Document:

EXHIBIT
10.7

2006
EXECUTIVE BONUSES

 

	
  Employee 

  	
   

  	
  Corporate Title 

  	
   

  	
  2006

  Bonuses 

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Jack
  C. Wauchope

  	
   

  	
  President and Chief
  Executive Officer

  	
   

  	
  $

  	
  27,500

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Davina
  A. Palazzo

  	
   

  	
  EVP/Small Business
  Lending Center Manager

  	
   

  	
  $

  	
  17,500

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Leah
  M. Pauly

  	
   

  	
  EVP/ Chief Credit
  Officer

  	
   

  	
  $

  	
  25,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Karan C. Pohl

  	
   

  	
  EVP/Chief Financial Officer

  	
   

  	
  $

  	
  4,000Exhibit 10.1

 

CRDENTIA CORP.

EXECUTIVE EMPLOYMENT
AGREEMENT

This Executive Employment Agreement (the “Agreement”), dated March 27, 2007 (the “Effective
Date”), is between Crdentia Corp., a Delaware corporation (the “Company”) and John Kaiser (“Executive”).

1.             POSITION AND RESPONSIBILITIES

a.             Position. 
Executive is employed by the Company to render services to the Company
in the position of Chief Executive Officer. 
Executive shall perform such duties and responsibilities as are normally
related to such position in accordance with the standards of the industry and
any additional duties now or hereafter assigned to Executive by the
Company.  To the extent not inconsistent
with the express terms of this Agreement, Executive shall abide by the rules,
regulations, and practices for the Company’s senior management as adopted or
modified from time to time in the Company’s sole discretion.

b.             Other Activities. 
Except upon the prior written consent of the Company, Executive will
not, during the term of this Agreement, (i) accept any other employment,
or (ii) engage, directly or indirectly, in any other business activity
(whether or not pursued for pecuniary advantage) that interferes with Executive’s
duties and responsibilities hereunder or create a conflict of interest with the
Company.

c.             No Conflict.  Executive represents and warrants that
Executive’s execution of this Agreement, Executive’s employment with the
Company, and the performance of Executive’s proposed duties under this
Agreement shall not violate any obligations Executive may have to any other
employer, person or entity, including any obligations with respect to
proprietary or confidential information of any other person or entity.

d.             Travel Expenses. 
The Company agrees to pay for (i) Executive’s weekly round trip airfare
between Dallas, Texas and Paso Robles, California and (ii) Executive’s
reasonable lodging expenses while in Dallas, Texas.

2.             COMPENSATION AND BENEFITS

a.             Base Salary.  In consideration of the services to be rendered under
this Agreement, the Company shall pay Executive a salary at the rate of Two
Hundred Fifty Thousand Dollars ($250,000) per year (“Base Salary”).  The Base Salary shall be paid in accordance
with the Company’s regularly established payroll practice.  Executive’s Base Salary will be reviewed from
time to time in accordance with the established procedures of the Company for
adjusting salaries for similarly situated employees and may be adjusted in the
sole discretion of the Company; provided, however, that the Company may not
reduce Executive’s Base Salary unless the base salaries of all executive
employees holding the position of vice president or above are reduced by the
same percentage as Executive’s Base Salary.

b.             Restricted Stock. 
In consideration of the services to be rendered hereunder, upon the
requisite approval of the Company’s board of directors, Executive shall be
granted 2,000,000 shares of the Company’s common stock.  Such grant shall be evidenced by, and subject
to the terms and conditions 

set forth in, the form of Notice of Restricted Stock
Bonus Award and Restricted Stock Bonus Award Agreement which is attached hereto
as Exhibit A (the “Restricted Stock Agreement”).

c.             Benefits. 
Executive shall be eligible to participate in the healthcare benefits
made generally available by the Company to similarly-situated executives, in
accordance with the benefit policies and plans established by the Company, and
as may be amended from time to time in the Company’s sole discretion.

d.             Expenses.  The Company shall reimburse Executive for
reasonable business expenses incurred in the performance of Executive’s duties
hereunder in accordance with the Company’s expense reimbursement guidelines.

3.             AT-WILL
EMPLOYMENT; TERMINATION BY COMPANY

a.             At-Will Termination by Company.  The employment of Executive shall be “at-will”
at all times.  The Company may terminate
Executive’s employment with the Company at any time, without any advance
notice, for any reason or no reason at all, notwithstanding anything to the
contrary contained in or arising from any statements, policies or practices of
the Company relating to the employment, discipline or termination of its
employees.  Upon and after such
termination by the Company, all obligations of the Company under this Agreement
shall cease, unless Executive’s employment is terminated without Cause, in
which case the Company shall provide Executive with the severance benefits
described in Section 3(b) below.

b.             Severance. 
Except in situations where the employment of Executive is terminated For
Cause or By Death (as defined in Section 4 below), in the event that the
Company terminates the employment of Executive at any time prior to the date
one year from the Effective Date (the “Employment Period”)
or Executive terminates his employment for Good Reason (as defined in Section 5
below), Executive will be eligible to receive an amount, payable in monthly
installments, equal to 100% of his Base Salary for the remaining period within
the Employment Period.  For purposes of
such calculation, “Base Salary” shall refer to $250,000 per year.  In the event the Company terminates the
employment of Executive at any time after one year from the Effective Date, the
Executive shall receive a lump sum severance payment equivalent to three months
of his Base Salary.  Executive’s
eligibility for severance is conditioned on Executive having first signed a
release agreement in the form attached as Exhibit B.  Executive shall not be entitled to any
severance payments if Executive’s employment is terminated For Cause or By
Death (as defined in Section 4 below) or if Executive’s employment is
terminated by Executive without Good Reason (in accordance with Section 5
below).

4.             OTHER
TERMINATIONS BY COMPANY

a.             Termination for Cause. 
For purposes of this Agreement, “For Cause” shall mean:  (i) Executive is indicted for or charged
with a crime involving dishonesty, breach of trust, or physical harm to any
person (provided, however, that the foregoing shall not include any misdemeanor
resulting from harm caused by Executive to another person through the operation
of a motor vehicle); (ii) Executive willfully engages in conduct that is
in bad faith and materially injurious to the Company, including but  not limited to, misappropriation of trade secrets, fraud or
embezzlement; (iii) Executive commits a material breach of this Agreement,
which breach is not cured within a reasonable period of time;
(iv) Executive willfully refuses to implement or follow a lawful policy or
directive of the Company that is consistent with the terms of this Agreement;
(v) Executive engages in misfeasance or malfeasance demonstrated by a
pattern of failure to perform job duties diligently and professionally.  Except for the 

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notices required above, the Company may terminate
Executive’s employment For Cause at any time, without any advance notice.  The Company shall pay to Executive all
compensation to which Executive is entitled up through the date of termination,
subject to any other rights or remedies of the Company under law; and
thereafter all obligations of the Company under this Agreement shall cease.

b.             By Death. 
Executive’s employment shall terminate automatically upon Executive’s
death.  The Company shall pay to
Executive’s beneficiaries or estate, as appropriate, any compensation then due and
owing.  Thereafter all obligations of the
Company under this Agreement shall cease. 
Nothing in this Section shall affect any entitlement of Executive’s
heirs or devisees to the benefits of any life insurance plan or other
applicable benefits.

c.             By Disability. 
If in the sole opinion of a qualified medical doctor in Executive’s
municipality of residence selected by the Company but otherwise not affiliated
with the Company or its senior management, Executive is unable to carry out the
responsibilities and functions of the position held by Executive by reason of
any physical or mental impairment for more than ninety (90) consecutive days or
more than one hundred and twenty (120) days in any twelve-month period, then,
to the extent permitted by law, the Company may terminate Executive’s
employment.  The Company shall pay to
Executive all compensation to which Executive is entitled through the date of
termination and any additional severance to which Executive is entitled
pursuant to Section 3(b) of this Agreement, and thereafter all obligations of
the Company under this Agreement shall cease. 
Nothing in this Section shall affect Executive’s rights under any
disability plan in which Executive is a participant.

5.             TERMINATION BY EXECUTIVE

a.             At-Will Termination by Executive. 
Executive may terminate employment with the Company at any time for any
reason or no reason at all, upon ninety (90) days’ advance written notice.  During such notice period Executive shall
continue to diligently perform all of Executive’s duties hereunder.  The Company shall have the option, in its
sole discretion, to make Executive’s termination effective at any time prior to
the end of such notice period as long as the Company pays Executive all
compensation to which Executive is entitled up through the last day of the
ninety (90) day notice period. 
Thereafter all obligations of the Company shall cease.

b.             Termination for Good Reason. 
Executive’s termination shall be for “Good Reason” if Executive provides
written notice to the Company of the Good Reason within thirty (30) days of the
event constituting Good Reason and provides the Company with a period of thirty
(30) days to cure the event constituting Good Reason and the Company fails to
cure the Good Reason within that period. 
For purposes of this Agreement, “Good Reason” shall mean any of the
following events, if such event is effected
by the Company without the consent of Executive:  (i) a change in Executive’s position
with the Company which materially reduces Executive’s level of responsibility;
(ii) a reduction in Executive’s Base Salary, except for reductions in
accordance with Section 2(a) hereof; or (iii) a material breach of this
Agreement by the Company.

6.             TERMINATION OBLIGATIONS

a.             Return of Property.  Executive agrees that all property (including, without
limitation, all equipment, tangible proprietary information, documents,
records, notes, contracts and computer-generated materials) furnished to or
created or prepared by Executive incident to Executive’s employment belongs to
the Company and shall be promptly returned to the Company upon termination of
Executive’s employment.

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b.             Resignation and Cooperation.  Upon termination of Executive’s employment, Executive
shall be deemed to have resigned from all offices and directorships then held
with the Company.  Following any
termination of employment, subject to Executive’s receiving reasonable and
customary compensation, Executive shall cooperate with the Company in the
winding up of pending work on behalf of the Company and the orderly transfer of
work to other employees.  Executive shall
also cooperate with the Company, at the Company’s expense, in the defense of
any action brought by any third party against the Company that relates to
Executive’s employment by the Company.

c.             Continuing Obligations.  Executive understands and agrees that Executive’s
obligations under Sections 6, 7, and 8 herein (including Exhibits C
and D) shall survive the termination of Executive’s employment for any
reason and the termination of this Agreement.

7.                                      INVENTIONS AND PROPRIETARY
INFORMATION; NON COMPETITION; PROHIBITION ON THIRD PARTY INFORMATION

a.             Proprietary Information
Agreement.  Executive agrees to sign and be bound by the
terms of the Proprietary Information and Inventions Agreement, which is
attached as Exhibit C (“Proprietary Information
Agreement”).

b.             Non-Competition.  As an inducement for the Company’s entering into this
Agreement and in consideration of the Company’s agreement to furnish Executive
with certain confidential and proprietary information regarding the Company
pursuant to Exhibit C, Executive covenants that commencing on the date
hereof (the “Effective Date”) and for a period
ending twenty-four (24) months following the termination of Executive’s
employment with the Company (the “Term”),
Executive shall not, directly or indirectly, manage, engage in, operate or
conduct, prepare to or plan to conduct or assist any person or entity to
conduct any business, or have any controlling interest in any business, person,
firm, corporation or other entity (as a principal, owner, agent, employee,
shareholder, officer, director, joint venturer, partner, member, security
holder, creditor, consultant or in any other capacity) whose revenue is
generated principally from a business which is competitive with the Business
anywhere in the United States (the “Territory”).   As
used herein, the term “Business” shall refer to the business of the company and
its subsidiaries of operating a temporary nurse staffing company, including,
without limitation, the provision of travel, per diem temporary and allied
nurse staffing services.  The covenants set forth in this
Section 7(b) shall be construed as a series of separate covenants covering
their subject matter in each of the separate states within the Territory, and
except for geographic coverage, each such separate covenant shall be deemed
identical in terms to the covenant set forth above in this
Section 7(b).  To the extent that
any such covenant shall be judicially unenforceable in any one or more states
in the United States, such covenant shall not be affected with respect to each
of such other states in the Territory. 
Each covenant with respect to such state in the Territory shall be
construed as severable and independent.

c.             Non-Solicitation; Non-Disparagement.  Executive acknowledges that because of Executive’s
position in the Company, Executive will have access to material intellectual
property and confidential information. 
During the Term (as previously defined), in addition to Executive’s other
obligations hereunder or under the Proprietary Information Agreement, Executive
shall not, for Executive or any third party, directly or indirectly
(a) divert or attempt to divert from the Company or its subsidiaries any
business of any kind, including without limitation the solicitation of or
interference with any of its customers, clients, members, business partners or
suppliers, or (b) solicit or otherwise induce any person engaged by the
Company or any of its subsidiaries (as an agent, employee, consultant, or in
any other capacity) to terminate his or her employment, consultancy or other
relationship with the Company or its subsidiaries.

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d.             Non-Disclosure of Third Party
Information.  Executive represents and warrants and
covenants that Executive shall not disclose to the Company, or use, or induce
the Company to use, any proprietary information or trade secrets of others at
any time, including but not limited to any proprietary information or trade
secrets of any former employer, if any; and Executive acknowledges and agrees
that any violation of this provision shall be grounds for Executive’s immediate
termination and could subject Executive to substantial civil liabilities and
criminal penalties.  Executive further
specifically and expressly acknowledges that no officer or other employee or
representative of the Company has requested or instructed Executive to disclose
or use any such third party proprietary information or trade secrets.

e.             Reasonableness of Restrictions. 
EXECUTIVE HAS CAREFULLY READ AND CONSIDERED THE PROVISIONS OF
SECTION 7 HEREOF AND, HAVING DONE SO, HEREBY AGREES THAT THE RESTRICTIONS
SET FORTH IN SUCH SECTIONS ARE FAIR AND REASONABLE AND ARE REASONABLY REQUIRED
FOR THE PROTECTION OF THE INTERESTS OF THE COMPANY AND ITS ASSETS AND
PROPERTIES, INCLUDING, WITHOUT LIMITATION, THE BUSINESS.  IF ANY COVENANT IN SECTION 7 IS HELD TO
BE UNREASONABLE, ARBITRARY, OR AGAINST PUBLIC POLICY, SUCH COVENANT WILL BE
CONSIDERED TO BE DIVISIBLE WITH RESPECT TO SCOPE, TIME, AND GEOGRAPHIC AREA, AND
SUCH LESSER SCOPE, TIME, OR GEOGRAPHIC AREA, OR ALL OF THEM, AS A COURT OF
COMPETENT JURISDICTION MAY DETERMINE TO BE REASONABLE, NOT ARBITRARY, AND NOT
AGAINST PUBLIC POLICY, WILL BE EFFECTIVE, BINDING AND ENFORCEABLE AGAINST THE
EXECUTIVE.

8.             ARBITRATION

Executive agrees to sign and be bound by the terms of the Arbitration
Agreement, which is attached as Exhibit D.

9.             AMENDMENTS;
WAIVERS; REMEDIES

This Agreement may not be amended or waived except by a writing signed
by Executive and by a duly authorized representative of the Company other than
Executive.  Failure to exercise any right
under this Agreement shall not constitute a waiver of such right.  Any
waiver of any breach of this Agreement shall not operate as a waiver of any
subsequent breaches.  All rights or
remedies specified for a party herein shall be cumulative and in addition to
all other rights and remedies of the party hereunder or under applicable law.

10.          ASSIGNMENT; BINDING EFFECT

a.             Assignment. 
The performance of Executive is personal hereunder, and Executive agrees
that Executive shall have no right to assign and shall not assign or purport to
assign any rights or obligations under this Agreement.  This Agreement may be assigned or transferred
by the Company; and nothing in this Agreement shall prevent the consolidation,
merger or sale of the Company or a sale of any or all or substantially all of
its assets.

b.             Binding Effect.  Subject to the foregoing restriction on assignment by
Executive, this Agreement shall inure to the benefit of and be binding upon
each of the parties; the affiliates, officers, directors, agents, successors
and assigns of the Company; and the heirs, devisees, spouses, legal
representatives and successors of Executive.

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11.          NOTICES

All notices or other communications required or permitted hereunder
shall be made in writing and shall be deemed to have been duly given if
delivered:  (a) by hand; (b) by a nationally recognized overnight courier
service; or (c) by United States first class registered or certified mail,
return receipt requested, to the principal address of the other party,
as set forth below.  The date of notice
shall be deemed to be the earlier of (i) actual receipt of notice by any
permitted means, or (ii) five business days following dispatch by overnight
delivery service or the United States Mail. 
Executive shall notify the Company in writing of any change in Executive’s
address.  Notice of change of address
shall be effective only when done in accordance with this paragraph.

Company’s Notice Address:

5001 LBJ Freeway, Suite 850

Dallas, TX 75244

Attention:  Chairman of the Board of
Directors

Executive’s Notice Address:

c/o Crdentia Corp

5001 LBJ Freeway, Suite 850

Dallas, TX 75244

12.          SEVERABILITY

If any provision of this Agreement shall be held by a court or
arbitrator to be invalid, unenforceable, or void, such provision shall be
enforced to the fullest extent permitted by law, and the remainder of this
Agreement shall remain in full force and effect.  In the event that the time period or scope of
any provision is declared by a court or arbitrator of competent jurisdiction to
exceed the maximum time period or scope that such court or arbitrator deems
enforceable, then such court or arbitrator shall reduce the time period or
scope to the maximum time period or scope permitted by law.

13.          TAXES

All amounts payable to Executive under this Agreement (including,
without limitation, Executive’s Base Salary and any bonuses and severance pay)
shall be paid less all applicable state and federal tax withholdings and any
other withholdings required by any applicable jurisdiction.

14.          GOVERNING LAW

This Agreement shall be governed by and construed in accordance with
the laws of the State of Texas.

 6
 

15.          INTERPRETATION

This Agreement shall be construed as a whole, according to its fair
meaning, and not in favor of or against any party.  Sections and section headings contained in
this Agreement are for reference purposes only, and shall not affect in any
manner the meaning or interpretation of this Agreement.  Whenever the context requires, references to
the singular shall include the plural and the plural the singular.

16.          COUNTERPARTS

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

17.          AUTHORITY

Each party represents and warrants that such
party has the right,
power and authority to enter into and execute this Agreement and to perform and
discharge all of the obligations hereunder; and that this Agreement constitutes
the valid and legally binding agreement and obligation of such party and is
enforceable in accordance with its terms.

18.          ENTIRE AGREEMENT

This Agreement is intended to be the final, complete, and exclusive
statement of the terms of Executive’s employment by the Company and may not be
contradicted by evidence of any prior or contemporaneous statements or
agreements, except for agreements specifically referenced herein (including the
Restricted Stock Agreement attached as Exhibit A, the Proprietary
Information Agreement attached as Exhibit C and the Arbitration
Agreement attached as Exhibit D). 
To the extent that the practices, policies or procedures of the Company,
now or in the future, apply to Executive and are inconsistent with the terms of
this Agreement, the provisions of this Agreement shall control.  Any subsequent change in Executive’s duties,
position, or compensation will not affect the validity or scope of this
Agreement.

19.          INJUNCTIVE RELIEF AND TERMINATION.

a.             General. 
Executive acknowledges and agrees that (i) the covenants and
restrictions contained in Section 7 of this Agreement are necessary,
fundamental and required for the protection of the Business, (ii) such
covenants relate to matters which are of a special, unique and extraordinary
character that gives each of such covenants a special, unique and extraordinary
value; and (iii) the Company will suffer irreparable harm in the event that
Executive breaches any of his obligations under Section 7 hereof, and that
monetary damages shall be inadequate to compensate the Company for any such
breach.  Executive agrees that in the
event of any breach or threatened breach by Executive of any of the provisions
of Section 7 hereof, the Company shall be entitled to a temporary restraining
order, preliminary injunction and/or permanent injunction in order to prevent
or restrain any such breach or threatened breach by Executive, or by any or all
of Executive’s agents, representatives or other persons directly or indirectly
acting for, on behalf of or with Executive, and the Company will not be
obligated to post bond or other security in seeking such relief.

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b.             No Limitation of Remedies.  Notwithstanding the provisions set forth in Section
19(a) above, or any other provision contained in this Agreement, the parties
hereby agree that no remedy conferred by any of the specific provisions of this
Agreement, including, without limitation, this Section 19, is intended to be
exclusive of any other remedy, and each and every remedy shall be cumulative
and shall be in addition to every other remedy given hereunder or now or
hereafter existing at law or in equity or by statute or otherwise.

20.          EXECUTIVE ACKNOWLEDGEMENT

EXECUTIVE ACKNOWLEDGES THAT EXECUTIVE HAS HAD THE
OPPORTUNITY TO CONSULT LEGAL COUNSEL CONCERNING THIS AGREEMENT, THAT EXECUTIVE
HAS READ AND UNDERSTANDS THIS AGREEMENT, THAT EXECUTIVE IS FULLY AWARE OF ITS
LEGAL EFFECT, AND THAT EXECUTIVE HAS ENTERED INTO THIS AGREEMENT FREELY BASED
ON EXECUTIVE’S OWN JUDGMENT AND NOT ON ANY REPRESENTATIONS OR PROMISES OTHER
THAN THOSE CONTAINED IN THIS AGREEMENT.

[REMAINDER OF PAGE
INTENTIONALLY LEFT BLANK]

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

	
  CRDENTIA CORP.:

  	
   

  	
  EXECUTIVE:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ C. Fred Toney

  	
   

  	
   

  	
  By:

  	
  /s/ John Kaiser

  	
   

  
	
  Name: C. Fred Toney

  	
   

  	
   

  	
  John Kaiser

  	
   

  
	
  Title: Chairman of the Board of Directors

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
							

 

 9

EXHIBIT
A

Restricted
Stock Agreement

EXHIBIT
B

FORM OF GENERAL
RELEASE OF CLAIMS

This General Release of Claims (hereinafter “Release”) is entered into
this ________ day of _________, 200_, by and between John Kaiser (hereinafter “Releasor”)
and Crdentia Corp. (hereinafter “Releasee”).

RECITALS

A.            On March __, 2007,
Releasor became employed by Releasee according to the terms and conditions of
an employment agreement (“Employment Agreement”).

B.            On or about
__________, _________, Releasee terminated the employment of Releasor without “Cause”
as that term is defined in the Employment Agreement.

C.            According to the
terms and conditions of the Employment Agreement, Releasor is entitled to
certain severance payments so long as Releasor executes this General Release of
any and all claims.  By execution hereof,
Releasor understands and agrees that this Release is a compromise of doubtful
and disputed claims, if any, which remain untested; that there has not been a
trial or adjudication of any issue of law or fact herein; that the terms and
conditions of this Release are in no way to be construed as an admission of
liability on the part of Releasee and that Releasee denies liability and
intends merely to avoid litigation with this Release.

AGREEMENT

NOW
THEREFORE FOR MUTUAL CONSIDERATION, the receipt and sufficiency of which the
parties hereto acknowledge, the parties agree as follows:

1.             Except for claims
arising under any Restricted Stock Agreements between Releasor and Releasee (“Restricted
Stock Agreements”), Releasor does hereby unconditionally, irrevocably and
absolutely release and discharge Releasee, and its affiliates, owners,
directors, officers, employees, agents, attorneys, heir, representatives,
legatees, stockholders, insurers, divisions, successors and/or assigns and any
related holding, parent or subsidiary corporations, from any and all loss,
liability, claims, costs (including, without limitation, attorneys’ fees),
demands, causes of action, or suits of any type, whether in law and/or in
equity, related directly or indirectly or in any way connected with any
transaction, affairs or occurrences between them and arising on or prior to the
date hereof, including, but not limited to, Releasor’s employment with
Releasee, the termination of said employment and claims of emotional or
physical distress related to such employment or termination.  This Release specifically applies to any
claims for age discrimination in employment, including any claims arising under
the Age Discrimination In Employment Act or any other statutes or laws that
govern discrimination in employment.

2.             Releasor
irrevocably and absolutely agrees that he will not prosecute nor allow to be
prosecuted on his behalf in any administrative agency, whether federal or
state, or in any court, whether federal or state, any claim or demand of any
type related to the matter released above, it being an intention of the parties
that with the execution by Releasor of this Release, Releasee, its owners,
officers, directors, employees, agents, attorneys, heirs, representatives,
legatees, successors and/or assigns and any related holding, parent and
subsidiary corporations will be absolutely, unconditionally and forever
discharged of and from all obligations to or on behalf of Releasor related in
any way to the matter discharged herein.

3.             Releasor agrees that all matters relative to this
Release and compromise in relation thereto shall remain confidential.  Accordingly, Releasor hereby agrees that,
with the exception of Releasor’s counsel, spouse and tax advisor, Releasor
shall not discuss, disclose or reveal to any other persons, entities or
organizations, whether within or outside of the State of Texas, the fact of
settlement and/or terms and conditions of settlement and of this Release,
including the amount paid to settle Releasor’s claims.  Similarly, Releasor shall not make, issue,
disseminate, publish, print or announce any news release, public statement or
announcement with respect to these matters, or any aspect thereof, the reasons
therefore and the terms of this Release. 
Further, in keeping with the spirit of this Release, Releasor shall,
upon the execution of this Release, cease and desist from taking any further
action in opposition to Releasee, respecting its past employment policies and
practices and shall never reapply for employment with Releasor; provided,
however, that nothing herein shall be deemed to preclude Releasor from giving
statements, affidavits, depositions, testimony, declarations or other
disclosures required by or pursuant to legal process.

4.             Releasor does
expressly waive all of the benefits and rights granted to him pursuant to any
applicable law or regulation to the effect that:

A general release does not
extend to claims which the creditor does not know of or suspect to exist in his
favor at the time of executing the release, which if known by his must have
materially affected his settlement with the debtor.

5.             Releasor covenants
that commencing on the date hereof, Releasor will not disparage Releasee or any
of its stockholders, directors, employees or agents (collectively the “Releaseee
Representatives”), and neither the Releasee nor the Releasee Representatives
will disparage Releasor.

6.             Releasor does
certify that he has read all of this Release, and that he fully understands all
of the same.  Except for claims under the
Restricted Stock Agreements, Releasor hereby expressly agrees that this Release
shall extend and apply to all unknown, unsuspected and unanticipated injuries
and damages, as well as those that are now known.

7.             Releasor further
declares and represents that no promise, inducement or agreement not herein
expressed has been made to him and that this Release contains the full and
entire agreement between and among the parties, and that the terms of this
Release are contractual and not a mere recital.

8.             The validity,
interpretation, and performance of this Release shall be construed and
interpreted according to the laws of the State of Texas.

9.             This Release may be
pleaded as a full and complete defense and may be used as the basis for an
injunction against any action, suit or proceeding that may be prosecuted,
instituted or attempted by either party in breach thereof.

10.           If any provision of
this Release, or part thereof, is held invalid, void or voidable as against the
public policy or otherwise, the invalidity shall not affect other provisions,
or parts thereof, which may be given effect without the invalid provision or
part.  To this extent, the provisions,
and parts thereof, of this Release are declared to be severable.

11.           As part of this
Release, Releasor agrees to indemnify and hold harmless Releasee against any
claim by any state or the Internal Revenue Service for Releasor’s income and
other taxes payable as a result of the consideration being paid by Releasee
pursuant to this Release or the Employment 

 2
 

Agreement.  It
is understood that the extent of Releasor’s obligation would be to pay all sums
due to either agency as income tax and his/her portion of social security taxes
related to this Release, plus any applicable penalty and/or interest relating
to failure to timely pay the tax.  It is
the intention of all parties to this Release that the severance payments made
to Releasor are proper and in accordance with all laws.  However, should there be a different
determination by any state or the Internal Revenue Service, Releasor will be
obligated based on the terms of this paragraph.

12.           It is understood
that this Release is not an admission of any liability by any person, firm
association or corporation but is in compromise of any disputed claim.

13.           Releasor represents,
acknowledges and agrees that Releasee has advised his, in writing, to discuss
this Release with an attorney, and that to the extent, if any, that Releasor
has desired, Releasor has done so; that Releasee has given Releasor twenty-one
(21) days to review and consider this Release before signing it, and Releasor
understands that he may use as much of this twenty-one (21) day period as he
wishes prior to signing; that no promise, representation, warranty or
agreements not contained herein have been made by or with anyone to cause his
to sign this Release; that he has read this Release in its entirety, and fully
understands and is aware of its meaning, intent, contents and legal effect; and
that he is executing this Release voluntarily, and free of any duress or
coercion.

14.           The parties
acknowledge that for a period of seven (7) days following the execution of this
Release, Releasor may revoke the Release, and the Release shall not become
effective or enforceable until the revocation period has expired.

15.           This Release shall
become effective eight (8) days after it is signed by Releasor and Releasee,
and in the event the parties do not sign on the same date, then this Release
shall become effective eight (8) days after the date it is signed by Releasor.

16.           Releasor has read
the foregoing Release and knows its contents and fully understands it.  Releasor acknowledges that he has fully
discussed this Release with his attorney.

17.           Releasor has read
the foregoing Release and knows its contents and fully understands it.  Releasor further acknowledges that he has
been offered the opportunity to discuss this Release and its contents with his
attorney.  Releasor acknowledges that he
has fully discussed this Release with his attorney or has voluntarily chosen to
sign this Release without consulting his attorney, fully understanding the
consequences of this Release.

 3

IN WITNESS WHEREOF, the undersigned have
executed this Release on the dates shown below at                                                                               .

 

RELEASOR:

 

 

                                                                 

John Kaiser

Dated:                                                        

 

RELEASEE:

 

 

CRDENTIA
CORP.

 

                                                                 

By:

Its:

Dated:                                                        

EXHIBIT
C

PROPRIETARY
RIGHTS AND INFORMATION AGREEMENT

In consideration of my employment by Crdentia Corp. (the “Company”) and
the mutual covenants hereof, I and the Company hereby agree to the terms and
conditions set forth in this Proprietary Rights and Information Agreement (the
“Agreement”).

RECITALS

Whereas, my
responsibilities as an employee of the Company may include creating, making,
conceiving, inventing, discovering, developing, reducing to practice or
suggesting Technology (as defined below) that relates in any manner to the
actual or reasonably anticipated business, research, development or other
activities of the Company; and

Whereas, my
compensation as an employee of the Company takes into account, among other
things, the value of such Technology and the potential economic benefit that
may be derived therefrom by the Company;

Now therefore, I and the
Company hereby agree as follows:

1.                                      PROPRIETARY INFORMATION

a.     Restrictions on
Proprietary Information.  I agree that, during my employment and, as
long as such information and materials constitute Proprietary Information (as
defined below) thereafter, I will hold the Proprietary Information of the
Company and its affiliates in strict confidence and will neither use the
information for the benefit of myself or any third party nor disclose it to any
third party, except to the extent necessary to carry out my responsibilities as
an employee of the Company or as specifically authorized in writing by a duly
authorized officer of the Company other than me.  “Proprietary
Information” means any and all information and materials, in
whatever form, whether tangible or intangible, pertaining in any manner to the
business of the Company or its affiliates, consultants, customers, business
associates or members (including its and their officers, directors, agents and
employees), or any person or entity to which the Company owes a duty of
confidentiality, whether or not labeled or identified as proprietary or
confidential, and including any copies, portions, extracts and derivatives
thereof, except to the extent that I can prove that such information or
materials (i) are or become generally known to the public through lawful
means and through no act or omission of mine; (ii) were part of my general
knowledge prior to my employment by the Company; or (iii) are disclosed to
me without restriction by a third party who rightfully possesses the
information and is under no duty of confidentiality with respect thereto.  “Proprietary Information” includes but is not
limited to any and all (a) Creations and other Technology (as defined
below) and related records; (b) financial information and other
information about costs, budgets, profits, margins markets, sales, pricing,
payment terms, discounts, rebates and other concessions or incentives,
forecasts, customers, subscribers, members, and bids; (c) strategies and
other plans for business, marketing, advertisement, future development and new
products, services and concepts; (d) employee and personnel information,
including, without limitation, files and information about employee
compensation and benefits.

b.     Location and Reproduction.  I agree
to maintain at my work station and/or any other place under my control only
such Proprietary 

Information that, and only as long as such Proprietary
Information, is necessary to carry out my responsibilities as an employee of
the Company.  I agree to return to the appropriate person
or location or otherwise properly dispose of Proprietary Information once that
necessity no longer exists.  I also agree
not to make copies or otherwise reproduce Proprietary Information except to the
extent necessary to carry out my responsibilities as an employee of the
Company.

c.     Prior Actions and Knowledge.  Except
as disclosed on Schedule A to this Agreement, I have no knowledge
of the Company’s business or Proprietary Information, other than information I have learned from the Company in the
course of being hired and employed.

d.     Third Party Information.  I
recognize that the Company has received and will receive confidential or
proprietary information and materials from third parties.  Such information and materials shall be
deemed “Proprietary Information” for all purposes of this Agreement and I will
be subject to all limitations on use and disclosure set forth in this Agreement
with respect thereto.  In addition, I
shall not use or disclose any such information and materials in any manner
inconsistent with any of Company’s obligations towards such third party.

e.     Interference with Business.  I
acknowledge that because of my position in the Company, I will have access to
the Company’s Proprietary Information.  I
agree that during my employment with the Company and for a period of
one (1) year after termination of my employment with the Company, I shall not directly or indirectly
(i) divert or attempt to divert from the Company (or any affiliate) any
business of any kind, including without limitation the solicitation of or
interference with any of its customers, clients, members, business partners or
suppliers or (ii) solicit, induce, recruit or encourage any person
employed by the Company to terminate his or her employment.

2.                                      CREATIONS

a.     Definitions.

(1) “Technology” comprises all materials, information, ideas and
other subject matter, including, without limitation, works of authorship and
other creations; inventions, invention disclosures, discoveries, developments
and patent applications; know-how and trade secrets; plans, designs and concepts; drawings, diagrams and
schematics; writings, reports, notebooks, and other information;
specifications, formulas, structures and other technical or engineering
information; prototypes, systems, compositions, hardware, tools, equipment,
instruments and other devices, products and technology; processes, methods,
techniques, procedures and work in process; computer programs (in source code,
object code or any other format), applications, algorithms, protocols, data and
databases, programmable logic and documentation; and any copies, extracts,
portions, derivatives, improvements and enhancements thereof and modifications
thereto.

(2) “Creations”
means any and all Technology that (i) is created, made, conceived, invented,
discovered, developed, reduced to practice or suggested by me, alone or
together with others, at any time during my employment by the Company or,
whether during or within a reasonable time after my employment with the
Company, otherwise in connection with my activities as an employee of, or based
upon any Proprietary Information or Proprietary Rights of, the Company, and
(ii) relates in any manner to 

 2
 

the actual or reasonably anticipated business,
research, development or other activities of the Company, or were created,
made, conceived, invented, discovered, developed, reduced to practice or
suggested using the Company’s equipment, supplies, facilities, or Proprietary
Information.  “Creations” shall not
include (a) Technology expressly set forth on Schedule A, and (b) other
Technology to the extent that any mandatory and non-waivable applicable law
prohibits the assignment thereof as set forth herein (such Technology described
in the foregoing subclauses (a) and (b) being the “Excluded
Technology”).  I acknowledge
that I have read and understand the law(s) set forth in Appendix 1
hereto.

(3) “Proprietary Rights”
means, throughout the world, any and all (i) copyrights, moral rights and other
personal author’s rights (including, without limitation any and all rights of
paternity or attribution, integrity, publication, withdrawal or retraction or
rights to receive additional remuneration) (“Moral Rights”),
related rights (including without limitation so called “neighboring rights” and
“sui generis” rights), database rights and all other rights associated with
works of authorship (including computer programs), creations or performances,
whether published or unpublished, (ii) rights with respect to trade secrets and
know-how, (iii) patents and related rights, inventor’s certificates, design
rights, industrial design rights, utility model rights, (iv) trademark, service
mark and trade dress rights and other rights relating to source or indicia of
origin, and (v) any and all other intellectual property, industrial property,
and other proprietary rights, together with (a) all rights related to any of
the foregoing, including, without limitation, rights with respect to
applications and filings for any of the foregoing, rights with respect to
registrations or renewals of any of the foregoing, and rights to apply for,
file, register, establish, maintain, extend or renew any of the foregoing, (b)
all benefits, privileges, causes of action and remedies relating to any of the
foregoing, whether before or hereafter accrued, including, without limitation,
the right to enforce and protect any of the foregoing, including to bring legal
actions against any party for all past, present and future infringements,
misappropriations or other violations of or relating to any of the foregoing
and to settle, and collect and retain the proceeds from, any such actions, and
(c) all rights to transfer and grant licenses and other rights with respect to
any and all of the foregoing in Company’s sole discretion.

b.     Ownership of Creations and Proprietary Rights.
 I agree and acknowledge that all right, title
and interest with respect to all Creations and any and all related Proprietary
Rights (including all Rights to Use, as defined below) shall solely vest in,
inure to the sole benefit of, and be the sole property of, the Company without
any limitations.  I agree and acknowledge
that all Creations shall be considered works made for hire and works produced
in the service of the Company within the scope of my employment.

c.     Assignment of Creations and Proprietary Rights. 
If, notwithstanding the foregoing, I retain any right, title or interest
with respect to any Creations or any related Proprietary Rights, I hereby
assign, transfer and convey, and agree to assign, transfer and convey, to the
Company, without any limitations or any additional remuneration, all such
right, title and interest.  The rights assigned,
transferred and conveyed hereunder shall include, without limitation, (i) all
rights to publish, copy, reproduce, adapt, modify, translate, prepare
derivatives based upon, distribute, rent, lease, lend, transmit, broadcast,
publicly perform, publicly display, otherwise communicate or make available to
the public, record, store on any medium, make, sell, offer to sell, import,
practice any method in connection with and otherwise use or exploit for any
purpose, throughout the world, by any and all means and in 

 3
 

any form or medium whatsoever, the Creations and any
other Technology that is the subject of, embodies or uses, or is made using,
any Proprietary Rights relating to the Creations, and (ii) all rights to
transfer and grant licenses and other rights with respect to any and all of the
foregoing rights, and to authorize any third party to exercise any of the
foregoing rights, in the Company’s sole discretion (all such rights described
in subclauses (i) and (ii) above being “Rights to Use”).

d.     License of Rights.  If,
notwithstanding the foregoing, I retain any right, title or interest with
respect to any Creations or any related Proprietary Rights, I hereby grant, and
agree to grant, to the Company, without any limitations or any additional
remuneration, the worldwide, exclusive, perpetual, irrevocable, transferable,
freely sublicenseable, right and license under all my right, title and interest
with respect to such Creations, any other Technology that is the subject of,
embodies or uses, or is made using, any Proprietary Rights relating to such
Creations, and any and all related Proprietary Rights, including all Rights to
Use.

e.     Moral Rights.  If, notwithstanding the foregoing, I retain
any Moral Rights with respect to any Creations or any other Technology that is
the subject of, embodies or uses, or is made using, any Proprietary Rights
relating to the Creations, I hereby waive all such Moral Rights.  I acknowledge that the Creations and the
related Proprietary Rights may have substantial economic value, that any and
all proceeds resulting from use and exploitation thereof shall solely belong to
the Company, and that the salary and other compensation I receive from the
Company for my employment with the Company includes fair and adequate consideration
for all assignments, licenses and waivers hereunder.  To the extent, if any, that any Moral Rights
are not waivable under applicable law, I hereby promise and covenant not to
institute, support, maintain or permit any action or proceeding on the basis of,
or otherwise assert any Moral Rights with respect to, any Creations or any
other Technology that is the subject of, embodies or uses, or is made using,
any Proprietary Rights relating to the Creations, or any Moral Rights relating
thereto in any forum.  I hereby authorize
the Company to publish the Creations and any other Technology that is the
subject of, embodies or uses, or is made using, any Proprietary Rights relating
to the Creations, in the Company’s sole discretion with or without attributing
any of the foregoing to me or identifying me in connection therewith and
regardless of the effect on such Creations and such other Technology or my
relationship thereto.

f.      Excluded Technology.  I
hereby grant and agree to grant to the Company a first right to negotiate a
license with respect to all Excluded Technology and all related Proprietary
Rights and to negotiate in good faith such a license if the Company so requests
within ninety (90) days after my disclosure of such Excluded Technology or
related Proprietary Rights.

g.     Cooperation.  At the Company’s request and expense, I will,
during the term of my employment and thereafter, cooperate with and assist the
Company, and perform such further acts and execute, acknowledge and deliver to
the Company such further documents, as the Company may deem necessary or
advisable in order to obtain, establish, perfect, maintain, evidence, enforce
or otherwise protect any of the rights, title and interests assigned,
transferred, conveyed, or licensed (or intended to be assigned, transferred,
conveyed, or licensed) to the Company under this Agreement, or otherwise carry
out the intent and accomplish the purposes of this Agreement.  Such cooperation and assistance shall
include, without limitation, any execution of an assignment, transfer,
conveyance, license or 

 4
 

waiver of, or any covenant not to institute, support,
maintain or permit any action or assert any, rights, and cooperation and
assistance in any proceedings before any government authorities or other legal
proceedings, including being named a party for purposes thereof.  Without limiting the generality of the
foregoing, to the extent permitted by applicable law, I hereby appoint the
Company as my attorney-in-fact (which appointment is coupled with an interest),
with full power of substitution and delegation, with the right (but not the
obligation) to perform any such acts and to execute, acknowledge and deliver
any such documents on my behalf, provided that the Company shall not exercise
such right unless I fail to perform such act or execute, acknowledge or deliver
such document within five (5) business days after the Company’s written request
therefor.  In addition, I agree to
maintain adequate and current written records regarding all Creations, and the
creation, making, conception, invention, discovery, development, reduction to
practice or suggestion thereof.  Such
records shall be the sole property of the Company and hereby assign, and agree
to assign, all my right, title and interest, if any, with respect to such
records to the Company.

h.     Disclosure.  I agree to maintain current and accurate
written records with respect to all Creations and to disclose to the Company,
promptly after the earliest of their creation, making, conception, invention,
discovery, development, reduction to practice or suggestion, all Creations and
pertinent records.  I will further
promptly notify the Company, in confidence, of any and all Technology created,
made, conceived, invented, discovered, developed, reduced to practice or suggested
by me (i) that I believe to be Excluded Technology, and/or (ii) during the
one-year period following termination of my employment, so as to enable the
Company to determine whether such Technology is a Creation subject to this
Agreement.

i.      Post Termination Period.  I agree
that any Technology created, conceived, invented, discovered, developed,
reduced to practice or suggested by me (alone or together with others) within
one (1) year after my termination of employment with the Company shall be
deemed a Creation based upon any Proprietary Information or Proprietary Rights
of the Company.  I can rebut the above
presumption if I prove that such Technology is not based upon any Proprietary
Information or Proprietary Rights of the Company.

3.                                      FORMER OR CONFLICTING AGREEMENTS; NO USE OF THIRD PARTY TECHNOLOGY

a.     Former Agreements.  I
represent and warrant that my performance of the terms of this Agreement will
not breach any agreement to keep in confidence proprietary information acquired
by me prior to my employment by the Company. 
I have listed in Schedule A all other agreements concerning
proprietary information, proprietary rights, inventions or other creations to
which I am a party and (i) attached copies of any such agreements in my
possession, or (ii), to the extent that I am bound by legal obligations
prohibiting the disclosure of copies of such agreements to the Company,
summarized the relevant terms thereof. 
To the best of my knowledge, there is no other contract between me and
any other person or entity that is in conflict with this Agreement or concerns
proprietary information, proprietary rights, inventions or other creations.

 5
 

b.     Prohibition on Use of Third Party Information. 
I represent and warrant and covenant that I will not disclose to the Company,
or use in connection with my activities as an employee of the Company, or
induce the Company to use, any proprietary or confidential information or trade
secrets, or any other Technology that is the subject of Proprietary Rights, of
myself or any third party at any time, including but not limited to any
proprietary or confidential information or trade secrets or such Technology of
any former employer, if any.  I
acknowledge and agree that any violation of this provision may be grounds for
my termination and could subject me to substantial civil liabilities and
criminal penalties.  I further
specifically and expressly acknowledge that no officer or other employee or
representative of the Company has requested or instructed me to disclose or use
any such third party proprietary or confidential information or trade
secrets.  Without limiting the generality
of the foregoing, in the event that I disclose or use in connection with my
activities as an employee of the Company, or induce the Company to use, any
proprietary or confidential information or trade secrets, or any other
Technology that is the subject of Proprietary Rights, with respect to which I
have any right, title or interest, I hereby grant, and agree to grant, to the
Company, without any limitations or any additional remuneration, the worldwide,
non-exclusive, perpetual, irrevocable, transferable, freely sublicenseable,
right and license under all such right, title and interest with respect
thereto, including all Rights to Use.

4.                                      TERMINATION

a.     Return of the Company’s Property.  I agree
to promptly return to the Company upon termination of my employment all
Proprietary Information and all personal property furnished to or prepared by
me in the course of or incident to my employment.  Following my termination, I will not retain
any written or other tangible material containing any Proprietary Information
or other information pertaining to any Creations.

b.     Termination Certificate.  In the
event of the termination of my employment, I agree, if requested by the
Company, to sign and deliver the Termination Certificate attached as Schedule B.

c.     Subsequent Employers.  I agree
that after the termination of my employment with the Company, I will not enter
into any agreement that would cause me to violate any of my obligations under
this Agreement and will inform any subsequent employers of my obligations under
this Agreement.

d.     Survival.  The terms and conditions of this Agreement
and my obligations hereunder shall survive any termination of my employment
with the company and any expiration or termination of any employment or other
agreement between the Company and me, and such terms and conditions shall
remain in full force and effect as set forth herein.

5.                                      NO IMPLIED EMPLOYMENT RIGHTS

I recognize that nothing in this Agreement
shall be construed to imply that my employment is guaranteed for any period of
time.  Unless stated in a written
agreement signed by a duly authorized officer of the Company, my employment is
for an indefinite duration and at-will, and either the Company 

 6
 

or I can terminate our employment relationship at any
time, without notice (except where required in my employment agreement with the
Company) and for any reason or no reason, with or without cause.

6.                                      REMEDIES

I recognize that nothing in this Agreement is
intended to limit any remedy of the Company under any law concerning trade
secrets or other Proprietary Rights.  I
recognize that my violation of this Agreement could cause the Company irreparable
harm and acknowledge that the Company may have the right to apply to any court
of competent jurisdiction for an order restraining any breach or threatened
breach of this Agreement.

7.                                      ASSIGNMENT

I acknowledge and agree that my obligations
hereunder are personal, and that I shall have no right to assign, transfer or
delegate and shall not assign, transfer or delegate or purport to assign,
transfer or delegate this Agreement or any of my rights or obligations
hereunder.  This Agreement and any rights
and obligations of the Company hereunder may be freely assigned, transferred or
delegated by the Company.  Any
assignment, transfer or delegation in violation of this Article 7. shall be
null and void.  Subject to the foregoing
restrictions on assignments, transfers and delegations, this Agreement shall
inure to the benefit of the Company and its affiliates, officers, directors,
agents, successors and assigns; and shall be binding on me and my heirs,
devisees, spouses, agents, legal representatives and successors.

8.                                      GOVERNING LAW

This Agreement is to be governed by and
construed in accordance with 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 obligations of the parties hereunder, and, to the extent federal
law is applicable, the laws of the United States of America without giving
effect to any choice of law rule that would cause the application of the laws
of any other country.

9.                                      SEVERABILITY

If any provision of this Agreement, or the
application thereof to any person, place or circumstance, shall be held by a
court of competent jurisdiction to be invalid, void or otherwise unenforceable,
such provision shall be enforced to the maximum extent possible so as to effect
the intent of the parties, or, if incapable of such enforcement, shall be
deemed to be deleted from this Agreement, 

 7
 

and the remainder of this Agreement and such
provisions as applied to other persons, places and circumstances shall remain
in full force and effect.

10.                               AMENDMENT; WAIVERS

This Agreement may not be amended or waived
except by a writing signed by me and by a duly authorized representative of the
Company other than me.  Failure to
exercise any right under this Agreement shall not constitute a waiver of such
right.  Any waiver of any breach of this
Agreement shall not operate as a waiver of any subsequent breaches.  All rights or remedies specified for a party
herein shall be cumulative and in addition to all other rights and remedies of
the party hereunder or under applicable law.

11.                               INTERPRETATION AND LANGUAGE

This Agreement shall be construed as a whole,
according to its fair meaning, and not in favor of or against any party.  Sections and section headings contained in
this Agreement are for reference purposes only, and shall not affect in any
manner the meaning of interpretation of this Agreement.  Whenever the context requires, references to
the singular shall include the plural and the plural the singular and any
gender shall include any other gender. 
This Agreement is in the English language only, which language shall be
controlling in all respects, and all versions hereof in any other language
shall be for accommodation only and shall not be binding upon the parties.  I ACKNOWLEDGE THAT I UNDERSTAND ALL THE TERMS
AND CONDITIONS OF THIS AGREEMENT.

12.                               ENTIRE AGREEMENT

This Agreement, including all exhibits
hereto, constitutes the entire agreement and understanding of the parties with
respect to the subject matter hereof, and supersedes all prior and
contemporaneous correspondence, negotiations, agreements and understandings
among the parties, both oral and written, regarding such subject matter.  I acknowledge that the Company has not made,
and that I have not relied on, any representations or warranties concerning the
subject matter of this Agreement other than those expressly set forth herein,
if any.

 8
 

I
HAVE READ THIS AGREEMENT CAREFULLY AND UNDERSTAND ITS TERMS.  I HAVE COMPLETELY NOTED ON SCHEDULE A TO
THIS AGREEMENT (1) ANY PROPRIETARY INFORMATION AND TECHNOLOGY, AND (2) ANY
PROPRIETARY RIGHTS AND ANY RELATED RIGHTS THAT I DESIRE TO EXCLUDE FROM THIS
AGREEMENT.

	
  Employee 

  	
   

  	
  CRDENTIA CORP.

  
	
   

  	
   

  
	
  /s/

  	
  John Kaiser

  	
  /s/

  	
  C. Fred Toney

  	
   

  	 

	
  Name: John Kaiser 

  	
   

  	
  Name: C. Fred Toney

  Title: Chairman of the Board of Directors

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date: March    , 2007

  	
  Date: March    , 2007

  	
   

  
								

 

 9

APPENDIX
1

I acknowledge and understand that nothing in
this Agreement shall be construed to assign or offer to assign any of my rights
in any invention which qualifies fully under the following provisions:

Any provision in an employment agreement
which provides that an employee shall assign, or offer to assign, any of his or
her rights in an invention to his or her employer shall not apply to an
invention that the employee developed entirely on his or her own time without
using the employer’s equipment, supplies, facilities, or trade secret
information except for those inventions that either:  (1) relate at the time of conception or
reduction to practice of the invention to the employer’s business, or actual or
demonstrably anticipated research or development of the employer; or (2) result
from any work performed by the employee for the employer.

I further acknowledge and understand that the
foregoing exclusion shall not apply to the extent that full title to certain
patents and inventions is required to be in the United States, as required by
contracts between the employer and the United States or any of its agencies.

John Kaiser

 

	
  /s/ John Kaiser

  	
   

  
	
  Signature

  

 

 10
 

SCHEDULE
A

EMPLOYEE’S
DISCLOSURE

1.     Proprietary Information.  Except as set forth below, I acknowledge that
at this time I know nothing about the business or Proprietary Information of
the Company, other than information I have learned from the Company in the
course of being hired: 

 

2.     Previously Created Technology.  Except as set forth below, there are no (i)
materials, information, ideas and other subject matter, including, without
limitation, works of authorship and other creations; inventions, invention
disclosures, discoveries, developments and patent applications; know-how and
trade secrets; plans, designs and concepts; drawings, diagrams and schematics;
writings, reports, notebooks, and other information; specifications, formulas,
structures and other technical or engineering information; prototypes, systems,
compositions, hardware, tools, equipment, instruments and other devices,
products and technology; processes, methods, techniques, procedures and work in
process; computer programs (in source code, object code or any other format),
applications, algorithms, protocols, data and databases, programmable logic and
documentation; and any copies, extracts, portions, derivatives, improvements
and enhancements thereof and modifications thereto, created, made, conceived,
invented, discovered, developed, reduced to practice or suggested by me, alone
or together with others; and (ii) copyrights, moral rights and other personal
author’s rights (including, without limitation any and all rights of paternity
or attribution, integrity, publication, withdrawal or retraction or rights to
receive additional remuneration), related rights (including without limitation
so called “neighboring rights” and “sui generis” rights), database rights and
all other rights associated with works of authorship (including computer programs),
creations or performances, whether published or unpublished; rights with
respect to trade secrets and know-how; patents and related rights, inventor’s
certificates, design rights, industrial design rights, utility model rights;
trademark, service mark and trade dress rights and other rights relating to
source or indicia of origin; and any and all other intellectual property,
industrial property, and other proprietary rights; that I wish to exclude from
the operation of this Agreement:

 

 11
 

3.     Prior Agreements.  Except as set forth below, I am aware of no
prior agreements between me and any other person or entity concerning
proprietary information, technology or proprietary rights (of the nature
described in Section 2 above) (attach copies, or summary of terms, of all
agreements in your possession):

 

Date:
March 27, 2007

	
  

  	
  John Kaiser

  
	
  

  	
  Employee Name

  
	
   

  	
   

  
	
   

  	
  /s/ John Kaiser

  
	
   

  	
  Employee
  Signature

  
	
   

  
	
   

  
	
   

  

 

 12
 

SCHEDULE
B

TERMINATION
CERTIFICATE CONCERNING

 COMPANY PROPRIETARY INFORMATION

This is to certify that I
have returned all property of Crdentia Corp., (the “Company”), including,
without limitation, all materials, information, ideas and other subject matter,
including, without limitation, works of authorship and other creations;
inventions, invention disclosures, discoveries, developments and patent
applications; know-how and trade secrets; plans, designs and concepts;
drawings, diagrams and schematics; writings, reports, notebooks, and other
information; specifications, formulas, structures and other technical or
engineering information; prototypes, systems, compositions, hardware, tools,
equipment, instruments and other devices, products and technology; processes,
methods, techniques, procedures and work in process; computer programs (in
source code, object code or any other format), applications, algorithms,
protocols, data and databases, programmable logic and documentation; and any
copies, extracts, portions, derivatives, improvements and enhancements thereof
and modifications thereto, and any other Proprietary Information, furnished to
or created, made, conceived, invented, discovered, developed, reduced to
practice or suggested by me, alone or together with others in the course of or
incident to my employment with the Company, and that I did not make or
distribute any copies of the foregoing.

I further certify that I have reviewed the
Company’s Proprietary Information and Rights Agreement (“Agreement”) signed by
me and that I have complied with and will continue to comply with each and all
of its terms and conditions, including without limitation: (i) materials,
information, ideas and other subject matter, including, without limitation,
works of authorship and other creations; inventions, invention disclosures,
discoveries, developments and patent applications; know-how and trade secrets;
plans, designs and concepts; drawings, diagrams and schematics; writings,
reports, notebooks, and other information; specifications, formulas, structures
and other technical or engineering information; prototypes, systems,
compositions, hardware, tools, equipment, instruments and other devices,
products and technology; processes, methods, techniques, procedures and work in
process; computer programs (in source code, object code or any other format),
applications, algorithms, protocols, data and databases, programmable logic and
documentation; and any copies, extracts, portions, derivatives, improvements
and enhancements thereof and modifications thereto, created, made, conceived,
invented, discovered, developed, reduced to practice or suggested by me, alone
or together with others, created, made, conceived, invented, discovered,
developed, reduced to practice or suggested by me, alone or together with
others, and covered by the Agreement and (ii) the restrictions on use and
disclosure of all Proprietary 

 13
 

Information (as defined in the Agreement) of the
Company.  This certificate in no manner
limits my responsibilities or the Company’s rights under the Agreement.

On termination of my employment with the
Company, I will be employed by                                            
[Name of New Employer] [in the                                    
division] and I will be working in connection with the following projects:

[generally describe the projects]

Date:

	
  

  	
  John Kaiser

  
	
  

  	
  Employee Name

  
	
   

  	
   

  
	
   

  	
  /s/ John Kaiser

  
	
   

  	
  Employee
  Signature

  
	
   

  
	
   

  
	
   

  

 

 14

EXHIBIT
D

ARBITRATION AGREEMENT

The Company and Employee hereby agree
that, to the fullest extent permitted by law, any and all claims or
controversies between them (or between Employee and any present or former
officer, director, agent, or employee of the Company or any parent, subsidiary,
or other entity affiliated with the Company) relating in any manner to the
employment or the termination of employment of Employee shall be resolved by
final and binding arbitration.  Except as
specifically provided herein, any arbitration proceeding shall be conducted in
accordance with the National Rules for the Resolution of Employment Disputes of
the American Arbitration Association (“the AAA Rules”).

Claims subject to arbitration shall
include, without limitation: contract claims, tort claims, claims relating to
compensation and stock options, as well as claims based on any federal, state,
or local law, statute, or regulation, including but not limited to any claims
arising under Title VII of the Civil Rights Act of 1964, the Age Discrimination
in Employment Act, the Americans with Disabilities Act, and the California Fair
Employment and Housing Act.  However,
claims for unemployment benefits, workers’ compensation claims, and claims
under the National Labor Relations Act shall not be subject to arbitration.

A neutral and impartial arbitrator shall
be chosen by mutual agreement of the parties; however, if the parties are
unable to agree upon an arbitrator within a reasonable period of time, then a
neutral and impartial arbitrator shall be appointed in accordance with the
arbitrator nomination and selection procedure set forth in the AAA Rules.  The arbitrator shall prepare a written
decision containing the essential findings and conclusions on which the award
is based so as to ensure meaningful judicial review of the decision.  The arbitrator shall apply the same
substantive law, with the same statutes of limitations and same remedies, that
would apply if the claims were brought in a court of law.

Either the Company or Employee may bring
an action in court to compel arbitration under this Agreement and to enforce an
arbitration award.  Otherwise, neither
party shall initiate or prosecute any lawsuit of claim in any way related to
any arbitrable claim.  Nothing in this
Agreement, however, precludes a party from filing an administrative charge
before an agency that has jurisdiction over an arbitrable claim.  Moreover, nothing in this Agreement prohibits
either party from seeking provisional relief.

All arbitration hearings under this
Agreement shall be conducted in Dallas, Texas, unless otherwise agreed by the
parties.  The arbitration provisions of
this Arbitration Agreement shall be governed by the Federal Arbitration Act.   In all other respects, this Arbitration
Agreement shall be construed in accordance with the laws of the State of Texas,
without reference to conflicts of law principles.

Each party shall pay its own costs and
attorney’s fees, unless a party prevails on a statutory claim, and the statute
provides that the prevailing party is entitled to payment of its attorneys’
fees.  In that case, the arbitrator may
award reasonable attorneys’ fees and costs to the prevailing party as provided
by law.

This Agreement does not alter Employee’s
at-will employment status.  Accordingly,
Employee understands that the Company may terminate Employee’s employment, as
well as discipline or demote Employee, at any time, with or without prior
notice, and with or without cause.  The
parties also 

understand that Employee is free to leave
the Company at any time and for any reason, with or without cause and with or
without advance notice.

If any provision of this Agreement shall
be held by a court or the arbitrator to be invalid, unenforceable, or void,
such provision shall be enforced to the fullest extent permitted by law, and
the remainder of this Agreement shall remain in full force and effect.  The parties’ obligations under this Agreement
shall survive the termination of Employee’s employment with the Company and the
expiration of this Agreement.

The Company and Employee understand and
agree that this Arbitration Agreement contains a full and complete statement of
any agreements and understandings regarding resolution of disputes between the
parties, and the parties agree that this Arbitration Agreement supersedes all
previous agreements, whether written or oral, express or implied, relating to
the subjects covered in this agreement. 
The parties also agree that the terms of this Arbitration Agreement
cannot be revoked or modified except in a written document signed by both
Employee and an officer of the Company.

THE PARTIES ALSO UNDERSTAND AND AGREE
THAT THIS AGREEMENT CONSTITUTES A WAIVER OF THEIR RIGHT TO A TRIAL BY JURY OF
ANY CLAIMS OR CONTROVERSIES COVERED BY THIS AGREEMENT.  THE PARTIES AGREE THAT NONE OF THOSE CLAIMS
OR CONTROVERSIES SHALL BE RESOLVED BY A JURY TRIAL.

 2
 

THE PARTIES FURTHER ACKNOWLEDGE THAT THEY
HAVE BEEN GIVEN THE OPPORTUNITY TO DISCUSS THIS AGREEMENT WITH THEIR LEGAL
COUNSEL AND HAVE AVAILED THEMSELVES OF THAT OPPORTUNITY TO THE EXTENT THEY WISH
TO DO SO.

Employee:  John Kaiser

	
  /s/ John Kaiser

  	
   

  
	
  Date: March __,
  2007

  
	
   

  
	
   

  
	
  Crdentia
  Corp.

  
	
   

  	
   

  
	
  /s/ C. Fred Toney

  	
   

  
	
  Name: C. Fred
  Toney

  
	
  Title: Chairman
  of the Board of Directors

  
	
  Date: March __,
  2007

  

 

 3

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