Document:

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                                                                    EXHIBIT 10.4

                                 CRDENTIA CORP.

                          NOTICE OF STOCK OPTION AWARD

      Grantee's Name and Address:    Pamela Atherton
                                     1589 Foard Drive
                                     Frisco, Texas  75034

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

      Award Number                                6
      Date of Award                               August 3, 2004
      Vesting Commencement Date                   August 3, 2004
      Exercise Price per Share                    $3.10
      Total Number of Shares Subject
      to the Option (the "Shares")                433,333
      Total Exercise Price                        $1,343,332.30
      Type of Option                              Non-Qualified Stock Option
      Expiration Date:                            August 2, 2014
      Post-Termination Exercise Period:           Three (3) Months

Vesting Schedule:

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

      (1)   25% of the Shares subject to the Option shall vest in the event the
Company's Common Stock becomes listed on an established stock exchange or
national market system (including, without limitation, The American Stock
Exchange or The Nasdaq National Market or The Nasdaq SmallCap Market of The
Nasdaq Stock Market) on or before December 31, 2004. Vesting acceleration
associated with the achievement of this performance goal will be effective on
the date the Common Stock becomes listed on an established stock exchange or
national market system, which listing must occur on or before December 31, 2004.

      (2)   25% of the Shares subject to the Option shall vest in the event the
Company closes an equity financing on or before December 31, 2004 in which it
issues shares of its

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preferred stock for the purpose of raising working capital in one or more
closings in exchange for aggregate proceeds in an amount not less than $500,000
(the "Equity Financing"). Vesting acceleration associated with the achievement
of this performance goal will be effective on the date of the closing of the
Equity Financing, which closing must occur on or before December 31, 2004.

      (3)   25% of the Shares subject to the Option shall vest in the event the
Company closes a term loan agreement with Bridge Opportunity Finance, LLC and
its affiliates on or before December 31, 2004 pursuant to which the Company may
borrow up to $10,000,000 (the "Term Loan"). Vesting acceleration associated with
the achievement of this performance goal will be effective on the date of the
closing of the Term Loan, which closing must occur on or before December 31,
2004.

      (4)   25% of the Shares subject to the Option shall vest in the event the
Company consummates a minimum of three acquisitions on or before December 31,
2004, at least one of which shall be the acquisition of (a) Arizona Home
Health/Private Duty, Inc. or (b) Na Kahu Malama Nurses, Inc. Vesting
acceleration associated with the achievement of this performance goal will be
effective on the date the Company closes the third acquisition, which third
closing must occur on or before December 31, 2004.

      In the event any of the Shares subject to the Option are not vested on
December 31, 2004, the Option shall terminate irrevocably never to be
exercisable with respect to such unvested Shares.

      In the event of termination of the Grantee's Continuous Service for Cause,
the Grantee's right to exercise the Option shall terminate concurrently with the
termination of the Grantee's Continuous Service, except as otherwise determined
by the Board.

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

                                              Crdentia Corp.,
                                              a Delaware corporation

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

THE GRANTEE ACKNOWLEDGES AND AGREES THAT THE SHARES SUBJECT TO THE OPTION SHALL
VEST, IF AT ALL, ONLY DURING THE PERIOD OF THE GRANTEE'S CONTINUOUS SERVICE (NOT
THROUGH THE ACT OF BEING HIRED, BEING GRANTED THE OPTION OR ACQUIRING SHARES
HEREUNDER). THE GRANTEE FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS
NOTICE OR THE OPTION AGREEMENT SHALL CONFER UPON THE GRANTEE ANY RIGHT WITH
RESPECT TO FUTURE AWARDS OR CONTINUATION OF THE GRANTEE'S CONTINUOUS SERVICE,
NOR SHALL IT INTERFERE IN ANY WAY WITH THE GRANTEE'S RIGHT OR THE RIGHT OF THE
COMPANY OR RELATED ENTITY

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TO WHICH THE GRANTEE PROVIDES SERVICES TO TERMINATE THE GRANTEE'S CONTINUOUS
SERVICE, WITH OR WITHOUT CAUSE, AND WITH OR WITHOUT NOTICE. THE GRANTEE
ACKNOWLEDGES THAT UNLESS THE GRANTEE HAS A WRITTEN EMPLOYMENT AGREEMENT WITH THE
COMPANY TO THE CONTRARY, THE GRANTEE'S STATUS IS AT WILL.

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

Dated: ______________________________      Signed: /s/ Pamela Atherton
                                                   -----------------------------
                                                            Grantee

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                                                                 AWARD NUMBER: 6

                                 CRDENTIA CORP.

                          STOCK OPTION AWARD AGREEMENT

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

      2.    Exercise of Option.

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

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

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

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

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

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

            (a)   cash;

            (b)   check;

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

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

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

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

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      7.    Disability of Grantee. In the event the Grantee's Continuous Service
terminates as a result of his or her Disability, the Grantee may, but only
within twelve (12) months from the Termination Date (and in no event later than
the Expiration Date), exercise the portion of the Option that was vested on the
Termination Date. To the extent that the Option was unvested on the Termination
Date, or if the Grantee does not exercise the vested portion of the Option
within the time specified herein, the Option shall terminate.

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

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

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

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

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

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

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            (a)   Exercise of Non-Qualified Stock Option. On exercise of a
Non-Qualified Stock Option, the Grantee will be treated as having received
compensation income (taxable at ordinary income tax rates) equal to the excess,
if any, of the Fair Market Value of the Shares on the date of exercise over the
Exercise Price. If the Grantee is an Employee or a former Employee, the Company
will be required to withhold from the Grantee's compensation or collect from the
Grantee and pay to the applicable taxing authorities an amount in cash equal to
a percentage of this compensation income at the time of exercise, and may refuse
to honor the exercise and refuse to deliver Shares if such withholding amounts
are not delivered at the time of exercise.

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

      14.   Lock-Up Agreement.

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

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

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

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of Texas without giving effect to any choice of law rule that would cause the
application of the laws of any jurisdiction other than the internal laws of the
State of Texas to the rights and duties of the parties. Should any provision of
the Notice or this Option Agreement be determined by a court of law to be
illegal or unenforceable, such provision shall be enforced to the fullest extent
allowed by law and the other provisions shall nevertheless remain effective and
shall remain enforceable.

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

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

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

      19.   Adjustments Upon Changes in Capitalization. Subject to any required
action by the stockholders of the Company, the number of Shares covered by the
Option, the exercise price of the Option, as well as any other terms that the
Board determines require adjustment shall be proportionately adjusted for (i)
any increase or decrease in the number of issued Shares resulting from a stock
split, reverse stock split, stock dividend, combination or reclassification of
the Shares, or similar transaction affecting the Shares, (ii) any other increase
or decrease in the number of issued Shares effected without receipt of
consideration by the Company, or (iii) as the Board may determine in its
discretion, any other transaction with respect to Common Stock

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including a corporate merger, consolidation, acquisition of property or stock,
separation (including a spin-off or other distribution of stock or property),
reorganization, liquidation (whether partial or complete) or any similar
transaction; provided, however that conversion of any convertible securities of
the Company shall not be deemed to have been "effected without receipt of
consideration." Such adjustment shall be made by the Board and its determination
shall be final, binding and conclusive. Except as the Board determines, no
issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment
by reason hereof shall be made with respect to, the number or price of Shares
subject to the Option.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

            (p)   "Immediate Family" means any child, stepchild, grandchild,
parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew,
mother-in-law, father-in-law, son-in law, daughter-in-law, brother-in-law, or
sister-in-law, including adoptive relationships, any person sharing the
Grantee's household (other than a tenant or employee), a

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trust in which these persons (or the Grantee) have more than fifty percent (50%)
of the beneficial interest, a foundation in which these persons (or the Grantee)
control the management of assets, and any other entity in which these persons
(or the Grantee) own more than fifty percent (50%) of the voting interests.

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

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

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

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

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

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

                                END OF AGREEMENT

                                       9
<PAGE>

                                    EXHIBIT A

                                 EXERCISE NOTICE

Crdentia Corp.
14111 Dallas Parkway, Suite 600
Dallas, Texas 75240
Attention: Chief Financial Officer

      1.    Effective as of today, ______________, ___ the undersigned (the
"Grantee") hereby elects to exercise the Grantee's option to purchase
___________ shares of the Common Stock (the "Shares") of Crdentia Corp. (the
"Company") under and pursuant to the Stock Option Award Agreement (the "Option
Agreement") and Notice of Stock Option Award (the "Notice") dated December 22,
2003. Unless otherwise defined herein, the terms defined in the Option Agreement
shall have the same defined meanings in this Exercise Notice.

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

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

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

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

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

                                       1
<PAGE>

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

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

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

      10.   Governing Law; Severability. This Exercise Notice is to be construed
in accordance with and governed by the internal laws of the State of Texas
without giving effect to any choice of law rule that would cause the application
of the laws of any jurisdiction other than the internal laws of the State of
Texas to the rights and duties of the parties. Should any provision of this
Exercise Notice be determined by a court of law to be illegal or unenforceable,
such provision shall be enforced to the fullest extent allowed by law and the
other provisions shall nevertheless remain effective and shall remain
enforceable.

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

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

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

                                       2
<PAGE>

Submitted by:                                 Accepted by:

GRANTEE:                                      CRDENTIA CORP.

                                              By:_________________________
                                              Title:______________________
________________________________________
                   (Signature)
Address:                                      Address:

                                              Crdentia Corp.
________________________________________      14111 Dallas Parkway, Suite 600
________________________________________      Dallas, Texas 75240
                                              Attention: Chief Financial Officer

                                       3
<PAGE>

                                    EXHIBIT B

                       INVESTMENT REPRESENTATION STATEMENT

GRANTEE:                                  PAMELA ATHERTON
COMPANY:                                  CRDENTIA CORP.
SECURITY:                                 COMMON STOCK
AMOUNT:
DATE:                                     _________________________________

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

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

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

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

                                       1

<PAGE>

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

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

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

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

                                                     Signature of Grantee:

                                                     ___________________________

                                                     Date: _______________, ____

                                       2<PAGE>

                                                                    EXHIBIT 10.7

                                 CRDENTIA CORP.

              AMENDMENT TO CONVERTIBLE SUBORDINATED PROMISSORY NOTE

      This Amendment to Convertible Subordinated Promissory Note (this
"Amendment") is made effective as of September 2, 2004 by and among Crdentia
Corp., a Delaware corporation (the "Company") and The DeLuca Trust, Joseph M.
DeLuca Trustee, dated 1/7/2000 (the "Noteholder").

                                    RECITALS

      A. On or about September 2, 2003, the Company issued to the Noteholder a
certain Convertible Subordinated Promissory Note in the original principal
amount of $50,000 (the "Note").

      B. The Company and the Noteholder desire to amend certain terms of the
Note.

      In consideration of the foregoing and the promises and covenants contained
herein and other good and valuable consideration the receipt of which is hereby
acknowledged, the parties hereto agree as follows. Any capitalized terms not
otherwise defined herein shall have the meanings given such terms in the Note:

      1. Amendment to First Paragraph of the Note.

      The first paragraph of the Note shall be amended and restated to read as
      follows:

         FOR VALUE RECEIVED, Crdentia Corp, a Delaware corporation
      ("Obligor"), hereby promises to pay to the order of The DeLuca Trust,
      Joseph M. DeLuca, Trustee, dated 1/7/2000 or its assigns ("Holder"), in
      lawful money of the United States at the address of Holder set forth
      below, the principal sum of Fifty Thousand dollars ($50,000), together
      with interest thereon from the date of this Promissory Note (the "Note")
      on the unpaid principal balance. Interest shall accrue at a rate of ten
      percent (10%) per annum, simple interest, and shall be payable quarterly.
      Subject to the conversion provisions set forth herein, unpaid principal
      together with all accrued and unpaid interest shall be due and payable in
      full on March 2, 2005 (the "Due Date"). This Note may be prepaid, in whole
      or in part, at any time without premium or penalty.

      2. Effect of Amendment. Except as expressly amended, restated or consented
to in this Amendment, the Note shall continue in full force and effect. In the
event of any conflict between the terms of this Amendment and the Note, the
terms of this Amendment shall govern and control.

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

<PAGE>

      4. Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

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

      6. Entire Agreement. This Amendment, together with the Note and the
agreements executed pursuant hereto and thereto, constitutes the full and entire
understanding and agreement between the parties with regard to the subjects
hereof and thereof.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       2

<PAGE>

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

COMPANY:

CRDENTIA CORP.

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

NOTEHOLDER:

THE DELUCA TRUST, JOSEPH M. DELUCA
TRUSTEE, DATED 1/7/2000

By: /s/ Joseph M. DeLuca
    ---------------------------
    Joseph M. DeLuca
    Trustee

                [SIGNATURE PAGE TO AMENDMENT TO PROMISSORY NOTE]

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