Document:

Exhibit 10.1

                              EMPLOYMENT AGREEMENT

     This  Agreement  ("the  Agreement")  dated as of the ____ day of September,
2005  (the  "Effective  Date"),  is by and  between  CRYOLIFE,  INC.,  a Florida
corporation ("CryoLife") and STEVEN G. ANDERSON (the "Employee").

                              W I T N E S S E T H:

     WHEREAS,  the Board of Directors of CryoLife (the "Board"),  has determined
that it is in the best interests of CryoLife and its  shareholders to enter into
this  Employment  Agreement  in order  to  assure  the  Employee  of  CryoLife's
commitment  and, in so doing, to motivate the Employee to continue in Employee's
dedicated  service to CryoLife even in  circumstances  such as a possible future
threat or occurrence of a Change of Control (defined below) of CryoLife; and,

     WHEREAS,  in order to  accomplish  these  objectives,  the Board has caused
CryoLife to enter into this Agreement.

     NOW, THEREFORE,  in consideration of the premises, the promises hereinafter
set forth and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledges, it is hereby agreed as follows:

     1. EMPLOYMENT.

     (a) CryoLife  hereby employs  Employee in the capacity of President,  Chief
Executive  Officer and  Chairman of the Board and Employee  hereby  accepts such
duties as are customarily performed and exercised by such officer subject to the
supervision of the Board. The duties of Employee shall include those duties more
specifically   described  on  Exhibit  A  attached  hereto  together  with  such
additional duties as are assigned by the Board.

     (b)  CryoLife  agrees to  continue  the  Employee  in its  employ,  and the
Employee hereby agrees to remain in the employ of CryoLife  subject to the terms
and  conditions of this  Agreement,  for the period  commencing on the Effective
Date  and  ending  on the  second  anniversary  of such  date  (the  "Employment
Period"). Unless either party elects not to extend the term of this Agreement by
so  notifying  the  other  in  writing  at  least  30 days  prior  to the  first
anniversary  of  the  Effective  Date  and  each  anniversary  thereafter,   the
Employment  Period shall  automatically  extend for an additional  one year upon
each such  anniversary.  The intent of this  provision  is to provide a two year
initial term with rolling one year extensions beginning on the first anniversary
of the Effective Date.

     2. EMPLOYMENT DUTIES.

     (a) During the Employment  Period, (A) the Employee's  position  (including
status,  offices,  titles and  reporting  requirements),  authority,  duties and
responsibilities  shall be at least  commensurate in all material  respects with

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the most  significant  of those held,  exercised and assigned at any time during
the  120-day  period  immediately  preceding  the  Effective  Date  and  (B) the
Employee's  services  shall be performed at the location  where the Employee was
employed immediately preceding the Effective Date.

     (b) During the Employment Period, and excluding any periods of vacation and
sick leave to which the  Employee is  entitled,  the  Employee  agrees to devote
reasonable  attention  and time to the business and affairs of CryoLife  and, to
the extent necessary to discharge the responsibilities  assigned to the Employee
hereunder,  to use the Employee's  reasonable best efforts to perform faithfully
and efficiently such responsibilities.

     (c) During the Employment  Period, the Employee will not, without the prior
written  consent  of  CryoLife,   directly  or  indirectly  other  than  in  the
performance of the duties hereunder, render services of a business, professional
or commercial  nature to any other person or firm,  whether for  compensation or
otherwise,  except with respect to any  noncompetitive  family businesses of the
Employee  for which the  rendering  of such  services  will not have an  adverse
effect upon Employee's performance of his duties and obligations hereunder.

     3. COMPENSATION, BENEFITS AND BUSINESS EXPENSES.

     (a) For all  services  which  Employee  renders to  CryoLife  or any of its
subsidiaries  or affiliates  during the term hereof,  CryoLife agrees to pay the
Employee the salary and bonus  compensation as set by the Compensation  Advisory
Committee of the Board of Directors.  Employee  shall be entitled to participate
in all  compensation  and bonus plans made  available  to  CryoLife's  executive
employees. Employee's salary at the Effective Date is set forth on Exhibit A.

     (b) CryoLife  shall pay all  reasonable  expenses  incurred by the Employee
directly related to performance of his  responsibilities and duties for CryoLife
hereunder.  Employee  shall  submit  to  CryoLife  statements  that  justify  in
reasonable detail all reasonable expenses so incurred. Subject to such audits as
CryoLife may deem necessary,  CryoLife shall reimburse  Employee the full amount
of any such  expenses  advanced by Employee.  Reimbursable  expenses  shall also
include,  with a value  of up to 10% of  Employee's  base  salary,  monthly  car
payments  and auto  expenses  and  dues and  business  related  expenses  at the
Georgian Club, Buckhead Club, Marietta Club and Delta Crown Room.

     (c) Employee  shall be entitled to a vacation  each year of his  employment
with CryoLife,  according to the standard  vacation policy, as well as insurance
and other  employment  benefits,  as more  particularly  described on Exhibit A.
Vacations not taken shall be cumulative  and carried over to a subsequent  year.
Upon  employment  termination,  Employee shall be paid at the rate of $2,307 per
day for  accumulated  vacation  days not taken.  Such  amount  shall be deemed a
payment  obligation  accruing  through the Date of  Termination  for purposes of
Section 6 of this Agreement.

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     4. CHANGE OF CONTROL.

     (a) In consideration and recognition of the Employee's continued employment
and his contribution to protecting and enhancing shareholder value in any future
sale of CryoLife that may occur and to provide incentive to Employee as a senior
executive  to remain with the  Company  through any future sale or merger of the
Company,  CryoLife agrees to pay to Employee a retention  payment in addition to
other  compensation  due  pursuant  to this  Agreement  equal to one  times  the
aggregate of  Employee's  annual salary and bonus  compensation  for the year in
which a Change of  Control  occurs  (the  "Retention  Payment").  The  Retention
Payment shall be in addition to sums otherwise payable pursuant to Section 3 and
shall be earned  and become due upon the  happening  of a Change of Control  (as
defined below) provided  Employee  remains  employed by the Company at such time
or, if no  longer  then  employed  by the  Company,  Employee's  employment  was
terminated  by the  Company  without  Cause  within 12  months of the  Change of
Control.  If the Change of Control  occurs before the awarding of bonuses in the
year in which the Change of Control occurs, the bonus compensation  component of
the Retention  Payment shall be computed based on the prior year's bonus.  Bonus
compensation shall include cash bonus payments and the present value of non-cash
bonuses such as options or restricted stock. The Retention Payment shall be paid
within three (3) months after the occurrence of a Change of Control.

     (b) For the purposes of this Agreement,  the term "Change of Control" shall
mean a change in the beneficial ownership of CryoLife's voting stock or a change
in the composition of the Board that occurs as follows:

     (i) any  "person,"  including a  "syndicate"  or "group" as those terms are
used in Section  13(d)(3) of the Securities  Exchange Act of 1934, is or becomes
the  beneficial  owner,  directly  or  indirectly,  of  securities  of  CryoLife
representing  20% or  more of the  combined  voting  power  of  CryoLife's  then
outstanding  "Voting   Securities,"  which  is  any  security  which  ordinarily
possesses  the  power to vote in the  election  of the Board of  Directors  of a
corporation without the happening of any precondition or contingency;

     (ii)  CryoLife  is merged or  consolidated  with  another  corporation  and
immediately after giving effect to the merger or consolidation  less than 60% of
the outstanding  Voting Securities of the surviving or resulting entity are then
beneficially  owned  in  the  aggregate  by (x)  the  shareholders  of  CryoLife
immediately prior to such merger or  consolidation,  or (y) if a record date has
been set to  determine  the  shareholders  of CryoLife  entitled to vote on such
merger or consolidation, the shareholders of CryoLife as of such record date;

     (iii) the  following  individuals  cease for any  reason  to  constitute  a
majority of the number of directors then serving:  individuals  who, on the date
hereof,  constitute the Board and any new director  (other than a director whose
initial  assumption  of office  is in  connection  with an actual or  threatened
election contest, including but not limited to a consent solicitation,  relating
to the election of directors of CryoLife)  whose  appointment or election by the
Board or  nomination  for election by  CryoLife's  stockholders  was approved or
recommended by a vote of at least  two-thirds  (2/3) of the directors then still
in office who either were  directors  on the date  hereof or whose  appointment,

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election or nomination for election was  previously so approved or  recommended;
or  (iv)  CryoLife  transfers   substantially  all  of  its  assets  to  another
corporation which is a less than 60% owned subsidiary of CryoLife.

     5. TERMINATION OF EMPLOYMENT.

     (a)  Disability  or Death.  If CryoLife  determines  in good faith that the
Disability of the Employee has occurred during the Employment  Period  (pursuant
to the  definition of Disability  set forth below),  it may give to the Employee
written  notice  in  accordance  with  Section  12(b) of this  Agreement  of its
intention to terminate the Employee's employment.  In such event, the Employee's
employment with CryoLife shall terminate effective on the 30th day after receipt
of such notice by the Employee (the "Disability Effective Date"), provided that,
within the 30 days after such receipt,  the Employee  shall not have returned to
full-time  performance of the Employee's duties. For purposes of this Agreement,
"Disability"  shall mean the absence of the Employee from the Employee's  duties
with  CryoLife  on a  full-time  basis for 180  consecutive  days as a result of
incapacity  due to mental or physical  illness or  determination  by a physician
selected by CryoLife  or its  insurers  and  acceptable  to the  Employee or the
Employee's  legal  representative  that the  Employee  is unable to perform  the
essential  functions of his position as a result of incapacity  due to mental or
physical illness. The Employee's  employment shall terminate  automatically upon
the Employee's death during the Employment Period.

     (b) Cause.  CryoLife may terminate  the  Employee's  employment  during the
Employment Period for Cause. For purposes of this Agreement, "Cause" shall mean:

     (i)  the  willful  and  continued   failure  of  the  Employee  to  perform
substantially  the Employee's  duties with CryoLife (other than any such failure
resulting from  incapacity due to physical or mental  illness),  after a written
demand for  substantial  performance  is  delivered  to Employee by the Board of
CryoLife which  specifically  identifies  the manner in which CryoLife  believes
that the Employee has not substantially performed the Employee's duties, or

     (ii) the  willful  engaging  by the  Employee  in illegal  conduct or gross
misconduct which is materially and demonstrably injurious to CryoLife.

For  purposes  of this  provision,  no act or failure to act, on the part of the
Employee,  shall be  considered  "willful"  unless it is done,  or omitted to be
done,  by the  Employee  in bad  faith or  without  reasonable  belief  that the
Employee's action or omission was in the best interests of CryoLife. Any act, or
failure to act, based upon authority given pursuant to a resolution duly adopted
by the  Board  or  based  upon the  advice  of  counsel  for  CryoLife  shall be
conclusively presumed to be done, or omitted to be done, by the Employee in good
faith and in the best interests of CryoLife.

     (c)  Good  Reason.  The  Employee's  employment  may be  terminated  by the
Employee for Good Reason.  For purposes of this  Agreement,  "Good Reason" shall
mean:

     (i) the  assignment  to the  Employee  of any  duties  inconsistent  in any
respect with the Employee's  position  (including  status,  offices,  titles and
reporting requirements),  authority,  duties or responsibilities as contemplated
by Section 1(a) of this Agreement, or any other action by CryoLife which results
in a  diminution  in  such  position,  authority,  duties  or  responsibilities,
excluding for this purpose an isolated, insubstantial and inadvertent action not
taken in bad faith and which is remedied by CryoLife  promptly  after receipt of
notice thereof given by the Employee;

     (ii) any  failure  by  CryoLife  to comply  with any of the  provisions  of
Section 3(a) or 3(b) of this Agreement, other than an isolated, insubstantial or
inadvertent failure not occurring in bad faith and which is remedied by CryoLife
promptly after receipt of notice thereof given by the Employee;

     (iii) any threatened  termination by CryoLife of the Employee's  employment
other than for Cause, Death or Disability; or

     (iv) any failure by CryoLife  to comply with and satisfy  Section  11(c) of
this Agreement.

For purposes of this Section 5(c), any good faith determination of "Good Reason"
made by the  Employee  shall be  conclusive.  Anything in this  Agreement to the
contrary notwithstanding,  a termination by the Employee for any reason at least
90 but not more than 120 days following  consummation  of a Change of Control or
during the 30 day period immediately following the first anniversary of a Change
of Control shall be deemed to be a termination  for Good Reason for all purposes
of this Agreement.

     (d) Retirement.  The Employee may  voluntarily  terminate his employment at
any time for reason of retirement ("Retirement").

     (e) Notice of Termination.  Any termination by CryoLife, or by the Employee
for Good Reason or Retirement, shall be communicated by Notice of Termination to
the other party hereto given in accordance with Section 12(b) of this Agreement.
For purposes of this Agreement, a "Notice of Termination" means a written notice
which (i) indicates the specific termination  provision in this Agreement relied
upon, (ii) to the extent  applicable,  sets forth in reasonable detail the facts
and  circumstances  claimed to provide a basis for termination of the Employee's
employment under the provision so indicated and (iii) if the Date of Termination
(as defined  below) is other than the date of receipt of such notice,  specifies
the termination date (which date shall not, except in the case of Retirement, be
more than 30 days after the giving of such notice).  The failure by the Employee
or CryoLife to set forth in the Notice of Termination  any fact or  circumstance
which contributes to a showing of Good Reason or Cause shall not waive any right
of the Employee or CryoLife, respectively, hereunder or preclude the Employee or
CryoLife,  respectively,  from asserting such fact or  circumstance in enforcing
the Employee's or CryoLife's rights hereunder.

     (f) Date of  Termination.  "Date of  Termination"  means if the  Employee's
employment is terminated (i) by CryoLife for Cause,  or by the Employee for Good
Reason or Retirement,  the date of receipt of the Notice of Termination,  or any
later date  specified  therein,  as the case may be, (ii) by CryoLife other than
for Cause or  Disability,  the date on which  the  Employee  receives  Notice of

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Termination,  (iii) by reason of death or  Disability,  the date of death of the
Employee  or the  Disability  Effective  Date,  as the case may be,  and (iv) by
reason of non-renewal of the Agreement, the last day of employment under Section
1(b).  Notwithstanding the foregoing, the Date of Termination may, except in the
case  of  Retirement,  be  accelerated  by the  party  who  receives  Notice  of
Termination  by providing  to the other party  written  notice of  acceleration,
including the accelerated Date of Termination,  within 30 days of receipt of the
Notice of Termination.

     (g)  Non-Compete  Commitment.  During the term of this  Agreement and for a
period of two years after any termination of this Agreement, the Employee agrees
not to accept  any  position  as chief  executive  officer,  president  or chief
operating officer with, or provide  comparable level executive  consultation to,
any  competitors  of CryoLife in the  cardiac,  vascular  or  orthopedic  tissue
processing  business  or  biological  glue  business  within the United  States.
Payments of amounts owing under any Severance  Payment (defined in Section 6(f))
obligation,  shall be conditioned upon Employee's continued compliance with this
non-compete commitment.

     (g) Agreement Not to Solicit.  During the term of this  Agreement and for a
period of two years after any termination of this Agreement, the Employee agrees
he will not,  without the prior written consent of the Company,  either directly
or  indirectly,  on his own  behalf or in the  service  or on behalf of  others,
solicit or attempt to  solicit,  divert or hire away any person  employed by the
Company.

     6. OBLIGATIONS OF CRYOLIFE UPON TERMINATION.

     (a) Good Reason; Other Than for Cause, Death or Disability.  If, during the
Employment Period, (i) CryoLife shall terminate the Employee's  employment other
than  for  Cause,  Death or  Disability  or (ii) the  Employee  shall  terminate
employment  for Good Reason,  then CryoLife  shall pay to Employee the Severance
Payment  (defined below) and shall,  subject to the limitations set forth in (g)
below,  continue to provide major medical insurance benefits comparable to those
described in the schedules  attached to this  Agreement  (collectively,  " Major
Medical  Benefits") for Employee and Employee's  wife, Ann B. Anderson,  for the
duration  of their  lives.  Such  payment  shall be in  addition  to sums due to
Employee  through  the Date of  Termination  and  shall  be  subject  to  normal
withholding requirements of CryoLife.

     (b) Retirement. If the Employee's employment is terminated by reason of the
Retirement or by reason of non-renewal,  this Agreement shall terminate  without
further  obligation  to the Employee  under this  Agreement,  other than for (i)
payment  of  obligations  occurring  through  the Date of  Termination  plus the
Severance  Payment,  and (ii) for  CryoLife's  agreement  to continue  the Major
Medical  Benefits for Employee and Employee's  wife,  Ann B.  Anderson,  for the
duration of their lives.

     (c) Death.  If the  Employee's  employment  is  terminated by reason of the
Employee's  death during the Employment  Period,  this Agreement shall terminate
without further  obligation to the Employee's legal  representatives  under this
Agreement,  other than for (i) payment of obligations occurring through the Date
of Termination  and (ii) for CryoLife's  agreement to continue the Major Medical
Benefits for Employee's wife, Ann B. Anderson, for the duration of her life.

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     (d) Disability. If the Employee's employment is terminated by reason of the
Employee's  Disability  during  the  Employment  Period,  this  Agreement  shall
terminate  without  further  obligations  to the  Employee,  other  than for (i)
payment  of  obligations  accruing  through  the  Date of  Termination  plus the
Severance Payment,  and (ii) and for Cryolife's  agreement to continue the Major
Medical  Benefits for Employee and Employee's  wife,  Ann B.  Anderson,  for the
duration of their lives.

     (e) Cause. If the Employee's employment shall be terminated by CryoLife for
Cause,  this  Agreement  shall  terminate  without  further  obligations  to the
Employee  other  than  for  payment  obligations  accruing  through  the Date of
Termination.

     (f) Severance Payment.  The "Severance Payment" shall be an amount equal to
two times the aggregate of Employee's  annual salary and bonus  compensation for
the year in which the  termination  of employment  occurs except in the event of
Retirement that occurs prior to the first anniversary of the Effective Date. The
Severance Payment for Retirement shall initially be an amount equal to one times
Employee's annual salary and bonus compensation for the year in which Retirement
occurs but, so long as Employee remains employed by CryoLife,  shall increase to
up to two times Employee's annual salary and bonus compensation. The increase in
such  Retirement  Severance  Payment  from one  times  annual  salary  and bonus
compensation to two times annual salary and bonus compensation shall occur in 12
equal monthly installments beginning with the date one month after the Effective
Date and ending on the first  anniversary  of the Effective  Date. The Severance
Payment shall be payable in cash by the Company in 24 equal monthly installments
commencing  on the date thirty (30) days after  Employee's  Date of  Termination
(the "Severance Period");  provided, however, that, to the extent required under
Section 409A of the Code to avoid the  imposition of additional  tax to Employee
under that Section,  any payment of the Severance  Payment shall commence on the
six-month  anniversary  of Employee's  separation  from service with the Company
(or, if earlier,  the date of  Employee's  death) and continue in equal  monthly
installments over the remainder of the Severance Period; provided further, that,
to the extent permitted under Section 409A of the Code without the imposition of
additional  tax to Employee under that Section,  the Severance  Payment shall be
paid (i) in an immediate  lump-sum in the event the Employee's  separation  from
service  occurs on or after a Change of Control or (ii) in an immediate lump sum
at the time of a Change of Control (less amounts previously paid to Employee) in
the event the separation from service occurs within six months prior to a Change
of  Control.  Payment  of any  Severance  Payment  will  be  subject  to  normal
withholding. If the employment termination occurs before the awarding of bonuses
in the year in which the employment  termination  occurs, the bonus compensation
component of the Severance  Payment shall be computed  based on the prior year's
bonus.  Bonus  compensation  shall  include cash bonus  payments and the present
value of non-cash bonuses such as options or restricted stock.

     (g)  Limitations  on Major Medical  Benefits.  The Company's  obligation to
provide Major  Medical  Benefits to Employee and Ann B.  Anderson,  or either of
them, after employment  termination  shall not oblige the Company to expend more
than the Maximum  Annual  Premium  Amount in any calendar  year as determined by
CryoLife.  For purposes of this  Agreement,  Maximum Annual Premium Amount shall
mean the sum of $25,000 increased by the Consumer Price Index using September 1,
2005 as the base date. If all of the Major Medical  Benefits  cannot be provided

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for the Maximum  Annual  Premium  Amount,  the Company shall utilize the Maximum
Annual  Premium  Amount to obtain such major medical  insurance  coverage as can
reasonably  be obtained.  When  Employee or Employee's  wife,  Ann B.  Anderson,
qualify for Medicare,  Medicaid or other  governmentally  provided major medical
benefit  (collectively,  " Government Benefits") of the sorts otherwise included
within Major Medical Benefits, the provision of benefits under the Major Medical
Benefits may be  conditioned  on Employee or Employee's  wife,  Ann B. Anderson,
looking first to Government  Benefits for coverage  before  drawing on the Major
Medical Benefits.

     7.  NON-EXCLUSIVITY  OF RIGHTS.  Nothing in this Agreement shall prevent or
limit the Employee's  continuing or future  participation in any plan,  program,
policy or practice  provided by CryoLife or any of its affiliated  companies and
for which the Employee may qualify, nor shall anything herein limit or otherwise
affect such rights as the Employee may have under any contract or agreement with
CryoLife or any of its affiliated  companies.  Amounts which are vested benefits
or which the Employee is otherwise entitled to receive under any plan,  practice
or  program  of or  any  contract  or  agreement  with  CryoLife  or  any of its
affiliated  companies  at or  subsequent  to the  Date of  Termination  shall be
payable in accordance with such plan, policy, practice or program or contract or
agreement except as explicitly modified by this Agreement.

     8. FULL  SETTLEMENT.  In no event shall the  Employee be  obligated to seek
other  employment  or take any other action by way of  mitigation of the amounts
payable to the Employee  under any of the  provisions of this Agreement and such
amounts  shall  not  be  reduced  whether  or not  the  Employee  obtains  other
employment.  CryoLife agrees to pay as incurred, to the full extent permitted by
law, all legal fees and expenses  which the Employee may  reasonably  incur as a
result of any contest  (regardless  of the outcome  thereof)  by  CryoLife,  the
Employee or others of the validity or enforceability of, or liability under, any
provision of this Agreement.

     9. LIMITATION OR EXPANSION OF BENEFITS.

     (a) In the  event it shall be  determined  that  any  benefit,  payment  or
distribution by CryoLife to or for the benefit of the Employee  (whether payable
or distributable pursuant to the terms of this Agreement or otherwise) would, if
paid,  be  subject to the excise  tax  imposed by Section  4999 of the  Internal
Revenue  Code of 1986,  as amended  (the  "Code";  such excise tax,  the "Excise
Tax"),  then  CryoLife  shall pay to  Employee an  additional  amount of cash (a
"Gross-Up  Payment")  equal to the amount  necessary  to cause the amount of the
aggregate after-tax compensation and benefits received by the Employee hereunder
(after  payment of the excise tax under Section 4999 of the Code with respect to
any excess  parachute  payment,  and any state and federal income and employment
taxes with respect to the  Gross-Up  Payment) to equal the  aggregate  after-tax
compensation  and benefits the Employee would have received if Sections 280G and
4999 of the Code had not been enacted. A nationally recognized public accounting
firm selected by CryoLife  shall  initially  determine,  at CryoLife's  expense,
whether an "excess parachute  payment" will be made to Employee,  and if so, the
amount  of the  Gross-Up  Payment.  In the  event of a  subsequent  claim by the
Internal  Revenue  Service  that,  if  successful,  would  result in  Employee's
liability  for an  Excise  Tax under  Section  4999 of the Code in excess of the
amount  covered by any previous  Gross-Up  Payment,  the Employee shall promptly

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notify  CryoLife in writing of such claim.  If CryoLife  elects to contest  such
claim,  it shall so notify  the  Employee  and shall  bear and pay  directly  or
indirectly all costs and expenses of contesting the claim (including  additional
interest and  penalties  incurred in  connection  with such  action),  and shall
indemnify and hold Employee  harmless,  on an after-tax  basis,  for any excise,
income,  or  employment  tax,  including  interest  and  penalties  with respect
thereto,  imposed as a result of  CryoLife's  payment  of costs of the  contest.
Employee  shall  cooperate  fully with  CryoLife  in the defense of any such IRS
claim.  If, as a result of CryoLife's  action with respect to a claim,  Employee
receives a refund of any amount  paid by  CryoLife  with  respect to such claim,
Employee shall promptly pay such refund to CryoLife.  In the event the IRS claim
is finally determined to result in the imposition of additional excise tax under
Section 280G of the Code on Employee, CryoLife shall make an additional Gross-Up
Payment with respect to any such additional excise tax.

     (b) Anything in this Agreement to the contrary notwithstanding,  severance,
separation  and/or similar payments made to the Employee shall be limited to the
equivalent of three years salary,  including bonuses and guaranteed benefits. If
necessary,  any  Gross-Up  Payment  will be reduced in order to comply with this
provision.

     10. CONFIDENTIAL INFORMATION.  The Employee and CryoLife are parties to one
or more separate agreements respecting confidential information,  trade secrets,
inventions and non-competition (collectively,  the "IP Agreements"). The parties
agree that the IP  Agreements  shall not be  superceded  or  terminated  by this
Agreement and shall survive any termination of this Agreement.

     11. SUCCESSORS.

     (a) This  Agreement  is  personal  to the  Employee  and  without the prior
written  consent of CryoLife  shall not be assignable by the Employee  otherwise
than by will or the laws of descent and distribution. This Agreement shall inure
to the benefit of and be enforceable by the Employee's legal representatives.

     (b) This  Agreement  shall  inure to the  benefit  of and be  binding  upon
CryoLife and its successors and assigns.

     (c) CryoLife will require any  successor  (whether  direct or indirect,  by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of CryoLife to assume expressly and agree to perform this
Agreement  in the same  manner and to the same  extent  that  CryoLife  would be
required to perform it if no such  succession  had taken place.  As used in this
Agreement,  "CryoLife"  shall mean  CryoLife  as  hereinbefore  defined  and any
successor to its business and/or assets as aforesaid which assumes and agrees to
perform this Agreement by operation of law, or otherwise.

     12. MISCELLANEOUS.

     (a) This  Agreement  shall be governed by and construed in accordance  with
the laws of the State of Georgia, without reference to principles of conflict of
laws. The captions of this  Agreement are not part of the provisions  hereof and
shall have no force and effect.  This  Agreement  may not be amended or modified

                                       8
<PAGE>

otherwise  than by a written  agreement  executed by the parties hereto or their
respective successors and legal representatives.

     (b) All notices and other communications  hereunder shall be in writing and
shall be given by hand delivery to the other party or by registered or certified
mail, return receipt requested, postage prepaid, addressed as follows:

                  If to the Employee:

                  Steven G. Anderson
                  5040 Northside Drive
                  Atlanta, Georgia  30327

                  If to CryoLife:

                  CryoLife, Inc.
                  1655 Roberts Boulevard, N.W,
                  Kennesaw, Georgia 30144
                  Attention:  President

or to such other  address as either  party shall have  furnished to the other in
writing in accordance  herewith.  Notice and  communications  shall be effective
when actually received by the addressee.

     (c) The invalidity or  unenforceability  or any provision of this Agreement
shall not affect the validity or  enforceability  of any other provision of this
Agreement.

     (d) CryoLife may withhold  from any amounts  payable  under this  Agreement
such Federal,  state, local or foreign taxes as shall be required to be withheld
pursuant to any applicable law or regulation.

     (e) From and after the Effective  Date this Agreement  shall  supersede any
other  agreement  between the parties with respect to the subject  matter hereof
including the Employment  Agreement between the parties dated September 3, 2002,
as amended May 1, 2003. In the event of any conflict  between this Agreement and
any benefits provision of CryoLife's  Employee Handbook,  the provisions of this
Agreement shall prevail.

     (f) The provisions of this Agreement are intended to satisfy the applicable
requirements  of Section 409A of the Code and shall be performed and interpreted
consistent with such intent. If any provision of this Agreement does not satisfy
such  requirements  or could  otherwise  cause  Employee  to be  subject  to the
interest and penalties under Section 409A of the Code,  Employee and the Company
agree to negotiate in good faith on appropriate modification to maintain, to the
maximum extent  practicable,  the original  intent of the  applicable  provision
without  violating the  requirements of Section 409A of the Code (or causing the
imposition of additional tax to Employee under Section 409A of the Code).

                                       9
<PAGE>

     IN WITNESS WHEREOF, the Employee has hereunder set the Employee's hand and,
pursuant to the authorization from its Board, CryoLife has caused these presents
to be executed in its name on its behalf, all as of the day and year first above
written.

                                          --------------------------------------
                                          Steven G. Anderson

                                          CRYOLIFE, INC.

                                          By:
                                             -----------------------------------
                                              Thomas F. Ackerman
                                              Director and Chairman,
                                              Compensation Committee

                                       10
<PAGE>

                                    EXHIBIT A

Duties and Responsibilities of Steven G. Anderson:
-------------------------------------------------

     All duties of President,  Chief Executive Officer and Chairman of the Board
     and duties not inconsistent with such duties that are assigned by the Board
     of Directors.

Compensation:

     Base  salary  of  $600,000  and  bonus  set  by the  Compensation  Advisory
     Committee.  Salary & bonus  subject  to yearly  review by the  Compensation
     Advisory Committee of the Board of Directors:

Vacation and Employee Benefits:

     See attached  Company  vacation  plan,  standard  Company  medical plan and
     contributory 401K plan.

Company Business:

     The development,  marketing,  sale and distribution of tissue  preservation
     services and biomedical and medical products including cardiac, vascular or
     orthopedic tissue processing business and biological glues.

Life Insurance:

     The life insurance coverage of at least two times base pay.

                                       11Exhibit 10.2

                              EMPLOYMENT AGREEMENT

     This  Agreement  ("the  Agreement")  dated  as of  the  __________  day  of
September,  2005 (the "Effective  Date"),  is by and between  CryoLife,  Inc., a
Florida corporation ("CryoLife") and D. Ashley Lee (the "Employee").

                                   WITNESSETH:

     WHEREAS,  the Board of Directors of CryoLife (the "Board"),  has determined
that it is in the best interests of CryoLife and its  shareholders to enter into
this  Employment  Agreement  in order  to  assure  the  Employee  of  CryoLife's
commitment  and, in so doing, to motivate the Employee to continue in Employee's
dedicated  service to CryoLife even in  circumstances  such as a possible future
threat or occurrence of a Change of Control (defined below) of CryoLife; and,

     WHEREAS,  in order to  accomplish  these  objectives,  the Board has caused
CryoLife to enter into this Agreement.

     NOW, THEREFORE,  in consideration of the premises, the promises hereinafter
set forth and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledges, it is hereby agreed as follows:

     1. Employment.

     (a) CryoLife  hereby  employs  Employee in the  capacity of Executive  Vice
President,  Chief Operating  Officer,  Chief Financial Officer and Treasurer and
Employee hereby accepts such duties as are  customarily  performed and exercised
by such officer  subject to the  supervision  of the President of CryoLife.  The
duties of Employee  shall  include those duties more  specifically  described on
Exhibit A attached hereto  together with such additional  duties as are assigned
by the President of CryoLife.

     (b)  CryoLife  agrees to  continue  the  Employee  in its  employ,  and the
Employee hereby agrees to remain in the employ of CryoLife  subject to the terms
and  conditions of this  Agreement,  for the period  commencing on the Effective
Date  and  ending  on the  second  anniversary  of such  date  (the  "Employment
Period"). Unless either party elects not to extend the term of this Agreement by
so  notifying  the  other  in  writing  at  least  30 days  prior  to the  first
anniversary of the Effective  Date, the  Employment  Period shall  automatically
extend for an additional one year.

     2. Employment Duties.

     (a) During the Employment  Period, (A) the Employee's  position  (including
status,  offices,  titles and  reporting  requirements),  authority,  duties and

<PAGE>

responsibilities  shall be at least  commensurate in all material  respects with
the most  significant  of those held,  exercised and assigned at any time during
the  120-day  period  immediately  preceding  the  Effective  Date  and  (B) the
Employee's  services  shall be performed at the location  where the Employee was
employed immediately preceding the Effective Date.

     (b) During the Employment Period, and excluding any periods of vacation and
sick leave to which the  Employee is  entitled,  the  Employee  agrees to devote
reasonable  attention  and time to the business and affairs of CryoLife  and, to
the extent necessary to discharge the responsibilities  assigned to the Employee
hereunder,  to use the Employee's  reasonable best efforts to perform faithfully
and efficiently such responsibilities.

     (c) During the Employment  Period, the Employee will not, without the prior
written  consent  of  CryoLife,   directly  or  indirectly  other  than  in  the
performance of the duties hereunder, render services of a business, professional
or commercial  nature to any other person or firm,  whether for  compensation or
otherwise,  except with respect to any  noncompetitive  family businesses of the
Employee  for which the  rendering  of such  services  will not have an  adverse
effect upon Employee's performance of his duties and obligations hereunder.

     3. Compensation, Benefits and Business Expenses.

     (a) For all  services  which  Employee  renders to  CryoLife  or any of its
subsidiaries  or affiliates  during the term hereof,  CryoLife agrees to pay the
Employee the salary and bonus  compensation as set by the Compensation  Advisory
Committee of the Board of Directors.  Employee  shall be entitled to participate
in all  compensation  and bonus plans made  available  to  CryoLife's  executive
employees. Employee's salary at the Effective Date is set forth on Exhibit A.

     (b) CryoLife  shall pay all  reasonable  expenses  incurred by the Employee
directly related to performance of his  responsibilities and duties for CryoLife
hereunder.  Employee  shall  submit  to  CryoLife  statements  that  justify  in
reasonable detail all reasonable expenses so incurred. Subject to such audits as
CryoLife may deem necessary,  CryoLife shall reimburse  Employee the full amount
of any such expenses advanced by Employee.

     (c) Employee  shall be entitled to a vacation  each year of his  employment
with CryoLife,  according to the standard  vacation policy, as well as insurance
and other  employment  benefits,  as more  particularly  described on Exhibit A.
Vacations not taken shall be cumulative and carried over to a subsequent year.

     4. Change of Control.

     (a) In consideration and recognition of the Employee's continued employment
and his contribution to protecting and enhancing shareholder value in any future
sale of CryoLife that may occur and to provide incentive to Employee as a senior
executive  to remain with the  Company  through any future sale or merger of the

                                       13
<PAGE>

Company,  CryoLife agrees to pay to Employee a retention  payment in addition to
other  compensation  due  pursuant  to this  Agreement  equal to one  times  the
aggregate of  Employee's  annual salary and bonus  compensation  for the year in
which a Change of  Control  occurs  (the  "Retention  Payment").  The  Retention
Payment shall be in addition to sums otherwise payable pursuant to Section 3 and
shall be earned  and become due upon the  happening  of a Change of Control  (as
defined below) provided  Employee  remains  employed by the Company at such time
or, if no  longer  then  employed  by the  Company,  Employee's  employment  was
terminated  by the  Company  without  Cause  within 12  months of the  Change of
Control.  If the Change of Control  occurs before the awarding of bonuses in the
year in which the Change of Control occurs, the bonus compensation  component of
the Retention  Payment shall be computed based on the prior year's bonus.  Bonus
compensation shall include cash bonus payments and the present value of non-cash
bonuses such as options or restricted stock. The Retention Payment shall be paid
within three (3) months after the occurrence of a Change of Control.

     (b) For the purposes of this Agreement,  the term "Change of Control" shall
mean a change in the beneficial ownership of CryoLife's voting stock or a change
in the composition of the Board that occurs as follows:

     (i) any  "person,"  including a  "syndicate"  or "group" as those terms are
used in Section  13(d)(3) of the Securities  Exchange Act of 1934, is or becomes
the  beneficial  owner,  directly  or  indirectly,  of  securities  of  CryoLife
representing  20% or  more of the  combined  voting  power  of  CryoLife's  then
outstanding  "Voting   Securities,"  which  is  any  security  which  ordinarily
possesses  the  power to vote in the  election  of the Board of  Directors  of a
corporation without the happening of any precondition or contingency;

     (ii)  CryoLife  is merged or  consolidated  with  another  corporation  and
immediately after giving effect to the merger or consolidation  less than 60% of
the outstanding  Voting Securities of the surviving or resulting entity are then
beneficially  owned  in  the  aggregate  by (x)  the  shareholders  of  CryoLife
immediately prior to such merger or  consolidation,  or (y) if a record date has
been set to  determine  the  shareholders  of CryoLife  entitled to vote on such
merger or consolidation, the shareholders of CryoLife as of such record date;

     (iii) the  following  individuals  cease for any  reason  to  constitute  a
majority of the number of directors then serving:  individuals  who, on the date
hereof,  constitute the Board and any new director  (other than a director whose
initial  assumption  of office  is in  connection  with an actual or  threatened
election contest, including but not limited to a consent solicitation,  relating
to the election of directors of CryoLife)  whose  appointment or election by the
Board or  nomination  for election by  CryoLife's  stockholders  was approved or
recommended by a vote of at least  two-thirds  (2/3) of the directors then still
in office who either were  directors  on the date  hereof or whose  appointment,
election or nomination for election was  previously so approved or  recommended;
or

                                       2
<PAGE>

     (iv)  CryoLife  transfers  substantially  all  of  its  assets  to  another
corporation which is a less than 60% owned subsidiary of CryoLife.

     5. Termination of Employment.

     (a)  Disability  or Death.  If CryoLife  determines  in good faith that the
Disability of the Employee has occurred during the Employment  Period  (pursuant
to the  definition of Disability  set forth below),  it may give to the Employee
written  notice  in  accordance  with  Section  12(b) of this  Agreement  of its
intention to terminate the Employee's employment.  In such event, the Employee's
employment with CryoLife shall terminate effective on the 30th day after receipt
of such notice by the Employee (the "Disability Effective Date"), provided that,
within the 30 days after such receipt,  the Employee  shall not have returned to
full-time  performance of the Employee's duties. For purposes of this Agreement,
"Disability"  shall mean the absence of the Employee from the Employee's  duties
with  CryoLife  on a  full-time  basis for 180  consecutive  days as a result of
incapacity  due to mental or physical  illness or  determination  by a physician
selected by CryoLife  or its  insurers  and  acceptable  to the  Employee or the
Employee's  legal  representative  that the  Employee  is unable to perform  the
essential  functions of his position as a result of incapacity  due to mental or
physical illness. The Employee's  employment shall terminate  automatically upon
the Employee's death during the Employment Period.

     (b) Cause.  CryoLife may terminate  the  Employee's  employment  during the
Employment Period for Cause. For purposes of this Agreement, "Cause" shall mean:

     (i)  the  willful  and  continued   failure  of  the  Employee  to  perform
substantially  the Employee's  duties with CryoLife (other than any such failure
resulting from  incapacity due to physical or mental  illness),  after a written
demand for substantial  performance is delivered to Employee by the Board or the
Chief Executive Officer of CryoLife which specifically  identifies the manner in
which CryoLife  believes that the Employee has not  substantially  performed the
Employee's duties, or

     (ii) the  willful  engaging  by the  Employee  in illegal  conduct or gross
misconduct which is materially and demonstrably injurious to CryoLife.

For  purposes  of this  provision,  no act or failure to act, on the part of the
Employee,  shall be  considered  "willful"  unless it is done,  or omitted to be
done,  by the  Employee  in bad  faith or  without  reasonable  belief  that the
Employee's action or omission was in the best interests of CryoLife. Any act, or
failure to act, based upon authority given pursuant to a resolution duly adopted
by the Board or upon the  instructions of the Chief Employee Officer or a senior
officer of CryoLife or based upon the advice of counsel  for  CryoLife  shall be
conclusively presumed to be done, or omitted to be done, by the Employee in good
faith and in the best interests of CryoLife.

     (c)  Good  Reason.  The  Employee's  employment  may be  terminated  by the
Employee for Good Reason.  For purposes of this  Agreement,  "Good Reason" shall
mean:

                                       3
<PAGE>

     (i) the  assignment  to the  Employee  of any  duties  inconsistent  in any
respect with the Employee's  position  (including  status,  offices,  titles and
reporting requirements),  authority,  duties or responsibilities as contemplated
by Section 1(a) of this Agreement, or any other action by CryoLife which results
in a  diminution  in  such  position,  authority,  duties  or  responsibilities,
excluding for this purpose an isolated, insubstantial and inadvertent action not
taken in bad faith and which is remedied by CryoLife  promptly  after receipt of
notice thereof given by the Employee;

     (ii) any  failure  by  CryoLife  to comply  with any of the  provisions  of
Section 3(a) or 3(b) of this Agreement, other than an isolated, insubstantial or
inadvertent failure not occurring in bad faith and which is remedied by CryoLife
promptly after receipt of notice thereof given by the Employee;

     (iii) any threatened  termination by CryoLife of the Employee's  employment
other than for Cause, Death or Disability; or

     (iv) any failure by CryoLife  to comply with and satisfy  Section  11(c) of
this Agreement.

For purposes of this Section 5(c), any good faith determination of "Good Reason"
made by the  Employee  shall be  conclusive.  Anything in this  Agreement to the
contrary notwithstanding,  a termination by the Employee for any reason at least
90 but not more than 120 days following  consummation  of a Change of Control or
during the 30 day period immediately following the first anniversary of a Change
of Control shall be deemed to be a termination  for Good Reason for all purposes
of this Agreement.

     (d) Notice of Termination. Any termination by CryoLife for Cause, or by the
Employee for Good Reason,  shall be communicated by Notice of Termination to the
other party hereto given in accordance with Section 12(b) of this Agreement. For
purposes of this  Agreement,  a "Notice of  Termination"  means a written notice
which (i) indicates the specific termination  provision in this Agreement relied
upon, (ii) to the extent  applicable,  sets forth in reasonable detail the facts
and  circumstances  claimed to provide a basis for termination of the Employee's
employment under the provision so indicated and (iii) if the Date of Termination
(as defined  below) is other than the date of receipt of such notice,  specifies
the termination date (which date shall be not more than 30 days after the giving
of such  notice).  The  failure by the  Employee or CryoLife to set forth in the
Notice of Termination any fact or circumstance which contributes to a showing of
Good  Reason or Cause  shall not waive any right of the  Employee  or  CryoLife,
respectively, hereunder or preclude the Employee or CryoLife, respectively, from
asserting  such fact or  circumstance  in enforcing the Employee's or CryoLife's
rights hereunder.

     (e) Date of Termination.  "Date of Termination" means (i) if the Employee's
employment  is  terminated  by CryoLife  for Cause,  or by the Employee for Good
Reason,  the date of  receipt of the  Notice of  Termination,  or any later date
specified  therein,  as the case may be, (ii) if the  Employee's  employment  is
terminated  by  CryoLife  other  than  for  Cause  or  Disability,  the  Date of

                                       4
<PAGE>

Termination  shall be the date on which  the  Employee  receives  the  Notice of
Termination,  and (iii) if the Employee's  employment is terminated by reason of
death or Disability,  the Date of Termination  shall be the date of death of the
Employee or the Disability Effective Date, as the case may be.

     (f)  Non-Compete  Commitment.  During the term of this  Agreement and for a
period of one year after any termination of this Agreement,  the Employee agrees
not to accept any  position  as chief  operating  officer to any  competitor  of
CryoLife in the cardiac,  vascular or orthopedic tissue  processing  business or
biological  glue business  within the United  States.  Payments of amounts owing
under any  Severance  Payment  (defined in Section  6(a))  obligation,  shall be
conditioned   upon  Employee's   continued   compliance  with  this  non-compete
commitment.

     (g) Agreement Not to Solicit.  During the term of this  Agreement and for a
period of one year after any termination of this Agreement,  the Employee agrees
he will not,  without the prior written consent of the Company,  either directly
or  indirectly,  on his own  behalf or in the  service  or on behalf of  others,
solicit or attempt to  solicit,  divert or hire away any person  employed by the
Company.

     6. Obligations of CryoLife upon Termination.

     (a) Good Reason; Other Than for Cause, Death or Disability.  If, during the
Employment Period, (i) CryoLife shall terminate the Employee's  employment other
than  for  Cause,  Death or  Disability  or (ii) the  Employee  shall  terminate
employment  for Good Reason,  then  CryoLife  shall pay to Employee as severance
compensation  an amount equal to one times the  aggregate of  Employee's  annual
salary  and  bonus  compensation  for  the  year in  which  the  termination  of
employment occurs (the "Severance  Payment").  Such payment shall be in addition
to sums due to Employee  through the Date of Termination and shall be subject to
normal  withholding  requirements  of CryoLife.  The Severance  Payment shall be
payable in cash by the Company in 12 equal  monthly  installments  commencing on
the date thirty (30) days after  Employee's Date of Termination  (the "Severance
Period");  provided, however, that, to the extent required under Section 409A of
the Code to avoid the  imposition  of  additional  tax to  Employee  under  that
Section,  any payment of the Severance  Payment shall  commence on the six-month
anniversary  of  Employee's  separation  from  service  with the Company (or, if
earlier,   the  date  of  Employee's   death)  and  continue  in  equal  monthly
installments over the remainder of the Severance Period; provided further, that,
to the extent permitted under Section 409A of the Code without the imposition of
additional  tax to Employee under that Section,  the Severance  Payment shall be
paid (i) in an immediate  lump-sum in the event the Employee's  separation  from
service  occurs on or after a Change of Control or (ii) in an immediate lump sum
at the time of a Change of Control (less amounts previously paid to Employee) in
the event the separation from service occurs within six months prior to a Change
of  Control.  Payment  of any  Severance  Payment  will  be  subject  to  normal
withholding. If the employment termination occurs before the awarding of bonuses
in the year in which the employment  termination  occurs, the bonus compensation
component of the Severance  Payment shall be computed  based on the prior year's
bonus.  Bonus  compensation  shall  include cash bonus  payments and the present
value of non-cash bonuses such as options or restricted stock.

                                       5
<PAGE>

     (b) Death.  If the  Employee's  employment  is  terminated by reason of the
Employee's  death during the Employment  Period,  this Agreement shall terminate
without further obligations to the Employee's legal  representatives  under this
Agreement,  other than for payment of obligations  accruing  through the Date of
Termination.

     (c) Disability. If the Employee's employment is terminated by reason of the
Employee's  Disability  during  the  Employment  Period,  this  Agreement  shall
terminate  without further  obligations to the Employee,  other than for payment
obligations accruing through the Date of Termination.

     (d) Cause;  Other than for Good Reason. If the Employee's  employment shall
be  terminated  by CryoLife  for Cause or by the  Employee  without  Good Reason
during the Employment  Period,  this Agreement shall  terminate  without further
obligations to the Employee other than the obligation to pay to the Employee his
or her salary through the Date of Termination.

     7.  Non-exclusivity  of Rights.  Nothing in this Agreement shall prevent or
limit the Employee's  continuing or future  participation in any plan,  program,
policy or practice  provided by CryoLife or any of its affiliated  companies and
for which the Employee may qualify, nor shall anything herein limit or otherwise
affect such rights as the Employee may have under any contract or agreement with
CryoLife or any of its affiliated  companies.  Amounts which are vested benefits
or which the Employee is otherwise entitled to receive under any plan,  practice
or  program  of or  any  contract  or  agreement  with  CryoLife  or  any of its
affiliated  companies  at or  subsequent  to the  Date of  Termination  shall be
payable in accordance with such plan, policy, practice or program or contract or
agreement except as explicitly modified by this Agreement.

     8. Full  Settlement.  In no event shall the  Employee be  obligated to seek
other  employment  or take any other action by way of  mitigation of the amounts
payable to the Employee  under any of the  provisions of this Agreement and such
amounts  shall  not  be  reduced  whether  or not  the  Employee  obtains  other
employment.  CryoLife agrees to pay as incurred, to the full extent permitted by
law, all legal fees and expenses  which the Employee may  reasonably  incur as a
result of any contest  (regardless  of the outcome  thereof)  by  CryoLife,  the
Employee or others of the validity or enforceability of, or liability under, any
provision of this Agreement.

     9. Limitation or Expansion of Benefits.

     (a) In the  event it shall be  determined  that  any  benefit,  payment  or
distribution by CryoLife to or for the benefit of the Employee  (whether payable
or distributable pursuant to the terms of this Agreement or otherwise) would, if
paid,  be  subject to the excise  tax  imposed by Section  4999 of the  Internal
Revenue  Code of 1986,  as amended  (the  "Code";  such excise tax,  the "Excise
Tax"),  then  CryoLife  shall pay to  Employee an  additional  amount of cash (a
"Gross-Up  Payment")  equal to the amount  necessary  to cause the amount of the
aggregate after-tax compensation and benefits received by the Employee hereunder
(after  payment of the excise tax under Section 4999 of the Code with respect to
any excess  parachute  payment,  and any state and federal income and employment
taxes with respect to the  Gross-Up  Payment) to equal the  aggregate  after-tax
compensation  and benefits the Employee would have received if Sections 280G and
4999 of the Code had not been enacted. A nationally recognized public accounting

                                       6
<PAGE>

firm selected by CryoLife  shall  initially  determine,  at CryoLife's  expense,
whether an "excess parachute  payment" will be made to Employee,  and if so, the
amount  of the  Gross-Up  Payment.  In the  event of a  subsequent  claim by the
Internal  Revenue  Service  that,  if  successful,  would  result in  Employee's
liability  for an  Excise  Tax under  Section  4999 of the Code in excess of the
amount  covered by any previous  Gross-Up  Payment,  the Employee shall promptly
notify  CryoLife in writing of such claim.  If CryoLife  elects to contest  such
claim,  it shall so notify  the  Employee  and shall  bear and pay  directly  or
indirectly all costs and expenses of contesting the claim (including  additional
interest and  penalties  incurred in  connection  with such  action),  and shall
indemnify and hold Employee  harmless,  on an after-tax  basis,  for any excise,
income,  or  employment  tax,  including  interest  and  penalties  with respect
thereto,  imposed as a result of  CryoLife's  payment  of costs of the  contest.
Employee  shall  cooperate  fully with  CryoLife  in the defense of any such IRS
claim.  If, as a result of CryoLife's  action with respect to a claim,  Employee
receives a refund of any amount  paid by  CryoLife  with  respect to such claim,
Employee shall promptly pay such refund to CryoLife.  In the event the IRS claim
is finally determined to result in the imposition of additional excise tax under
Section 280G of the Code on Employee, CryoLife shall make an additional Gross-Up
Payment with respect to any such additional excise tax.

     (b) Anything in this Agreement to the contrary notwithstanding,  severance,
separation  and/or similar payments made to the Employee shall be limited to the
equivalent of three years salary,  including bonuses and guaranteed benefits. If
necessary,  any  Gross-Up  Payment  will be reduced in order to comply with this
provision.

     10. Confidential Information.  The Employee and CryoLife are parties to one
or more separate agreements respecting confidential information,  trade secrets,
inventions and non-competition (collectively,  the "IP Agreements"). The parties
agree that the IP  Agreements  shall not be  superceded  or  terminated  by this
Agreement and shall survive any termination of this Agreement.

     11. Successors.

     (a) This  Agreement  is  personal  to the  Employee  and  without the prior
written  consent of CryoLife  shall not be assignable by the Employee  otherwise
than by will or the laws of descent and distribution. This Agreement shall inure
to the benefit of and be enforceable by the Employee's legal representatives.

     (b) This  Agreement  shall  inure to the  benefit  of and be  binding  upon
CryoLife and its successors and assigns.

     (c) CryoLife will require any  successor  (whether  direct or indirect,  by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of CryoLife to assume expressly and agree to perform this
Agreement  in the same  manner and to the same  extent  that  CryoLife  would be
required to perform it if no such  succession  had taken place.  As used in this
Agreement,  "CryoLife"  shall mean  CryoLife  as  hereinbefore  defined  and any

                                       7
<PAGE>

successor to its business and/or assets as aforesaid which assumes and agrees to
perform this Agreement by operation of law, or otherwise.

     12. Miscellaneous.

     (a) This  Agreement  shall be governed by and construed in accordance  with
the laws of the State of Georgia, without reference to principles of conflict of
laws. The captions of this  Agreement are not part of the provisions  hereof and
shall have no force and effect.  This  Agreement  may not be amended or modified
otherwise  than by a written  agreement  executed by the parties hereto or their
respective successors and legal representatives.

     (b) All notices and other communications  hereunder shall be in writing and
shall be given by hand delivery to the other party or by registered or certified
mail, return receipt requested, postage prepaid, addressed as follows:

                  If to the Employee:

                  David Ashley Lee
                  3802 Wieuca Terrace NE
                  Atlanta, Georgia 30342

                  If to CryoLife:

                  CryoLife, Inc.
                  1655 Roberts Boulevard, N.W,
                  Kennesaw, Georgia 30144
                  Attention:  President

or to such other  address as either  party shall have  furnished to the other in
writing in accordance  herewith.  Notice and  communications  shall be effective
when actually received by the addressee.

     (c) The invalidity or  unenforceability  or any provision of this Agreement
shall not affect the validity or  enforceability  of any other provision of this
Agreement.

     (d) CryoLife may withhold  from any amounts  payable  under this  Agreement
such Federal,  state, local or foreign taxes as shall be required to be withheld
pursuant to any applicable law or regulation.

     (e) From and after the Effective  Date this Agreement  shall  supersede any
other agreement between the parties with respect to the subject matter hereof.

     (f) The provisions of this Agreement are intended to satisfy the applicable
requirements  of Section 409A of the Code and shall be performed and interpreted
consistent with such intent. If any provision of this Agreement does not satisfy
such  requirements  or could  otherwise  cause  Employee  to be  subject  to the

                                       8
<PAGE>

interest and penalties under Section 409A of the Code,  Employee and the Company
agree to negotiate in good faith on appropriate modification to maintain, to the
maximum extent  practicable,  the original  intent of the  applicable  provision
without  violating the  requirements of Section 409A of the Code (or causing the
imposition of additional tax to Employee under Section 409A of the Code).

     IN WITNESS WHEREOF, the Employee has hereunder set the Employee's hand and,
pursuant to the authorization from its Board, CryoLife has caused these presents
to be executed in its name on its behalf, all as of the day and year first above
written.

                                          --------------------------------------
                                          D. Ashley Lee

                                          CRYOLIFE, INC.

                                          By:
                                             -----------------------------------
                                              Steven G. Anderson
                                              Chairman, President and CEO

                                       9
<PAGE>

                                    Exhibit A

Duties and Responsibilities of D. Ashley Lee:
--------------------------------------------

     All duties of Executive Vice  President,  Chief  Operating  Officer,  Chief
     Financial  Officer  and  Treasurer  and duties not  inconsistent  with such
     duties that are assigned by the President.

Compensation:

     Salary of $340,000 and bonus set by the  Compensation  Advisory  Committee.
     Salary & Bonus  subject  to  yearly  review  by the  Compensation  Advisory
     Committee of the Board of Directors:

Vacation and Employee Benefits:

     See attached  Company  vacation  plan,  standard  Company  medical plan and
     contributory 401K plan.

Company Business:

     The development,  marketing,  sale and distribution of tissue  preservation
     services and biomedical and medical products including cardiac, vascular or
     orthopedic tissue processing business and biological glues.

                                       10

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