AND PERMANENT FINANCING AGREEMENT

 EXHIBIT 10.1

                      SECOND AMENDMENT TO CONSTRUCTION LOAN
                        AND PERMANENT FINANCING AGREEMENT

     This  Second  Amendment  to  Construction  Loan  and  Permanent   Financing
Agreement (this "Amendment") is made and entered into as of July 30, 2002 by and
between  CRYOLIFE,  INC.  (the  "Borrower"),  and  BANK OF  AMERICA,  N.A.  (the
"Lender");

                              W I T N E S S E T H:

     WHEREAS,  the  Borrower  and the  Lender  have made and  entered  into that
Construction Loan and Permanent Financing Agreement, dated as of April 25, 2000,
as amended  through the date  hereof  (the  "Original  Loan  Agreement"  and, as
amended  hereby,  the "Loan  Agreement";  capitalized  terms used herein and not
otherwise  defined  shall  have  the  meanings  ascribed  thereto  in  the  Loan
Agreement);

     WHEREAS,  the  Borrower's  obligations  to the Lender  are  secured by that
certain Security  Agreement,  dated as of April 25, 2000, as amended through the
date hereof (the "Original Security Agreement" and, as so amended, the "Security
Agreement");

     WHEREAS,  pursuant to the Original Loan Agreement,  the Lender has extended
to the Borrower a construction/permanent loan facility in the original principal
amount of up to $8,000,000;

     WHEREAS,  the Lender has  previously  extended to the  Borrower a revolving
loan facility in the original  principal  amount of up to $2,000,000,  which has
expired;

     WHEREAS,  Borrower desires to obtain a new revolving loan facility of up to
$10,000,000 and to make certain other changes to the Loan Agreement;

     WHEREAS,  the  Borrower  desires to amend  certain  provisions  of the Loan
Agreement,  and the  Lender  is  willing  to agree to the same on the  terms and
conditions set forth herein;

     NOW  THEREFORE,  for  and in  consideration  of the  foregoing  and for ten
dollars  ($10.00)  and other good and  valuable  consideration,  the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:

                                   ARTICLE 1.
                          AMENDMENTS TO LOAN AGREEMENT

     SECTION 1.1 DEFINITION AMENDMENTS. The following definitions in Section 1.1
of the Loan Agreement are hereby amended in their entirety to read as follows:

     "Adjusted LIBO Rate" means:

     (i) with respect to the  Construction  Loan (and Term Loan),  the LIBO Rate
     divided  by a  percentage  equal to one (1) minus the then  average  stated
     maximum amount (stated as a decimal) of all reserve requirements applicable
     to any member of the  Federal  Reserve  System in  respect of  Eurocurrency
     liabilities  as defined in  Regulation  D of the Board of  Governors of the
     Federal  Reserve System (or any successor  categories for such  liabilities
     under such  Regulation  D). The Adjusted LIBO Rate shall be set on the date
     of Closing and shall be recalculated  each thirtieth (30th) day thereafter.
     The Adjusted LIBO Rate, once so calculated or recalculated, shall remain in
     effect until the next scheduled  recalculation  date. If any  recalculation
     date for the Adjusted LIBO Rate is not a Business Day, the recalculation of
     the Adjusted  LIBO Rate shall be made on the next  Business  Day  following
     such date.

     (ii) with respect to the Line of Credit,  the fluctuating  rate of interest
     (rounded  upwards,  if necessary to the nearest  1/100 of 1%)  appearing on
     Telerate Page 3750 (or any successor page) as the 1 month London  interbank
     offered rate for deposits in United States Dollars at  approximately  11:00
     a.m. (London time) on the second  preceding  business day, as adjusted from
     time  to time in  Lender's  sole  discretion  for  then-applicable  reserve
     requirements,  deposit  insurance  assessment  rates and  other  regulatory
     costs; if for any reason such rate is not available,  the term "LIBOR Daily
     Floating  Rate" shall mean the  fluctuating  rate of interest  equal to the
     rate of interest (rounded upwards, if necessary to the nearest 1/100 of 1%)
     appearing  on  Reuters  Screen  LIBO Page as the 1 month  London  interbank
     offered rate for deposits in United States Dollars at  approximately  11:00
     a.m.  (London time) on the second  preceding  day, as adjusted from time to
     time in Lender's sole discretion for then-applicable  reserve requirements,
     deposit insurance  assessment rates and other regulatory  costs;  provided,
     however,  if more than one rate is specified  on Reuters  Screen LIBO page,
     the  applicable  rate shall be the  arithmetic  mean of all such rates (the
     "Index").  The Index is not necessarily the lowest charged by Lender on its
     loans,  Lender may make loans based on other rates as well and if the Index
     becomes  unavailable  during  the term of this Line of  Credit,  Lender may
     designate a substitute  index after notice to Borrower.  The interest  rate
     change applicable to the Line of Credit will not occur more often than each
     date of such change in the Index.

     "Advances" means, (i) with respect to the Construction  Loan, any direct or
     indirect advance made by Lender to Borrower pursuant to Article Two of this
     Agreement,  and (ii) with  respect  to the Line of  Credit,  any  direct or
     indirect  advance  made by Lender to Borrower  pursuant to Article  IIIA of
     this Agreement.

     "Commitment"  means,  (i) with respect to the  Construction  Loan (and Term
     Loan),   $8,000,000,   and  (ii)  with  respect  to  the  Line  of  Credit,
     $10,000,000.

     "Commitment  Letter" means, (i) with respect to the Construction  Loan (and
     Term Loan),  that  certain  letter  from Lender to Borrower  dated March 9,
     2000,  a copy of which is  attached  hereto  as  Exhibit  B, and (ii)  with
     respect to the Line of Credit,  that certain letter from Lender to Borrower
     dated June 18, 2002, a copy of which is attached hereto as Exhibit B-1.

     "Line of Credit" means the revolving  line of credit  extended by Lender to
     Borrower pursuant to Section IIIA hereof.

     "Loan" means (i) either the Construction Loan or the Term Loan, or both, as
     the context may require,  or (ii) the Line of Credit,  or both (i) and (ii)
     as the context may require.

     "Note" means (i) with respect to the Construction Loan (and Term Loan), the
     promissory  note,  dated as of April 25, 2000, from Borrower to Lender,  in
     the principal  amount of $8,000,000,  as amended,  modified,  supplemented,
     restated or renewed from time to time, and (ii) with respect to the Line of
     Credit,  the promissory  note,  dated as of July 30, 2002, from Borrower to
     Lender,  in the  principal  amount of  $10,000,000,  as amended,  modified,
     supplemented, restated or renewed from time to time.

     SECTION 1.2 NEW DEFINITIONS.  The following definitions are hereby added in
Section 1.1 of the Loan Agreement to read in their entirety as follows:

     "Line of Credit Commitment" means $10,000,000.

     "Termination Date" means July 30, 2005.

     SECTION 1.3 LOAN AGREEMENT AMENDMENT.  The Loan Agreement is hereby amended
by adding a new Article IIIA to read in its entirety as follows:

     3.01A The Line of Credit.  (a) From time to time upon  Borrower's  request,
     and subject to the terms and conditions of this Agreement, Lender agrees to
     advance to Borrower  prior to the  Termination  Date  amounts  which do not
     exceed the Line of Credit  Commitment  in aggregate  outstanding  principal
     amount at any one time.  Notwithstanding  anything in this Agreement to the
     contrary, Lender shall not be obligated hereunder to make any Advance under
     the Line of Credit on or after the earlier of (i) the  Termination  Date or
     (ii) the occurrence of a Default or Event of Default hereunder.  Subject to
     the terms and conditions hereof,  prior to the Termination Date,  Borrower,
     at its option, from time to time may borrow,  repay and reborrow all or any
     portion of the Line of Credit.

     (b) The  proceeds  of the Line of Credit  may be used by  Borrower  only to
     finance Borrower's and its Subsidiaries'  working capital and other general
     corporate needs.

     (c) The Advances under the Line of Credit shall bear interest at a floating
     rate per annum  equal to the  Adjusted  LIBO Rate plus one and  one-quarter
     percent  (1.25%).  To the extent  permitted by law, any overdue interest on
     the  Advances  under the Line of Credit  shall  bear  interest,  payable on
     demand, for each day until paid at a rate equal to the Default Rate.

     (d) Borrower shall pay to Lender unused  facility fees for Borrower's  Line
     of Credit facility  hereunder  during the term hereof computed on the daily
     average unused portion of the Line of Credit Commitment at a rate per annum

     of one-quarter of one percent  (.25%).  Such unused  facility fees shall be
     payable by Borrower to Lender monthly in arrears,  commencing on August 31,
     2002,  and  continuing  to be due on the last  Business  Day of each  month
     thereafter as well as on the Termination Date.

     (e)  Interest on the  principal  amount of the  Advances  under the Line of
     Credit  shall be due and payable  monthly in arrears on the first (1st) day
     of each  calendar  month  commencing  September 1, 2002 with respect to all
     interest  accrued  during the  calendar  month  immediately  preceding  the
     interest payment date, and on the Termination Date.

     (f) The  outstanding  principal  balance of the Advances  under the Line of
     Credit, together with all accrued but unpaid interest thereon, shall be due
     and payable in full on the Termination Date.

     (g)  Borrower  hereby  authorizes  Lender   automatically  to  deduct  from
     Borrower's  account numbered 6218199 the amount of any interest payments on
     Line  of  Credit  when  and  as  due.  If the  funds  in  the  account  are
     insufficient  to cover  any such  interest  payment,  Lender  shall  not be
     obligated to advance  funds to cover the  payment.  At any time and for any
     reason,  Borrower or Lender may voluntarily terminate automatic payments of
     interest on the Line of Credit.  In the event that Borrower  terminates the
     automatic  payment  arrangement  with  Lender,  Borrower  agrees  that  the
     interest rate for the Line of Credit will  increase,  at the  discretion of
     the Lender, by one-half percentage point (0.50%) per annum over the rate of
     interest stated above, and the amount of each interest  installment will be
     increased  accordingly.  The effective  rate of interest  under the Line of
     Credit shall not in any event exceed the maximum rate permitted by law.

     (h) The Line of Credit may be prepaid,  in whole or in part, by Borrower at
     any time or from time to time hereafter without premium or penalty.

     (i) All of the Advances under the Line of Credit shall  constitute one loan
     by Lender to Borrower. Lender shall maintain a loan account on its books in
     which shall be recorded all Advances under the Line of Credit, all payments
     made by Borrower on the Line of Credit and all other appropriate debits and
     credits as provided in this  Agreement  and the Note with respect  thereto,
     including  without  limitation  all charges,  expenses and  interests.  All
     entries  in such  account  shall be made in  accordance  with the  Lender's
     customary accounting practices as in effect from time to time. Lender shall
     render to Borrower a monthly  statement  setting  forth the balance of such
     account,  including principal,  interest,  expenses and fees, and each such
     statement shall,  absence manifest error or omissions,  be presumed correct
     and binding upon Borrower and shall  constitute an account  stated  unless,
     within  thirty (30) days after receipt of any such  statement  from Lender,
     Borrower shall deliver to Lender a written objection thereto specifying the
     error or  errors  of  omission  or  omissions,  if any,  contained  in such
     statement.

     (g) All  interest  and fees owing by Borrower to Lender  hereunder or under
     the other  Financing  Documents shall be computed on the basis of a 360-day
     year and the actual days elapsed.

     SECTION 1.4 LOAN  AGREEMENT  AMENDMENT.  Section 5.02 of the Loan Agreement
shall apply to the  Construction  Loan Advances  only and the Loan  Agreement is
hereby  further  amended by adding a new Section 5.03 to read in its entirety as
follows:

     5.03  Conditions  Precedent to Each Line of Credit  Advance.  The following
     conditions,  in  addition  to any  other  requirements  set  forth  in this
     Agreement,  shall  have been met or  performed  by the date of such Line of
     Credit Advance with respect to any request for a Line of Credit Advance and
     each request for an Advance  (whether or not a written  Advance  request is
     required) shall be deemed to be a  representation  that all such conditions
     have been satisfied:

     (a) All  provisions  of the  Commitment  Letter with respect to the Line of
     Credit shall have been complied with;

     (b) Borrower's  representations  and warranties set forth herein and in the
     other  Financing  Documents  shall  remain true and correct in all material
     respects;

     (c) No Default or Event of Default shall have occurred under this Agreement
     or under any other Financing Document;

     (d) There shall have occurred no act,  omission or undertaking which would,
     singly or in the  aggregate,  have a  materially  adverse  effect  upon the
     business, assets, liabilities,  financial condition,  results of operations
     or  financial  prospects  of  Borrower,  or upon the ability of Borrower to
     perform any material obligations arising under the Financing Documents;

     (e) The proposed Advance shall not cause the outstanding  principal balance
     of the Line of Credit to exceed the Line of Credit Commitment.

     (f) Borrower shall have delivered such further  documentation or assurances
     as Lender may reasonably require.

     SECTION 1.5 LOAN AGREEMENT AMENDMENT.  The Loan Agreement is hereby amended
by adding new Section 7.25 to read in its entirety as follows:

     7.25 New Subsidiaries. Within thirty (30) days after Borrower's creation or
     acquisition  of any  Subsidiary,  Borrower  shall cause such  Subsidiary to
     guaranty  the  repayment  of the  Liabilities  and  Obligations  to Lender,
     pursuant to a Subsidiary  Guaranty and other documents as are acceptable in
     all respects to the Lender. Borrower also shall provide Lender with any and
     all closing  certificates,  opinions of counsel and other closing documents
     as the  Lender  may  request  with  respect  to  such  guaranty  and  other
     documents.

     SECTION 1.6 LOAN  AGREEMENT  AMENDMENT.  The reference to  "$5,000,000"  in
Section   8.03(iii)(e)   of  the  Loan  Agreement  is  hereby  amended  to  read
"$10,000,000".

     SECTION 1.7 LOAN AGREEMENT AMENDMENT. Section 8.08(c) of the Loan Agreement
is hereby amended in its entirety to read as follows:

     (c) Borrower  shall not permit its  Leverage  Ratio to exceed 0.5 to 1.0 at
     any time.

     SECTION 1.8 LOAN AGREEMENT AMENDMENT. Section 8.08(d) of the Loan Agreement
is hereby amended in its entirety to read as follows:

     (d)  Borrower  shall not permit its Net Worth at any time after the date of
     this  Agreement  to be less than  $90,000,000  plus (i) 80% of the positive
     amount of Net Income of Borrower for each fiscal  quarter  ending after the
     date hereof and (ii) the amount of any increase in Net Worth resulting from
     the issuance of stock, corporate reorganizations,  recapitalizations or any
     similar event.

     SECTION 1.9 LOAN AGREEMENT AMENDMENT.  The Loan Agreement is hereby amended
by adding a new Section 8.12 to read in its entirety as follows:

     8.12 Investments.  Borrower shall not make loans or advances to any Person,
     or  investments  in any Person,  except for (a)  investments  permitted  by
     Section  8.03  hereof,  (b)  U.S.  dollar  denominated  time  deposits  and
     certificates  of deposit  issued by Lender or another  domestic  commercial
     bank of  recognized  standing  having  capital  and  surplus  in  excess of
     $500,000,000,  (c)  securities  issued or directly and fully  guaranteed or
     insured  by the United  States of America or any agency or  instrumentality
     thereof (provided the full faith and credit of the United States of America
     is pledged in support  thereof),  (d) municipal bonds or equity  securities
     that have an investment grade rating from a nationally  recognized  ratings
     service,  and (e) loans and  advances  not in  excess  of  $250,000  in the
     aggregate at any time.

     SECTION  1.10 LOAN  AGREEMENT  AMENDMENT.  Notwithstanding  anything to the
contrary herein,  all notices and communications to the Lender shall be directed
to the following address:

                           Bank of America, N.A.
                           Jacksonville CLSC; Attn:  Notice Desk
                           9000 Southside Blvd., 3rd Floor
                           Jacksonville, FL 32256

     SECTION 1.11 EXHIBITS. The Loan Agreement is hereby amended by adding a new
Exhibit B-1 in the form  attached  hereto as Exhibit B-1,  Exhibit E to the Loan
Agreement is hereby amended in its entirety to read in the form attached  hereto
as Exhibit E, and Schedule 6.05 to the Loan  Agreement is hereby  amended in its
entirety to read in the form attached hereto as Schedule 6.05.

                                   ARTICLE 2.
                           CONDITIONS TO EFFECTIVENESS

     SECTION 2.1  CONDITIONS.  The amendments to the Loan Agreement set forth in
this  Amendment  shall become  effective as of the date first above written (the
"Effective  Date") after all of the conditions set forth in Sections 2.2 through
2.6 hereof shall have been satisfied.

     SECTION 2.2 EXECUTION OF AMENDMENT. This Amendment shall have been executed
and delivered by the Borrower.

     SECTION 2.3 EXECUTION OF REVOLVING NOTE. The Revolving Note shall have been
executed and delivered by the Borrower.

     SECTION  2.4  GUARANTIES.  Each of  Cryolife  Acquisition  Corp.,  Cryolife
Europa,  Ltd.,  Cryolife  Technology,  Inc., AuraZyme  Pharmaceuticals  Inc. and
Cryolife  International,  Inc.  shall have  executed and delivered a guaranty of
Borrower's Obligations and Liabilities.

     SECTION 2.5 SECRETARIAL AND INCUMBENCY  CERTIFICATE.  The Lender shall have
received  counterparts  of a Secretarial  and  Incumbency  Certificate  from the
Borrower and each corporate Guarantor.

     SECTION 2.6 REPRESENTATIONS  AND WARRANTIES.  (a) As of the Effective Date,
except as modified by Schedule 4.06 hereto, the  representations  and warranties
set forth in the Loan  Agreement,  and the  representations  and  warranties set
forth in each of the Loan  Documents,  shall be true and correct in all material
respects;  (b) as of the Effective  Date, no Defaults or Events of Default shall
have  occurred and be  continuing;  (c) the Lender shall have  received from the
Borrower a certificate  dated the  Effective  Date,  certifying  the matters set
forth in subsections (a) and (b) of this Section 2.6.

                                   ARTICLE 3.
                                  MISCELLANEOUS

     SECTION 3.1 ENTIRE  AGREEMENT;  NO NOVATION  OR  RELEASE.  This  Amendment,
together with the Loan Documents,  as in effect on the Effective Date,  reflects
the entire  understanding  with respect to the subject matter contained  herein,
and supersedes any prior agreements,  whether written or oral. This Amendment is
not intended to be, and shall not be deemed or construed to be, a  satisfaction,
novation or release of the Loan Agreement or any other Loan Document.  Except as
expressly amended hereby, all representations,  warranties, terms, covenants and
conditions  of the Loan  Agreement  and the other Loan  Documents  shall  remain
unamended and unwaived and shall continue in full force and effect.

     SECTION 3.2 FEES AND EXPENSES. All fees and expenses of the Lender incurred
in connection  with the issuance,  preparation  and closing of the  transactions
contemplated  hereby  shall  be  payable  by  the  Borrower  promptly  upon  the
submission of the bill therefor. If the Borrower shall fail to promptly pay such

bill,  the  Lender is  authorized  to pay such bill  through an advance of funds
under the Loan.

     SECTION 3.3 CHOICE OF LAW; SUCCESSORS AND ASSIGNS.  This Amendment shall be
construed and enforced in accordance  with and governed by the internal laws (as
opposed to the  conflicts  of laws  provisions)  of the State of  Georgia.  This
Amendment  shall be binding  upon and shall  inure to the benefit of the parties
hereto and their respective successors and assigns.

     WITNESS the hand and seal of each of the  undersigned  as of the date first
written above.

                                  LENDER:

                                  BANK OF AMERICA, N.A.

                                  By: /s/ Ken Topham
                                     -----------------------------------------
                                  Title:   Vice President
                                        --------------------------------------

                                   BORROWER:

                                   CRYOLIFE, INC.

                                   By: /s/ D. A. Lee
                                      ----------------------------------------
                                   Title:   VP & CFO
                                          ------------------------------------

                                   Attest:  /s/ Suzanne K. Gabbert
                                          ------------------------------------
                                   Title: Asst. Corp. Secretary
                                         -------------------------------------

                                                      [Seal]

                                  Exhibit "B-1"

                          [Bank of America Letterhead]

June 18, 2002

Mr. Ashley Lee
Chief Financial Officer
Cryolife, Inc.
1655 Roberts Boulevard, NW
Kennesaw, GA  30144

Re:  Letter of Commitment

Dear Mr. Lee:

Bank of America  (hereafter  the  "Bank")  is pleased to offer you a  commitment
(hereafter the "Commitment")  for a loan (hereafter the "Loan"),  subject to the
following terms and conditions:

  1.    BORROWER:                     Cryolife, Inc.

  GENERAL CORPORATE USE LINE:
2A. LOAN AMOUNT: Up to Ten Million & 00/100 Dollars ($10,000,000.00). 2B. USE OF PROCEEDS: The proceeds from this loan will be used for general corporate use including the funding of future acquisitions by the Borrower. 2C. TERMS: The Terms of this proposed loan shall be for a thirty-six (36) month period from closing. Payments will be interest only with principal due at maturity. 2D. INTEREST RATE: Interest on the daily unpaid balance from Loan date until maturity at a floating rate of 30-Day LIBOR, as determined by Bank of America and adjusted for reserves, deposit insurance assessments and other regulatory costs, plus 1.25%. This line shall bear a fee of 25 basis points per annum based on the unused portion of the Loan Amount. 3. LOAN ADVANCES: Borrower may borrow, repay, and reborrow funds under the Loan at its option during the term of the Loan. 4. COLLATERAL: The Acquisition Line shall be secured at all Cryolife, Inc. June 18, 2002 Page 2 of 8 times by a valid, perfected, first priority security interest in all Accounts Receivable, Inventory, Equipment and Leasehold Improvements of the Borrower of every description now or hereafter acquired or existing. Note that the Bank will continue a negative pledge against the intangible assets of the company. The Acquisition Line shall be cross pledged and collateralized by the existing Term Loan. 5. GUARANTORS: The Loan and the other Obligations shall be fully guaranteed by the Subsidiaries of Borrower pursuant to a Subsidiary Guaranty (or confirmation of an existing Guaranty, as applicable) which shall be duly executed and delivered by each Subsidiary to Lender in connection with this Agreement. The list of guarantors is and is not limited to the following: Cryolife Acquisition Corp. Cryolife Technology, Inc. Cryolife Foreign Sales, Inc. Cryolife Europa, LTD. AuraZyme Pharmaceuticals, Inc. 6. SPECIAL PROVISIONS: a. Borrower will provide the Bank, annually, within one hundred twenty (120) days of the end of its fiscal year end, with CPA Audited financial statements to include a statement of revenues and expenditures as well as a balance sheet. Three statements shall be presented on a consolidated basis. b. Borrower will provide the Bank with quarterly internally-prepared financial statements within forty-five (45) days of the end of each quarter. These statements shall be presented on a consolidated basis. Cryolife, Inc. June 18, 2002 Page 3 of 8 c. Each Financial statement submitted to the Bank shall be accompanied by a duly completed Compliance Certificate executed on behalf of Borrower by its Chief Financial Officer. d. Borrower will provide to the Bank from time to time such financial or other information, as the Bank shall reasonably request. e. Borrower will maintain adequate property damage insurance, naming the Bank as mortgagee/loss payee, and furnish evidence thereof at Loan closing. f. Borrower will provide the Bank with certain legal information at Loan closing to include "Articles of Incorporation", "Certificate of Incorporation", "Corporate Resolution", and a "Certificate of Good Standing" with the Office of the Secretary of State. g. Borrower will maintain all primary operating deposit accounts with Bank of America during the life of the Loan. h. Borrower will maintain certain financial covenants as described on Exhibit "A" attached. 7. COSTS, EXPENSES, AND ATTORNEY'S FEES: Borrower shall pay to Bank immediately upon demand the full amount of all costs and expenses, including reasonable attorneys' fees (to include outside counsel fees and all allocated costs of Bank's in-house counsel if permitted by applicable law), incurred by Bank in connection with negotiation and preparation of this Agreement and each of the Loan Documents. 8. EXTENSIONS OF CREDIT: In an amount not to exceed $250,000.00, Borrower can make loans or advances to any partnership, corporation, individual or other entity, including the normal extensions of trade credit Cryolife, Inc. June 18, 2002 Page 4 of 8 in the ordinary course of Borrower's business. 9. OUTSIDE BORROWING: Borrower shall not create, incur, assume or become liable in any manner for any indebtedness in excess of $250,000.00 (for borrowed money, deferred payment for the purchase of assets, lease payments, as surety or guarantor for the debt of another, or otherwise) other than to Bank, except for normal trade debts incurred in the ordinary course of Borrower's business. 10. SUCCESSORS AND ASSIGNS: This Commitment shall be binding on all parties thereto, their successors, assigns and representatives. 11. COUNTERPARTS: This Commitment may be executed simultaneously in two or more counterparts, each of which shall be deemed an original for evidentiary purposes, but all of which together shall constitute one and the same instrument. 12. DEFAULT: Borrower shall be in default under this Commitment and under any and all promissory notes executed by Borrower in favor of Bank and any and all other documents, instruments, deeds of trust, mortgages, security agreements, guarantees executed and/or delivered by Borrower in connection with the Loan (collectively, the "Loan Documents"), if it shall default in the payment of any amounts due and owing under the Loan or to some other party (if the default to some other party would materially impact the Borrower's ability to operate their business) or should it fail to timely and properly perform, keep and observe any term, covenant, agreement or condition in this Commitment or any of the Loan Documents. 13. CANCELLATION: The Bank reserves the right to cancel this Cryolife, Inc. June 18, 2002 Page 5 of 8 Commitment and terminate the obligation thereunder at any time upon the occurrence of any of the following: (a) Failure of the Borrower to comply with any of the applicable conditions of this Commitment within the time specified, (b) Non-payment of any of the fees or expenses to be paid by the Borrower in connection with this Commitment, or (c) Any filing by or against the Borrower of any petition in bankruptcy or insolvency or for the appointment of a receiver, or the reorganization of Borrower under such conditions or the making of any assignment for the benefit of creditors. 14. ERRORS OR OMISSIONS: Borrower agrees that should any inadvertent errors or omissions later be discovered in any documents executed at closing, Borrower shall promptly execute such corrective documents and remit such sums as may be required to adjust or correct such errors or omissions. 15. MATERIAL ADVERSE CHANGE: This Commitment is conditioned upon there having occurred no act, omission or undertaking which would, singly, or in the aggregate, have a materially adverse effect upon the business, assets, liabilities, financial condition, results of operations or business prospects of the Borrower, and any of its subsidiaries or of any Guarantor, or upon the ability of the Borrower to perform any material obligations arising under the Loan Documents. 16. ARBITRATION: Any controversy or claim between or among the parties hereto including but not limited to those arising out of or relating to this Commitment or any related instruments, agreements or documents including any claim based on or arising from an alleged tort, shall be determined by binding arbitration in accordance with the Federal Cryolife, Inc. June 18, 2002 Page 6 of 8 Arbitration Act (or if not applicable, the applicable state law), and the rules of practice and procedure for the arbitration of commercial disputes of Judicial Arbitration and Mediation Services, Inc. (J.A.M.S.) as supplemented by any special rules set forth in any of the Loan Documents. Judgment upon any arbitration award may be entered in any court having jurisdiction. Any party to this Commitment may bring an action, including a summary or expedited proceeding, to compel arbitration of any controversy or claim to which this Commitment applies in any court having jurisdiction over such action. 17. LOAN AGREEMENT: Borrower shall execute a Loan Agreement at Loan closing in form and substance satisfactory to Bank. 18. INCORPORATION INTO DOCUMENTATION: At the time of Loan closing, this executed Letter of Commitment shall become a part of the Loan documentation. 19. ENTIRE AGREEMENT: This Commitment, together with Loan Documents, supersede all prior written or oral understandings or agreements between Borrower and Bank with respect to the matters addressed in the Loan Documents.
If the terms and conditions of this Letter of Commitment meet with your approval, please indicate your acceptance by signing and returning the original to us. This Letter of Commitment shall become null and void if not accepted within fifteen (15) days of the date hereof, and closed within thirty (30) days of acceptance of this Commitment. Cryolife, Inc. June 18, 2002 Page 7 of 8 Thank you for banking with Bank of America. Sincerely, /s/ Ken Topham -------------------------------------------- Ken Topham Vice President Signed and accepted the 19th day of June, 2002. BORROWER: Cryolife, Inc. BY: /s/ D. A. Lee ------------------------------ NAME: D. Ashley Lee ------------------------------ TITLE: VP & CFO ------------------------------ Cryolife, Inc. June 18, 2002 Page 8 of 8 EXHIBIT "A" Debt Coverage Ratio: Borrower shall not permit its Debt Coverage Ratio for any fiscal quarter or year-end to be less than 1.3 to 1.0. The Debt Coverage Ratio is defined as, with respect to any particular fiscal period of Borrower, the ratio of (a) Borrower's EBITDAR for the consecutive 4-quarter period ending therewith to (b) the sum (without duplication) of (i) Borrower's Current Maturities of Funded Debt for the immediately succeeding consecutive 4-quarter period plus (ii) Borrower's Interest Expense for the consecutive 4-quarter period ending therewith plus (iii) Borrower's Rental Expense for the immediately succeeding consecutive 4-quarter period, all as determined on a consolidated basis. Leverage Ratio. Borrower agrees to maintain a ratio of Total Liabilities to its Net Worth of no greater than 0.5 to 1.0 at all times. Total Liabilities shall mean, as of any particular date, the amount which all liabilities of Borrower would be shown on a consolidated balance sheet of Borrower at such date prepared in accordance with generally accepted accounting principles consistently applied. Net Worth means, as of any particular date, Borrower's total shareholder's equity (including capital stock, additional paid-in capital, and retained earnings after deducting treasury stock) which would appear as such on a consolidated balance sheet of Borrower prepared in accordance with generally accepted accounting principles as then in effect. Net Worth Minimum. Borrower agrees to maintain a minimum net worth of $90,000,000 at all times. Borrower shall increase its minimum net worth by 80% of the positive amount of Net Income of Borrower for each fiscal year period after the date hereof and the amount of any increase in Net Worth resulting from the issuance of stock, corporate reorganizations, capitizations or similar event. Net Worth means, as of any particular date, Borrower's total shareholder's equity (including capital stock, additional paid-in capital, and retained earnings after deducting treasury stock) which would appear as such on a consolidated balance sheet of Borrower prepared in accordance with generally accepted accounting principles as then in effect. Maximum Annual Capital Expenditures. Borrower agrees to spend no more than $5,000,000 annually on capital expenditures. Borrower shall not make Capital Expenditures in excess of $5,000,000 in the aggregate in any fiscal year. Exhibit "E" FORM OF COMPLIANCE CERTIFICATE This Certificate is delivered pursuant to that certain Loan Agreement, dated as of April 25, 2000, as amended (the "Agreement"), by and between CRYOLIFE, INC., a Florida corporation (the "Borrower"), and BANK OF AMERICA, N.A., a national banking association (the "Lender"). All capitalized terms used in this Certificate which are defined in the Agreement are used in this Certificate with the same meanings given such terms in the Agreement. Unless otherwise defined in the Agreement, all accounting terms used herein shall have the meaning given such terms under generally accepted accounting principles consistently applied ("GAAP"). I hereby certify, to the best of my knowledge and believe and in my representative capacity on behalf of the Borrower, to the Lender as follows: 1. I am the duly qualified and acting chief financial officer of the Borrower. 2. I have prepared or reviewed the financial statements of the Borrower as of and for the period ending _________________, _____, true, complete and correct copies of which are attached hereto as Exhibit 1 (collectively, the "Financial Statements"). 3. The Financial Statements were prepared in accordance with GAAP and fairly present the financial position and results of operations of the Borrower (and its consolidated subsidiaries, if any) as of and for the period ending on the date of the Financial Statements (subject to normal year-end adjustments). 4. I further certify that as of, and for the period ending on, the date of the Financial Statements, and except as may be disclosed on Exhibit 2 attached hereto (all of the following being calculated on a consolidated basis and in accordance with GAAP and the Agreement): (a) The Borrower's Leverage Ratio did not exceed 0.5 to 1.0 at any time during such period; (b) The Borrower's Debt Coverage Ratio was not less than 1.3 to 1.0 for such period; (c) The Borrower's Net Worth was not less than __________________ [insert an amount equal to $90,000,000 plus 80% of the positive aggregate amount of Net Income of Borrower for each fiscal quarter beginning with quarter ending 6/30/2002 plus aggregate proceeds from issuance of stock, corporate reorganizations, recapitalization or any similar event]; and (d) The Borrower's Capital Expenditures for such fiscal year (or for the portion thereof ending with such period) did not exceed $5,000,000 in total. Attached hereto as Exhibit 3 are calculations demonstrating whether or not the Borrower was in compliance, as of and for the period ending on the date of the Financial Statements, with the covenants in the Loan Agreement which are summarized in items (a) through (e) above. 5. No Default or Event of Default has occurred and is continuing as of the date of this Certificate other than those Defaults or Events of Defaults (if any) which are described on the aforesaid Exhibit 2 attached hereto. I represent the foregoing information to be true and correct to the best of my knowledge and belief and I execute this Certificate in my representative capacity on behalf of the Borrower as of this _____ day of ---------------, -----. -------------------------------------------- Name: Title: Schedule 6.05 A. CryoLife as a Defendant: 1. Gregory A. Link and Diane Link, as Husband & Wife v. Abington Memorial Hospital, V. Paul Addonizio, M.D. and CryoLife, Inc. Date Filed: September 15, 2000 Case No. 2000-01095 Court of Common Pleas, Montgomery County, Pennsylvania 2. Ann Regner, Leo J. Regner, Michael Shawn Steele and Brandon Steele vs. Inland Eye & Tissue Bank of Redlands; Inland Eye & Tissue Bank of Bakersfield; Pacific Coast Tissue Bank; Doheny Eye & Tissue Transplant Bank; Northern California Transplant Bank; University of California, San Diego, Regional Tissue Bank; University of California, Irvine, Willed Body Program; Musculoskeletal Transplant Foundation; American Red Cross; CryoLife, Inc.; Dr. Steven Burres; Fascia Biosystems; Edwards Life Sciences, LLP; Tissue Banks International; TBI, Inc. d/b/a Northern CA Transplant Bank; Gensci Orthobiologics, Inc.; Osteotech, Inc.; Lifecell Corporation; and Does 1 to 400, Inclusive. Date Filed: May 4, 2000 Case No. SCVSS 66746 Superior Court of California, San Bernardino County, Central District 3. Majid Sadeghi and Sandra Sadeghi, as Husband and Wife v. CryoLife, Inc.; CryoLife International, Inc.; Jefferson Health System, Inc., d/b/a Bryn Mawr Hospital; Main Line Health, Inc., d/b/a Bryn Mawr Hospital; Orthopaedic Specialists; and William D. Emper, M.D. Date Filed: June 21, 2001 Case No. 002695 Court of Common Pleas, Philadelphia County, Pennsylvania 4. Pamela Drahos, as Mother and Next Friend of Cassidy Dawn Chandler-Drahos a/k/a Chandler v. CryoLife, Inc.; St. Francis Hospital, Inc.; and Dr. Richard D. Ranne. Date Filed: May 18, 2000 Case No. CJ 2000-281 District Court In and For Wagoner County, State of Oklahoma 5. Lee Travis Montgomery and wife, Ann Montgomery v. CryoLife, Inc. Date Filed: January 22, 2002 Case No. 3:02-CV-29 United States District Court. Eastern District of Tennessee, Northern Division 6. Alan J. Minvielle v. CryoLife, Inc., Jeffrey Carter, M.D., and Does 1 through 100, Inclusive. Date Filed: April 10, 2002 Case No. CV 143210 Superior Court of California, County of Santa Cruz 7. Kenneth Alesescu and Pamela Alesescu v.CryoLife, Inc.; Midwest Transplant Network; Mercy General Hospital; and Does 1-50, Inclusive. Date Filed: July 2, 2002 Case No. 02AS04017 Superior Court of California, County of Sacramento 8. Julie S. Dayton v. CryoLife, Inc.; and Breg, Inc. Date Filed: June 11, 2002 Case No. 3:02-CV-305 United States District Court, Eastern District of Tennessee, Northern Division at Knoxville 9. William G. Karnes and wife Kelly C. Karnes v. CryoLife, Inc. Date Filed: June 20, 2002 Case No. 3:02-CV-330 United States District Court, Eastern District of Tennessee, Northern Division at Knoxville 10. Steve Lykins, as Trustee for the benefit of the next of kin of Brian Lykins, Deceased v. CryoLife, Inc.; Intermountain Donor Services, Inc.; Michael White, John Doe, Inc., 1 through 5, and John Does Individually, 1 through 5. Date Filed: July 12, 2002 Case No. 0210561324 Superior Court of Cobb County, State of Georgia 11. Joann Savitt, individually and on behalf of all other persons similarly situated v. Doheny Eye & Tissue Bank, Tissue Banks International, Lifecell Corp.; CryoLife, Inc.; Osteotech, Inc.; and Does 1-199, Inclusive. Date Filed: June 7, 2002 Case No. BC275521 Superior Court of California, County of Los Angeles B. CryoLife Acquisition Corporation (f/k/a Ideas for Medicine) as defendant: 1. David A. Ganz, Dr. William I. Ganz and Cecelia Hecht as co-personal representatives of the Estate of Jean Ganz, deceased v. Dr. Alan S. Livingstone; Dr. Jorge De La Pedraja; University of Miami, a private University d/b/a University of Miami School of Medicine; The Public Health Trust of Dade County d/b/a Jackson Memorial Hospital; and CryoLife, Inc. Date Filed: June 13, 2001 Case No. 00-13275 CA 06 Circuit Court of the Eleventh Judicial Circuit In and For Dade County, FL, General Jurisdiction Division 2. Bernard Michaels, as Administrator of the estate of Irene Michaels v. Our Lady of Victory Hospital of Lackawanna, Perala S. Rao, M.D., Perala S. Rao, P.C., Frederick M. Occhino, M.D., Frederick M. Occhino, M.D., P.C., Leo M. Michalek, M.D., and Ideas for Medicine, Inc. Date filed: August 15, 2000 Case No. 12000/7109 Supreme Court of New York: Erie County C. The following is a list of law firms that have filed or are contemplating filing class actions alleging securities law violations by CryoLife, Inc. CryoLife has not yet been served in any of these suits. Berger & Montague, P.C. Cauley Geller Bowman & Coates, LLP Charles J. Piven, P.A. Holzer & Holzer Mark McNair, P.A. Leo W. Desmond Schiffrin & Barroway, LLP Wolf Popper LLP Chitwood & Harley D. In addition, CryoLife is aware of the following suits that may be filed by the following individuals, but CryoLife has not yet been served: Hailey Moulton Timothy C. Talton Andrew T. Swanson, III and/or Andrew T. Swanson, Jr. (father) Benjamin Saile Ramona Pursley Kevin Ryan Wheeler, a minor, and Kimberly Leahew, individually and parent and next friend of Kevin Ryan Wheeler Date Filed: July 2, 2002 Case No. 46834 Circuit Court for Rutherford County, Tennessee E. On June 17, 2002 CryoLife, Inc. received a warning letter from the Food and Drug Administration.

Basic Info X:

Name: AND PERMANENT FINANCING AGREEMENT
Type: and Permanent Financing Agreement
Date: Oct. 29, 2002
Company: CRYOLIFE INC
State: Florida

Other info: