Document:

Exhibit 10.1

 

SL GREEN OPERATING PARTNERSHIP, L.P.

 

Fifth Amendment to

First Amended and Restated Agreement of Limited Partnership

 

This Amendment is made as of March 15, 2006, by SL
GREEN REALTY CORP., a Maryland corporation, as general partner (the “General
Partner”), of SL GREEN OPERATING PARTNERSHIP, L.P., a Delaware limited
partnership (the “Partnership”), for the purpose of amending the First
Amended and Restated Agreement of Limited Partnership of the Partnership dated
August 20, 1997 (the “Partnership Agreement”). All capitalized terms
used herein and not defined shall have the respective meanings ascribed to them
in the Partnership Agreement.

 

WHEREAS, the Partnership desires to provide for equity
incentives to certain persons who provide services for the benefit of the
Partnership (“Grantees”) in the form of Partnership Units which shall be
designated “LTIP Units.”

 

WHEREAS, pursuant to Section 4.2.A of the Partnership
Agreement, the Partnership is issuing LTIP Units to the Grantees.

 

WHEREAS, pursuant to Sections 4.2.A, 5.4, 6.2, 8.6.E
and 14.1.B the General Partner is amending the Partnership Agreement to
facilitate the issuance of the LTIP Units.

 

NOW, THEREFORE, in consideration of the mutual
covenants set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the General Partner
hereby amends the Agreements as follows:

 

1.                                       Issuance
of LTIP Units.

 

A.                                   Pursuant
to Section 4.2.A of the Partnership Agreement, the Partnership hereby issues
750,000 LTIP Units to the Grantees
in the respective amounts set forth on Schedule A hereto. The holder of any LTIP
Units shall have the benefits and obligations under the Partnership Agreement
to which the holder of such a Limited Partner Interest may be entitled or
obliged under the Partnership Agreement, as supplemented and amended by the
rights, powers, privileges, restrictions, qualifications and limitations
specified in Exhibit G to the Partnership Agreement as added by this Amendment.

 

B.                                     The
admission of the Grantees as Additional Limited Partners of the Partnership
shall become effective as of the date of this Amendment, which shall also be
the date upon which the names of the Grantees are recorded on the books and
records of the Partnership, and Exhibit A to the Partnership Agreement is
amended to reflect such admission.

 

2.                                       Amendments
to Partnership Agreement.

 

The General Partner, as general partner of the
Partnership and as attorney-in-fact for its Limited Partners, hereby amends the
Partnership Agreement as follows:

 

 

A.                                   Article
1 of the Partnership Agreement is amended by inserting the following
definitions in alphabetical order:

 

“Class A Unit Economic Balance” has the meaning
set forth in Section 6.1.E.

 

“Economic Capital Account Balance” has the
meaning set forth in Section 6.1.E.

 

“LTIP Units” means the Partnership Units
designated as such having the rights, powers, privileges, restrictions,
qualifications and limitations set forth in Exhibit G hereto.

 

B.                                     Section
4.2.C of the Partnership Agreement is amended by replacing the text thereof
with the following:

 

C.                                     Classes
of Partnership Units. From and after the Effective Date, subject to Section
4.2.A above, the Partnership shall have two classes of Partnership Units,
entitled “Class A Units” and “Class B Units.” 
From and after March 15, 2006, the Partnership shall have an additional
class of Partnership Units, entitled “LTIP Units.”  Either Class A Units or Class B Units, at the
election of the General Partner, in its sole and absolute discretion, may be
issued to newly admitted Partners in exchange for the contribution by such
Partners of cash, real estate partnership interests, stock, notes or other
assets or consideration, provided that, any Partnership Unit that is not
specifically designated by the General Partner as being of a particular class
shall be deemed to be a Class A Unit.

 

C.                                     Section
4.2 of the Partnership Agreement is amended by appending the following new
paragraph D:

 

D.                                    Issuance
of LTIP Units. From time to time the General Partner may issue LTIP Units
to Persons providing services to or for the benefit of the Partnership. LTIP
Units shall have the rights, powers, privileges, restrictions, qualifications
and limitations specified in Exhibit G hereto. LTIP Units are intended to
qualify as profits interests in the Partnership and for the avoidance of doubt,
the provisions of Section 4.4 shall not apply to the issuance of LTIP Units.

 

D.                                    Section
5.1.A of the Partnership Agreement is amended by replacing the text of the
first sentence thereof with the following:

 

A.                                   General.
The General Partner shall distribute at least quarterly an amount equal to one
hundred percent (100%) of Available Cash generated by the Partnership during
such quarter or shorter period to the Partners who are Partners on the
Partnership Record Date with respect to such quarter or shorter period as
provided in Sections 5.1.B, 5.1.C and 5.1.D below.

 

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E.                                      Sections
5.1.C and 5.1.D of the Partnership Agreement are amended by appending the
following sentence to each such Section:

 

For purposes of the foregoing calculations, LTIP Units
with an associated Distribution Participation Date (as defined in Exhibit G
hereto) that falls on or before the date of the relevant distribution shall be
treated as outstanding Class A Units.

 

F.                                      Section
5.1 of the Partnership Agreement is amended by appending the following new
paragraph F:

 

F.                                      LTIP
Units Intended to Qualify as Profits Interests. Distributions made pursuant
to this Section 5.1 shall be adjusted as necessary to ensure that the amount
apportioned to each LTIP Unit does not exceed the amount attributable to items
of Partnership income or gain realized after the date such LTIP Unit was issued
by the Partnership. The intent of this Section 5.1.F is to ensure that any LTIP
Units issued after the date of this Agreement qualify as “profits interests”
under Revenue Procedure 93-27, 1993-2 C.B. 343 (June 9, 1993) and Revenue
Procedure 2001-43, 2001-2 C.B. 191 (August 3, 2001), and Section 5.1 shall be
interpreted and applied consistently therewith. The General Partner at its
discretion may amend this Section 5.1.F to ensure that any LTIP Units granted
after the date of this Agreement will qualify as “profits interests” under Revenue
Procedure 93-27, 1993-2 C.B. 343 (June 9, 1993) and Revenue Procedure 2001-43,
2001-2 C.B. 191 (August 3, 2001) (and any other similar rulings or regulations
that may be in effect at such time).

 

G.                                     Section
6.1 of the Partnership Agreement is amended by appending the following new
paragraph E:

 

E.                                      Special
Allocations With Respect to LTIP Units. After giving effect to the special
allocations set forth in Section 1 of Exhibit C hereto, and notwithstanding the
provisions of Sections 6.1.A and 6.1.B above, but subject to the prior
allocation of income and gain under clauses 6.1.A(i) through (v) above, any
Liquidating Gains shall first be allocated to the holders of LTIP Units until
the Economic Capital Account Balances of such holders, to the extent attributable
to their ownership of LTIP Units, are equal to (i) the Class A Unit
Economic Balance, multiplied by (ii) the number of their LTIP Units; provided
that no such Liquidating Gains will be allocated with respect to any particular
LTIP Unit unless and to the extent that such Liquidating Gains, when aggregated
with other Liquidating Gains realized since the issuance of such LTIP Unit,
exceed Liquidating Losses realized since the issuance of such LTIP Unit. After
giving effect to the special allocations set forth in Section 1 of Exhibit C
hereto, and notwithstanding the provisions of Sections 6.1.A and 6.1.B above,
in the event that, due to distributions with respect to Class A Units in which
the LTIP Units do not participate or otherwise, the Economic Capital Account
Balance of any present or former holder of LTIP Units, to the extent
attributable to the holder’s ownership of LTIP Units, exceeds the target
balance specified above, then

 

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Liquidating Losses shall be allocated to such holder
to the extent necessary to reduce or eliminate the disparity. In the event that
Liquidating Gains or Liquidating Losses are allocated under this Section 6.1.E,
Net Income allocable under clause 6.1.A(vi) and any Net Losses shall be
recomputed without regard to the Liquidating Gains or Liquidating Losses so
allocated. For this purpose, “Liquidating Gains” means any net capital
gain realized in connection with the actual or hypothetical sale of all or
substantially all of the assets of the Partnership, including but not limited
to net capital gain realized in connection with an adjustment to the Carrying
Value of Partnership assets under Section 1.D of Exhibit B to this Agreement. Similarly,
“Liquidating Losses” means any net capital loss realized in connection
with any such event. The “Economic Capital Account Balances” of the
holders of LTIP Units will be equal to their Capital Account balances, plus the
amount of their shares of any Partner Minimum Gain or Partnership Minimum Gain,
in either case to the extent attributable to their ownership of LTIP Units. Similarly,
the “Class A Unit Economic Balance” shall mean (i) the Capital Account
balance of the General Partner, plus the amount of the General Partner’s share
of any Partner Minimum Gain or Partnership Minimum Gain, in either case to the
extent attributable to the General Partner’s ownership of Class A Units and
computed on a hypothetical basis after taking into account all allocations
through the date on which any allocation is made under this Section 6.1.E,
divided by (ii) the number of the General Partner’s Class A Units. Any such
allocations shall be made among the holders of LTIP Units in proportion to the
amounts required to be allocated to each under this Section 6.1.E. The parties
agree that the intent of this Section 6.1.E is to make the Capital Account
balance associated with each LTIP Unit economically equivalent to the Capital
Account balance associated with the General Partner’s Class A Units (on a
per-unit basis), but only if the Partnership has recognized cumulative net
gains with respect to its assets since the issuance of the relevant LTIP Unit.

 

H.                                    Section
8.6.A of the Partnership Agreement is amended by appending the following clause
(v):

 

(v)                                 Notwithstanding
the foregoing, the Redemption Right shall not be exercisable with respect to
any Class A Unit issued upon conversion of an LTIP Unit until on or after the
date that is two years after the date on which the LTIP Unit was issued,
provided however, that the foregoing restriction shall not apply if the
Redemption Right is exercised by a LTIP Unit holder in connection with a
transaction that falls within the definition of a “change of control” under the
agreement or agreements pursuant to which the LTIP Units were issued to him or
her and provided further that the two (2) year requirement set forth in the
first sentence of Section 8.6.A(i) shall not apply with respect to Class A
Units issued upon conversion of LTIP Units.

 

I.                                         Section
10.2 of the Partnership Agreement is amended by designating the existing text
of Section 10.2 as paragraph A, and by appending the following new paragraph B:

 

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B.                                     To
the extent provided for in Treasury Regulations, revenue rulings, revenue
procedures and/or other IRS guidance issued after the date hereof, the
Partnership is hereby authorized to, and at the direction of the General
Partner shall, elect a safe harbor under which the fair market value of any
Partnership Interests issued after the effective date of such Treasury
Regulations (or other guidance) will be treated as equal to the liquidation
value of such Partnership Interests (i.e., a value equal to the total amount
that would be distributed with respect to such interests if the Partnership
sold all of its assets for their fair market value immediately after the
issuance of such Partnership Interests, satisfied its liabilities (excluding
any non-recourse liabilities to the extent the balance of such liabilities
exceeds the fair market value of the assets that secure them) and distributed
the net proceeds to the Partners under the terms of this Agreement). In the
event that the Partnership makes a safe harbor election as described in the
preceding sentence, each Partner hereby agrees to comply with all safe harbor
requirements with respect to transfers of such Partnership Interests while the
safe harbor election remains effective.

 

J.                                        Section
1.D(2) of Exhibit B to the Partnership Agreement is amended by replacing the
text thereof with the following:

 

(2)                                  Such
adjustments shall be made as of the following times:  (a) immediately prior to the acquisition
of an additional interest in the Partnership by any new or existing Partner in
exchange for more than a de minimis Capital Contribution; (b) immediately prior
to the acquisition of a more than de minimis additional interest in the
Partnership by any new or existing Partner as consideration for the provision
of services to or for the benefit of the Partnership in a partner capacity or
in anticipation of becoming a partner; (c) immediately prior to the
distribution by the Partnership to a Partner of more than a de minimis amount
of property as consideration for an interest in the Partnership; and
(d) immediately prior to the liquidation of the Partnership within the
meaning of Regulations Section 1.704-1(b)(2)(ii)(g) (except for a liquidation
resulting from the termination of the Partnership under Section 708(b)(1)(B) of
the Code), provided  however that adjustments pursuant to
clauses (a), (b) and (c) above shall be made only if the General Partner
determines that such adjustments are necessary or appropriate to reflect the
relative economic interests of the Partners in the Partnership.

 

K.                                    Section
1 of Exhibit C to the Partnership Agreement is hereby amended by appending the
following new paragraph H:

 

H.                                    Forfeiture
Allocations. Upon a forfeiture of any unvested Partnership Interest by any
Partner, gross items of income, gain, loss or deduction shall be allocated to
such Partner if and to the extent required by final Treasury Regulations
promulgated after the Effective Date to ensure that allocations made with
respect to all unvested Partnership Interests are recognized under Code Section
704(b).

 

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L.                                      The
Partnership Agreement is hereby amended by appending Exhibit G to this
Amendment as Exhibit G to the Partnership Agreement.

 

3.                                       Continuation
of Partnership Agreement.

 

The Partnership Agreement
and this Amendment shall be read together and shall have the same force and
effect as if the provisions of the Partnership Agreement and this Amendment
(including Exhibit G hereto) were contained in one document. Any provisions of
the Partnership Agreement not amended by this Amendment shall remain in full
force and effect as provided in the Partnership Agreement immediately prior to
the date hereof.

 

[Remainder of
page intentionally blank]

 

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IN WITNESS WHEREOF, the
parties hereto have executed this Amendment to the Partnership Agreement as of
the                 
day of March, 2006.

 

	
   

  	
  GENERAL PARTNER:

  
	
   

  	
   

  
	
   

  	
  SL GREEN REALTY CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  GRANTEES:

  
	
   

  	
   

  
	
  

  

  
	
   

  	
  *Individual Counterpart
  Signature Pages Attached.

  

 

 

[Signature Page to
Amendment to the Partnership Agreement]

 

 

SL
GREEN OPERATING PARTNERSHIP, L.P.

 

Limited
Partner Signature Page

 

The undersigned, desiring to become one of the within
named Limited Partners of SL Green Operating Partnership, L.P. (the “Partnership”)
hereby becomes a party to the First Amended and Restated Agreement of Limited
Partnership of the Partnership, dated as of August 20, 1997 and amended through
the date hereof (the “Partnership Agreement”), by and among SL Green
Realty Corp. and such Limited Partners. The undersigned agrees that this
signature page may be attached to any counterpart of the Partnership Agreement.

 

	
  Date:

  	
   

  
	
   

  	
  Name of Limited Partner (please print)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Signature

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address

  

 

 

Schedule A to Fifth Amendment to Partnership Agreement

 

	
  Name and Address

  	
   

  	
  Number of LTIP Units

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

 

EXHIBIT
G

 

SL
GREEN OPERATING PARTNERSHIP, L.P.

 

DESIGNATION
OF THE RIGHTS, POWERS, PRIVILEGES,

RESTRICTIONS,
QUALIFICATIONS AND LIMITATIONS

OF
THE LTIP UNITS

 

The following are the terms
of the LTIP Units:

 

1.                                       Vesting.

 

A.                                   Vesting,
Generally. LTIP Units may, in the sole discretion of the General Partner,
be issued subject to vesting, forfeiture and additional restrictions on
transfer pursuant to the terms of an award, vesting or other similar agreement
(a “Vesting Agreement”). The terms of any Vesting Agreement may be
modified by the General Partner from time to time in its sole discretion,
subject to any restrictions on amendment imposed by the relevant Vesting
Agreement or by the terms of any plan pursuant to which the LTIP Units are
issued, if applicable. LTIP Units that have vested and are no longer subject to
forfeiture under the terms of a Vesting Agreement are referred to as “Vested
LTIP Units”; all other LTIP Units are referred to as “Unvested LTIP
Units.”  Subject to the terms of any
Vesting Agreement, a holder of LTIP Units shall be entitled to transfer his or
her LTIP Units to the same extent, and subject to the same restrictions as
holders of Class A Units are entitled to transfer their Class A Units pursuant
to Article XI of the Agreement.

 

B.                                     Forfeiture
or Transfer of Unvested LTIP Units. Unless otherwise specified in the
relevant Vesting Agreement, upon the occurrence of any event specified in a
Vesting Agreement as resulting in either the forfeiture of any LTIP Units, or
the right of the Partnership or the General Partner to repurchase LTIP Units at
a specified purchase price, then upon the occurrence of the circumstances
resulting in such forfeiture or if the Partnership or the General Partner
exercises such right to repurchase, then the relevant LTIP Units shall
immediately, and without any further action, be treated as cancelled or
transferred to the General Partner, as applicable, and no longer outstanding
for any purpose. Unless otherwise specified in the Vesting Agreement, no
consideration or other payment shall be due with respect to any LTIP Units that
have been forfeited, other than any distributions declared with a record date
prior to the effective date of the forfeiture. In connection with any
forfeiture or repurchase of LTIP Units, the balance of the portion of the
Capital Account of the holder that is attributable to all of his or her LTIP
Units shall be reduced by the amount, if any, by which it exceeds the target
balance contemplated by Section 6.1.E of the Agreement, calculated with respect to the holder’s
remaining LTIP Units, if any.

 

C.                                     Legend.
Any certificate evidencing an LTIP Unit shall bear an appropriate legend
indicating that additional terms, conditions and restrictions on transfer,
including without limitation any Vesting Agreement, apply to the LTIP Unit.

 

G-1

 

2.                                       Distributions.

 

A.                                   LTIP
Distribution Amount. Commencing from the Distribution Participation Date
(as defined below) established for any LTIP Units, for any quarterly or other
period holders of such LTIP Units shall be entitled to receive, if, when and as
authorized by the General Partner out of funds legally available for the
payment of distributions, regular cash distributions in an amount per unit
equal to the distribution payable on each Class A Unit for the corresponding
quarterly or other period (the “LTIP Distribution Amount”). In addition,
from and after the Distribution Participation Date, LTIP Units shall be
entitled to receive, if, when and as authorized by the General Partner out of
funds or other property legally available for the payment of distributions,
non-liquidating special, extraordinary or other distributions in an amount per
unit equal to the amount of any non-liquidating special, extraordinary or other
distributions payable on the Class A Units which may be made from time to time.
LTIP Units shall also be entitled to receive, if, when and as authorized by the
General Partner out of funds or other property legally available for the
payment of distributions, distributions representing proceeds of a sale or
other disposition of all or substantially all of the assets of the Partnership
in an amount per unit equal to the amount of any such distributions payable on
the Class A Units, whether made prior to, on or after the Distribution
Participation Date, provided that the amount of such distributions shall not
exceed the positive balances of the Capital Accounts of the holders of such
LTIP Units to the extent attributable to the ownership of such LTIP Units. Distributions
on the LTIP Units, if authorized, shall be payable on such dates and in such
manner as may be authorized by the General Partner (any such date, a “Distribution
Payment Date”); provided that the Distribution Payment Date and the record
date for determining which holders of LTIP Units are entitled to receive a
distribution shall be the same as the corresponding dates relating to the
corresponding distribution on the Class A Units.

 

B.                                     Distribution
Participation Date. The “Distribution Participation Date” for each
LTIP Units will be either (i) with respect to LTIP Units granted pursuant to
the General Partner’s 2005 Long-Term Outperformance Plan (the “2005
Outperformance Plan”), the applicable Valuation Date (as defined in the
Vesting Agreement of each Person granted LTIP Units under the 2005
Outperformance Plan) or (ii) with respect to other LTIP Units, such date as may
be specified in the Vesting Agreement or other documentation pursuant to which
such LTIP Units are issued.

 

3.                                       Allocations.

 

Commencing with the portion of the taxable year of the
Partnership that begins on the Distribution Participation Date established for
any LTIP Units, such LTIP Units shall be allocated Net Income and Net Loss in
amounts per LTIP Unit equal to the amounts allocated per Class A Unit. The
allocations provided by the preceding sentence shall be subject to the proviso
to the first sentence of Section 6.1.B of the Agreement. The General Partner is
authorized in its discretion to delay or accelerate the participation of the
LTIP Units in allocations of Net Income and Net Loss, or to adjust the
allocations made after the Distribution Participation Date, so that the ratio
of (i) the total amount of

 

G-2

 

Net Income or Net Loss allocated with respect to each LTIP Unit in the
taxable year in which that LTIP Unit’s Distribution Participation Date falls,
to (ii) the total amount distributed to that LTIP Unit with respect to
such period, is more nearly equal to such ratio as computed for the Class A
Units held by the General Partner.

 

4.                                       Adjustments.

 

The Partnership shall maintain at all times a
one-to-one correspondence between LTIP Units and Class A Units for conversion,
distribution and other purposes, including without limitation complying with
the following procedures; provided that the foregoing is not intended to alter
the Capital Account Limitation (as defined in Section 7.C of this Exhibit G), the
special allocations pursuant to Section 6.1.E of the Partnership Agreement,
differences between non-liquidating distributions to be made with respect to
the LTIP Units and Class A Units prior to the Distribution Participation Date
for such LTIP Units, differences between liquidating distributions to be made
with respect to the LTIP Units and Class A Units pursuant to Section 13.2 of
the Partnership Agreement or Section 2.A of this Exhibit G in the event that
the Capital Accounts attributable to the LTIP Units are less than those
attributable to the Class A Units due to insufficient special allocations
pursuant to Section 6.1.E of the Partnership Agreement or related provisions. If
an Adjustment Event (as defined below) occurs, then the General Partner shall
make a corresponding adjustment to the LTIP Units to maintain such one-for-one
correspondence between Class A Units and LTIP Units. The following shall be “Adjustment
Events”:  (A) the Partnership makes a
distribution on all outstanding Class A Units in Partnership Units, (B) the
Partnership subdivides the outstanding Class A Units into a greater number of
units or combines the outstanding Class A Units into a smaller number of units,
or (C) the Partnership issues any Partnership Units in exchange for its
outstanding Class A Units by way of a reclassification or recapitalization of
its Class A Units. If more than one Adjustment Event occurs, the adjustment to
the LTIP Units need be made only once using a single formula that takes into
account each and every Adjustment Event as if all Adjustment Events occurred
simultaneously. For the avoidance of doubt, the following shall not be
Adjustment Events: (x) the issuance of Partnership Units in a financing,
reorganization, acquisition or other similar business transaction, (y) the
issuance of Partnership Units pursuant to any employee benefit or compensation
plan or distribution reinvestment plan, or (z) the issuance of any Partnership
Units to the General Partner in respect of a capital contribution to the Partnership
of proceeds from the sale of securities by the General Partner. If the
Partnership takes an action affecting the Class A Units other than actions
specifically described above as Adjustment Events and in the opinion of the
General Partner such action would require an adjustment to the LTIP Units to
maintain the one-to-one correspondence described above, the General Partner
shall have the right to make such adjustment to the LTIP Units, to the extent
permitted by law and by the terms of any plan pursuant to which the LTIP Units
have been issued, in such manner
and at such time as the General Partner, in its sole discretion, may determine
to be appropriate under the circumstances. If an adjustment is made to the LTIP
Units as herein provided the Partnership shall promptly file in the books and
records of the Partnership an officer’s certificate setting forth such
adjustment and a brief statement of the facts requiring such adjustment, which
certificate shall be conclusive evidence of the

 

G-3

 

correctness of such adjustment absent manifest error. Promptly after
filing of such certificate, the Partnership shall mail a notice to each holder
of LTIP Units setting forth the adjustment to his or her LTIP Units and the
effective date of such adjustment.

 

5.                                       Ranking.

 

The LTIP Units shall rank on parity with the Class A
Units in all respects, subject to the proviso in the first sentence of Section
4 of this Exhibit G.

 

6.                                       No
Liquidation Preference.

 

The LTIP Units shall have no liquidation preference.

 

7.                                       Right
to Convert LTIP Units into Class A Units.

 

A.                                   Conversion
Right. A holder of LTIP Units shall have the right (the “Conversion
Right”), at his or her option, at any time to convert all or a portion of
his or her Vested LTIP Units into Class A Units. Holders of LTIP Units shall
not have the right to convert Unvested LTIP Units into Class A Units until they
become Vested LTIP Units; provided, however, that when a holder
of LTIP Units is notified of the expected occurrence of an event that will
cause his or her Unvested LTIP Units to become Vested LTIP Units, such Person
may give the Partnership a Conversion Notice conditioned upon and effective as
of the time of vesting, and such Conversion Notice, unless subsequently revoked
by the holder of the LTIP Units, shall be accepted by the Partnership subject
to such condition. The General Partner shall have the right at any time to
cause a conversion of Vested LTIP Units into Class A Units. In all cases, the
conversion of any LTIP Units into Class A Units shall be subject to the
conditions and procedures set forth in this Section 7.

 

B.                                     Number
of Units Convertible. A holder of Vested LTIP Units may convert such Vested
LTIP Units into an equal number of fully paid and non-assessable Class A Units,
giving effect to all adjustments (if any) made pursuant to Section 4. Notwithstanding
the foregoing, in no event may a holder of Vested LTIP Units convert a number
of Vested LTIP Units that exceeds (x) the Economic Capital Account Balance of
such holder, to the extent attributable to its ownership of LTIP Units, divided
by (y) the Class A Unit Economic Balance, in each case as determined as of the
effective date of conversion (the “Capital Account Limitation”).

 

C.                                     Notice.
In order to exercise his or her Conversion Right, a holder of LTIP Units shall
deliver a notice (a “Conversion Notice”) in the form attached as
Attachment A to this Exhibit G to the Partnership not less than 10 nor
more than 60 days prior to a date (the “Conversion Date”) specified in
such Conversion Notice. Each holder of LTIP Units covenants and agrees with the
Partnership that all Vested LTIP Units to be converted pursuant to this Section
7 shall be free and clear of all liens. Notwithstanding anything herein to the
contrary, a holder of LTIP Units may deliver a Redemption Notice pursuant

 

G-4

 

to Section 8.6 of the Agreement relating to those Class A Units that
will be issued to such holder upon conversion of such LTIP Units into Class A
Units in advance of the Conversion Date; provided, however, that the redemption
of such Class A Units by the Partnership shall in no event take place until the
Conversion Date. For clarity, it is noted that the objective of this paragraph
is to put a holder of LTIP Units in a position where, if he or she so wishes,
the Class A Units into which his or her Vested LTIP Units will be converted can
be redeemed by the Partnership simultaneously with such conversion, with the
further consequence that, if the General Partner elects to assume the
Partnership’s redemption obligation with respect to such Class A Units under
Section 8.6 of the Agreement by delivering to such holder Shares rather than
cash, then such holder can have such Shares issued to him or her simultaneously
with the conversion of his or her Vested LTIP Units into Class A Units. The
General Partner shall cooperate with a holder of LTIP Units to coordinate the
timing of the different events described in the foregoing sentence.

 

D.                                    Forced
Conversion. The Partnership, at any time at the election of the General
Partner, may cause any number of Vested LTIP Units held by a holder of LTIP
Units to be converted (a “Forced Conversion”) into an equal number of
Class A Units, giving effect to all adjustments (if any) made pursuant to
Section 4; provided, that the Partnership may not cause a Forced
Conversion of any LTIP Units that would not at the time be eligible for
conversion at the option of the holder of such LTIP Units pursuant to Section
7.B above. In order to exercise its right to cause a Forced Conversion, the
Partnership shall deliver a notice (a “Forced Conversion Notice”) in the
form attached as Attachment B to this Exhibit G to the applicable holder
not less than 10 nor more than 60 days prior to the Conversion Date specified
in such Forced Conversion Notice. A Forced Conversion Notice shall be provided
in the manner provided in Section 15.1 of the Agreement.

 

E.                                      Conversion
Procedures. A conversion of Vested LTIP Units for which the holder thereof
has given a Conversion Notice or the Partnership has given a Forced Conversion
Notice shall occur automatically after the close of business on the applicable
Conversion Date without any action on the part of such holder of LTIP Units, as
of which time such holder of LTIP Units shall be credited on the books and
records of the Partnership with the issuance as of the opening of business on
the next day of the number of Class A Units issuable upon such conversion. After
the conversion of LTIP Units as aforesaid, the Partnership shall deliver to
such holder of LTIP Units, upon his or her written request, a certificate of
the General Partner certifying the number of Class A Units and remaining LTIP
Units, if any, held by such Person immediately after such conversion.

 

F.                                      Treatment
of Capital Account. For purposes of making future allocations under Section
6.1.E of the Agreement and applying the Capital Account Limitation, the portion
of the Economic Capital Account balance of the applicable holder of LTIP Units
that is treated as attributable to his or her LTIP Units shall be reduced, as
of the date of conversion, by the product of the number of LTIP Units converted
multiplied by the Class A Unit Economic Balance.

 

G-5

 

G.                                     Mandatory
Conversion in Connection with a Transaction. If the Partnership or the
General Partner shall be a party to any transaction (including without
limitation a merger, consolidation, unit exchange, self tender offer for all or
substantially all Class A Units or other business combination or
reorganization, or sale of all or substantially all of the Partnership’s
assets, but excluding any transaction which constitutes an Adjustment Event),
in each case as a result of which Class A Units shall be exchanged for or
converted into the right, or the holders of Class A Units shall otherwise be
entitled, to receive cash, securities or other property or any combination
thereof (each of the foregoing being referred to herein as a “Transaction”),
then the General Partner shall, immediately prior to the Transaction, exercise
its right to cause a Forced Conversion with respect to the maximum number of
LTIP Units then eligible for conversion, taking into account any allocations
that occur in connection with the Transaction or that would occur in connection
with the Transaction if the assets of the Partnership were sold at the
Transaction price or, if applicable, at a value determined by the General
Partner in good faith using the value attributed to the Partnership Units in
the context of the Transaction (in which case the Conversion Date shall be the
effective date of the Transaction and the conversion shall occur immediately
prior to the effectiveness of the Transaction).

 

In anticipation of such Forced Conversion and the
consummation of the Transaction, the Partnership shall use commercially
reasonable efforts to cause each holder of LTIP Units to be afforded the right
to receive in connection with such Transaction in consideration for the Class A
Units into which his or her LTIP Units will be converted the same kind and
amount of cash, securities and other property (or any combination thereof)
receivable upon the consummation of such Transaction by a holder of the same
number of Class A Units, assuming such holder of Class A Units is not a Person
with which the Partnership consolidated or into which the Partnership merged or
which merged into the Partnership or to which such sale or transfer was made,
as the case may be (a “Constituent Person”), or an affiliate of a
Constituent Person. In the event that holders of Class A Units have the
opportunity to elect the form or type of consideration to be received upon
consummation of the Transaction, prior to such Transaction the General Partner
shall give prompt written notice to each holder of LTIP Units of such election,
and shall use commercially reasonable efforts to afford such holders the right
to elect, by written notice to the General Partner, the form or type of
consideration to be received upon conversion of each LTIP Unit held by such
holder into Class A Units in connection with such Transaction. If a holder of
LTIP Units fails to make such an election, such holder (and any of its
transferees) shall receive upon conversion of each LTIP Unit held him or her
(or by any of his or her transferees)
the same kind and amount of consideration that a holder of a Class A Unit would
receive if such holder of Class A Units failed to make such an election.

 

Subject to the rights of the Partnership and the General
Partner under any Vesting Agreement and the terms of any plan under which LTIP
Units are issued, the Partnership shall use commercially reasonable effort to
cause the terms of any Transaction to be consistent with the provisions of this
Section 7 and to enter into an agreement with the successor or purchasing
entity, as the case may be, for the benefit of any holders of LTIP Units whose
LTIP Units will not be converted into Class A Units in connection with the

 

G-6

 

Transaction that will (i) contain provisions enabling the holders of
LTIP Units that remain outstanding after such Transaction to convert their LTIP
Units into securities as comparable as reasonably possible under the
circumstances to the Class A Units and (ii) preserve as far as reasonably
possible under the circumstances the distribution, special allocation,
conversion, and other rights set forth in the Agreement for the benefit of the
holders of LTIP Units.

 

8.                                       Redemption
at the Option of the Partnership.

 

LTIP Units will not be redeemable at the option of the
Partnership; provided, however, that the foregoing shall not
prohibit the Partnership from repurchasing LTIP Units from the holder thereof
if and to the extent such holder agrees to sell such Units.

 

9.                                       Voting
Rights.

 

A.                                   Voting
with Class A Units. Holders of LTIP Units shall have the right to vote on
all matters submitted to a vote of the holders of Class A Units; holders of
LTIP Units and Class A Units shall vote together as a single class, together
with any other class or series of units of limited partnership interest in the
Partnership upon which like voting rights have been conferred. In any matter in
which the LTIP Units are entitled to vote, including an action by written
consent, each LTIP Unit shall be entitled to vote a Percentage Interest equal
on a per unit basis to the Percentage Interest of the Class A Units.

 

B.                                     Special
Approval Rights. In addition to, and not in limitation of, the provisions
of Section 9.A above (and notwithstanding anything appearing to be contrary in
the Agreement), the General Partner and/or the Partnership shall not, without
the affirmative consent of the holders of sixty-six and two-thirds percent (66
2/3%) of the then outstanding LTIP Units, given in person or by proxy, either
in writing or at a meeting, take any action that would materially and adversely
alter, change, modify or amend the rights, powers or privileges of the LTIP
Units; but subject in any event to the following provisions: (i) no consent of
the holders of LTIP Units will be required if and to the extent that any such
alteration, change, modification or amendment would similarly alter, change,
modify or amend the rights, powers or privileges of the Class A Units;
(ii) with respect to the occurrence of any merger, consolidation or other
business combination or reorganization, so long as the LTIP Units either (x)
are all converted into Class A Units immediately prior to the effectiveness of
the transaction, (y) remain outstanding with the terms thereof materially
unchanged or (z) if the Partnership is not the surviving entity in such
transaction, are exchanged for a security of the surviving entity with terms
that are materially the same with respect to rights to allocations,
distributions, redemption,

 

G-7

 

conversion and voting as the LTIP Units and without any income, gain or
loss expected to be recognized by the holder upon the exchange for federal
income tax purposes (and with the terms of the Class A Units or such other
securities into which the LTIP Units (or the substitute security therefor) are
convertible materially the same with respect to rights to allocations,
distributions, redemption, conversion and voting), the occurrence of any such
event shall not be deemed to materially and adversely alter, change, modify or
amend the rights, powers or privileges of the LTIP Units, provided further,
that if some, but not all, of the LTIP Units are converted into Class A Units
immediately prior to the effectiveness of the transaction (and neither clause
(y) or (z) above is applicable), then the consent required pursuant to this
Section will be the consent of the holders of sixty-six and two-thirds percent
(66 2/3%) of the LTIP Units to be outstanding following such conversion;
(iii) any creation or issuance of any Class A Units or of any class of series
of common or preferred units of the Partnership (whether ranking junior to, on
a parity with or senior to the LTIP Units with respect to payment of distributions,
redemption rights and the distribution of assets upon liquidation, dissolution
or winding up), which either (x) does not require the consent of the holders of
Class A Units or (y) does require such consent and is authorized by a vote of
the holders of Class A Units and LTIP Units voting together as a single class,
together with any other class or series of units of limited partnership
interest in the Partnership upon which like voting rights have been conferred,
shall not be deemed to materially and adversely alter, change, modify or amend
the rights, powers or privileges of the LTIP Units; and (iv) any waiver by the
Partnership of restrictions or limitations applicable to any outstanding LTIP
Units with respect to any holder or holders thereof shall not be deemed to
materially and adversely alter, change, modify or amend the rights, powers or
privileges of the LTIP Units with respect to other holders. The foregoing
voting provisions will not apply if, as of or prior to the time when the action
with respect to which such vote would otherwise be required will be taken or be
effective, all outstanding LTIP Units shall have been converted and/or
redeemed, or provision is made for such redemption and/or conversion to occur
as of or prior to such time.

 

G-8

 

Attachment A to Exhibit G

 

Notice of Election by Partner to
Convert

LTIP Units into Class A Units

 

The undersigned holder of LTIP Units hereby
irrevocably elects to convert the number of Vested LTIP Units in SL Green
Operating Partnership, L.P. (the “Partnership”) set forth below into
Class A Units in accordance with the terms of the First Amended and Restated
Agreement of Limited Partnership of the Partnership, as amended. The
undersigned hereby represents, warrants, and certifies that the undersigned:
(a) has title to such LTIP Units, free and clear of the rights or interests of
any other person or entity other than the Partnership; (b) has the full right,
power, and authority to cause the conversion of such LTIP Units as provided
herein; and (c) has obtained the consent or approval of all persons or
entities, if any, having the right to consent or approve such conversion.

 

	
  Name of Holder:

  
	
  (Please Print: Exact
  Name as Registered with Partnership)

  

 

Number
of LTIP Units to be Converted:                                           

 

Conversion
Date:                                                                               

 

	
   

  	
   

  	
   

  
	
   

  	
  (Signature of Holder: Sign Exact Name as Registered with Partnership)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Street Address)

  
	
   

  	
   

  
	
   

  	
  (City)

  	
  (State)

  	
  (Zip Code)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Signature Guaranteed by:

  	
   

  	
   

  
						

 

 

Attachment B to Exhibit G

 

Notice of Election by Partnership to
Force Conversion

of LTIP Units into Class A Units

 

SL Green Operating Partnership, L.P. (the “Partnership”)
hereby irrevocably elects to cause the number of LTIP Units held by the holder
of LTIP Units set forth below to be converted into Class A Units in accordance
with the terms of the First Amended and Restated Agreement of Limited
Partnership of the Partnership, as amended.

 

Name
of Holder:

(Please Print: Exact Name
as Registered with Partnership)

 

Number
of LTIP Units to be Converted:                                           

 

Conversion
Date:EXHIBIT 10.1

 

EMPLOYMENT AGREEMENT

 

This Agreement (“the Agreement”) dated as of
the          day of May, 2006 (the
“Effective Date”), is by and between CryoLife, Inc., a Florida corporation (“CryoLife”)
and [Executive’s Name]  (the “Employee”).

 

WITNESSETH:

 

WHEREAS, CryoLife desires, 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, the Employee desires to remain
employed by CryoLife in the capacity and upon the terms set forth in this
Employment 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 acknowledged, it
is hereby agreed as follows:

 

1.             Employment.

 

(a)           CryoLife hereby
employs Employee in the capacity of [Description of Position]
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 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.

 

1

 

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 her
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 her 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 her contribution to protecting and
enhancing shareholder value in any future sale of CryoLife that may occur and
to provide incentive to Employee as an executive to remain with CryoLife
through any future sale or merger of CryoLife, CryoLife has provided in Section
6(a) to increase the severance payment amount upon the occurrence of a
Severance Increase Event. A Severance Increase Event shall occur upon the
happening of a Change of Control (as defined below) if Employee remains
employed by CryoLife at such time or   if
Employee’s employment was terminated by CryoLife without Cause within the six
(6) months immediately preceding 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 of the Directors of CryoLife (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

 

(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 Executive 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:

 

(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.

 

3

 

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 days 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 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 Corporate Secretary 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 CryoLife, either directly or indirectly,
on her own behalf or in the service or on behalf of others, solicit or attempt
to solicit, divert or hire away any person then employed by CryoLife.

 

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 time the aggregate of Employee’s
annual salary and bonus compensation for the year in which the termination of
employment occurs except, however, if a Severance Increase Event has occured,
the severance compensation shall be increased to 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 (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 CryoLife 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 extend required under Section 409A of the Code
to avoid the imposition of additional tax to Employee under the Section, any
payment of the Severance Payment shall commence on the six-month anniversary of
Employee’s separation from service with CryoLife (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

 

4

 

Change of Control. Payment of
any Severance Payment or Retention 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.

 

(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 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 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 

 

5

 

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 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:

 

[Employee name and address]

 

 

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.

 

6

 

(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 interest and penalties under Section 409A of the Code, Employee and
CryoLife agree to negotiate in good faith an 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).

 

7

 

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.

 

 

	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [Employee Name]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CRYOLIFE, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Steven G. Anderson

  
	
   

  	
   

  	
   

  	
  Chairman, President and CEO

  
					

 

8

 

Exhibit A

 

Duties
and Responsibilities of [Employee Name]:

 

All duties of [Position Name] and duties not inconsistent with such duties
that are assigned by the President.

 

Compensation:

 

Salary of $[ ] and bonus set
by the Compensation Committee. Salary & Bonus subject to yearly review by
the Compensation Committee of the Board of Directors:

 

Vacation
and Employee Benefits:

 

See attached CryoLife vacation plan, standard CryoLife medical plan and
contributory

 

401K plan.

 

CryoLife 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.

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