On January 20, 2016, CryoLife Inc. entered into a third amended and restated credit agreement among the company, On-X Life Technologies Holdings Inc., or On-X, AuraZyme Pharmaceuticals Inc., CryoLife International Inc., On-X Life Technologies Inc., Valve Special Purpose Co., LLC, the financial institutions party thereto from time to time as lenders and Healthcare Financial Solutions, LLC, an affiliate of Capital One, National Association, as agent for such lenders. The credit agreement amends and restates the company existing $20.0 million second amended and restated credit agreement, dated as of September 26, 2014. The credit agreement provides for a $75.0 million secured term loan credit facility and a $20.0 million secured revolving loan credit facility (including a $4.0 million letter of credit sub-facility and a $3.0 million swing-line loan sub-facility).

Subject to the satisfaction of certain conditions, including obtaining additional commitments from existing and/or new lenders, the company may increase the amounts of both the term loan credit facility and the revolving loan credit facility. On January 20, 2016, the company drew the entire $75.0 million secured term loan facility. Term loan facility proceeds, along with cash on hand and shares of the company common stock, were used to fund the acquisition of On-X Life Technologies Holdings Inc. and its subsidiaries.

Term loan facility proceeds and cash on hand were used to pay certain fees and expenses related to the acquisition and the Credit Agreement. Term loan facility proceeds were also used to repay approximately $1.9 million of indebtedness of On-X Life Technologies Inc. owed to comerical bank under that certain amended and restated loan and security agreement, dated as of May 15, 2008. The secured revolving loan credit facility was undrawn following the acquisition and may be used for working capital, capital expenditures, acquisitions permitted under the Credit Agreement, and other general corporate purposes pursuant to the terms of the credit agreement.

Term loans are repayable on a quarterly basis according to the amortization schedule set forth in the Credit Agreement and incorporated herein by reference. CryoLife has the right to prepay loans under the Credit Agreement in whole or in part at any time. Term loans amounts repaid may not be reborrowed.

Revolving loans repaid may be reborrowed. All outstanding principal and interest must be repaid on or before January 20, 2021, the maturity date. CryoLife is obligated to pay an unused commitment fee equal to 0.50% per annum of the average unutilized portion of the revolving loans.

In addition, CryoLife is also obligated to pay other customary fees for a credit facility of this size and type. The loans under the credit agreement (other than the swing-line loans) bear interest, at the company option, at a floating annual rate equal to either the base rate plus a margin of between 1.75% and 2.75%, depending on the company consolidated leverage ratio or to LIBOR plus a margin of between 2.75% and 3.75%, depending on the company consolidated leverage ratio. Swing-line loans shall bear interests only at a floating annual rate equal to the base rate plus a margin of between 1.75% and 2.75%, depending on the company consolidated leverage ratio.

While a payment event of default exists, the company is obligated to pay a per annum default rate of interest of 2.00% above the applicable interest rate on the past due principal amount of the loans outstanding. While a bankruptcy or insolvency event of default exists, CryoLife is obligated to pay a per annum default rate of interest of 2.00% above the applicable interest rate on all loans outstanding. The Credit Agreement prohibits CryoLife from exceeding a maximum consolidated leverage ratio and requires CryoLife to maintain a minimum interest coverage ratio.

In addition, the Credit Agreement contains certain customary affirmative and negative covenants, including covenants that limit the ability of CryoLife and its subsidiaries to, among other things, grant liens, incur debt, dispose of assets, make loans and investments, make acquisitions, make certain restricted payments, merge or consolidate, change their business and accounting or reporting practices, in each case subject to customary exceptions for a credit facility of this size and type.