Exhibit 10.3


 


SETTLEMENT AGREEMENT


 


This Settlement Agreement (this “Agreement”) is made and entered into
between Crdentia Corp. (“Crdentia”), on the one hand, and Nick Liuzza, Jr.,
Nick Liuzza, Sr., Christopher Liuzza (collectively referred to as the “Liuzza
Parties”), and those other former shareholders of New Age Staffing, Inc.
who are signatories hereto (collectively with the Liuzza Parties, the “Former
New Age Shareholders”) on the other hand, as of January 9, 2006 (the “Effective
Date”) with reference to the following:


 


In order to avoid the expense of litigation, and with all parties
denying liability, the parties enter into this Agreement and by so doing intend
to fully, completely, and finally resolve, terminate, and settle all disputes,
claims, and actions between Crdentia and the Liuzza Parties, including, without
limitation, those claims which were actually asserted or which could have been
asserted in the litigation entitled Nick Liuzza Sr., et al. v.
Crdentia Corp., No. 05-3031, pending in the United States
District Court, Eastern District of Louisiana, (the “Action”), and to preclude
the possibility of further disputes between them.


 


WHEREFORE, in consideration of the promises, covenants, warranties, and
representations set forth below, the parties agree as follows:


 


1.                                       Return of Shares by Nick Liuzza, Jr.



 


Nick Liuzza Jr. owns 684,137 shares of common stock in Crdentia.  Crdentia is further presently obligated to
deliver 498,855 additional shares of common stock in Crdentia to Nick Liuzza
Jr. as (i) dividends payable but not yet paid on the shares of Crdentia’s Class B-1
Preferred Stock (the “B-1 Preferred”) formerly owned by Nick Liuzza Jr. and (ii) consideration


 





















 


payable by Crdentia to Nick Liuzza Jr. upon the
conversion of his former shares of B-1 Preferred into Crdentia’s common stock
on March 29, 2005 (collectively, the “Nick Liuzza Jr. Dividend/Conversion
Shares”).


 


Within 15 calendar days following the Effective Date, (i) Crdentia
shall deliver to Nick Liuzza Jr. stock certificates evidencing the Nick Liuzza
Jr. Dividend/Conversion Shares, and (ii) Nick Liuzza Jr. shall deliver to
Crdentia certificates representing 591,496 shares of common stock originally
issued to Nick Liuzza Jr. on September 22, 2003, free and clear of all
encumbrances imposed by Nick Liuzza Jr. and accompanied by signed blank stock
powers and such other documentation as is reasonably requested by Crdentia’s
transfer agent (other than an opinion of counsel with respect to compliance
with federal and state securities laws which, if required, shall be delivered
by Crdentia’s counsel).  Crdentia
acknowledges and agrees that Nick Liuzza Jr. will continue to own 591,496 of
shares of common stock in Crdentia following this Agreement.


 


2.                                       Extension of Lock-Up Agreement


 


By execution of this Agreement, Crdentia and Nick Liuzza Jr. are hereby
amending that certain Lock-Up Agreement between Crdentia and Nick Liuzza Jr.
dated September 13, 2003 (the “Lock-Up Agreement”) (i) subject to
clause (iii) immediately below, to extend the term thereof for a period
expiring on the one (1) year anniversary of its original expiration date,
with such extension to be effective retroactively to the original expiration
date, (ii) to include all Crdentia common stock owned by Nick Liuzza Jr.
within the definition of “Restricted Shares” thereunder, regardless of whether
such shares were received in the Merger (as defined in the Lock-Up Agreement)
or thereafter, and (iii) to terminate the Lock-Up Agreement, other than


 





















 


Section 3 thereof,
ninety (90) days following the occurrence of a Qualified Secondary Offering.  A
“Qualified Secondary Offering” means a secondary offering of Crdentia common
stock raising $20,000,000 or more in gross proceeds.


 


3.                                       Sales and Transfers of Stock by Former
New Age Shareholders


 


Crdentia covenants that: (i) Crdentia will immediately rescind any
and all stop-transfer orders placed with its transfer agent affecting the
Former New Age Shareholders; (ii) upon expiration or early termination of
the Lock-Up Agreement, Crdentia will immediately rescind any and all
stop-transfer orders placed with its transfer agent affecting Nick Liuzza Jr.; (iii) Crdentia
will not take any action to impair the right or ability of the Former New Age
Shareholders to sell or transfer their Crdentia common stock unless the sale or
transfer is prohibited by applicable securities laws or, in the case of Nick
Liuzza Jr., the Lock-Up Agreement; and (iv) upon receipt from the Former
New Age Shareholders of customary documentation, Crdentia will perform all
ministerial acts necessary, including the issuance of appropriate and customary
opinions by company counsel without charge to the selling party, to authorize
and effect the sale and transfer of common stock sold by the Former New Age
Shareholders unless the sale or transfer is prohibited by applicable securities
laws or, in the case of Nick Liuzza Jr., the Lock-Up Agreement.  Without limiting the foregoing, Crdentia
acknowledges that Chris Liuzza intends to sell 30,000 shares of Crdentia common
stock immediately following the Effective Date, and Crdentia agrees to comply
with its obligations under this Section within time frames customary in
the securities industry.


 





















 


4.                                       Shares Deliverable Pursuant to B-1
Preferred Conversion and Accrued Dividends


 


Promptly following delivery to Crdentia of the certificates
representing the B-1 Preferred shares currently held by the Former New Age
Shareholders, Crdentia shall deliver all shares (together with any and all
certificates representing the shares) due to the Former New Age Shareholders as
a result of the conversion of the B-1 Preferred shares held thereby and accrued
dividends payable in stock on the B-1 Preferred prior to its conversion to
Crdentia common stock.


 


Crdentia agrees and acknowledges that 525,210 additional shares of
Crdentia common stock are deliverable under this Section to Nick Liuzza
Sr.


 


5.                                       Release of Claims by the Former New Age
Shareholders


 


Reserving the rights of Nick Liuzza Sr. and Nick Liuzza Jr. under that
certain Registration Rights Agreement, dated September 22, 2003, with
Credentia (the “2003 Registration Rights Agreement”), the Former New Age
Shareholders, on behalf of themselves and their spouses, heirs, successors,
administrators, successors, and assigns, absolutely and forever releases and
discharges Crdentia, together with its assigns, insurers, subrogees,
predecessors-in-interest, successors-in-interest, divisions, all affiliated,
parent or subsidiary corporations or entities, officers, directors, employees,
members, managers, supervisors, shareholders, and attorneys, from any and all
claims, rights, demands, covenants, agreements, contracts, invoices, duties,
obligations, responsibilities, representations, warranties, promises, liens,
accounts, debts, liabilities, damages, expenses, attorneys’ fees, costs and
causes of action, known or unknown of whatever kind and howsoever arising,
which each now has, ever has had,


 





















 


or may have had against Crdentia up to and until the
Effective Date, whether in law or equity, including without limitation, all
claims which were asserted or could have been asserted in the Action, all
claims related to, based upon, or arising out of that certain Agreement and
Plan of Reorganization by and among Crdentia Corp., NAS Acquisition
Corporation, New Age Staffing, Inc., and the Shareholders of New Age
Staffing, Inc., all claims arising out of Crdentia’s employment of Nick
Liuzza, Jr., all rights to require registration of any shares of Crdentia
common stock received in the conversion of the B-1 Preferred (except to the
extent that the Former New Age Shareholders may hereafter be entitled to demand
registration thereof under the Registration Rights Agreement), and all claims
of fraudulent conduct.


 


6.                                       Release of Claims by Crdentia


 


Reserving its rights against Nick Liuzza Jr. under the Lock-Up
Agreement, Crdentia, on behalf of itself, its assigns, insurers, subrogees,
predecessors-in-interest, successors-in-interest, divisions, all affiliated,
parent or subsidiary corporations or entities, officers, directors, employees,
members, managers, supervisors, shareholders, and attorneys, absolutely and
forever releases and discharges the Former New Age Shareholders, together with
their spouses, heirs, successors, administrators, successors, and assigns, from
any and all claims, rights, demands, covenants, agreements, contracts,
invoices, duties, obligations, responsibilities, representations, warranties,
promises, liens, accounts, debts, liabilities, damages, expenses, attorneys’
fees, costs and causes of action, known or unknown of whatever kind and
howsoever arising, which each now has, ever has had, or may have had against
the Former New Age Shareholders up to and until the Effective Date, whether in
law or equity, including without limitation, all claims asserted in any action
against the Former New Age Shareholders, all claims related to, based


 





















 


upon, or arising out of that certain Agreement and
Plan of Reorganization by and among Crdentia Corp., NAS Acquisition
Corporation, New Age Staffing, Inc., and the Shareholders of New Age
Staffing, Inc. or its employment of Nick Liuzza Jr., and all claims of
fraudulent conduct.


 


7.                                       No Liability


 


It is understood and agreed that this Agreement does not constitute an
admission of liability on the part of any party or parties released
herein.  Each party denies liability as
to all claims or causes of action but agrees to settle this dispute merely to
buy their peace.


 


8.                                       Covenant Not to Sue


 


The parties represent and warrant that they will not bring, commence,
maintain, support or prosecute, directly or indirectly, any action at law or
proceeding in equity or any legal or administrative proceeding or assert a
claim for damages or other relief based in whole or in part upon any claim,
demand, debt or liability which is released herein.


 


9.                                       Dismissal of Action


 


The Liuzza Parties further agree that this Agreement expresses a full
and complete compromise and settlement of all claims asserted in the Action,
regardless of the adequacy of the aforesaid consideration, and DIRECTS AND AUTHORIZES
their counsel to DISMISS THE ACTION WITH PREJUDICE, each party to bear its own
costs and attorneys’ fees.


 





















 


10.                                 Applicable Law and Venue


 


This Agreement and the rights, duties, and obligations of the Parties
to this Agreement shall be interpreted, construed, performed, and enforced in
accordance with and governed by the internal law, and not the law of conflicts,
of the State of Louisiana.  Crdentia
acknowledges and agrees that the Liuzza Parties may seek to enforce this
Agreement in any state or federal court of competent jurisdiction in Louisiana,
and Crdentia hereby waives any objections to the jurisdiction of those courts
based on personal jurisdiction or forum non conveniens.


 


11.                                 Differences in Fact


 


The Parties fully understand and agree that the assumptions and
perceived circumstances upon which this Agreement is executed may be mistaken
or otherwise in error. With such understanding and agreement, the Parties
expressly accept and assume the risk of facts being other than or different
from its or their assumptions or perceptions as of any date prior to and
including the date hereof; the Parties fully agree that this Agreement shall be
in all respects effective, and shall not be subject to termination, rescission,
or modification by reason of any mistaken or erroneous assumption of perceived
circumstances.


 


12.                                 No Representation


 


The Parties acknowledge to one another that no promise, inducement or
agreement not contained herein has been expressed or made to any of them in
connection with this Agreement.


 





















 


13.                                 Complete Agreement


 


This Agreement is intended by the Parties as a final and complete
expression of their agreement and understanding with respect to its subject
manner. The terms of this Agreement are contractual, and may not be changed,
modified, altered, interlineated, or supplemented, nor may any covenant,
representation, warranty, or other provisions hereof be waived, except by
agreement in writing signed by the party against whom enforcement of the
change, modification, alteration, interlineation, waiver or supplementation is
sought.


 


14.                                 General Provisions


 


(a)                                  This Agreement may be executed in
counterparts each of which shall be deemed to be an original, but all of which
taken together will constitute but one agreement.


 


(b)                                 In the event any provision of the
Agreement is found to be unenforceable, that finding shall not affect the
enforceability of any other provision hereof.


 


(c)                                  This Agreement confers no rights upon any
party, person and/or entity that is not a signatory
hereto.


 


(d)                                 This Agreement shall not be construed for
or against any of the parties on the basis of the extent to which that party
participated in drafting it.


 


(e)                                  Each party shall bear its own attorneys’
fees or costs incurred in connection with this Action.  However, in the event any party to this
Agreement is required to file an action in order to enforce the provisions of
this Agreement, the prevailing party in such action shall be entitled to
recover their reasonable attorneys’ fees and costs incurred in such action.


 





















 


(f)                                    This Agreement constitutes a single,
integrated contract expressing the entire agreement of the Parties concerning
its subject matter. All prior discussions and negotiations have been merged and
integrated into, and are superseded by, this Agreement.


 


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


 


 


	
  DATED: January 9,
  2006

  	
  /s/ Nick Liuzza, Jr.

  	
   

  
	
   

  	
  NICK LIUZZA JR.

  
	
   

  	
   

  
	
  DATED: January 8,
  2006

  	
  /s/ Nick Liuzza, Sr.

  	
   

  
	
   

  	
  NICK LIUZZA SR.

  
	
   

  	
   

  
	
  DATED: January 9,
  2006

  	
  /s/ Christopher Liuzza

  	
   

  
	
   

  	
  CHRISTOPHER LIUZZA

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CRDENTIA CORP.

  
	
   

  	
   

  
	
  DATED: January 11,
  2006

  	
  /s/ James J. TerBeest,
  Chief Financial Officer

  	
   

  
	
   

  	
  By Its Duly Authorized
  Representative

  
						



 





















 


JOINDER


 


IN WITNESS WHEREOF, the
undersigned former shareholder of New Age Staffing, Inc. has executed this
Agreement effective as of January 9, 2006.


 


 


	
  DATED:

  	
   

  	
   , 2006

  	
   

  	
   

  
	
   

  	
  Name: