Exhibit 10.2
Award Number: 4
CRDENTIA CORP.
STOCK OPTION PLAN AND AWARD AGREEMENT
1. Stock Subject to the Plan and Option Agreement.
(a) Crdentia Corp., a Delaware corporation (the "Company"), hereby
adopts this Stock Option Plan and Award Agreement (the "Plan and Option
Agreement") and, subject to Section 17, reserves 7,000,000 Shares as the
maximum aggregate number of Shares which may be issued pursuant to this
Plan and Option Agreement.
(b) Subject to Section 17, the Company hereby grants to the Grantee
named in the Notice of Stock Option Award (the "Notice"), an option (the
"Option") to purchase 7,000,000 Shares at the Exercise Price per Share as
set forth in the Notice (the "Exercise Price") subject to the terms and
provisions of this Plan and Option Agreement and the Notice which is
incorporated herein by reference.
2. Exercise of Option.
(a) Right to Exercise. The Option shall be exercisable during its term
in accordance with the Exercise Schedule set out in the Notice and with the
applicable provisions of this Plan and Option Agreement. The Option shall
be subject to the provisions of Section 18 of this Plan and Option
Agreement relating to the exercisability or 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. Xxxxxxx'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 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 of Service.
Subject to Section 18, the exercisability of the Option shall not be
affected by the termination of the Grantee's employment or service to the
Company for any reason.
7. Transferability of Option.
The Option may be transferred to the extent and in the manner authorized
by the Board. The Grantee also may designate one or more beneficiaries of
the Grantee's Option in the event of the Grantee's death on a beneficiary
designation form provided by the Board. In the event of the Grantee's
death while the Option is still in effect, the Option may be exercised (a)
by the person or persons designated under the deceased Grantee's
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beneficiary designation or (b) in the absence of an effectively designated
beneficiary, by the Grantee's legal representative or by any person
empowered to do so under the deceased Xxxxxxx's will or under the then
applicable laws of descent and distribution. The terms of the Option
shall be binding upon the executors, administrators, heirs, successors and
transferees of the Grantee.
8. Term of Option.
The Option must be exercised no later than the Expiration Date set forth
in the Notice. After the Expiration Date or such earlier date, the Option
shall be of no further force or effect and may not be exercised.
9. Stop-Transfer Notices.
In order to ensure compliance with the restrictions on transfer set forth
in this Plan and 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.
10. 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 Plan and 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.
11. Tax Consequences.
Set forth below is a brief summary as of the date of this Plan and 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.
(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 of the Company, 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.
12. 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
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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 12.
(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 12(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 12 may not be
amended or waived except with the consent of the Lead Underwriter.
13. Entire Agreement: Governing Law.
The Notice and this Plan and 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 Plan and 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 Plan and Option Agreement are 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 the Notice or this Plan and Option Agreement be determined 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.
14. Headings.
The captions used in the Notice and this Plan and Option Agreement are
inserted for convenience and shall not be deemed a part of the Option for
construction or interpretation.
15. Dispute Resolution.
The provisions of this Section 15 shall be the exclusive means of resolving
disputes arising out of or relating to the Notice and this Plan and 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 Plan and 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.
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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 Plan and 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. In addition to the recovery
of costs as provided by applicable law, the prevailing party in any such
suit, action or proceeding shall be entitled to recover reasonable
attorneys' fees and expenses. If any one or more provisions of this
Section 15 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.
16. 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.
17. Adjustments Upon Changes in Capitalization. Subject to any
required action by the stockholders of the Company, the number of Shares
covered by this Plan and Option Agreement, 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 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.
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18. Corporate Transactions.
(a) 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.
(b) Acceleration of Option Upon Corporate Transaction. In the event of
a Corporate Transaction, for the portion of the Option that is neither
Assumed nor Replaced, such portion of the Option shall automatically
become fully exercisable for all of the Shares at the time represented by
such portion of the Option, immediately prior to the specified effective
date of such Corporate Transaction.
19. Reservation of Shares.
(a) The Company, during the term of the Plan and Option Agreement, will
at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan and Option Agreement.
(b) The inability of the Company to obtain authority from any regulatory
body having jurisdiction, which authority is deemed by the Company's
counsel to be necessary to the lawful issuance and sale of any Shares
hereunder, shall relieve the Company of any liability in respect of the
failure to issue or sell such Shares as to which such requisite authority
shall not have been obtained.
20. No Effect on Retirement and Other Benefit Plans. Except as
specifically provided in a retirement or other benefit plan of the Company
or a Parent or Subsidiary of the Company, the Option shall not be deemed
compensation for purposes of computing benefits or contributions under any
retirement plan of the Company or a Parent or Subsidiary of the Company,
and shall not affect any benefits under any other benefit plan of any kind
or any benefit plan subsequently instituted under which the availability or
amount of benefits is related to level of compensation. The Plan and
Option Agreement is not a "Retirement Plan" or "Welfare Plan" under the
Employee Retirement Income Security Act of 1974, as amended.
21. Stockholder Approval. The adoption of this Plan and Option
Agreement shall not be subject to the approval of the Company's
stockholders.
22. Definitions. As used herein, the following definitions shall apply:
(a) "Applicable Laws" means the legal requirements applicable to the
Plan and Option Agreement 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 Plan and Option Agreement is expressly affirmed by the Company or (ii)
the contractual obligations represented by the Plan and Option Agreement
are expressly assumed (and not simply by operation of law) by the successor
entity or its Parent in connection with the Corporate
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Transaction with appropriate adjustments to the number and type of
securities of the successor entity or its Parent subject to the Plan and
Option Agreement 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 Plan and Option Agreement.
(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) "Code" means the Internal Revenue Code of 1986, as amended.
(e) "Common Stock" means the common stock of the Company.
(f) "Company" means Crdentia Corp., a Delaware corporation.
(g) "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;
(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 (A) the shares of Common Stock outstanding immediately prior to
such merger are converted or exchanged by virtue of the merger into other
property, whether in the form of securities, cash or otherwise, or (B) 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 Securities Exchange Act of 1934, as
amended) 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.
(h) "Fair Market Value" means, as of any date, the value of Common
Stock determined as follows:
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(i) If the Common Stock is listed on one or more established
stock exchanges or national market systems, 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
the principal exchange or system on which the Common Stock is listed (as
determined by the Board) 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, its Fair Market Value shall be the closing sales price
for such stock as quoted on such system or by such securities dealer on the
date of determination, but if 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 the 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.
(i) "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.
(j) "Parent" means a "parent corporation," whether now or hereafter
existing, as defined in Section 424(e) of the Code.
(k) "Replaced" means that pursuant to a Corporate Transaction the
Option is replaced with a comparable stock award or a cash incentive
program of the Company, the successor entity (if applicable) or Parent of
either of them which preserves the compensation element of such Option
existing at the time of the Corporate Transaction and provides for
subsequent payout in accordance with the same (or a more favorable)
exercise schedule applicable to such Option. The determination of Option
comparability shall be made by the Board and its determination shall be
final, binding and conclusive.
(l) "Share" means a share of the Common Stock.
(m) "Subsidiary" means a "subsidiary corporation," whether now or
hereafter existing, as defined in Section 424(f) of the Code.
END OF PLAN AND OPTION AGREEMENT
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EXHIBIT A
EXERCISE NOTICE
Crdentia Corp.
00000 Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Secretary
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 Plan and Award
Agreement (the "Plan and Option Agreement") and Notice of Stock Option
Award (the "Notice") dated December 31, 2003. Unless otherwise defined
herein, the terms defined in the Plan and 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 Plan and
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 17 of the Plan
and 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 Plan and Option Agreement.
5. Tax Consultation. The Grantee understands that the Grantee may
suffer adverse tax consequences as a result of the Grantee' 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 United States
federal, state, local and non-U.S. 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 United States
federal, state, local or non-U.S. 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.
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 15 of the Plan and
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 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 Plan and 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 Plan and 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.
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Submitted by: Accepted by:
GRANTEE: CRDENTIA CORP.
By:
------------------------- -----------------------
(Signature) Title:
--------------------
Address: Address:
00000 Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
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EXHIBIT B
INVESTMENT REPRESENTATION STATEMENT.
GRANTEE: XXXXX XXXXXX
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 Xxxxxxx'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 Xxxxxxx'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. Xxxxxxx further acknowledges and understands
that the Company is under no obligation to register the Securities.
Xxxxxxx 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
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:
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