BONUS
AWARD AND RESTRICTED STOCK BONUS AWARD AGREEMENTS RELATING TO THE RESTRICTED
STOCK AWARDS GRANTED TO DURHAM ON MARCH 24, 2006 (THE "2006 RESTRICTED STOCK
GRANT") AND MAY 31, 2005 (THE "2005 RESTRICTED STOCK GRANT") (COLLECTIVELY, THE
"RESTRICTED STOCK GRANTS").
IN ACCORDANCE WITH THE TERMS OF THE RESTRICTED
STOCK GRANTS, VESTING IN THE RESTRICTED STOCK GRANTED THEREUNDER WILL CONTINUE
DURING THE PERIOD DURHAM CONTINUES TO PROVIDE CONSULTING SERVICES PURSUANT TO
SECTION 7 AND SHALL CEASE IN ANY EVENT AS OF OCTOBER 31, 2007.
[CRDENTIA
CONFIRMS THAT AS OF THE DATE OF THIS AGREEMENT, 105,000 SHARES OF RESTRICTED
STOCK HAVE VESTED PURSUANT TO THE 2005 RESTRICTED STOCK GRANT AND NO SHARES OF
RESTRICTED STOCK HAVE VESTED UNDER THE 2006 RESTRICTED STOCK GRANT.]
(B)
NOTHING IN THIS AGREEMENT, INCLUDING THE MUTUAL RELEASE SET FORTH IN
SECTION 18 BELOW SHALL AFFECT ANY RIGHTS OR OBLIGATIONS OF THE PARTIES WITH
RESPECT TO THE STOCK OPTION GRANTS AND COMMON STOCK PURCHASE RIGHTS LISTED ON
EXHIBIT A TO THIS AGREEMENT (THE "OPTIONS").
CRDENTIA CONFIRMS THAT EXHIBIT A
LISTS (I) ALL OPTIONS CURRENTLY HELD BY DURHAM, INCLUDING THE NUMBER OF SHARES
OF CRDENTIA COMMON STOCK FOR WHICH EACH SUCH OPTION IS EXERCISABLE, (II) THE
OPTION EXERCISE PRICE WITH RESPECT TO EACH SUCH OPTION, (III) THAT ALL SUCH
OPTIONS ARE FULLY VESTED AND (IV) THE PERIOD THROUGH WHICH EACH SUCH OPTION MAY
BE EXERCISED BY DURHAM.
IN ACCORDANCE WITH THE TERMS OF THE OPTIONS, SUCH
OPTIONS WILL REMAIN EXERCISABLE UNTIL THEY EXPIRE PURSUANT TO THEIR TERMS
(INCLUDING EARLY TERMINATION DUE TO THE TERMINATION OF DURHAM'S EMPLOYMENT OR
SERVICE TO CRDENTIA, BUT THE PERIOD FOR EXERCISE OF ANY OPTIONS SHALL NOT EXPIRE
EARLIER THAN NINETY DAYS AFTER THE TERMINATION OF THE CONSULTING PERIOD).
(C)
DURHAM AGREES TO TAKE ALL ACTIONS AND EXECUTE ALL DOCUMENTS (INCLUDING
WITHOUT LIMITATION THE ENDORSEMENT AND DELIVERY OF SHARE CERTIFICATES) REQUIRED
TO EFFECTUATE THE AGREEMENTS SET FORTH IN THIS SECTION 10.
11.
ADDITIONAL STOCK OPTION GRANT.
IN FURTHER CONSIDERATION OF DURHAM SIGNING
THIS AGREEMENT, AND THE COVENANTS AND RELEASES GIVEN HEREIN, ON THE EFFECTIVE
DATE (THE "GRANT DATE"), CRDENTIA SHALL GRANT DURHAM AN OPTION TO PURCHASE
1,000,000 SHARES OF CRDENTIA'S COMMON STOCK IN THE FORM ATTACHED HERETO AS
EXHIBIT B ("STOCK OPTION"), AT AN EXERCISE PRICE OF $0.60 PER SHARE OR THE
CLOSING PRICE OF CRDENTIA'S COMMON STOCK ON THE OVER-THE-COUNTER BULLETIN ON THE
EFFECTIVE DATE, WHICHEVER IS GREATER.
THE STOCK OPTION SHALL BE FULLY VESTED AS
OF THE GRANT DATE, DURHAM SHALL HAVE UP TO AND INCLUDING THE TENTH ANNIVERSARY
OF THE GRANT DATE TO EXERCISE THE STOCK OPTION, AND THE STOCK OPTION WILL
CONTAIN A CASHLESS EXERCISE PROVISION.
CRDENTIA WILL CAUSE THE STOCK OPTION AND
THE SHARES OF COMMON STOCK UNDERLYING THE STOCK OPTION TO BE COVERED BY A
REGISTRATION STATEMENT ON FORM S-8, TO THE EXTENT PERMISSIBLE BY LAW AND THE
RULES AND REGULATIONS PROMULGATED BY THE U.S. SECURITIES AND EXCHANGE
COMMISSION.
12.
CONTINUATION OF HEALTH INSURANCE COVERAGE.
IN FURTHER CONSIDERATION OF
DURHAM SIGNING THIS AGREEMENT, AND THE COVENANTS AND RELEASES GIVEN