ASSET PURCHASE AGREEMENT between CRDENTIA CORP., MATTHEW J. CAHILLANE and C. MICHAEL EMERY Dated as of June 30, 2007

Exhibit 10.1

ASSET PURCHASE AGREEMENT

between

CRDENTIA CORP.,

XXXXXXX X. XXXXXXXXX

and

C. XXXXXXX XXXXX

Dated as of June 30, 2007

TABLE OF CONTENTS

			Page

ARTICLE I	PURCHASE AND SALE OF ACQUIRED ASSETS		1
SECTION 1.1		Purchase and Sale	1
SECTION 1.2		Transfer of Assets	1
SECTION 1.3		Assumed Liabilities	3
SECTION 1.4		Consents of Third Parties	4
SECTION 1.5		Refunds and Remittances	5

ARTICLE II	CLOSING		5
SECTION 2.1		Closing	5

ARTICLE III	REPRESENTATIONS AND WARRANTIES OF SELLER		6
SECTION 3.1		Authority	6
SECTION 3.2		No Conflicts; Consents	6
SECTION 3.3		Taxes	7
SECTION 3.4		Good and Valid Title	7
SECTION 3.5		Contracts	7
SECTION 3.6		Litigation	8
SECTION 3.7		DISCLAIMER	8

ARTICLE IV	REPRESENTATIONS AND WARRANTIES OF CE		9
SECTION 4.1		Authority	9
SECTION 4.2		No Conflicts; Consents	9
SECTION 4.3		Actions and Proceedings	9
SECTION 4.4		Availability of Funds	9
SECTION 4.5		Title to Shares	10
SECTION 4.6		No Knowledge of Misrepresentation or Omission	10

ARTICLE V	COVENANTS OF CE		10
SECTION 5.1		Confidentiality	10
SECTION 5.2		No Additional Representations	10
SECTION 5.3		Non-Solicitation; Non-Interference	10
SECTION 5.4		Employees	11

ARTICLE VI	MUTUAL COVENANTS		11
SECTION 6.1		Consents	11
SECTION 6.2		Security Interest Release	12
SECTION 6.3		Cooperation	12
SECTION 6.4		Publicity	13
SECTION 6.5		Termination of Lease; Termination of Non-Competition Agreements	13
SECTION 6.6		Bulk Transfer Laws	13
SECTION 6.7		Transfer Taxes; Purchase Price Allocation; Entitlement to Tax Refunds and Credits; Proration of Non-Income Taxes	13

			Page

SECTION 6.8		Mutual Release	14
SECTION 6.9		Litigation Standstill	15

ARTICLE VII	INDEMNIFICATION		15
SECTION 7.1		Indemnification by Seller	15
SECTION 7.2		Indemnification by CE	15
SECTION 7.3		Limitations on Liability; Cooperation	15
SECTION 7.4		Losses Net of Insurance, etc.	16
SECTION 7.5		Termination of Representations and Warranties	16
SECTION 7.6		Procedures Relating to Indemnification for Third Party Claims	16
SECTION 7.7		Procedures Related to Indemnification for Other Claims	17
SECTION 7.8		Tax Treatment of Indemnification Payments	17
SECTION 7.9		Remedies Exclusive	17

ARTICLE VIII	MISCELLANEOUS		17
SECTION 8.1		Assignment	17
SECTION 8.2		No Third-Party Beneficiaries	18
SECTION 8.3		Expenses	18
SECTION 8.4		Attorney Fees	18
SECTION 8.5		Amendments	18
SECTION 8.6		Notices	18
SECTION 8.7		Interpretation; Exhibits, Seller Disclosure Schedule and Other Schedules; Certain Definitions	19
SECTION 8.8		Counterparts	24
SECTION 8.9		Entire Agreement	24
SECTION 8.10		Fees	24
SECTION 8.11		Severability	24
SECTION 8.12		Consent to Jurisdiction	24
SECTION 8.13		Waiver of Jury Trial	25
SECTION 8.14		GOVERNING LAW	25

ASSET PURCHASE AGREEMENT dated as of
June 30, 2007, between CRDENTIA CORP., a Delaware corporation (“Seller”) and
Xxxxxxx X. Xxxxxxxxx and C. Xxxxxxx Xxxxx (collectively “CE”)

Seller desires to sell to CE, and CE desires to purchase from Seller, the Acquired Assets (as defined below), all upon the terms and subject to the conditions set forth in this Agreement.

Certain capitalized terms used in this Agreement are defined in Section 8.7(b). Section 8.7(c) identifies other Sections of this Agreement in which capitalized terms used in this Agreement are defined.

Accordingly, the parties hereby agree as follows:

ARTICLE I

PURCHASE AND SALE OF ACQUIRED ASSETS

SECTION 1.1 Purchase and Sale. Upon the terms and subject to the conditions set forth in this Agreement, at the Closing, Seller shall, and shall cause the Selling Affiliates to, sell, assign, transfer, convey and deliver to CE, and CE shall purchase from Seller and the Selling Affiliates all the right, title and interest of Seller and the Selling Affiliates in, to and under the Acquired Assets (as defined below), for (a) a purchase price (the “Purchase Price”) equal to (i) $300,000 in cash and (ii) 128,367 shares of Seller’s common stock (the “Shares”), and (b) the assumption by CE of the Assumed Liabilities. The purchase and sale of the Acquired Assets and the assumption of the Assumed Liabilities are referred to in this Agreement collectively as the “Acquisition”. Notwithstanding the foregoing, with respect to shifts for professional services under the Transferred Contracts that commence prior to but end after 11:59:59 p.m. on June 30, 2007, Assignor shall (a) be entitled to any payments or other benefits due under and (b) be responsible for all obligations with respect to payments to the professional service providers under such Transferred Contracts with respect to such shifts through their termination on July 1, 2007.

SECTION 1.2 Transfer of Assets. (a) The term “Acquired Assets” means all of Seller’s and the Selling Affiliates’ right, title and interest in, to and under those certain assets identified below:

(i) all contracts, licenses, agreements, commitments and all other legally binding arrangements, whether written or oral (“Contracts”) to which Seller or any of the Selling Affiliates is a party that relate exclusively to the Business, including the Contracts set forth in Section 3.5 of the Seller Disclosure Schedule (the “Transferred Contracts”); provided, however, that Transferred Contracts shall not include any Excluded Contract;

(ii) all rights, claims and credits, including all guarantees, warranties, indemnities and similar rights (“Other Rights”), in favor of Seller and the Selling Affiliates, to the extent relating exclusively to any Acquired Asset or exclusively to any Assumed Liability (the “Transferred Other Rights”); provided, however, that Transferred Other Rights shall not include any Excluded Other Rights;

(iii) all books and records, and any customers’ and suppliers’ lists and other distribution lists (in all cases, in any form or medium) (“Records”) of Seller and the Selling Affiliates that relate exclusively to the Business and are stored upon the premises at 0000 Xxx Xxxxxx,Xxxxxxxxx, XX 00000 (the “Premises”), in each case in existence on the Closing Date and within the possession and control of Seller (the “Transferred Records”); provided, however, that Transferred Records shall not include any Excluded Records; and

(iv) all tangible personal property relating exclusively to the Business and are located on the Premises (including the Existing Network Server but not including the Additional Network Server) and any warranty rights applicable to such tangible personal property, fixed assets and equipment.

(b) The term “Excluded Assets” means:

(i) all cash and cash equivalents of Seller, and any of its Affiliates;

(ii) all Accounts Receivable;

(iii) all Contracts to which Seller or any of its Affiliates is a party other than the Transferred Contracts described in Section 1.2(a)(i) (the “Excluded Contracts”);

(iv) all Permits of Seller or any of its Affiliates;

(v) all Other Rights of Seller or any of its Affiliates other than the Transferred Other Rights (the “Excluded Other Rights”);

(vi) all of the following: (A) any and all books and records prepared and maintained by Seller or any of its Affiliates that do not relate exclusively to the Business or are not stored on the Premises, (B) any and all Tax records that relate to Taxes that constitute Excluded Tax Liabilities, (C) all personnel records, and (D) any and all books and records, files, correspondence or other Records of Seller or its Affiliates other than the Transferred Records, (collectively, the “Excluded Records”);

(vii) all rights, claims and credits of Seller or any of its Affiliates to the extent relating to any Excluded Asset or any Excluded Liability, including any such items arising under insurance policies and all guarantees, warranties, indemnities and similar rights in favor of Seller and its Affiliates in respect of any other Excluded Asset or any Excluded Liability;

(viii) any refund or credit of Taxes attributable to any Excluded Tax Liability;

(ix) all insurance policies and insurance contracts insuring the Business or the Acquired Assets, together with any claim, action or other right Seller or any of its Affiliates might have for insurance coverage under any past and present policies and insurance contracts insuring the Business or the Acquired Assets, in each case including any proceeds received from any such policy or contract prior to, on or after the Closing Date;

(x) all rights of Seller and its Affiliates under this Agreement, the Other Transaction Documents and the other agreements and instruments executed and delivered in connection with this Agreement;

(xi) the Additional Network Server; and

(xii) except to the extent identified in a subsection of Section 1.2(a) of the Seller Disclosure Schedule as included in the Acquired Assets, all other properties, assets, goodwill and rights of Seller, the Selling Affiliates and any of their respective Affiliates of whatever kind and nature, real, personal or mixed, tangible or intangible, that are not used, held for use or intended to be used exclusively in connection with, or that do not arise exclusively out of, the Business or the Acquired Assets.

SECTION 1.3 Assumed Liabilities. (a) Upon the terms and subject to the conditions of this Agreement, CE shall assume, effective as of 12:00:00 a.m. (EDT) on the Closing Date (subject to the last sentence of Section 1.1 regarding shifts for professional services under the Transferred Contracts that begin prior to but end after the Closing), and from and after the Closing CE shall pay, perform and discharge when due, all of the following liabilities, obligations and commitments (“Liabilities”) of Seller and the Selling Affiliates, other than any Excluded Liability (the “Assumed Liabilities”):

(i) all Liabilities of Seller and the Selling Affiliates under or otherwise arising out of or relating to the Transferred Contracts (including all Liabilities arising out of or relating to any termination or announcement or notification of an intent to terminate any such Contract), in each case arising out of actions or circumstances occurring on or after the Closing Date;

(ii) all accounts payable, expenses and other current liabilities incurred on or after the Closing Date;

(iii) all Liabilities in respect of any lawsuits, claims, actions or proceedings arising out of or relating to the Business or the ownership, sale, lease or use of any of the Acquired Assets, in each case based on actions or circumstances occurring on or after the Closing Date;

(iv) all Liabilities for warranty claims and product or service liability or similar claims, including all suits, actions or proceedings relating to any such Liabilities, in each case arising out of or relating to Business with respect to actions or circumstances occurring on or after the Closing Date;

(v) all Liabilities for Taxes arising out of or relating to or in respect of the Business or any Acquired Asset for any Post-Closing Tax Period, other than any Excluded Tax Liabilities;

(vi) all Liabilities for transfer, documentary, sales, use, registration, value-added and other similar Taxes and related amounts (including any penalties, interest and additions to Tax) incurred in connection with this Agreement, any of the Other Transaction

Documents, the Acquisition and the other transactions contemplated hereby and thereby (“Transfer Taxes”); and

(vii) all other Liabilities of Seller and the Selling Affiliates of whatever kind and nature, primary or secondary, direct or indirect, absolute or contingent, known or unknown, whether or not accrued, in each case arising out of or relating to the Acquired Assets based on actions or circumstances occurring on or after the Closing Date (including any claim, action, suit, arbitration, inquiry, proceeding or investigation by or before any Governmental Entity).

(b) Notwithstanding any other provision of this Agreement, CE shall not assume any Excluded Liability, each of which shall be retained and paid, performed and discharged when due by Seller and the Selling Affiliates. The term “Excluded Liability” means:

(i) all Liabilities, to the extent related to or arising out of any Excluded Asset;

(ii) any Tax payable with respect to any business, asset, property or operation of Seller or its Affiliates (including any Taxes relating to or arising out of the Acquired Assets) for any Pre-Closing Tax Period, other than any Tax for which CE is responsible pursuant to Section 6.7 (“Excluded Tax Liability”); and

(iii) all Accounts Payable other than the accounts payable, accrued expenses and other current liabilities assumed pursuant to Section 1.3(a)(ii).

(c) Each of CE’s and Seller’s obligations under this Section 1.3 will not be subject to offset or reduction by reason of any actual or alleged breach of any representation, warranty, covenant or agreement contained in this Agreement or any Other Transaction Document or any right or alleged right to indemnification hereunder.

SECTION 1.4 Consents of Third Parties. (a) Notwithstanding anything in this Agreement to the contrary, this Agreement shall not constitute an agreement to assign any asset or claim or right or any benefit arising under or resulting from such asset (including any Contract) or Permit or any claim, right or benefit arising under or resulting from such asset or Permit if the assignment or transfer thereof, without the consent of a third party, would constitute a breach or other contravention of the rights of such third party, would be ineffective with respect to any party to an agreement concerning such asset or Permit, or, upon assignment or transfer, would in any way adversely affect the rights of Seller or any Selling Affiliate or, upon transfer, CE. If any transfer or assignment by Seller or any Selling Affiliate to, or any assumption by CE of, any interest in, or liability, obligation or commitment under, any asset or Permit, or related claim, right or benefit requires the consent of a third party, then such transfer or assumption shall be made subject to such consent being obtained.

(b) If any such consent is not obtained prior to the Closing, Seller, the Selling Affiliates and CE shall cooperate (each at their own expense) in any lawful and reasonable arrangement reasonably proposed by CE under which CE shall obtain the economic claims, rights and benefits under the asset (including any Contract), Permit or related claim, right or benefit with respect to which the consent has not been obtained in accordance with this

Agreement. Such reasonable arrangement may include (i) the subcontracting, sublicensing or subleasing to CE of any and all rights of Seller and the Selling Affiliates against the other party to such third-party agreement arising out of a breach or cancellation thereof by the other party and (ii) the enforcement by Seller or the Selling Affiliates of such rights. Seller and the Selling Affiliates make no representation or warranty as to whether consent to assignment of any Contracts or Permits will be obtained, CE shall bear the risk of loss with respect to Contracts or Permits not assigned as of the Closing.

SECTION 1.5 Refunds and Remittances. (a) Received by Seller or the Selling Affiliates. After the Closing, if Seller or any of the Selling Affiliates receives (i) any refund or other amount which is an Acquired Asset or is otherwise properly due and owing to CE in accordance with the terms of this Agreement, or (ii) any refund or other amount which is related to claims or other matters for which CE is responsible hereunder, and which amount is not an Excluded Asset, or is otherwise properly due and owing to CE in accordance with the terms of this Agreement, Seller promptly shall remit, or shall cause to be remitted, such amount to CE at the address set forth in Section 8.6(a).

(b) Received by CE or its Affiliates. After the Closing, if CE or any of its Affiliates receives (i) any refund or other amount which is an Excluded Asset or is otherwise properly due and owing to Seller or any of the Selling Affiliates in accordance with the terms of this Agreement, or (ii) any refund or other amount which is related to claims or other matters for which Seller is responsible hereunder, and which amount is not an Acquired Asset, or is otherwise properly due and owing to Seller in accordance with the terms of this Agreement, CE promptly shall remit, or shall cause to be remitted, such amount to Seller at the address set forth in Section 8.6(b).

ARTICLE II

CLOSING

SECTION 2.1 Closing. (a) The closing of the Acquisition (the “Closing”) shall be held at the offices of Xxxxxxxx & Xxxxxxxx LLP, 00000 Xxxx Xxxxx Xxxxx, Xxx Xxxxx, Xxxxxxxxxx at 11:59:59 p.m. (EDT) on the date of this Agreement. The date on which the Closing shall occur is hereinafter referred to as the “Closing Date”.

(b) At the Closing, CE shall deliver to the Seller:

(i) by wire transfer to a bank account designated in writing by Seller in United States Dollars, immediately available funds in an amount equal to $300,000;

(ii) the Shares duly endorsed in blank;

(iii) the Assumption Agreement and such other instruments of assumption and such other instruments and documents as Seller or the Selling Affiliates may reasonably request to effect or evidence the purchase of the Acquired Assets and the assumption of the Assumed Liabilities; and

(iv) the Other Transaction Documents to which CE is a party.

(i) a receipt for the Purchase Price paid by CE;

(ii) the Xxxx of Sale and such other instruments and documents as CE may reasonably request to effect or evidence the transfer to CE of the Acquired Assets; and

(iii) the Other Transaction Documents to which Seller and each Selling Affiliate is a party.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF SELLER

Except as set forth in the Seller Disclosure Schedule attached hereto (the “Seller Disclosure Schedule”) with such specificity to give reasonable notice to CE of the representation and warranty to which such exception relates, Seller hereby represents and warrants to CE as follows:

SECTION 3.1 Authority. Seller is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. Each Selling Affiliate is a legal entity, duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization. Seller has all requisite corporate power and authority to enter into this Agreement, and Seller and each of the Selling Affiliates has all requisite corporate power and authority to enter into the Other Transaction Documents to which it is, or is specified to be, a party and to consummate the transactions contemplated hereby and thereby. All corporate acts and other proceedings required to be taken by Seller and each of the Selling Affiliates to authorize the execution, delivery and performance of this Agreement and the Other Transaction Documents to which it is, or is specified to be, a party and to consummate the transactions contemplated hereby and thereby have been duly and properly taken. This Agreement has been duly executed and delivered by Seller and, assuming this Agreement has been duly authorized, executed and delivered by CE, constitutes, and the Other Transaction Documents on the Closing Date will be duly executed and delivered by Seller or the Selling Affiliates, as applicable, and will constitute, a legal, valid and binding obligation of Seller or the Selling Affiliates, as applicable, enforceable against such person in accordance with its terms, subject, as to enforcement, to applicable bankruptcy, insolvency, moratorium, reorganization or similar laws affecting creditors’ rights generally and to general equitable principles.

SECTION 3.2 No Conflicts; Consents. (a) The execution and delivery of this Agreement by Seller do not, and the execution and delivery of the Other Transaction Documents by Seller and the Selling Affiliates specified to be parties thereto will not, and the consummation of the transactions contemplated hereby and thereby and compliance with the terms and conditions hereof and thereof will not, conflict with, or result in any violation of or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation or loss of a material benefit under, or result in the creation of any liens, claims, encumbrances, security interests, options, charges or restrictions of any kind (“Liens”) upon any of the Acquired Assets under, any provision of (i) the certificate of

incorporation or by-laws (or the comparable governing instruments) of Seller or any Selling Affiliate, or (ii) any judgment, order or decree, or, subject to the matters referred to in clauses (i) and (ii) of paragraph (b) below, Applicable Law applicable to Seller or any Selling Affiliate or the Acquired Assets.

(b) No material consent, approval, license, permit, order or authorization of, or registration, declaration or filing with, any Governmental Entity is required to be obtained or made by or with respect to Seller or any Selling Affiliate in connection with the execution, delivery and performance of this Agreement, the Other Transaction Documents or the consummation of the transactions contemplated hereby or thereby other than (i) those that may be required solely by reason of CE’s or any Affiliate of CE’s (as opposed to any other third party’s) participation in the transactions contemplated hereby or by the Other Transaction Documents, and (ii) such consents, approvals, licenses, permits, orders, authorizations, registrations, declarations and filings the absence of which, or the failure to make or obtain which, individually or in the aggregate, would not be reasonably likely to have a Material Adverse Effect.

SECTION 3.3 Taxes. No material Tax liens have been filed and no material claims are being asserted in writing with respect to any Taxes due with respect to the Acquired Assets.

SECTION 3.4 Good and Valid Title. (a) Seller and the Selling Affiliates have, or as of the Closing Date will have, good and valid title to all material Acquired Assets, in each case free and clear of all Liens, except (i) such as are set forth in Section 3.4 of the Seller Disclosure Schedule; (ii) mechanics’, carriers’, workmen’s, repairmen’s or other like Liens arising or incurred in the ordinary course of business and Liens for Taxes and other governmental charges which are not due and payable or which may thereafter be paid without penalty; and (iii) other imperfections of title or encumbrances, if any, which do not, individually or in the aggregate, materially impair the continued use and operation of the Acquired Assets to which they relate (the Liens described in clauses (i), (ii) and (iii) above are hereinafter referred to collectively as “Permitted Liens”).

(b) This Section 3.4 does not relate to Contracts, such item being the subject of Section 3.5.

SECTION 3.5 Contracts. (a) Section 3.5 of the Disclosure Schedule sets forth each Transferred Contract that is or contains:

(i) a continuing contract for the future provision of nursing services.

(b) Except as set forth in Section 3.5 of the Seller Disclosure Schedule, each Transferred Contract set forth in Section 3.5 of the Seller Disclosure Schedule is valid, binding and in full force and effect and, to the knowledge of Seller, is enforceable by Seller or the applicable Selling Affiliate in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other laws affecting creditors’ rights generally, general principles of equity and the discretion of courts in granting equitable remedies and except to the extent that the failure of a Transferred Contract to be valid, binding and in full force and effect would not be reasonably likely to have a Material Adverse Effect. Seller and the Selling Affiliates have performed in all material respects all material obligations

required to be performed by them to date under the Transferred Contracts and is not (with or without the lapse of time or the giving of notice, or both) in breach or default in any material respect thereunder and, to the knowledge of Seller, no other party to any of the Transferred Contracts set forth in Section 3.5 of the Seller Disclosure Schedule, as of the date of this Agreement, is (with or without the lapse of time or the giving of notice, or both) in breach or default in any material respect thereunder, except to the extent that such breach or default would not be reasonably likely to have a Material Adverse Effect.

SECTION 3.6 Litigation. There are no lawsuits or claims pending as of the date of this Agreement, with respect to which Seller or any Selling Affiliate has been contacted in writing by counsel for the plaintiff or claimant, against any Acquired Asset or which seek any material injunctive relief or seek any legal restraint on or prohibition against the transactions contemplated by this Agreement. To the knowledge of Seller, as of the date of this Agreement, none of Seller or the Selling Affiliates is a party or subject to or in default under any material judgment, order, injunction or decree of any Governmental Entity or arbitration tribunal applicable to the Business or any material Acquired Asset.

SECTION 3.7 DISCLAIMER. CE ACKNOWLEDGES THAT EXCEPT AS SET FORTH IN THIS ARTICLE III AND IN THE SELLER DISCLOSURE SCHEDULE, NEITHER SELLER NOR ANY OTHER PERSON HAS MADE ANY REPRESENTATION OR WARRANTY, EXPRESSED OR IMPLIED, AS TO THE ACQUIRED ASSETS, THE BUSINESS OR THE ACCURACY AND COMPLETENESS OF ANY INFORMATION REGARDING THE ACQUIRED ASSETS FURNISHED OR MADE AVAILABLE TO CE AND THEIR REPRESENTATIVES AND CE HAS NOT RELIED ON ANY REPRESENTATION FROM SELLER OR ANY OTHER PERSON WITH RESPECT TO THE ACQUIRED ASSETS, THE BUSINESS OR THE ACCURACY OR COMPLETENESS OF ANY INFORMATION REGARDING THE ACQUIRED ASSETS FURNISHED OR MADE AVAILABLE TO CE AND THEIR REPRESENTATIVES IN DETERMINING TO ENTER INTO THIS AGREEMENT, EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS ARTICLE III AND IN THE SELLER DISCLOSURE SCHEDULE. CE ACKNOWLEDGES THAT SHOULD THE CLOSING OCCUR, CE SHALL ACQUIRE THE ACQUIRED ASSETS WITHOUT ANY REPRESENTATION AS TO MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, IN AN “AS IS” CONDITION AND ON A “WHERE IS” BASIS AND CE SHALL BEAR THE ECONOMIC AND LEGAL RISKS THAT ANY CONVEYANCE SHALL PROVE TO BE INSUFFICIENT TO VEST IN CE GOOD AND MARKETABLE TITLE, FREE AND CLEAR OF ANY LIENS, THAT ANY NECESSARY CONSENTS OR GOVERNMENTAL APPROVALS ARE NOT OBTAINED AND THAT ANY REQUIREMENTS OF APPLICABLE LAWS OR JUDGMENTS ARE NOT COMPLIED WITH.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF CE

CE hereby represents and warrants to Seller as follows:

SECTION 4.1 Authority. This Agreement has been duly executed and delivered by CE and, assuming this Agreement has been duly authorized, executed and delivered by Seller, constitutes, and the Other Transaction Documents on the Closing Date will be duly executed by CE, and upon the due authorization, execution and delivery by each other party to the Other Transaction Documents, will constitute a legal, valid and binding obligation of CE, enforceable against CE in accordance with its terms, subject, as to enforcement, to applicable bankruptcy, insolvency, moratorium, reorganization or similar laws affecting creditors’ rights generally and to general equitable principles.

SECTION 4.2 No Conflicts; Consents. (a) The execution and delivery of this Agreement by CE does not, and the execution and delivery by CE of each Other Transaction Document to which it is, or is specified to be, a party will not, and the consummation of the transactions contemplated hereby and thereby and compliance with the terms hereof and thereof will not, conflict with, or result in any violation of or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation or to loss of a material benefit under, or result in the creation of any Lien upon any of the properties or assets of CE under, any provision of (i) its certificate of incorporation or by-laws, (ii) any Contract to which CE is a party or by which any of its properties or assets are bound or (iii) any judgment, order, or decree, or, subject to the matters referred to in paragraph (b) below, statute, law, ordinance, rule or regulation applicable to CE or its properties or assets, other than, in the case of clauses (ii) and (iii) above, any such items that, individually or in the aggregate, would not be reasonably likely to have a material adverse effect on the ability of CE to consummate the Acquisition.

(b) No consent, approval, license, permit, order or authorization of, or registration, declaration or filing with, any Governmental Entity is required to be obtained or made by or with respect to CE in connection with the execution, delivery and performance of this Agreement, the Other Transaction Documents or the consummation of the transactions contemplated hereby or thereby, other than (i) those that may be required solely by reason of Seller’s or any Selling Affiliates’ (as opposed to any other third party’s) participation in the transactions contemplated hereby or by the Other Transaction Documents and (ii) such consents, approvals, licenses, permits, orders, authorizations, registrations, declarations and filings the absence of which, or the failure to make which, individually or in the aggregate, would not be reasonably likely to have a material adverse effect on the ability of CE to consummate the Acquisition.

SECTION 4.3 Actions and Proceedings. There are no (a) outstanding judgments, orders, injunctions or decrees of any Governmental Entity or arbitration tribunal against CE, (b) lawsuits, actions or proceedings pending or, to the knowledge of CE, threatened against CE, or (c) investigations by any Governmental Entity which are pending or, to the knowledge of CE, threatened against CE, which, in the case of each of clauses (a), (b) and (c), have had or would be reasonably likely to have a material adverse effect on the ability of CE to consummate the Acquisition.

SECTION 4.4 Availability of Funds. CE has cash available or has existing borrowing facilities which together are sufficient to enable it to consummate the Acquisition.

SECTION 4.5 Title to Shares. CE owns beneficially and of record, free and clear of any Liens, the Shares. CE have the right and power to transfer the Shares to Seller. Upon the Closing, Seller shall receive good and valid title to the Shares, free and clear of all Liens.

SECTION 4.6 No Knowledge of Misrepresentation or Omission. CE has no knowledge that any of the representations and warranties of Seller made in this Agreement or any Other Transaction Document qualified as to materiality are not true and correct, or that those not so qualified are not true and correct in all material respects, and CE has no knowledge of any material errors in, or material omissions from, any Section of the Seller Disclosure Schedule.

ARTICLE V

COVENANTS OF CE

CE covenants and agrees as follows:

SECTION 5.1 Confidentiality. CE acknowledges that the information being provided to CE in connection with the Acquisition and the consummation of the other transactions contemplated hereby and by the Other Transaction Documents (including the terms and conditions of this Agreement and the Other Transaction Documents) constitutes Confidential Information. Following the Closing, CE covenants and agrees to hold in strict confidence, not disclose to any third party and not use for any purpose (i) any Confidential Information obtained by CE while CE was employed by Seller; and (ii) any and all other Confidential Information and other information (other than information relating to the Acquired Assets, the Business or the Assumed Liability) provided to CE by or on behalf of Seller, any Selling Affiliate or Seller’s representatives concerning Seller, the Selling Affiliates or any other Affiliate of Seller and the terms and conditions of this Agreement and the Other Transaction Documents.

SECTION 5.2 No Additional Representations. CE acknowledges that they and their representatives have received or been afforded the opportunity to review prior to the date hereof all written materials which Seller was required to deliver or make available, as the case may be, to CE pursuant to this Agreement on or prior to the date hereof. CE acknowledges that they and their representatives have been permitted full and complete access to the books and records, facilities, equipment, Contracts and other properties and assets of Seller and the Selling Affiliates to the extent relating to the Business or the Acquired Assets that they and their representatives have desired or requested to see and/or review, and that it and its representatives have had a full opportunity to meet with the officers and employees of Seller and the Selling Affiliates to discuss the Business, the Acquired Assets and the Assumed Liabilities. CE acknowledges that none of Seller, any Selling Affiliate or any other person has made any representation or warranty, expressed or implied, as to the accuracy or completeness of any information regarding the Acquired Assets or the Assumed Liabilities furnished or made available to CE and their representatives, except as expressly set forth in this Agreement or the Seller Disclosure Schedule.

SECTION 5.3 Non-Solicitation; Non-Interference. From and after the Closing, CE and its Affiliates shall not, directly or indirectly: (i) at any time, either for itself or for any other person, solicit or encourage, or take any action intended to solicit or encourage, any current

employee, director, partner, independent contractor or consultant of Seller (or any Affiliate of Seller) or any future such person hired or engaged by Seller (or any Affiliate of Seller) located outside the Detroit, Michigan metropolitan area to terminate, discontinue or alter his, her or its relationship with Seller or any such Affiliate, or in any other way interfere with the relationship between any such person and Seller or any such Affiliate; (ii) at any time, employ or otherwise engage as a contractor or consultant any person currently employed or engaged as a contractor or consultant by Seller (or any Affiliate of Seller) or employed or engaged in the future and located outside the Detroit, Michigan metropolitan area during such person’s employment or engagement with Seller or any such Affiliate or for eighteen months following termination of such employment or engagement; or (iii) for a period of eighteen months, compete with Seller (or any Affiliate of Seller) with respect to any business of any kind (outside the Detroit, Michigan metropolitan area) in the states set forth on Schedule 5.3 hereto; provided, however, parties agree that with the sole exception to the prohibition contained in this subsection (iii) shall be that CE shall have the ability to place nurses in hospitals or other healthcare institutions in return for payment of a fee by CE to Seller in an amount equal to 5% of the gross revenues generated by all nurses so placed for six months following the Closing Date and 3% of gross revenues for nurses so placed for the twelve (12) months thereafter (the “Fee”). The Fee shall be payable quarterly in arrears. Payments must be made in immediately available funds by wire transfer to such bank account as Seller will specify. CE will prepare and will cause CE’s certified public accountants to review and approve a statement in respect to calculation of the Fee each quarter which shall include the applicable nurses, rates, hours worked, state of placement and contractual counterparty. If Seller disputes the calculation of the Fee, CE will furnish Seller such work papers and other documents and information relating to the dispute at issue as Seller may reasonably request to enable Seller to audit and determine the amount of the Fee, and the parties hereto shall cooperate to resolve the dispute in accordance with the provisions of this Agreement. The parties agree that in the event of a breach by CE or its Affiliates of any of the covenants set forth in this Section 5.3, monetary damages alone would be inadequate to fully protect Seller from, and compensate Seller for, the harm caused by such breach or threatened breach. Accordingly, CE agrees that if it breaches or threatens breach of any provision of this Section 5.3, Seller shall be entitled to, in addition to any other right or remedy otherwise available, injunctive relief restraining such breach or threatened breach and to specific performance of any such provision of this Section 5.3. Seller shall not be required to post a bond or other security in connection with, or as a condition to, obtaining such relief before a court of competent jurisdiction.

SECTION 5.4 Employees. Upon the Closing Date, CE shall offer employment to all Business —related employees of Seller and the Selling Affiliates. Such offers of employment shall be on terms substantially similar to the terms of employment such employees had with Seller and the Selling Affiliates immediately prior to the Closing Date.

ARTICLE VI

MUTUAL COVENANTS

SECTION 6.1 Consents. CE acknowledges that certain consents and waivers with respect to the transactions contemplated by this Agreement may be required from parties to the Transferred Contracts in order to transfer such Transferred Contracts to CE and that such

consents and waivers have not been obtained. CE agrees that, except for the provision of Section 1.4(b), Seller and its Affiliates shall not have any liability or obligation whatsoever to CE arising out of or relating to the failure to obtain any consents or waivers that may be required in connection with the transactions contemplated by this Agreement or because of the termination of any Transferred Contract or Transferred Permit as a result thereof. CE further agrees that no representation, warranty, covenant or agreement of Seller contained herein shall be breached or deemed breached, and no condition shall be deemed not satisfied, as a result of (a) the failure to obtain any such consent or waiver, (b) any such termination or (c) any lawsuit, action, proceeding or investigation commenced or threatened by or on behalf of any person arising out of or relating to the failure to obtain any such consent or waiver or any such termination. Seller shall, and shall cause the Selling Affiliates to, cooperate with CE, upon the request of CE, in any reasonable manner in connection with CE obtaining any such consents and waivers; provided, however, that such cooperation shall not include any requirement of Seller or any of its Affiliates (including the Selling Affiliates) to expend money, commence, defend or participate in any litigation, incur any obligation in favor of, or offer or grant any accommodation (financial or otherwise) to, any third party.

SECTION 6.2 Security Interest Release. CE acknowledges that the Acquired Assets are subject to a first priority security (the “Security Interest”) in favor of Systran Financial Services Corporation (“Systran”) and that Systran has not yet released the Security Interest or consented to the Acquisition in writing. CE agrees that, except for the provision of this Section 6.2, Seller and its Affiliates shall not have any liability or obligation whatsoever to CE arising out of or relating to the failure to obtain the release of the Security Interest or any other consent or waiver of Systran that may be required in connection with the transactions contemplated by this Agreement. CE further agrees that no representation, warranty, covenant or agreement of Seller contained herein shall be breached or deemed breached, and no condition shall be deemed not satisfied, as a result of the failure to obtain any such release, consent or waiver. CE shall cooperate with Seller, upon the request of Seller, in any reasonable manner in connection with Seller obtaining any such releases, consents and waivers, including without limitation, by executing any documentation reasonably requested by Systran; provided, however, that such cooperation shall not include any requirement of CE to expend money, commence, defend or participate in any litigation, incur any obligation in favor of, or offer or grant any accommodation (financial or otherwise) to, any third party.

SECTION 6.3 Cooperation. (a) CE and Seller shall cooperate with each other, and shall cause their respective officers, employees, agents, auditors and representatives to cooperate with each other, for a period of one (1) year after the Closing to ensure the orderly transition of the Acquired Assets from Seller to CE and to minimize any disruption to the respective businesses of Seller, the Selling Affiliates, CE that might result from the transactions contemplated hereby. After the Closing, upon reasonable written notice, CE and Seller shall furnish or cause to be furnished to each other and their employees, counsel, auditors and representatives reasonable access, during normal business hours, to such information and assistance relating to the Business and the Acquired Assets as is reasonably necessary for financial reporting and accounting matters, the preparation and filing of any Tax returns, reports or forms or the defense of any Tax claim or assessment. The obligation to cooperate pursuant to the preceding sentence insofar as it concerns Taxes shall terminate at the time the relevant applicable statute of limitations expires (giving effect to any extension thereof). Neither party shall be required by this Section 6.3 to

take any action that would unreasonably interfere with the conduct of its business or unreasonably disrupt its normal operations.

(b) Following the Closing, CE shall, and shall cause their respective Affiliates to, cooperate fully with Seller in the prosecution, defense and/or settlement of any litigation or dispute to which Seller and/or its Affiliates may become a party, other than any litigation or dispute relating to the terms and provisions of this Agreement and the transactions contemplated hereby. Such cooperation shall include (i) affording Seller, its counsel and its other representatives full and complete access, upon reasonable notice during normal business hours, to all relevant personnel, properties, books, contracts, commitments and records, (ii) furnishing promptly to Seller, its counsel and its other representatives any information reasonably requested by Seller, such counsel or such other representatives and (iii) providing any other assistance to Seller, its counsel and its other representatives reasonably requested by such Seller, such counsel or such other representatives. In addition, CE shall promptly notify Seller of any communication or other contact they receive regarding any litigation, potential litigation or dispute relating to Seller and/or its Affiliates.

(c) From time to time, as and when requested by either party hereto, the other party shall execute and deliver, or cause to be executed and delivered, all such documents and instruments and shall take, or cause to be taken, all such further or other actions (subject to the provisions of Section 6.1), as such other party may reasonably deem necessary or desirable to consummate the transactions contemplated by this Agreement.

SECTION 6.4 Publicity. Seller and CE agree that no public release or announcement concerning the transactions contemplated hereby shall be issued by either party or its Affiliates without the prior written consent of the other party (which consent shall not be unreasonably withheld), except as such release or announcement may be required by Applicable Law or the rules or regulations of any United States or foreign securities exchange to which such party is subject, in which case the party required to make the release or announcement shall allow the other party reasonable time to comment on such release or announcement in advance of such issuance.

SECTION 6.5 Termination of Lease; Termination of Non-Competition Agreements. Each party hereto agrees that effective upon the Closing, the Lease shall terminate and be of no further force or effect, and Seller and the Selling Affiliates shall have no further obligation thereunder. Further, each party hereto agrees that effective upon the Closing, the Non-Competition and Non-Solicitation Agreements entered in connection with the Agreement and Plan of Reorganization shall terminate and be of no further force or effect.

SECTION 6.6 Bulk Transfer Laws. CE hereby waives compliance by Seller and its Affiliates with the provisions of any so-called “bulk transfer law” of any jurisdiction in connection with the sale of the Acquired Assets to CE.

SECTION 6.7 Transfer Taxes; Purchase Price Allocation; Entitlement to Tax Refunds and Credits; Proration of Non-Income Taxes. (a) All Transfer Taxes and any filing or recording fees applicable to the Acquisition shall be paid by CE. Each party shall use reasonable efforts to avail itself of any available exemptions from any such Taxes or fees, and to cooperate with the

other party in providing any information and documentation that may be necessary to obtain such exemptions.

(b) Seller shall allocate the Purchase Price among the Acquired Assets, subject to CE’s consent, such consent not to be unreasonably withheld. Such allocation will comply with the requirements of Section 1060 of the Code. Each of Seller and CE agrees that it shall (i) report the sale and purchase of the Acquired Assets for United States Tax purposes in accordance with such allocations and (ii) not take any position inconsistent with such allocations on any of their respective United States Tax returns.

(c) Seller shall be entitled to any refunds or credits of Taxes relating to any Excluded Tax Liability. CE shall be entitled to any refunds or credits of Taxes relating to the Acquired Assets, other than any such refunds or credits of Taxes relating to any Excluded Tax Liability.

(d) Any value-added, goods and services, stamp duties, ad valorem and similar Taxes shall be allocated between portions of a tax period that includes (but does not end on) the Closing Date (a “Straddle Period”) in the following manner: (i) in the case of a Tax imposed in respect of property and that applies ratably to a Straddle Period, the amount of Tax allocable to a portion of the Straddle Period shall be the total amount of such Tax for the period in question multiplied by a fraction, the numerator of which is the total number of days in such portion of such Straddle Period and the denominator of which is the total number of days in such Straddle Period, and (ii) in the case of sales, value added and similar transaction-based Taxes (other than Transfer Taxes), such Taxes shall be allocated to the portion of the Straddle Period in which the relevant transaction occurred.

SECTION 6.8 Mutual Release. Except for the rights and obligations expressly set forth or excluded in this Agreement, each of CE on the one hand and Seller on the other, for themselves and for each of their respective past and present agents, assigns, transferees, heirs, spouses, relatives, executors, attorneys, administrators, officers, directors, employees, predecessors, subsidiaries, parents, Affiliates, successors, insurers, and representatives (“Releasors”), hereby release and discharge the other and their respective past and present agents, assigns, transferees, heirs, spouses, relatives, executors, attorneys, administrators, officers, directors, employees, predecessors, subsidiaries, parents, Affiliates, successors, insurers, and representatives (“Releasees”) from any and all claims and causes of action, known or unknown, which Releasors now have or may have against any of the Releasees arising through the date of this Agreement, including but not limited to claims relating to the Lease, the Agreement and Plan of Reorganization (and the transactions contemplated thereby), the employment of CE by Seller or any of its Affiliates, ownership of the Shares by CE, discrimination, harassment, retaliation, breach of contract, breach of the implied covenant of good faith and fair dealing, intentional and negligent infliction of emotional distress, violation of privacy rights, violation of any other state or federal law, any charge of discrimination filed by CE against Seller with any state or federal agency, claims for unpaid wages, paid time off, and/or attorneys’ fees and costs incurred in reaching this Agreement. The parties expressly acknowledge and agree that neither Seller nor CE would enter into this Agreement but for the representation and warranty that CE and Seller are hereby releasing any and all claims of any nature whatsoever arising through the date of this Agreement other than any claims relating to

the terms and provisions of this Agreement and the transactions contemplated hereby, known or unknown, whether statutory or at common law, which CE or Seller now has or could assert directly or indirectly against any of the Releasees.

SECTION 6.9 Litigation Standstill. CE, individually, hereby covenants and agrees that CE shall refrain from initiating, filing, instituting, maintaining or proceeding upon any lawsuit, claim, demand, cause of action, litigation, arbitration or any right of any nature whatsoever, against Seller and its subsidiaries, Affiliates, officers, directors, stockholders, agents or employees, arising out of any subject matter whatsoever through the date of this Agreement other than claims relating to the terms and provisions of this Agreement and the transactions contemplated hereby and from encouraging, advising, preparing for or voluntarily assisting any other person or entity to initiate, institute, maintain or proceed upon any lawsuit, claim, demand, cause of action, litigation, arbitration or any right of any nature whatsoever, against Seller and its subsidiaries, Affiliates, officers, directors, stockholders, agents or employees, arising out of any subject matter whatsoever. Seller hereby covenants and agrees to refrain from initiating, filing, instituting, maintaining or proceeding upon any lawsuit, claim, demand, cause of action, litigation, arbitration or any right of any nature against CE that was released pursuant to Section 6.8 above.

ARTICLE VII

INDEMNIFICATION

SECTION 7.1 Indemnification by Seller. From and after the Closing, Seller shall indemnify CE and its Affiliates and each of their respective officers, directors, employees, agents and representatives against and hold them harmless from any loss, liability, claim, damage or expense (including reasonable legal fees and expenses) (“Losses”) suffered or incurred by any such indemnified party to the extent arising from (i) any breach of a covenant or agreement of Seller contained in this Agreement; (ii) the operation of the Business or the Acquired Assets prior to the Closing Date; or (iii) the Excluded Liabilities. Notwithstanding the forgoing, (x) Seller’s liability under this Section 7.1 shall in no event exceed $100,000.

SECTION 7.2 Indemnification by CE. From and after the Closing, CE shall jointly and severally indemnify Seller and its Affiliates and each of their respective officers, directors, employees, agents and representatives against and hold them harmless from any Loss suffered or incurred by any such indemnified party to the extent arising from (i) any breach of a covenant or agreement of CE contained in this Agreement; (ii) the operation of the Business or the Acquired Assets on and after the Closing Date; or (iii) the Assumed Liabilities.

SECTION 7.3 Limitations on Liability; Cooperation. (a) Notwithstanding any provision herein, neither Seller nor CE shall in any event be liable to the other party or its Affiliates, officers, directors, employees, agents or representatives on account of any indemnity obligation set forth in Section 7.1 or Section 7.2 for any indirect, consequential, special, incidental or punitive damages (including lost profits, loss of use, damage to goodwill or loss of business). Further, neither Seller nor CE shall have any liability to the other party or its Affiliates, officers, directors, employees, agents or representatives relating to the future or historic financial condition, or results of operations of the Business.

(b) CE further acknowledges and agrees that, should the Closing occur, their sole and exclusive remedy with respect to any and all claims relating to this Agreement, any Other Transaction Document, the Acquisition, any document or certificate delivered in connection herewith, the Business, the Acquired Assets and the Assumed Liabilities or any Federal, state, local or foreign statute, law, ordinance, rule or regulation or otherwise (other than claims of, or causes of action arising from, fraud) shall be pursuant to the indemnification provisions set forth in this Article VII. In furtherance of the foregoing, CE hereby waives, from and after the Closing, to the fullest extent permitted under Applicable Law, any and all rights, claims and causes of action (other than claims of, or causes of action arising from, fraud) they or any of their Affiliates may have against Seller and its Affiliates arising under or based upon this Agreement, any Other Transaction Document, the Acquisition, any document or certificate delivered in connection herewith, the Business, the Acquired Assets and the Assumed Liabilities or any Federal, state, local or foreign statute, law, ordinance, rule or regulation or otherwise (except pursuant to the indemnification provisions set forth in this Article VII).

SECTION 7.4 Losses Net of Insurance, etc. The amount of any Loss for which indemnification is provided under this Article VII shall be net of any amounts recovered or recoverable by the indemnified party under insurance policies with respect to such Loss and shall be reduced to take account of any net Tax benefit (including as a result of any basis adjustment) actually realized by the indemnified party arising from the incurrence or payment of any such Loss. In computing the amount of any such Tax benefit, the indemnified party shall be deemed to recognize all other items of income, gain, loss, deduction or credit before recognizing any item arising from the incurrence or payment of any indemnified Loss.

SECTION 7.5 Termination of Representations and Warranties. The representations and warranties in this Agreement shall terminate at the Closing.

SECTION 7.6 Procedures Relating to Indemnification for Third Party Claims. (a) In order for a party (the “indemnified party”) to be entitled to any indemnification provided for under this Agreement in respect of, arising out of or involving a claim or demand made by any person against the indemnified party (a “Third Party Claim”), such indemnified party must notify the indemnifying party in writing, and in reasonable detail, of the Third Party Claim within ten (10) business days after receipt by such indemnified party of written notice of the Third Party Claim; provided, however, that failure to give such notification shall not affect the indemnification provided hereunder except to the extent the indemnifying party shall have been prejudiced as a result of such failure. Thereafter, the indemnified party shall deliver to the indemnifying party, promptly after the indemnified party’s receipt thereof, copies of all notices and documents (including court papers) received by the indemnified party relating to the Third Party Claim.

(b) If a Third Party Claim is made against an indemnified party, the indemnifying party shall be entitled to participate in the defense thereof and, if it so chooses, to assume the defense thereof with counsel selected by the indemnifying party; provided, however, that such counsel is not reasonably objected to by the indemnified party. Should the indemnifying party so elect to assume the defense of a Third Party Claim, the indemnifying party shall not be liable to the indemnified party for legal expenses subsequently incurred by the indemnified party in connection with the defense thereof. If the indemnifying party assumes

such defense, the indemnified party shall have the right to participate in the defense thereof and to employ counsel (not reasonably objected to by the indemnifying party), at its own expense, separate from the counsel employed by the indemnifying party, it being understood that the indemnifying party shall control such defense. The indemnifying party shall be liable for the fees and expenses of counsel employed by the indemnified party for any period during which the indemnifying party has failed to assume the defense thereof.

(c) If the indemnifying party so elects to assume the defense of any Third Party Claim, all of the indemnified parties shall cooperate with the indemnifying party in the defense or prosecution thereof. Such cooperation shall include the retention and (upon the indemnifying party’s request) the provision to the indemnifying party of records and information which are reasonably relevant to such Third Party Claim, and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder. Whether or not the indemnifying party shall have assumed the defense of a Third Party Claim, the indemnified party shall not admit any liability with respect to, or settle, compromise or discharge, such Third Party Claim without the indemnifying party’s prior written consent (which consent shall not be unreasonably withheld).

SECTION 7.7 Procedures Related to Indemnification for Other Claims. In the event any indemnified party should have a claim against any indemnifying party under Section 7.1 or 7.2 that does not involve a Third Party Claim being asserted against or sought to be collected from such indemnified party, the indemnified party shall deliver notice of such claim with reasonable promptness to the indemnifying party. The failure by any indemnified party so to notify the indemnifying party shall not relieve the indemnifying party from any liability which it may have to such indemnified party under Section 7.1 or 7.2, except to the extent that the indemnifying party demonstrates that it has been materially prejudiced by such failure.

SECTION 7.8 Tax Treatment of Indemnification Payments. For all Tax purposes, CE, Seller and each of their respective Affiliates agree to treat any indemnity payment under this Agreement as an adjustment to the Purchase Price received by the Seller for the transactions contemplated by this Agreement unless a final determination (as defined in Section 1313 of the Code) provides otherwise.

SECTION 7.9 Remedies Exclusive. The remedies provided for in this Article VII shall constitute the sole and exclusive remedy for any post-Closing claims, except in the case of fraud.

ARTICLE VIII

MISCELLANEOUS

SECTION 8.1 Assignment. This Agreement and the rights and obligations hereunder shall not be assignable or transferable by CE or Seller (including by operation of law in connection with a merger, consolidation or sale of substantially all the assets of CE or Seller) without the prior written consent of the other party hereto; provided, that Seller may assign its rights and obligations hereunder (a) to any direct or indirect wholly owned subsidiary of Seller or (b) to any transferee of all or substantially all of the assets of Seller, in either case without the consent of CE. Any attempted assignment in violation of this Section 8.1 shall be void.

SECTION 8.2 No Third-Party Beneficiaries. Except as provided in Article VII, this Agreement is for the sole benefit of the parties hereto and their permitted assigns and nothing herein expressed or implied shall give or be construed to give to any person, other than the parties hereto and such assigns, any legal or equitable rights hereunder.

SECTION 8.3 Expenses. Whether or not the transactions contemplated hereby are consummated, and except as otherwise specifically provided in this Agreement, all costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such costs or expenses.

SECTION 8.4 Attorney Fees. If any legal action is brought relating to this Agreement or the breach hereof, the prevailing party in any final judgment, or the non-dismissing party in the event of a voluntary dismissal by the party instituting the action, shall be entitled to the full amount of all reasonable expenses, including all court costs and actual attorneys’ fees paid or incurred in good faith.

SECTION 8.5 Amendments. This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto. By an instrument in writing CE, on the one hand, or Seller, on the other hand, may waive compliance by the other with any term or provision of this Agreement that such other party was or is obligated to comply with or perform.

SECTION 8.6 Notices. All notices or other communications required or permitted to be given hereunder shall be in writing and shall be delivered by hand or sent by prepaid telex, cable or telecopy or sent, postage prepaid, by registered, certified or express mail or reputable overnight courier service and shall be deemed given when so delivered by hand, telexed, cabled or telecopied, or if mailed, three days after mailing (one business day in the case of overnight mail or overnight courier service), as follows:

(a) if to CE,

0000 Xxx Xxxxxx
Xxxxxxxxx, XX 00000

Attention: Xxxxxxx X. Xxxxxxxxx and C. Xxxxxxx Xxxxx

with a copy to:

The Business Law Advisors
0000 Xxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000

Attention: B. Xxxxxx Xxxxxxx, Jr.; and

(b) if to Seller,

Crdentia Corp.
0000 XXX Xxxxxxx, Xxxxx 000
Xxxxxx, XX 00000

Attention: Chief Executive Officer

with a copy to:

Xxxxxxxx & Xxxxxxxx LLP
00000 Xxxx Xxxxx Xxxxx
Xxx Xxxxx, XX 00000

Attention: Xxxxxx X. Xxxxxx, Esq.

SECTION 8.7 Interpretation; Exhibits, Seller Disclosure Schedule and Other Schedules; Certain Definitions. (a) The definitions of the terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The word “will” shall be construed to have the same meaning and effect as the word “shall”. Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth therein), (ii) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (iii) all references herein to Articles, Sections, Appendices, Exhibits or Schedules shall be construed to refer to Articles, Sections, Appendices, Exhibits and Schedules of this Agreement and (iv) the headings contained in this Agreement, the Seller Disclosure Schedule, other Schedules or any Appendix or Exhibit and in the table of contents to this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Any matter set forth in any provision, subprovision, section or subsection of the Seller Disclosure Schedule shall be deemed set forth for all purposes of the Seller Disclosure Schedule to the extent relevant and reasonably apparent. The Seller Disclosure Schedule, all other Schedules and all Appendices and Exhibits annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein. Any capitalized terms used in the Seller Disclosure Schedule, any other Schedule or any Appendix or Exhibit annexed hereto but not otherwise defined therein, shall have the meaning as defined in this Agreement. In the event of an ambiguity or a question of intent or interpretation, this Agreement shall be construed as if drafted jointly by the parties and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions of this Agreement.

(b) For all purposes hereof:

“Accounts Payable” means all accounts payable and liabilities, obligations and commitments, regardless of when asserted, billed or imposed, of Seller or the Selling Affiliates as of the end of the day immediately prior to the Closing Date.

“Accounts Receivable” means all accounts receivable, notes receivable and other indebtedness due and owed by any third party to Seller or the Selling Affiliates as of the end of the day immediately prior to the Closing Date, including all trade accounts receivable representing amounts receivable in respect of goods shipped, products sold or services rendered prior to the day immediately prior to the Closing Date and the full benefit of any security for such accounts or debts.

“Additional Network Server” means the network server located at the principal office of the Business that was purchased by Seller following the closing of the transactions contemplated by the Agreement and Plan of Reorganization and primarily runs Seller’s Austin and San Antonio offices.

“Affiliate” means, with respect to any specified person, any other person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified person; and for the purposes of this definition, “control” when used with respect to any specified person means the power to direct the management and policies of such person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

“Agreement and Plan of Reorganization” means the Agreement and Plan of Reorganization by and among Seller, HIP Holding, Inc. and the shareholders of HIP Holding, Inc. dated March 28, 2005.

“Applicable Laws” means all applicable statutes, laws, ordinances, rules, orders and regulations of any Governmental Entity

“Assumption Agreement” means the assumption agreement to be executed by CE to evidence its assumption of the Assumed Liabilities.

“Xxxx of Sale” means a xxxx of sale and assignment with respect to the Acquired Assets.

“Business” means Seller’s and the Selling Affiliates’ temporary nurse staffing business in the Detroit, Michigan metropolitan area.

“business day” means any day, other than a Saturday or Sunday, on which commercial banks are not required or authorized to close in the City of New York.

“Code” shall mean the U.S. Internal Revenue Code of 1986, as amended.

“Confidential Information” shall mean all Trade Secrets and other confidential and/or proprietary information of a person, including information derived from reports, investigations, research, work in progress, codes, marketing and sales programs, financial projections, cost summaries, pricing formulae, contract analyses, financial information, projections, confidential filings with any state or federal agency, and all other confidential concepts, methods of doing

business, ideas, materials or information prepared or performed for, by or on behalf of such person by its employees, officers, directors, agents, representatives, or consultants.

“dollars” or “$” means lawful money of the United States of America.

“Existing Network Server” means the network server that has been located at the principal office of the Business since prior to the closing of the transactions contemplated by the Agreement and Plan of Reorganization.

“Governmental Entity” means Federal, state or local government or any court of competent jurisdiction, administrative agency or commission or other governmental authority or instrumentality.

“including” means including, without limitation.

“knowledge of Seller” means the current actual knowledge of (i) Xxxx Xxxxxx; and (ii) Xxxxx X. XxxXxxxx.

“Lease” means the Building Lease dated March 2005 by and among Ladder Company, LLC, a Michigan limited liability company and Seller, as amended.

“Material Adverse Effect” means a material adverse effect on (i) the Acquired Assets and the Business, taken as a whole, or (ii) the ability of Seller to consummate the Acquisition. For purposes of this Agreement, “Material Adverse Effect” shall exclude any effects to the extent resulting from (A) changes in the United States or foreign economies in general, (B) changes in industries relating to the Business in general and not specifically relating to the Business, (C) the announcement by Seller of its intention to sell the Acquired Assets, (D) the completion of the Acquisition or (E) the execution of this Agreement (including the disclosure of the identity of CE) or any Other Transaction Document and the consummation of the transactions contemplated hereby or thereby.

“Other Transaction Documents” means (i) the Xxxx of Sale, and (ii) the Assumption Agreement.

“person” means any individual, firm, corporation, partnership, limited liability company, trust, joint venture, Governmental Entity or other entity.

“Post-Closing Tax Period” shall mean all taxable periods beginning and ending after the Closing Date and the portion beginning on the day after the Closing Date of any Straddle Period.

“Pre-Closing Tax Period” shall mean all taxable periods ending on or before the Closing Date and the portion ending on the Closing Date of any taxable period that includes (but does not end on) the Closing Date.

“Selling Affiliate” means each Affiliate of the Seller identified in Section 1(a)(i) of the Seller Disclosure Schedule.

“subsidiary” of any person means another person, an amount of the voting securities, other voting ownership or voting partnership interests of which is sufficient to elect at least a majority of its Board of Directors or other governing body (or, if there are no such voting interests, fifty percent (50%) or more of the equity interests of which) is owned directly or indirectly by such first person or by another subsidiary of such person.

“Tax” or “Taxes” shall mean all Federal, state, local and foreign taxes and similar assessments (other than Transfer Taxes), including all interest, penalties and additions imposed with respect to such amounts.

“Trade Secrets” shall mean all trade secrets under applicable law and other rights in know-how and confidential or proprietary information, processing, manufacturing or marketing information, including new developments, inventions, processes, ideas or other proprietary information that provide Seller and the Selling Affiliates with advantages over competitors who do not know or use it and documentation thereof (including related papers, blueprints, drawings, research data and results, flowcharts, diagrams, chemical compositions, formulae, diaries, notebooks, specifications, designs, methods of manufacture, processing techniques, data processing software, compilations of information, customer and supplier lists, pricing and cost information, and business and marketing plans and proposals) and all claims and rights related thereto.

“United States” means the United States of America, including its territories and possessions (excluding all military bases and other military installations outside of the continental United States, Alaska, Hawaii and Washington, D.C.).

Term		Section
Accounts Payable		8.7(b)
Accounts Receivable		8.7(b)
Acquired Assets		1.2(a)
Acquisition		1.1
Additional Network Server		8.7(b)
Affiliate		8.7(b)
Agreement and Plan of Reoganization		8.7(b)
Applicable Laws		8.7(b)
Assumed Liabilities		1.3(a)
Assumption Agreement		8.7(b)
Xxxx of Sale		8.7(b)
Business		8.7(b)
business day		8.7(b)
CE		Preamble
Closing		2.1
Closing Date		2.1
Code		8.7(b)

Term		Section
Confidential Information		8.7(b)
Contracts		1.2(a)(i)
Dollars		8.7(b)
Excluded Assets		1.2(b)
Excluded Contracts		1.2(b)(iii)
Excluded Liabilities		1.3(b)
Excluded Other Rights		1.2(b)(v)
Excluded Permits		1.2(b)(iv)
Excluded Records		1.2(b)(vi)
Excluded Tax Liability		1.3(b)(ii)
Existing Network Server		8.7(b)
Fee		5.3
Governmental Entity		8.7(b)
including		8.7(a)
indemnified party		7.6
Knowledge of Seller		8.7(b)
Lease		8.7(b)
Liabilities		1.3(a)
Liens		3.2(a)
Losses		7.1
Material Adverse Effect		8.7(b)
Other Rights		1.2(a)(iii)
Other Transaction Documents		8.7(b)
Permits		1.2(a)(ii)
Permitted Liens		3.4(a)
Person		8.7(b)
Post-Closing Tax Period		8.7(b)
Pre-Closing Tax Period		8.7(b)
Purchase Price		1.1
CE		Preamble
Records		1.2(a)(iv)
Releasees		6.8
Releasors		6.8
Security Interest		6.2
Seller		Preamble
Seller Disclosure Schedule		Article III
Selling Affiliate		8.7(b)
Shares		1.1
Straddle Period		6.6(d)
Subsidiary		8.7(b)
Systran		6.2
Tax		8.7(b)
Taxes		8.7(b)
Third Party Claim		7.6

Term		Section
Trade Secrets		8.7(b)
Transfer Taxes		1.3(a)(vi)
Transferred Contracts		1.2(a)(i)
Transferred Other Rights		1.2(a)(iii)
Transferred Permits		1.2(a)(ii)
Transferred Records		1.2(a)(iv)
United States		8.7(b)

SECTION 8.8 Counterparts. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more such counterparts have been signed by each of the parties and delivered to the other party.

SECTION 8.9 Entire Agreement. This Agreement contains the entire agreement and understanding between the parties hereto with respect to the subject matter hereof and supersede all prior agreements and understandings relating to such subject matter. Neither party shall be liable or bound to any other party in any manner by any representations, warranties or covenants relating to such subject matter except as specifically set forth herein or in the Seller Disclosure Schedule.

SECTION 8.10 Fees. Each of Seller and CE hereby represents and warrants to the other that no broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the Acquisition based upon arrangements made by or on behalf of Seller or CE, as applicable.

SECTION 8.11 Severability. If any provision of this Agreement (or any portion thereof) or the application of any such provision (or any portion thereof) to any person or circumstance shall be held invalid, illegal or unenforceable in any respect by a court of competent jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision hereof (or the remaining portion thereof) or the application of such provision to any other persons or circumstances.

SECTION 8.12 Consent to Jurisdiction. Each of CE and Seller irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the State of Texas for the purposes of any suit, action or other proceeding arising out of this Agreement or any transaction contemplated hereby or thereby. Each of CE and Seller agrees to commence any such action, suit or proceeding either in the United States District Court in the State of Texas or if such suit, action or other proceeding may not be brought in such court for jurisdictional reasons, in state court of the State of Texas. Each of CE and Seller further agrees that service of any process, summons, notice or document by U.S. registered mail to such party’s respective address(es) set forth above shall be effective service of process for any action, suit or proceeding in Texas with respect to any matters to which it has submitted to jurisdiction in this Section 8.12. Each of CE and Seller irrevocably and unconditionally waives any objection to the laying of venue of any action, suit or proceeding arising out of this Agreement or the transactions contemplated hereby or thereby in (i) the state and federal courts sitting in the State of Texas, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in

any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum.

SECTION 8.13 Waiver of Jury Trial. Each party hereto hereby waives to the fullest extent permitted by Applicable Law, any right it may have to a trial by jury in respect of any litigation directly or indirectly arising out of, under or in connection with this Agreement or any transaction contemplated hereby or thereby. Each party hereto (a) certifies that no representative, agent or attorney of any other party has represented, expressly or otherwise, that such other party would not, in the event of litigation, seek to enforce that foregoing waiver and (b) acknowledges that it and the other parties hereto have been induced to enter into this Agreement by, among other things, the mutual waivers and certifications in this Section 8.13.

SECTION 8.14 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF DELAWARE APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO THE CONFLICTS OF LAW PRINCIPLES OF SUCH STATE.

IN WITNESS WHEREOF, Seller and CE have duly executed this Agreement as of the date first written above.

	CRDENTIA CORP.


	By:
		Name:
		Title:


	By:
		Xxxxxxx X. Xxxxxxxxx


	By:
		C. Xxxxxxx Xxxxx

[Signature Page to the Asset Purchase Agreement]

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ASSET PURCHASE AGREEMENT between CRDENTIA CORP., MATTHEW J. CAHILLANE and C. MICHAEL EMERY Dated as of June 30, 2007

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