTAL CHANGES, LINE OF BUSINESS. Borrower shall not
enter into a new line of business materially different from Borrower's current
business. Borrower further agrees that no Borrower shall amend its
organizational documents or change its Fiscal Year if such actions (i) would


                                       27
<PAGE>

have a Material Adverse Effect on the Borrower; (ii) would affect the
obligations of Borrower to Lender; or (iii) would affect the interpretation of
any of the terms of this Agreement or the Other Agreements unless Lender has
provided written consent after receiving not less than thirty (30) days' prior
written notice of such actions

                  (g) EQUIPMENT. Borrower shall not (i) permit any Equipment to
become a Fixture to real property unless such real property is owned by Borrower
and is subject to a mortgage in favor of Lender or, if such real estate is
leased, is subject to a landlord's agreement in favor of Lender on terms
acceptable to Lender, or (ii) permit any Equipment to become an accession to any
other personal property unless such personal property is subject to a first
priority Lien in favor of Lender.

                  (h) AFFILIATE TRANSACTIONS. Except as set forth on SCHEDULE
11(i) hereto or as permitted pursuant to SUBSECTION 11(c) hereof, Borrower shall
not conduct, permit or suffer to be conducted, transactions with Affiliates
other than (i) investments by Affiliates in a Borrower; (ii) the provision of
employment, management and consulting services approved by Borrower's
compensation committee; and (iii) other transactions for the purchase or sale of
Inventory or services in the ordinary course of business pursuant to terms that
are no less favorable to Borrower than the terms upon which such transactions
would have been made had they been made to or with a Person that is not an
Affiliate.

                  (i) SETTLING OF ACCOUNTS. Borrower will not make without
concurrent written notice provided to Lender, any agreement with any Account
Debtor for any extension of the time for payment of the Account, any compromise
or settlement for less than the full amount thereof, any release of any Account
Debtor from liability therefore, or any deduction therefrom except a discount or
allowance for prompt or early payment allowed by Borrower in the ordinary course
of its business consistent with its historical practices and as disclosed to
Lender in writing; PROVIDED, that following the occurrence and during the
continuance of a Default an Event of Default, Borrower shall not settle or
adjust any Account without the consent of Lender.

                  (j) RESTRICTED PAYMENTS. Until the termination of this
Agreement, Borrower shall not make any direct or indirect payment or prepayment,
in cash, in kind, or otherwise, with respect to the following Indebtedness,
except as provided in clauses (i), (ii) and (iii) below:

                           (i) SELLER NOTES. Scheduled payments of principal and
                  interest under any Seller Note or other instrument of
                  Subordinated Debt may be paid if, and only to the extent that,
                  at the time of any such payment no Event of Default then
                  exists or would result from the making of such payment;

                           (ii) MANAGEMENT/ADVISORY FEES. Scheduled payments in
                  respect of any management fees, advisory fees or similar fees
                  payable by any Borrower to any other Borrower may be paid if,
                  and only to the extent that, at the time of any such payment
                  no Event of Default described in this Agreement then exists or
                  would result from the making of such payment; and

                           (iii) SUBORDINATED DEBT. Scheduled payments in
                  respect of Subordinated Debt may be made only if either: (a)
                  the Borrowers have Excess Availability under the Revolving


                                       28
<PAGE>

                  Loan Agreement or any Replacement Revolving Loan Agreement of
                  $500,000, or (b) the Borrower (in the aggregate) have a ratio
                  of Operating Cash Flow to Total Debt Service of at least 1.00
                  to 1.00 as a result of such Subordinated Debt payment.

                  (k) RESTRICTED LOCATIONS. Borrower shall not move any of its
books or records or any of its other assets of any kind to its offices located
at (i) 3000 S. 31st St. #301, Temple, Arizona 76502 or (ii) 5151 E. Broadway
#1530, Tucson, Arizona 85711.

         14. FINANCIAL COVENANTS.

         Borrower shall maintain and keep in full force and effect each of the
financial covenants set forth below:

                  (a) TANGIBLE NET WORTH. Borrower's Tangible Net Worth, on a
Crdentia Proper Consolidated Basis, shall not at any time be less than the
Minimum Tangible Net Worth; "MINIMUM TANGIBLE NET WORTH" being defined for
purposes of this Subsection as (i) $(1,500,000) at all times from the Closing
Date through September 30, 2004 and (ii) thereafter, from the last day of each
fiscal quarter of the Crdentia Proper Borrowers through the day prior to the
last day of each immediately succeeding fiscal quarter of the Crdentia Proper
Borrowers, the Minimum Tangible Net Worth during the immediately preceding
period plus seventy-five percent (75%) of the Crdentia Proper Borrowers' net
income (but without reduction for any net loss) for the Fiscal Year ending on
the first day of such period as reflected on the Crdentia Proper Borrowers' s
audited year end financial statement; and "Tangible Net Worth" being defined for
purposes of this Subsection as the Crdentia Proper Borrowers' shareholders'
equity (including retained earnings) LESS the book value of all intangible
assets of the Crdentia Proper Borrowers as determined solely by Lender on a
consistent basis PLUS the amount of any Subordinated Debt, all as determined
under GAAP applied on a basis consistent with the financial statement dated
March 31, 2004 except as set forth herein;

                  (b) SENIOR DEBT SERVICE COVERAGE RATIO. As of the last day of
each applicable period, the ratio of the Borrower's Operating Cash Flow, on a
Crdentia Proper Consolidated Basis, to Borrower's Senior Debt Service, on a
Crdentia Proper Consolidated Basis, for each period set forth below (which ratio
shall be tested as of the last day of each such period) must be at least the
following:

                                       29
<PAGE>
<TABLE>
------------------------------- ---------------------------- ---------------------------- ----------------------------
                                                                 SENIOR DEBT SERVICE
          TIME FRAME                    DATE TESTED                COVERAGE RATIO                  BASED ON
------------------------------- ---------------------------- ---------------------------- ----------------------------
<S>                             <C>                          <C>                          <C>
Monthly                         1/31/05                      1.00 to 1.00                 Monthly
------------------------------- ---------------------------- ---------------------------- ----------------------------
Monthly                         2/28/05                      1.00 to 1.00                 Monthly
------------------------------- ---------------------------- ---------------------------- ----------------------------
Monthly                         3/31/05                      1.00 to 1.00                 Trailing 3 months
------------------------------- ---------------------------- ---------------------------- ----------------------------
Monthly                         4/30/05                      1.00 to 1.00                 Trailing 4 months
------------------------------- ---------------------------- ---------------------------- ----------------------------
Monthly                         5/31/05                      1.00 to 1.00                 Trailing 5 months
------------------------------- ---------------------------- ---------------------------- ----------------------------
Monthly                         6/30/05                      1.25 to 1.00                 Trailing 6 months
------------------------------- ---------------------------- ---------------------------- ----------------------------
Monthly                         7/31/05                      1.25 to 1.00                 Trailing 7 months
------------------------------- ---------------------------- ---------------------------- ----------------------------
Monthly                         8/31/05                      1.25 to 1.00                 Trailing 8 months
------------------------------- ---------------------------- ---------------------------- ----------------------------
Monthly                         9/30/05                      1.25 to 1.00                 Trailing 9 months
------------------------------- ---------------------------- ---------------------------- ----------------------------
Monthly                         10/31/05                     1.25 to 1.00                 Trailing 10 months
------------------------------- ---------------------------- ---------------------------- ----------------------------
Monthly                         11/30/05                     1.25 to 1.00                 Trailing 11 months
------------------------------- ---------------------------- ---------------------------- ----------------------------
Monthly                         12/31/05                     1.25 to 1.00                 Trailing 12 months
------------------------------- ---------------------------- ---------------------------- ----------------------------
Quarterly                       3/31/06  and  each  quarter  1.25 to 1.00                 Trailing 12 months
                                thereafter
------------------------------- ---------------------------- ---------------------------- ----------------------------

                  (c) MINIMUM EBITDA. Borrower shall not permit EBITDA (which
calculation shall include for the months ended 8/31/04 through 12/31/04 any
payment made by MedCap Partners L.P. pursuant to the terms of Makewell
Agreement), on a Crdentia Proper Consolidated Basis, to be less than the amount
set forth below for the corresponding period set forth below:

------------------------------- ---------------------------- ---------------------------- ----------------------------
          TIME FRAME                    DATE TESTED                MINIMUM EBITDA                  BASED ON
------------------------------- ---------------------------- ---------------------------- ----------------------------
Monthly                         8/31/04                      $(151,662)                   Monthly
------------------------------- ---------------------------- ---------------------------- ----------------------------
Monthly                         9/30/04                      $(83,271)                    Monthly
------------------------------- ---------------------------- ---------------------------- ----------------------------
Monthly                         10/31/04                     $(28,059)                    Monthly
------------------------------- ---------------------------- ---------------------------- ----------------------------
Monthly                         11/30/04                     $1,875                       Monthly
------------------------------- ---------------------------- ---------------------------- ----------------------------
Monthly                         12/31/04                     $39,212                      Monthly
------------------------------- ---------------------------- ---------------------------- ----------------------------
Quarterly                       3/31/05                      $82,501                      Trailing 3 months
------------------------------- ---------------------------- ---------------------------- ----------------------------
Quarterly                       6/30/05                      $99,393                      Trailing 6 months
------------------------------- ---------------------------- ---------------------------- ----------------------------
Quarterly                       9/30/05                      $158,708                     Trailing  months
------------------------------- ---------------------------- ---------------------------- ----------------------------
Quarterly                       12/31/05                     $219,897                     Trailing 12 months
------------------------------- ---------------------------- ---------------------------- ----------------------------
</TABLE>

                                       30
<PAGE>

         Notwithstanding the foregoing, (i) to the extent that the Crdentia
Proper Borrowers maintain a Senior Debt Service Coverage Ratio of 1.50 to 1.00
or greater as determined at the end of any measuring period as set forth in
SECTION 14(b) above, the Crdentia Proper Borrowers shall not be required to
maintain minimum EBITDA as set forth in this Section for such corresponding
month and during the continuance of such compliance.

                  (d) ACQUISITION SUBSIDIARY DEBT SERVICE COVERAGE RATIO.
Commencing on the last day of the first fiscal quarter following the first
Permitted Acquisition, and continuing quarterly thereafter, Borrower shall not
permit the ratio of (i) Acquisition Subsidiary EBITDA to (ii) scheduled payments
of interest and fees, to the extent carried as interest expense on Acquisition
Subsidiary's consolidated financial statements, with respect to Acquisition
Subsidiary Debt (and, if the period of measurement is less than 12 months,
determined on an annualized basis), to be less than the amount set forth below
for the corresponding period set forth below:

<TABLE>
------------------------------- ---------------------------- ---------------------------- ----------------------------
          TIME FRAME                    DATE TESTED          Acquisition Subsidiary Deb            BASED ON
                                                               Service Coverage RATIO
------------------------------- ---------------------------- ---------------------------- ----------------------------
<S>                             <C>                           <C>                          <C>
Quarterly                       Last day of the first         1.50 to 1.00                 Trailing 3 months
                                Fiscal Quarter following
                                the first Permitted
                                Acquisition
------------------------------- ---------------------------- ---------------------------- ----------------------------
                                Next Fiscal Quarter          1.50 to 1.00                 Trailing 6 months
Quarterly                       Thereafter
------------------------------- ---------------------------- ---------------------------- ----------------------------
                                Next Fiscal Quarter          1.50 to 1.00                 Trailing 9 months
Quarterly                       Thereafter
------------------------------- ---------------------------- ---------------------------- ----------------------------
Quarterly                       Each Fiscal Quarter          1.50 to 1.00                 Trailing 12 months
                                Thereafter
------------------------------- ---------------------------- ---------------------------- ----------------------------
</TABLE>

                  (e) ACQUISITION SUBSIDIARY DEBT LEVERAGE RATIO. Commencing on
the last day of the first fiscal quarter following the first Permitted
Acquisition, and continuing quarterly thereafter, Borrower shall not permit the
ratio of Acquisition Subsidiary Debt to Acquisition Subsidiary EBITDA to be more
than the following:

                                       31
<PAGE>
<TABLE>

            Period                         Date Tested                    Coverage                 Based on:
            ------                         -----------                    --------                 ---------
<S>                             <C>                                      <C>                   <C>
Quarterly                       Last day of the first fiscal             4.0 to 1.0            Trailing 3 Months
                                quarter following the first
                                Permitted Acquisition
Quarterly                       Next Fiscal Quarter Thereafter           4.0 to 1.0            Trailing 6 months
Quarterly                       Next Fiscal Quarter Thereafter           4.0 to 1.0            Trailing 9 months
Quarterly Thereafter            Each Fiscal Quarter Thereafter           4.0 to 1.0           Trailing 12 months

                  (f) ACQUISITION SUBSIDIARY TERM LOAN DEBT LEVERAGE RATIO.
Commencing on the last day of the first fiscal quarter following the first
Permitted Acquisition, and continuing quarterly thereafter, Borrower shall not
permit the ratio of Acquisition Subsidiary Term Loan Debt to Acquisition
Subsidiary EBITDA to be more than the following:

          Time Frame                       Date Tested                    Coverage                 Based on:
          ----------                       -----------                    --------                 ---------
Quarterly                       Last day of the first fiscal             2.50 to 1             Trailing 3 Months
                                quarter following the first
                                Permitted Acquisition
Quarterly                       Next Fiscal Quarter Thereafter           2.50 to 1             Trailing 6 months
Quarterly                       Next Fiscal Quarter Thereafter           2.50 to 1             Trailing 9 months
Quarterly Thereafter            Each Fiscal Quarter Thereafter           2.50 to 1            Trailing 12 months
</TABLE>

                  (g) CAPITAL EXPENDITURE LIMITATIONS. Borrowers shall not make
any Capital Expenditures if, after giving effect to such Capital Expenditure,
the aggregate cost of all such fixed assets purchased or otherwise acquired
would exceed $200,000 during any Fiscal Year.

                  (h) OPERATING LEASE OBLIGATIONS. Borrower shall not incur
operating lease obligations requiring payments in excess of $100,000 in the
aggregate during any Fiscal Year of Borrower.

                  (i) FINANCIAL REPORTING CONSOLIDATION. Lender, in its sole
discretion, will consider permitting a consolidation of Crdentia, Acquisition
Subsidiary, and each of their direct and indirect Subsidiaries for purposes of
financial reporting and financial covenant tests under this Agreement; PROVIDED
THAT, (i) the Borrower's Senior Debt Service Coverage Ratio (determined on a
Crdentia Proper Consolidated Basis) as set forth under SECTION 14(b) of this
Agreement is 1.25 to 1.00 or greater for a period of six (6) consecutive months,
(ii) the Acquisition Subsidiary Debt Service Coverage Ratio as set forth under
SECTION 14(d) of this Agreement is 1.50 to 1.00 or greater for a period of six
(6) consecutive months, (iii) the Acquisition Subsidiary Debt Leverage Ratio as
set forth in SECTION 14(e) of this Agreement is no more than 4.0 to 1.0 for six
(6) consecutive months, (iv) the Acquisition Subsidiary Term Loan Debt Leverage
Ratio as set forth in SECTION 14(f) of this Agreement is no more than 2.50 to


                                       32
<PAGE>

1.0 for six consecutive months, (v) no Event of Default, which has not been
cured or waived, exists, (vi) Borrower, on a Crdentia Proper Consolidated Basis,
has Excess Availability of at least $250,000, and (vii) Lender is satisfied with
the Operating Cash Flow of all Borrowers, on a consolidated basis, based upon
the completion of a cash flow audit of Borrowers.

         15. DEFAULT.

         The occurrence of any one or more of the following events shall
constitute an "Event of Default" by Borrower hereunder:

                  (a) PAYMENT. The failure of any Obligor to pay when due,
declared due, or demanded by Lender, any of the Obligations or the Revolving
Loan Obligations.

                  (b) BREACH OF THIS AGREEMENT, THE OTHER AGREEMENTS AND THE
REVOLVING LOAN AGREEMENT. The failure of any Obligor to perform, keep or observe
any of the covenants, conditions, promises, agreements or obligations of such
Obligor under this Agreement or any of the Other Agreements or the Revolving
Loan Agreement (or, if the Revolving Loan Agreement has been replaced by a
Replacement Revolving Loan Agreement, under the similar provisions of such
Replacement Revolving Loan Agreement); provided that (i) any such failure by
Borrower under SUBSECTIONS 12(b)(i), (iv), (v) and 12(i) of this Agreement (or
the Revolving Loan Agreement, or, if the Revolving Loan Agreement has been
replaced by a Replacement Revolving Loan Agreement, under such Replacement
Revolving Loan Agreement) shall not constitute an Event of Default hereunder
until the fifteenth (15th) day following the occurrence thereof, and (ii) any
such failure by Borrower under SUBSECTIONS 12(b)(ii) and (v) of this Agreement
(or SUBSECTIONS 12(b)(iii) and 12(b)(vi) of the Revolving Loan Agreement, or, if
the Revolving Loan Agreement has been replaced by a Replacement Revolving Loan
Agreement, under similar provisions of such Replacement Revolving Loan
Agreement) shall not constitute an Event of Default hereunder until the fifth
(5th) day following the occurrence thereof (including any grace periods
thereto).

                  (c) BREACH OF SUBORDINATION AGREEMENT The failure of any
Person to perform, keep or observe any of the covenants, conditions, promises,
agreements or obligations of such Person under any Subordination Agreement.

                  (d) BREACHES OF OTHER OBLIGATIONS. The failure of Obligor to
pay when due or within any applicable grace period any obligation of Obligor in
excess of $100,000 (other than its Obligations under this Agreement) for the
payment of Indebtedness, other than Subordinated Debt that is not paid when due
to the operation of the requirements of subordination hereunder, or the becoming
due and payable, or declaration to be due any payable, of such obligation before
the expressed maturity of the obligation, or the occurrence of an event that,
with the giving of notice or lapse of time, or both, would cause any such
obligation to become, or allow any such obligation to be declared to be, due and
payable;

                  (e) BREACH OF REPRESENTATIONS AND WARRANTIES. The making or
furnishing by any Obligor to Lender of any representation, warranty,
certificate, schedule, report or other communication within or in connection
with this Agreement or the Other Agreements, or in connection with any other


                                       33
<PAGE>

agreement between such Obligor and Lender which is untrue or misleading in any
material respect as of the date made.

                  (f) LOSS OF COLLATERAL. The loss, theft, damage or destruction
of any of the Collateral in an amount in excess of $100,000 in excess of
insurance in the aggregate for all such events during any year of the Term as
determined by Lender in its reasonable discretion determined in good faith, or
(except as permitted hereby) sale, lease or furnishing under a contract of
service of, any of the Collateral.

                  (g) LEVY, SEIZURE OR ATTACHMENT. The making or any attempt by
any Person to make any levy, seizure or attachment upon any of the Collateral
with a value in excess of $100,000.

                  (h) BANKRUPTCY OR SIMILAR PROCEEDINGS. The commencement of any
proceedings in bankruptcy by or against any Obligor or for the liquidation or
reorganization of any Obligor, or alleging that such Obligor is insolvent or
unable to pay its debts as they mature, or for the readjustment or arrangement
of any Obligor's debts, whether under the United States Bankruptcy Code or under
any other law, whether state or federal, now or hereafter existing, for the
relief of debtors, or the commencement of any analogous statutory or
non-statutory proceedings involving any Obligor; provided, however, that if such
commencement of proceedings against such Obligor is involuntary, such action
shall not constitute an Event of Default unless such proceedings are not
dismissed within forty-five (45) days after the commencement of such
proceedings, though Lender shall have no obligation to make Term Loans to
Borrower during such forty-five (45) day period or, if earlier, until such
proceedings are dismissed.

                  (i) APPOINTMENT OF RECEIVER. The appointment of a receiver or
trustee for any Obligor, for any of the Collateral or for any substantial part
of any Obligor's assets or the institution of any proceedings for the
dissolution, or the full or partial liquidation, or the merger or consolidation,
of any Obligor which is a corporation, limited liability company or a
partnership; provided, however, that, if such appointment or commencement of
proceedings against such Obligor is involuntary, such action shall not
constitute an Event of Default unless such appointment is not revoked or such
proceedings are not dismissed within forty-five (45) days after the commencement
of such proceedings, though Lender shall have no obligation to make Term Loans
to Borrower during such forty-five (45) day period or, if earlier, until such
proceedings are dismissed.

                  (j) JUDGMENT. The entry of any judgments or orders aggregating
in excess of confirmed insurance coverage in an amount of $100,000 or more
against any Obligor which remain unsatisfied or undischarged and in effect for
thirty (30) days after such entry without a stay of enforcement or execution.

                  (k) DEFAULT OR REVOCATION OF GUARANTY; SUBORDINATION
AGREEMENT. The occurrence of an event of default under, or the revocation or
termination of, any agreement, instrument or document executed and delivered by
any Person to Lender pursuant to which such Person has guaranteed to Lender the
payment of all or any of the Obligations, has granted Lender a Lien upon some or
all of such Person's real and/or personal property to secure the payment of all
or any of the Obligations or has subordinated indebtedness in whole or in part
to the Obligations.

                                       34
<PAGE>

                  (l) CHANGE OF OWNERSHIP/MANAGEMENT. If any of the following
events occurs: (i) Jim Durham shall cease to be (x) the owner of 1,000,000
shares of the issued and outstanding capital stock of Crdentia, and (y) the
Chief Executive Officer of Crdentia at any time, (ii) Pam Atherton shall cease
to be the President of the Borrower at any time, and (iii) Fred Toney shall
cease to be a director of the Borrower at any time, unless Borrower has received
Lender's written consent for a replacement of Jim Durham, Pam Atherton, or Fred
Toney, as applicable, within 30 days of such notification (such consent not to
be unreasonably withheld).

                  (m) MATERIAL ADVERSE CHANGE. Any material adverse change in
the Collateral, business, property, assets, prospects, operations or condition,
financial or otherwise of any Obligor, as determined by Lender in its sole
judgment or the occurrence of any event which, in Lender's sole judgment, could
have a Material Adverse Effect.

                  (n) GOVERNMENTAL AUTHORIZATIONS. A Government Authority shall
have revoked any Governmental Authorization of Borrower that results in the
cessation of business.

                  (o) FAILURE TO MAINTAIN THIRD-PARTY PAYROLL TAX SERVICE
PROVIDER. The failure to maintain a contractual relationship with a payroll tax
service provider, acceptable to Lender, at any time.

                  (p) FAILURE TO OBTAIN INTERCREDITOR AGREEMENT The failure of
any lender or lenders (or if a syndicated facility, agent and the lenders) party
to any Replacement Revolving Loan Agreement to execute on or prior to the date
of such Replacement Revolving Loan Agreement an Intercreditor Agreement, in form
and substance acceptable to Lender.

         16. REMEDIES UPON AN EVENT OF DEFAULT.

                  (a) Upon the occurrence and during the continuance of an Event
of Default described in Subsection 15(g) hereof, all of the Obligations shall
immediately and automatically become due and payable, without notice of any
kind. Upon the occurrence of any other Default or Event of Default, all
Obligations may, at the option of Lender, and without demand, notice or legal
process of any kind, be declared, and immediately shall become, due and payable.

                  (b) Upon the occurrence and during the continuance of a
Default or an Event of Default, Lender may exercise from time to time any rights
and remedies available to it under the Uniform Commercial Code and any other
applicable law in addition to, and not in lieu of, any rights and remedies
expressly granted in this Agreement or in any of the Other Agreements and all of
Lender's rights and remedies shall be cumulative and non-exclusive to the extent
permitted by law. In particular, but not by way of limitation of the foregoing,
subject to the rights of BHF, Lender may, without notice, demand or legal
process of any kind, take possession of any or all of the Collateral (in
addition to Collateral of which it already has possession), wherever it may be
found, and for that purpose may pursue the same wherever it may be found and,
may enter onto any of Borrower's premises where any of the Collateral may be,
and search for, take possession of, remove, keep and store any of the Collateral
until the same shall be sold or otherwise disposed of, and Lender shall have the
right to store the same at any of Borrower's premises without cost to Lender. At


                                       35
<PAGE>

Lender's request, but subject to the rights of BHF, Borrower shall, at
Borrower's expense, assemble the Collateral and make it available to Lender at
one or more places to be designated by Lender and reasonably convenient to
Lender and Borrower. Borrower recognizes that if Borrower fails to perform,
observe or discharge any of its Obligations under this Agreement or the Other
Agreements, no remedy at law will provide adequate relief to Lender, and agrees
that Lender shall be entitled to temporary and permanent injunctive relief in
any such case without the necessity of proving actual damages. Any notification
of intended disposition of any of the Collateral required by law will be deemed
to be a reasonable authenticated notification of disposition if given at least
ten (10) days prior to such disposition and such notice shall (i) describe
Lender and Borrower, (ii) describe the Collateral that is the subject of the
intended disposition, (iii) state the method of the intended disposition, (iv)
state that Borrower is entitled to an accounting of the Obligations and state
the charge, if any, for an accounting and (v) state the time and place of any
public disposition or the time after which any private sale is to be made.
Lender may disclaim any warranties that might arise in connection with the sale,
lease or other disposition of the Collateral and has no obligation to provide
any warranties at such time. Subject to the rights of BHF, any Proceeds of any
disposition by Lender of any of the Collateral may be applied by Lender to the
payment of expenses in connection with the Collateral, including, without
limitation, legal expenses and reasonable attorneys' fees, and any balance of
such Proceeds may be applied by Lender toward the payment of such of the
Obligations, and in such order of application as Lender may from time to time
elect.

         17. CONDITIONS PRECEDENT.

         The obligation of Lender to fund any Term Loan is subject to the
satisfaction or waiver on or before the date hereof, of the following conditions
precedent:

                  (a) Prior to the funding of the first Term Loan hereunder,
Lender shall have received four (4) originals of each of the agreements (other
than the Subordination Agreements and the Account Control Agreements for the
deposit accounts listed therein), opinions, reports, approvals, consents,
certificates and other documents set forth on the closing document list attached
hereto as EXHIBIT B (the "CLOSING DOCUMENT LIST"), or any supplement thereto
pertaining to a Permitted Acquisition in each case in form and substance
satisfactory to Lender (other than Notes, of which Lender shall receive one (1)
original) executed by Borrower and other required Persons, as applicable;

                  (b) Lender shall have received such financial statements,
reports, certifications, and other operational information required to be
delivered under this Agreement, including, without limitation, a post-closing
balance sheet for each Closing Date Permitted Acquisition, in form and substance
reasonably acceptable to Lender;

                  (c) All of the obligations of Borrower to any prior lender
(other than Subordinated Debt and BHF) as in effect immediately prior to the
Closing Date will be performed and paid in full from the proceeds of the initial
advances under the initial Loans on the Closing Date and all Liens of any such
prior lender on any property of Borrower in respect thereof will be terminated
immediately upon such payment;

                                       36
<PAGE>

                  (d) Lender shall have received evidence satisfactory to it
that the insurance policies required under Section 5 are in full force and
effect, together with written evidence showing loss payable or additional
insured clauses or endorsements in favor of Lender as required under such
section;

                  (e) Lender shall have received each of the agreements,
opinions, reports, approvals, consents, certificates and other documents set
forth on the Closing Document List with respect to the Permitted Acquisition, in
each case in form and substance satisfactory to Lender;

                  (f) Since March 31, 2004, no event shall have occurred which
has had or could reasonably be expected to have a Material Adverse Effect on any
Obligor, as determined by Lender in its reasonable credit judgment, determined
in good faith;

                  (g) Lender shall have received payment in full of all fees and
expenses payable to it by Borrower or any other Person in connection herewith,
on or before disbursement of the initial Loans hereunder, including, without
limitation, payment of all underwriting fees as agreed to by the parties;

                  (h) Lender shall have determined that immediately after giving
effect to the proposed Acquisition, Acquisition Subsidiary has Acquisition
Subsidiary Excess Availability of not less than Two Hundred Fifty Thousand
Dollars ($250,000);

                  (i) The Obligors shall have executed and delivered to Lender
all such other documents, instruments and agreements which Lender determines are
reasonably necessary to consummate the transactions contemplated hereby;

                  (j) Lender shall have reviewed the results of, and found such
results acceptable, in its sole discretion, a takedown audit including
verification of payment of all due and owing taxes;

                  (k) Lender shall have received the results of an audit of the
Target of any proposed Acquisition, which shall be satisfactory to Lender in its
sole discretion;

                  (l) There is no material default in any of the Borrower's
obligations under any contract to which Borrower is a party;

                  (m) Borrower shall be in compliance with all applicable laws;

                  (n) Lender shall have received an opinion from Borrower's
counsel, in form and substance reasonably acceptable to the Lender in connection
with any Permitted Acquisition;

                  (o) Borrower shall have delivered to Lender, with respect to
each Deposit Account maintained by Borrower, a deposit account control agreement
in form and substance satisfactory to the Lender, executed by the financial
institution at which such Deposit Account is maintained;

                                       37
<PAGE>

                  (p) Borrower shall have delivered all due diligence materials
pertaining to the Target and to Borrower to the Lender as Lender has requested;

                  (q) Lender shall have reviewed general background
verifications of select principals, officers and directors of the Target that
will remain after the closing of the Acquisition;

                  (r) Lender shall have received the Warrant Agreement, together
with the Warrant Certificate contemplated therein, fully executed by Crdentia;

                  (s) Lender shall have received the following stock pledges:
(i) by Crdentia of each of its direct and indirect Subsidiaries (including
Acquisition Subsidiary), and (ii) by Acquisition Subsidiary of each of its
direct and indirect Subsidiaries;

                  (t) The Acquisition shall have been completed in accordance
with the terms of the Acquisition documents and in compliance with all
applicable laws subject only to the funding of the Term Loan hereunder;

                  (u) Lender shall have received satisfactory evidence that
Borrower has secured the services of a third-party payroll tax service provider;

                  (v) As of the closing of the initial Term Loan hereunder,
Lender shall have received satisfactory evidence that not less than Two Million
One Hundred Thousand Dollars ($2,100,000) of the outstanding indebtedness under
the Seller Notes has been extinguished and converted to equity interests in
Crdentia;

                  (w) Lender shall have received a Subordination Agreement, in
form and substance acceptable to Lender, with respect to any seller Indebtedness
(i) issued in connection with each Closing Date Permitted Acquisition, and (ii)
all other seller Indebtedness outstanding as of the Closing Date;

                  (x) Lender shall have received an executed Intercreditor
Agreement, in form and substance acceptable to Lender, from the Arizona Home
Health Care / Private Duty, Inc. seller with respect to the account receivables
of such seller; (y) Lender shall have received evidence of the investments by
(i) MedCap Partners L.P. of not less than $1,900,000 in equity in Crdentia and
(ii) James Durham of not less than $250,000 in equity in Crdentia, together, in
each case, with all documents related thereto, all on terms and conditions
reasonably satisfactory to Lender;

                  (z) Lender shall have received the Makewell Agreement, in form
and substance acceptable to Lender, executed by MedCap Partners L.P.; and

                  (aa) Lender shall have determined that immediately after
giving effect to each of the respective Closing Date Permitted Acquisitions, (i)
Arizona Acquisition Subsidiary has Arizona Acquisition Subsidiary Excess
Availability of not less than $300,000, and (ii) Care Pros Acquisition
Subsidiary has Care Pros Acquisition Subsidiary Excess Availability of not less
than $75,000.

                                       38
<PAGE>

                  (bb) Lender shall have received a pledge agreement of the
equity ownership interests or issued and outstanding capital stock, as
applicable, of each direct and indirect Subsidiary of Crdentia, together with
stock powers (undated and in blank), any original certificates evidencing such
equity interests and UCC investment property financing statements in connection
therewith.

         18. JOINT AND SEVERAL LIABILITY.

                  (a) Each Borrower hereby irrevocably designates Borrowing
Agent to be its attorney and agent and in such capacity to borrow, sign and
endorse notes, and execute and deliver all instruments, documents, writings and
further assurances now or hereafter required hereunder, on behalf of such
Borrower or Borrowers, and hereby authorizes Lender to pay over or credit all
loan proceeds hereunder in accordance with the request of Borrowing Agent.

                  (b) The handling of this credit facility as a co-borrowing
facility with a borrowing agent in the manner set forth in this Agreement is
solely as an accommodation to Borrowers and at their request. Lender shall not
incur liability to Borrowers as a result thereof. To induce Lender to do so and
in consideration thereof, each Borrower hereby indemnifies Lender and holds
Lender harmless from and against any and all liabilities, expenses, losses,
damages and claims of damage or injury asserted against Lender by any Person
arising from or incurred by reason of the handling of the financing arrangements
of Borrowers as provided herein, reliance by Lender on any request or
instruction from Borrowing Agent or any other action taken by Lender with
respect to this Section 18 except due to willful misconduct or gross (not mere)
negligence by the indemnified party.

                  (c) Notwithstanding anything to the contrary contained herein,
all Obligations of each Borrower hereunder shall be joint and several
obligations of Borrowers.

                  (d) Notwithstanding any provisions of this Agreement to the
contrary, it is intended that the joint and several nature of the Obligations of
Borrowers, and the liens and security interests granted by Borrowers to secure
the Obligations, not constitute a "Fraudulent Conveyance" (as defined below).
Consequently, Lender and Borrowers agree that if the Obligations of a Borrower,
or any liens or security interests granted by such Borrower securing the
Obligations, would, but for the application of this sentence, constitute a
Fraudulent Conveyance, the Obligations of such Borrower and the liens and
security interests securing such Obligations shall be valid and enforceable only
to the maximum extent that would not cause such Obligations or such lien or
security interest to constitute a Fraudulent Conveyance, and the Obligations of
such Borrower and this Agreement shall automatically be deemed to have been
amended accordingly. For purposes hereof, "Fraudulent Conveyance" means a
fraudulent conveyance under Section 548 of Chapter 11 of Title II of the United
States Code (11 U.S.C. ss. 101, et seq.), as amended (the "BANKRUPTCY CODE"), or
a fraudulent conveyance or fraudulent transfer under the applicable provisions
of any fraudulent conveyance or fraudulent transfer law or similar law of any
state, nation or other governmental unit, as in effect from time to time.

                  (e) Each Borrower assumes responsibility for keeping itself
informed of the financial condition of the each other Borrower, and any and all
endorsers and/or guarantors of any instrument or document evidencing all or any
part of such other Borrower's Obligations, and of all other circumstances


                                       39
<PAGE>

bearing upon the risk of nonpayment by such other Borrowers of their Obligations
and each Borrower agrees that Lender shall not have any duty to advise such
Borrower of information known to Lender regarding such condition or any such
circumstances or to undertake any investigation not a part of its regular
business routine. If Lender, in its sole discretion, undertakes at any time or
from time to time to provide any such information to a Borrower, Lender shall
not be under any obligation to update any such information or to provide any
such information to such Borrower on any subsequent occasion.

                  (f) Lender is hereby authorized, without notice or demand and
without affecting the liability of a Borrower hereunder, to, at any time and
from time to time, (i) renew, extend, accelerate or otherwise change the time
for payment of, or other terms relating to, a Borrower's Obligations or
otherwise modify, amend or change the terms of any promissory note or other
agreement, document or instrument now or hereafter executed by a Borrower and
delivered to Lender; (ii) accept partial payments on a Borrower's Obligations;
(iii) take and hold security or collateral for the payment of a Borrower's
Obligations hereunder or for the payment of any guaranties of a Borrower's
Obligations or other liabilities of a Borrower and exchange, enforce, waive and
release any such security or collateral; (iv) apply such security or collateral
and direct the order or manner of sale thereof as Lender, in its sole
discretion, may determine; and (v) settle, release, compromise, collect or
otherwise liquidate a Borrower's Obligations and any security or collateral
therefor in any manner, without affecting or impairing the obligations of the
other Borrowers. Lender shall have the exclusive right to determine the time and
manner of application of any payments or credits, whether received from a
Borrower or any other source, and such determination shall be binding on such
Borrower. All such payments and credits may be applied, reversed and reapplied,
in whole or in part, to any of a Borrower's Obligations as Lender shall
determine in its sole discretion without affecting the validity or
enforceability of the Obligations of the other Borrowers.

                  (g) Each Borrower hereby agrees that, except as hereinafter
provided, its obligations hereunder shall be unconditional, irrespective of (i)
the absence of any attempt to collect a Borrower's Obligations from any Borrower
or any guarantor or other action to enforce the same; (ii) the waiver or consent
by Lender with respect to any provision of any instrument evidencing Borrowers'
Obligations, or any part thereof, or any other agreement heretofore, now or
hereafter executed by a Borrower and delivered to Lender; (iii) failure by
Lender to take any steps to perfect and maintain its security interest in, or to
preserve its rights to, any security or collateral for Borrowers' Obligations;
(iv) the institution of any proceeding under the Bankruptcy Code, or any similar
proceeding, by or against a Borrower or Lender's election in any such proceeding
of the application of Section 1111(b)(2) of the Bankruptcy Code; (v) any
borrowing or grant of a security interest by any Borrower as
debtor-in-possession under Section 364 of the Bankruptcy Code; (vi) the
disallowance, under Section 502 of the Bankruptcy Code, of all or any portion of
Lender's claim(s) for repayment of any of Borrowers' Obligations; or (vii) any
other circumstance which might otherwise constitute a legal or equitable
discharge or defense of a guarantor.

                  (h) Until the Obligations of Lender have been paid in full, no
payment made by or for the account of a Borrower, including, without
limitations, (i) a payment made by such Borrower on behalf of another Borrower's
Obligations or (ii) a payment made by any other person under any guaranty, shall
entitle such Borrower, by subrogation or otherwise, to any payment from such


                                       40
<PAGE>

other Borrower or from or out of such other Borrower's property and such
Borrower shall not exercise any right or remedy against such other Borrower or
any property of such other Borrower by reason of any performance of such
Borrower of its joint and several obligations hereunder.

         19. RELEASES; INDEMNITIES.

         (a) To the fullest extent permitted by applicable law, in consideration
of Lender's entering into this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which Borrower hereby
acknowledges, Borrower, on its own behalf and on behalf of its successors
(including, without limitation, any receiver or trustee acting on behalf of
Borrower and any debtor-in-possession with respect to Borrower), assigns,
subsidiaries and Affiliates (collectively, the "Releasors"), hereby forever
release, discharge and acquit Lender and its parents, subsidiaries,
shareholders, Affiliates, partners, trustees, officers, employees, directors,
agents and attorneys and their respective successors, heirs and assigns
(collectively, the "Releasees") from any and all claims, demands, liabilities,
responsibilities, disputes, causes, damages, actions and causes of actions
(whether at law or in equity) indebtedness and obligations (collectively,
"Claims") of every type, kind, nature, description or character, including,
without limitation, any so-called "lender liability" claims or defenses, and
irrespective of how, why or by reason of what facts, whether such Claims have
heretofore arisen, are now existing or hereafter arise, or which could, might or
be claimed to exist, of whatever kind or nature, whether known or unknown,
suspected or unsuspected, liquidated or unliquidated, matured or unmatured,
fixed or contingent, each as though fully set forth herein at length, which may
in any way arise out of, are connected with or in any way relate to actions or
omissions which occurred on or prior to the date hereof with respect to
Borrower, this Agreement, the Obligations, any Collateral, the Prior Agreements,
any other Loan Document and any third parties liable in whole or in part for the
Obligations, other than such Claims arising out of the gross negligence or
willful misconduct of a Releasee. This provision shall survive and continue in
full force and effect whether or not Borrower shall satisfy all other provisions
of this Agreement or the Loan Documents, including payment in full of the
Obligations.

         (b) Each of the Releasors further agrees to indemnify the Releasees and
hold the Releasees harmless from and against any and all such Claims (as such
term is defined in the immediately preceding paragraph) which may be brought
against any of the Releasees on behalf of any entity or Person, including,
without limitation, officers, directors, agents, trustees, creditors, partners
or shareholders of any of the Releasors, whether threatened or initiated,
asserting any claim for legal or equitable remedy under any statutes, regulation
or common law principle arising from or in connection with the negotiation,
preparation, execution, delivery, performance, administration and enforcement of
this Agreement or any other Loan Document, the Obligations, any Collateral or
the Prior Agreements, other than such Claims arising out of the gross negligence
or willful misconduct of a Releasee. The foregoing indemnity shall survive the
payment in full of the Obligations and the termination of this Agreement and the
other Loan Documents.

                                       41
<PAGE>

         20. NOTICE.

         All written notices and other written communications with respect to
this Agreement shall be sent by ordinary, certified or overnight mail, by
telecopy or delivered in person, and in the case of Lender shall be sent to it
at 233 South Wacker Drive, Suite 5350, Chicago, Illinois 60606, Attention: Chief
Credit Officer, facsimile number: (312) 334-4450, and in the case of Borrower
shall be sent to it at its principal place of business set forth on SCHEDULE
11(b) hereto or as otherwise directed by Borrower in writing. All notices shall
be deemed received upon actual receipt thereof or refusal of delivery.

         21. CHOICE OF GOVERNING LAW; CONSTRUCTION; FORUM SELECTION.

         This Agreement and the Other Agreements are submitted by Borrower to
Lender for Lender's acceptance or rejection at Lender's principal place of
business as an offer by Borrower to borrow monies from Lender now and from time
to time hereafter, and shall not be binding upon Lender or become effective
until accepted by Lender, in writing, at said place of business. If so accepted
by Lender, this Agreement and the Other Agreements shall be deemed to have been
made at said place of business. THIS AGREEMENT AND THE OTHER AGREEMENTS SHALL BE
GOVERNED AND CONTROLLED BY THE INTERNAL LAWS OF THE STATE OF ILLINOIS AS TO
INTERPRETATION, ENFORCEMENT, VALIDITY, CONSTRUCTION, EFFECT, AND IN ALL OTHER
RESPECTS, INCLUDING, WITHOUT LIMITATION, THE LEGALITY OF THE INTEREST RATE AND
OTHER CHARGES, BUT EXCLUDING PERFECTION OF THE SECURITY INTERESTS IN COLLATERAL
LOCATED OUTSIDE OF THE STATE OF ILLINOIS, WHICH SHALL BE GOVERNED AND CONTROLLED
BY THE LAWS OF THE RELEVANT JURISDICTION IN WHICH SUCH COLLATERAL IS LOCATED. If
any provision of this Agreement shall be held to be prohibited by or invalid
under applicable law, such provision shall be ineffective only to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provision or remaining provisions of this Agreement.

         To induce Lender to accept this Agreement, Borrower irrevocably agrees
that, subject to Lender's sole and absolute election, ALL ACTIONS OR PROCEEDINGS
IN ANY WAY, MANNER OR RESPECT, ARISING OUT OF OR FROM OR RELATED TO THIS
AGREEMENT, THE OTHER AGREEMENTS OR THE COLLATERAL SHALL BE LITIGATED IN COURTS
HAVING SITUS WITHIN THE CITY OF CHICAGO, STATE OF ILLINOIS. BORROWER HEREBY
CONSENTS AND SUBMITS TO THE JURISDICTION OF ANY LOCAL, STATE OR FEDERAL COURTS
LOCATED WITHIN SAID CITY AND STATE. BORROWER HEREBY WAIVES PERSONAL SERVICE OF
ANY AND ALL PROCESS AND AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE UPON
SUCH BORROWER BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED,
ADDRESSED TO BORROWER AT THE ADDRESS SET FORTH FOR NOTICE IN THIS AGREEMENT AND
SERVICE SO MADE SHALL BE COMPLETE TEN (10) DAYS AFTER THE SAME HAS BEEN POSTED.
BORROWER HEREBY WAIVES ANY RIGHT IT MAY HAVE TO TRANSFER OR CHANGE THE VENUE OF
ANY LITIGATION BROUGHT AGAINST BORROWER BY LENDER IN ACCORDANCE WITH THIS
SECTION.

                                       42
<PAGE>

         22. MODIFICATION AND BENEFIT OF AGREEMENT.

         This Agreement and the Other Agreements may not be modified, altered or
amended except by an agreement in writing signed by Borrower or such other
Person who is a party to such Other Agreement and Lender. Borrower may not sell,
assign or transfer this Agreement, or the Other Agreements or any portion
thereof, including, without limitation, Borrower's rights, titles, interest,
remedies, powers or duties hereunder and thereunder. Borrower hereby consents to
Lender's sale, assignment, transfer, pledge or other disposition, at any time
and from time to time hereafter, of this Agreement, or the Other Agreements, or
of any portion thereof, or to Lender granting participations in the Obligations
and related Loan Documents, including, without limitation, Lender's rights,
titles, interest, remedies, powers and/or duties. Borrower agrees that it shall
execute and deliver such documents as Lender may request in connection with the
foregoing. Borrower further consents to the pledge or collateral assignment and
grant of a security interest, by Lender, in connection with its' own financing,
including all rights, benefits, warranties, representations, covenants,
indemnities and remedies, and all proceeds of the foregoing, contained in this
Agreement and any of the Other Agreements.

         23. HEADINGS OF SUBDIVISIONS.

         The headings of subdivisions in this Agreement are for convenience of
reference only, and shall not govern the interpretation of any of the provisions
of this Agreement.

         24. POWER OF ATTORNEY.

         Borrower acknowledges and agrees that its appointment of Lender as its
attorney and agent-in-fact for the purposes specified in this Agreement is an
appointment coupled with an interest and shall be irrevocable until all of the
Obligations are satisfied and paid in full and this Agreement is terminated.

         25. CONFIDENTIALITY.

         Lender hereby agrees to use commercially reasonable efforts to assure
that any and all information relating to Borrower which is (i) furnished by
Borrower to Lender (or to any affiliate of Lender); and (ii) non-public,
confidential or proprietary in nature shall be kept confidential by Lender or
such affiliate in accordance with applicable law; provided, however, that such
information and other credit information relating to Borrower may be distributed
by Lender or such affiliate to Lender's or such affiliate's directors, officers,
employees, attorneys, affiliates, assignees, participants, auditors, agents and
regulators, and upon the order of a court or other governmental agency having
jurisdiction over Lender or such affiliate, to any other party, as long as such
person or entity has been informed of Lender's confidentiality obligation
hereunder and has agreed to abide by its terms. Borrower and Lender further
agree that this provision shall survive the termination of this Agreement.
Notwithstanding the foregoing, Borrower hereby consents to Lender publishing a
tombstone or similar advertising material relating to the financing transaction
contemplated by this Agreement.

                                       43
<PAGE>

         26. BROKERAGE FEES.

         Borrower represents and warrants to Lender that, with respect to the
financing transaction contemplated herein, no Person (other than Roth Capital
Partners, LLC) is entitled to any brokerage fee or other commission and Borrower
agrees to indemnify and hold Lender harmless against any and all such claims.

         27. PUBLICITY.

         Lender is hereby authorized to issue appropriate press releases and to
cause a tombstone to be published announcing the consummation of this
transaction and the aggregate amount thereof.

         28. LIMITATION OF ACTIONS.

         Borrower agrees that any claim or cause of action by Borrower against
Lender, or any of Lender's directors, officers, employees, agents, accountants
or attorneys, based upon, arising from, or relating to this Agreement, or any
other present or future agreement, or any other transaction contemplated hereby
or thereby or relating hereto or thereto, or any other matter, cause or thing
whatsoever, whether or not relating hereto or thereto, occurred, done, omitted
or suffered to be done by Lender, or by Lender's directors, officers, employees,
agents, accountants or attorneys, whether sounding in contract or in tort or
otherwise, shall be barred unless asserted by Borrower by the commencement of an
action or proceeding in a court of competent jurisdiction by the filing of a
complaint within one (1) year after the first act, occurrence or omission upon
which such claim or cause of action, or any part thereof, is based and service
of a summons and complaint on an officer of Lender or any other Person
authorized to accept service of process on behalf of Lender, within thirty (30)
days thereafter. Borrower agrees that such one-year period of time is a
reasonable and sufficient time for Borrower to investigate and act upon any such
claim or cause of action. The one-year period provided herein shall not be
waived, tolled, or extended except by a specific written agreement of Lender.
This provision shall survive any termination of this Agreement or any other
agreement.

         29. LIABILITY.

         Neither Lender nor any Lender Affiliate shall be liable for any
indirect, special, incidental or consequential damages in connection with any
breach of contract, tort or other wrong relating to this Agreement or the
Obligations or the establishment, administration or collection thereof
(including without limitation damages for loss of profits, business
interruption, or the like), whether such damages are foreseeable or
unforeseeable, even if Lender has been advised of the possibility of such
damages. Neither Lender, nor any Lender Affiliate shall be liable for any
claims, demands, losses or damages, of any kind whatsoever, made, claimed,
incurred or suffered by the Borrower through the ordinary negligence of Lender,
or any Lender Affiliate.

                                       44
<PAGE>

         30. COUNTERPARTS.

         This Agreement, any of the Other Agreements, and any amendments,
waivers, consents or supplements may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which, when so
executed and delivered, shall be deemed an original, but all of which
counterparts together shall constitute but one agreement.

         31. ELECTRONIC SUBMISSIONS.

         Upon not less than thirty (30) days' prior written notice (the
"APPROVED ELECTRONIC FORM NOTICE"), Lender may permit or require that any of the
documents, certificates, forms, deliveries or other communications, authorized,
required or contemplated by this Agreement or the Other Agreements be submitted
to Lender in "APPROVED ELECTRONIC FORM" (as hereafter defined), subject to any
reasonable terms, conditions and requirements in the applicable Approved
Electronic Forms Notice. For purposes hereof, "ELECTRONIC FORM" means e-mail,
e-mail attachments, data submitted on web-based forms or any other communication
method that delivers machine readable data or information to Lender, and
"APPROVED ELECTRONIC FORM" means an Electronic Form that has been approved in
writing by Lender (which approval has not been revoked or modified by Lender)
and sent to Borrower in an Approved Electronic Form Notice. Except as otherwise
specifically provided in the applicable Approved Electronic Form Notice, any
submissions made in an applicable Approved Electronic Form shall have the same
force and effect that the same submissions would have had if they had been
submitted in any other applicable form authorized, required or contemplated by
this Agreement or the Other Agreements.

         32. WAIVER OF JURY TRIAL; OTHER WAIVERS.

                  (a) BORROWER AND LENDER EACH HEREBY WAIVES ALL RIGHTS TO TRIAL
BY JURY IN ANY ACTION OR PROCEEDING WHICH PERTAINS DIRECTLY OR INDIRECTLY TO
THIS AGREEMENT, ANY OF THE OTHER AGREEMENTS, THE OBLIGATIONS, THE COLLATERAL,
ANY ALLEGED TORTUOUS CONDUCT BY BORROWER OR LENDER OR WHICH, IN ANY WAY,
DIRECTLY OR INDIRECTLY, ARISES OUT OF OR RELATES TO THE RELATIONSHIP BETWEEN
BORROWER AND LENDER. IN NO EVENT SHALL LENDER BE LIABLE FOR LOST PROFITS OR
OTHER SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES.

                  (b) Borrower hereby waives demand, presentment, protest and
notice of nonpayment, and further waives the benefit of all valuation, appraisal
and exemption laws.

                  (c) Borrower hereby waives the benefit of any law that would
otherwise restrict or limit Lender or any affiliate of Lender in the exercise of
its right, which is hereby acknowledged and agreed to, to set-off against the
Obligations, without notice at any time hereafter, any indebtedness, matured or
unmatured, owing by Lender or such affiliate of Lender to Borrower, including,
without limitation, any deposit account at Lender or such affiliate.

                  (d) BORROWER HEREBY WAIVES ALL RIGHTS TO NOTICE AND HEARING OF
ANY KIND PRIOR TO THE EXERCISE BY LENDER OF ITS RIGHTS TO REPOSSESS THE
COLLATERAL OF BORROWER WITHOUT JUDICIAL PROCESS OR TO REPLEVY, ATTACH OR LEVY


                                       45
<PAGE>

UPON SUCH COLLATERAL, PROVIDED THAT IN THE EVENT LENDER SEEKS TO ENFORCE ITS
RIGHTS HEREUNDER BY JUDICIAL PROCESS OR SELF-HELP, LENDER SHALL PROVIDE BORROWER
WITH SUCH NOTICES AS ARE REQUIRED BY LAW.

                  (e) Lender's failure, at any time or times hereafter, to
require strict performance by Borrower of any provision of this Agreement or any
of the Other Agreements shall not waive, affect or diminish any right of Lender
thereafter to demand strict compliance and performance therewith. Any suspension
or waiver by Lender of an Event of Default under this Agreement or any default
under any of the Other Agreements shall not suspend, waive or affect any other
Event of Default under this Agreement or any other default under any of the
Other Agreements, whether the same is prior or subsequent thereto and whether of
the same or of a different kind or character. No delay on the part of Lender in
the exercise of any right or remedy under this Agreement or any Other Agreement
shall preclude other or further exercise thereof or the exercise of any right or
remedy. None of the undertakings, agreements, warranties, covenants and
representations of Borrower contained in this Agreement or any of the Other
Agreements and no Event of Default under this Agreement or default under any of
the Other Agreements shall be deemed to have been suspended or waived by Lender
unless such suspension or waiver is in writing, signed by a duly authorized
officer of Lender and directed to Borrower specifying such suspension or waiver.

                             SIGNATURE PAGES FOLLOW



                                       46
<PAGE>

                      SIGNATURE PAGE TO TERM LOAN AGREEMENT



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



                                             CRDENTIA CORP.,
                                             a Delaware corporation


                                             By: /S/ JAMES D. DURHAM
                                                -------------------
                                                James D. Durham
                                                Chief Executive Officer


                                             BAKER ANDERSON CHRISTIE, INC.,
                                             a California corporation


                                             By: /S/ JAMES D. DURHAM
                                                 -------------------
                                                 James D. Durham
                                                 Chief Executive Officer
                                                 NURSES NETWORK, INC.,
                                                 California corporation


                                             By: /S/ JAMES D. DURHAM
                                                 -------------------
                                                 James D. Durham
                                                 Chief Executive Officer


                                             NEW AGE STAFFING, INC.,
                                             a Delaware corporation


                                             By:  /S/ JAMES D. DURHAM
                                                  --------------------
                                                  James D. Durham
                                                  Chief Executive Officer


<PAGE>


                      SIGNATURE PAGE TO TERM LOAN AGREEMENT

                                                PSR NURSES, LTD.,
                                                a Texas limited partnership

                                                By: PSR NURSE RECRUITING, INC.
                                                Its: General Partner

                                                By: /S/ JAMES D. DURHAM
                                                    ----------------------------
                                                    James D. Durham
                                                    Chief Executive Officer


                                                PSR NURSE RECRUITING, INC.,
                                                a Texas corporation

                                                By: /S/ JAMES D. DURHAM
                                                    ----------------------------
                                                    James D. Durham
                                                    Chief Executive Officer


                                                 PSR NURSES HOLDINGS CORP.,
                                                 a Texas corporation

                                                 By: /S/ JAMES D. DURHAM
                                                    ----------------------------
                                                     James D. Durham
                                                     Chief Executive Officer

                                                 CRDE CORP.,
                                                 a Delaware corporation


                                                 By: /S/ JAMES D. DURHAM
                                                   ----------------------------
                                                 Name:   JAMES D. DURHAM
                                                    ----------------------------
                                                 Title:  CHIEF EXECUTIVE OFFICER
                                                    ----------------------------



                                                 AHHC ACQUISITION CORPORATION,
                                                 a Delaware corporation

                                                 By: /S/ JAMES D. DURHAM
                                                    ----------------------------
                                                 Name:   JAMES D. DURHAM
                                                    ----------------------------
                                                 Title:  CHIEF EXECUTIVE OFFICER
                                                    ----------------------------



<PAGE>


                                                 CPS ACQUISITION CORPORATION,
                                                 a Texas corporation


                                                 By:  /S/ WILLIAM S. LEFTWICH
                                                    ----------------------------
                                                 Name:
                                                 Title:



<PAGE>


                      SIGNATURE PAGE TO TERM LOAN AGREEMENT





                                            BRIDGE OPPORTUNITY FINANCE, LLC,
                                            a Delaware limited liability company


                                            By:  /S/ RANDY ABRAHAMS
                                                 ----------------------------
                                                 Randy Abrahams
                                                 Chief Executive Officer



<PAGE>

                              ANNEX I-DEFINED TERMS

         "ACCOUNT" shall mean all present and future accounts and payment
intangibles (in respect of Staffing Services), as such terms are defined in the
UCC, of Borrower, including, without limitation, all obligations for the payment
of money (including, without limitation, all amounts due and owing from
Government Authorities to the extent such amounts are deemed to be or construed
to be general intangibles) arising out of the sale, lease, license or other
disposition of goods or other Property or the rendering of services and all
proceeds thereof.

         "ACCOUNT DEBTOR" shall mean, with respect to any Account, the Person
obligated to pay under such Account. The term "Account Debtor" specifically
includes, without limitation, any insurer or Government Reimbursement Program.

         "ACQUISITION" shall mean the purchase by Crdentia (or another Borrower)
of all of the issued and outstanding equity interests or substantially all of
the operating assets of any Person in the healthcare staffing industry pursuant
to the Acquisition Documents.

         "ACQUISITION DOCUMENTS" shall mean all agreements, instruments and
documents executed or delivered in connection with an Acquisition.

         "ACQUISITION SUBSIDIARY" shall mean CRDE Corp., the Subsidiary of
Crdentia formed to hold all Target entities acquired in Permitted Acquisitions,
and shall mean, collectively, CRDE Corp. and each of its direct or indirect
subsidiaries.

         "ACQUISITION SUBSIDIARY ACCOUNT DEBTOR COLLECTION LOCKBOX ACCOUNT"
shall mean an account or accounts maintained at the Lockbox Bank into which all
collections of Accounts of Acquisition Subsidiary are paid directly; the
Acquisition Subsidiary Account Debtor Collection Lockbox Account shall be an
account in the name of Lender (or Borrower for the sole benefit of Lender), and
shall be the sole and exclusive property of Lender.

         "ACQUISITION SUBSIDIARY DEBT" shall mean and include, collectively (a)
the outstanding Revolving Loans to Acquisition Subsidiary, PLUS (b) the
aggregate principal amount of the Term Loan then outstanding, PLUS (c) all
Capitalized Lease Obligations of Acquisition Subsidiary, PLUS (d) all other
Indebtedness for Borrowed Money of Acquisition Subsidiary, excluding the
Subordinated Debt.

         "ACQUISITION SUBSIDIARY EBITDA" shall mean, with respect to any period,
Acquisition Subsidiary's, on a consolidated basis, net income after taxes for
such period (excluding any after-tax gains or losses and excluding other
after-tax extraordinary gains or losses) PLUS interest expense, income tax
expense, depreciation and amortization for such period, PLUS or MINUS any other
non-cash charges or gains which have been subtracted or added in calculating net
income after taxes for such period. In the event that the period of measurement
is less than 12 months, the Acquisition Subsidiary EBITDA shall be determined on
an annualized basis. Upon each Permitted Acquisition and the addition of a
Target to the consolidated financial reporting of the Acquisition Subsidiary,
the portion of the Acquisition Subsidiary EBITDA attributable to the Target
shall be calculated on an annualized basis, until such Target has been a part of
the Acquisition Subsidiary for 12 months.

                                   Annex I - 1

<PAGE>

         "ACQUISITION SUBSIDIARY EXCESS AVAILABILITY" shall mean, as of any date
of determination by BHF (or if the Revolving Loan Agreement has been replaced by
a Replacement Revolving Loan Agreement, under such Replacement Revolving Loan
Agreement), the excess, if any, of the Revolving Borrowing Base Amount
attributable to the Acquisition Subsidiary less the sum of the outstanding
Revolving Loans to the Acquisition Subsidiary, as of the close of business on
such date and assuming, for purposes of calculation, that all accounts payable
of the Acquisition Subsidiary which remain unpaid more than thirty (30) days
after the due dates thereof (except for professional fees and amounts contested
in good faith) as of the close of business on such date are treated as
additional Revolving Loans outstanding on such date.

          "ACQUISITION SUBSIDIARY TERM LOAN DEBT" shall mean and include,
collectively, the aggregate principal amount of the Term Loan outstanding
hereunder.

         "AFFILIATE" shall mean any Person (i) which directly or indirectly
through one or more intermediaries, controls, is controlled by, or is under
common control with, Borrower, (ii) which beneficially owns or holds five
percent (5%) or more of the voting control or equity interests of Borrower, or
(iii) five percent (5%) or more of the voting control or equity interests of
which is beneficially owned or held by Borrower.

         "ARIZONA ACQUISITION SUBSIDIARY" means Arizona Home Health Care /
Private Duty, Inc., an Arizona corporation, including all its successors and
assigns.

         "ARIZONA ACQUISITION SUBSIDIARY EXCESS AVAILABILITY" shall mean, as of
any date of determination by BHF (or if the Revolving Loan Agreement has been
replaced by a Replacement Revolving Loan Agreement, under such Replacement
Revolving Loan Agreement), the excess, if any, of the Revolving Borrowing Base
Amount attributable to the Arizona Acquisition Subsidiary less the sum of the
outstanding Revolving Loans to the Arizona Acquisition Subsidiary, as of the
close of business on such date and assuming, for purposes of calculation, that
all accounts payable of the Arizona Acquisition Subsidiary which remain unpaid
more than thirty (30) days after the due dates thereof (except for professional
fees and amounts contested in good faith) as of the close of business on such
date are treated as additional Revolving Loans outstanding on such date.

         "AUTHORIZED OFFICER" shall mean, as applied to any Person, any
individual holding the position of chairman of the board (if an officer), chief
executive officer, president or one of its vice presidents (or the equivalent
thereof), and such Person's chief financial officer or treasurer.

         "BHF" shall mean Bridge Healthcare Finance, LLC. Notwithstanding the
foregoing, in the event that the Revolving Loan Agreement has been replaced by a
Replacement Revolving Loan Agreement, BHF shall mean the lender or lenders (or,
if a syndicated facility, the agent and lenders) under such Replacement
Revolving Loan Agreement.

         "BORROWED MONEY" shall mean, as applied to any Person, without
duplication, (a) all Indebtedness of such Person, (b) all debt of such Person,
whether or not evidenced by bonds, debentures, notes or similar instruments, (c)
all obligations of such Person as lessee under Capital Leases which have been or
should be recorded as liabilities on a balance sheet of such Person in
accordance with GAAP, (d) all obligations of such Person to pay the deferred
purchase price of property or services (excluding trade accounts payable in the
ordinary course of business), (e) all indebtedness secured by a Lien on the

                                  Annex I - 2
<PAGE>

property of such Person, whether or not such indebtedness shall have been
assumed by such Person; provided that if such Person has not assumed or
otherwise become liable for such indebtedness, such indebtedness shall be
measured at the fair market value of such property securing such indebtedness at
the time of determination, (f) all obligations, contingent or otherwise, with
respect to the face amount of all letters of credit (whether or not drawn),
bankers' acceptances and similar obligations issued for the account of such
Person (including the Letters of Credit), (g) all hedging, swap, or similar
obligations of such Person, (h) all Contingent Liabilities of such Person and
(i) all debt of any partnership, limited liability company, or other entity
(only if such partnership, limited liability company or other entity is a
Borrower) of which such Person is a majority owner.

         "BORROWER" and "BORROWERS" shall mean, individually and collectively,
each of the Borrowers named in the first paragraph hereof provided that each
reference to "Borrower" herein shall mean each Borrower individually and all
Borrowers collectively, as the context requires.

         "BORROWING AGENT" shall mean Crdentia.

         "BUSINESS DAY" shall mean any day other than a Saturday, a Sunday or
any day that banks in Chicago, Illinois are required or permitted to close.

         "CAPITAL EXPENDITURES" shall mean with respect to any period, the
aggregate of all expenditures (whether paid in cash or accrued as liabilities
and including Capital Lease Obligations) by Borrowers during such period that
are required by GAAP, consistently applied, to be included in or reflected by
the property, plant and equipment or similar fixed asset accounts (or intangible
accounts subject to amortization) on the balance sheet of Borrowers.

         "CAPITAL LEASE" shall mean, as to any Person, a lease of any interest
in any kind of property or asset, whether real, personal or mixed, or tangible
or intangible, by such Person as lessee that is, or should be, recorded as a
"capital lease" on the balance sheet of such Person prepared in accordance with
GAAP.

         "CAPITAL LEASE OBLIGATIONS" shall mean, as to any Person, indebtedness
represented by obligations under a Capital Lease that is required to be
capitalized for financial reporting purposes in accordance with GAAP.

         "CARE PROS ACQUISITION SUBSIDIARY" means Care Pros Staffing, Inc., a
Texas corporation, including all its successors and assigns.

         "CARE PROS ACQUISITION SUBSIDIARY EXCESS AVAILABILITY" shall mean, as
of any date of determination by BHF (or if the Revolving Loan Agreement has been
replaced by a Replacement Revolving Loan Agreement, under such Replacement
Revolving Loan Agreement), the excess, if any, of the Revolving Borrowing Base
Amount attributable to the Care Pros Acquisition Subsidiary less the sum of the
outstanding Revolving Loans to the Care Pros Acquisition Subsidiary, as of the
close of business on such date and assuming, for purposes of calculation, that
all accounts payable of the Care Pros Acquisition Subsidiary which remain unpaid
more than thirty (30) days after the due dates thereof (except for professional
fees and amounts contested in good faith) as of the close of business on such
date are treated as additional Revolving Loans outstanding on such date.

                                  Annex I - 3
<PAGE>

         "CLOSING DATE" shall mean August 31, 2004.

         "CLOSING DATE PERMITTED ACQUISITIONS" shall mean the Permitted
Acquisition by Borrower of (i) Arizona Home Health Care / Private Duty, Inc. and
(ii) Care Pros Staffing, Inc.

         "CLOSING DOCUMENT LIST" shall have the meaning set forth in SECTION 17
hereof.

         "COLLATERAL" shall mean all of the property of Borrower described in
SECTION 5 hereof, together with all other real or personal property of any
Obligor or any other Person now or hereafter pledged to Lender to secure, either
directly or indirectly, repayment of any of the Obligations.

         "CONCENTRATION ACCOUNT" shall have the meaning set forth in Section
8(a) of the Revolving Loan Agreement.

         "CONTINGENT LIABILITY" shall mean any agreement, undertaking or
arrangement by which any Person guarantees, endorses or otherwise becomes or is
contingently liable upon (by direct or indirect agreement, contingent or
otherwise, to provide funds for payment, to supply funds to or otherwise to
invest in a debtor, or otherwise to assure a creditor against loss) any
Indebtedness, obligation or other liability of any other Person (other than by
endorsements of instruments in the course of collection), or guarantees the
payment of dividends or other distributions upon the shares of any other Person.
The amount of any Contingent Liability shall (subject to any limitation set
forth herein) be deemed to be the outstanding principal amount (or maximum
permitted principal amount, if larger) of the Indebtedness, obligation or other
liability guaranteed or supported thereby.

         "CRDENTIA PROPER BORROWERS" shall mean Crdentia and all of its
Subsidiaries, except for Acquisition Subsidiary.

         "CRDENTIA PROPER CONSOLIDATED BASIS" shall mean the financial reporting
by the Borrowers of Crdentia and all of its Subsidiaries, except for Acquisition
Subsidiary, on a consolidated basis.

         "DEFAULT" shall mean an event which, with the giving of notice or
passage of time or both, would constitute an Event of Default.

         "DERIVATIVE OBLIGATIONS" shall mean every obligation of a Person under
any forward contract, futures contract, exchange contract, swap, option or other
financing agreement or arrangement (including, without limitation, caps, floors,
collars and similar agreement), the value of which is dependent upon interest
rates, currency exchange rates, commodities or other indices.

         "EBITDA" shall mean, with respect to any period, Borrowers', on a
consolidated basis, net income after taxes for such period (excluding any
after-tax gains or losses and excluding other after-tax extraordinary gains or
losses) PLUS interest expense, income tax expense, depreciation and amortization
for such period, PLUS or MINUS any other non-cash charges or gains which have
been subtracted or added in calculating net income after taxes for such period.

                                  Annex I - 4
<PAGE>

         "ELIGIBLE ACCOUNT" shall have the meaning set forth in the Revolving
Loan Agreement or, if the Revolving Loan Agreement has been replaced by a
Replacement Revolving Loan Agreement, as set forth in the Replacement Revolving
Loan Agreement.

         "ENVIRONMENTAL LAWS" shall mean all federal, state, district, local and
foreign laws, rules, regulations, ordinances, and consent decrees relating to
health, safety, hazardous substances, pollution and environmental matters, as
now or at any time hereafter in effect, applicable to Borrower's business or
facilities owned or operated by Borrower, including laws relating to emissions,
discharges, releases or threatened releases of pollutants, contamination,
chemicals, or hazardous, toxic or dangerous substances, materials or wastes into
the environment (including, without limitation, ambient air, surface water,
ground water, land surface or subsurface strata) or otherwise relating to the
generation, manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials.

         "ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended, modified or restated from time to time.

         "EVENT OF DEFAULT" shall have the meaning specified in SECTION 15
hereof.

         "EXCESS AVAILABILITY" shall mean, as of any date of determination by
BHF (or, if the Revolving Loan Agreement has been replaced by a Replacement
Revolving Loan Agreement, under the Replacement Revolving Loan Agreement), the
excess, if any, of the lesser of (i) the Maximum Revolving Loan Limit less the
sum of the outstanding Revolving Loans and (ii) the Revolving Borrowing Base
Amount less the sum of the outstanding Revolving Loans, in each case as of the
close of business on such date and assuming, for purposes of calculation, that
all accounts payable of the Borrower which remain unpaid more than thirty (30)
days after the due dates thereof (except for professional fees and amounts
contested in good faith) as of the close of business on such date are treated as
additional Revolving Loans outstanding on such date.

         "FISCAL YEAR" shall mean each twelve (12) month accounting period of
Borrower, which ends on December 31st of each year.

         "GAAP" shall mean generally accepted accounting principles, using the
accrual basis of accounting and consistently applied with prior periods to the
extent required under SECTION 1(B); provided, however, that GAAP with respect to
any interim financial statements or reports shall be deemed subject to fiscal
year-end adjustments and footnotes made in accordance with GAAP.

         "GOVERNMENTAL AUTHORIZATION" means any permit, license, registration,
authorization, certificate, accreditation, plan, directive, consent order or
consent decree of or from, or notice to, any Government Authority.

         "GOVERNMENT AUTHORITY" means any federal, state, District of Columbia,
municipal, national or other government, governmental department, commission,
board, bureau, court, agency or instrumentality or political subdivision thereof
or any entity or officer exercising executive, legislative, judicial, regulatory
or administrative functions of or pertaining to any government or any court, in
each case whether associated with a state of the United States, the United
States, or a foreign entity or government.

                                  Annex I - 5
<PAGE>

         "GOVERNMENT REIMBURSEMENT PROGRAM" shall mean (i) the Medicare program
established under the Title XVIII of the Federal Social Security Act, the
Federal Employees Health Benefit Program under 5 U.S.C. ss.ss. 8902 et seq., the
TRICARE program established by the Department of Defense under 10 U.S.C. ss.ss.
1071 et seq. or the Civilian Health and Medical Program of the Uniformed
Services under 10 U.S.C. ss.ss. 1079 and 1086, (ii) the Medicaid program of any
state or the District of Columbia acting pursuant to a health plan adopted
pursuant to Title XIX of the Federal Social Security Act or (iii) any agent,
administrator, intermediary or carrier for any of the foregoing.

         "HAZARDOUS MATERIALS" shall mean any hazardous, toxic or dangerous
substance, materials and wastes, including, without limitation, hydrocarbons
(including naturally occurring or man-made petroleum and hydrocarbons),
flammable explosives, asbestos, urea formaldehyde insulation, radioactive
materials, biological substances, polychlorinated biphenyls, pesticides,
herbicides and any other kind and/or type of pollutants or contaminants
(including, without limitation, materials which include hazardous constituents),
sewage, sludge, industrial slag, solvents and/or any other similar substances,
materials, or wastes and including any other substances, materials or wastes
that are, or become, regulated under any Environmental Law (including, without
limitation any that are, or become, classified as hazardous or toxic under any
Environmental Law).

         "HEALTHCARE REGULATIONS" means any and all current or future Laws
relating to HMOs, healthcare service providers, Government Reimbursement
Programs, Persons engaged in the Healthcare Service Business, healthcare-related
insurance companies, or any other similar Person and any rule, regulation,
directive, order or decision promulgated or issued pursuant thereto. Healthcare
Regulations shall include the Food, Drug and Cosmetic Act (21 U.S.C. ss. 301 et
seq.), federal anti-kickback statute (42 U.S.C. ss. 1320a-7b), the False Claims
Act (31 U.S.C. ss.ss. 3729 et seq.), the Health Insurance Portability and
Accountability Act of 1996 (Pub. L. No. 104-191, 110 Stat. 1936 (1996)) and the
federal physician self-referral laws (42 U.S.C. ss. 1395nn).

         "INDEBTEDNESS" of any Person shall mean, without duplication, (a) all
indebtedness of such Person for borrowed money, whether or not evidenced by
bonds, debentures, notes or similar instruments, (b) all Capital Lease
Obligations of such Person, (c) all obligations of such Person to pay the
deferred purchase price of property or services (excluding trade accounts
payable in the ordinary course of business), (d) all indebtedness secured by a
Lien on the property of such Person, whether or not such indebtedness shall have
been assumed by such Person, (e) all obligations, contingent or otherwise, with
respect to the face amount of all letters of credit (whether or not drawn) and
banker's acceptances issued for the account of such Person, (f) all Derivative
Obligations of such Person, (g) all Contingent Obligations, and (h) all
liabilities of any partnership or joint venture of which such Person is a
general partner or joint venturer.

         "INFORMATION CERTIFICATE" means the document attached hereto as EXHIBIT
C.

         "INTELLECTUAL PROPERTY" shall mean all past, present and future: trade
secrets (including, without limitation, customer lists), know-how and other
proprietary information; trademarks, Internet domain names, service marks, trade


                                  Annex I - 6
<PAGE>

dress, trade names, business names, designs, logos, slogans (and all
translations, adaptations, derivations and combinations of the foregoing),
indicia and other source and/or business identifiers, and the goodwill of the
business relating thereto and all registrations or applications for
registrations which have heretofore been or may hereafter be issued thereon
throughout the world; copyrights (including copyrights for computer programs)
and copyright registrations or applications for registrations which have
heretofore been or may hereafter be issued throughout the world and all tangible
property embodying the copyrights; unpatented inventions (whether or not
patentable); patent applications and patents; industrial designs, industrial
design applications and registered industrial designs; license agreements
related to any of the foregoing and income therefrom; books, records, writings,
computer tapes or disks, flow diagrams, specification sheets, computer software,
source codes, object codes, executable code, data, databases and other physical
manifestations, embodiments or incorporations of any of the foregoing; the right
to sue for all past, present and future infringements of any of the foregoing;
all other intellectual property; and all common law and other rights throughout
the world in and to all of the foregoing.

         "INTERCREDITOR AGREEMENT" shall mean any Intercreditor Agreement to be
executed by and among the lenders or lenders (or if a syndicated facility, agent
and the lenders) party to any Replacement Revolving Loan Agreement and Lender,
which Intercreditor Agreement shall be in form and substance acceptable to the
Lender.

         "LENDER AFFILIATE" shall mean Lender's directors, officers, employees,
agents, attorneys or any other Person or entity affiliated with or representing
Lender.

         "LIEN" shall mean any mortgage, pledge, claim, hypothecation, judgment
lien or similar legal process, title retention lien, or other lien or security
interest, including, without limitation, the interest of a vendor under any
conditional sale or other title retention agreement and the interest of a lessor
under a lease of any interest in any kind of property or asset, whether real,
personal or mixed, or tangible or intangible, that is, or should be, accounted
for as a Capital Lease.

         "LOAN DOCUMENTS" shall mean this Agreement and the Other Agreements.

         "LOANS" shall mean all loans and advances made by Lender to or on
behalf of Borrower hereunder or under the Revolving Loan Agreement or, if the
Revolving Loan Agreement has been replaced by a Replacement Revolving Loan
Agreement, under the Replacement Revolving Loan Agreement.

         "LOCKBOX" shall have the meaning specified in SUBSECTION 8(A) hereof.

         "LOCKBOX BANK" shall have the meaning specified in SUBSECTION 8(A)
hereof.

         "MAKEWELL AGREEMENT" means that certain Makewell Agreement executed by
MedCap Partners L.P., a Delaware limited partnership, dated as of the date
hereof in favor of the Lender, as the same may be amended, restated,
supplemented or otherwise modified from time to time.

         "MATERIAL ADVERSE EFFECT" shall mean a material adverse effect on the
business, property, assets, prospects, operations or condition, financial or
otherwise, of a Person.

                                  Annex I - 7
<PAGE>

         "MAXIMUM REVOLVING LOAN LIMIT" means the maximum commitments of BHF
under the Revolving Loan Agreement or, if the Revolving Loan Agreement is
replaced by a Replacement Revolving Loan Agreement, under such Replacement
Revolving Loan Agreement.

         "OBLIGATIONS" shall mean any and all obligations, liabilities and
Indebtedness of Borrower to Lender (other than Revolving Loan Obligations), or
to any parent, affiliate or subsidiary of Lender, of any and every kind and
nature, howsoever created, arising or evidenced and howsoever owned, held or
acquired, whether now or hereafter existing, whether now due or to become due,
whether primary, secondary, direct, indirect, absolute, contingent or otherwise
(including, without limitation, obligations of performance), whether several,
joint or joint and several, and whether arising or existing under written or
oral agreement or by operation of law.

         "OBLIGOR" shall mean Borrower and each other Person who is or shall
become primarily or secondarily liable for any of the Obligations.

         "OPERATING CASH FLOW" means, for any period, Borrower's net income or
loss (excluding the effect of any extraordinary gains or losses), determined in
accordance with GAAP, PLUS or MINUS each of the following items, to the extent
deducted from or added to the revenues of Borrower in the calculation of net
income or loss: (i) depreciation; (ii) amortization and other non-cash charges;
(iii) interest and fee expenses paid or accrued; (iv) total federal and state
income tax expense determined as the accrued liability of Borrower in respect of
such period, regardless of what portion of such expense has actually been paid
by Borrower during such period; and (v) gain or loss on the sale of property,
plant or equipment of Borrower; and (vi) management fees and other fees paid to
subordinating creditors to the extent permitted hereunder, and under the
applicable subordination agreement(s), but only to the extent any such item was
expensed in the calculation of net income and after deduction for each of (a)
federal and state income taxes, to the extent actually paid during such period;
(b) any non-cash income and gains from the sale of property; and (c) all actual
Capital Expenditures made during such period and not financed.

         "OTHER AGREEMENTS" shall mean all agreements, makewell agreements,
instruments and documents, other than this Agreement and the Revolving Loan
Documents, including, without limitation, guaranties, mortgages, trust deeds,
pledges, powers of attorney, consents, assignments, contracts, notices, security
agreements, leases, financing statements, subordination agreements, and all
other writings heretofore, now or from time to time hereafter executed by or on
behalf of Borrower or any other Person and delivered to Lender in connection
with the Obligations or the transactions contemplated hereby, as each of the
same may be amended, modified or supplemented from time to time.

         "PARENT" shall mean any Person now or at any time or times hereafter
owning or controlling (alone or with any other Person) at least a majority of
the issued and outstanding equity of Borrower and, if Borrower is a partnership,
the general partner of Borrower.

         "PBGC" shall have the meaning specified in SUBSECTION 12(B)(IV) hereof.

         "PERMITTED ACQUISITION" shall have the meaning set forth in Section
2(b) hereof.

                                  Annex I - 8
<PAGE>

         "PERMITTED LIENS" shall mean (i) statutory Liens of landlords,
carriers, warehousemen, processors, mechanics, materialmen or suppliers incurred
in the ordinary course of business and securing amounts not yet due or declared
to be due by the claimant thereunder in excess of fifteen (15) days or amounts
which are being contested in good faith and by appropriate proceedings and for
which Borrower has maintained adequate reserves; (ii) Liens in favor of Lender;
(iii) zoning restrictions and easements, licenses, covenants and other
restrictions affecting the use of real property that do not individually or in
the aggregate have a material adverse effect on Borrower's ability to use such
real property for its intended purpose in connection with Borrower's business;
(iv) Liens in connection with purchase money indebtedness and Capital Leases
otherwise permitted pursuant to this Agreement, provided, that such Liens attach
only to the assets the purchase of which was financed by such purchase money
indebtedness or which is the subject of such Capital Leases; (v) Liens set forth
on SCHEDULE 1; (vi) Liens specifically permitted by Lender in writing; (vii)
involuntary Liens securing amounts less than $50,000 and which are released or
for which a bond acceptable to Lender in its reasonable credit judgment,
determined in good faith, has been posted within ten (10) days of its creation;
(viii) Liens for taxes not yet due and payable or for taxes being contested in
good faith by appropriate proceedings and as to which the Borrower has deposited
with the Lender an amount sufficient in the Lender's sole discretion to pay such
taxes, together with all estimated interest and penalties in connection
therewith; and (ix) Liens in favor of BHF (including any such Liens granted in
connection with a Replacement Revolving Loan Agreement).

         "PERSON" shall mean any individual, sole proprietorship, partnership,
joint venture, trust, unincorporated organization, association, corporation,
limited liability company, institution, entity, party or foreign or United
States government (whether federal, state, county, city, municipal or
otherwise), including, without limitation, any instrumentality, division,
agency, body or department thereof.

         "PLAN" shall have the meaning specified in SUBSECTION 12(B)(IV) hereof.

         "PRIME RATE" shall mean the prime rate publicly announced by LaSalle
Bank, N.A., in effect from time to time.

         "PROPERTY" shall mean, with respect to any Person, any interest of such
Person in any kind of property or asset, whether real, personal or mixed, or
tangible or intangible, including capital stock in, and other securities of, any
other Person.

         "REVOLVING BORROWING BASE AMOUNT" shall have the meaning set forth in
the Revolving Loan Agreement. In the event that the Revolving Loan Agreement is
replaced by a Replacement Revolving Loan Agreement, "Revolving Borrowing Base
Amount" shall mean the maximum amount available for borrowing by Borrowers under
such Replacement Revolving Loan Agreement and such term is reasonably
satisfactory to the Lender.

         "REPLACEMENT REVOLVING LOAN AGREEMENT" shall mean any revolving loan or
credit agreement that replaces the Revolving Loan Agreement, and which is in
form and substance reasonably satisfactory to the Lender, in the event that the
Revolving Loan Obligations under the Revolving Loan Agreement are prepaid solely
as a result of the circumstances described in Section 10(e) of the Revolving
Loan Agreement.

                                  Annex I - 9
<PAGE>

         "REVOLVING LOAN AGREEMENT" shall have the meaning set forth in the
recitals hereto.

         "REVOLVING LOAN DOCUMENTS" shall mean the Revolving Loan Agreement, the
Revolving Pledge Agreement and all agreements, instruments and documents,
executed by or on behalf of Borrower or any other Person and delivered to BHF in
connection with the transactions contemplated by the Revolving Loan Agreement.
In the event that the Revolving Loan Agreement is replaced by a Replacement
Revolving Loan Agreement, "Revolving Loan Documents" shall mean the Replacement
Revolving Loan Agreement and all agreements, instruments and documents, which
Replacement Revolving Loan Agreement and all agreements, instruments and
documents shall each be in form and substance reasonably acceptable to the
Lender, executed by or on behalf of Borrower or any other Person and delivered
to the lenders thereunder in connection with the transactions contemplated by
the Replacement Revolving Loan Agreement.

         "REVOLVING LOAN OBLIGATIONS" shall mean all indebtedness and
obligations of every kind and nature of Borrowers in respect of the Revolving
Loan Documents.

         "REVOLVING LOANS" shall mean those certain Revolving Loans of BHF to
Borrowers pursuant to the Revolving Loan Agreement or any Replacement Revolving
Loan Agreement.

         "REVOLVING PLEDGE AGREEMENT" shall mean that certain Pledge Agreement,
dated as of June 16, 2004 by and among Crdentia and any other entity named as a
"Pledgor" thereunder, and BHF.

         "SELLER NOTES" shall mean, collectively, the notes listed on SCHEDULE
11(N) hereto and any other notes representing Subordinated Debt incurred as a
part of the purchase price of a Permitted Acquisition subject to a Subordination
Agreement acceptable to the Lender.

         "SENIOR DEBT SERVICE" means, for any period with respect to the
Crdentia Proper Borrowers, the sum of payments made or required to be made by
Borrower during such period for (i) interest only payments due on the Revolving
Loans facility, and (ii) interest and scheduled principal payments due on any
and all other Indebtedness for Borrowed Money excluding the Subordinated Debt.

         "STAFFING SERVICES" means arranging to provide healthcare-related
staffing services, long-term care or any business or activity that is reasonably
similar thereto or a reasonable extension, development or expansion thereof or
ancillary thereto.

         "SUBORDINATED DEBT" shall mean Indebtedness of Borrower or any
Subsidiary of Borrower that is subordinated to the Obligations in a manner
satisfactory to Lender, and contains terms, including, without limitation,
payment terms, satisfactory to Lender.

         "SUBORDINATION AGREEMENTS" shall mean, individually and collectively,
all subordination agreements, intercreditor agreements, consent and similar
agreements among either Borrower, Lender and any holder of Indebtedness, whether
entered into on or prior to the date hereof or from time to time hereafter,
together with all modifications, amendments and restatements of any of the
foregoing, including, without limitation, the Subordination Agreements listed on
SCHEDULE 11(n) hereto in respect of the Seller Notes existing on the Closing
Date.

                                  Annex I - 10
<PAGE>

         "SUBSIDIARY" shall mean any corporation of which more than fifty
percent (50%) of the outstanding capital stock having ordinary voting power to
elect a majority of the board of directors of such corporation (irrespective of
whether, at the time, stock of any other class of such corporation shall have or
might have voting power by reason of the happening of any contingency) is at the
time, directly or indirectly, owned by Borrower, or any partnership, joint
venture or limited liability company of which more than fifty percent (50%) of
the outstanding equity interests are at the time, directly or indirectly, owned
by Borrower or any partnership of which Borrower is a general partner.

         "TANGIBLE NET WORTH" shall have the meaning specified in SUBSECTION
14(A) hereof.

         "TARGET" shall mean, the entity which is the subject of an Acquisition.

         "TARGET PRO FORMA DEBT SERVICE" means, for any period, the sum of
payments that will be made or required to be made by the Acquisition Subsidiary
during such period for (i) interest, fees and scheduled principal payments due
on the Term Loans that will be made to the Acquisition Subsidiary in connection
with the Permitted Acquisition of such Target, and (ii) interest only payments
due on the Revolving Loans that will be made to the Acquisition Subsidiary
during such period (assuming that the maximum principal amount of Revolving
Loans will be made to the Acquisition Subsidiary during such 12-month period,
based on the Acquisition Subsidiary's anticipated borrowing base of Eligible
Accounts), and (iii) interest and schedule principal payments due on any and all
other Indebtedness for Borrowed Money of the Acquisition Subsidiary anticipated
during such period, excluding the Subordinated Debt of the Acquisition
Subsidiary.

         "TARGET PRO FORMA EBITDA" shall mean, with respect to any period, the
Acquisition Subsidiary's net income after taxes for such period (excluding any
after-tax gains or losses and excluding other after-tax extraordinary gains or
losses) PLUS interest expense, income tax expense, depreciation and amortization
for such period, PLUS or MINUS any other non-cash charges or gains which have
been subtracted or added in calculating net income after taxes for such period.

         "TARGET PRO FORMA SENIOR DEBT" means (a) the maximum amount of
Revolving Loans that will be made to the Acquisition Subsidiary under the
Revolving Loan Agreement or any Replacement Revolver Loan Agreement (based on
the Acquisition Subsidiary's anticipated borrowing base of Eligible Accounts),
PLUS (b) the aggregate principal amount of the Term Loans that will be made to
the Acquisition Subsidiary in connection with the Permitted Acquisition of
Target, PLUS (c) all Capitalized Lease Obligations of the Acquisition Subsidiary
that are anticipated during such 12-month period, PLUS (d) all other
Indebtedness for Borrowed Money of the Acquisition Subsidiary, excluding the
Subordinated Debt of the Acquisition Subsidiary.

         "TARGET PRO FORMA TERM LOAN DEBT" means for the projected period from
the closing date of a Permitted Acquisition to the date that is 12 months from
such closing date, the aggregate principal amount of the Term Loan that will be
made to the Acquisition Subsidiary in connection with the Permitted Acquisition
of Target.

                                  Annex I - 11
<PAGE>

         "TERM" shall have the meaning specified in SECTION 10 hereof.

         "TERM LOAN " shall have the meaning specified in SUBSECTION 2(a)
hereof.

         "TOTAL DEBT SERVICE" means, for any period, the sum of payments made
(or, as to clause (i) of this sentence, required to be made) by Borrower during
such period for (i) Senior Debt Service, (ii) interest, fees and scheduled
principal payments due on the Term Loans, (iii) pursuant to the scheduled
Subordinated Debt payments permitted by this Agreement and the applicable
subordination agreement, and (iv) interest and scheduled principal payments due
on any and all other Indebtedness for Borrowed Money of Borrower.

         "UCC" shall mean the Uniform Commercial Code as in effect from time to
time in the State of Illinois.

         "WARRANT AGREEMENT" shall mean that certain Warrant Agreement dated as
of the date hereof between Crdentia Corp. and Lender.

         "WARRANT CERTIFICATE" shall mean a certificate evidencing one or more
warrants, substantially in the form of Exhibit A to the Warrant Agreement, with
such changes therein as may be required to reflect any adjustments made pursuant
to Section 12 of the Warrant Agreement.


                                  Annex I - 12
<PAGE>



                         INDEX OF EXHIBITS AND SCHEDULES

EXHIBITS
--------
Exhibit A                 Compliance Certificate
Exhibit B                 Closing Checklist
Exhibit C                 Information Certificate
Exhibit D                 Subordination Agreement

SCHEDULES
---------
Schedule 1                Permitted Liens
Schedule 11(b)            Business and Collateral Locations
Schedule 11(b)            Certain Collateral
Schedule 11(g)            Litigation
Schedule 11(i)            Affiliate Transactions
Schedule 11(j)            Names & Trade Names
Schedule 11(n)            Indebtedness
Schedule 11(p)            Parent, Subsidiaries and Affiliates
Schedule 11(q)            Defaults
Schedule 11(x)            Government Reimbursement Program Matters
Schedule 11(t)            Environmental Matters
Schedule 11(x)            Healthcare Compliance
Schedule 11(y)            Healthcare Regulatory Matters
Schedule 11(z)            Licenses and Permits



<PAGE>


                       EXHIBIT A - COMPLIANCE CERTIFICATE

Date:

TO:      Bridge Healthcare Finance, LLC, Agent
         233 South Wacker Drive, Suite 5350
         Chicago, Illinois 60606


Gentlemen and Ladies:

The undersigned Borrower hereby certifies to you the following pursuant to
Section 9(c) of the Loan and Security Agreement-Term Loans (the "AGREEMENT")
dated as of August 31, 2004, among and Crdentia Corp., Baker Anderson Christie,
Inc., Nurses Network, Inc., New Age Staffing, Inc., PSR Nurses, Ltd., PSR Nurse
Recruiting, Inc., PSR Nurses Holdings Corp., CRDE Corp., AHHC Acquisition
Corporation and CPS Acquisition Corporation (collectively, the "BORROWER"),
Bridge Healthcare Finance, LLC (the "LENDER").

1.       As of ___, no event of default or event which with the lapse of time or
         the giving of notice, or both, would become an event of default (an
         "unmatured event of default") has occurred or, if such a change has
         occurred, a writing attached hereto specifies the nature thereof and
         the action that Borrower has taken or proposes to take with respect
         thereto.

2.       No material adverse change in the condition, financial or otherwise,
         business, property, or results of operations of Borrower has occurred
         since [date of last Compliance Certificate/last financial statements
         delivered prior to closing], or, if such a change has occurred, a
         writing attached hereto specifies the nature thereof and the action
         that Borrower has taken or proposes to take with respect thereto.

3.       Borrower is in compliance with the representations, warranties and
         covenants in the Agreement or, if Borrower is not in compliance with
         any representations, warranties or covenants in the Agreement, a
         writing attached hereto specifies the nature thereof and the action
         that Borrower has taken or proposes to take with respect thereto.

4.       As of __________, Borrower maintains the following financial covenants
         pursuant to Section 14 of the Agreement.

         a.       Borrower shall maintain a Minimum Tangible Net Worth, on a
                  Crdentia Proper Consolidated Basis, of (i) $(1,500,000) at all
                  times from the Closing Date through September 30, 2004 and
                  (ii) thereafter, from the last day of each fiscal quarter of
                  the Crdentia Proper Borrowers through the day prior to the
                  last day of each immediately succeeding fiscal quarter of the
                  Crdentia Proper Borrowers, the Minimum Tangible Net Worth
                  during the immediately preceding period plus seventy-five
                  percent (75%) of the Crdentia Proper Borrowers' net income


                                 EXHIBIT A - 1
<PAGE>

                  (but without reduction for any net loss) for the Fiscal Year
                  ending on the first day of such period as reflected on the
                  Crdentia Proper Borrowers' audited year end financial
                  statement. (See attached SCHEDULE A for calculation of
                  Tangible Net Worth)

                      Compliance            Yes:              No:
                                                     --------        -------

         b.       SENIOR DEBT SERVICE COVERAGE RATIO. As of the last day of each
                  applicable period, the ratio of Borrower's Operating Cash
                  Flow, on a Crdentia Proper Consolidated Basis, to Borrower's
                  Senior Debt Service, on a Crdentia Proper Consolidated Basis,
                  for each period set forth below (which ratio shall be tested
                  as of the last day of each such period) must be at least the
                  following: (See attached SCHEDULE B for calculation)
<TABLE>
---------------------------- ------------------------- --------------------------- --------------------------
        TIME FRAME                 DATE TESTED            SENIOR DEBT SERVICE              BASED ON
                                                             COVERAGE RATIO
---------------------------- ------------------------- --------------------------- --------------------------
<S>                          <C>                       <C>                         <C>
Monthly                      1/31/05                   1.00 to 1.00                Monthly
---------------------------- ------------------------- --------------------------- --------------------------
Monthly                      2/28/05                   1.00 to 1.00                Monthly
---------------------------- ------------------------- --------------------------- --------------------------
Monthly                      3/31/05                   1.00 to 1.00                Trailing 3 months
---------------------------- ------------------------- --------------------------- --------------------------
Monthly                      4/30/05                   1.00 to 1.00                Trailing 4 months
---------------------------- ------------------------- --------------------------- --------------------------
Monthly                      5/31/05                   1.00 to 1.00                Trailing 5 months
---------------------------- ------------------------- --------------------------- --------------------------
Monthly                      6/30/05                   1.25 to 1.00                Trailing 6 months
---------------------------- ------------------------- --------------------------- --------------------------
Monthly                      7/31/05                   1.25 to 1.00                Trailing 7 months
---------------------------- ------------------------- --------------------------- --------------------------
Monthly                      8/31/05                   1.25 to 1.00                Trailing 8 months
---------------------------- ------------------------- --------------------------- --------------------------
Monthly                      9/30/05                   1.25 to 1.00                Trailing 9 months
---------------------------- ------------------------- --------------------------- --------------------------
Monthly                      10/31/05                  1.25 to 1.00                Trailing 10 months
---------------------------- ------------------------- --------------------------- --------------------------
Monthly                      11/30/05                  1.25 to 1.00                Trailing 11 months
---------------------------- ------------------------- --------------------------- --------------------------
Monthly                      12/31/05                  1.25 to 1.00                Trailing 12 months
---------------------------- ------------------------- --------------------------- --------------------------
Quarterly                    3/31/06 and each          1.25 to 1.00                Trailing 12 months
                             quarter thereafter
---------------------------- ------------------------- --------------------------- --------------------------

      Actual Debt Service Coverage Ratio:           Compliance:   Yes:           No:
                                           -----                           -----       -----
</TABLE>

                                 EXHIBIT A - 2
<PAGE>

         c.       MINIMUM EBITDA. Borrower shall not permit EBITDA (which
                  calculation shall include for the months ended 8/31/04 through
                  12/31/04 any payment made by MedCap Partners L.P. pursuant to
                  the terms of Makewell Agreement), on a Crdentia Proper
                  Consolidated Basis, to be less than the amount set forth below
                  for the corresponding period set forth below (See attached
                  SCHEDULE C for calculation):
<TABLE>
---------------------------- -------------------------- --------------------------- -------------------------
        TIME FRAME                  DATE TESTED               MINIMUM EBITDA                BASED ON
---------------------------- -------------------------- --------------------------- -------------------------
<S>                          <C>                        <C>                         <C>
Monthly                      8/31/04                    $(151,662)                  Monthly
---------------------------- -------------------------- --------------------------- -------------------------
Monthly                      9/30/04                    $(83,271)                   Monthly
---------------------------- -------------------------- --------------------------- -------------------------
Monthly                      10/31/04                   $(28,059)                   Monthly
---------------------------- -------------------------- --------------------------- -------------------------
Monthly                      11/30/04                   $1,875                      Monthly
---------------------------- -------------------------- --------------------------- -------------------------
Monthly                      12/31/04                   $39,212                     Monthly
---------------------------- -------------------------- --------------------------- -------------------------
Quarterly                    3/31/05                    $82,501                     Trailing 3 months
---------------------------- -------------------------- --------------------------- -------------------------
Quarterly                    6/30/05                    $99,393                     Trailing 6 months
---------------------------- -------------------------- --------------------------- -------------------------
Quarterly                    9/30/05                    $158,708                    Trailing  months
---------------------------- -------------------------- --------------------------- -------------------------
Quarterly                    12/31/05                   $219,897                    Trailing 12 months
---------------------------- -------------------------- --------------------------- -------------------------
</TABLE>

         Notwithstanding the foregoing, to the extent the Crdentia Proper
Borrowers maintain a Senior Debt Service Coverage Ratio of 1.50 to 1.00 or
greater as determined at the end of any measuring period as set forth in Section
4(b) above, the Crdentia Proper Borrowers shall not be required to maintain
minimum EBITDA as set forth in this Section for such corresponding month and
during the continuance of such compliance.

                      Compliance            Yes:              No:
                                                     --------        -------

         d.       ACQUISITION SUBSIDIARY DEBT SERVICE COVERAGE RATIO. Commencing
                  on the last day of the first fiscal quarter following the
                  first Permitted Acquisition, and continuing quarterly
                  thereafter, Borrower shall not permit the ratio of (i)
                  Acquisition Subsidiary EBITDA to (ii) scheduled payments of
                  interest and fees, to the extent carried as interest expense
                  on Acquisition Subsidiary's consolidated financial statements,
                  with respect to Acquisition Subsidiary Debt (and, if the
                  period of measurement is less than 12 months, determined on an
                  annualized basis), to be less than the amount set forth below
                  for the corresponding period set forth below (See Schedule D
                  for calculation) :

                                 EXHIBIT A - 3
<PAGE>

<TABLE>
---------------------------- --------------------------- -------------------------- -------------------------
        TIME FRAME                  DATE TESTED           ACQUISITION SUBSIDIARY            BASED ON
                                                          DEBT SERVICE COVERAGE
                                                                   RATIO
---------------------------- --------------------------- -------------------------- -------------------------
<S>                          <C>                         <C>                        <C>
Quarterly                    Last day of the first       1.50 to 1.00               Trailing 3 months
                             Fiscal Quarter following
                             the first Permitted
                             Acquisition
---------------------------- --------------------------- -------------------------- -------------------------
Quarterly                    Next Fiscal Quarter         1.50 to 1.00               Trailing 6 months
                             Thereafter
---------------------------- --------------------------- -------------------------- -------------------------
Quarterly                    Next Fiscal Quarter         1.50 to 1.00               Trailing 9 months
                             Thereafter
---------------------------- --------------------------- -------------------------- -------------------------
Quarterly                    Each Fiscal Quarter         1.50 to 1.00               Trailing 12 months
                             Thereafter
---------------------------- --------------------------- -------------------------- -------------------------

         Actual Acquisition Subsidiary Debt
         Service Coverage Ratio:                   Compliance:         Yes:           No:
                                      -----                                    ------       ------
</TABLE>

         e.       ACQUISITION SUBSIDIARY DEBT LEVERAGE RATIO. Commencing on the
                  last day of the first fiscal quarter following the first
                  Permitted Acquisition, and continuing quarterly thereafter,
                  Borrower shall not permit the ratio of Acquisition Subsidiary
                  Debt to Acquisition Subsidiary EBITDA to be more than the
                  following (See Schedule E for calculation):
<TABLE>
            Period                         Date Tested                    Coverage                 Based on:
            ------                         -----------                    --------                 ---------
<S>                             <C>                                      <C>                   <C>
Quarterly                       Last day of the first fiscal             4.0 to 1.0            Trailing 3 Months
                                quarter following the first
                                Permitted Acquisition
Quarterly                       Next Fiscal Quarter Thereafter           4.0 to 1.0            Trailing 6 months
Quarterly                       Next Fiscal Quarter Thereafter           4.0 to 1.0            Trailing 9 months
Quarterly Thereafter            Each Fiscal Quarter Thereafter           4.0 to 1.0           Trailing 12 months


         Actual Acquisition Subsidiary Debt
         Leverage Ratio:                   Compliance:         Yes:           No:
                              -----                                    ------       ------
</TABLE>

                                 EXHIBIT A - 4
<PAGE>

         f.       ACQUISITION SUBSIDIARY TERM LOAN DEBT LEVERAGE RATIO.
                  Commencing on the last day of the first fiscal quarter
                  following the first Permitted Acquisition, and continuing
                  quarterly thereafter, Borrower shall not permit the ratio of
                  Acquisition Subsidiary Term Loan Debt to Acquisition
                  Subsidiary EBITDA to be more than the following:

<TABLE>
<S>     <C>
          Time Frame                       Date Tested                    Coverage                 Based on:
          ----------                       -----------                    --------                 ---------
Quarterly                       Last day of the first fiscal             2.50 to 1             Trailing 3 Months
                                quarter following the first
                                Permitted Acquisition
Quarterly                       Next Fiscal Quarter Thereafter           2.50 to 1             Trailing 6 months
Quarterly                       Next Fiscal Quarter Thereafter           2.50 to 1             Trailing 9 months
Quarterly Thereafter            Each Fiscal Quarter Thereafter           2.50 to 1            Trailing 12 months

         Actual Acquisition Subsidiary Term
         LoanDebt Leverage Ratio:                             Compliance:         Yes:           No:
                                                 -----                                    ------       ------

         g.       Capital Expenditure Limitation: the aggregate cost of all
                  fixed assets purchased or otherwise acquired shall not exceed
                  $200,000 during any Fiscal Year.

       Total Capital Expenditures (YTD):                        Compliance:        Yes:          No:
                                               ----------                                   ----        ----

         h.       Operating Lease Obligations: payments made pursuant to
                  operating lease obligations shall not exceed $100,000 during
                  any Fiscal Year.

       Operating Lease Payments (YTD):                         Compliance:         Yes:          No:
                                              -----------                                  -----        ----
</TABLE>

The financial statements, reports and information submitted concurrently
herewith have been prepared in accordance with generally accepted accounting
principles consistently applied, where applicable, and there have been no
material changes in accounting policies or financial reporting practices of
Borrower since [date of last Compliance Certificate/last financial statements
delivered prior to closing], or, if such a change has occurred, a writing
attached hereto specifies the nature thereof and the action that Borrower has
taken or proposes to take with respect thereto.


                                 EXHIBIT A - 5
<PAGE>



Any and all initially capitalized terms set forth in this certificate without
definition shall have the respective meanings ascribed thereto in the Agreement.




                                                   CRDENTIA CORP.

                                          By:
                                                   -----------------------------
                                          Its:
                                                   -----------------------------



                                 EXHIBIT A - 6
<PAGE>
<TABLE>


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


                               TANGIBLE NET WORTH
                               ------------------


TANGIBLE NET WORTH
------------------

<S>                                                                    <C>
Shareholders' equity (including retained earnings and preferred
stock) of Crdentia Proper Borrowers
                                                                       -------------------------

Less:    Book value of all intangible assets
                                                                       -------------------------

Add:     Amount of debt of Crdentia Proper Borrowers subordinated to
Lender
                                                                       -------------------------

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

TANGIBLE NET WORTH
------------------
                                                                       -------------------------
</TABLE>

                                 EXHIBIT A - 7
<PAGE>


                                   SCHEDULE B
                                   ----------


                       SENIOR DEBT SERVICE COVERAGE RATIO
                       ----------------------------------



OPERATING CASH FLOW
-------------------

Net income (Loss) of the Crdentia Proper Borrowers excluding
extraordinary gains or losses
<TABLE>
<S>     <C>
                                                                       -------------------------

Add:    Depreciation
                                                                       -------------------------
            Amortization and other non-cash charges
                                                                       -------------------------
            Interest and fee expenses paid or accrued
                                                                       -------------------------
            Total federal and state income tax expenses accrued regardless of
            whether paid during such period
                                                                       -------------------------
            Management fees and other fees paid to
            subordinated creditors
                                                                       -------------------------

Add/Less:
            Gain or loss on the sale of property, plant or
            Equipment


             Subtotal
                                                                       -------------------------

Less:     Cash Capital Expenditures made during such period of the
Crdentia Proper Borrowers
                                                                       -------------------------
              All taxes paid or required to be paid during
              such period and all non-cash income of the Crdentia
Proper Borrowers
                                                                       -------------------------


TOTAL OPERATING CASH FLOW
                                                                       -------------------------


SENIOR DEBT SERVICE

Add:     Interest due on Revolving Loans of the Crdentia
             Proper Borrowers
                                                                       -------------------------
                                                                       -------------------------

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

            Scheduled principal and interest payments made
            or required to be made on all other indebtedness
---------------------------------------------------------------------
            of the Crdentia Proper Borrowers
            (excluding Subordinated Debt)
                                                                       -------------------------
                                                                       -------------------------


TOTAL SENIOR DEBT SERVICE
                                                                       -------------------------
                                                                       -------------------------



TOTAL OPERATING CASH FLOW:
TOTAL SENIOR DEBT SERVICE                       =            to 1.0
                                                  ----------
</TABLE>

<PAGE>

                                   SCHEDULE C


                                     EBITDA



EBITDA

Net income (Loss) of the Crdentia Proper Borrowers (excluding any
after-tax gains or losses and excluding other after-tax
extraordinary gains or losses)
<TABLE>
<S>     <C>
                                                                       -------------------------
                                                                       -------------------------

Add:     Interest expense
                                                                       -------------------------
                                                                       -------------------------
             Income tax expense
                                                                       -------------------------
                                                                       -------------------------
             Depreciation
                                                                       -------------------------
                                                                       -------------------------
             Amortization
                                                                       -------------------------

Add/Less:
            Other non-cash charges or gains
                                                                       -------------------------
                                                                       -------------------------


Add:  (for months ending 8/31/04 through 12/31/04 only)
          Payments from MedCap Partners L.P.


TOTAL EBITDA
                                                                       -------------------------

Minimum EBITDA               $____________         Total EBITDA          $______________

</TABLE>
<PAGE>

                                   SCHEDULE D

               ACQUISITION SUBSIDIARY DEBT SERVICE COVERAGE RATIO


ACQUISITION SUBSIDIARY EBITDA

Net income (Loss)of the Acquisition Subsidiary (excluding any
after-tax gains or losses and excluding other after-tax
extraordinary gains or losses)
<TABLE>
<S>     <C>
                                                                       -------------------------
                                                                       -------------------------

Add:     Interest expense
                                                                       -------------------------
                                                                       -------------------------
             Income tax expense
                                                                       -------------------------
                                                                       -------------------------
             Depreciation
                                                                       -------------------------
                                                                       -------------------------
             Amortization
                                                                       -------------------------

Add/Less:
            Other non-cash charges or gains
                                                                       -------------------------
                                                                       -------------------------


TOTAL EBITDA
                                                                       -------------------------

ACQUISITION SUBSIDIARY DEBT SERVICE

Add:     Scheduled payments of interest and fees (carried as
             an interest expense on Acquisition Subsidiaries
             consolidated financials) with respect to:
                                                                       -------------------------
                                                                       -------------------------

            Revolving Loans to Acquisition Subsidiary
            Aggregate principal amount of Term Loan
            Capitalized Lease Obligations of Acquisition
            Subsidiary
            Indebtedness for Borrowed Money of Acquisition
            Subsidiary (excluding Subordinated Debt)
                                                                       -------------------------

TOTAL ACQUISITION SUBSIDIARY DEBT SERVICE
                                                                       -------------------------

TOTAL ACQUISITION SUBSIDIARY EBITDA TO          =            to 1.0
                                                  ----------
ACQUISITION SUBSIDIARY DEBT SERVICE:
</TABLE>
<PAGE>


                                   SCHEDULE E

                   ACQUISITION SUBSIDIARY DEBT LEVERAGE RATIO



ACQUISITION SUBSIDIARY DEBT

ACQUISITION SUBSIDIARY DEBT (
---------------------------
<TABLE>
<S>     <C>
                                                                       -------------------------
                                                                       -------------------------

ACQUISITION SUBSIDIARY DEBT
                                                                       -------------------------
                                                                       -------------------------
            Outstanding Revolving Loan to Acquisition Subsidiary
                                                                       -------------------------
                                                                       -------------------------
            Aggregate principal amount of Term Loan outstanding
                                                                       -------------------------
                                                                       -------------------------
            Capitalized Lease Obligations of Acquisition Subsidiary

                                                                       -------------------------
                                                                       -------------------------
            Indebtedness for Borrowed Money of Acquisition
            Subsidiary (excluding the Subordinated Debt)
                                                                       -------------------------



ACQUISITION SUBSIDIARY DEBT TO:
     ACQUISITION SUBSIDIARY EBITDA              =            to 1.0
                                                  ----------
</TABLE>
<PAGE>

                                                    EXHIBIT A - 13
sd-217849
                                   SCHEDULE F


              ACQUISITION SUBSIDIARY TERM LOAN DEBT LEVERAGE RATIO



ACQUISITION SUBSIDIARY TERM LOAN DEBT

Aggregate principal amount of Term Loan outstanding
<TABLE>
<S>     <C>
                                                                       -------------------------
                                                                       -------------------------


ACQUISITION SUBSIDIARY EBITDA (FROM SCHEDULE D)
                                                                       -------------------------
                                                                       -------------------------



ACQUISITION SUBSIDIARY TERM LOAN DEBT TO
ACQUISITION SUBSIDIARY EBITDA                   =            to 1.0
                                                  ----------
</TABLE>

<PAGE>

                                    EXHIBIT B
                                    ---------
                                CLOSING CHECKLIST
                                 (SEE ATTACHED)


                                  EXHIBIT B - 1
<PAGE>

                                    EXHIBIT C
                                    ---------
                             INFORMATION CERTIFICATE
                                 (SEE ATTACHED)


                                  EXHIBIT C - 1
<PAGE>

                                    EXHIBIT D
                                    ---------
                             SUBORDINATION AGREEMENT
                                 (SEE ATTACHED)


                                  EXHIBIT D - 1
<PAGE>

                          SCHEDULE 1 - PERMITTED LIENS

Receivables Allocation Agreement dated August 31, 2004 between William C.
Crocker, Crdentia Corp., CRDE Corp., AHHC Acquisition Corporation, Bridge
Healthcare Finance, LLC and Bridge Opportunity Finance.

<PAGE>

               SCHEDULE 11(B) - BUSINESS AND COLLATERAL LOCATIONS;
                               CERTAIN COLLATERAL

A.       Borrower's business locations (please indicate which location is the
         principal place of business and at which locations originals and all
         copies of Borrower's books, records and accounts are kept).

         1.       Principal place of business and location of originals and all
                  copies of books, records and accounts:

                  14114 Dallas Parkway
                  Dallas, TX 75254

         2.       2124 Union Street, Suite D
                  San Francisco, CA 94123

         3.       3522 Vann Road
                  Birmingham, AL 35235

         4.       174 Bellevue Avenue, Suite 315
                  Newport, RI 02840

         5.       1114 Seventeenth Avenue
                  Nashville, TN 37212

         6.       5829 N. 7th St., #1E
                  Phoenix, AZ 85014

         7.       808 S. College St. #122
                  McKinney, TX

B.       Other locations of Collateral (including, without limitation, warehouse
         locations, processing locations, consignment locations) and all post
         office boxes of Borrower. NONE

C.       Bank Accounts of Borrower:

<TABLE>
                    BANK (WITH ADDRESS)               ACCOUNT NUMBER            TYPE OF ACCOUNT
                    -------------------               --------------            ---------------
<S>      <C>         <C>                               <C>                       <C>
         1.          Comerica Bank                     1892275403                Operating

         2.          Legacy Bank of Texas              888321                    Payroll

         3.          Legacy Bank of Texas              888339                    Operating

         4.          LaSalle Bank                      5800678400                Operating

<PAGE>

         5.          LaSalle Bank                      5800678392                Lockbox

         6.          West American Bank                924-00703-02              Credit card clearing

         7.          Bank One, NA                      000000636694283           Operating

         8.          Bank One, NA                      000000649350550           ATM/Debit Cards

         9.          Regions Bank                      03-0499-2709              Payroll

         10.         First American Bank               1032016243

         11.         First American Bank               1038027375

         12.         First American Bank               1038030851

         13.         Bank One, NA                      07590138

         14.         Bank One, NA                      28644166
</TABLE>

D.       Certain Collateral

                  a.       Intellectual Property -- NONE

                  b.       Instruments -- NONE

                  c.       Deposit Accounts --SEE ACCOUNTS LISTED
                                              UNDER C ABOVE

                  d.       Investment Property - NONE

                  e.       Letter-of-Credit Rights -- NONE

                  f.       Chattel Paper -- NONE

                  g.       Documents -- NONE

                  h.       Commercial Tort Claims -- NONE

                  i.       Certificate of Title Goods -- NONE

                  j.       Collateral with Third Parties - NONE

<PAGE>

                           SCHEDULE 11(G) - LITIGATION



         NONE.

<PAGE>

                     SCHEDULE 11(I) - AFFILIATE TRANSACTIONS

         Registration rights granted pursuant to that certain Amended and
Restated Registration Rights Agreement, dated as of August 31, 2004 by and
between Crdentia Corp. and the investors listed on Schedule A thereto.

         Subscription Agreement dated August 31, 2004 by and between Crdentia
Corp. and MedCap Partners L.P.

         Subscription Agreement dated August 31, 2004 by and between Crdentia
Corp. and James D. Durham.

         Warrant to Purchase Shares of Series B-1 Preferred Stock dated August
31, 2004 issued by Crdentia Corp. to MedCap Partners L.P.

         Warrant to Purchase Shares of Series C Preferred Stock dated August 31,
2004 issued by Crdentia Corp. to MedCap Partners L.P.

         Warrant to Purchase Shares of Series C Preferred Stock dated August 31,
2004 issued by Crdentia Corp. to James D. Durham.

         Stock Purchase Agreement, dated as of May 18, 2003, by and between
Crdentia Corp., MedCap Partners L.P. and the stockholders listed on EXHIBIT A
thereto.

         Options to purchase 2,333,333 shares of Crdentia Corp.'s Common Stock
granted to James D. Durham, Crdentia Corp.'s Chairman and Chief Executive
Officer, on December 31, 2003 and a bonus agreement executed in connection
therewith.

         Option to purchase up to 66,666 shares of Crdentia Corp.'s Common Stock
made by Crdentia Corp. to each of two members of its Board of Directors on
December 16, 2003.

         Option to purchase up to 206,074 shares of Crdentia Corp.'s Common
Stock made by Crdentia Corp. to Pamela Atherton, its President, on December 16,
2003.

         Executive Employment Agreement by and between Crdentia Corp. and Ms.
Atherton dated on or about December 16, 2003.

         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").

         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 "PSR
Merger Agreement"), pursuant to which Crdentia Corp. obtained a 100% ownership
interest in PSR Nurses, Ltd. (through its acquisition of PSR Nurse Recruiting,
Inc., the sole general partner of PSR Nurses, Ltd. and PSR Nurses Holdings
Corp., the sole limited partner of PSR Nurses, Ltd.). Crdentia Corp. uses
offices leased by PSR Nurses, Ltd. as its principal executive offices, a

<PAGE>

substantial number of Crdentia Corp.'s staff is PSR Nurses, Ltd. personnel, and
Crdentia Corp. uses some PSR Nurses, Ltd. deposit accounts. In addition,
Crdentia Corp. uses the personnel and bank accounts of several of its other
subsidiaries.

         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.

         Common Stock Purchase Agreement dated May 15, 2002 by and between
Crdentia Corp. and the parties thereto.

         Convertible Subordinated Promissory Note dated August 28, 2003 in the
original principal amount of $50,000 made payable to James D. Durham.

         Convertible Subordinated Promissory Note dated September 2, 2003 in the
original principal amount of $50,000 made payable to the DeLuca Trust, dated
1/7/00.

         Convertible Subordinated Promissory Note dated September 2, 2003 in the
original principal amount of $50,000 made payable to the R.P. Oliver Community
Propoerty Trust dated 5/5/75.

         Subscription Agreement dated June 16, 2004 by and between Crdentia
Corp. and MedCap Partners, L.P.

         Subscription Agreement dated August 9, 2004 by and between Crdentia
Corp. and Durham Properties, LLC.

         Subscription Agreement dated August 9, 2004 by and between Crdentia
Corp. and Nick Liuzza, Sr.

         Subscription Agreement dated August 9, 2004 by and between Crdentia
Corp. and Nick Liuzza, Jr.

         Subscription Agreement dated August 9, 2004 by and between Crdentia
Corp. and Robin Riddle.

         Subscription Agreement dated August 9, 2004 by and between Crdentia
Corp. and Robert Kenneth.

         Registration Rights Agreement dated August 9, 2004 by and between
Crdentia Corp. and the investors listed on Schedule A thereto.

         Option to purchase 866,666 shares of Crdentia Corp.'s common stock
granted to James D. Durham on August 3, 2004.

         Option to purchase 433,333 shares of Crdentia Corp.'s common stock
granted to Pamela Atherton on August 3, 2004.

<PAGE>

         Option to purchase 8,333 shares of Crdentia Corp.'s common stock
granted to Robert. Oliver on May 27, 2004.

         Option to purchase 16,667 shares of Crdentia Corp.'s common stock
granted to Joseph DeLuca on May 27, 2004.

         Option to purchase 8,333 shares of Crdentia Corp.'s common stock
granted to Robert Kenneth on May 27, 2004.

         Option to purchase 8,333 shares of Crdentia Corp.'s common stock
granted to C. Fred Toney on May 27, 2004.

         Option to purchase 8,333 shares of Crdentia Corp.'s common stock
granted to Thomas Herman on May 27, 2004.

         Indemnification Agreement dated February 26, 2004 by and between
Crdentia Corp. and James D. Durham.

         Indemnification Agreement dated February 26, 2004 by and between
Crdentia Corp. and Thomas Herman.

         Indemnification Agreement dated February 26, 2004 by and between
Crdentia Corp. and C. Fred Toney.

         Indemnification Agreement dated February 26, 2004 by and between
Crdentia Corp. and Robert Oliver.

         Indemnification Agreement dated February 26, 2004 by and between
Crdentia Corp. and Joseph DeLuca.

         Indemnification Agreement dated February 26, 2004 by and between
Crdentia Corp. and Robert Kenneth.

         Indemnification Agreement dated February 26, 2004 by and between
Crdentia Corp. and Pamela Atherton.

         Indemnification Agreement dated February 26, 2004 by and between
Crdentia Corp. and William S. Leftwich.

         Option to purchase up to 110,504 shares of Common Stock granted by
Crdentia Corp. to William S. Leftwich.

         16,666 shares of Common Stock issued by Crdentia Corp. to MedCap
Partners L.P. in May 2004 pursuant to the terms of the Certificate of
Designations, Preferences and Rights of Series A Preferred Stock of Crdentia
Corp., as amended.

<PAGE>

                      SCHEDULE 11(J) - NAMES & TRADE NAMES


-------------------------------------- -----------------------------------------
BORROWER                               NAME AND TRADE NAMES

-------------------------------------- -----------------------------------------
Crdentia Corp.                         Crdentia Corp.
                                       Lifen, Inc.
                                       Digivision International, Ltd.

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

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

-------------------------------------- -----------------------------------------
New Age Staffing, Inc.                 New Age Staffing, Inc.
                                       NAS Acquisition Corporation

-------------------------------------- -----------------------------------------
PSR Nurses, Ltd.                       PSR Nurses, Ltd.

                                       PSR Nurses Limited Partnership

-------------------------------------- -----------------------------------------
PSR Nurse Recruiting, Inc.             PSR Nurse Recruiting, Inc.

-------------------------------------- -----------------------------------------
PSR Nurses Holdings Corp.              PSR Nurses Holdings Corp.

-------------------------------------- -----------------------------------------
CRDE Corp.                             CRDE Corp.

-------------------------------------- -----------------------------------------
AHHC Acquisition Corporation           AHHC Acquisition Corporation

-------------------------------------- -----------------------------------------
CPS Acquisition Corporation            CPS Acquisition Corporation

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

<PAGE>

                          SCHEDULE 11(N) - INDEBTEDNESS

Convertible Subordinated Promissory Note dated December 2, 2003 in the original
principal amount of $2,525,000 made payable to Professional Staffing Services,
Inc. and Nursing Services Registry of Savannah, Inc. ("Permenter Note No. 1").

Convertible Subordinated Promissory Note dated December 2, 2003 in the original
principal amount of $200,000 made payable to Professional Staffing Services,
Inc. and Nursing Services Registry of Savannah, Inc. ("Permenter Note No. 2",
and collectively with Permenter Note No. 1, the "Permenter Notes").

Convertible Subordinated Promissory Note dated August 28, 2003 in the original
principal amount of $50,000 made payable to James D. Durham.

Convertible Subordinated Promissory Note dated September 2, 2003 in the original
principal amount of $50,000 made payable to the DeLuca Trust, dated 1/7/00.

Convertible Subordinated Promissory Note dated September 2, 2003 in the original
principal amount of $50,000 made payable to the R.P. Oliver Community Propoerty
Trust dated 5/5/75.

Convertible Subordinated Promissory Note dated September 2, 2003 in the original
principal amount of $300,000 made payable to Robert Dillon.

Convertible Subordinated Promissory Note dated September 2, 2003 in the original
principal amount of $200,000 made payable to Anthony D. Errico.

Convertible Subordinated Promissory Note dated September 2, 2003 in the original
principal amount of $25,000 made payable to Health Care Investment Visions, LLC

Convertible Subordinated Promissory Note dated September 30, 2003 in the
original principal amount of $25,000 made payable to David A. Levenson and Ron
E. Rubinstein, Tenants in Common.

Convertible Subordinated Promissory Note dated October 16, 2003 in the original
principal amount of $120,000 made payable to Aydah Kytay

Convertible Subordinated Promissory Note dated December 12, 2003 in the original
principal amount of $25,000 made payable to Donald L. Bolich IRA.

Convertible Subordinated Promissory Note dated December 12, 2003 in the original
principal amount of $25,000 made payable to Steven P. Covey.

Convertible Subordinated Promissory Note dated December 3, 2003 in the original
principal amount of $15,000 made payable to Dorothy E. Elliot Revocable Trust
U/A dated 10/02/98.

<PAGE>

Convertible Subordinated Promissory Note dated December 3, 2003 in the original
principal amount of $25,000 made payable to Donald B. Gustafson and Beverly J.
Gustafson, Co-Trustees of the Gustafson Family Trust, dated 04/03/85. Revolving
Note dated June 16, 2004 made payable to Bridge Healthcare Finance, LLC.

Term Note dated August 31, 2004 made payable to Bridge Opportunity Finance, LLC.

Subordinated Promissory Notes dated August 16, 2004 in the aggregate original
principal amount of $275,000.

<PAGE>

              SCHEDULE 11(P) - PARENT, SUBSIDIARIES AND AFFILIATES

        Crdentia Corp., directly or indirectly, controls the following entities:

        Baker Anderson Christie, Inc.

        Nurses Network, Inc.

        New Age Staffing, Inc.

        PSR Nurses, Ltd.

        PSR Nurse Recruiting, Inc.

        PSR Nurses Holdings Corp.

        CRDE Corp.

        AHHC Acquisition Corporation

        CPS Acquisition Corporation


         Reference is made to the ownership by MedCap Partners L.P. of more than
10% of the outstanding securities of Crdentia Corp.

<PAGE>

                            SCHEDULE 11(Q) - DEFAULTS


In August 2004, Crdentia Corp. tendered the scheduled principal and/or interest
payments under the Permenter Notes to the holder thereof, subject to the holder
executing and returning the form of Subordination Agreement required by Bridge
Healthcare Finance, LLC. By the terms of the Permenter Notes, the holder is
required to execute any documents required by Crdentia Corp.'s senior lender,
including the Subordination Agreement.

The holder of the Permenter Notes has refused to (i) execute the Subordination
Agreement, and (ii) accept the tendered payments under the Permenter Notes.

<PAGE>

                     SCHEDULE 11(T) - ENVIRONMENTAL MATTERS


         NONE.

<PAGE>

            SCHEDULE 11(X) - GOVERNMENT REIMBURSEMENT PROGRAM MATTERS


NONE.

<PAGE>

                      SCHEDULE 11(Z) - LICENSES AND PERMITS


Reference is made to license number NR 00000530 issued by the State of
Washington to PSR Nurses, Ltd. on March 19, 2003, which was valid until March
19, 2004.

<PAGE>

                     BRIDGE OPPORTUNITY FINANCE, LLC ("BOF")

                                      with

                           CRDENTIA CORP. ("CRDENTIA")
                     BAKER ANDERSON CHRISTIE, INC.("BAKER")
                     NURSES NETWORK, INC.("NURSES NEWTORK")
                       NEW AGE STAFFING, INC. ("NEW AGE")
                          PSR NURSES, LTD. ("PSR LTD.")
                  PSR NURSE RECRUITING, INC. ("PSR RECRUITING")
                   PSR NURSES HOLDINGS CORP. ("PSR HOLDING"),
                               CRDE CORP. ("CRDE")
                         AHHC ACQUISITION, INC. ("AHHC")
                          CPS ACQUISITION, INC. ("CPS")
                         (COLLECTIVELY, THE "BORROWERS")

                            Term Loan Credit Facility

                               Document Checklist

                                 August 31, 2004


1.       DEAL TEAM

Borrowers                           CRDENTIA CORP.
("B")                               14114 DALLAS PARKWAY, SUITE 600
                                    DALLAS, TEXAS 75254
                                    Tel:  (800) 803-1777
                                    Fax:  (972) 392-2722

                                    Attn: William Leftwich
                                    Title: Chief Financial Offier
                                    E-Mail: bleftwich@crdentia.com

Borrower Counsel:                   MORRISON & FORESTER LLP
("BC")                              425 Market Street
                                    San Francisco, California 94105

                                    Jill Feldman, Esq.
                                    Tel: (415) 268-6474
                                    Fax: (415) 276-7298
                                    E-Mail: jfeldman@mofo.com

                                            1
<PAGE>

Lender:                             BRIDGE OPPORTUNITY FINANCE, LLC
("L")                               233 South Wacker Drive, Suite 5350
                                    Chicago, Illinois 60606

                                    Attn: Kim Gordon
                                    Tel: (312) 334-4455 ext. 209
                                    Fax: (312) 334-4450
                                    E-Mail: KGORDON@BRIDGEHCF.COM

                                    Attn: Shawn Andrews
                                    Tel: (312) 334-4452 ext. 204
                                    Cel: (312) 282-3614
                                    E-Mail: SANDREWS@BRIDGEHCF.COM

Counsel to Lender:                  VEDDER, PRICE, KAUFMAN & KAMMHOLZ, P.C.
("CL")                              222 N. LaSalle Street
                                    Chicago, Illinois 60601
                                    Tel: (312) 609-7500
                                    Fax: (312) 609-5005

                                    Thomas E. Schnur, Esq.
                                    Dir: (312) 609-7715
                                    E-Mail: TSCHNUR@VEDDERPRICE.COM

                                    A.J. Gable, Esq. Dir: (312)
                                    609-7852 E-Mail:
                                    AGABLE@VEDDERPRICE.COM

                                    Diana Schoendorff, Paralegal
                                    Dir: (312) 609-7859
                                    E-Mail: DSCHOENDORFF@VEDDERPRICE.COM

                                            2
<PAGE>
<TABLE>
<S>     <C>

2.       FINANCING DOCUMENTATION                                                            RESPONSIBLE PARTY
                                                                                            -----------------

         (a)      LOAN DOCUMENTATION                                                                CL

                  (i)      Loan and Security Agreement - Term Loan (BOF), together with:

                           (1)      ANNEX I - Definitions                                           CL

                           (2)      Exhibit A - Borrowing Base Certificate                          L/B
                                    Exhibit B - Compliance Certificate                              CL
                                    Exhibit C - Closing Document List                               CL

                           (3)      Schedule 1 - Permitted Liens                                     B
                                    Schedule 11(b) - Business and Collateral                         B
                                    Locations                                                        B
                                    Schedule 11(b) - Certain Collateral                              B
                                    Schedule 11(g) - Litigation                                      B
                                    Schedule 11(i) - Affiliate Transactions                          B
                                    Schedule 11(j) - Names & Trade Names                             B
                                    Schedule 11(n) - Indebtedness                                    B
                                    Schedule 11(p) - Parent, Subsidiaries & Affiliates               B
                                    Schedule 11(x) - Government Reimbursement                        B
                                    Program Matters                                                  B

                  (ii)     Term Loan Note (BOF)                                                     CL

                  (iii)    Warrant Agreement                                                        CL

                  (iv)     Makewell Agreement from MedCap Partners L.P.                             CL

                  (v)      Stock Pledge Agreement                                                  VPKK

                           (1)      Original Stock Certificates                                      B
                           (2)      Stock Powers                                                     B

                  (vi)     Intercreditor and Subordination Agreement                               VPKK

                  (vii)    Assignment of Rights under Purchase Agreement with respect to
                           each of the following Acquisitions:                                       CL

                           (1)      Acquisition of Care Pros Staffing, Inc.
                           (2)      Acquisition of Arizona Home Health Care / Private
                                    Duty, Inc.

                  (viii)   Officer's Certificate (BOF)                                              CL

                  (ix)     Accountant's Access Letter (BOF)                                       CL/Form

                                                    3
<PAGE>

                  (x)      Borrowing Base Certificate (confirming Acquisition Subsidiary
                           Excess Availability)                                                      B

                  (xi)     Disbursement Request                                                     CL

         (b)      ACCOUNT DOCUMENTATION                                                            CL/B

                  (i)      Lockbox Agreements (in addition to account documents with BHF
                           also for the benefit of BOF) with respect to each of the
                           following:                                                              CL/B

                           (1)      CRDE Corp.

                  (ii)     Deposit Account Control Agreement with respect to each of the
                           following bank accounts:                                                CL/B

                           (1)      Care Pros Staffing, Inc. bank accounts with First
                                    American Bank: Account Numbers 1038016243, 1038027375
                                    and 1038030851
                           (2)      Arizona Home Health Care / Private Duty, Inc. bank
                                    accounts with Bank One: Account Numbers 07590138 and
                                    28644166

         (c)      INSURANCE DOCUMENTATION

                  (i)      Certificates of Insurance or Binders naming Bridge                      B/BC
                           Healthcare Opportunity, LLC and Bridge Healthcare Finance,
                           LLC as "additional insureds" with respect to liability
                           insurance and a "lender's loss payee" with respect to
                           casualty insurance, together with (i) a lender's loss
                           payee endorsement in favor of Bridge Opportunity Finance,
                           LLC and Bridge Healthcare Finance, LLC executed by the
                           insurance company or authorized insurance agent and

                  (ii)     copies of the insurance policies (shared docs with BHF)

         (d)      THIRD PARTY DOCUMENTATION

                  (i)      Opinion Letter from Morrison & Foerster LLP                              BC

                  (ii)     Opinion Letter from Texas counsel                                        TC

                  (iii)    Landlord Agreements (in favor of BHF also for the benefit
                           of BOF) for each of the following locations:                           CL/B

                           (1)      Care Pros Staffing, Inc:
                                    a.       808 S. College St. #122, McKinney, TX
                                    b.       3000 S. 31st St. #301, Temple, TX 76502

                                                      4
<PAGE>

                           (2)      Arizona Home Health Care / Private Duty, Inc
                                    a.       5151 E. Broadway #1530, Tucson, AZ 85711
                                    b.       5829 N. 7th St. #1E, Phoenix, AZ 85014

3.       UCC, TAX LIEN AND JUDGMENTS

         (i)      UCC, Tax Lien and Judgment Searches                                               CL

                  (1)      Borrower - BHF Loan
                  (2)      CRDE Corp.
                  (3)      Care Pros Staffing, Inc.
                  (4)      Arizona Home Health Care / Private Duty, Inc.

         (ii)     UCC Pre-Filing Authorization, together with UCC-1 Financing Statements           B/CL

                  (1)      Crdentia - Delaware

                  (2)      Baker Anderson Christie, Inc. - California

                  (3)      Nurses Network, Inc. - California

                  (4)      New Age Staffing, Inc. - Delaware

                  (5)      PSR Nurses, Ltd. - Texas

                  (6)      PSR Nurse Recruiting, Inc. - Texas

                  (7)      PSR Nurses Holdings Corp. - Texas

                  (8)      CRDE Corp. - Delaware

                  (9)      AHHC Acquisition Corporation - Delaware (to be amended to
                           Arizona Home Health Care / Private Duty, Inc. following
                           consummation of the merger.)

                  (10)     CPS Acquisition Corporation - Texas (to be amended to Care
                           Pros Staffing, Inc. following consummation of the merger.)

4.       CORPORATION AUTHORIZATION

         (i)      Good Standing Certificates                                                         BC

                                                    5
<PAGE>

                  (1)      CRDENTIA - Delaware

                  (2)      BAKER ANDERSON CHRISTIE, INC. - California

                  (3)      NURSES NETWORK, INC. - California

                  (4)      NEW AGE STAFFING, INC. - Delaware

                  (5)      PSR NURSES, LTD. - Texas

                  (6)      PSR NURSE RECRUITING, INC. - Texas

                  (7)      PSR NURSES HOLDINGS CORP. - Texas

                  (8)      CRDE CORP. - Delaware

                  (9)      AHHC ACQUISITION CORPORATION - Delaware

                  (10)     CPS ACQUISITION CORPORATION - Texas

                  (11)     CARE PROS STAFFING, INC. - Texas (delivered upon
                           consummation of merger)

                  (12)     ARIZONA HOME HEALTH CARE / PRIVATE DUTY, INC. - Arizona
                           (delivered upon consummation of merger)

                  (13)     MEDCAP PARTNERS L.P.

         (ii)     Certificate of Secretary, together with (i) Certified
                  Certificate/Articles of BC Incorporation, (ii) By-Laws, and
                  (iii) Borrowing resolutions (shared doc with BHF)

                  (1)      Crdentia

                  (2)      Baker Anderson Christie, Inc.

                  (3)      Nurses Network, Inc.

                  (4)      New Age Staffing, Inc.

                  (5)      PSR Nurses, Ltd.

                  (6)      PSR Nurse Recruiting, Inc.

                  (7)      PSR Nurses Holdings Corp.

                                                    6
<PAGE>

                  (8)      CRDE Corp.

                  (9)      AHHC Acquisition Corporation

                  (10)     CPS Acquisition Corporation

                  (11)     MedCap Partners L.P. (with resolutions only)

         (iii)    Post-Closing Agreement                                                            CL

         (iv)     Information Certificates                                                           B

                  (1)      Care Pros Staffing, Inc.
                  (2)      Arizona Home Health Care / Private Duty, Inc.

         (v)      Healthcare Related Documents with respect to each of Care Pros Staffing,           B
                  Inc. and Arizona Home Health Care / Private Duty, Inc.

                  (1)      Copies of all state licenses required by Borrowers to operate
                           business
                  (2)      Copies of service agreements with hospitals and healthcare
                           entities

         (vi)     Arizona Home Health Care / Private Duty, Inc. Acquisition                           B

                  (1)      Copies of all of the Acquisition Documents, certified as true              B
                           and complete by an officer of Borrower
                  (2)      Receivables Allocation Agreement                                        B/CL

         (vii)    Care Pros Staffing, Inc. Acquisition                                                B

                  (1)      Copies of all of the Acquisition Documents, certified as                   B
                           true and complete by an officer of Borrower
                  (2)      Subordination Agreement                                                 B/CL

         (viii)   Other Documents                                                                   all

                  (1)      William Crocker Employment Agreement
                  (2)      Dan Ross Employment Agreement

                                                    7
</TABLE>
<PAGE>

                                                  BRIDGE HEALTHCARE FINANCE, LLC
                                                                 CREDIT FACILITY

                         BRIDGE HEALTHCARE FINANCE, LLC

                             INFORMATION CERTIFICATE

                               Dated: July 2, 2004


PLEASE COMPLETE AND RETURN
AS SOON AS POSSIBLE TO:

<TABLE>
<CAPTION>
<S>                                               <C>
(a)    Thomas E. Schnur, Esq.                     (b)    Ms. Kim Gordon
       Vedder, Price, Kaufman & Kammholz, P.C.           Bridge Healthcare Finance, LLC
       222 N. LaSalle Street                             233 South Wacker Drive, 53rd Floor
       Chicago, Illinois  60601                          Chicago, Illinois 60606
       Tel:  312-609-7715                                Tel:  847-317-9984
       Fax:  312-609-5005                                Fax:  847-943-9678
       e-mail:  tschnur@vedderprice.com                  e-mail:  kgordon@bridgehcf.com
</TABLE>

Ladies and Gentlemen:

         Reference is hereby made to the proposed draft Loan and Security
Agreement of even date herewith (the "LOAN AND SECURITY AGREEMENT"; capitalized
terms used in this Information Certificate and not otherwise defined in this
Information Certificate shall have the meanings assigned thereto in the Loan and
Security Agreement) by and among Bridge Healthcare Finance, LLC ("BANK"). To
induce Bank to enter into the Loan and Security Agreement and fund the Loans
provided for thereunder, Borrower hereby provides you with the following
information regarding (collectively as the "CREDIT PARTIES" and each, a "CREDIT
PARTY"): Arizona Home Health Care/Private Duty, Inc. and EACH PARENT ENTITY AND
EACH OF ITS DIRECT AND INDIRECT SUBSIDIARIES Borrower represents and warrants to
Bank that the information provided in this Information Certificate is true,
correct and complete as of the date hereof.

                                       1
<PAGE>

         A.       IDENTIFICATION MATTERS

1.       The full, correct and current name of each Credit Party as it appears
         in such Credit Party's Organizational Documents is:





         [PLEASE PROVIDE OUR COUNSEL WITH A COPY OF EACH CREDIT PARTY'S
         ORGANIZATIONAL DOCUMENTS, CERTIFIED AS OF A RECENT DATE BY THE
         JURISDICTION ISSUING SUCH ORGANIZATIONAL DOCUMENTS]

2.       Each Credit Party's type of organization is:

-------------------------------------------- -----------------------------------
CREDIT PARTY                                 TYPE OF ORGANIZATION
-------------------------------------------- -----------------------------------
Arizona Home and Health Care Private Duty    S Corp
-------------------------------------------- -----------------------------------

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

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


3.       Each Credit Party's jurisdictions of organization are:

-------------------------------------------- -----------------------------------
CREDIT PARTY                                 JURISDICTION OF ORGANIZATION
-------------------------------------------- -----------------------------------
Arizona Home and Health Care Private Duty    Arizona
-------------------------------------------- -----------------------------------

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

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

4.       Each Credit Party's jurisdictions of qualification are:

-------------------------------------------- -----------------------------------
CREDIT PARTY                                 JURISDICTIONS OF QUALIFICATION
-------------------------------------------- -----------------------------------
Arizona Home and Health Care Private Duty    Arizona only
-------------------------------------------- -----------------------------------

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

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

5.       Each Credit Party's organizational identification number is:

-------------------------------------------- -----------------------------------
                                             ORGANIZATIONAL IDENTIFICATION
CREDIT PARTY                                 NUMBER
-------------------------------------------- -----------------------------------
Arizona Home and Health Care Private Duty    86-0980138
-------------------------------------------- -----------------------------------

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

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

6.       Any names of a Credit Party (as appearing in such Person's
         Organizational Documents) not specified above in Item 1 that such
         Credit Party has had during the 5 year period preceding the Closing
         Date are:

                                       2
<PAGE>

-------------------------------------------- -----------------------------------
CREDIT PARTY                                 ADDITIONAL NAMES
-------------------------------------------- -----------------------------------
                   N/A
-------------------------------------------- -----------------------------------

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

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

         B.       LEGAL MATTERS

7.       The officers of each Credit Party and their respective titles are:

------------------------- ------------------- ----------------------------------
CREDIT PARTY              TITLE               NAME
------------------------- ------------------- ----------------------------------
William W. Crocker        Chairman            Arizona Home and Health Care
------------------------- ------------------- ----------------------------------
William C. Crocker        CEO                 Arizona Home and Health Care
------------------------- ------------------- ----------------------------------
Toni Brunner              EVP                 Arizona Home and Health Care
------------------------- ------------------- ----------------------------------

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

8.       The members of the Board of Directors of each Credit Party (or, if such
         Credit Party is a limited partnership, the general partner or, if such
         Credit Party is a limited liability company, the managers) are:

-------------------------------------------- -----------------------------------
                                             BOARD OF DIRECTORS /
CREDIT PARTY                                 GENERAL PARTNER / MANAGERS
-------------------------------------------- -----------------------------------
              See attached
-------------------------------------------- -----------------------------------

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

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

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

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

9.       The Affiliates of each Credit Party are as follows and, except as set
         forth below, no Credit Party is party to any agreements with any such
         Affiliate:

------------------------- --------------------------- --------------------------
CREDIT PARTY              AFFILIATES                  AGREEMENTS WITH AFFILIATES
------------------------- --------------------------- --------------------------
                                    None
------------------------- --------------------------- --------------------------

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

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

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

                                       3
<PAGE>

   [PLEASE PROVIDE OUR COUNSEL WITH COPIES OF ANY AGREEMENTS IDENTIFIED ABOVE]

10.      A list of all of the material contracts to which any Credit Party is a
         party or by which such Credit Party is bound is set forth below. For
         purposes of this Item 10, the list of "material contracts" should
         include any long term or significant customer agreements, long term or
         significant supply agreements, real estate leases, agreements pursuant
         to which intellectual property is licensed or other material licensing
         agreements, employment agreements, collective bargaining agreements,
         management and consulting agreements requiring payment of more than
         $25,000 in any year and equity holders' agreements.

         CPS


 [PLEASE PROVIDE OUR COUNSEL WITH COPIES OF THE MATERIAL CONTRACTS LISTED ABOVE]

11.      Except as set forth below, the execution and delivery of the Loan
         Documents and the consummation of the transactions contemplated thereby
         will not violate, conflict with or cause a breach of, or result in the
         creation of a Lien under, any of the agreements identified in Item 10,
         any Credit Party's Organizational Documents or applicable law:

         None


12.      The following consents shall have been obtained on or prior to the
         Closing Date in connection with the execution and delivery of the Loan
         Documents and the consummation of the transactions contemplated
         thereby:

         See attached - ?


13.      Each Credit Party's fiscal year ends on December 31, of each year.


14.      The authorized equity securities of each Credit Party, and the identity
         of the holders of issued equity securities with the percentage of their
         fully-diluted ownership of such Credit Party, are as set forth on the
         Capitalization Schedule attached hereto. Any preemptive or other
         outstanding rights, warrants, options, conversion rights or similar
         agreements or understandings are described on the Capitalization
         Schedule. [PLEASE PROVIDE OUR COUNSEL WITH COPIES OF ANY SHAREHOLDERS'
         AGREEMENTS OR OTHER AGREEMENTS EVIDENCING ANY PREEMPTIVE OR OTHER
         OUTSTANDING RIGHTS, WARRANTS, OPTIONS OR CONVERSION RIGHTS SET FORTH ON
         THE CAPITALIZATION SCHEDULE]

         See attached


15.      A brief description of each Credit Party's Pension Plans is:

                                       4
<PAGE>

16.      During the 5 year period preceding the Closing Date neither any Credit
         Party has been party to any merger, consolidation, stock acquisition or
         purchase of all or a substantial portion of the assets of any Person,
         except:

         No


         [PLEASE PROVIDE OUR COUNSEL WITH COPIES OF THE MATERIAL DOCUMENTS
         RELATING TO THE TRANSACTIONS DESCRIBED ABOVE]

         C.       NATURE OF OPERATIONS AND LOCATIONS

17.      The following is a brief description of each Credit Party's business:

----------------------------------------- --------------------------------------
CREDIT PARTY                              BUSINESS DESCRIPTION
----------------------------------------- --------------------------------------
Arizona Home and Health Care Private      Medical Staffing Agency
Duty
----------------------------------------- --------------------------------------

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

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

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


18.      Each location at which any Credit Party maintains any books, records,
         inventory, equipment or other assets is set forth in the table below,
         including for each such location a street address, the approximate
         size, an indication of whether the location is owned by the applicable
         Credit Party, leased by the applicable Credit Party (and, if so, the
         name and address of the owner of the location) or operated by a third
         party, such as a warehouseman or processor (and, if so, the name and
         address of such third party). The chief executive office of each Credit
         Party is indicated in the table below with an asterisk (*). In
         addition, the legal descriptions for any leased or owned real estate at
         which any Credit Party maintains any equipment are set forth on the
         Real Estate Schedule attached hereto.

<TABLE>
<S>     <C>
------------------ -------------------- -------- ------------------- --------------------------------
CREDIT PARTY       ADDRESS              SIZE     OWNED/LEASED/       NAME AND ADDRESS OF OWNER (IF
                                                 OPERATED            LEASED) OR THIRD-PARTY OPERATOR
                                                 BY THIRD PARTY      (IF OPERATED BY A THIRD PARTY)
------------------ -------------------- -------- ------------------- --------------------------------
                   5151 E. Broadway,    1,000                        Copy of Lease
                   #1530
                   Tucson, AZ 85711
------------------ -------------------- -------- ------------------- --------------------------------
                   5829 N. 7th Street,  1,000                        Copy of Lease
                   #1E
                   Phoenix, AZ 85014
------------------ -------------------- -------- ------------------- --------------------------------

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

------------------ -------------------- -------- ------------------- --------------------------------
</TABLE>
                                                 5
<PAGE>

         [WITH RESPECT TO PROPERTIES OPERATED BY A THIRD PARTY, PLEASE PROVIDE
         OUR COUNSEL WITH COPIES OF ANY AGREEMENTS BETWEEN SUCH THIRD PARTY AND
         THE APPLICABLE CREDIT PARTY. WE WILL SEPARATELY ADVISE YOU REGARDING
         OUR REQUIREMENTS FOR OWNED REAL ESTATE]

19.      The addresses of any locations not specified in Item 18 where any
         Credit Party has maintained inventory, books, records, equipment or
         other assets during the 4 month period preceding the Closing Date are:

------------------------------------- ------------------------------------------
CREDIT PARTY                          ADDRESS
------------------------------------- ------------------------------------------
                                                       N/A
------------------------------------- ------------------------------------------

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

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

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

         D.       FINANCING MATTERS

20.      No Credit Party has any Debt or any contingent obligations which would
         become Debt if they were non-contingent, except as set forth on the
         Debt Schedule attached hereto. [PLEASE PROVIDE OUR COUNSEL WITH COPIES
         OF THE MATERIAL DOCUMENTATION RELATING TO DEBT IDENTIFIED ON THE DEBT
         SCHEDULE THAT WILL REMAIN OUTSTANDING AFTER THE CLOSING DATE]

         None


21.      Any current creditors of any Credit Party that will be refinanced in
         connection with the funding of the initial Loans and any letters of
         credit currently outstanding on behalf of any Credit Party (together
         with an indication of whether any such letters of credit will be
         replaced or collateralized on the Closing Date) are as follows:

---------------------- ---------------------------- ----------------------------
CREDIT PARTY           CREDITORS TO BE REFINANCED   LETTERS OF CREDIT / REPLACED
                                                    OR COLLATERALIZED
---------------------- ---------------------------- ----------------------------
                                  None
---------------------- ---------------------------- ----------------------------

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

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

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

22.      Each Credit Party's assets are owned free and clear of any consensual
         Liens, except for the consensual Liens set forth on the Lien Schedule
         attached hereto. [PLEASE INDICATE WHICH LIENS DISCLOSED ON THE LIEN
         SCHEDULE WILL BE DISCHARGED AT CLOSING. PLEASE ALSO PROVIDE OUR COUNSEL
         WITH COPIES OF THE DOCUMENTS EVIDENCING THE LIENS DISCLOSED ON THE LIEN
         SCHEDULE THAT WILL NOT BE DISCHARGED AT CLOSING.]

         None

                                       6
<PAGE>


23.      No Credit Party has made any loans to, or otherwise made any
         Investments in, any other Persons, except as follows:

         None


         [PLEASE PROVIDE OUR COUNSEL WITH COPIES OF THE DOCUMENTATION RELATING
         TO ANY MATERIAL INVESTMENTS DESCRIBED ABOVE]

24.      No Credit Party is obligated to pay any management, consulting or
         similar professional advisory fees, except:

         Ongoing business activity to accountant and lawyer.


         [PLEASE PROVIDE OUR COUNSEL WITH COPIES OF THE AGREEMENTS EVIDENCING
         THE FEES DESCRIBED ABOVE]

25.      Any broker's or similar fees which will be owing in connection with the
         consummation of the transactions contemplated by the Loan Documents
         are:

         None


         [PLEASE PROVIDE OUR COUNSEL WITH COPIES OF THE AGREEMENTS EVIDENCING
         ANY FEES DESCRIBED ABOVE]

         E.       REGULATORY MATTERS AND DISPUTES

26.      Any actions, suits, judgments or proceedings pending against, or, to
         Borrower's knowledge, threatened against or affecting, any Credit Party
         before any court or arbitrator or any governmental body, agency or
         official, are described on the Litigation Schedule attached hereto.
         [FOR EACH OF THE MATTERS DISCLOSED ON THE LITIGATION SCHEDULE, PLEASE
         PROVIDE A BRIEF SUMMARY OF SUCH MATTER WHICH INCLUDES THE CURRENT
         STATUS OF THE PROCEEDINGS, AN INDICATION OF WHETHER ANY LIABILITY
         RESULTING FROM SUCH MATTER WOULD BE COVERED BY INSURANCE, AND, IF AN
         INSURANCE POLICY WOULD APPLY, AN INDICATION OF WHETHER THE INSURANCE
         CARRIER HAS ACKNOWLEDGED RESPONSIBILITY UNDER SUCH POLICY]

         None


27.      All of the material licenses, permits and certificates necessary to the
         operation of any Credit Party's business are:

--------------------------------------- ----------------------------------------
CREDIT PARTY                            LICENSES / PERMITS / CERTIFICATES
--------------------------------------- ----------------------------------------
                                        State of Arizona Business License
--------------------------------------- ----------------------------------------

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

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

                                       7
<PAGE>

28.      Any strikes or other labor disputes pending or, to Borrower's
         knowledge, threatened, against any Credit Party are:

         None


29.      Any notices of non-compliance received by any Credit Party from any
         governmental authority during the 5 year period preceding the Closing
         Date with respect to any Environmental Laws, securities laws or
         regulations, tax laws or regulations, laws or regulations addressing
         the sale or distribution of durable medical equipment, health and
         safety laws or regulations or ERISA are as follows:

         N/A


         [PLEASE PROVIDE OUR COUNSEL WITH ANY NOTICES OF NON-COMPLIANCE
         DESCRIBED ABOVE]

         F.       SPECIAL COLLATERAL

30.      All of the financial institutions at which any Credit Party maintains
         any deposit accounts, investment accounts, securities accounts or
         similar accounts, together with the account number and a description
         for each such account, are:
<TABLE>
<S>     <C>
--------------------------- -------------------------------- ---------------------------- ----------------------------
CREDIT PARTY                FINANCIAL INSTITUTION(S) WHERE   ACCOUNT NUMBERS              DESCRIPTIONS OF ACCOUNTS
                            ACCOUNTS MAINTAINED
--------------------------- -------------------------------- ---------------------------- ----------------------------
                                                             Rt# for both 122100024
--------------------------- -------------------------------- ---------------------------- ----------------------------
                            Bank One                         07590138                     Operating
--------------------------- -------------------------------- ---------------------------- ----------------------------
                            Bank One                         28644166                     Bill paying
--------------------------- -------------------------------- ---------------------------- ----------------------------

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

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

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

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

31.      All of the items of intellectual property owned by or licensed to any
         Credit Party, together with the registration or application number for
         each such item of intellectual property (if registered or if an
         application for registration has been submitted), are:

--------------------- ------------------------------ ------------------------------- ---------------------------------
CREDIT PARTY          PATENTS / REGISTRATION OR      TRADEMARKS / REGISTRATION OR    COPYRIGHTS / REGISTRATION OR
                      APPLICATION NUMBERS            APPLICATION NUMBERS             APPLICATION NUMBERS
--------------------- ------------------------------ ------------------------------- ---------------------------------

--------------------- ------------------------------ ------------------------------- ---------------------------------
                                                                  N/A
--------------------- ------------------------------ ------------------------------- ---------------------------------

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

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

--------------------- ------------------------------ ------------------------------- ---------------------------------
</TABLE>

                                                     8
<PAGE>

32.      No Credit Party has any chattel paper (whether tangible or electronic)
         or instruments as of the date hereof, except:



33.      No Credit Party owns any equipment subject to a certificate of title
         statute (including, without limitation, any motor vehicles), except:

         Chrysler PT Cruiser/paid in full


34.      No Credit Party owns any assets that are of a type in which a lien may
         be registered, recorded or filed under, or notice thereof given under,
         any federal statute or regulation, except for the intellectual property
         identified in Item 31 above and except:

         N/A


35.      No Credit Party has any letter of credit rights, any interests in
         commercial tort claims or any documents of title, except:

         None


         G.       HEALTHCARE MATTERS

36. Each Credit Party is certified for participation in the Medicare program in
the following jurisdictions:

<TABLE>
<S>     <C>
------------------------------ ---------------------------- ----------------------------- ----------------------------
CREDIT PARTY                   REGION (A, B, C, D)          CARRIER/INTERMEDIARY NAME     SUPPLIER/PROVIDER NUMBER
------------------------------ ---------------------------- ----------------------------- ----------------------------
None
------------------------------ ---------------------------- ----------------------------- ----------------------------

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

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

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

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

------------------------------ ---------------------------- ----------------------------- ----------------------------
</TABLE>

         [PLEASE PROVIDE OUR COUNSEL WITH COPIES OF CMS FORM 855 (OR EARLIER
VERSION USED BY HCFA) AND ALL RELATED CORRESPONDENCE FROM EACH
CARRIER/INTERMEDIARY DEMONSTRATING ENROLLMENT AND GOOD STANDING]

37.      Each Credit Party is certified for participation in the Medicaid
         programs offered by the following states:

                                       9
<PAGE>

---------------------------- ------------------------ --------------------------
CREDIT PARTY                 STATE                    MEDICAID SUPPLIER NUMBER
---------------------------- ------------------------ --------------------------
None
---------------------------- ------------------------ --------------------------

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

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

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

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

---------------------------- ------------------------ --------------------------
         [PLEASE PROVIDE OUR COUNSEL WITH COPIES OF ALL RELATED CORRESPONDENCE
FROM EACH STATE MEDICAID AGENCY DEMONSTRATING ENROLLMENT] N/A

38.      No Credit Party is accredited by a private health care organization
         accreditation agency, except:

         [PLEASE PROVIDE OUR COUNSEL WITH COPIES OF CURRENT CERTIFICATES OF
ACCREDITATION, MOST RECENT ACCREDITATION SURVEY REPORT, DEFICIENCY LISTS, IF
ANY, AND PLAN(S) OF CORRECTION, IF ANY]

39.      No Credit Party has received notice of non-compliance with state or
         federal laws or regulations addressing health care fraud and abuse,
         except: None

         [PLEASE PROVIDE OUR COUNSEL WITH COPIES OF EACH CREDIT PARTY'S
CORPORATE HEALTHCARE REGULATORY COMPLIANCE PROGRAM].

40.      No Credit Party has received notice of non-compliance with any of the
         regulations promulgated under the Health Insurance Portability and
         Accountability Act which currently are in effect, except: N/A

         [PLEASE PROVIDE OUR COUNSEL WITH COPIES OF EACH CREDIT PARTY'S HIPAA
COMPLIANCE PLAN]

         H.       CONTACT INFORMATION

41.      Legal Counsel for the Company is as follows:

                 Name of the Firm:                    SEE ATTACHED

                 Address:                             __________________________

                 Partner Handling Relationship:       __________________________

                 Telephone:                           __________________________

                 Telecopier:                          __________________________

                 E-Mail:                              __________________________

                                       10
<PAGE>

42.      The Certified Public Accountant for the Company is as follows:

                 Name of the Firm:                    SEE ATTACHED

                 Address:                             __________________________

                 Partner Handling Relationship:       __________________________

43.      The Insurance Broker/Bank for the Corporation is as follows:

                 Name of the Firm:                    VOIGHT INS. SERVICES LLC

                 Address:                             72819 CAMELBACK ROAD, #210
                                                      SCOTTSDALE, AZ 85251

                 Partner Handling Relationship:       WALLY VOIGHT

                 Telephone:                           (480) 421-0200

                 Telecopier:                          (480) 421-0219

                 E-Mail:                              ?


                            [Signature page follows]

                                       11
<PAGE>

                   (SIGNATURE PAGE TO INFORMATION CERTIFICATE)


         Bank shall be entitled to rely upon the foregoing in all respects and
the undersigned is duly authorized to execute and deliver this Information
Certificate.

                                    Very truly yours,

                                    Arizona Home Health Care/Private Duty, Inc.


                                    By:
                                       -----------------------------------------
                                       Name:    William Crocker
                                       Title:   President

<PAGE>

                              LIST OF SCHEDULES TO
                              --------------------
                             INFORMATION CERTIFICATE
                             -----------------------



Capitalization Schedule
Real Estate Schedule
Debt Schedule
Lien Schedule
Litigation Schedule


<PAGE>

                     ARIZONA HOME & HEALTH CARE/PRIVATE DUTY
                          5829 N. 7th Street, Suite 1E
                                Phoenix, AZ 85014
                      PH: 602-248-9027 - FAX: 602-248-9331


                                   ACCOUNTANT
                                   ----------

DOXEY & CO.
         Marv Doxey
         Kimala Christopherson
668 N. 44th Street, Suite 300
Phoenix, AZ  85008

602-685-1191

August 2002 - Present (June 2004)


MR. HARRY INGOLD, CPA

May 2000 - July 2002 (deceased)


CLIFTON GUNDERSON, LLP
         (formerly Zolondek, Strassels, Greene & Freed, PC)
3636 N. Central Avenue, Suite 400
Phoenix, AZ  85012

602-266-2248

May 2000 - May 2002

                                    ATTORNEY
                                    --------

KELLER ROHRBACK, PLC
         Leon Silver, Esq.
3101 N. Central Avenue, Suite 900
Phoenix, AZ  85012

602-230-6378

May 2000 - Present (June 2004)

<PAGE>

                                                  BRIDGE HEALTHCARE FINANCE, LLC
                                                                 CREDIT FACILITY

                         BRIDGE HEALTHCARE FINANCE, LLC

                             INFORMATION CERTIFICATE

                              Dated: July 14, 2004


PLEASE COMPLETE AND RETURN
AS SOON AS POSSIBLE TO:

<TABLE>
<S>     <C>
(a)    Thomas E. Schnur, Esq.                     (b)    Ms. Kim Gordon
       Vedder, Price, Kaufman & Kammholz, P.C.           Bridge Healthcare Finance, LLC
       222 N. LaSalle Street                             233 South Wacker Drive, 53rd Floor
       Chicago, Illinois  60601                          Chicago, Illinois 60606
       Tel:  312-609-7715                                Tel:  847-317-9984
       Fax:  312-609-5005                                Fax:  847-943-9678
       e-mail:  tschnur@vedderprice.com                  e-mail:  kgordon@bridgehcf.com
</TABLE>

Ladies and Gentlemen:

         Reference is hereby made to the proposed draft Loan and Security
Agreement of even date herewith (the "LOAN AND SECURITY AGREEMENT"; capitalized
terms used in this Information Certificate and not otherwise defined in this
Information Certificate shall have the meanings assigned thereto in the Loan and
Security Agreement) by and among Bridge Healthcare Finance, LLC ("BANK"). To
induce Bank to enter into the Loan and Security Agreement and fund the Loans
provided for thereunder, Borrower hereby provides you with the following
information regarding (collectively as the "CREDIT PARTIES" and each, a "CREDIT
PARTY"): Arizona Home Health Care/Private Duty, Inc. and EACH PARENT ENTITY AND
EACH OF ITS DIRECT AND INDIRECT SUBSIDIARIES Borrower represents and warrants to
Bank that the information provided in this Information Certificate is true,
correct and complete as of the date hereof.

                                       1
<PAGE>

         A.       IDENTIFICATION MATTERS

1.       The full, correct and current name of each Credit Party as it appears
         in such Credit Party's Organizational Documents is: Care Pros Staffing,
         Inc.



         [PLEASE PROVIDE OUR COUNSEL WITH A COPY OF EACH CREDIT PARTY'S
         ORGANIZATIONAL DOCUMENTS, CERTIFIED AS OF A RECENT DATE BY THE
         JURISDICTION ISSUING SUCH ORGANIZATIONAL DOCUMENTS]

2.       Each Credit Party's type of organization is:

<TABLE>
<S>     <C>
------------------------------------------------------------ ---------------------------------------------------------
CREDIT PARTY                                                 TYPE OF ORGANIZATION
------------------------------------------------------------ ---------------------------------------------------------
Care Pros Staffing, Inc.                                     S. Corporation
------------------------------------------------------------ ---------------------------------------------------------

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

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


3.       Each Credit Party's jurisdictions of organization are:

------------------------------------------------------------ ---------------------------------------------------------
CREDIT PARTY                                                 JURISDICTION OF ORGANIZATION
------------------------------------------------------------ ---------------------------------------------------------
Care Pros Staffing, Inc.                                     Texas
------------------------------------------------------------ ---------------------------------------------------------

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

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

4.       Each Credit Party's jurisdictions of qualification are:

------------------------------------------------------------ ---------------------------------------------------------
CREDIT PARTY                                                 JURISDICTIONS OF QUALIFICATION
------------------------------------------------------------ ---------------------------------------------------------
Care Pros Staffing, Inc.                                     Texas
------------------------------------------------------------ ---------------------------------------------------------

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

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

5.       Each Credit Party's organizational identification number is:

------------------------------------------------------------ ---------------------------------------------------------
CREDIT PARTY                                                 ORGANIZATIONAL IDENTIFICATION NUMBER
------------------------------------------------------------ ---------------------------------------------------------
Care Pros Staffing, Inc.                                     Fed Id: 75-2950403
------------------------------------------------------------ ---------------------------------------------------------

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

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

                                                     2
</TABLE>
<PAGE>

6.       Any names of a Credit Party (as appearing in such Person's
         Organizational Documents) not specified above in Item 1 that such
         Credit Party has had during the 5 year period preceding the Closing
         Date are:

<TABLE>
<S>     <C>
------------------------------------------------------------ ---------------------------------------------------------
CREDIT PARTY                                                 ADDITIONAL NAMES
------------------------------------------------------------ ---------------------------------------------------------
(N/A)
------------------------------------------------------------ ---------------------------------------------------------

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

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

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

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


         B.       LEGAL MATTERS

7.       The officers of each Credit Party and their respective titles are:

---------------------------------------- -------------------------------------- --------------------------------------
CREDIT PARTY                             TITLE                                  NAME
---------------------------------------- -------------------------------------- --------------------------------------
Care Pros Staffing, Inc.                 President                              Dan Ross
---------------------------------------- -------------------------------------- --------------------------------------
Care Pros Staffing, Inc.                 Chairman                               David Kingery
---------------------------------------- -------------------------------------- --------------------------------------

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

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

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


8.       The members of the Board of Directors of each Credit Party (or, if such
         Credit Party is a limited partnership, the general partner or, if such
         Credit Party is a limited liability company, the managers) are:

------------------------------------------------------------ ---------------------------------------------------------
CREDIT PARTY                                                 BOARD OF DIRECTORS / GENERAL PARTNER / MANAGERS
------------------------------------------------------------ ---------------------------------------------------------
Care Pros Staffing, Inc.                                     Dan Ross & David Kingery
------------------------------------------------------------ ---------------------------------------------------------

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

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

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

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


9.       The Affiliates of each Credit Party are as follows and, except as set
         forth below, no Credit Party is party to any agreements with any such
         Affiliate:

---------------------------------------- -------------------------------------- --------------------------------------
CREDIT PARTY                             AFFILIATES                             AGREEMENTS WITH AFFILIATES
---------------------------------------- -------------------------------------- --------------------------------------
Care Pros Staffing, Inc.                 Telesis Financial Services, Inc.       Provides CPS with Financial and
                                                                                Accounting Services, Owned by David
                                                                                Kingery
---------------------------------------- -------------------------------------- --------------------------------------

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

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

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

                                                          3
</TABLE>
<PAGE>

         [PLEASE PROVIDE OUR COUNSEL WITH COPIES OF ANY AGREEMENTS IDENTIFIED
         ABOVE]

                             (PROVIDED TO CRDENTIA)

10.      A list of all of the material contracts to which any Credit Party is a
         party or by which such Credit Party is bound is set forth below. For
         purposes of this Item 10, the list of "material contracts" should
         include any long term or significant customer agreements, long term or
         significant supply agreements, real estate leases, agreements pursuant
         to which intellectual property is licensed or other material licensing
         agreements, employment agreements, collective bargaining agreements,
         management and consulting agreements requiring payment of more than
         $25,000 in any year and equity holders' agreements. (SEE ADDENDUM
         ATTACHED)


         [PLEASE PROVIDE OUR COUNSEL WITH COPIES OF THE MATERIAL CONTRACTS
         LISTED ABOVE]

11.      Except as set forth below, the execution and delivery of the Loan
         Documents and the consummation of the transactions contemplated thereby
         will not violate, conflict with or cause a breach of, or result in the
         creation of a Lien under, any of the agreements identified in Item 10,
         any Credit Party's Organizational Documents or applicable law:

         (N/A)

12.      The following consents shall have been obtained on or prior to the
         Closing Date in connection with the execution and delivery of the Loan
         Documents and the consummation of the transactions contemplated
         thereby: (N/A)



13.      Each Credit Party's fiscal year ends on 12/31 of each year.



14.      The authorized equity securities of each Credit Party, and the identity
         of the holders of issued equity securities with the percentage of their
         fully-diluted ownership of such Credit Party, are as set forth on the
         Capitalization Schedule attached hereto. Any preemptive or other
         outstanding rights, warrants, options, conversion rights or similar
         agreements or understandings are described on the Capitalization
         Schedule. [PLEASE PROVIDE OUR COUNSEL WITH COPIES OF ANY SHAREHOLDERS'
         AGREEMENTS OR OTHER AGREEMENTS EVIDENCING ANY PREEMPTIVE OR OTHER
         OUTSTANDING RIGHTS, WARRANTS, OPTIONS OR CONVERSION RIGHTS SET FORTH ON
         THE CAPITALIZATION SCHEDULE]

                  David Kingery             25,000 shares     25%

                  Dan Ross                  25,000 shares     25%

                  David Gorman              25,000 shares     25%

                  John Pencsak              25,000 shares     25%

                                       4
<PAGE>

15.      A brief description of each Credit Party's Pension Plans is: (N/A)



16.      During the 5 year period preceding the Closing Date neither any Credit
         Party has been party to any merger, consolidation, stock acquisition or
         purchase of all or a substantial portion of the assets of any Person,
         except: (N/A)

         [PLEASE PROVIDE OUR COUNSEL WITH COPIES OF THE MATERIAL DOCUMENTS
         RELATING TO THE TRANSACTIONS DESCRIBED ABOVE]

         C.       NATURE OF OPERATIONS AND LOCATIONS

17.      The following is a brief description of each Credit Party's business:

<TABLE>
<S>     <C>
----------------------------------------- ----------------------------------------------------------------------------
CREDIT PARTY                              BUSINESS DESCRIPTION
----------------------------------------- ----------------------------------------------------------------------------
Care Pros Staffing, Inc.                  Temp. Nurse Staffing
----------------------------------------- ----------------------------------------------------------------------------

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

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

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

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


18.      Each location at which any Credit Party maintains any books, records,
         inventory, equipment or other assets is set forth in the table below,
         including for each such location a street address, the approximate
         size, an indication of whether the location is owned by the applicable
         Credit Party, leased by the applicable Credit Party (and, if so, the
         name and address of the owner of the location) or operated by a third
         party, such as a warehouseman or processor (and, if so, the name and
         address of such third party). The chief executive office of each Credit
         Party is indicated in the table below with an asterisk (*). In
         addition, the legal descriptions for any leased or owned real estate at
         which any Credit Party maintains any equipment are set forth on the
         Real Estate Schedule attached hereto.

----------------- ----------------------- ------------- ----------------------- --------------------------------------
CREDIT PARTY      ADDRESS                 SIZE          OWNED/LEASED/OPERATED   NAME AND ADDRESS OF OWNER (IF
                                                        BY THIRD PARTY          LEASED) OR THIRD-PARTY OPERATOR (IF
                                                                                OPERATED BY A THIRD PARTY)
----------------- ----------------------- ------------- ----------------------- --------------------------------------
Care Pros         808 S. College St.      500 Sq. Feet  Leased                  Park Board Limited. - Richard Dill
Staffing, Inc.    #122
                  McKinney, TX
----------------- ----------------------- ------------- ----------------------- --------------------------------------
Care Pros         3000 S. 31st St. #301   346 Sq. Feet  Leased                  Charter Property Management
Staffing, Inc.    Temple, TX 76502
----------------- ----------------------- ------------- ----------------------- --------------------------------------

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

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

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

                                                    5
</TABLE>
<PAGE>

         [WITH RESPECT TO PROPERTIES OPERATED BY A THIRD PARTY, PLEASE PROVIDE
         OUR COUNSEL WITH COPIES OF ANY AGREEMENTS BETWEEN SUCH THIRD PARTY AND
         THE APPLICABLE CREDIT PARTY. WE WILL SEPARATELY ADVISE YOU REGARDING
         OUR REQUIREMENTS FOR OWNED REAL ESTATE]

19.      The addresses of any locations not specified in Item 18 where any
         Credit Party has maintained inventory, books, records, equipment or
         other assets during the 4 month period preceding the Closing Date are:

<TABLE>
<S>     <C>
------------------------------------------- --------------------------------------------------------------------------
CREDIT PARTY                                ADDRESS
------------------------------------------- --------------------------------------------------------------------------
(N/A)
------------------------------------------- --------------------------------------------------------------------------

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

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

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

         D.       FINANCING MATTERS

20.      No Credit Party has any Debt or any contingent obligations which would
         become Debt if they were non-contingent, except as set forth on the
         Debt Schedule attached hereto. [PLEASE PROVIDE OUR COUNSEL WITH COPIES
         OF THE MATERIAL DOCUMENTATION RELATING TO DEBT IDENTIFIED ON THE DEBT
         SCHEDULE THAT WILL REMAIN OUTSTANDING AFTER THE CLOSING DATE] (N/A)



21.      Any current creditors of any Credit Party that will be refinanced in
         connection with the funding of the initial Loans and any letters of
         credit currently outstanding on behalf of any Credit Party (together
         with an indication of whether any such letters of credit will be
         replaced or collateralized on the Closing Date) are as follows:

---------------------------------------- -------------------------------------- --------------------------------------
CREDIT PARTY                             CREDITORS TO BE REFINANCED             LETTERS OF CREDIT / REPLACED OR
                                                                                COLLATERALIZED
---------------------------------------- -------------------------------------- --------------------------------------
(N/A)
---------------------------------------- -------------------------------------- --------------------------------------

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

---------------------------------------- -------------------------------------- --------------------------------------
</TABLE>

22.      Each Credit Party's assets are owned free and clear of any consensual
         Liens, except for the consensual Liens set forth on the Lien Schedule
         attached hereto. [PLEASE INDICATE WHICH LIENS DISCLOSED ON THE LIEN
         SCHEDULE WILL BE DISCHARGED AT CLOSING. PLEASE ALSO PROVIDE OUR COUNSEL
         WITH COPIES OF THE DOCUMENTS EVIDENCING THE LIENS DISCLOSED ON THE LIEN
         SCHEDULE THAT WILL NOT BE DISCHARGED AT CLOSING.] (N/A)

                                       6
<PAGE>

23.      No Credit Party has made any loans to, or otherwise made any
         Investments in, any other Persons, except as follows:(N/A)

         [PLEASE PROVIDE OUR COUNSEL WITH COPIES OF THE DOCUMENTATION RELATING
         TO ANY MATERIAL INVESTMENTS DESCRIBED ABOVE]

24.      No Credit Party is obligated to pay any management, consulting or
         similar professional advisory fees, except: (None that will survive the
         closing)



         [PLEASE PROVIDE OUR COUNSEL WITH COPIES OF THE AGREEMENTS EVIDENCING
         THE FEES DESCRIBED ABOVE]

25.      Any broker's or similar fees which will be owing in connection with the
         consummation of the transactions contemplated by the Loan Documents
         are: (N/A)



         [PLEASE PROVIDE OUR COUNSEL WITH COPIES OF THE AGREEMENTS EVIDENCING
         ANY FEES DESCRIBED ABOVE]

         E.       REGULATORY MATTERS AND DISPUTES

26.      Any actions, suits, judgments or proceedings pending against, or, to
         Borrower's knowledge, threatened against or affecting, any Credit Party
         before any court or arbitrator or any governmental body, agency or
         official, are described on the Litigation Schedule attached hereto.
         [FOR EACH OF THE MATTERS DISCLOSED ON THE LITIGATION SCHEDULE, PLEASE
         PROVIDE A BRIEF SUMMARY OF SUCH MATTER WHICH INCLUDES THE CURRENT
         STATUS OF THE PROCEEDINGS, AN INDICATION OF WHETHER ANY LIABILITY
         RESULTING FROM SUCH MATTER WOULD BE COVERED BY INSURANCE, AND, IF AN
         INSURANCE POLICY WOULD APPLY, AN INDICATION OF WHETHER THE INSURANCE
         CARRIER HAS ACKNOWLEDGED RESPONSIBILITY UNDER SUCH POLICY]

         (N/A)

27.      All of the material licenses, permits and certificates necessary to the
         operation of any Credit Party's business are:

<TABLE>
<S>     <C>
--------------------------------------- ------------------------------------------------------------------------------
CREDIT PARTY                            LICENSES / PERMITS / CERTIFICATES
--------------------------------------- ------------------------------------------------------------------------------
(N/A)
--------------------------------------- ------------------------------------------------------------------------------

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

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

--------------------------------------- ------------------------------------------------------------------------------
</TABLE>

28.      Any strikes or other labor disputes pending or, to Borrower's
         knowledge, threatened, against any Credit Party are:(N/A)

                                       7
<PAGE>

29.      Any notices of non-compliance received by any Credit Party from any
         governmental authority during the 5 year period preceding the Closing
         Date with respect to any Environmental Laws, securities laws or
         regulations, tax laws or regulations, laws or regulations addressing
         the sale or distribution of durable medical equipment, health and
         safety laws or regulations or ERISA are as follows: (N/A)



         [PLEASE PROVIDE OUR COUNSEL WITH ANY NOTICES OF NON-COMPLIANCE
         DESCRIBED ABOVE]

         F.       SPECIAL COLLATERAL

30.      All of the financial institutions at which any Credit Party maintains
         any deposit accounts, investment accounts, securities accounts or
         similar accounts, together with the account number and a description
         for each such account, are:

<TABLE>
<S>     <C>
--------------------------- -------------------------------- ---------------------------- ----------------------------
CREDIT PARTY                FINANCIAL INSTITUTION(S) WHERE   ACCOUNT NUMBERS              DESCRIPTIONS OF ACCOUNTS
                            ACCOUNTS MAINTAINED
--------------------------- -------------------------------- ---------------------------- ----------------------------
Care Pros Staffing, Inc.    First American Bank              1038016243                   Operating
--------------------------- -------------------------------- ---------------------------- ----------------------------
Care Pros Staffing, Inc.    First American Bank              1038027375                   Temple Daily Pay
--------------------------- -------------------------------- ---------------------------- ----------------------------
Care Pros Staffing, Inc.    First American Bank              1038030851                   McKinney Daily Pay
--------------------------- -------------------------------- ---------------------------- ----------------------------

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

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

31.      All of the items of intellectual property owned by or licensed to any
         Credit Party, together with the registration or application number for
         each such item of intellectual property (if registered or if an
         application for registration has been submitted), are:

--------------------- ------------------------------ ------------------------------- ---------------------------------
CREDIT PARTY          PATENTS / REGISTRATION OR      TRADEMARKS / REGISTRATION OR    COPYRIGHTS / REGISTRATION OR
                      APPLICATION NUMBERS            APPLICATION NUMBERS             APPLICATION NUMBERS
--------------------- ------------------------------ ------------------------------- ---------------------------------
(N/A)
--------------------- ------------------------------ ------------------------------- ---------------------------------

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

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

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

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


32.      No Credit Party has any chattel paper (whether tangible or electronic)
         or instruments as of the date hereof, except: (N/A)

                                       8
<PAGE>

33.      No Credit Party owns any equipment subject to a certificate of title
         statute (including, without limitation, any motor vehicles), except:
         (N/A)



34.      No Credit Party owns any assets that are of a type in which a lien may
         be registered, recorded or filed under, or notice thereof given under,
         any federal statute or regulation, except for the intellectual property
         identified in Item 31 above and except: (N/A)



35.      No Credit Party has any letter of credit rights, any interests in
         commercial tort claims or any documents of title, except: (N/A)



         G.       HEALTHCARE MATTERS

36.      Each Credit Party is certified for participation in the Medicare
         program in the following jurisdictions:

------------------------------ ---------------------------- ----------------------------- ----------------------------
CREDIT PARTY                   REGION (A, B, C, D)          CARRIER/INTERMEDIARY NAME     SUPPLIER/PROVIDER NUMBER
------------------------------ ---------------------------- ----------------------------- ----------------------------
(N/A)
------------------------------ ---------------------------- ----------------------------- ----------------------------

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

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

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

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

------------------------------ ---------------------------- ----------------------------- ----------------------------
         [PLEASE PROVIDE OUR COUNSEL WITH COPIES OF CMS FORM 855 (OR EARLIER
VERSION USED BY HCFA) AND ALL RELATED CORRESPONDENCE FROM EACH
CARRIER/INTERMEDIARY DEMONSTRATING ENROLLMENT AND GOOD STANDING]

37.      Each Credit Party is certified for participation in the Medicaid
         programs offered by the following states:

------------------------------- ---------------------------- ---------------------------------------------------------
CREDIT PARTY                    STATE                        MEDICAID SUPPLIER NUMBER
------------------------------- ---------------------------- ---------------------------------------------------------
(N/A)
------------------------------- ---------------------------- ---------------------------------------------------------

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

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

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

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

------------------------------- ---------------------------- ---------------------------------------------------------
</TABLE>
         [PLEASE PROVIDE OUR COUNSEL WITH COPIES OF ALL RELATED CORRESPONDENCE
FROM EACH STATE MEDICAID AGENCY DEMONSTRATING ENROLLMENT]

                                       9
<PAGE>

38.      No Credit Party is accredited by a private health care organization
         accreditation agency, except: (N/A)

         [PLEASE PROVIDE OUR COUNSEL WITH COPIES OF CURRENT CERTIFICATES OF
ACCREDITATION, MOST RECENT ACCREDITATION SURVEY REPORT, DEFICIENCY LISTS, IF
ANY, AND PLAN(S) OF CORRECTION, IF ANY]

39.      No Credit Party has received notice of non-compliance with state or
         federal laws or regulations addressing health care fraud and abuse,
         except: (N/A)

         [PLEASE PROVIDE OUR COUNSEL WITH COPIES OF EACH CREDIT PARTY'S
CORPORATE HEALTHCARE REGULATORY COMPLIANCE PROGRAM].

40.      No Credit Party has received notice of non-compliance with any of the
         regulations promulgated under the Health Insurance Portability and
         Accountability Act which currently are in effect, except: (N/A)

         [PLEASE PROVIDE OUR COUNSEL WITH COPIES OF EACH CREDIT PARTY'S HIPAA
COMPLIANCE PLAN]

         H.       CONTACT INFORMATION

41.      Legal Counsel for the Company is as follows:

<TABLE>
<S>     <C>
                 Name of the Firm:                        SHAMOUN & KLATSKEY

                 Address:                                 SUITE 1210 AT REGENCY PLAZA, 3710
                                                          RAWLINS ST., DALLAS, TX  75219

                 Partner Handling Relationship:           DAN ROSS

                 Telephone:                               214-987-1745

                 Telecopier:                              214-521-9033

                 E-Mail:                                  attorney@shamounandklatsky.com

42.      The Certified Public Accountant for the Company is as follows:

                 Name of the Firm:                        BRIAN DOBRY, CPA

                 Address:                                 321 N. PORTER, NORMAN, OK  73071

                 Partner Handling Relationship:           DAVID KINGERY

                                       10
<PAGE>

43.      The Insurance Broker/Bank for the Corporation is as follows:

                 Name of the Firm:                        THE SOLUTIONS GROUP

                 Address:                                 2101 LOCKHILL-SELMA RD., SUITE 210,
                                                          SAN ANTONIO, TX  78213

                 Partner Handling Relationship:           DAN ROSS / DAVID KINGERY

                 Telephone:                               800-866-2682

                 Telecopier:                              866-847-7232

                 E-Mail:
</TABLE>


                            [Signature page follows]

                                       11
<PAGE>

                   (SIGNATURE PAGE TO INFORMATION CERTIFICATE)


         Bank shall be entitled to rely upon the foregoing in all respects and
the undersigned is duly authorized to execute and deliver this Information
Certificate.

                                                Very truly yours,

                                                Care Pros Staffing, Inc.


                                                By:
                                                   ----------------------------
                                                   Name:    Dan Ross
                                                   Title:   President

<PAGE>

                              LIST OF SCHEDULES TO
                              --------------------
                             INFORMATION CERTIFICATE
                             -----------------------



Capitalization Schedule
Real Estate Schedule
Debt Schedule
Lien Schedule
Litigation Schedule

<PAGE>

                             SUBORDINATION AGREEMENT
                             -----------------------

         This Subordination Agreement is made as of this ____ day of
________________, 2004 among Bridge Healthcare Finance, LLC ("SENIOR REVOLVER
LENDER"), and Bridge Opportunity Finance, LLC ("SENIOR TERM LENDER"; and
together with Senior Revolver Lender, collectively, "SENIOR LENDER"), [NAME OF
SUBORDINATED LENDER] (the "SUBORDINATED LENDER"), Crdentia Corp., a Delaware
corporation ("Crdentia"), Baker Anderson Christie, Inc., a California
corporation ("Baker"), Nurses Network, Inc., a California corporation ("Nurses
Network"), New Age Staffing, Inc., a Delaware corporation ("New Age"), PSR
Nurses, Ltd., a Texas limited partnership ("PSR Ltd."), PSR Nurse Recruiting,
Inc., a Texas corporation ("PSR Recruiting"), and PSR Nurses Holdings Corp., a
Texas corporation ("PSR Holding") (Crdentia, Baker, Nurses Network, New Age, PSR
Ltd, PSR Recruiting and PSR Holding each individually, and referred to
collectively as, "BORROWER").

                              W I T N E S S E T H:

         WHEREAS, Senior Revolving Lender and Borrower have entered into a Loan
and Security Agreement, dated as of June ___, 2004 (as from time to time
amended, modified, extended, renewed, or restated, the "REVOLVING LOAN
AGREEMENT"), and Senior Term Lender and Borrower may enter into a Loan and
Security Agreement after the date hereof (as from time to time amended,
modified, extended, renewed, or restated, the "TERM LOAN AGREEMENT", and
together with the Revolving Loan Agreement, collectively the "LOAN AGREEMENT")
together with the other Loan Documents (as defined below), whereby Senior Lender
has made and shall make available to Borrower a credit facility (as from time to
time amended, modified, extended, renewed, or restated the "SENIOR LOAN")
therein set forth, which Senior Loan is secured by certain assignments of and
security interests in the assets of Borrower, now or hereafter existing, all as
more fully set forth in the Loan Documents; and

         WHEREAS, Borrower has issued one or more promissory note(s)
(individually and/or collectively, the "NOTES") in favor of Subordinated Lender
as described on SCHEDULE I attached hereto (such Notes together with all other
documents or instruments executed in connection therewith as from time to time
modified, extended, renewed or restated, collectively the "SUBORDINATED
DOCUMENTS"); and

         WHEREAS, as set forth in SECTION 18 hereof, Subordinated Lender shall
benefit from the execution and delivery of the Loan Agreement and the making of
the Senior Loan; and

         WHEREAS, as a condition of the financing accommodations under the Loan
Documents, the parties hereto are required to enter into this Agreement to
establish the priority of the repayment of the Borrower's debt, and to address
certain related matters; and

         WHEREAS, Subordinated Lender and Borrower desire to enter into this
Agreement in order to induce Senior Lender to enter into the Loan Agreement with
Borrower and to make the Senior Loan.

         NOW, THEREFORE, for good and valuable consideration, the sufficiency of
which is hereby acknowledged, the parties agree as follows:

                                       1
<PAGE>

         1. DEFINITIONS. Except as otherwise provided herein, all capitalized
terms used in this Agreement shall have the meanings ascribed to such terms in
the Loan Agreement, provided that the following terms shall have the meanings
set forth below:

         "ALLOWED PAYMENT" shall have the meaning set forth in Section 5 below.

         "BANKRUPTCY CODE" shall mean Title 11 of the United States Code as it
may be amended and/or restated from time to time, including any successor
provisions.

         "BORROWER" shall have the meaning set forth in the recitals above.

         "BORROWER'S PROPERTY" means all assets, property and property rights,
of any kind or nature, tangible or intangible, now or hereafter existing, in
which Borrower owns, asserts or maintains an interest.

         "FINALLY PAID" or "FINAL PAYMENT," when used in connection with the
Senior Indebtedness shall mean the full, final and indefeasible payment in cash
of all of the Senior Indebtedness and the irrevocable termination of Senior
Lender's obligation to make loans or other advances under the Loan Agreement; in
each case subject to such waiting periods as are necessary to prevent such
actions being subject to avoidance under Section 547 of the Bankruptcy Code, or
its successor.

         "INSOLVENCY PROCEEDING" shall mean any proceeding commenced by or
against any Person under any provision of the Bankruptcy Code, or under any
other bankruptcy or insolvency law, including assignments for the benefit of
creditors, formal or informal moratoria, compositions, extensions generally with
its creditors, or proceedings seeking reorganization, arrangement, or other
similar relief.

         "LIENS" shall mean any mortgage, deed of trust, pledge, lien, security
interest, charge, set-off right or other encumbrance, whether now existing or
hereafter created, acquired or arising.

         "LOAN DOCUMENTS" means all agreements, instruments and documents,
including, without limitation, guaranties, mortgages, trust deeds, pledges,
powers of attorney, consents, assignments, contracts, notices, security
agreements, leases, financing statements, subordination agreements, and all
other writings heretofore, now or from time to time hereafter executed by or on
behalf of Borrower or any other Person and delivered to Lender or to any parent,
affiliate or subsidiary of Lender in connection with the Obligations or the
transactions contemplated hereby, as each of the same may be amended, modified
or supplemented from time to time

         "NOTES" shall have the meaning set forth in the recitals hereof.

         "OBLIGATIONS" means all "Obligations" as such term is defined in the
Term Loan Agreement and Revolving Loan Agreement.

         "REVOLVING LOAN AGREEMENT" shall have the meaning set forth in the
recitals hereof.

                                       2
<PAGE>

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

         "SENIOR LENDER" shall have the meaning set forth in the recitals
hereof.

         "SENIOR REVOLVER LENDER" shall have the meaning set forth in the
recitals hereof.

         "SENIOR TERM LENDER" shall have the meaning set forth in the recitals
hereof.

         "SUBORDINATED DOCUMENTS" shall have the meaning set forth in the
recitals hereof.

         "SUBORDINATED INDEBTEDNESS" means all indebtedness of Borrower to
Subordinated Lender pursuant to the Subordinated Documents and all present and
future loans, advances, debts, liabilities, indemnification obligations (under
the Purchase Agreement or otherwise), claims and causes of action, otherwise
owing to or arising in favor of Subordinated Lender in respect of Borrower,
whether evidenced by any note, or other instrument or document, whether absolute
or contingent, due or to become due, including, without limitation, all
interest, charges, expenses, fees, attorneys' fees and any other sums chargeable
to Borrower. Subordinated Indebtedness shall include, without limitation: (i)
all interest which accrues on the principal amount of the Subordinated
Indebtedness, (ii) all amounts due under the Notes, and (iii) all other
obligations arising out of or in connection with the Subordinated Documents
incurred in connection with the Subordinated Indebtedness, in each instance
subsequent to the commencement of a case under Chapter 11 of the Bankruptcy
Code, whether or not such interest is allowed as a claim in such case.

         "SUBORDINATED LENDER" means, individually and collectively, the
individuals and entities named on the signature page hereto, and each reference
herein to "Subordinated Lender" shall be deemed to mean each Subordinated
Lender, individually and collectively, as the context requires.

         "SUBORDINATED LENDER REMEDIES" means any action which results in (A)
the sale, foreclosure, realization on or liquidation of any of Borrower's
Property, (B) the execution on any judgment obtained against Borrower, (C) the
acceleration of the Subordinated Indebtedness, (D) the filing of any petition or
lien under any bankruptcy, insolvency or creditors' rights laws with respect to
Borrower, or (E) the institution or exercise against Borrower of any suit, legal
action, arbitration or other enforcement remedy.

         "TERM LOAN AGREEMENT" shall have the meaning set forth in the recitals
hereof.

                                       3
<PAGE>

         "UCC" shall mean Article 9 of the Uniform Commercial Code, as in effect
in the State of Illinois from time to time.

         2. SUBORDINATION.

                  (a) Subordinated Lender hereby postpones and subordinates in
right of payment all of the Subordinated Indebtedness to the Final Payment of
all of the Senior Indebtedness. Subordinated Lender does not, as of the date
hereof, hold any Liens or security interests in Borrower's Property. If at any
time after the date hereof Senior Lender agrees in writing in its sole
discretion to permit such Liens, Subordinated Lender hereby agrees that any
Liens, security interests, claims and rights of any kind in favor of, or for the
benefit of, Subordinated Lender in, to or against Borrower or Borrower's
Property shall be junior, subordinate and subject in all respects to the Liens,
security interests, claims and rights against Borrower and/or Borrower's
Property of Senior Lender arising from or out of the Senior Indebtedness, which
shall under all circumstances be and remain superior and prior in right of
payment and enforcement to any Liens arising in favor of Subordinated Lender
regardless of the order or time as of which any Liens attach to any of
Borrower's Property, and notwithstanding the usual application of the priority
provisions of the Uniform Commercial Code as in effect in any jurisdiction or
any other applicable law or judicial decision of any jurisdiction, or whether
the Subordinated Lender is perfected without filing or possession in any part of
the Collateral, the order or time of UCC filings or any other filings or
recordings, the order or time of granting of any such Liens, or the physical
possession of any of Borrower's Property until this Agreement is terminated in
accordance with Section 25 hereof.

                  (b) Subordinated Lender agrees that the priority of the Senior
Indebtedness set forth herein shall continue during any Insolvency Proceeding
(including without limitation for any interest which accrues or is paid after
the commencement of an Insolvency Proceeding). Subordinated Lender further
agrees to execute and deliver such documents, instruments, lien releases,
assignments and financing statements and do such acts as may be necessary in
order for the Senior Lender to establish and maintain a first, valid, prior and
perfected security interest in the Collateral. If, after the date of this
Agreement, Borrower issues any instrument or document evidencing or pertaining
to the Subordinated Indebtedness each such instrument and document shall bear a
conspicuous legend, substantially in the form attached hereto as EXHIBIT A, that
it is subordinated to the Senior Indebtedness in accordance with the terms of
this Agreement.

                  (c) Borrower agrees that Borrower's books shall be marked to
evidence the subordination of all of the Subordinated Indebtedness to the holder
of Senior Indebtedness, in accordance with the terms of this Agreement. Senior
Lender is authorized to examine such books from time to time and to make any
notations required by this Agreement.

         3. WARRANTIES AND REPRESENTATIONS OF BORROWER AND SUBORDINATED LENDER.
Borrower and Subordinated Lender each hereby severally represents and warrants
to the Senior Lender that the Senior Lender has been furnished with a true and
correct copy of all the Subordinated Documents (attached hereto as EXHIBIT B)
with the legend described in EXHIBIT A affixed thereto and all instruments and
securities evidencing or pertaining to the Subordinated Indebtedness. Borrower
hereby represents and warrants to the Senior Lender that this Agreement has been
duly executed and delivered by Borrower and constitutes a legal, valid and

                                       4
<PAGE>

binding obligation of Borrower enforceable in accordance with its terms except
to the extent that the enforceability thereof may be limited by any applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws from time to
time in effect affecting generally the enforcement of creditors' rights and
remedies and general principles of equity. Subordinated Lender represents and
warrants to the Senior Lender that: (A) this Agreement has been duly executed
and delivered by Subordinated Lender and constitutes a legal, valid and binding
obligation of Subordinated Lender enforceable against the Subordinated Lender in
accordance with its terms, except to the extent that the enforceability thereof
may be limited by any applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws from time to time in effect affecting generally the
enforcement of creditors' rights and remedies and general principles of equity;
(B) Subordinated Lender has an address set forth below his, her or its name on
the signature page hereto; (C) Subordinated Lender is acquiring the Subordinated
Indebtedness for its, his or her own account and not with a view to the
distribution thereof and has no present intention of distributing the
Subordinated Indebtedness; and (D) Subordinated Lender has not relied and shall
not rely on any representation or information of any nature made by or received
from Senior Lender relative to Borrower in deciding to execute this Agreement or
to permit it to continue in effect.

         4. NEGATIVE COVENANTS. Until all of the Senior Indebtedness has been
Finally Paid: (A) Borrower shall not, directly or indirectly, grant a security
interest in, mortgage, pledge, assign or transfer any properties, to secure or
satisfy all or any part of the Subordinated Indebtedness; (B) Subordinated
Lender shall not demand or accept from Borrower any collateral; (C) Borrower
shall not discharge the Subordinated Indebtedness other than in accordance with
its terms; (D) Subordinated Lender shall not demand or accept from Borrower or
other person any consideration which would result in a discharge of the
Subordinated Indebtedness other than in accordance with its terms; (E)
Subordinated Lender shall not hereafter give any subordination in respect of the
Subordinated Indebtedness or convert any or all of the Subordinated Indebtedness
to capital stock, equity, ownership interest or other securities of Borrower;
(F) Subordinated Lender shall not transfer or assign any of the Subordinated
Indebtedness to any person, except upon the prior written consent of Senior
Lender and subject to the condition that such transferee or assignee shall have
agreed in writing to be bound by the terms of this Agreement as a Subordinated
Lender hereunder; (G) Borrower shall not hereafter issue any instrument,
security or other writing evidencing any part of the Subordinated Indebtedness,
and Subordinated Lender shall not receive any such writing, except upon the
condition that such security shall bear the legend attached hereto as Exhibit A
and a true copy thereof shall be furnished to Senior Lender; and (H) neither
Borrower nor Subordinated Lender otherwise shall take any action contrary to
Senior Lender's priority position over Subordinated Lender that is created by
this Agreement, except with respect to the exercise by Subordinated Lender of
the rights granted to it in this Agreement.

         5. PAYMENTS OF SUBORDINATED INDEBTEDNESS. Until all of the Senior
Indebtedness has been Finally Paid, Borrower shall not make and Subordinated
Lender shall not accept any direct or indirect payment or prepayment in cash,
property or securities, by set-off or otherwise, with respect to any
Subordinated Indebtedness, except that scheduled payments under the Notes may be
paid as due ("ALLOWED PAYMENT") if, and only to the extent that at the time of
any such Allowed Payment: (a) no "Event of Default" has occurred and is
continuing under the Loan Agreement and no Event of Default would result from
the making of such Allowed Payment, (b) according to the monthly financial

                                       5
<PAGE>

statements submitted to Senior Lender by Borrower pursuant to the Loan Agreement
Borrower will be in compliance with all the financial covenants set forth in
Section 14 of the Revolving Loan Agreement after giving effect to all of the
Allowed Payments Borrower proposes to make, and (c) Borrower will have at least
$500,000 of Excess Availability (as such term is defined in the Revolving Loan
Agreement) after giving effect to all the Allowed Payments Borrower proposes to
make. Compliance with the foregoing requirements must be reflected in the most
recent financial statements and compliance certificate submitted to Senior
Lender by Borrower pursuant to the Loan Agreement prior to the making of any
Allowed Payment.

         6. PROHIBITION ON PAYMENTS.

                  (a) Notwithstanding the provisions of Section 5 above, upon
the happening of any Event of Default under and as defined in the Loan
Agreement, no direct or indirect payment or prepayment in cash, property or
securities, by set-off or otherwise, shall be made or agreed to be made by the
Borrower or accepted by the Subordinated Lender on account of the principal of,
premium or interest on, or any other amounts in respect of the Subordinated
Indebtedness, and the Borrower shall not segregate or hold in trust money for
any such payment or distribution, unless and until Subordinated Lender has
received a written notice from the Senior Lender that the Event of Default has
been cured or waived by Senior Lender, and thereafter Subordinated Lender shall
be entitled to the payment of suspended payments of the Subordinated
Indebtedness from Borrower, to the extent permitted as an Allowed Payment under
Section 5 hereof, provided that no Event of Default will result from the making
of such payments by Borrower.

                  (b) In the event that the Borrower shall make or Subordinated
Lender shall collect any payment on account of the principal of, premium or
interest on or any other amounts due under the Subordinated Indebtedness in
contravention of this Section 6, such payments shall be paid over and delivered
to the Senior Lender immediately upon receipt thereof.

                  (c) In the event that any failure of the Borrower to make or
the Subordinated Lender to receive any payment with respect to the Subordinated
Indebtedness as a result of the provisions of this Section 6 shall be deemed a
default under the Subordinated Documents, such event shall not give rise to any
right of Subordinated Lender to exercise any Subordinated Lender Remedies, any
provision of the Subordinated Documents to the contrary notwithstanding.

         7. FORBEARANCE OF LEGAL REMEDIES. The Subordinated Lender shall not
exercise any Subordinated Lender Remedies or other remedies it may have for a
default under the Subordinated Documents, except as permitted below.
Subordinated Lender may exercise one or more or all of the following rights and
remedies (in each case, subject at all times to the payment subordination and
lien subordination provisions set forth in this Agreement), but only the
following rights and remedies, after prior written notice to Senior Lender and
upon the occurrence of any of the following conditions: (A) an Insolvency
Proceeding shall occur, or (B) the Senior Lender commences legal proceedings
against the Borrower:

                  (i) accelerate payment of the Subordinated Indebtedness;

                                       6
<PAGE>

                  (ii) commence legal proceedings against the Borrower and, if
         requested by the Senior Lender, become a co-plaintiff in any legal
         proceedings commenced by the Senior Lender, provided, that in no event
         shall Subordinated Lender be permitted to execute on any judgment
         obtained against Borrower until the Senior Indebtedness shall have been
         Finally Paid unless the proceeds of such execution of judgment are paid
         to the Senior Lender for application against the Senior Indebtedness,
         and further provided that Subordinated Lender shall not be permitted to
         execute on any judgment obtained against Borrower if the only predicate
         act above is the acceleration of payment of the Senior Indebtedness;
         and

                  (iii) file a proof of claim and otherwise participate in any
         Insolvency Proceeding, to the extent not inconsistent with this
         Agreement.

                  The Subordinated Lender agrees to provide the Senior Lender
         with not less than ten (10) days prior written notice of its intent to
         exercise any legal remedy.

         8. SUBORDINATED INDEBTEDNESS SUBORDINATED TO PRIOR PAYMENT OF ALL
SENIOR INDEBTEDNESS ON DISSOLUTION, LIQUIDATION OR REORGANIZATION OF THE
BORROWER. Upon any distribution of assets of the Borrower in any dissolution,
winding up, liquidation or reorganization of the Borrower (whether in
bankruptcy, insolvency or receivership proceedings or upon an assignment for the
benefit of creditors or otherwise) tending toward liquidation of the business
and assets of Borrower:

                  (a) the holder of all Senior Indebtedness shall first be
entitled to receive payment in full (or to have such payment duly provided for
in a manner previously agreed upon or otherwise satisfactory to it) of the
principal thereof, and premium and interest due thereon, and other amounts
payable comprising such Senior Indebtedness, before the Subordinated Lender is
entitled to receive any payment on account of the principal of, premium or
interest on or any other amounts due under the Subordinated Indebtedness; and

                  (b) any payment or distribution of assets of the Borrower of
any kind or character, whether in cash, property or securities, to which the
Subordinated Lender would be entitled except for these provisions, shall be paid
by the liquidating trustee or agent or other person making such payment or
distribution directly to the holder of the Senior Indebtedness, to the extent
necessary to make payment in full of all Senior Indebtedness remaining unpaid,
after giving effect to any concurrent payment or distribution or provision
therefor to the holders of such Senior Indebtedness.

                  The Borrower shall give prompt written notice to the Senior
Lender and the Subordinated Lender of any dissolution, winding up, liquidation
or reorganization of the Borrower or any assignment for the benefit of any of
the creditors of the Borrower tending toward the liquidation of the business and
assets of the Borrower.

         9. OBLIGATION OF BORROWER UNCONDITIONAL. Nothing contained herein or in
the Loan Documents is intended to or shall impair, as between the Borrower and
the Subordinated Lender only, the obligation of the Borrower, which is absolute
and unconditional, to pay to the holder of the Subordinated Indebtedness the

                                       7
<PAGE>

Subordinated Indebtedness as and when the same shall become due and payable in
accordance with their terms, or to affect the relative rights of the
Subordinated Lender and creditors of the Borrower other than the Senior Lender.

         10. SUBORDINATION RIGHTS NOT IMPAIRED BY ACTS OR OMISSIONS OF BORROWER
OR HOLDER OF SENIOR INDEBTEDNESS. No right of any present or future holder of
any Senior Indebtedness to enforce subordination as provided herein shall at any
time in any way be prejudiced or impaired by any act or failure to act on the
part of the Borrower; by any act or failure to act, which act or failure is in
good faith, by any such holder; by any act or failure to act by any other holder
of the Senior Indebtedness; or by any noncompliance by the Borrower with the
terms hereof, regardless of any knowledge thereof which any such holder may have
or be otherwise charged with. Subordinated Lender hereby agrees that the Senior
Lender shall have the right, but shall have no obligation, to cure any default
under the Subordinated Documents. Further, Subordinated Lender hereby agrees
that Subordinated Lender shall not be released, nor shall Subordinated Lender's
obligation hereunder be in anyway diminished, by any of the following: (A) the
exercise or the failure to exercise by Senior Lender of any rights or remedies
conferred on it or them under the Loan Documents hereunder or existing at law or
otherwise, or against any of Borrower's Property; (B) the commencement of an
action at law or the recovery of a judgment at law against Borrower or any
obligor ("OBLIGOR") for the performance of the Senior Indebtedness and the
enforcement thereof through levy or execution or otherwise; (C) the taking or
institution or any other action or proceeding against Borrower or any Obligor;
or (D) any delay in taking, pursuing, or exercising any of the foregoing
actions, rights, powers, or remedies (even though requested by Subordinated
Lender) by Senior Lender or anyone acting for Senior Lender. Without limiting
the generality of the foregoing, and anything else contained herein to the
contrary notwithstanding, Senior Lender, from time to time, without prior notice
to or the consent of Subordinated Lender, may take all or any of the following
actions without in any manner affecting or impairing the obligation or liability
of Subordinated Lender hereunder: (i) obtain a lien or a security interest in
any property to secure any of the Senior Indebtedness; (ii) obtain the primary
and secondary liability of any party or parties with respect to any of the
Senior Indebtedness; (iii) increase the amount of the Senior Loan or renew,
extend, or otherwise change the time for payment of the Senior Loan or any
installment thereof for any period; (iv) release or compromise any liability of
any nature of any person or entity with respect to the Senior Indebtedness; (v)
exchange, enforce, waive, release, and apply any of Borrower's Property and
direct the order or manner of sale thereof as Senior Lender may in its
discretion determine; (vi) enforce its rights hereunder, whether or not Senior
Lender shall proceed against any other person or entity; (vii) exercise its
rights to consent to any action or non-action of Borrower which may violate the
covenants and agreements contained in the Loan Documents, with or without
consideration, on such terms and conditions as may be acceptable to it; or
(viii) exercise any of its rights conferred by the Loan Documents or by law.

         11. AUTHORITY TO ACT FOR SUBORDINATED LENDER. Until the Senior
Indebtedness has been Finally Paid, in the event an Insolvency Proceeding shall
occur and be continuing, Subordinated Lender shall file all claims it may have
against Borrower and shall direct the debtor in possession or trustee in
bankruptcy, as appropriate, to pay over to Senior Lender all amounts due to
Subordinated Lender on account of the Subordinated Indebtedness until the Senior
Indebtedness has been Finally Paid. If Subordinated Lender fails to file such
claims as requested by Senior Lender, Senior Lender may file such claims on
Subordinated Lender's own behalf. Subordinated Lender acknowledges and agrees
that so long as any Senior Indebtedness is owed to Senior Lender by Borrower,

                                       8
<PAGE>

Senior Lender shall have the right to vote the Subordinated Lender's claim in
any Insolvency Proceeding, and Subordinated Lender shall execute any and all
future documents and/or instruments requested by Senior Lender at any time to
further evidence and confirm such right. Until the Senior Indebtedness has been
Finally Paid, in the event an Insolvency Proceeding shall occur and be
continuing, Subordinated Lender hereby (i) expressly consents to the granting by
Borrower to Senior Lender of senior liens and priorities in connection with any
post-petition financing of Borrower by Senior Lender and (ii) agrees that
adequate notice of such financing to Subordinated Lender shall have been
provided if Subordinated Lender received notice in accordance with Section 17
hereof two (2) Business Days prior to the entry of any order approving such cash
collateral usage or financing. In the event that Subordinated Lender has or at
any time acquires any security for the Subordinated Indebtedness, Subordinated
Lender agrees not to assert any right it may have to "adequate protection" of
its interest in such security in any Insolvency Proceeding and agrees that it
will not seek to have the automatic stay lifted with respect to such security,
in each case without the prior written consent of Senior Lender. Subordinated
Lender waives any claim or defense Subordinated Lender may now or hereafter have
arising out of the election by the Senior Lender in any Insolvency Proceeding
instituted under Chapter 11 of the Bankruptcy Code, of the application of
Section 1111(b)(2) of the Bankruptcy Code, and/or any use of cash collateral,
any borrowing or any grant of a security interest under Sections 363 and/or 364
of the Bankruptcy Code by Borrower, as debtor-in-possession. To the extent that
Senior Lender receives payments on, or proceeds of collateral for, the Senior
Indebtedness which are subsequently invalidated, declared to be fraudulent or
preferential, set aside and/or required to be repaid to a trustee, receiver or
any other party under any bankruptcy law, state or federal law, common law, or
equitable cause, then as between Senior Lender and Subordinated Lender
hereunder, to the extent of such payment or proceeds received, the Senior
Indebtedness, or part thereof, intended to be satisfied shall be revived and
continue in full force and effect as if such payments or proceeds had not been
received by the Senior Lender.

         12. WAIVERS. Borrower and Subordinated Lender each hereby waives, to
the fullest extent permitted by law, any defense based on the adequacy of a
remedy at law which might be asserted as a bar to the remedy of specific
performance of this Agreement in any action brought therefor by Senior Lender.
To the fullest extent permitted by law and except as to any notices specified in
this Agreement, notices regarding the intended sale or disposition of any
portion of the Collateral by Senior Lender, or any notice which may not be
waived in accordance with the UCC, Borrower and Subordinated Lender each hereby
further waives: presentment, demand, protest, notice of protest, notice of
default or dishonor, notice of payment or nonpayment and any and all other
notices and demands of any kind in connection with all negotiable instruments
evidencing all or any portion of the Senior Indebtedness or the Subordinated
Indebtedness to which Borrower or Subordinated Lender may be a party; prior
notice of and consent to any loans made, extensions granted or other action
taken in reliance thereon; and all other demands and notices of every kind in
connection with this Agreement, the Senior Indebtedness or the Subordinated
Indebtedness. Subordinated Lender consents to any release, renewal, extension,
compromise or postponement of the time of payment of the Senior Indebtedness, to
any substitution, exchange or release of collateral therefor, and to the
addition or release of any person primarily or secondarily liable thereon.

                                       9
<PAGE>

         13. INDULGENCES NOT WAIVERS. Neither the failure nor any delay on the
part of Senior Lender to exercise any right, remedy, power or privilege
hereunder shall operate as a waiver thereof or give rise to an estoppel, nor be
construed as an agreement to modify the terms of this Agreement, nor shall any
single or partial exercise of any right, remedy, power or privilege with respect
to any occurrence be construed as a waiver of such right, remedy, power or
privilege with respect to any other occurrence. No waiver by a party hereunder
shall be effective unless it is in writing and signed by the party making such
waiver, and then only to the extent specifically stated in such writing.

         14. DEFAULT. If any material representation or warranty of Borrower or
Subordinated Lender in this Agreement or in any instrument evidencing, securing
or relating to the Senior Indebtedness proves to have been materially false when
made, or, in the event of a material breach by either the Borrower or
Subordinated Lender in the performance of any of the material terms of this
Agreement, or any instrument or agreement evidencing, securing or relating to
the Senior Indebtedness, all of the Senior Indebtedness shall, at the option of
Senior Lender, become immediately due and payable without presentment, demand,
protest, or notices of any kind, notwithstanding any time or credit otherwise
allowed. At any time Subordinated Lender fails to comply with any provision of
this Agreement that is applicable to Subordinated Lender, Senior Lender may
demand specific performance of this Agreement, whether or not Borrower has
complied with this Agreement, and may exercise any other remedy available at law
or equity.

         15. AMENDMENT OF THE SUBORDINATED DOCUMENTS. Subordinated Lender agrees
that it will not, without the consent of the Senior Lender, amend the
Subordinated Documents, so as to modify the financial terms thereof (including,
without limitation, the amount of principal, rate of interest, dividends, fees
and prepayment premiums, if any), extend the maturity thereof, add or change any
covenants in a manner materially more restrictive to the Borrower, or effect any
other modification to the Subordinated Documents, which would be materially
adverse to the Senior Lender.

         16. INCONSISTENT OR CONFLICTING PROVISIONS. In the event a provision of
the Loan Documents or the Subordinated Documents, is inconsistent or conflicts
with the provisions of this Agreement, the provisions of this Agreement shall
govern and prevail.

         17. NOTICES. Any written notice, consent or other communication
provided for in this Agreement shall be delivered personally (effective upon
delivery), via facsimile (effective upon confirmation of transmission), via
overnight courier (effective the next Business Day after dispatch if instructed
to deliver on next Business Day) or via U.S. Mail (effective three (3) days
after mailing, postage prepaid, first class) to each party at its address(es)
and/or facsimile number(s) set forth below its signature, or to such other
address as either party shall specify to the other in writing from time to time.

         18. BENEFIT. Subordinated Lender represents and warrants that the
making of the Senior Loan will benefit Subordinated Lender in that Subordinated
Lender is financially interested in Borrower and will benefit from the financial
success of Borrower. Subordinated Lender acknowledges that Senior Lender would
not make the Senior Loan but for the execution of this Agreement. Therefore,
Subordinated Lender has received good, sufficient and adequate consideration for
the making of this Agreement.

                                       10
<PAGE>

         19. ENTIRE AGREEMENT. This Agreement constitutes and expresses the
entire understanding among the parties hereto with respect to the subject matter
hereof, and supersedes all prior and contemporaneous agreements and
understandings, inducements or conditions, whether express or implied, oral or
written. Neither this Agreement nor any portion or provision hereof may be
changed, waived or amended orally or in any manner other than by an agreement in
writing signed by Senior Lender and Subordinated Lender; provided, however, any
such change, waiver or amendment shall be binding upon the Borrower by its
written consent thereto.

         20. ADDITIONAL DOCUMENTATION. Borrower and Subordinated Lender shall
execute and deliver to Senior Lender such further instruments and shall take
such further action as Senior Lender may at any time or times reasonably request
in order to carry out the provisions and intent of this Agreement.

         21. EXPENSES. Borrower agrees to pay Senior Lender on demand all
expenses of every kind, including reasonable attorneys' fees, that Senior Lender
may incur in enforcing any of its rights against Borrower under this Agreement.
As between Senior Lender and the Subordinated Lender, the court may, in the
exercise of its discretion, award attorneys' fees to a prevailing party, in a
manner consistent with Illinois law governing actions arising out of a contract,
and the prevailing party shall have the right to petition the court to make such
award.

         22. SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit
of Senior Lender, its successors and assigns, and shall be binding upon Borrower
and its successors and assigns, and each Subordinated Lender and their
respective heirs, legatees, distributees, transferees, executors, administrators
and personal representatives and assigns, including without limitation, any
subsequent holders of any Note. Senior Lender, without prior notice or consent
of any kind, may sell, assign or transfer the Senior Indebtedness, and in such
event each and every immediate and successive assignee or transferee thereof may
be given the right by Senior Lender to enforce this Agreement in full against
Borrower and Subordinated Lender, by suit or otherwise, for its own benefit,
provided that such successor, assignee or transferee agrees to be bound by the
terms of this Agreement.

         23. COVENANT NOT TO CHALLENGE. This Agreement has been negotiated by
the parties with the expectation and in reliance upon the assumption that the
instruments and documents evidencing the Senior Indebtedness are valid and
enforceable. In determining whether to enter into this Agreement, Subordinated
Lender has assumed such validity and enforceability, and has agreed to the
provisions contained herein, without relying upon any reservation of a right to
challenge or call into question such validity or enforceability. As between
Senior Lender and Subordinated Lender, Subordinated Lender hereby covenants and
agrees, to the fullest extent permitted by law, that it shall not (x) initiate
in any proceeding a challenge to the validity or enforceability of the documents
and instruments evidencing the Senior Indebtedness, the right of Senior Lender
to be paid the Senior Indebtedness in full in cash, or the priority or amount of
Senior Lender's claim in respect of the Senior Indebtedness (y) instigate other
parties to raise any such challenges, (z) participate in or otherwise assert any
such challenges which are raised by other parties.

         24. SUBROGATION. Subject to the foregoing provisions hereof, provided
that the Senior Indebtedness has been Finally Paid, the Subordinated Lender
shall be subrogated, to the extent of such Senior Indebtedness so paid, to the

                                       11
<PAGE>

rights of the holder of such Senior Indebtedness to receive payments or
distributions or assets of the Borrower that secure such Senior Indebtedness
until all amounts owing on the Subordinated Indebtedness shall be paid in full.
For the purpose of such subrogation no payments or distributions to the holder
of the Senior Indebtedness by or on behalf of the Borrower or by or on behalf of
Subordinated Lender by virtue of the provisions hereof which otherwise would
have been made to the Subordinated Lender shall, as between the Borrower, a
creditor of the Borrower (other than Subordinated Lender and the Senior Lender)
and the Subordinated Lender, be deemed to be payment by the Borrower to or on
account of the Subordinated Indebtedness, it being understood that the
provisions of this Agreement are, and are intended solely, for the purpose of
defining the relative rights of Subordinated Lender on the one hand, and Senior
Lender on the other hand. In the event that Subordinated Lender turns over to
any Senior Lender any payment or contributions received by it in accordance with
this Agreement, Subordinated Lender shall, for purposes of determining whether
any default under the Subordinated Documents has occurred, be deemed never to
have received such payment or distribution. In the event that Borrower fails to
make any payment on account of the Subordinated Indebtedness by reason of any
provision contained herein, such failure shall, notwithstanding such provision
contained herein, constitute a default with respect to the Subordinated
Indebtedness if and to the extent such failure would otherwise constitute such a
default in accordance with the terms of the Subordinated Indebtedness.

         25. TERMINATION OF AGREEMENT. This Agreement shall continue and shall
be irrevocable until the date all of the Senior Indebtedness has been Finally
Paid by Borrower or otherwise discharged and released by the Senior Lender.

         26. REINSTATEMENT. The obligations of Subordinated Lender under this
Agreement shall continue to be effective, or be reinstated, as the case may be,
if at any time any payment in respect of any Senior Indebtedness is rescinded or
must otherwise be restored or returned by Senior Lender by reason of any
bankruptcy, reorganization, arrangement, composition or similar proceeding or as
a result of the appointment of a receiver, intervenor or conservator of, or
trustee or similar officer for, Borrower or any substantial part of its
property, or otherwise, all as though such payment had not been made.

         27. GOVERNING LAW. THE VALIDITY, CONSTRUCTION AND ENFORCEMENT OF THIS
AGREEMENT SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF ILLINOIS. EACH
PARTY HEREBY AGREES THAT ALL ACTIONS OR PROCEEDINGS INITIATED BY ANY PARTY AND
ARISING DIRECTLY OR INDIRECTLY OUT OF THIS AGREEMENT SHALL BE LITIGATED IN A
COOK COUNTY, ILLINOIS SUPREME COURT OR THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF ILLINOIS OR, IF SENIOR LENDER INITIATES SUCH ACTION, IN
ADDITION TO THE FOREGOING COURTS, ANY COURT IN WHICH SENIOR LENDER SHALL
INITIATE SUCH ACTION, TO THE EXTENT SUCH COURT HAS JURISDICTION. EACH PARTY
HERETO HEREBY EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN
ANY ACTION OR PROCEEDING COMMENCED BY ANY OTHER PARTY HERETO AND HEREBY WAIVES
ANY CLAIM THAT SUCH COURTS ARE AN INCONVENIENT FORUM OR AN IMPROPER FORUM BASED
UPON LACK OF VENUE. THE EXCLUSIVE CHOICE OF FORUM AS SET FORTH IN THIS SECTION
SHALL NOT BE DEEMED TO PRECLUDE THE ENFORCEMENT, BY ANY PARTY, OF ANY JUDGMENT

                                       12
<PAGE>

OBTAINED IN ANY OTHER FORUM OR THE TAKING, BY ANY PARTY, OF ANY ACTION TO
ENFORCE THE SAME IN ANY OTHER APPROPRIATE JURISDICTION, AND EACH PARTY HERETO
HEREBY WAIVES THE RIGHT TO COLLATERALLY ATTACK SUCH JUDGMENT OR ACTION.

         28. JURY TRIAL. SENIOR LENDER, SUBORDINATED LENDER AND BORROWER WAIVE
TRIAL BY JURY IN ANY DISPUTE ARISING FROM, UNDER OR IN CONNECTION WITH THIS
AGREEMENT.

         29. SEVERABILITY. The provisions of this Agreement are independent of
and separable from each other. If any provision hereof shall for any reason be
held invalid or unenforceable, it is the intent of the parties that such
invalidity or unenforceability shall not affect the validity or enforceability
of any other provision hereof, and that this Agreement shall be construed as if
such invalid or unenforceable provision had never been contained herein.

         30. CONSTRUCTION. The parties acknowledge that each party and its
counsel have reviewed this Agreement and have participated jointly in the
negotiations and drafting of this Agreement and hereby agree that the normal
rule of construction to the effect that any ambiguities are to be resolved
against the drafting party shall not be employed in the interpretation of this
Agreement or any amendments or exhibits hereto.

         31. COUNTERPARTS; FACSIMILE. This Agreement may be executed in any
number of separate counterparts, all of which, when taken together, shall
constitute one and the same instrument, notwithstanding the fact that all
parties did not sign the same counterpart. Each of the parties agrees that a
signature transmitted to the other parties or their respective counsel by
facsimile transmission shall be effective to bind the party whose signature was
transmitted, as a duly executed and delivered original. Each party further
agrees to promptly deliver its original signature pages to this Agreement to
counsel for the other parties promptly following execution, but any failure to
do so shall not affect the binding effect of such signature.

                            [SIGNATURES PAGES FOLLOW]

                                       13
<PAGE>

                     SUBORDINATION AGREEMENT SIGNATURE PAGE

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


SUBORDINATED LENDER:

                                           _____________________________________
                                           ROBERT KENNETH


                                           Address for Notices:

                                           [Please specify contact information:]
                                           Facsimile:

<PAGE>


                     SUBORDINATION AGREEMENT SIGNATURE PAGE

SUBORDINATED LENDER:

                                           _____________________________________
                                           DEBORAH A. MCDONNELL


                                           Address for Notices:

                                           [Please specify contact information:]
                                           Facsimile:

<PAGE>

                     SUBORDINATION AGREEMENT SIGNATURE PAGE

SUBORDINATED LENDER:

                                           _____________________________________
                                           NICK LIUZZA, JR.


                                           Address for Notices:

                                           [Please specify contact information:]
                                           Facsimile:

<PAGE>

                     SUBORDINATION AGREEMENT SIGNATURE PAGE

SUBORDINATED LENDER:                       PROFESSIONAL STAFFING RESOURCES, INC.


                                           By: _________________________________
                                           Name: _______________________________
                                           Title: ______________________________

                                           Address for Notices:

                                           [Please specify contact information:]
                                           Facsimile:

<PAGE>

                     SUBORDINATION AGREEMENT SIGNATURE PAGE


SUBORDINATED LENDER:                       NURSING SERVICES REGISTRY OF
                                           SAVANNAH, INC.

                                           By: _________________________________
                                           Name: _______________________________
                                           Title: ______________________________

                                           Address for Notices:

                                           [Please specify contact information:]
                                           Facsimile:

<PAGE>

                     SUBORDINATION AGREEMENT SIGNATURE PAGE


SUBORDINATED LENDER:

                                           _____________________________________
                                           ROBIN RIDDLE


                                           Address for Notices:

                                           [Please specify contact information:]
                                           Facsimile:

<PAGE>

                     SUBORDINATION AGREEMENT SIGNATURE PAGE


BORROWER:                                  CRDENTIA CORP.


                                           By: _________________________________
                                                  James D. Durham
                                                  Chief Executive Officer


                                           Address for Notices:

                                           14114 Dallas Parkway, Suite 600
                                           Dallas, Texas 75254
                                           Attn: William Leftwich
                                           Facsimile:  (972) 392-2722

<PAGE>

                     SUBORDINATION AGREEMENT SIGNATURE PAGE


BORROWER:                                  BAKER ANDERSON CHRISTIE, INC.


                                           By: _________________________________
                                                  James D. Durham
                                                  Chief Executive Officer


                                           Address for Notices:

                                           14114 Dallas Parkway, Suite 600
                                           Dallas, Texas 75254
                                           Attn: William Leftwich
                                           Facsimile:  (972) 392-2722

<PAGE>

                     SUBORDINATION AGREEMENT SIGNATURE PAGE


BORROWER:                                  NURSES NETWORK, INC.


                                           By: _________________________________
                                                   James D. Durham
                                                   Chief Executive Officer


                                           Address for Notices:

                                           14114 Dallas Parkway, Suite 600
                                           Dallas, Texas 75254
                                           Attn: William Leftwich
                                           Facsimile:  (972) 392-2722

<PAGE>

                     SUBORDINATION AGREEMENT SIGNATURE PAGE


BORROWER:                                  NEW AGE STAFFING, INC.


                                           By: _________________________________
                                                   James D. Durham
                                                   Chief Executive Officer


                                           Address for Notices:

                                           14114 Dallas Parkway, Suite 600
                                           Dallas, Texas 75254
                                           Attn: William Leftwich
                                           Facsimile:  (972) 392-2722

<PAGE>

                     SUBORDINATION AGREEMENT SIGNATURE PAGE


BORROWER:                                  PSR NURSES, LTD.,
                                           a Texas limited partnership

                                              By:   PSR NURSE RECRUITING, INC.
                                              Its:  General Partner

                                              By: ______________________________
                                                    James D. Durham
                                                    Chief Executive Officer


                                           Address for Notices:

                                           14114 Dallas Parkway, Suite 600
                                           Dallas, Texas 75254
                                           Attn: William Leftwich
                                           Facsimile:  (972) 392-2722

<PAGE>

                     SUBORDINATION AGREEMENT SIGNATURE PAGE


BORROWER:                                  PSR NURSE RECRUITING, INC.


                                           By: _________________________________
                                                   James D. Durham
                                                   Chief Executive Officer


                                           Address for Notices:

                                           14114 Dallas Parkway, Suite 600
                                           Dallas, Texas 75254
                                           Attn: William Leftwich
                                           Facsimile:  (972) 392-2722

<PAGE>

                     SUBORDINATION AGREEMENT SIGNATURE PAGE


BORROWER:                                  PSR NURSES HOLDINGS CORP.


                                           By: _________________________________
                                                   James D. Durham
                                                   Chief Executive Officer


                                           Address for Notices:

                                           14114 Dallas Parkway, Suite 600
                                           Dallas, Texas 75254
                                           Attn: William Leftwich
                                           Facsimile:  (972) 392-2722

<PAGE>

                     SUBORDINATION AGREEMENT SIGNATURE PAGE


SENIOR LENDER:                             BRIDGE HEALTHCARE FINANCE, LLC

                                           By: _________________________________
                                                 Kim Gordon
                                                 Executive Vice President/Chief
                                                 Credit Officer

                                           Address: 233 South Wacker Drive
                                                    Suite 5350
                                                    Chicago, Illinois 60606

                                           Attention: Chief Credit Officer
                                           Facsimile:  (312) 334-4455

<PAGE>

                     SUBORDINATION AGREEMENT SIGNATURE PAGE


SENIOR LENDER:                             BRIDGE OPPORTUNITY FINANCE, LLC

                                           By: _________________________________
                                                 Kim Gordon
                                                 Executive Vice President/Chief
                                                 Credit Officer

                                           Address: 233 South Wacker Drive
                                                    Suite 5350
                                                    Chicago, Illinois 60606

                                           Attention: Chief Credit Officer
                                           Facsimile:  (312) 334-4455

<PAGE>

                                    EXHIBIT A
                                    ---------

                              LEGEND TO BE INSERTED
                                  AT THE TOP OF
                             SUBORDINATED DOCUMENTS
                             ----------------------

ALL INDEBTEDNESS EVIDENCED HEREBY AND REFERENCED HEREIN IS SUBORDINATED IN RIGHT
OF PAYMENT TO THE PRIOR PAYMENT IN FULL OF ALL INDEBTEDNESS OWED TO BRIDGE
HEALTHCARE FINANCE, LLC AS SET FORTH IN THAT CERTAIN SUBORDINATION AGREEMENT
AMONG BRIDGE HEALTHCARE FINANCE, LLC, BRIDGE OPPORTUNITY FINANCE, LLC, THE
[______________] UNDER THIS DOCUMENT AND THE OTHER PARTIES NAMED THEREIN.


                                      A-1
<PAGE>

                                    EXHIBIT B
                                    ---------

                             SUBORDINATED DOCUMENTS
                             ----------------------

                                  SEE ATTACHED


                                      B-1
<PAGE>

                                   SCHEDULE I
                                   ----------


NOTES
-----


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>9
<FILENAME>crdentia_ex99-1.txt
<TEXT>
<PAGE>

                                                                    Exhibit 99.1

NEWS BULLETIN                           RE:   CRDENTIA CORP.
   FROM:                                      14114 DALLS PARKWAY,
                                              SUITE 600
FINANCIAL                                     DALLAS, TX 75254
RELATIONS BOARD                               OTCBB: CRDE

--------------------------------------------------------------------------------
For Further Information:
  AT THE COMPANY:                           AT FINANCIAL RELATIONS BOARD:
  James D. Durham      Pamela Atherton      Moira Conlon
  CEO and Chairman     President            (310) 407-6524
  972-850-0780         972-850-0780         mconlon@financialrelationsboard.com
--------------------------------------------------------------------------------

FOR IMMEDIATE RELEASE

                 CRDENTIA SECURES $10 MILLION TERM LOAN TO FUND
                              PLANNED ACQUISITIONS

DALLAS - AUGUST 31, 2004 - CRDENTIA CORP. (OTCBB: CRDE), a leading U.S. provider
of healthcare staffing services, today announced that it has entered into a
three-year secured term loan of up to $10 million in support of its strategic
expansion strategy and acquisition plan. Funded by Bridge Healthcare Finance,
the term loan allows Crdentia to draw down amounts based on the EBITDA
performance of the acquired company.

James D. Durham, CEO and Chairman of Crdentia commented, "In keeping with
Crdentia's stated acquisition and consolidation goals, this financing vehicle
provides the additional capital resources and financial flexibility needed to
fund our targeted transactions and selectively expand our business. We are
pleased to expand our relationship with Bridge Healthcare Finance, and with this
funding support we look forward to our continued successful execution of our
expansion plan."

"We are very pleased to close this acquisition line for Crdentia," said Randy T.
Abrahams, President and Chief Executive Officer of Bridge Healthcare Finance.
"We believe Crdentia's accretive acquisitions are a key component in building
the Company into a significant platform poised for future growth."

ABOUT BRIDGE HEALTHCARE FINANCE

Bridge Healthcare Finance offers a combination of comprehensive loan products,
decades of financial expertise and an unparalleled service approach unique to
the healthcare lending industry. Through accounts receivable, cash flow and real
estate based term loan lending products, Bridge is able to address the differing
capital needs of the healthcare industry.

ABOUT CRDENTIA CORP.

Crdentia Corp. is one of the nation's leading providers of healthcare staffing
services. Crdentia seeks to capitalize on an opportunity that currently exists
in the healthcare industry by targeting the critical nursing shortage issue.
There are many small, private companies that are addressing the rapidly
expanding needs of the healthcare industry. Unfortunately, due to their
relatively small capitalization, they are unable to maximize their potential,
obtain outside capital or expand. By consolidating well-run small private
companies into a larger public entity, Crdentia intends to facilitate access to
capital, the acquisition of technology, and expanded distribution that, in turn,
drive internal growth. For more information, visit WWW.CRDENTIA.COM.

                                     -more-
<PAGE>

FORWARD LOOKING STATEMENTS

Statements contained in this release that are not historical facts are
forward-looking statements that involve risks and uncertainties. Among the
important factors which could cause actual results to differ materially from
those in the forward-looking statements include, but are not limited to, those
discussed in "Risk Factors" in the Company's Forms 10-KSB, Forms 10-QSB, and
other filings with the Securities and Exchange Commission. Such risk factors
include, but are not limited to, a limited operating history with no earnings;
reliance on the Company's management team, members of which have other business
interests; the ability to successfully implement the Company's business plan;
the ability to continue as a going concern; the ability to fund the Company's
business and acquisition strategy; the growth of the temporary healthcare
professional staffing business; difficulty in managing operations of acquired
businesses; uncertainty in government regulation of the healthcare industry; and
the limited public market for the Company's common stock. The actual results
that the Company achieves may differ materially from any forward-looking
statements due to such risks and uncertainties. We undertake no obligation to
revise or update publicly any forward-looking statements for any reason.

                                      # # #

Financial Relations Board serves as financial relations counsel to this company,
is acting on the company's behalf in issuing this bulletin and receiving
compensation therefor. The information contained herein is furnished for
information purposes only and is not to be construed as an offer to buy or sell
securities.

</TEXT>
</DOCUMENT>
</SUBMISSION>
