<SUBMISSION>
<ACCESSION-NUMBER>0001104659-06-083660
<TYPE>424B3
<PUBLIC-DOCUMENT-COUNT>3
<FILING-DATE>20061222
<DATE-OF-FILING-DATE-CHANGE>20061222
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>CRDENTIA CORP
<CIK>0001073857
<ASSIGNED-SIC>7361
<IRS-NUMBER>760585701
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>424B3
<ACT>33
<FILE-NUMBER>333-131603
<FILM-NUMBER>061297107
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>14114 DALLAS PARKWAY
<STREET2>SUITE 600
<CITY>DALLAS
<STATE>TX
<ZIP>75254
<PHONE>972-850-0780
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>14114 DALLAS PARKWAY
<STREET2>SUITE 600
<CITY>DALLAS
<STATE>TX
<ZIP>75254
</MAIL-ADDRESS>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>LIFEN INC
<DATE-CHANGED>20001115
</FORMER-COMPANY>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>DIGIVISION INTERNATIONAL LTD
<DATE-CHANGED>20001005
</FORMER-COMPANY>
</FILER>
<DOCUMENT>
<TYPE>424B3
<SEQUENCE>1
<FILENAME>a06-26137_1424b3.htm
<DESCRIPTION>PROSPECTUS FILED PURSUANT TO RULE 424(B)(3)
<TEXT>
<html>

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 <p style="margin:0pt 0pt .0001pt;text-align:center;"></p>

<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">PROSPECTUS SUPPLEMENT NO.
6</font></p>

<p align="right" style="margin:0pt 0pt 12.0pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Filed Pursuant to
Rule 424(b)(3)<br>
Registration File No.&nbsp;333-131603</font></p>

<p align="center" style="margin:0pt 0pt 12.0pt;text-align:center;"><font size="2" face="Times New Roman"><img width="269" height="91" src="g261371bai001.gif"></font></p>

<p align="center" style="margin:0pt 0pt 12.0pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">CRDENTIA CORP.</font></p>

<p align="center" style="margin:0pt 0pt 12.0pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">PROSPECTUS
SUPPLEMENT NO. 6 DATED December 22, 2006</font></p>

<p align="center" style="margin:0pt 0pt 12.0pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">TO THE PROSPECTUS
DATED April 10, 2006</font></p>

<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">This Prospectus
Supplement No. 6 supplements our Prospectus dated April 10, 2006 with the
following attached document:</font></p>

<p style="margin:0pt 0pt .0001pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">A.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Definitive Proxy Statement filed
with the Securities and Exchange Commission on December 13, 2006</font></p>

<p style="line-height:1.0pt;margin:0pt 0pt 12.0pt;"><font size="1" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The attached information
modifies and supersedes, in part, the information in the prospectus. Any
information that is modified or superseded in the prospectus shall not be
deemed to constitute a part of the Prospectus except as modified or superseded
by this Prospectus Supplement.</font></p>

<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">This Prospectus
Supplement No. 6 should be read in conjunction with the Prospectus Supplement
No. 1, the Prospectus Supplement No. 2, the Prospectus Supplement No. 3, the
Prospectus Supplement No. 4, the Prospectus Supplement No. 5 and the
Prospectus, each of which are required to be delivered with this Prospectus Supplement.</font></p>

<p align="center" style="margin:0pt 0pt 12.0pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">INVESTING IN OUR
COMMON STOCK INVOLVES A HIGH DEGREE OF RISK.<br>
SEE &#147;RISK FACTORS&#148; BEGINNING ON PAGE 3 OF THE PROSPECTUS, AS<br>
SUPPLEMENTED BY THIS PROSPECTUS SUPPLEMENT.</font></p>

<p align="center" style="margin:0pt 0pt 12.0pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">NEITHER THE
SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE<br>
SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE<br>
SECURITIES OR DETERMINED IF THIS PROSPECTUS SUPPLEMENT IS<br>
TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A<br>
CRIMINAL OFFENSE.</font></p>

<p align="center" style="margin:0pt 0pt 12.0pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The date of this
prospectus supplement is December 22, 2006</font></p>


<br><hr size="3" width="100%" noshade color="#010101" align="center">

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<p align="center" style="margin:0pt 0pt 12.0pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">INDEX TO FILINGS</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;font-family:Times New Roman;width:100.0%;">
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  <td width="91%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:91.84%;">
  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt;"><!-- SET mrlNoTableShading --></p>
  </td>
  <td width="1%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:1.66%;">
  <p style="margin:0pt 0pt .0001pt;"><strong><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:normal;">&nbsp;</font></b></strong></p>
  </td>
  <td width="6%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:6.5%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;"><strong><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Annex</font></b></strong></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="91%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:91.84%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:1.66%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="6%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:6.5%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="91%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:91.84%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Definitive Proxy
  Statement filed with the Securities and Exchange Commission on December 13,
  2006</font></p>
  </td>
  <td width="1%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:1.66%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="6%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:6.5%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">A</font></p>
  </td>
 </tr>
</table>

<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>



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 <p style="margin:0pt 0pt .0001pt;text-align:center;"></p>

<p align="right" style="font-weight:bold;margin:0pt 0pt 12.0pt;page-break-after:auto;text-align:right;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">Annex A</font></b></p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt;page-break-after:auto;text-align:center;"><b><font size="2" face="Times New Roman"><img width="269" height="91" src="g261371dai001.gif"></font></b></p>

<p align="center" style="font-size:10.0pt;margin:0pt 0pt .0001pt;text-align:center;"><!-- SET mrlHTMLTableLeft --><!-- SET mrlNoTableShading -->December 13, 2006</p>

<p style="font-size:10.0pt;margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Dear Stockholder:</font><!-- SET mrlNoTableShading --></p>

<p style="line-height:1.0pt;margin:0pt 0pt 12.0pt;"><font size="1" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">You are cordially invited to attend the 2006 Annual
Meeting of Stockholders of Crdentia Corp. to be held at the company&#146;s offices
at 5001 LBJ Freeway, Suite&nbsp;850, Dallas, Texas 75244, on Thursday,
December&nbsp;28, 2006 at 9:00&nbsp;a.m. local time. Details of the business to
be conducted at the Annual Meeting are given in the accompanying Notice of
Annual Meeting of Stockholders and Proxy Statement.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">It is important that your shares be represented at the
Annual Meeting. Whether or not you plan to attend the Annual Meeting, please
complete, sign, date and promptly return the accompanying proxy in the enclosed
postage-prepaid envelope. If you send in your proxy card and then decide to
attend the Annual Meeting to vote your shares in person, you may still do so.
Your proxy is revocable in accordance with the procedures set forth in the
Proxy Statement.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Your Board of Directors recommends that you vote in favor
of the two proposals outlined in this Proxy Statement. Please refer to the
Proxy Statement for detailed information on each of the proposals.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">On behalf of the Board of Directors, I would like to
express our appreciation for your continued interest in our company. We look
forward to seeing you at the Annual Meeting.</font></p>

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  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt;"><!-- SET mrlNoTableShading --></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="49%" colspan="2" valign="top" style="padding:0pt .7pt 0pt 0pt;width:49.18%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Sincerely,</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="48%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:48.06%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="49%" colspan="2" valign="top" style="padding:0pt .7pt 0pt 0pt;width:49.18%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="48%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:48.06%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="42%" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:42.44%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">/s/ JAMES D. DURHAM</font></p>
  </td>
  <td width="6%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:6.74%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="48%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:48.06%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="49%" colspan="2" valign="top" style="padding:0pt .7pt 0pt 0pt;width:49.18%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="48%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:48.06%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.76%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="49%" colspan="2" valign="top" style="padding:0pt .7pt 0pt 0pt;width:49.18%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">James D. Durham</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="48%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:48.06%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.76%;">
  <p style="margin:0pt 0pt .0001pt;"><i><font size="2" face="Times New Roman" style="font-size:1.0pt;font-style:italic;">&nbsp;</font></i></p>
  </td>
  <td width="49%" colspan="2" valign="top" style="padding:0pt .7pt 0pt 0pt;width:49.18%;">
  <p style="margin:0pt 0pt .0001pt;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;">Chairman of the Board and Chief Executive Officer</font></i></p>
  </td>
 </tr>
</table>

<p style="line-height:1.0pt;margin:0pt 0pt 12.0pt;"><font size="1" face="Times New Roman">&nbsp;</font></p>

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<p style="font-weight:bold;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">CRDENTIA CORP. <a name="CrdentiaCorp_5001LbjFreewaySuite8_051425"></a><br>
5001 LBJ Freeway, Suite&nbsp;850<br>
Dallas, Texas 75244</font></b></p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">NOTICE OF ANNUAL
MEETING OF STOCKHOLDERS<a name="NoticeOfAnnualMeetingOfStockholde_051429"></a><br>
TO BE HELD ON DECEMBER 28, 2006</font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">To the Stockholders of Crdentia Corp.:</font></p>

<p style="margin:0pt 0pt 12.0pt;page-break-after:avoid;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We will hold the
Annual Meeting of Stockholders of Crdentia Corp. at the company&#146;s offices at
5001&nbsp;LBJ Freeway, Suite&nbsp;850, Dallas, Texas 75244 on Thursday,
December&nbsp;28, 2006, at 9:00&nbsp;a.m. local time, for the following
purposes:</font></p>

<p style="font-size:10.0pt;margin:0pt 0pt 12.0pt 72.0pt;text-indent:-36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1.</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>To
elect two&nbsp;(2)&nbsp;Class&nbsp;I directors to the Board of Directors to
hold office until their successors are duly elected and qualified.</p>

<p style="font-size:10.0pt;margin:0pt 0pt 12.0pt 72.0pt;text-indent:-36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2.</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>To
ratify the appointment of KBA Group LLP as independent auditors for Crdentia
for the fiscal year ending December&nbsp;31, 2006.</p>

<p style="font-size:10.0pt;margin:0pt 0pt 12.0pt 72.0pt;text-indent:-36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>To
transact any other business as may properly come before the Annual Meeting or
any adjournments or postponements of the Annual Meeting.</p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">These items of business are described in the attached
proxy statement. Only Crdentia stockholders of record at the close of business
on December&nbsp;11, 2006, the record date for the Annual Meeting, are entitled
to notice of and to vote at the Annual Meeting and any adjournments or
postponements of the Annual Meeting.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">A list of stockholders eligible to vote at the Annual
Meeting will be available for inspection at the Annual Meeting, and at our
executive offices during regular business hours for a period of no less than
ten days prior to the Annual Meeting.</font></p>

<p style="font-size:10.0pt;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-indent:36.0pt;"><font style="font-weight:bold;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">Your vote is very
important.</font></b></font>&nbsp;&nbsp; Whether or not you plan to attend the
Annual Meeting, please complete, sign, date and promptly return the
accompanying proxy in the enclosed postage-prepaid envelope. If you send in
your proxy card and then decide to attend the Annual Meeting to vote your
shares in person, you may still do so. Your proxy is revocable in accordance
with the procedures set forth in the accompanying proxy statement.</p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
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  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt;"><!-- SET mrlNoTableShading --></p>
  </td>
  <td width="48%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:48.48%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">By Order of the Board of Directors,</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="51%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:51.52%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="48%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:48.48%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="51%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:51.52%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="48%" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:48.48%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">/s/ James D. Durham</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="51%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:51.52%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="48%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:48.48%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">James D. Durham</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="51%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:51.52%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="48%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:48.48%;">
  <p style="margin:0pt 0pt .0001pt;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;">Chief Executive Officer</font></i></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="51%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:51.52%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="48%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:48.48%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Crdentia Corp.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="51%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:51.52%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Dallas, Texas</font></p>
  </td>
  <td width="48%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:48.48%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="51%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:51.52%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">December&nbsp;13, 2006</font></p>
  </td>
  <td width="48%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:48.48%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="51%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:51.52%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="48%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:48.48%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Mailed to Stockholders</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="51%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:51.52%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="48%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:48.48%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">on or about
  December&nbsp;14, 2006</font></p>
  </td>
 </tr>
</table>

<p style="line-height:1.0pt;margin:0pt 0pt 12.0pt;"><font size="1" face="Times New Roman">&nbsp;</font></p>

</div><br><hr size="3" width="100%" noshade color="#010101" align="center">

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<p style="font-weight:bold;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">PROXY STATEMENT<a name="ProxyStatement_053534"></a><br>
FOR ANNUAL MEETING OF STOCKHOLDERS</font></b></p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">To Be Held December
28, 2006<a name="ToBeHeldDecember282006_053540"></a></font></b></p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">INFORMATION
CONCERNING SOLICITATION AND VOTING<a name="InformationConcerningSolicitation_053541"></a></font></b></p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt 10.0pt;page-break-after:avoid;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">General
Information<a name="GeneralInformation_053542"></a></font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">This Proxy Statement is furnished to the stockholders
of Crdentia Corp., a Delaware corporation (&#147;we,&#148; &#147;Crdentia&#148; or the &#147;Company&#148;),
in connection with the solicitation by our board of directors of proxies in the
accompanying form for use in voting at the Annual Meeting of Stockholders (the
&#147;Annual Meeting&#148;) to be held on Thursday, December 28, 2006, at 9:00 a.m., local
time, at our offices at 5001 LBJ Freeway, Suite 850, Dallas, Texas 75244, and any
adjournment or postponement thereof. The shares represented by the proxies
received, properly marked, dated, executed and not revoked will be voted at the
Annual Meeting.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Our complete mailing address is 5001 LBJ Freeway,
Suite 850, Dallas, Texas 75244. Our website address is www.crdentia.com. Our annual reports on Form 10-KSB, quarterly
reports on Form 10-QSB, current reports on Form 8-K, and amendments to those
reports filed or furnished pursuant to Section&nbsp;13(a) or 15(d) of the
Exchange Act are available free of charge in electronic or paper form upon
request to us after they are electronically filed with, or furnished to, the
Securities and Exchange Commission (the &#147;SEC&#148;). Our annual report on Form
10-KSB for the fiscal year ended December 31, 2005 was filed with the SEC on
March 31, 2006 and amended on April 28, 2006. Upon written request to our
Secretary at the address of our principal executive offices, the exhibits set
forth on the exhibit index of the Form 10-KSB may be made available without
charge. All materials filed by us with the SEC can also be obtained at the
SEC&#146;s Public Reference Room at 100 F
Street NE, Washington, DC 20549-2521 or through the SEC&#146;s website at www.sec.gov. You may obtain
information&nbsp;on the operation of the Public Reference Room by calling
1-800-SEC-0330.</font></p>

<p style="margin:0pt 0pt 12.0pt;page-break-after:avoid;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The Annual Meeting
is being held for the following purposes:</font></p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 72.0pt;text-indent:-36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1.</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>To
elect two&nbsp;(2) Class I directors to the board of directors to hold office
until their successors are duly elected and qualified; </p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 72.0pt;text-indent:-36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2.</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>To
ratify the appointment of KBA Group LLP as independent auditors for the fiscal
year ending December 31, 2006; and</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 72.0pt;text-indent:-36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>To
transact any other business as may properly come before the Annual Meeting or
any adjournments or postponements of the Annual Meeting.</p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt 10.0pt;page-break-after:avoid;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">Recommendation
of the Board of Directors</font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The board of directors unanimously recommends that
stockholders vote <b>&#147;FOR&#148;</b> the
election of each of the two nominees for director and <b>&#147;FOR&#148;</b> the ratification of the appointment
of KBA Group LLP as independent auditors for the fiscal year ending December
31, 2006.</font></p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt 10.0pt;page-break-after:avoid;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">Record
Date; Outstanding Shares; Shares Entitled to Vote</font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The close of business on December 11, 2006 has been
fixed as the record date (the &#147;Record Date&#148;) for determining the holders of
shares of our capital stock entitled to notice of and to vote at the Annual
Meeting. As of the close of business on the Record Date, we had 14,344,230 shares
of common stock outstanding and entitled to vote at the Annual Meeting held by
approximately 345 holders of record. No shares of preferred stock were
outstanding as of the Record Date. Unless otherwise indicated, all share
amounts in this Proxy Statement have been adjusted to reflect the one-for-three
reverse split of our common stock effected in June 2004 and the one-for-ten
reverse split of our common stock effected in </font></p>


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<p style="margin:0pt 0pt 12.0pt;text-indent:0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">April 2006. The presence at the Annual Meeting of a
majority of these shares of common stock, either in person or by proxy, will
constitute a quorum for the transaction of business at the Annual Meeting. The
Company&#146;s Secretary, James J. TerBeest, will act as inspector of elections to
tabulate votes cast in person at the Annual Meeting. Each outstanding share of
common stock on the Record Date is entitled to one vote on all matters.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">A list of Crdentia stockholders entitled to vote at
the Annual Meeting will be available for review at the Annual Meeting and at
the executive offices of Crdentia during regular business hours for a period of
ten days before the Annual Meeting.</font></p>

<p style="font-family:Times New Roman;font-size:10.0pt;font-weight:bold;margin:0pt 0pt 12.0pt 10.0pt;page-break-after:avoid;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">Quorum;
Vote Required</font></b>; Abstentions and Broker Non-Votes</p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">A quorum of stockholders is necessary to hold a valid Annual
Meeting. The required quorum for the transaction of business at the Annual
Meeting is a majority of the outstanding shares of Crdentia common stock
entitled to vote and present, whether in person or by proxy, at the Annual
Meeting. All shares of our common stock represented at the Annual Meeting,
including abstentions and &#147;broker non-votes,&#148; will be treated as shares that
are present and entitled to vote for purposes of determining the presence of a
quorum.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Brokers who hold shares of our common stock in &#147;street
name&#148; for a beneficial owner of those shares typically have the authority to
vote in their discretion on &#147;routine&#148; proposals when they have not received
instructions from beneficial owners. Brokers are not allowed to exercise their
voting discretion with respect to &#147;non-routine&#148; matters. These non-voted shares
are referred to as &#147;broker non-votes.&#148; </font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Because directors are elected by a plurality of the
votes cast, abstentions will not be counted in determining which nominees
received the largest number of votes cast. Abstentions will have the same
effect as voting against the proposal to ratify the appointment of KBA Group
LLP as independent auditors for the Company for the fiscal year ending December
31, 2006. Broker non-votes are not expected to result from the vote on either
proposal.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Directors are elected by a plurality of the votes cast
at the Annual Meeting. Votes may be cast in favor of, or withheld from, each
nominee. Votes that are withheld will be excluded entirely from the vote and
will have no effect. The affirmative vote of the holders of a majority of the
outstanding shares of common stock represented at the Annual Meeting and
entitled to vote on the proposal is required to ratify the selection of KBA
Group LLP as our independent auditors.</font></p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt 10.0pt;page-break-after:avoid;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">Voting;
Proxies; Revocation</font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">You may vote by proxy or in person at the Annual
Meeting. Votes cast by proxy or in person at the Annual Meeting will be
certified by the inspector of elections appointed for the Annual Meeting.</font></p>

<p style="font-style:italic;margin:0pt 0pt 12.0pt 36.0pt;page-break-after:avoid;text-indent:0pt;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;">Voting in Person</font></i></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">If you plan to attend the Annual Meeting and wish to
vote in person, you will be given a ballot at the Annual Meeting. Please note,
however, that if your shares are held in &#147;street name,&#148; which means your shares
are held of record by a broker, bank or other nominee, and you wish to vote at
the Annual Meeting, you must bring to the Annual Meeting a proxy from the
record holder of the shares authorizing you to vote at the Annual Meeting.</font></p>

<p style="font-style:italic;margin:0pt 0pt 12.0pt 36.0pt;page-break-after:avoid;text-indent:0pt;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;">Voting by Proxy</font></i></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Your vote is very important. Accordingly, please
complete, sign and return the enclosed proxy card whether or not you plan to
attend the Annual Meeting in person. You should vote your proxy even if you
plan to attend the Annual Meeting. You can always change your vote at the Annual
Meeting. Voting </font></p>


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<p style="margin:0pt 0pt 12.0pt;text-indent:0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">instructions are included
on your proxy card. If you properly give your proxy and submit it to us in time
to vote, one of the individuals named as your proxy will vote your shares as
you have directed. A proxy card is enclosed for your use.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The method of voting by proxy differs for shares held
as a record holder and shares held in &#147;street name.&#148; If you hold your shares of
our common stock as a record holder, you may vote by completing, dating and
signing the enclosed proxy card and promptly returning it in the enclosed,
pre-addressed, postage-paid envelope or otherwise mailing it to us. If you hold
your shares of our common stock in street name, which means your shares are
held of record by a broker, bank or nominee, you will receive instructions from
your broker, bank or other nominee that you must follow in order to vote your
shares. Your broker, bank or nominee may allow you to deliver your voting
instructions over the Internet or by telephone. Please see the<a name="TheMethodOfVotingByProxyDiffersFo_053641"></a> voting instructions from
your broker, bank or nominee.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">All properly signed proxies that are received prior to
the Annual Meeting and that are not revoked will be voted at the Annual Meeting
according to the instructions indicated on the proxies or, if no direction is
indicated, they will be voted <b>&#147;FOR&#148;</b>
election of each of the two nominees for director and <b>&#147;FOR&#148;</b> ratification of the selection of
independent auditors.</font></p>

<p style="font-style:italic;margin:0pt 0pt 12.0pt 36.0pt;page-break-after:avoid;text-indent:0pt;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;">Revocation of Proxy</font></i></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">You may revoke your proxy at any time before your
proxy is voted at the Annual Meeting by (i) <font color="black" style="color:black;">taking </font>delivering to our corporate secretary
a signed written notice of revocation, bearing a date later than the date of
the proxy; (ii) stating that the proxy is revoked or by signing and delivering
a new proxy, relating to the same shares and bearing a later date; or (iii)
attending the Annual Meeting and voting in person, although attendance at the
Annual Meeting will not, by itself, revoke a proxy. If your shares are held in
street name, you may change your vote by submitting new voting instructions to
your broker, bank or other nominee. You must contact your broker, bank or other
nominee to find out how to do so.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Written notices of revocation and other communications
with respect to the revocation of Crdentia proxies should be addressed to:</font></p>

<p style="margin:0pt 0pt 12.0pt 36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Crdentia Corp.<br>
5001 LBJ Freeway, Suite 850<br>
Dallas, Texas 75244<br>
Attn: Corporate Secretary</font></p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt 10.0pt;page-break-after:avoid;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">Proxy
Solicitation</font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The Crdentia board of directors is soliciting proxies
for the Annual Meeting from our stockholders. We will bear the entire cost of
soliciting proxies from our stockholders. In addition to the solicitation of
proxies by mail, we will request that brokers, banks and other nominees send
proxies and proxy materials to the beneficial owners of our common stock held
by them and secure their voting instructions. We will reimburse those record
holders for their reasonable expenses. We may use several of our regular
employees, who will not be specially compensated, to solicit proxies from our stockholders,
either personally or by telephone, Internet, facsimile or special delivery
letter.</font></p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt 10.0pt;page-break-after:avoid;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">Other
Business; Adjournments</font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">As of the date of this proxy statement, we do not
expect that any matter other than the proposals presented in this proxy
statement will be brought before the Annual Meeting. However, if other matters
incident to the conduct of the Annual Meeting are properly presented at the Annual
Meeting or any adjournment or postponement of the Annual Meeting, the persons
named as proxies will vote in accordance with their best judgment with respect
to those matters.</font></p>


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<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">An adjournment may be made from time to time by the
affirmative vote of a majority of the shares of our common stock represented at
the meeting and entitled to vote thereon, whether or not a quorum exists,
without further notice other than by an announcement made at the Annual Meeting.</font></p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt 10.0pt;page-break-after:avoid;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">Assistance</font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">If you need assistance in completing your proxy card
or have questions regarding the Annual Meeting, please contact the Crdentia Corporate
Secretary at (972) 850-0780 or write to Crdentia Corp., 5001 LBJ Freeway, Suite
850, Dallas, Texas, 75244.</font></p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">CRDENTIA PROPOSAL
NUMBER 1<a name="CrdentiaProposalNumber1_054625"></a></font></b></p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">ELECTION OF
DIRECTORS<a name="ElectionOfDirectors_054626"></a></font></b></p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt 10.0pt;page-break-after:avoid;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">General<a name="General_054628"></a></font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Our board of directors is currently comprised of three
classes of directors with staggered three-year terms. The directors in each
class serve for their respective terms or until their successors have been duly
elected and qualified. Upon expiration of the term of a particular class,
directors elected to the class will serve for a term of three years. Two
directors will be elected at the Annual Meeting. Each director will serve in
Class&nbsp;I of the board of directors and will hold office until the 2009
Annual Meeting or until his successor shall have been duly elected and
qualified. The two candidates receiving the highest number of affirmative votes
of the shares entitled to vote at the Annual Meeting will be elected directors.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Thomas F. Herman and C.&nbsp;Fred Toney currently
serve as directors with a term expiring at this Annual Meeting. The board of
directors has nominated each of Thomas F. Herman and C.&nbsp;Fred Toney for re-election
to the board at this Annual Meeting. Each nominee would serve for a three year
term expiring at the 2009 Annual Meeting of stockholders.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The nominees for election have agreed to serve if
elected, and our management has no reason to believe that the nominees will be
unavailable to serve. If any nominee is unable or declines to serve as a
director at the time of the Annual Meeting, the proxies will be voted for any
nominee who may be designated by the present board of directors to fill the
vacancy. Unless otherwise instructed, the proxy holders will vote the proxies
received by them <b>FOR</b> the nominees named below. No
arrangement or understanding exists between any nominee and any other person or
persons pursuant to which any nominee was or is to be selected as a director or
nominee. None of the nominees has any family relationship to any other nominee
or to any executive officer of Crdentia.</font></p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-indent:0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">The Crdentia board of directors recommends a vote
&#147;FOR&#148; election of the board&#146;s nominees for the<a name="TheCrdentiaBoardOfDirectorsRecomm_054633"></a> Class&nbsp;I directors.</font></b></p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt 10.0pt;page-break-after:avoid;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">Information
Regarding Executive Officers and Directors<a name="InformationRegardingExecutiveOffi_054640"></a></font></b></p>

<p style="margin:0pt 0pt 12.0pt;page-break-after:avoid;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The following are
our executive officers and directors and their respective ages and positions as
of December&nbsp;1, 2006:</font></p>

<div align="center" style="font-family:Times New Roman;">

<table border="0" cellspacing="0" cellpadding="0" style="border-collapse:collapse;">
 <tr style="page-break-inside:avoid;">
  <td width="119" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:88.9pt;">
  <p align="left" style="font-size:8.0pt;font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:left;"><!-- SET mrlHTMLTableCenter -->Name</p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="25" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:18.75pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Age</font></b></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="336" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:252.15pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Position</font></b></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="119" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:88.9pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">James D. Durham</font></p>
  </td>
  <td width="16" valign="top" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="25" valign="top" style="padding:0pt .7pt 0pt 0pt;width:18.75pt;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">59</font></p>
  </td>
  <td width="16" valign="top" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="336" valign="top" style="padding:0pt .7pt 0pt 0pt;width:252.15pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Director, Chief Executive Officer and Chairman of
  the Board</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="119" valign="top" style="padding:0pt .7pt 0pt 0pt;width:88.9pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">James J. TerBeest</font></p>
  </td>
  <td width="16" valign="top" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="25" valign="top" style="padding:0pt .7pt 0pt 0pt;width:18.75pt;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">59</font></p>
  </td>
  <td width="16" valign="top" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="336" valign="top" style="padding:0pt .7pt 0pt 0pt;width:252.15pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Chief Financial Officer</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="119" valign="top" style="padding:0pt .7pt 0pt 0pt;width:88.9pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Thomas F. Herman</font></p>
  </td>
  <td width="16" valign="top" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="25" valign="top" style="padding:0pt .7pt 0pt 0pt;width:18.75pt;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">65</font></p>
  </td>
  <td width="16" valign="top" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="336" valign="top" style="padding:0pt .7pt 0pt 0pt;width:252.15pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Director</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="119" valign="top" style="padding:0pt .7pt 0pt 0pt;width:88.9pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Robert J. Kenneth</font></p>
  </td>
  <td width="16" valign="top" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="25" valign="top" style="padding:0pt .7pt 0pt 0pt;width:18.75pt;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">69</font></p>
  </td>
  <td width="16" valign="top" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="336" valign="top" style="padding:0pt .7pt 0pt 0pt;width:252.15pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Director</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="119" valign="top" style="padding:0pt .7pt 0pt 0pt;width:88.9pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">William J. Nydam</font></p>
  </td>
  <td width="16" valign="top" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="25" valign="top" style="padding:0pt .7pt 0pt 0pt;width:18.75pt;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">56</font></p>
  </td>
  <td width="16" valign="top" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="336" valign="top" style="padding:0pt .7pt 0pt 0pt;width:252.15pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Director</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="119" valign="top" style="padding:0pt .7pt 0pt 0pt;width:88.9pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">C.&nbsp;Fred Toney</font></p>
  </td>
  <td width="16" valign="top" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="25" valign="top" style="padding:0pt .7pt 0pt 0pt;width:18.75pt;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">40</font></p>
  </td>
  <td width="16" valign="top" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="336" valign="top" style="padding:0pt .7pt 0pt 0pt;width:252.15pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Director</font></p>
  </td>
 </tr>
</table>

</div>

<p style="line-height:1.0pt;margin:0pt 0pt 12.0pt;"><font size="1" face="Times New Roman">&nbsp;</font></p>

<p style="line-height:1.0pt;margin:0pt 0pt 12.0pt;"><font size="1" face="Times New Roman">&nbsp;</font></p>


 <p style="font-size:10.0pt;margin:24.0pt 0pt .0001pt;text-align:center;"><font face="Times New Roman">4</font></p>
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 <p style="margin:0pt 0pt .0001pt;text-align:center;"></p>

<p style="line-height:1.0pt;margin:0pt 0pt .0001pt;"><font size="1" face="Times New Roman">&nbsp;</font></p>

<p style="font-style:italic;font-weight:bold;margin:0pt 0pt 12.0pt 10.0pt;page-break-after:auto;text-indent:-10.0pt;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;">Class&nbsp;I Directors&#151;Nominees for Election at this
Annual Meeting (Term to Expire in 2009)</font></i></b></p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt 10.0pt;page-break-after:auto;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">Thomas F. Herman, director since 2003<a name="ThomasF_HermanDirectorSince2003_054829"></a></font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Mr.&nbsp;Herman has served as a member of our board of
directors since September&nbsp;2003. Since January&nbsp;2004, Mr.&nbsp;Herman
has served as the managing partner of Oak Harbor Partners, LLC, a boutique
financial services firm that specializes in mergers, acquisitions and financed
business expansion. From June&nbsp;2003 to January&nbsp;2004, Mr.&nbsp;Herman
served as Chief Operating Officer of Good Guys,&nbsp;Inc., a consumer
electronics retailer. From July&nbsp;2001 to June&nbsp;2003, Mr.&nbsp;Herman
served as managing partner of Oak Harbor Partners, LLC. From December&nbsp;1998
to July&nbsp;2001, Mr.&nbsp;Herman served as President and Chief Executive
Officer of Employment Law Learning Tech, a distance learning company focused on
employment law. Mr.&nbsp;Herman received a B.S. degree in political science
from the University of Oregon and an M.B.A. from the University of California
at Berkeley.</font></p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt 10.0pt;page-break-after:auto;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">C.&nbsp;Fred Toney, director since 2003<a name="C_fredToneyDirectorSince2003_054850"></a></font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Mr.&nbsp;Toney has served as a member of our board of
directors since December&nbsp;2003. Since December&nbsp;2001, Mr.&nbsp;Toney
has served as a managing member of MedCap Management&nbsp;&amp; Research, LLC,
the general partner of MedCap Partners, L.P. and MedCap Partners Offshore, Ltd.
MedCap Management&nbsp;&amp; Research LLC is an investment advisory firm
specializing in healthcare, life sciences and medical technology and devices.
From February&nbsp;2001 to November&nbsp;2001, Mr.&nbsp;Toney served as
President and Chief Executive Officer, and from July&nbsp;1999 to
February&nbsp;2001 as Executive Vice President and Chief Financial Officer of
HealthCentral.com,&nbsp;Inc., a provider of healthcare e-commerce to consumers,
through the sale of its five primary operating divisions. Mr.&nbsp;Toney
previously served as senior managing partner, director of research and research
analyst at Pacific Growth Equities,&nbsp;Inc., an investment banking and
institutional brokerage firm. Mr.&nbsp;Toney has also served as research
analyst or associate at Volpe, Welty&nbsp;&amp; Company, an investment banking
firm; RCM Capital Management, an investment management firm; Donaldson,
Lufkin&nbsp;&amp; Jenrette Securities Corporation, an investment banking and
institutional brokerage firm; and Phamavite Pharmaceuticals Corporation, a
pharmaceutical manufacturing firm. Mr.&nbsp;Toney received a B.A. in economics
and English from the University of California at Davis.</font></p>

<p style="font-style:italic;font-weight:bold;margin:0pt 0pt 12.0pt 10.0pt;page-break-after:auto;text-indent:-10.0pt;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;">Class&nbsp;III Directors (Term to Expire in 2008)</font></i></b></p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt 10.0pt;page-break-after:auto;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">James D. Durham, director since 2002<a name="JamesD_DurhamDirectorSince2002_054854"></a></font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Mr.&nbsp;Durham has been our Chief Executive Officer
and the Chairman of the board of directors since his founding of Crdentia in
August&nbsp;2002. From September&nbsp;1993 to June&nbsp;2000, Mr.&nbsp;Durham
served as Chairman and Chief Executive Officer of QuadraMed Corporation, a
public company which offers a suite of software products and services focused
on the financial and clinical needs of hospitals. Mr.&nbsp;Durham received a
B.S. in industrial engineering from the University of Florida and an M.B.A.
from the University of California at Los Angeles. Mr.&nbsp;Durham is a
certified public accountant.</font></p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt 10.0pt;page-break-after:auto;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">William J. Nydam, director since 2006<a name="WilliamJ_NydamDirectorSince2006_054856"></a></font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Mr.&nbsp;Nydam has
served as a member of our board of directors since April&nbsp;2006.
Mr.&nbsp;Nydam is also a board member and the chairman of the audit committee
of iVOW,&nbsp;Inc. From March&nbsp;2003 to August&nbsp;2006, Mr.&nbsp;Nydam
served as president and chief operating officer of Endocare,&nbsp;Inc., a
publicly-traded medical device company. Prior to joining Endocare,
Mr.&nbsp;Nydam was president and chief executive officer of Pulse
Metric,&nbsp;Inc., a cardiovascular device company, from September&nbsp;2001 to
December&nbsp;2002. Mr.&nbsp;Nydam previously served as senior vice president
for Science Applications International Corporation, an employee-owned research
and engineering firm, from September&nbsp;1999 to August&nbsp;2001. Prior to
that time, Mr.&nbsp;Nydam worked for Premier,&nbsp;Inc., a national alliance of
healthcare providers, where he served as executive vice president from
April&nbsp;1996 to August&nbsp;1999, chief operating officer from May&nbsp;1992
to </font></p>


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<p style="margin:0pt 0pt 12.0pt;text-indent:0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">March&nbsp;1996 and
senior vice president and chief financial officer from January&nbsp;1986 to
April&nbsp;1992. Mr.&nbsp;Nydam holds a B.S. degree in accounting and an M.B.A.
from the University of California at Berkeley and he is a certified public
accountant.</font></p>

<p style="font-style:italic;font-weight:bold;margin:0pt 0pt 12.0pt 10.0pt;page-break-after:auto;text-indent:-10.0pt;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;">Class&nbsp;II Directors (Term to Expire in 2007)</font></i></b></p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt 10.0pt;page-break-after:auto;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">Robert J. Kenneth, director since 2002<a name="RobertJ_KennethDirectorSince2002_054900"></a></font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Mr.&nbsp;Kenneth has served as a member of our board
of directors since October&nbsp;2002. Since March&nbsp;1971, Mr.&nbsp;Kenneth
has served as President of Kenneth Associates, a privately held company that he
founded which provides staffing and professional services to hospitals and
physicians in California, focused on on-site billing staff and management
as well as off-site billing services with a goal of reducing accounts
receivable. Mr.&nbsp;Kenneth has served on the Board of Trustees of St. Francis
Memorial Hospital and the Board of Overseers for the University of California
School of Nursing and is a member of the Healthcare Financial Management
Association and the American Guild of Patient Accounts Managers.
Mr.&nbsp;Kenneth received a B.A. in business administration from Roosevelt
University and an M.B.A. from Golden Gate&nbsp;University.</font></p>

<p style="font-style:italic;font-weight:bold;margin:0pt 0pt 12.0pt 10.0pt;page-break-after:auto;text-indent:-10.0pt;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;">Executive Officers</font></i></b></p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt 10.0pt;page-break-after:auto;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">James J. TerBeest<a name="JamesJ_Terbeest_054905"></a></font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Mr.&nbsp;TerBeest has served as our Chief Financial
Officer since November&nbsp;2004. Mr.&nbsp;TerBeest served in public accounting
in the audit department of Ernst&nbsp;&amp; Young LLP for 23 years. The last
nine years of his tenure with Ernst&nbsp;&amp; Young was as a partner
supervising large national and international audit clients. From
January&nbsp;1993 until November&nbsp;2004, Mr.&nbsp;TerBeest served as Chief
Financial Officer for companies in the health care and home improvement
industries. Mr.&nbsp;TerBeest has been a partner in a small CPA firm that he
co-founded in 2000. He has also functioned as a contract Chief Financial
Officer from time to time over the past 11 years. Mr.&nbsp;TerBeest graduated
from the University of Wisconsin&#151;Whitewater with a B.S.&nbsp;degree in accounting.
He has been a Certified Public Accountant since 1973. He is a member of the
American Institute of Certified Public Accountants and several state societies.</font></p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt 10.0pt;page-break-after:auto;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">Corporate Governance<a name="CorporateGovernance_054908"></a></font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Our board of directors has determined that each of its
directors, other than James D. Durham, our Chief Executive Officer, is
independent as that term is defined under Rule&nbsp;4200 of the National
Association of Securities&#146; Dealers listing standards.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Crdentia&#146;s board of directors held 16 meetings and
acted by written consent three times during the fiscal year ended
December&nbsp;31, 2005. The board of directors has an audit committee and a
compensation committee. Each director attended 75% or more of the aggregate of
(i)&nbsp;the total number of meetings of the board of directors (held during
the period for which such person was a director) and (ii)&nbsp;the total number
of meetings held by all committees of the board of directors on which the
director served (during the periods that he served).</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Although the board of directors does not have a formal
policy regarding attendance by members of the board of directors at the Annual
Meeting, it encourages directors to attend. Each of our then-current directors
attended the 2005 Annual Meeting of stockholders.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Our compensation committee currently consists of two
directors, Mr.&nbsp;Kenneth, who serves as chairman of the committee, and
Mr.&nbsp;Herman, and is primarily responsible for reviewing and approving the
company&#146;s general compensation policies and setting compensation levels for its
executive officers. The committee held six meetings during the 2005 fiscal
year.</font></p>


 <p style="font-size:10.0pt;margin:24.0pt 0pt .0001pt;text-align:center;"><font face="Times New Roman">6</font></p> <br><hr size="3" width="100%" noshade color="#010101" align="center">

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<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Our audit committee currently consists of three
directors, Mr.&nbsp;Nydam, who serves as chairman of the committee,
Mr.&nbsp;Kenneth and Mr.&nbsp;Herman. Each of the members of the audit
committee is independent as defined pursuant to Rule&nbsp;4200 of the National
Association of Securities&#146; Dealers listing standards and as required by
applicable law and the SEC. The board of directors has designated
Mr.&nbsp;Herman as the audit committee&#146;s financial expert. The audit committee
generally meets at least quarterly to review our financial statements and to
perform its other functions. The audit committee held nine meetings during the
2005 fiscal year.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Given our limited operating history, the board of
directors has not yet formed a nominating committee for the election of
directors. Currently, the full board of directors designates nominees for
election to the board of directors at each annual meeting of stockholders.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The board of directors has not adopted a formal policy
concerning stockholder recommendations regarding the election of directors. The
absence of such a policy does not mean, however, that a recommendation would
not have been considered had one been received. Although our board of directors
has historically designated nominees for election, the board of directors will
consider nominations submitted by its stockholders, and our Bylaws contain
provisions which address the process by which a stockholder may nominate an
individual to stand for election to the board of directors at the annual
meeting. To date, the board of directors has not received any recommendations
from stockholders requesting that it consider a candidate for inclusion among
the slate of nominees in its proxy statement.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In evaluating director nominees, the board of
directors considers a number of factors, including the appropriate size of the
board of directors; the knowledge, skills and experience of nominees, including
experience in business, finance, administration or healthcare in light of
prevailing business conditions and the knowledge, skills and experience already
possessed by other members of the board of directors; experience with
accounting rules&nbsp;and practices; and the desire to balance the considerable
benefit of continuity with the periodic injection of the fresh perspective
provided by new members. The board of directors&#146; goal is to assemble a board of
directors that brings a variety of perspectives and skills derived from high
quality business and professional experience. In doing so, the board of
directors also considers candidates with appropriate non-business backgrounds.
Other than the foregoing there are no stated minimum criteria for director
nominees, although the board of directors may also consider such other factors
as it may deem are in the best interests of Crdentia and its stockholders.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The board of directors identifies nominees by first
evaluating the current members of the board of directors willing to continue in
service. Current members of the board of directors with skills and experience
that are relevant to our business and who are willing to continue in service
are considered for re-nomination, balancing the value of continuity of service
by existing members of the board of directors with that of obtaining a new
perspective. If any member of the board of directors does not wish to continue
in service or if the board of directors decides not to re-nominate a member for
re-election, the board of directors then identifies the desired skills and
experience of a new nominee in light of the criteria above. Current members of
the board of directors are polled for suggestions as to individuals meeting the
desired criteria. Research may also be performed to identify qualified
individuals. To date, the board of directors has not engaged third parties to
identify or evaluate or assist in identifying potential nominees, although it
reserves the right in the future to retain a third party search firm, if
necessary.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Historically, we have not adopted a formal process for
stockholder communications with the board of directors. Nevertheless, every
effort has been made to ensure that the views of stockholders are heard by the
board of directors or individual directors, as applicable, and that appropriate
responses are provided to stockholders in a timely manner.</font></p>


 <p style="font-size:10.0pt;margin:24.0pt 0pt .0001pt;text-align:center;"><font face="Times New Roman">7</font></p> <br><hr size="3" width="100%" noshade color="#010101" align="center">

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<p style="font-weight:bold;margin:0pt 0pt 12.0pt 10.0pt;page-break-after:auto;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">Code of Ethics<a name="CodeOfEthics_054916"></a></font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Crdentia has adopted a Code of Ethics that applies to
all of its employees, officers and directors. The Code of Ethics contains
general guidelines for conducting the business of the company consistent with
the highest standards of business ethics, and is intended to qualify as a &#147;code
of ethics&#148; within the meaning of Section&nbsp;406 of the Sarbanes-Oxley Act of
2002 and Item 406 of Regulation S-B.</font></p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt 10.0pt;page-break-after:auto;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">Report of the Audit Committee<a name="ReportOfTheAuditCommittee_054918"></a></font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The Audit Committee oversees Crdentia&#146;s financial reporting
process on behalf of its board of directors. Management has the primary
responsibility for the financial statements and the reporting process including
the systems of internal controls. In fulfilling its oversight responsibilities,
the Audit Committee reviewed the audited financial statements in Crdentia&#146;s
Annual Report on Form&nbsp;10-KSB with management, including a discussion of
the quality, not just the acceptability, of the accounting principles, the
reasonableness of significant judgments, and the clarity of disclosures in the
financial statements.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The Audit Committee reviewed with KBA Group LLP, which
is responsible for expressing an opinion on the conformity of these audited
financial statements with generally accepted accounting principles, its judgments
as to the quality, not just the acceptability, of Crdentia&#146;s accounting
principles and such other matters as are required to be discussed with the
Audit Committee under generally accepted auditing standards. In addition, the
Audit Committee discussed with KBA Group LLP its independence from management
and Crdentia, received from KBA Group LLP the written disclosures and the
letter required by Independence Standards Board Standard No.&nbsp;1, and
considered the compatibility of non-audit services with the auditors&#146;
independence.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The Audit Committee discussed with KBA Group LLP the
overall scope of its audit. The Audit Committee met with KBA Group LLP, with
and without management present, to discuss the results of its examination, its
evaluation of Crdentia&#146;s internal controls and the overall quality of
Crdentia&#146;s financial&nbsp;reporting.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In reliance on the reviews and discussions referred to
above, the Audit Committee recommended to Crdentia&#146;s board of directors that
the Company&#146;s audited financial statements be included in its Annual Report on
Form&nbsp;10-KSB for the year ended December&nbsp;31, 2005. The Audit Committee
and board of directors also recommended the ratification of the selection of
KBA Group LLP as Crdentia&#146;s independent auditors for 2006.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">This report of the Audit Committee shall not be deemed
incorporated by reference by any general statement incorporating by reference
this proxy statement into any filing under the Securities Act of 1933, as
amended, or the Securities Exchange Act of 1934, as amended, except to the
extent that Crdentia specifically incorporates this information by reference,
and shall not otherwise be deemed filed under such&nbsp;acts.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The foregoing report has been furnished by the Audit
Committee.</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;font-family:Times New Roman;width:100.0%;">
 <tr style="page-break-inside:avoid;">
  <td width="54%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:54.54%;">
  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt;"><!-- SET mrlNoTableShading --></p>
  </td>
  <td width="45%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:45.46%;">
  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt;"><!-- SET mrlNoTableShading -->William J. Nydam</p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="54%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:54.54%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="45%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:45.46%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Thomas F. Herman</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="54%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:54.54%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="45%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:45.46%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Robert J.
  Kenneth</font></p>
  </td>
 </tr>
</table>

<p style="line-height:1.0pt;margin:0pt 0pt 12.0pt;"><font size="1" face="Times New Roman">&nbsp;</font></p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt 10.0pt;page-break-after:auto;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">Director Compensation<a name="DirectorCompensation_055009"></a></font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Non-employee
directors receive an annual payment of $50,000, payable quarterly, for their
service as members of the board of directors, including attending meetings of
the board of directors. Members of the audit committee receive an annual
payment of $55,000, payable quarterly, for their service as members of the
audit committee. The chairman of the audit committee receives an annual payment
of $62,500, payable </font></p>


 <p style="font-size:10.0pt;margin:24.0pt 0pt .0001pt;text-align:center;"><font face="Times New Roman">8</font></p> <br><hr size="3" width="100%" noshade color="#010101" align="center">

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<p style="margin:0pt 0pt 12.0pt;text-indent:0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">quarterly, for his
service. All directors are reimbursed for reasonable expenses incurred in
connection with serving as a director. The directors have agreed that the cash
compensation payable to the directors shall be accrued indefinitely (but not
forgiven) and not paid until such time as the board determines that Crdentia
has sufficient cash flow.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In addition, non-employee directors are issued 3,333
shares of common stock (or options to purchase such shares) upon their election
to the board of directors. Such non-employee directors are thereafter issued
833 shares of common stock (or options to purchase such shares) in each of the
next two years of their three year term, except for the chairman of the audit
committee, who receives an aggregate of 1,666&nbsp;shares of common stock (or
options to purchase such shares) in each of the next two years. Each such grant
will have a purchase price or exercise price per share equal to the fair market
value per share of our common stock on the date of such grant.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Mr.&nbsp;Toney has waived the accrual of any cash and
non-cash compensation with respect to himself, including his right to receive
common stock or options to purchase common stock.</font></p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt 10.0pt;page-break-after:auto;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">Compensation Committee Interlocks and Insider
Participation<a name="CompensationCommitteeInterlocksAn_055013"></a></font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">There were no interlocking relationships between us
and other entities that might affect the determination of the compensation of
our directors and executive officers.</font></p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt;page-break-after:auto;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT<a name="SecurityOwnershipOfCertainBenefic_054411"></a></font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The following table sets forth information regarding
the beneficial ownership of our common stock as of December&nbsp;1, 2006 unless
otherwise noted, by:</font></p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 60.0pt;text-indent:-10.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160; </font>each of our named executive
officers;</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 60.0pt;text-indent:-10.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160; </font>each of our directors and
nominees;</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 60.0pt;text-indent:-10.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160; </font>each person known by us to
beneficially own more than 5% of our common stock; and</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 60.0pt;text-indent:-10.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160; </font>all of our executive
officers, directors and nominees as a group.</p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Information with respect to beneficial ownership has
been furnished by each executive officer, director, nominee or beneficial owner
of more than 5% of our common stock. Beneficial ownership is determined in
accordance with the rules&nbsp;of the Securities and Exchange Commission and
includes voting and investment power with respect to the securities. Except as
indicated by footnote, and subject to applicable community property laws, the
persons named in the table have sole voting and investment power with respect
to all shares of common stock shown as beneficially owned by them.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Percentage of beneficial ownership is based on
14,344,230 shares of common stock outstanding as of December&nbsp;1, 2006. The
number of shares of common stock beneficially owned by each person and the
percentage ownership of each person include any shares of common stock
underlying options or warrants held by such persons that are exercisable within
60 days of December&nbsp;1, 2006, if any.</font></p>

<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>


 <p style="font-size:10.0pt;margin:24.0pt 0pt .0001pt;text-align:center;"><font face="Times New Roman">9</font></p>
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 <p style="margin:0pt 0pt .0001pt;text-align:center;"></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Unless otherwise indicated, the address for the
following stockholders is c/o Crdentia Corp., 5001 LBJ Freeway, Suite&nbsp;850,
Dallas, Texas 75244.</font></p>

<div align="center" style="font-family:Times New Roman;">

<table border="0" cellspacing="0" cellpadding="0" style="border-collapse:collapse;">
 <tr style="page-break-inside:avoid;">
  <td width="378" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:283.35pt;">
  <p align="left" style="font-size:8.0pt;font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:left;"><!-- SET mrlHTMLTableCenter -->Name&nbsp;and&nbsp;Address&nbsp;of&nbsp;Beneficial&nbsp;Owner</p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="62" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:46.5pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Number<br>
  of&nbsp;Shares<br>
  Beneficially<br>
  Owned</font></b></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="61" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:45.7pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Percentage<br>
  of&nbsp;Shares<br>
  Beneficially<br>
  Owned</font></b></p>
  </td>
  <td width="12" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.15pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="378" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:283.35pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Executive Officers, Directors and Nominees:</font></b></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="62" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:46.5pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="61" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:45.7pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.15pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="378" valign="top" style="padding:0pt .7pt 0pt 0pt;width:283.35pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">James D. Durham(1)</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="62" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:46.5pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1,012,049</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="61" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:45.7pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">7.06</font></p>
  </td>
  <td width="12" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.15pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">%</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="378" valign="top" style="padding:0pt .7pt 0pt 0pt;width:283.35pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">James J. TerBeest</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="62" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:46.5pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">55,000</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="61" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:45.7pt;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">*</font></p>
  </td>
  <td width="12" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.15pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="378" valign="top" style="padding:0pt .7pt 0pt 0pt;width:283.35pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Thomas F. Herman(2)</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="62" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:46.5pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2,523</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="61" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:45.7pt;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">*</font></p>
  </td>
  <td width="12" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.15pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="378" valign="top" style="padding:0pt .7pt 0pt 0pt;width:283.35pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Robert J. Kenneth(3)</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="62" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:46.5pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">23,173</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="61" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:45.7pt;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">*</font></p>
  </td>
  <td width="12" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.15pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="378" valign="top" style="padding:0pt .7pt 0pt 0pt;width:283.35pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">William J. Nydam</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="62" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:46.5pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">0</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="61" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:45.7pt;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">*</font></p>
  </td>
  <td width="12" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.15pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="378" valign="top" style="padding:0pt .7pt 0pt 0pt;width:283.35pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">C.&nbsp;Fred Toney(4)</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="62" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:46.5pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">11,176,769</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="61" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:45.7pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">77.92</font></p>
  </td>
  <td width="12" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.15pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">%</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="378" valign="top" style="padding:0pt .7pt 0pt 0pt;width:283.35pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">5% Stockholders:</font></b></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="62" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:46.5pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="61" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:45.7pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.15pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="378" valign="top" style="padding:0pt .7pt 0pt 0pt;width:283.35pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">MedCap Partners, L.P.</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="62" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:46.5pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">10,999,519</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="61" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:45.7pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">76.68</font></p>
  </td>
  <td width="12" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.15pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">%</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="378" valign="top" style="padding:0pt .7pt 0pt 0pt;width:283.35pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">500 Third Street, Suite&nbsp;535 San Francisco, CA 94107</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="62" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:46.5pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="61" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:45.7pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.15pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="378" valign="top" style="padding:0pt .7pt 0pt 0pt;width:283.35pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">All directors and executive officers as a group (6 persons)(5)</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="62" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:46.5pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">12,269,514</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="61" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:45.7pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">85.54</font></p>
  </td>
  <td width="12" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.15pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">%</font></p>
  </td>
 </tr>
</table>

</div>

<p style="line-height:1.0pt;margin:0pt 0pt 12.0pt;"><font size="1" face="Times New Roman">&nbsp;</font></p>

<div style="margin:0pt 0pt .0001pt;page-break-after:auto;"><hr size="1" width="160" noshade color="black" align="left" style="width:120.0pt;"></div>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 20.0pt;text-indent:-20.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">*</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Indicates
beneficial ownership of less than 1% of the total outstanding common stock.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 20.0pt;text-indent:-20.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(1)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Includes
(i)&nbsp;39,966 shares of common stock held with his spouse, Sandra J. Durham,
as community property; (ii)&nbsp;1,333 shares of common stock held by Paine
Webber as custodian for the IRA FBO James D. Durham; (iii)&nbsp;29,632 shares
of common stock held by the James D. Durham Living Trust (1997), as amended;
(iv)&nbsp;6,666 shares of common stock held by RCMJ, LLC, as its managing
member; (v)&nbsp;350,000 shares of restricted common stock held by Mr.&nbsp;Durham;
(vi)&nbsp;438,877 shares of common stock held by Durham Properties, LLC;
(vii)&nbsp;92,242 shares of common stock issuable within 60 days of
December&nbsp;1, 2006 upon the exercise of rights pursuant to a Common Stock
Purchase Agreement dated May&nbsp;15, 2002; and (viii)&nbsp;43,333 shares
subject to options exercisable within 60 days of December&nbsp;1, 2006.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 20.0pt;text-indent:-20.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(2)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Consists
of 2,523 shares subject to options exercisable within 60 days of
December&nbsp;1, 2006.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 20.0pt;text-indent:-20.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(3)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Includes
(i)&nbsp;3,333 shares of common stock held by Mr.&nbsp;Kenneth; (ii)&nbsp;19,447
shares of common stock held by the Kenneth Family Trust U/A 3/11/87; and
(iii)&nbsp;393 shares subject to options exercisable within 60 days of
December&nbsp;1, 2006.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 20.0pt;text-indent:-20.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(4)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Includes
(i)&nbsp;10,999,519 shares of common stock held by MedCap Partners L.P. and
(ii)&nbsp;177,250&#160; shares of common stock
held by MedCap Master Fund L.P. C.&nbsp;Fred Toney, a member of the board of
directors, is managing partner of MedCap Management&nbsp;&amp; Research, LLC,
the general partner of MedCap Partners L.P. and MedCap Master Fund L.P.
Mr.&nbsp;Toney disclaims beneficial ownership of the shares held by MedCap
Partners, L.P. and MedCap Master Fund L.P., except to the extent of his
pecuniary interest therein.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 20.0pt;text-indent:-20.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(5)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Includes
138,491 shares subject to options and purchase rights exercisable within 60
days of December&nbsp;1, 2006.</p>


 <p style="font-size:10.0pt;margin:24.0pt 0pt .0001pt;text-align:center;"><font face="Times New Roman">10</font></p> <br><hr size="3" width="100%" noshade color="#010101" align="center">

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<p style="font-weight:bold;margin:0pt 0pt 12.0pt;page-break-after:auto;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">EXECUTIVE COMPENSATION<a name="ExecutiveCompensation_054600"></a></font></b></p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt 10.0pt;page-break-after:auto;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">Summary Compensation Table<a name="SummaryCompensationTable_054600"></a></font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The following table summarizes the compensation paid
to or earned by our Chief Executive Officer, former President, and Chief
Financial Officer and Secretary (the &#147;named executive officers&#148;).</font></p>

<table border="0" cellspacing="0" cellpadding="0" style="border-collapse:collapse;font-family:Times New Roman;margin-left:44.0pt;">
 <tr style="page-break-inside:avoid;">
  <td width="137" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:103.0pt;">
  <p style="font-size:8.0pt;font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><!-- SET mrlNoTableShading --><!-- SET mrlHTMLTableLeft --></p>
  </td>
  <td width="12" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="35" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:26.4pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="11" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.4pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="67" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:50.05pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.25pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="67" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:50.05pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.25pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="150" colspan="3" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:112.35pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Long-Term<br>
  Compensation&nbsp;Award</font></b></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.25pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="67" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:50.05pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.75pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="137" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:103.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="12" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="35" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:26.4pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="11" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.4pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="150" colspan="4" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:112.35pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Annual</font></b></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.25pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="67" valign="bottom" style="border:none;padding:0pt .7pt 0pt 0pt;width:50.05pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Restricted</font></b></p>
  </td>
  <td width="16" valign="bottom" style="border:none;border-top:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:12.25pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="67" valign="bottom" style="border:none;border-top:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:50.05pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Securities</font></b></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.25pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="67" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:50.05pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.75pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="137" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:103.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="12" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="35" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:26.4pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="11" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.4pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="150" colspan="4" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:112.35pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Compensation</font></b></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.25pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="67" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:50.05pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Stock</font></b></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.25pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="67" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:50.05pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Underlying</font></b></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.25pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="67" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:50.05pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">All&nbsp;Other</font></b></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.75pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="137" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:103.0pt;">
  <p align="left" style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Name&nbsp;and&nbsp;Principal&nbsp;Position</font></b></p>
  </td>
  <td width="12" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="35" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:26.4pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Year</font></b></p>
  </td>
  <td width="11" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.4pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="67" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:50.05pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Salary</font></b></p>
  </td>
  <td width="16" valign="bottom" style="border:none;border-top:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:12.25pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="67" valign="bottom" style="border-bottom:solid windowtext 1.0pt;border-left:none;border-right:none;border-top:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:50.05pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Bonus</font></b></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.25pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="67" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:50.05pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Award(s)</font></b></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.25pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="67" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:50.05pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Options/SARs</font></b></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.25pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="67" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:50.05pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Compensation</font></b></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.75pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="137" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:103.0pt;">
  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-indent:-10.0pt;"><!-- SET mrlShadeRow -->James D. Durham</p>
  </td>
  <td width="12" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="35" valign="bottom" style="border:none;padding:0pt .7pt 0pt 0pt;width:26.4pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2005</font></p>
  </td>
  <td width="11" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.4pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="7" valign="bottom" style="border:none;padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="60" valign="bottom" style="border:none;border-top:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:45.05pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">320,000</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.25pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="67" valign="bottom" style="border:none;padding:0pt .7pt 0pt 0pt;width:50.05pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.25pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="67" valign="bottom" style="border:none;padding:0pt .7pt 0pt 0pt;width:50.05pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">200,000</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.25pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="67" valign="bottom" style="border:none;padding:0pt .7pt 0pt 0pt;width:50.05pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.25pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="67" valign="bottom" style="border:none;padding:0pt .7pt 0pt 0pt;width:50.05pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.75pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="137" valign="top" style="padding:0pt .7pt 0pt 0pt;width:103.0pt;">
  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-indent:-10.0pt;"><!-- SET mrlShadeRow --><i>Chairman and Chief</i></p>
  </td>
  <td width="12" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="35" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:26.4pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2004</font></p>
  </td>
  <td width="11" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.4pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="7" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="60" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:45.05pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">316,103</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.25pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="67" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:50.05pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.25pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="67" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:50.05pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.25pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="67" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:50.05pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">43,333</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.25pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="67" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:50.05pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.75pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="137" valign="top" style="padding:0pt .7pt 0pt 0pt;width:103.0pt;">
  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-indent:-10.0pt;"><!-- SET mrlShadeRow --><i>Executive Officer</i></p>
  </td>
  <td width="12" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="35" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:26.4pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2003</font></p>
  </td>
  <td width="11" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.4pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="7" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="60" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:45.05pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">200,000</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.25pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="67" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:50.05pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.25pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="67" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:50.05pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.25pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="67" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:50.05pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">233,333</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.25pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="67" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:50.05pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.75pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="137" valign="top" style="padding:0pt .7pt 0pt 0pt;width:103.0pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Pamela G.
  Atherton(l)</font></p>
  </td>
  <td width="12" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="35" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:26.4pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2005</font></p>
  </td>
  <td width="11" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.4pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="7" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="60" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:45.05pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">175,000</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.25pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(3)</font></p>
  </td>
  <td width="67" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:50.05pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.25pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="67" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:50.05pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">90,000</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.25pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(2)</font></p>
  </td>
  <td width="67" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:50.05pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.25pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="67" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:50.05pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.75pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="137" valign="top" style="padding:0pt .7pt 0pt 0pt;width:103.0pt;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-indent:-10.0pt;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;">Former President</font></i></p>
  </td>
  <td width="12" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="35" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:26.4pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2004</font></p>
  </td>
  <td width="11" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.4pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="7" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="60" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:45.05pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">175,000</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.25pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="67" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:50.05pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.25pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="67" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:50.05pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.25pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="67" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:50.05pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">21,666</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.25pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="67" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:50.05pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.75pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="137" valign="top" style="padding:0pt .7pt 0pt 0pt;width:103.0pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-indent:-10.0pt;"><i><font size="2" face="Times New Roman" style="font-size:1.0pt;font-style:italic;">&nbsp;</font></i></p>
  </td>
  <td width="12" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="35" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:26.4pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2003</font></p>
  </td>
  <td width="11" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.4pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="7" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="60" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:45.05pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">71,934</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.25pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="67" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:50.05pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.25pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="67" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:50.05pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.25pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="67" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:50.05pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">20,607</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.25pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="67" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:50.05pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.75pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="137" valign="top" style="padding:0pt .7pt 0pt 0pt;width:103.0pt;">
  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-indent:-10.0pt;"><!-- SET mrlShadeRow -->James J. TerBeest</p>
  </td>
  <td width="12" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="35" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:26.4pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2005</font></p>
  </td>
  <td width="11" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.4pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="7" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="60" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:45.05pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">175,000</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.25pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(4)</font></p>
  </td>
  <td width="67" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:50.05pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.25pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="67" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:50.05pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">50,000</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.25pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="67" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:50.05pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.25pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="67" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:50.05pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.75pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="137" valign="top" style="padding:0pt .7pt 0pt 0pt;width:103.0pt;">
  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-indent:-10.0pt;"><!-- SET mrlShadeRow --><i>Chief Financial</i></p>
  </td>
  <td width="12" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="35" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:26.4pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2004</font></p>
  </td>
  <td width="11" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.4pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="7" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="60" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:45.05pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">20,192</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.25pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="67" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:50.05pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.25pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="67" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:50.05pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.25pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="67" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:50.05pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.25pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="67" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:50.05pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.75pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="137" valign="top" style="padding:0pt .7pt 0pt 0pt;width:103.0pt;">
  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt 20.0pt;text-indent:-10.0pt;"><!-- SET mrlShadeRow --><i>Officer and Secretary</i></p>
  </td>
  <td width="12" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.0pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="35" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:26.4pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.4pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="67" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:50.05pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.25pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="67" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:50.05pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.25pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="67" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:50.05pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.25pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="67" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:50.05pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.25pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="67" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:50.05pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.75pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
</table>

<p style="line-height:1.0pt;margin:0pt 0pt 12.0pt;"><font size="1" face="Times New Roman">&nbsp;</font></p>

<div style="margin:0pt 0pt .0001pt;page-break-after:auto;"><hr size="1" width="160" noshade color="black" align="left" style="width:120.0pt;"></div>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-indent:-36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(1)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Ms.&nbsp;Atherton
resigned effective January&nbsp;7, 2006.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-indent:-36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(2)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>All
90,000 shares were to vest upon the achievement of certain performance targets.
Those targets were not achieved as of December&nbsp;31, 2005 and therefore the
restricted stock has been forfeited.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-indent:-36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(3)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Ms.&nbsp;Atherton
did not begin to receive a salary from Crdentia until August&nbsp;2003.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-indent:-36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(4)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Mr.&nbsp;TerBeest
began employment in November&nbsp;2004.</p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt 10.0pt;page-break-after:auto;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">Option Grants in Last Fiscal Year<a name="OptionGrantsInLastFiscalYear_055558"></a></font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We did not grant any stock options made to the named
executive officers during the fiscal year ended December&nbsp;31, 2005.</font></p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt 10.0pt;page-break-after:auto;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">Aggregated Option Exercises in Last Fiscal Year and
Fiscal Year-End Option Values<a name="AggregatedOptionExercisesInLastFi_055603"></a></font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The following table sets forth certain information
with respect to the named executive officers, concerning the exercise of
options during our fiscal year ended December&nbsp;31, 2005 and unexercised
options held by them at the end of that fiscal year. No stock appreciation
rights were exercised by the named executive officers during such fiscal year,
and no stock appreciation rights were held by them at the end of such fiscal
year.</font></p>

<table border="0" cellspacing="0" cellpadding="0" style="border-collapse:collapse;font-family:Times New Roman;margin-left:60.0pt;">
 <tr style="page-break-inside:avoid;">
  <td width="125" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:93.55pt;">
  <p style="font-size:8.0pt;font-weight:bold;line-height:normal;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><!-- SET mrlHTMLTableLeft --></p>
  </td>
  <td width="8" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:6.0pt;">
  <p style="font-weight:bold;line-height:normal;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="45" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:33.5pt;">
  <p style="font-weight:bold;line-height:normal;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Number<br>
  of<br>
  Shares<br>
  Acquired<br>
  on</font></b></p>
  </td>
  <td width="8" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:6.0pt;">
  <p style="font-weight:bold;line-height:normal;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="41" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:30.85pt;">
  <p style="font-weight:bold;line-height:normal;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Value</font></b></p>
  </td>
  <td width="8" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:6.0pt;">
  <p style="font-weight:bold;line-height:normal;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="129" colspan="3" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:96.55pt;">
  <p style="font-weight:bold;line-height:normal;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Number&nbsp;of&nbsp;Shares<br>
  Underlying&nbsp;Unexercised<br>
  Options&nbsp;as&nbsp;of<br>
  December&nbsp;31,&nbsp;2005</font></b></p>
  </td>
  <td width="8" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:6.0pt;">
  <p style="font-weight:bold;line-height:normal;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="136" colspan="5" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:102.0pt;">
  <p style="font-weight:bold;line-height:normal;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Value&nbsp;of&nbsp;Unexercised&nbsp;In-the<br>
  Money&nbsp;Options&nbsp;as&nbsp;of<br>
  December&nbsp;31,&nbsp;2005(1)</font></b></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.7pt;">
  <p style="font-weight:bold;line-height:normal;margin:0pt 0pt .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="125" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:93.55pt;">
  <p align="left" style="font-weight:bold;line-height:normal;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Name</font></b></p>
  </td>
  <td width="8" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:6.0pt;">
  <p style="font-weight:bold;line-height:normal;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="45" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:33.5pt;">
  <p style="font-weight:bold;line-height:normal;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Exercise</font></b></p>
  </td>
  <td width="8" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:6.0pt;">
  <p style="font-weight:bold;line-height:normal;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="41" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:30.85pt;">
  <p style="font-weight:bold;line-height:normal;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Realized</font></b></p>
  </td>
  <td width="8" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:6.0pt;">
  <p style="font-weight:bold;line-height:normal;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="55" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:41.05pt;">
  <p style="font-weight:bold;line-height:normal;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Exercisable</font></b></p>
  </td>
  <td width="8" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:6.0pt;">
  <p style="font-weight:bold;line-height:normal;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="66" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:49.5pt;">
  <p style="font-weight:bold;line-height:normal;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Unexercisable</font></b></p>
  </td>
  <td width="8" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:6.0pt;">
  <p style="font-weight:bold;line-height:normal;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="62" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:46.5pt;">
  <p style="font-weight:bold;line-height:normal;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Exercisable</font></b></p>
  </td>
  <td width="8" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:6.0pt;">
  <p style="font-weight:bold;line-height:normal;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="66" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:49.5pt;">
  <p style="font-weight:bold;line-height:normal;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Unexercisable</font></b></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.7pt;">
  <p style="font-weight:bold;line-height:normal;margin:0pt 0pt .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="125" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:93.55pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">James D. Durham</font></p>
  </td>
  <td width="8" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:6.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="45" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:33.5pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="8" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:6.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="41" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:30.85pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="8" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:6.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="55" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:41.05pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">135,575</font></p>
  </td>
  <td width="8" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:6.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="66" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:49.5pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">233,333</font></p>
  </td>
  <td width="8" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:6.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="7" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="55" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:41.5pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2,304,775</font></p>
  </td>
  <td width="8" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:6.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="7" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="59" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:44.5pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3,966,661</font></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.7pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="125" valign="top" style="padding:0pt .7pt 0pt 0pt;width:93.55pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Pamela G.
  Atherton</font></p>
  </td>
  <td width="8" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:6.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="45" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:33.5pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="8" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:6.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="41" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:30.85pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="8" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:6.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="55" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:41.05pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">42,742</font></p>
  </td>
  <td width="8" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:6.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="66" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:49.5pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="8" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:6.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="7" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="55" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:41.5pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="8" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:6.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="66" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:49.5pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.7pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="125" valign="top" style="padding:0pt .7pt 0pt 0pt;width:93.55pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">James J. TerBeest</font></p>
  </td>
  <td width="8" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:6.0pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="45" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:33.5pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="8" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:6.0pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="41" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:30.85pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="8" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:6.0pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="55" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:41.05pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="8" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:6.0pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="66" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:49.5pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="8" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:6.0pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="62" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:46.5pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="8" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:6.0pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="66" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:49.5pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.7pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr height="0">
  <td width="125" style="border:none;"></td>
  <td width="8" style="border:none;"></td>
  <td width="45" style="border:none;"></td>
  <td width="8" style="border:none;"></td>
  <td width="41" style="border:none;"></td>
  <td width="8" style="border:none;"></td>
  <td width="55" style="border:none;"></td>
  <td width="8" style="border:none;"></td>
  <td width="66" style="border:none;"></td>
  <td width="8" style="border:none;"></td>
  <td width="7" style="border:none;"></td>
  <td width="55" style="border:none;"></td>
  <td width="8" style="border:none;"></td>
  <td width="7" style="border:none;"></td>
  <td width="59" style="border:none;"></td>
  <td width="2" style="border:none;"></td>
 </tr>
</table>

<p style="line-height:1.0pt;margin:0pt 0pt 12.0pt;"><font size="1" face="Times New Roman">&nbsp;</font></p>

<div style="margin:0pt 0pt .0001pt;page-break-after:auto;"><hr size="1" width="160" noshade color="black" align="left" style="width:120.0pt;"></div>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-indent:-36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(1)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Based
on the market price of $17.00 per share, which was the average of the high and
low bid prices per share of Crdentia&#146;s common stock on the OTC Bulletin Board
on the last day its common stock </p>


 <p style="font-size:10.0pt;margin:24.0pt 0pt .0001pt;text-align:center;"><font face="Times New Roman">11</font></p> <br><hr size="3" width="100%" noshade color="#010101" align="center">

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<p style="margin:0pt 0pt 12.0pt 36.0pt;text-indent:0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">was traded during
the fiscal year ended December&nbsp;31, 2005, less the exercise price payable
upon exercise of such options.</font></p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt 10.0pt;page-break-after:auto;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">Employment Contracts and Severance Agreements<a name="EmploymentContractsAndSeveranceAg_060459"></a></font></b></p>

<p style="font-style:italic;margin:0pt 0pt 12.0pt 36.0pt;page-break-after:auto;text-indent:0pt;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;">Employment
Agreement with James D. Durham</font></i></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We have entered into an Employment Agreement with
James D. Durham, our Chairman and Chief Executive Officer. Pursuant to the
Employment Agreement, as amended to date, we have agreed to pay Mr.&nbsp;Durham
a base salary $320,000 for the 2004 calendar year, subject to adjustment each
calendar year thereafter by the board of directors. In the event that
Mr.&nbsp;Durham becomes subject to an &#147;Involuntary Termination,&#148; we have agreed
to pay severance to Mr.&nbsp;Durham in one lump sum within 30 days of the date
of such Involuntary Termination in an aggregate amount equal to two times his then-current
rate of base salary. In addition, for a period of 24 months, Mr.&nbsp;Durham
would also be provided with life, health and disability plan benefits.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">As used in the Employment Agreement, the term
&#147;Involuntary Termination&#148; means the termination of Mr.&nbsp;Durham&#146;s employment
involuntarily upon his discharge or dismissal or our failure to renew the
Employment Agreement. In addition, the term &#147;Involuntary Termination&#148; also
means his termination, voluntarily or involuntarily, provided such termination occurs
in connection with (i)&nbsp;a change in his position or any successor which
materially reduces his level of responsibility or changes his title from
Chairman and Chief Executive Officer, (ii)&nbsp;a reduction in his level of
compensation, (iii)&nbsp;a relocation of his principal place of employment by
more than 45 miles without his written consent, (iv)&nbsp;our failure to
qualify for trading on the OTC Bulletin Board within 90 days of the date of the
Employment Agreement or failure to be listed for trading on the OTC Bulletin
Board or another national securities exchange continuously at all times
thereafter, or (v)&nbsp;the commencement of any action, arbitration, audit,
hearing, investigation, litigation or suit conducted or heard by or before, or
otherwise involving, the SEC, the National Association of Securities Dealers or
any other federal or state governmental body which has a material adverse
effect on the price at which our securities trade and is not principally
attributable to his actions or omissions.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Under the Employment Agreement, if Mr.&nbsp;Durham
receives the benefit of any payment or distribution of any type from us, any of
our affiliates, any person who acquires ownership or effective control of us or
ownership of a substantial portion of our assets (within the meaning of
Section&nbsp;280G of the Code and the regulations thereunder) or any affiliate
of such person, pursuant to the terms of the Employment Agreement or otherwise
(the &#147;Total Payments&#148;), that is subject to the excise tax imposed by
Section&nbsp;4999 of the Code or any interest or penalties with respect to such
excise tax (collectively, the &#147;Excise Tax&#148;), then Mr.&nbsp;Durham will be
entitled to receive an additional payment (a &#147;Gross-Up Payment&#148;) in an amount
such that after payment by Mr.&nbsp;Durham of all taxes imposed upon the
Gross-Up Payment, including any Excise Tax, Mr.&nbsp;Durham will retain an
amount of the Gross-Up Payment equal to the Excise Tax imposed on the Total
Payments.</font></p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In addition, under the Employment Agreement, in the
event that, during the term of the Employment Agreement, we close a sale
transaction which constitutes a change in control, Mr.&nbsp;Durham will be
entitled to receive a bonus in the amount of one and one-half percent (1</font><font size="1" style="font-size:6.0pt;position:relative;top:-3.0pt;">1</font><font face="Symbol">&#164;</font><font size="1" style="font-size:6.0pt;">2</font>%)
of the Total Consideration actually paid to our stockholders. The term &#147;Total
Consideration&#148; means the aggregate consideration actually paid to our
stockholders and does not include &#147;earn-out&#148;, escrow, hold back or similar
contingent payments unless and until such amounts are actually paid to our
stockholders. Payments will be made at the same time and in the same form and
combination (whether in cash, securities or other property) as the form and
combination in which the Total Consideration is paid to the stockholders.</p>


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<p style="font-style:italic;margin:0pt 0pt 12.0pt 36.0pt;page-break-after:auto;text-indent:0pt;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;">Option
Grant to James D. Durham</font></i></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">On August&nbsp;3, 2004, Mr.&nbsp;Durham was granted an
option to purchase 86,666 shares of common stock, at a price per share of
$31.00. This option is exercisable with respect to 43,333 shares and, due to
the failure to satisfy certain vesting provisions, the option terminated with
respect to the remaining 43,333 shares on December&nbsp;31, 2004. This option
terminates in full on August&nbsp;2, 2014 and is exercisable for a period of
three (3)&nbsp;months following the termination of Mr.&nbsp;Durham&#146;s employment
or service to us, provided that the option may be exercised for a period of 12
months following the termination of Mr.&nbsp;Durham&#146;s employment or service as
a result of Mr.&nbsp;Durham&#146;s disability or death.</font></p>

<p style="font-style:italic;margin:0pt 0pt 12.0pt 36.0pt;page-break-after:auto;text-indent:0pt;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;">Restricted
Stock Bonus Agreement with James D. Durham</font></i></p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We entered into a Restricted Stock Bonus Agreement
with Mr.&nbsp;Durham dated May&nbsp;31, 2005. Pursuant to the agreement, we
issued to Mr.&nbsp;Durham 200,000 shares of Crdentia common stock with an
aggregate fair market value of $3,400,000. In the event that the average daily
trading volume of our common stock over any consecutive 30 day period equals or
exceeds 10,000 shares (the &#147;Trading Volume Goal&#148;), one fortieth (</font><font size="1" style="font-size:6.0pt;position:relative;top:-3.0pt;">1</font><font face="Symbol">&#164;</font><font size="1" style="font-size:6.0pt;">40</font>)
of the shares vests on the Wednesday of each week following the achievement of
the Trading Volume Goal for a period of 40 weeks until the shares are fully vested.
In the event of a &#147;Corporate Transaction&#148; (as defined in the agreement), the
shares immediately become fully vested if, within five years after the
Corporation Transaction, Mr.&nbsp;Durham&#146;s service is terminated by the
successor company, us or a related entity without cause or voluntarily by
Mr.&nbsp;Durham with good reason.</p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">For purposes of the agreement, Mr.&nbsp;Durham may be
terminated for cause in the event of Mr.&nbsp;Durham&#146;s: (i)&nbsp;performance of
any act or failure to perform any act in bad faith and to the detriment of
Crdentia or a related entity; (ii)&nbsp;dishonesty, intentional misconduct or
material breach of any agreement with us or a related entity; or
(iii)&nbsp;commission of a crime involving dishonesty, breach of trust, or
physical or emotional harm to any person. Mr.&nbsp;Durham may voluntarily
terminate his services for good reason for: (i)&nbsp;any reduction in his base
salary to a level below that in effect at any time within the preceding
six&nbsp;(6)&nbsp;months; or (ii)&nbsp;being required to be based at any place
outside a 45-mile radius from his job location, except for reasonably required
business travel.</font></p>

<p style="font-style:italic;margin:0pt 0pt 12.0pt 36.0pt;page-break-after:auto;text-indent:0pt;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;">Restricted
Stock Bonus Agreement with James D. Durham</font></i></p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We entered into another Restricted Stock Bonus
Agreement with Mr.&nbsp;Durham dated effective March&nbsp;24, 2006. Pursuant to
the agreement, we issued to Mr.&nbsp;Durham 150,000 shares of Crdentia common
stock with an aggregate fair market value of $675,000. One quarter (</font><font size="1" style="font-size:6.0pt;position:relative;top:-3.0pt;">1</font><font face="Symbol">&#164;</font><font size="1" style="font-size:6.0pt;">4</font>)
of the total shares vest on March&nbsp;24, 2007 and one forty-eighth (<font size="1" style="font-size:6.0pt;position:relative;top:-3.0pt;">1</font><font face="Symbol">&#164;</font><font size="1" style="font-size:6.0pt;">48</font>)
of the total shares vest monthly thereafter. In the event of a &#147;Corporate
Transaction&#148; (as defined in the agreement), the shares shall immediately become
fully vested if, within five years after the Corporation Transaction,
Mr.&nbsp;Durham&#146;s service is terminated by the successor company, us or a related
entity without cause or voluntarily by Mr.&nbsp;Durham with good reason.</p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">For purposes of the agreement, Mr.&nbsp;Durham may be
terminated for cause in the event of Mr.&nbsp;Durham&#146;s: (i)&nbsp;performance of
any act or failure to perform any act in bad faith and to the detriment of us
or a related entity; (ii)&nbsp;dishonesty, intentional misconduct or material
breach of any agreement with us or a related entity; or (iii)&nbsp;commission
of a crime involving dishonesty, breach of trust, or physical or emotional harm
to any person. Mr.&nbsp;Durham may voluntarily terminate his services for good
reason for: (i)&nbsp;any reduction in his base salary to a level below that in
effect at any time within the preceding six&nbsp;(6)&nbsp;months; or
(ii)&nbsp;being required to be based at any place outside a 45-mile radius from
his job location, except for reasonably required business travel.</font></p>


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<p style="font-style:italic;margin:0pt 0pt 12.0pt 36.0pt;page-break-after:auto;text-indent:0pt;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;">Bonus
and Other Agreement with James D. Durham</font></i></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">On December&nbsp;31, 2003, we entered into a Bonus and
Other Agreement with Mr.&nbsp;Durham, pursuant to which we agreed, among other
things, to pay to Mr.&nbsp;Durham cash bonuses in the amount of $540,000 on
each of December&nbsp;31, 2006 and January&nbsp;4, 2007. On November&nbsp;17,
2005 we entered into an Amendment to Bonus and Other Agreement with
Mr.&nbsp;Durham, pursuant to which the Bonus and Other Agreement was amended to
provide that we will pay to Mr.&nbsp;Durham cash bonuses in the amount of
$540,000 on each of December&nbsp;31, 2008 and January&nbsp;4, 2009.</font></p>

<p style="font-style:italic;margin:0pt 0pt 12.0pt 36.0pt;page-break-after:auto;text-indent:0pt;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;">Other
Equity Arrangements with James D. Durham</font></i></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We entered into a Common Stock Purchase Agreement
dated May&nbsp;15, 2002 with Mr.&nbsp;Durham, pursuant to which Mr.&nbsp;Durham
had the right to purchase, at a purchase price of $0.003 per share, up to that
number of additional shares of common stock equal to 25% of the aggregate
number of additional shares of common stock and other securities convertible
into common stock issued or issuable in connection with any acquisitions we
complete on or before August&nbsp;7, 2004. We issued an aggregate of 368,970
shares as consideration for the acquisitions of Baker Anderson
Christie,&nbsp;Inc., New Age Staffing,&nbsp;Inc., Nurses Network,&nbsp;Inc.,
PSR Nurse Recruiting,&nbsp;Inc. and PSR Nurses Holdings Corp. As a result of
the completion of these acquisitions, Mr.&nbsp;Durham has the right to purchase
up to 92,242 shares of common stock at $0.003 per share.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In December&nbsp;2003, our board of directors approved
certain modifications to our equity arrangements with Mr.&nbsp;Durham. In
connection with these modifications, Mr.&nbsp;Durham agreed to relinquish
certain rights pursuant to the Common Stock Purchase Agreement to purchase additional
shares of our common stock that accrue to him after December&nbsp;31, 2003 in
connection with acquisitions that occur either before or after
December&nbsp;31, 2003. With respect to Mr.&nbsp;Durham&#146;s rights to purchase an
additional 92,242 shares of common stock that accrued to him prior to such
date, we agreed to extend Mr.&nbsp;Durham&#146;s right to purchase such additional
shares to 15 years after the Vesting Expiration Date (as defined in the Common
Stock Purchase Agreement). In consideration for Mr.&nbsp;Durham&#146;s modification
of his purchase right, our board of directors approved the issuance to him of
an option (the &#147;Option&#148;) to purchase up to 233,333 shares of our common stock
at an exercise price of $3.00 per share, which expires on December&nbsp;31,
2018. Mr.&nbsp;Durham is fully vested in the Option, which is exercisable by
him in accordance with the following schedule: One hundred percent (100%) of
the shares of our common stock subject to the Option shall be exercisable by
Mr.&nbsp;Durham on December&nbsp;31, 2008. Notwithstanding the foregoing, a certain
number of shares of common stock subject to the Option may be exercised prior
to December&nbsp;31, 2008 upon the closing of certain acquisitions by us. In
addition to the issuance of the Option, we also entered into a Bonus and Other
Agreement with Mr.&nbsp;Durham pursuant to which Crdentia agreed to pay to
Mr.&nbsp;Durham two cash bonuses in the amount of $540,000 on each of
December&nbsp;31, 2006 and January&nbsp;4, 2007. The Bonus and Other Agreement
was amended on November&nbsp;17, 2005 to provide that Mr.&nbsp;Durham will
receive two cash bonuses in the amount of $540,000 on each of December&nbsp;31,
2008 and January&nbsp;4, 2009.</font></p>

<p style="font-style:italic;margin:0pt 0pt 12.0pt 36.0pt;page-break-after:auto;text-indent:0pt;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;">Separation
Agreement and General Release of Claims with Pamela G. Atherton</font></i></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Ms.&nbsp;Atherton&#146;s employment was terminated on
January&nbsp;7, 2006. In connection with such termination, on January&nbsp;7,
2006, we executed a Separation Agreement and a General Release of Claims with
Ms.&nbsp;Atherton. The Separation Agreement provides Ms.&nbsp;Atherton with
certain benefits in exchange for, among other things, her providing us with
consulting services for a one year period (the &#147;Severance Period&#148;) and
executing a release of claims. Pursuant to the terms of the Separation
Agreement, we agreed to continue to pay Ms.&nbsp;Atherton her current base
salary of $175,000 per year during the Severance Period. In addition, we agreed
to allow Ms.&nbsp;Atherton to continue to vest, during the Severance Period,
her (i)&nbsp;options to purchase 42,274 shares of common stock and
(ii)&nbsp;13,331 restricted shares. Unvested options remaining at the end of
the Severance Period will accelerate and vest in full.</font></p>


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<p style="font-style:italic;margin:0pt 0pt 12.0pt 36.0pt;page-break-after:auto;text-indent:0pt;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;">Employment
Agreement with Pamela G. Atherton</font></i></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We entered into an Executive Employment Agreement with
Ms.&nbsp;Atherton dated December&nbsp;22, 2003. We no longer have any
obligations under this agreement pursuant to the Separation Agreement and
General Release of Claims described above. Under the Executive Employment
Agreement, we agreed to pay Ms.&nbsp;Atherton a base salary at the rate of
$175,000 per year, to be reviewed from time to time in accordance with our
procedures for adjusting salaries for similarly situated employees. In
addition, we agreed to issue to Ms.&nbsp;Atherton one or more options to
purchase a number of shares of our common stock equal to 5.209% of that
aggregate number of shares of common stock issued or issuable in connection
with any acquisitions that we completed on or prior to August&nbsp;7, 2004. We
also agreed that, except for situations in which we terminate Ms.&nbsp;Atherton
for cause, in the event that we terminated Ms.&nbsp;Atherton&#146;s employment or in
the event that she resigned for good reason she would be eligible to receive an
amount, payable in a lump sum, equal to (i)&nbsp;six (6)&nbsp;months of her
then-current base salary plus (ii)&nbsp;one month of the base salary for each
month of employment beginning on August&nbsp;7, 2003 in excess of six months
but not to exceed twelve months.</font></p>

<p style="font-style:italic;margin:0pt 0pt 12.0pt 36.0pt;page-break-after:auto;text-indent:0pt;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;">Restricted
Stock Issuance Agreement with Pamela G. Atherton</font></i></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We entered into a Restricted Stock Issuance Agreement
with Ms.&nbsp;Atherton dated November&nbsp;1, 2002, pursuant to which we issued
to her 13,310 shares of common stock at a purchase price of approximately $2.01
per share. The shares vest over a four year period with 25% of the shares
vesting on November&nbsp;1, 2002 and the remaining shares vesting in equal
installments over the 36 months beginning one year after the grant. Pursuant to
the Separation Agreement described above, we have agreed to allow
Ms.&nbsp;Atherton to continue vesting under the Restricted Stock Issuance
Agreement for a one year period beginning on January&nbsp;7, 2006.</font></p>

<p style="font-style:italic;margin:0pt 0pt 12.0pt 36.0pt;page-break-after:auto;text-indent:0pt;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;">Option
Grants to Pamela G. Atherton</font></i></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">On December&nbsp;22, 2003, we issued to
Ms.&nbsp;Atherton an option to purchase up to 20,607 shares of our common stock
at an exercise price of $28.80 per share. Ms.&nbsp;Atherton vested in 100% of
the shares subject to option on the date of the grant.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">On August&nbsp;3, 2004, Ms.&nbsp;Atherton was granted
an option to purchase 43,333 shares of common stock, at a price per share of
$31.00. This option is exercisable with respect to 21,666 shares and, due to
the failure to satisfy certain vesting provisions, the option terminated with
respect to the remaining 21,666&nbsp;shares on December&nbsp;31, 2004. This
option terminates in full on August&nbsp;2, 2014 and is exercisable for a
period of three&nbsp;(3)&nbsp;months following the termination of
Ms.&nbsp;Atherton&#146;s employment or service, provided that the option may be exercised
for a period of 12 months following the termination of Ms.&nbsp;Atherton&#146;s
employment or service to us as a result of Ms.&nbsp;Atherton&#146;s disability or
death.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Pursuant to the Separation Agreement described above,
we have agreed to allow Ms.&nbsp;Atherton to continue vesting in her option
grants for a one year period beginning on January&nbsp;7, 2006.</font></p>

<p style="font-style:italic;margin:0pt 0pt 12.0pt 36.0pt;page-break-after:auto;text-indent:0pt;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;">Restricted
Stock Bonus Agreement with Pamela G. Atherton</font></i></p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We entered into a Restricted Stock Bonus Agreement
with Ms.&nbsp;Atherton dated May&nbsp;31, 2005. Pursuant to the agreement, we
issued to Ms.&nbsp;Atherton 90,000 shares of common stock with an aggregate
fair market value of $1,530,000. In the event that the average daily trading
volume for our common stock over any consecutive 30 day period equals or
exceeds 10,000 shares (the &#147;Trading Volume Goal&#148;), one fortieth (</font><font size="1" style="font-size:6.0pt;position:relative;top:-3.0pt;">1</font><font face="Symbol">&#164;</font><font size="1" style="font-size:6.0pt;">40</font>)
of the shares vests on Wednesday of each week following the achievement of the
Trading Volume Goal for a period of 40 weeks until the shares are fully vested.
Pursuant to the Separation Agreement describe above, Ms.&nbsp;Atherton agreed
to forfeit her rights to the shares of restricted stock granted pursuant to the
Restricted Stock Bonus Agreement.</p>


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<p style="font-style:italic;margin:0pt 0pt 12.0pt 36.0pt;page-break-after:auto;text-indent:0pt;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;">Employment
Agreement with James J. TerBeest</font></i></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">On May&nbsp;31, 2005, we entered into an Executive
Employment Agreement with James J. TerBeest, our Chief Financial Officer,
pursuant to which Mr.&nbsp;TerBeest will receive $175,000 in salary. In
addition, we agreed to issue to Mr.&nbsp;TerBeest a restricted stock bonus of
50,000 shares of common stock, the principal terms of which are discussed below.
In the event that we terminate Mr.&nbsp;TerBeest&#146;s employment at any time
without cause, he will be eligible to receive a severance payment equal to
(i)&nbsp;six (6)&nbsp;months of his base salary plus (ii)&nbsp;one
(1)&nbsp;month of his base salary for each month of employment beginning on
January&nbsp;1, 2005 in excess of six (6)&nbsp;months but not to exceed 12
months. On July&nbsp;18, 2006, we entered into an Amendment to Executive
Employment Agreement with Mr.&nbsp;TerBeest, that provides that, among other
things, Mr.&nbsp;TerBeest is entitled to receive a bonus in the amount of
one-half percent (0.5%) of the Total Consideration (as defined in the
amendment) actually paid to our stockholders in connection with a Corporation
Transaction (as defined in the amendment).</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">For purposes of the employment agreement, we may
terminate Mr.&nbsp;TerBeest for cause in the event that he (i)&nbsp;is indicted
for or charged with a crime involving dishonesty, breach of trust, or physical
harm to any person (except for misdemeanor resulting from harm caused through
the operation of a motor vehicle); (ii)&nbsp;willfully engages in conduct that
is in bad faith and materially injurious to us (including misappropriation of
trade secrets, fraud or embezzlement); (iii)&nbsp;commits a material, uncured
breach of the employment agreement; (iv)&nbsp;willfully refuses to implement or
follow a lawful policy or directive that is consistent with the terms of the
employment agreement; (v)&nbsp;engages in misfeasance or malfeasance
demonstrated by a pattern of failure to perform job duties diligently and
professionally; or (vi)&nbsp;fails to relocate his principal residence as
contemplated by the agreement. Mr.&nbsp;TerBeest may terminate the employment
agreement for Good Reason upon (i)&nbsp;a change in his position which
materially reduces his level of responsibility; (ii)&nbsp;a reduction in his
base salary (unless the base salaries of all executive employees are also
proportionately reduced); (iii)&nbsp;a relocation of his principal place of
employment by more than 50 miles (excluding his relocation to Dallas, Texas);
or (iv)&nbsp;a material breach of the employment agreement by&nbsp;us.</font></p>

<p style="font-style:italic;margin:0pt 0pt 12.0pt 36.0pt;page-break-after:auto;text-indent:0pt;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;">Restricted
Stock Bonus Agreement with James J. TerBeest</font></i></p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We entered into a Restricted Stock Bonus Agreement
with Mr.&nbsp;TerBeest dated May&nbsp;31, 2005. Pursuant to the agreement, we
issued to Mr.&nbsp;TerBeest 50,000 shares of common stock with an aggregate
fair market value of $850,000. In the event that the average daily trading
volume for our common stock over any consecutive 30 day period equals or
exceeds 10,000 shares (the &#147;Trading Volume Goal&#148;), one fortieth (</font><font size="1" style="font-size:6.0pt;position:relative;top:-3.0pt;">1</font><font face="Symbol">&#164;</font><font size="1" style="font-size:6.0pt;">40</font>)
of the shares vest on Wednesday of each week following the achievement of the
Trading Volume Goal for a period of 40 weeks until the shares are fully vested.
In the event of a corporate transaction, the shares shall immediately become
fully vested if within five years after the corporation transaction
Mr.&nbsp;TerBeest&#146;s service is terminated by the successor company, us or a
related entity without cause or voluntarily by Mr.&nbsp;TerBeest with good
reason.</p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">For purposes of the agreement, Mr.&nbsp;TerBeest may
be terminated for cause in the event of Mr.&nbsp;TerBeest&#146;s:
(i)&nbsp;performance of any act or failure to perform any act in bad faith and
to the detriment of us or a related entity; (ii)&nbsp;dishonesty, intentional
misconduct or material breach of any agreement with us or a related entity; or
(iii)&nbsp;commission of a crime involving dishonesty, breach of trust, or
physical or emotional harm to any person. Mr.&nbsp;TerBeest may voluntarily
terminate his services for good reason for: (i)&nbsp;any reduction in his base
salary to a level below that in effect at any time within the preceding
six&nbsp;(6)&nbsp;months; or (ii)&nbsp;being required to be based at any place
outside a 45-mile radius from his job location, except for reasonably required
business travel.</font></p>


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 <p style="margin:0pt 0pt .0001pt;text-align:center;"></p>

<p style="font-style:italic;margin:0pt 0pt 12.0pt 36.0pt;page-break-after:auto;text-indent:0pt;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;">Option
Grant to James J. TerBeest</font></i></p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">On March&nbsp;24, 2006 we granted to Mr.&nbsp;TerBeest
an option to purchase 150,000 shares of common stock at a per share exercise
price of $4.50. One quarter of the total shares vest on March&nbsp;24, 2007 and
</font><font size="1" style="font-size:6.0pt;position:relative;top:-3.0pt;">1</font><font face="Symbol">&#164;</font><font size="1" style="font-size:6.0pt;">48</font>
of the total shares vest monthly thereafter.</p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt 10.0pt;page-break-after:auto;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">Equity Compensation Plan Information<a name="EquityCompensationPlanInformation_060731"></a></font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The following table provides information as of
December&nbsp;31, 2005 with respect to the shares of our common stock that may
be issued under currently outstanding equity compensation plans.</font></p>

<table border="0" cellspacing="0" cellpadding="0" style="border-collapse:collapse;font-family:Times New Roman;margin-left:40.0pt;">
 <tr style="page-break-inside:avoid;">
  <td width="175" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:131.2pt;">
  <p style="font-size:8.0pt;font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><!-- SET mrlHTMLTableLeft --></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="113" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:84.7pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">A</font></b></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="113" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:84.7pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">B</font></b></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="113" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:84.7pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">C</font></b></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.7pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="175" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:131.2pt;">
  <p align="left" style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Plan&nbsp;Category</font></b></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="113" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:84.7pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Number&nbsp;of&nbsp;Securities<br>
  to&nbsp;be&nbsp;Issued&nbsp;Upon<br>
  Exercise&nbsp;of<br>
  Outstanding&nbsp;Options</font></b></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="113" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:84.7pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Weighted&nbsp;Average<br>
  Exercise&nbsp;Price&nbsp;of<br>
  Outstanding<br>
  Options</font></b></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="113" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:84.7pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Number&nbsp;of&nbsp;Securities<br>
  Remaining&nbsp;Available&nbsp;for<br>
  Future&nbsp;Issuance&nbsp;Under<br>
  Equity&nbsp;Compensation<br>
  Plans&nbsp;(Excluding<br>
  Securities&nbsp;Reflected<br>
  in&nbsp;Column&nbsp;A)</font></b></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.7pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="175" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:131.2pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Equity Compensation
  Plans Approved by Security Holders(1)</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="113" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:84.7pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">82,819</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="7" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="106" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:79.7pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">19.40</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="113" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:84.7pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">62,247</font></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.7pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="175" valign="top" style="padding:0pt .7pt 0pt 0pt;width:131.2pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Equity Compensation Plans not Approved by Security Holders(2)</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="113" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:84.7pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">417,847</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="7" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="106" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:79.7pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">8.40</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="113" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:84.7pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.7pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
</table>

<p style="line-height:1.0pt;margin:0pt 0pt 12.0pt;"><font size="1" face="Times New Roman">&nbsp;</font></p>

<div style="margin:0pt 0pt .0001pt;page-break-after:auto;"><hr size="1" width="160" noshade color="black" align="left" style="width:120.0pt;"></div>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-indent:-36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(1)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Consists
of our 2004 Stock Incentive Plan.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-indent:-36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(2)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Consists
of (i)&nbsp;an option to purchase 3,333 shares of common stock granted to
Thomas F. Herman on December&nbsp;16, 2003; (ii)&nbsp;an option to purchase
20,607 shares of common stock granted to Pamela Atherton on December&nbsp;22,
2003; (iii)&nbsp;an option to purchase 233,333 shares of common stock granted
to James D. Durham on December&nbsp;31, 2003; (iv)&nbsp;rights of
Mr.&nbsp;Durham to purchase up to 92,242 shares of Crdentia common stock
pursuant to a Common Stock Purchase Agreement dated May&nbsp;15, 2002;
(v)&nbsp;an option to purchase 43,333 shares of common stock granted to James
D. Durham on August&nbsp;3, 2004; and (vi)&nbsp;an option to purchase 21,666
shares of common stock granted to Pamela G. Atherton on August&nbsp;3, 2004.</p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In December&nbsp;2003, we issued to each of Thomas F.
Herman and C.&nbsp;Fred Toney, members of our board of directors, an option to
purchase 3,333 shares of our common stock with an exercise price of $28.80 in
connection with their respective appointments to the board. Such options have a
10 year term and vest over a three year period, with one third of the shares
subject to the option vesting after the first year and the remainder of the
shares subject to the option vesting in equal amounts over the next 24 months
thereafter. Mr. Toney&#146;s options were subsequently cancelled in connection with
his waiver of his right to receive cash and non-cash compensation as a
director.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">On December&nbsp;22, 2003, we issued to Pamela G.
Atherton an option to purchase up to 20,607 shares of our common stock at an
exercise price of $28.80 per share. On August&nbsp;3, 2004, we granted
Ms.&nbsp;Atherton an option to purchase up to 21,666 shares of common stock at
an exercise price per share of $31.00.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">On August&nbsp;3, 2004, we granted James D. Durham an
option to purchase up to 43,333 shares of common stock at an exercise price per
share of $31.00. In May&nbsp;2002, we entered into a Common Stock Purchase
Agreement with Mr.&nbsp;Durham pursuant to which he is entitled to purchase
92,242 shares of our common stock at $0.003 per share. In December&nbsp;2002, we
issued to Mr.&nbsp;Durham an option to purchase up to 233,333 shares of our
common stock at an exercise price of $3.00 per share.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">For further discussion of these options, see
&#147;Employment Contracts and Severance Agreements.&#148;</font></p>


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<p style="font-weight:bold;margin:0pt 0pt 12.0pt 10.0pt;page-break-after:auto;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">Certain Relationships and Related Transactions<a name="CertainRelationshipsAndRelatedTra_060903"></a></font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Since December&nbsp;1, 2004, there has not been, nor
is there currently proposed, any transaction or series of similar transactions
to which we were or are a party in which the amount involved exceeds $60,000
and in which any director, executive officer or beneficial holder of more than
5% of any class of our voting securities or members of such person&#146;s immediate
family had or will have a direct or indirect material interest other than the
transactions described below.</font></p>

<p style="font-style:italic;margin:0pt 0pt 12.0pt 36.0pt;page-break-after:auto;text-indent:0pt;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;">Issuance
of Series&nbsp;A Convertible Preferred Stock</font></i></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In December&nbsp;2003, we issued an aggregate of
1,000,000 shares of Series&nbsp;A convertible preferred stock to MedCap
Partners L.P. (&#147;MedCap&#148;) and 750,000 shares of Series&nbsp;A convertible
preferred stock to SF Capital, Ltd. C.&nbsp;Fred Toney, a member of our board of
directors, is the managing member of MedCap Management&nbsp;&amp; Research LLC,
the general partner of MedCap. In January&nbsp;2004, we issued an additional
1,000,000 shares of Series&nbsp;A convertible preferred stock to MedCap. These
shares of Series&nbsp;A convertible preferred stock were issued at a per share
price of $1.00. On September&nbsp;30, 2004, all outstanding shares of
Series&nbsp;A convertible preferred stock were voluntarily converted into
458,333 shares of common stock. Such conversion was effected pursuant to the
provisions of the Company&#146;s Amended and Restated Certificate of Incorporation
and the Certificate of Designations, Preferences and Rights of Series&nbsp;A
Convertible Preferred Stock. The holders of our Series&nbsp;A convertible
preferred stock (and the common stock issued upon conversion of the
Series&nbsp;A convertible preferred stock) were granted certain registration
rights set forth in an Amended and Restated Registration Rights Agreement dated
August&nbsp;31, 2004 by and among the Company and the investors listed on Schedule
A thereto.</font></p>

<p style="font-style:italic;margin:0pt 0pt 12.0pt 36.0pt;page-break-after:auto;text-indent:0pt;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;">Issuance
of Series&nbsp;B Convertible Preferred Stock</font></i></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">On June&nbsp;16, 2004, we issued 6,250,000 shares of
Series&nbsp;B convertible preferred stock at a cash price per share of $0.20 to
MedCap. On September&nbsp;30, 2004, 2,500,000 shares of Series&nbsp;B
convertible preferred stock were voluntarily converted into 83,333 shares of
common stock. On March&nbsp;29, 2005, the remaining 3,750,000 shares of
Series&nbsp;B convertible preferred stock were voluntarily converted into
125,000 shares of common stock. Such conversions were effected pursuant to the
provisions of the Company&#146;s Amended and Restated Certificate of Incorporation
and the Certificate of Designations, Preferences and Rights of Series&nbsp;B
Convertible Preferred Stock. The holder of our Series&nbsp;B convertible preferred
stock (including the common stock issued upon conversion of the Series&nbsp;B
convertible preferred stock) was granted certain registration rights set forth
in an Amended and Restated Registration Rights Agreement dated August&nbsp;31,
2004 by and among the Company and the investors listed on Schedule A thereto.</font></p>

<p style="font-style:italic;margin:0pt 0pt 12.0pt 36.0pt;page-break-after:auto;text-indent:0pt;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;">Issuance
of Series&nbsp;B-1 Convertible Preferred Stock and Warrant to Purchase
Series&nbsp;B-1 Convertible Preferred Stock</font></i></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Effective as of August&nbsp;9, 2004, we
(i)&nbsp;issued approximately 29,841 shares of Series&nbsp;B-1 convertible preferred
stock, (ii)&nbsp;issued approximately 4,082 shares of common stock, and
(iii)&nbsp;paid approximately $225,000 in cash in exchange for the cancellation
of all outstanding principal and accrued and unpaid interest under certain
promissory notes issued in 2003. Nick Liuzza,&nbsp;Jr., who at the time was an
employee of the Company, received a portion of such cash and shares of
Series&nbsp;B-1 convertible preferred stock.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In addition, effective as of August&nbsp;9, 2004, we
issued approximately 7,916 shares of Series&nbsp;B-1 convertible preferred
stock at a cash price per share of $60.00 to investors, including James D.
Durham, our Chairman and Chief Executive Officer, who purchased 4,166 shares of
Series&nbsp;B-1 convertible preferred stock.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">On September&nbsp;30, 2004, we issued 12,644 shares of
Series&nbsp;B-1 convertible preferred stock in exchange for the cancellation of
$758,640 in outstanding principal plus accrued and unpaid interest under
certain </font></p>


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<p style="margin:0pt 0pt 12.0pt;text-indent:0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">convertible subordinated
promissory notes issued in 2003. The holders of such notes included James D.
Durham, our Chairman and Chief Executive Officer, Robert P. Oliver, a former
member of our board of directors, and Health Care Investment Visions, LLC, an
entity in which Joseph M. DeLuca, a former member of our board of directors, is
a managing member.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Effective as of September&nbsp;30, 2004, the holders
of 4,112 shares of Series&nbsp;B-1 convertible preferred stock voluntarily
converted those shares into 41,120 shares of common stock. Such conversion was
effected pursuant to the provisions of the Company&#146;s Amended and Restated
Certificate of Incorporation and the Certificate of Designations, Preferences
and Rights of Series&nbsp;B-1 Convertible Preferred Stock. The holders of such
shares included Mr.&nbsp;Durham, Mr.&nbsp;Oliver, and Health Care Investment
Visions, LLC.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In consummation of discussions that began in
July&nbsp;2004, on November&nbsp;10, 2004, we issued 45,450 shares of
Series&nbsp;B-1 convertible preferred stock in exchange for the cancellation of
approximately $2.7 million in outstanding principal plus accrued and unpaid interest
under certain subordinated promissory notes issued in December&nbsp;2003. In
connection with such conversion, we entered into a release with Cynthia&nbsp;F.
Permenter, Professional Staffing Resources,&nbsp;Inc. and Nursing Services
Registry of Savannah,&nbsp;Inc.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The holders of such shares of Series&nbsp;B-1
convertible preferred stock (and the common stock issued upon conversion of the
Series&nbsp;B-1 convertible preferred stock) were granted certain registration
rights set forth in a Registration Rights Agreement dated August&nbsp;9, 2004
by and among the Company and the investors listed on Schedule A thereto.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">On August&nbsp;31, 2004, we granted a warrant to
purchase up to 6,000 shares of Series&nbsp;B-1 convertible preferred stock to
MedCap (the &#147;MedCap Warrant&#148;). The MedCap Warrant is exercisable for a period
of five years at a price of $60.00 per share of Series&nbsp;B-1 Preferred
Stock.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">On March&nbsp;29, 2005, the remaining 93,043 shares of
Series&nbsp;B-1 convertible preferred stock were voluntarily converted into
930,430 shares of common stock. Such conversion was effected pursuant to the
provisions of the Company&#146;s Amended and Restated Certificate of Incorporation
and the Certificate of Designations, Preferences and Rights of Series&nbsp;B-1
Convertible Preferred Stock.</font></p>

<p style="font-style:italic;margin:0pt 0pt 12.0pt 36.0pt;page-break-after:auto;text-indent:0pt;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;">Issuance
of Series&nbsp;C Convertible Preferred Stock and Warrants to Purchase
Series&nbsp;C Convertible Preferred Stock</font></i></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In August&nbsp;2004, September&nbsp;2004,
October&nbsp;2004, November&nbsp;2004, March&nbsp;2005 and May&nbsp;2005, we
issued (i)&nbsp;an aggregate total of 183,028 shares of Series&nbsp;C
convertible preferred stock at a cash price per share of $60.00, and
(ii)&nbsp;warrants to purchase an aggregate total of 254,582 shares, of which
warrants covering 130,520 shares have been exercised of Series&nbsp;C
convertible preferred stock. Such shares of Series&nbsp;C convertible preferred
stock and warrants were issued to certain investors, including MedCap and
James&nbsp;D. Durham, our Chairman and Chief Executive Officer.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The holders of such shares of Series&nbsp;C
convertible preferred stock were granted certain registration rights set forth
in an Amended and Restated Registration Rights Agreement dated August&nbsp;31,
2004 by and among the Company and the investors listed on Schedule A thereto.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Effective April&nbsp;4, 2006, the holders of our
outstanding Series&nbsp;C convertible preferred stock and warrants to purchase
Series&nbsp;C convertible preferred stock and Series&nbsp;B-1 convertible
preferred stock exchanged such stock and warrants for an aggregate of
10,257,131 shares of common stock.</font></p>

<p style="font-style:italic;margin:0pt 0pt 12.0pt 36.0pt;page-break-after:auto;text-indent:0pt;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;">Makewell
Agreement</font></i></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In connection with the August&nbsp;31, 2004 closing of
a Term Loan Credit Facility provided to us by Bridge Opportunity Finance, LLC
(&#147;BOF&#148;), we were required to enter into a Makewell Agreement (the </font></p>


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<p style="margin:0pt 0pt 12.0pt;text-indent:0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;Makewell&#148;) with MedCap,
BOF and Bridge Healthcare Finance, LLC. Under the Makewell, MedCap agreed to
contribute to Crdentia a cash amount equal to any &#147;EBITDA Shortfall&#148; (as
defined in the Makewell). Such contributions were to be in the form of
purchases of additional shares of Series&nbsp;C convertible preferred stock.
The Makewell terminated in November&nbsp;2004.</font></p>

<p style="font-style:italic;margin:0pt 0pt 12.0pt 36.0pt;page-break-after:auto;text-indent:0pt;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;">MedCap
Loans</font></i></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">To fund working capital needs, in the third quarter of
2004 and the first quarter of 2005 we obtained loans in the aggregate amount of
$1,450,000 from MedCap (collectively, the &#147;Loans&#148;). The Loans were payable upon
demand, bore interest at the rate of five percent (5%) per annum and were
evidenced by secured promissory notes. In connection with the Loans, MedCap was
granted a subordinate security interest in all of the assets and property of
Crdentia and its subsidiaries. The Loans plus accrued interest were repaid on
March&nbsp;29, 2005. As an incentive to MedCap to provide the Loans, we issued
7,775 shares of common stock to MedCap.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">To fund working capital needs, in November&nbsp;2005
we obtained loans in the aggregate amount of $2,000,000 from MedCap (the &#147;2005
Loans&#148;). The 2005 Loans were payable upon demand, bore interest at the rate of
five percent (5%) per annum and were evidenced by secured promissory notes. In
connection with the 2005 Loans, MedCap was granted a subordinate security
interest in all of the assets and property of Crdentia and its subsidiaries.
The principal amount of the 2005 Loans, plus accrued interest, was surrendered
as consideration for shares of common stock on December&nbsp;30, 2005.</font></p>

<p style="font-style:italic;margin:0pt 0pt 12.0pt 36.0pt;page-break-after:auto;text-indent:0pt;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;">Issuance
of Convertible Subordinated Promissory Notes</font></i></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In September&nbsp;2003, we issued $675,000 in
principal amount of convertible subordinated promissory notes to six investors.
We issued additional notes in the aggregate principal amount of $235,000 in
September, October&nbsp;and December&nbsp;2003. Subject to the conversion
provisions set forth in the notes, the unpaid principal together with all
accrued interest on the notes is due and payable in full one year following the
issuance date of each such note. Interest accrues on the unpaid principal
balance at a rate of ten percent (10%) per annum, simple interest, and is
payable in quarterly payments.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Three of the purchasers of the notes included Joseph
M. DeLuca, Robert P. Oliver and James D. Durham. Messrs.&nbsp;DeLuca and Oliver
are former members of our board of directors and the audit committee.
Messrs.&nbsp;DeLuca and Oliver, together with an affiliate of
Mr.&nbsp;DeLuca&#146;s, purchased notes in the aggregate principal amount of
$125,000. Mr.&nbsp;Durham, our Chairman and Chief Executive Officer, purchased
a note in the principal amount of $50,000.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Effective September&nbsp;2, 2004, Mr.&nbsp;DeLuca
extended the maturity of his $50,000 convertible subordinated promissory note
to March&nbsp;2, 2005, and effective March&nbsp;2, 2005, Mr.&nbsp;DeLuca
extended the maturity of his convertible subordinated note to March&nbsp;2,
2006. We subsequently paid $25,000 in principal outstanding under the note.
Effective September&nbsp;30, 2004, we issued 12,611 shares of Series&nbsp;B-1
convertible preferred stock in exchange for the cancellation of $758,640 in
outstanding principal plus accrued and unpaid interest under certain of the
convertible subordinated promissory notes. In November&nbsp;2004 we paid the
remaining $120,000 of outstanding principal and accrued and unpaid interest
under the convertible subordinated promissory notes.</font></p>

<p style="font-style:italic;margin:0pt 0pt 12.0pt 36.0pt;page-break-after:auto;text-indent:0pt;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;">Acquisition
of Nurses Network,&nbsp;Inc.</font></i></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In October&nbsp;2003, we completed the acquisition of
Nurses Network,&nbsp;Inc., a California corporation, pursuant to an Agreement
and Plan of Reorganization dated July&nbsp;16, 2003, as amended on
September&nbsp;9, 2003. The aggregate merger consideration was equal to sixty
percent of the sum of Nurses Network,&nbsp;Inc.&#146;s revenue for the six
consecutive fiscal quarters commencing with the fiscal quarter ending
September&nbsp;30, 2003 and was payable solely in shares of Crdentia common
stock. Subject to the terms and conditions of </font></p>


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<p style="margin:0pt 0pt 12.0pt;text-indent:0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">the merger agreement, we
made an advance closing payment of 39,361 shares of our common stock to the
former stockholders of Nurses Network,&nbsp;Inc. at the closing. Robert
Kenneth, a member of our board of directors, was a director, officer and
stockholder of Nurses Network,&nbsp;Inc., and at closing 1,968 shares of common
stock were issued to the Kenneth Family Trust U/A 3/11/87.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Two notes were due to the sellers of Nurses Network.
The first note amounted to $64,000 and was due in three equal installments on
October&nbsp;2, 2004, October&nbsp;2, 2005 and October&nbsp;2, 2006. Interest
was accrued at a financial institution&#146;s Base Rate plus 1%. The second note, in
the amount of $50,432 plus interest accrued at a financial institution&#146;s Base
Rate plus 1% was due and payable on July&nbsp;2, 2004. Of the original note,
$91,932 was payable to a member of our board of directors. Remaining amounts
due on the notes were converted into shares of Series&nbsp;B-1 Preferred Stock
in August&nbsp;2004.</font></p>

<p style="font-style:italic;margin:0pt 0pt 12.0pt 36.0pt;page-break-after:auto;text-indent:0pt;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;">Stock
Purchase Agreement</font></i></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">On May&nbsp;18, 2004, we and MedCap entered into a
Stock Purchase Agreement pursuant to which we and MedCap agreed to purchase an
aggregate of 176,601 shares of our common stock from certain of our
stockholders. Under the Stock Purchase Agreement, MedCap purchased 101,601
shares of common stock for $762,011 on May&nbsp;18, 2004. The remaining 75,000
shares of common stock were delivered to an escrow agent. These shares will be
released from escrow as follows: (i)&nbsp;beginning on July&nbsp;1, 2004 and
continuing on the first day of each month through and including June&nbsp;1,
2005, we shall pay $31,250 to the escrow agent, and the escrow agent shall
cause 3,125 shares to be transferred to us; and (ii)&nbsp;beginning on
July&nbsp;1, 2005 and continuing on the first day of each month through and
including June&nbsp;1, 2006, we shall pay $46,875 to the escrow agent, and the
escrow agent shall cause 3,125 shares to be released to us. The escrow agent
shall distribute funds received from us to the stockholders who are parties to
the Stock Purchase Agreement. For July&nbsp;2004 through February&nbsp;2005, we
assigned our right to purchase under the Stock Purchase Agreement to an
existing stockholder. Neither we nor our assignee purchased shares subsequent
to February&nbsp;2005, and the escrow agent was authorized to return all
remaining shares to the parties who initially tendered their shares to the
escrow agent.</font></p>

<p style="font-style:italic;margin:0pt 0pt 12.0pt 36.0pt;page-break-after:auto;text-indent:0pt;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;">Acquisition
of iVow,&nbsp;Inc.</font></i></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">On September&nbsp;21, 2006, we entered into an Agreement and Plan of
Merger, dated as of September&nbsp;20, 2006 (the &#147;Merger Agreement&#148;), by and
among Crdentia, iVOW,&nbsp;Inc. (&#147;iVOW&#148;) and iVOW Acquisition Corp., a
wholly-owned subsidiary of Crdentia (&#147;Merger Sub&#148;). Pursuant to the Merger
Agreement, Merger Sub will merge with and into iVOW, with iVOW surviving as our
wholly-owned subsidiary (the &#147;Merger&#148;). The completion of the Merger is subject
to several conditions, including the receipt of applicable approvals from our
respective stockholders. At the effective time of the Merger, all shares of
iVOW common stock issued and outstanding immediately prior to the effective time
will be converted automatically into the right to receive, in the aggregate,
approximately $3.5 million in shares of our common stock, subject to reduction
based on the iVOW bank and financing debt assumed by us, the value of any
uncollected accounts receivable at the effective time and the value of any iVOW
warrants assumed by us. </font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Members of our board of directors, C. Fred Toney and William Nydam, also
served on the board of directors of iVOW at the time our board of directors
approved the Merger Agreement. Mr.&nbsp;Toney is a Managing Member of MedCap.
MedCap beneficially owns more than 76% of the outstanding shares of Crdentia
and 26% of the outstanding shares of iVOW, as reported in iVOW&#146;s proxy
statement for its 2006 Annual Meeting of Stockholders filed with the SEC on
May&nbsp;10, 2006. In addition, Mr.&nbsp;Durham is a former director of iVOW.
Our board of directors unanimously approved the Merger Agreement, with
Mr.&nbsp;Toney and Mr.&nbsp;Durham abstaining. Mr.&nbsp;Toney voluntarily
resigned from the iVOW board of directors immediately following the approval of
the Merger Agreement by iVOW.</font></p>


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<p style="font-style:italic;margin:0pt 0pt 12.0pt 36.0pt;page-break-after:auto;text-indent:0pt;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;">Right
of First Negotiation and Related Agreements</font></i></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">On November&nbsp;3, 2006, we entered into a Right of First Negotiation
Agreement with Mr.&nbsp;Durham, Mr.&nbsp;Toney and MedCap, granting
Mr.&nbsp;Durham, Mr.&nbsp;Toney and MedCap Partners L.P. the exclusive right to
negotiate with us to acquire Sound Health Solutions,&nbsp;Inc. (&#147;SHS&#148;), a
wholly-owned subsidiary of iVOW, if and when we close our proposed acquisition
of iVOW pursuant to the Agreement and Plan of Merger. We entered into the Right
of First Negotiation Agreement in consideration for Mr.&nbsp;Durham,
Mr.&nbsp;Toney and MedCap&#146;s grant of an advance of $1,000,000 to a cash
collateral account for benefit of us to facilitate additional borrowing by us
from Bridge Healthcare Finance LLC (the &#147;Advance&#148;). Such funds will be used to
cover the operating expenses of both Crdentia and iVOW, pursuant to the Interim
Management Agreement entered into by Crdentia and iVOW on September&nbsp;20,
2006 in connection with the entry into the Merger Agreement. Mr.&nbsp;Durham,
Mr.&nbsp;Toney and MedCap were also granted a security interest in the
outstanding shares of SHS by iVOW. The agreement granting such security
interest was executed by us for iVOW under our authority granted pursuant to the
Interim Management Agreement.</font></p>

<p style="font-style:italic;margin:0pt 0pt 12.0pt 36.0pt;page-break-after:auto;text-indent:0pt;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;">Employment,
Bonus and Option Agreements with Executive Officers</font></i></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">For a description of employment, bonus and option
agreements with executive officers, see &#147;Executive Compensation&#151;Employment
Contracts and Severance Agreements.&#148;</font></p>

<p style="font-style:italic;margin:0pt 0pt 12.0pt 36.0pt;page-break-after:auto;text-indent:0pt;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;">Separation
Agreement and General Release with William S. Leftwich</font></i></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In September&nbsp;2004, we entered into a Separation
Agreement and General Release with William S. Leftwich, our former Chief
Financial Officer and Secretary. This agreement provides Mr.&nbsp;Leftwich with
certain benefits in exchange for, among other things, our receipt of a general
release of claims and his cooperation in helping us with the transition of his
successor. Pursuant to the terms of the Separation Agreement, we agreed to
continue to pay Mr.&nbsp;Leftwich his current base salary of $175,000 per year
for a period of one month. In addition, we agreed to accelerate
Mr.&nbsp;Leftwich&#146;s vesting in twenty-five percent of the options he holds to
purchase 11,050 shares of our common stock and agreed to provide Mr.&nbsp;Leftwich
until September&nbsp;10, 2005 in which to exercise the options. All of such
options have expired unexecised.</font></p>

<p style="font-style:italic;margin:0pt 0pt 12.0pt 36.0pt;page-break-after:auto;text-indent:0pt;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;">Stock
and Option Agreements with Directors</font></i></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In November&nbsp;2005 we issued the following options:
(i)&nbsp;an option to purchase 833 shares of common stock to Mr.&nbsp;Oliver (a
former director); (ii)&nbsp;an option to purchase 833 shares to
Mr.&nbsp;Kenneth; (iii)&nbsp;an option to purchase 833 shares to
Mr.&nbsp;Herman; and (iv)&nbsp;an option to purchase 1,666 shares to
Mr.&nbsp;DeLuca (a former director).</font></p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt;page-break-after:auto;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">CRDENTIA PROPOSAL NUMBER 2</font></b></p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt;page-break-after:auto;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS</font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Our audit committee has reappointed KBA Group LLP,
independent registered public accounting firm, to audit the financial
statements of Crdentia and its subsidiaries for the fiscal year ending
December&nbsp;31, 2006. The board of directors is seeking ratification by our
stockholders at the Annual Meeting of the selection of KBA Group LLP as our
independent auditors for the fiscal year ending December&nbsp;31, 2006. We have
been advised by KBA Group LLP that no member of that firm, to the best of its
knowledge and belief, has any direct or material indirect financial interest in
us or our subsidiaries, and that during the past three years no member of the
firm has any connection with us or our subsidiaries in the capacity of promoter,
underwriter, voting trustee, director, officer or employee.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">If our stockholders do not ratify the appointment of
KBA Group LLP, the matter of the appointment of independent auditors will be
considered by the audit committee. Even if the selection of KBA Group </font></p>


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<p style="margin:0pt 0pt 12.0pt;text-indent:0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">LLP is ratified, the
audit committee, in its discretion, may direct the appointment of a different
public accounting firm at any time during the year if the audit committee
believes that such a change would be in the best interests of Crdentia and its
stockholders. Representatives of KBA Group LLP are expected to be present at
the Annual Meeting.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">On January&nbsp;13, 2005 we received a resignation
letter from BDO Seidman, LLP. On January&nbsp;13, 2005 our audit committee
approved, and our board of directors ratified, the engagement of KBA Group LLP
as our independent auditors. KBA Group LLP reported on our financial statements
for the fiscal years ended December&nbsp;31, 2004 and December&nbsp;31, 2005.
BDO Seidman, LLP did not provide a report on our financial statements for the
fiscal years ended December&nbsp;31, 2004 or December&nbsp;31, 2005. During our
fiscal year ended December&nbsp;31, 2004 and through January&nbsp;13, 2005,
there were no &#147;reportable events,&#148; as such term is defined in Item 304(a)(1)(v)&nbsp;of
Regulation S-B.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">During the fiscal year ended December&nbsp;31, 2004
and the subsequent interim period through January&nbsp;13, 2005, we did not
consult KBA Group LLP with respect to the application of accounting principles
to a specified transaction, either completed or proposed, or the type of audit
opinion that might be rendered on our consolidated financial statements, or any
other matters that were either the subject of a disagreement (as defined in
Item 304(a)(1)(iv)&nbsp;of Regulation S-B) or a reportable event (as defined in
Item 304(a)(1)(v)&nbsp;of Regulation S-B).</font></p>

<p style="margin:0pt 0pt 12.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">The Crdentia board of directors recommends you
vote &#147;FOR&#148; the ratification of the selection of KBA<a name="TheCrdentiaBoardOfDirectorsRecomm_061033"></a> Group LLP as our
independent auditors.</font></b></p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt 10.0pt;page-break-after:auto;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">Auditor Fees and Services</font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The following table sets forth the aggregate fees
billed to us for the fiscal years ended December&nbsp;31, 2004 and 2005 by BDO
Seidman, LLP and KBA Group LLP:</font></p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt .0001pt;"><!-- SET mrlHTMLTableLeft --><!-- SET mrlNoTableShading --><b>BDO&nbsp;Seidman,&nbsp;LLP KBA&nbsp;Group&nbsp;LLP</b></p>

<p style="line-height:1.0pt;margin:0pt 0pt 12.0pt;"><font size="1" face="Times New Roman">&nbsp;</font></p>

<div align="center" style="font-family:Times New Roman;">

<table border="0" cellspacing="0" cellpadding="0" style="border-collapse:collapse;margin-left:60.0pt;">
 <tr style="page-break-inside:avoid;">
  <td width="377" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:282.6pt;">
  <p style="font-size:8.0pt;font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><!-- SET mrlHTMLTableLeft --></p>
  </td>
  <td width="11" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="52" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:39.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">2004</font></b></p>
  </td>
  <td width="11" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="51" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:38.2pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">2005</font></b></p>
  </td>
  <td width="11" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="377" valign="top" style="padding:0pt .7pt 0pt 0pt;width:282.6pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Audit Fees(1)</font></p>
  </td>
  <td width="11" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="7" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="45" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:34.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">150,900</font></p>
  </td>
  <td width="11" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="7" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="44" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:33.2pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="11" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="377" valign="top" style="padding:0pt .7pt 0pt 0pt;width:282.6pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Audit-Related Fees(2)</font></p>
  </td>
  <td width="11" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="52" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:39.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">36,600</font></p>
  </td>
  <td width="11" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="51" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:38.2pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="11" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="377" valign="top" style="padding:0pt .7pt 0pt 0pt;width:282.6pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Tax Fees(3)</font></p>
  </td>
  <td width="11" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="52" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:39.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="11" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="51" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:38.2pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="11" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="377" valign="top" style="padding:0pt .7pt 0pt 0pt;width:282.6pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">All Other Fees</font></p>
  </td>
  <td width="11" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.0pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="52" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:39.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="11" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.0pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="51" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:38.2pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="11" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.0pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr height="0">
  <td width="377" style="border:none;"></td>
  <td width="11" style="border:none;"></td>
  <td width="7" style="border:none;"></td>
  <td width="45" style="border:none;"></td>
  <td width="11" style="border:none;"></td>
  <td width="7" style="border:none;"></td>
  <td width="44" style="border:none;"></td>
  <td width="11" style="border:none;"></td>
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</div>

<p style="margin:0pt 0pt .0001pt;page-break-after:auto;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<div align="center" style="font-family:Times New Roman;">

<table border="0" cellspacing="0" cellpadding="0" style="border-collapse:collapse;margin-left:60.0pt;">
 <tr style="page-break-inside:avoid;">
  <td width="377" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:282.6pt;">
  <p style="font-size:8.0pt;font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><!-- SET mrlHTMLTableLeft --></p>
  </td>
  <td width="11" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="52" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:39.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">2004</font></b></p>
  </td>
  <td width="11" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="51" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:38.2pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">2005</font></b></p>
  </td>
  <td width="11" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="377" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:282.6pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Audit Fees(1)</font></p>
  </td>
  <td width="11" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="7" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="45" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:34.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">118,700</font></p>
  </td>
  <td width="11" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="7" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="44" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:33.2pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">130,500</font></p>
  </td>
  <td width="11" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="377" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:282.6pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Audit-Related
  Fees(2)</font></p>
  </td>
  <td width="11" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="52" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:39.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="11" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="51" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:38.2pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">28,000</font></p>
  </td>
  <td width="11" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="377" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:282.6pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Tax
  Fees(3)</font></p>
  </td>
  <td width="11" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="52" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:39.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="11" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="51" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:38.2pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="11" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="377" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:282.6pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">All
  Other Fees</font></p>
  </td>
  <td width="11" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="52" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:39.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="11" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="51" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:38.2pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="11" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr height="0">
  <td width="377" style="border:none;"></td>
  <td width="11" style="border:none;"></td>
  <td width="7" style="border:none;"></td>
  <td width="45" style="border:none;"></td>
  <td width="11" style="border:none;"></td>
  <td width="7" style="border:none;"></td>
  <td width="44" style="border:none;"></td>
  <td width="11" style="border:none;"></td>
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</table>

</div>

<p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<div style="margin:0pt 0pt .0001pt;page-break-after:auto;"><hr size="1" width="160" noshade color="black" align="left" style="width:120.0pt;"></div>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-indent:-36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(1)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Audit
Fees consist of fees billed for professional services rendered for the audit of
our consolidated annual financial statements, review of the interim
consolidated financial statements included in quarterly reports and services
that are normally provided by its independent registered public accounting firm
in connection with statutory and regulatory filings or engagements.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-indent:-36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(2)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Audit-Related
Fees consist of fees billed for assurance and related services that are
reasonably related to the performance of the audit or review of our consolidated
financial statements and are not reported under &#147;Audit Fees.&#148;</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-indent:-36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(3)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Tax
Fees consist of fees billed for professional services rendered for tax
compliance, tax advice and tax planning.</p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The audit committee&#146;s policy is to pre-approve all
audit and permissible non-audit services provided by its independent auditors.
These services may include audit services, audit-related services, tax services
and other services. Pre-approval is generally provided for up to one year and
any pre-approval is detailed as to the particular service or category of
services. The independent auditor and management are required to periodically
report to the audit committee regarding the extent of services provided by the
independent auditor in accordance with this pre-approval.</font></p>


 <p style="font-size:10.0pt;margin:24.0pt 0pt .0001pt;text-align:center;"><font face="Times New Roman">23</font></p> <br><hr size="3" width="100%" noshade color="#010101" align="center">

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<p style="font-weight:bold;margin:0pt 0pt 12.0pt;page-break-after:auto;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">SECTION&nbsp;16(A)&nbsp;BENEFICIAL OWNERSHIP REPORTING
COMPLIANCE<a name="Section16abeneficialOwnershipRepo_061719"></a></font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Section&nbsp;16(a)&nbsp;of the Securities Exchange Act
of 1934 requires our executive officers, directors and persons who beneficially
own more than 10% of its common stock to file initial reports of ownership and
reports of changes in ownership with the SEC. Such persons are required by SEC
regulations to furnish us with copies of all Section&nbsp;16(a)&nbsp;forms
filed by such person.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Based solely on our review of such forms furnished to
us and written representations from such reporting persons, Crdentia believes
that all filing requirements applicable to its executive officers, directors
and more than 10% stockholders were met in a timely manner, except that
(i)&nbsp;James D. Durham made one late filing with respect to a transaction in
March&nbsp;2005, (ii)&nbsp;MedCap Partners LP made a late filing with respect
to a transaction in December&nbsp;2005; (iii)&nbsp;MedCap Partners LP made a
late filing with respect to a transaction in November&nbsp;2005;
(iv)&nbsp;MedCap Partners LP made a late filing with respect to a transaction
in March&nbsp;2005; (vi)&nbsp;C.&nbsp;Fred Toney made a late filing with
respect to a transaction in March&nbsp;2005; (vii)&nbsp;C.&nbsp;Fred Toney made
a late filing with respect to a transaction in November&nbsp;2005; and (viii)&nbsp;C.&nbsp;Fred
Toney made a late filing with respect to a transaction in December&nbsp;2005.</font></p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt;page-break-after:auto;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">STOCKHOLDER PROPOSALS FOR THE 2007 ANNUAL MEETING<a name="StockholderProposalsForThe2007ann_061721"></a></font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Stockholder proposals that are intended to be
presented at our 2007 Annual Meeting must be received by our Secretary at 5001
LBJ Freeway, Suite&nbsp;850, Dallas, Texas 75244, no later than August&nbsp;15,
2007, in order that they may be included in the Proxy Statement and form of
proxy relating to that meeting, and must meet all the other requirements as
specified in our Bylaws. In addition, the proxy solicited by the board of
directors for the 2007 Annual Meeting will confer discretionary authority to
vote on any stockholder proposal presented at that meeting, unless we receive
notice of such proposal not later than August&nbsp;15, 2007.</font></p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt;page-break-after:auto;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">OTHER MATTERS<a name="OtherMatters_061722"></a></font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The board of directors knows of no other business
which will be presented at the Annual Meeting.&#160;
If any other business is properly brought before the Annual Meeting, it
is intended that proxies in the enclosed form will be voted in respect thereof
in accordance with the judgments of the proxyholders.</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;font-family:Times New Roman;width:100.0%;">
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  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt;"><!-- SET mrlNoTableShading --></p>
  </td>
  <td width="3%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:3.72%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="46%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:46.44%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">By Order of the Board of Directors,</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="49%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:49.84%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="3%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:3.72%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="46%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:46.44%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="49%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:49.84%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="3%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:3.72%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="46%" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:46.44%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">/s/ James D. Durham</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="49%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:49.84%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="3%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:3.72%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="46%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:46.44%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="49%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:49.84%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="3%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:3.72%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="46%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:46.44%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">James D. Durham</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="49%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:49.84%;">
  <p style="margin:0pt 0pt .0001pt;"><i><font size="2" face="Times New Roman" style="font-size:1.0pt;font-style:italic;">&nbsp;</font></i></p>
  </td>
  <td width="3%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:3.72%;">
  <p style="margin:0pt 0pt .0001pt;"><i><font size="2" face="Times New Roman" style="font-size:1.0pt;font-style:italic;">&nbsp;</font></i></p>
  </td>
  <td width="46%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:46.44%;">
  <p style="margin:0pt 0pt .0001pt;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;">Chairman of the Board and</font></i></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="49%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:49.84%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="3%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:3.72%;">
  <p style="margin:0pt 0pt .0001pt;"><i><font size="2" face="Times New Roman" style="font-size:1.0pt;font-style:italic;">&nbsp;</font></i></p>
  </td>
  <td width="46%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:46.44%;">
  <p style="margin:0pt 0pt .0001pt;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;">Chief Executive Officer</font></i></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="49%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:49.84%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">December&nbsp;13, 2006</font></p>
  </td>
  <td width="3%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:3.72%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="46%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:46.44%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="49%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:49.84%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Dallas, Texas</font></p>
  </td>
  <td width="3%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:3.72%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="46%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:46.44%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
</table>

<p style="line-height:1.0pt;margin:0pt 0pt 12.0pt;"><font size="1" face="Times New Roman" style="font-size:1.0pt;">7</font></p>


 <p style="font-size:10.0pt;margin:24.0pt 0pt .0001pt;text-align:center;"><font face="Times New Roman">24</font></p>
</div><br><hr size="3" width="100%" noshade color="#010101" align="center">

<!-- SEQ.=1,FOLIO='24',FILE='C:\JMS\knatara\06-26137-1\task1569703\26137-1-dk.htm',USER='105063',CD='Dec 20 15:35 2006' -->



<br clear="all" style="page-break-before:always;">

<div>
 <p style="margin:0pt 0pt .0001pt;text-align:center;"></p>

<p style="font-family:Times New Roman;font-size:10.0pt;font-weight:bold;margin:0pt 0pt 8.0pt;page-break-after:avoid;text-align:center;"><b><font size="2" face="Wingdings" style="font-size:10.0pt;">&#234;</font></b><font size="1" style="font-size:8.0pt;"> FOLD AND DETACH HERE AND READ THE REVERSE
SIDE </font><font face="Wingdings">&#234;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;font-family:Times New Roman;width:100.0%;">
 <tr style="page-break-inside:avoid;">
  <td width="25%" colspan="6" valign="top" style="padding:0pt 0pt 0pt 0pt;width:25.96%;">
  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt;"><!-- SET mrlNoTableShading --></p>
  </td>
  <td width="5%" colspan="2" valign="top" style="padding:0pt 0pt 0pt 0pt;width:5.46%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="5" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="top" style="padding:0pt 0pt 0pt 0pt;width:.94%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="15%" valign="top" style="padding:0pt 0pt 0pt 0pt;width:15.32%;">
  <p style="margin:0pt 0pt .0001pt;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="1%" valign="top" style="padding:0pt 0pt 0pt 0pt;width:1.52%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="5%" valign="top" style="padding:0pt 0pt 0pt 0pt;width:5.42%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="5" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" colspan="2" valign="top" style="padding:0pt 0pt 0pt 0pt;width:1.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="25%" colspan="6" valign="top" style="padding:0pt 0pt 0pt 0pt;width:25.94%;">
  <p style="margin:0pt 0pt .0001pt;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="3%" colspan="2" valign="top" style="padding:0pt 0pt 0pt 0pt;width:3.9%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="5" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="top" style="padding:0pt 0pt 0pt 0pt;width:1.16%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="7%" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:7.5%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;text-autospace:none;"><font size="1" face="Times New Roman" style="font-size:6.0pt;">Please mark<br>
  your votes<br>
  like this </font></p>
  </td>
  <td width="4%" valign="top" style="padding:0pt 0pt 0pt 0pt;width:4.9%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><font size="5" face="Wingdings" style="font-size:16.0pt;">&#253;</font></p>
  </td>
  <td width="0%" style="border:none;font-size:1.0pt;padding:0pt 0pt 0pt 0pt;"><p style="margin:0pt 0pt .0001pt;">&nbsp;</p></td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="25%" colspan="6" valign="top" style="padding:0pt 0pt 0pt 0pt;width:25.96%;">
  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt;"><!-- SET mrlNoTableShading --><b><font size="1" style="font-size:8.0pt;font-weight:bold;">1. ELECTION OF DIRECTORS</font></b></p>
  </td>
  <td width="5%" colspan="2" valign="top" style="padding:0pt 0pt 0pt 0pt;width:5.46%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="5" face="Wingdings" style="font-size:18.0pt;">o</font></p>
  </td>
  <td width="0%" valign="top" style="padding:0pt 0pt 0pt 0pt;width:.94%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="15%" valign="top" style="padding:0pt 0pt 0pt 0pt;width:15.32%;">
  <p style="margin:0pt 0pt .0001pt;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;font-weight:bold;">FOR</font></b><font size="1" style="font-size:8.0pt;"> all nominees<br>
  listed below</font></p>
  </td>
  <td width="1%" valign="top" style="padding:0pt 0pt 0pt 0pt;width:1.52%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="5%" valign="top" style="padding:0pt 0pt 0pt 0pt;width:5.42%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="5" face="Wingdings" style="font-size:18.0pt;">o</font></p>
  </td>
  <td width="1%" colspan="2" valign="top" style="padding:0pt 0pt 0pt 0pt;width:1.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="25%" colspan="6" valign="top" style="padding:0pt 0pt 0pt 0pt;width:25.94%;">
  <p style="margin:0pt 0pt .0001pt;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;font-weight:bold;">WITHHOLD AUTHORITY</font></b><font size="1" style="font-size:8.0pt;"> to vote for all nominees listed below</font></p>
  </td>
  <td width="3%" colspan="2" valign="top" style="padding:0pt 0pt 0pt 0pt;width:3.9%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="5" face="Wingdings" style="font-size:18.0pt;">o</font></p>
  </td>
  <td width="1%" valign="top" style="padding:0pt 0pt 0pt 0pt;width:1.16%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="top" style="padding:0pt 0pt 0pt 0pt;width:12.4%;">
  <p style="margin:0pt 0pt .0001pt;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;font-weight:bold;">* EXCEPTIONS</font></b></p>
  </td>
  <td width="0%" style="border:none;font-size:1.0pt;padding:0pt 0pt 0pt 0pt;"><p style="margin:0pt 0pt .0001pt;">&nbsp;</p></td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="99%" colspan="25" valign="top" style="padding:0pt 0pt 0pt 0pt;width:99.06%;">
  <p style="margin:4.0pt 0pt .0001pt;"><i><font size="1" face="Times New Roman" style="font-size:8.0pt;font-style:italic;">Nominees:</font></i><font size="1" style="font-size:8.0pt;"> 01 Thomas F. Herman, 02 C. Fred Toney</font></p>
  </td>
  <td width="0%" style="border:none;font-size:1.0pt;padding:0pt 0pt 0pt 0pt;"><p style="margin:0pt 0pt .0001pt;">&nbsp;</p></td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="99%" colspan="25" valign="top" style="padding:0pt 0pt 0pt 0pt;width:99.06%;">
  <p style="margin:0pt 0pt .0001pt;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;font-weight:bold;">(INSTRUCTIONS: To withhold authority
  to vote for any individual nominee mark the &#147;Exceptions&#148; box and write that
  nominee&#146;s name on the space provided below.)</font></b></p>
  </td>
  <td width="0%" style="border:none;font-size:1.0pt;padding:0pt 0pt 0pt 0pt;"><p style="margin:0pt 0pt .0001pt;">&nbsp;</p></td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:11.1%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="1" face="Times New Roman" style="font-size:8.0pt;">EXCEPTIONS</font></p>
  </td>
  <td width="87%" colspan="23" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt 0pt 0pt 0pt;width:87.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" style="border:none;font-size:1.0pt;padding:0pt 0pt 0pt 0pt;"><p style="margin:0pt 0pt .0001pt;">&nbsp;</p></td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="47%" colspan="10" valign="top" style="padding:0pt 0pt 0pt 0pt;width:47.68%;">
  <p style="margin:4.0pt 0pt .0001pt;"><font size="1" face="Times New Roman" style="font-size:8.0pt;">2. To ratify the
  appointment of KBA Group LLP as our independent auditor for the fiscal year
  ending December&nbsp;31, 2006.</font></p>
  </td>
  <td width="1%" valign="top" style="padding:0pt 0pt 0pt 0pt;width:1.52%;">
  <p style="margin:4.0pt 0pt .0001pt;"><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="49%" colspan="14" valign="top" style="padding:0pt 0pt 0pt 0pt;width:49.86%;">
  <p style="margin:4.0pt 0pt .0001pt;"><font size="1" face="Times New Roman" style="font-size:8.0pt;">3. Any other matters as
  may properly come before the meeting or any adjournment or postponement
  thereof. As to these other matters, the undersigned hereby confers
  discretionary authority.</font></p>
  </td>
  <td width="0%" style="border:none;font-size:1.0pt;padding:0pt 0pt 0pt 0pt;"><p style="margin:0pt 0pt .0001pt;">&nbsp;</p></td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="3%" valign="top" style="padding:0pt 0pt 0pt 0pt;width:3.68%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="5" face="Wingdings" style="font-size:18.0pt;">o</font></p>
  </td>
  <td width="7%" colspan="2" valign="top" style="padding:0pt 0pt 0pt 0pt;width:7.52%;">
  <p style="margin:0pt 0pt .0001pt;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;font-weight:bold;">FOR</font></b></p>
  </td>
  <td width="4%" valign="top" style="padding:0pt 0pt 0pt 0pt;width:4.14%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="5" face="Wingdings" style="font-size:18.0pt;">o</font></p>
  </td>
  <td width="10%" valign="top" style="padding:0pt 0pt 0pt 0pt;width:10.16%;">
  <p style="margin:0pt 0pt .0001pt;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;font-weight:bold;">AGAINST</font></b></p>
  </td>
  <td width="3%" colspan="2" valign="top" style="padding:0pt 0pt 0pt 0pt;width:3.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="5" face="Wingdings" style="font-size:18.0pt;">o</font></p>
  </td>
  <td width="18%" colspan="3" valign="top" style="padding:0pt 0pt 0pt 0pt;width:18.22%;">
  <p style="margin:0pt 0pt .0001pt;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;font-weight:bold;">ABSTAIN</font></b></p>
  </td>
  <td width="1%" valign="top" style="padding:0pt 0pt 0pt 0pt;width:1.52%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="5%" valign="top" style="padding:0pt 0pt 0pt 0pt;width:5.42%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="5" face="Wingdings" style="font-size:18.0pt;">o</font></p>
  </td>
  <td width="0%" valign="top" style="padding:0pt 0pt 0pt 0pt;width:.2%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="6%" colspan="2" valign="top" style="padding:0pt 0pt 0pt 0pt;width:6.86%;">
  <p style="margin:0pt 0pt .0001pt;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;font-weight:bold;">FOR</font></b></p>
  </td>
  <td width="4%" valign="top" style="padding:0pt 0pt 0pt 0pt;width:4.36%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="5" face="Wingdings" style="font-size:18.0pt;">o</font></p>
  </td>
  <td width="1%" valign="top" style="padding:0pt 0pt 0pt 0pt;width:1.08%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" valign="top" style="padding:0pt 0pt 0pt 0pt;width:10.04%;">
  <p style="margin:0pt 0pt .0001pt;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;font-weight:bold;">AGAINST</font></b></p>
  </td>
  <td width="3%" valign="top" style="padding:0pt 0pt 0pt 0pt;width:3.7%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="5" face="Wingdings" style="font-size:18.0pt;">o</font></p>
  </td>
  <td width="0%" colspan="2" valign="top" style="padding:0pt 0pt 0pt 0pt;width:.9%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="18%" colspan="5" valign="top" style="padding:0pt 0pt 0pt 0pt;width:18.24%;">
  <p style="margin:0pt 0pt .0001pt;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;font-weight:bold;">ABSTAIN</font></b></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="47%" colspan="10" valign="top" style="padding:0pt 0pt 0pt 0pt;width:47.68%;">
  <p style="margin:4.0pt 0pt .0001pt;"><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="top" style="padding:0pt 0pt 0pt 0pt;width:1.52%;">
  <p style="margin:4.0pt 0pt .0001pt;"><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="49%" colspan="14" valign="top" style="padding:0pt 0pt 0pt 0pt;width:49.86%;">
  <p style="margin:4.0pt 0pt .0001pt;"><font size="1" face="Times New Roman" style="font-size:8.0pt;">If you wish to vote in
  accordance with the recommendations of management, all you need to do is sign
  and return this card. The Trustee cannot vote your shares unless you sign and
  return the card.</font></p>
  </td>
  <td width="0%" style="border:none;font-size:1.0pt;padding:0pt 0pt 0pt 0pt;"><p style="margin:0pt 0pt .0001pt;">&nbsp;</p></td>
 </tr>
 <tr height="0">
  <td width="28" style="border:none;"></td>
  <td width="56" style="border:none;"></td>
  <td width="1" style="border:none;"></td>
  <td width="31" style="border:none;"></td>
  <td width="76" style="border:none;"></td>
  <td width="3" style="border:none;"></td>
  <td width="26" style="border:none;"></td>
  <td width="15" style="border:none;"></td>
  <td width="7" style="border:none;"></td>
  <td width="115" style="border:none;"></td>
  <td width="11" style="border:none;"></td>
  <td width="41" style="border:none;"></td>
  <td width="1" style="border:none;"></td>
  <td width="6" style="border:none;"></td>
  <td width="45" style="border:none;"></td>
  <td width="33" style="border:none;"></td>
  <td width="8" style="border:none;"></td>
  <td width="75" style="border:none;"></td>
  <td width="28" style="border:none;"></td>
  <td width="6" style="border:none;"></td>
  <td width="1" style="border:none;"></td>
  <td width="28" style="border:none;"></td>
  <td width="9" style="border:none;"></td>
  <td width="56" style="border:none;"></td>
  <td width="37" style="border:none;"></td>
  <td width="7" style="border:none;"></td>
 </tr>
</table>

<p style="line-height:1.0pt;margin:0pt 0pt 8.0pt;"><font size="1" face="Times New Roman">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;font-family:Times New Roman;width:100.0%;">
 <tr style="page-break-inside:avoid;">
  <td width="52%" valign="top" style="padding:0pt 0pt 0pt 0pt;width:52.7%;">
  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt;"><!-- SET mrlNoTableShading --></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt 0pt 0pt 0pt;width:2.56%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="44%" colspan="2" valign="top" style="padding:0pt 0pt 0pt 0pt;width:44.74%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="1" face="Times New Roman" style="font-size:8.0pt;">Please sign exactly as your name is printed. Each
  joint tenant should sign. Executors, administrators, trustees and guardians
  should give full titles when signing. Corporations and partnerships should
  sign in full the corporate or partnership name by an authorized person.
  Please mark, sign, date and return your Proxy promptly in the enclosed
  envelope, which requires no postage if mailed in the United States.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="52%" valign="top" style="padding:0pt 0pt 0pt 0pt;width:52.7%;">
  <p style="margin:4.0pt 0pt .0001pt;"><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt 0pt 0pt 0pt;width:2.56%;">
  <p style="margin:4.0pt 0pt .0001pt;"><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="5%" valign="top" style="padding:0pt 0pt 0pt 0pt;width:5.14%;">
  <p style="margin:4.0pt 0pt .0001pt;"><font size="1" face="Times New Roman" style="font-size:8.0pt;">Dated:</font></p>
  </td>
  <td width="39%" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt 0pt 0pt 0pt;width:39.6%;">
  <p style="margin:4.0pt 0pt .0001pt;"><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="52%" valign="top" style="padding:0pt 0pt 0pt 0pt;width:52.7%;">
  <p style="margin:4.0pt 0pt .0001pt;"><font size="1" face="Times New Roman" style="font-size:8.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt 0pt 0pt 0pt;width:2.56%;">
  <p style="margin:4.0pt 0pt .0001pt;"><font size="1" face="Times New Roman" style="font-size:8.0pt;">&nbsp;</font></p>
  </td>
  <td width="44%" colspan="2" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt 0pt 0pt 0pt;width:44.74%;">
  <p style="margin:4.0pt 0pt .0001pt;"><font size="1" face="Times New Roman" style="font-size:8.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="52%" valign="top" style="padding:0pt 0pt 0pt 0pt;width:52.7%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt 0pt 0pt 0pt;width:2.56%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="44%" colspan="2" valign="top" style="border:none;padding:0pt 0pt 0pt 0pt;width:44.74%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><font size="1" face="Times New Roman" style="font-size:8.0pt;">Signature</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="52%" valign="top" style="padding:0pt 0pt 0pt 0pt;width:52.7%;">
  <p style="margin:4.0pt 0pt .0001pt;"><font size="1" face="Times New Roman" style="font-size:8.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt 0pt 0pt 0pt;width:2.56%;">
  <p style="margin:4.0pt 0pt .0001pt;"><font size="1" face="Times New Roman" style="font-size:8.0pt;">&nbsp;</font></p>
  </td>
  <td width="44%" colspan="2" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt 0pt 0pt 0pt;width:44.74%;">
  <p style="margin:4.0pt 0pt .0001pt;"><font size="1" face="Times New Roman" style="font-size:8.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="52%" valign="top" style="padding:0pt 0pt 0pt 0pt;width:52.7%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt 0pt 0pt 0pt;width:2.56%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="44%" colspan="2" valign="top" style="border:none;padding:0pt 0pt 0pt 0pt;width:44.74%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><font size="1" face="Times New Roman" style="font-size:8.0pt;">Signature</font></p>
  </td>
 </tr>
</table>

<p style="line-height:1.0pt;margin:0pt 0pt 8.0pt;"><font size="1" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">BEFORE RETURNING IT IN
THE ENCLOSED ENVELOPE, YOU MUST DETACH THIS PORTION OF THE PROXY CARD</font></p>

<br><hr size="3" width="100%" noshade color="#010101" align="center">

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<br clear="all" style="page-break-before:always;">
 <p style="margin:0pt 0pt .0001pt;text-align:center;"></p>


<p style="font-family:Times New Roman;font-size:10.0pt;font-weight:bold;margin:0pt 0pt 6.0pt;page-break-after:avoid;text-align:center;"><b><font size="2" face="Wingdings" style="font-size:10.0pt;">&#234;</font></b><font size="1" style="font-size:8.0pt;"> FOLD AND DETACH HERE AND READ THE REVERSE
SIDE </font><font face="Wingdings">&#234;</font></p>

<div style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt 0pt 1.0pt 0pt;">

<p style="border:none;font-weight:bold;margin:0pt 0pt 12.0pt;padding:0pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>

</div>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">CRDENTIA CORP.</font></b></p>

<p style="font-weight:bold;margin:0pt 0pt 6.0pt;page-break-after:avoid;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">ANNUAL
MEETING OF STOCKHOLDERS HELD ON DECEMBER&nbsp;28, 2006<br>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF CRDENTIA CORP.</font></b></p>

<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The undersigned hereby appoints James J. TerBeest and
James D. Durham, and each of them, proxyholders, each with full power of
substitution to vote all of the shares of stock of Crdentia Corp. (the
&#147;Company&#148;) which the undersigned may be entitled to vote at the Annual Meeting
of Stockholders of the Company to be held at the Company&#146;s offices at 5001 LBJ
Freeway, Suite&nbsp;850, Dallas, Texas 75244 on Thursday, December&nbsp;28,
2006 at 9:00&nbsp;a.m. (local time) and at any continuation, postponement or
adjournments thereof, with respect to the following matters, which were more
fully described in the Proxy Statement dated December&nbsp;13, 2006, receipt of
which is hereby acknowledged by the undersigned.</font></p>

<p style="margin:0pt 0pt 12.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">This proxy will be voted as directed. Unless
otherwise directed, this proxy will be voted (1)&nbsp;FOR election of the
director nominees and (2)&nbsp;FOR the appointment of KBA Group LLP as our
independent auditor for the fiscal year ending December&nbsp;31, 2006.</font></b></p>

<p style="font-weight:bold;margin:0pt 0pt 112.0pt;page-break-after:auto;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">This proxy is valid only
when signed and dated.<br>
See Reverse Side</font></b></p>

<p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

</div><br><hr size="3" width="100%" noshade color="#010101" align="center">

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