10-Q

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2002

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 1-11442

CHART INDUSTRIES, INC.
(Exact Name of Registrant as Specified in its Charter)

Delaware
(State or Other Jurisdiction
of Incorporation or Organization)
34-1712937
(I.R.S. Employer Identification No.)

5885 Landerbrook Dr., Suite 150, Cleveland, Ohio
(Address of Principal Executive Offices)
44124
(ZIP Code)

Registrant’s Telephone Number, Including Area Code: (440) 753-1490

Not Applicable
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

At September 30, 2002, there were 25,244,152 outstanding shares of the Company’s Common Stock, par value $.01 per share.

Page 1 of 24 sequentially numbered pages.

1

CHART INDUSTRIES, INC.

INDEX

			Page
Part I.	Financial Information
	Item 1:	Financial Statements
		Condensed Consolidated Balance Sheets as of September 30, 2002 and December 31, 2001	3
		Condensed Consolidated Statements of Operations for the Three Months and Nine Months Ended September 30, 2002 and 2001	4
		Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2002 and 2001	5
		Notes to Unaudited Condensed Consolidated Financial Statements	6-13
	Item 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14-19
	Item 3:	Quantitative and Qualitative Disclosures About Market Risk	20
	Item 4:	Controls and Procedures	20
Part II.	Other Information
	Item 1:	Legal Proceedings	21
	Item 2:	Changes in Securities and Use of Proceeds	21
	Item 6:	Exhibits and Reports on Form 8-K	21

Signatures	22
Certifications	22-23
Exhibit Index	24

2

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

CHART INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share amounts)

	September 30, 2002			December 31, 2001
	(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents	$	13,989		$	11,801
Accounts receivable, net		43,853			45,427
Inventories, net		53,551			56,490
Other current assets		33,841			26,062
Total Current Assets		145,234			139,780
Property, plant and equipment, net		58,520			62,070
Goodwill, net		169,255			168,282
Other assets, net		37,072			38,848
TOTAL ASSETS	$	410,081		$	408,980
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Accounts payable	$	25,851		$	25,634
Customer advances and billings in excess of contract revenue		9,310			9,290
Accrued expenses and other liabilities		35,479			35,617
Current portion of long-term debt		42,249			12,963
Total Current Liabilities		112,889			83,504
Long-term debt		228,312			259,120
Other long-term liabilities		16,630			17,016
Shareholders’ Equity
Preferred stock, 1,000,000 shares authorized, none issued or outstanding
Common stock, par value $.01 per share – 60,000,000 shares authorized,        25,366,500 and 24,917,187 shares issued at September 30, 2002 and December        31, 2001, respectively		254			249
Additional paid-in capital		44,283			42,832
Retained earnings		10,883			14,699
Accumulated other comprehensive loss		(2,411	)		(7,670	)
Treasury stock, at cost, 122,348 and 109,437 shares at September 30, 2002 and        December 31, 2001, respectively		(759	)		(770	)
		52,250			49,340
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	410,081		$	408,980

The balance sheet at December 31, 2001 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

3

CHART INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(Dollars and shares in thousands, except per share amounts)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2002			2001			2002			2001
Sales	$	74,225		$	80,595		$	221,113		$	254,424
Cost of sales		55,073			59,415			164,611			184,644
Gross profit		19,152			21,180			56,502			69,780
Selling, general and administrative expense		13,558			13,192			45,113			43,065
Goodwill amortization expense					1,239						3,778
Employee separation and plant closure costs		2,175			198			3,483			1,737
Equity income in joint venture		(103	)		(96	)		(382	)		(379	)
		15,630			14,533			48,214			48,201
Operating income		3,522			6,647			8,288			21,579
Other income (expense):
Gain on sale of assets					538			1,420			538
Interest expense, net		(4,329	)		(5,269	)		(13,084	)		(17,465	)
Financing costs amortization		(638	)		(377	)		(2,383	)		(1,120	)
Derivative contracts valuation expense		(702	)		(1,616	)		(1,114	)		(2,678	)
Foreign currency gain (loss)		1			(537	)		(661	)		(519	)
		(5,668	)		(7,261	)		(15,822	)		(21,244	)
(Loss) income before income taxes, minority interest and     cumulative effect of change in accounting principle		(2,146	)		(614	)		(7,534	)		335
Income tax (benefit) expense		(1,447	)		506			(3,742	)		1,340
Loss before minority interest and cumulative effect of change     in accounting principle		(699	)		(1,120	)		(3,792	)		(1,005	)
Minority interest, net of taxes		23			50			24			96
Loss before cumulative effect of change in accounting principle		(722	)		(1,170	)		(3,816	)		(1,101	)
Cumulative effect of change in accounting principle, net of taxes											88
Net loss	$	(722	)	$	(1,170	)	$	(3,816	)	$	(1,189	)
Net loss per common share – basic and assuming dilution:
Loss before cumulative effect of change in accounting        principle	$	(0.03	)	$	(0.05	)	$	(0.15	)	$	(0.05	)
Cumulative effect of change in accounting principle											0.00
Net loss per common share	$	(0.03	)	$	(0.05	)	$	(0.15	)	$	(0.05	)
Shares used in per share calculations – basic and assuming     Dilution		25,129			24,634			24,977			24,519

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

4

CHART INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Dollars in thousands)

	Nine Months Ended September 30,
	2002			2001
OPERATING ACTIVITIES
Net loss	$	(3,816	)	$	(1,189	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Cumulative effect of change in accounting principle					88
Gain on sale of assets		(1,420	)		(538	)
Depreciation and amortization		8,677			12,590
Financing costs amortization		2,383			1,120
Amendment-related fees expensed		3,756
Employee separation and plant closure costs		868			1,297
Other non-cash operating activities		1,250			1,634
Increase (decrease) in cash resulting from changes in operating assets and liabilities:
Accounts receivable		2,214			(2,086	)
Inventory and other current assets		(4,283	)		5,312
Accounts payable and other current liabilities		(9,592	)		(19,583	)
Income tax refund		9,258
Customer advances and billings in excess of contract revenue		(421	)		1,886
Net Cash Provided By Operating Activities		8,874			531
INVESTING ACTIVITIES
Capital expenditures		(2,444	)		(5,740	)
Proceeds from sale of assets		2,300			2,365
Dividends received from joint venture		492
Other investing activities		741			5
Net Cash Provided By (Used In) Investing Activities		1,089			(3,370	)
FINANCING ACTIVITIES
Borrowings on revolving credit facilities		37,411			88,188
Repayments on revolving credit facilities		(36,596	)		(71,471	)
Principal payments on long-term debt		(3,056	)		(14,888	)
Other financing activities		(6,018	)		(254	)
Net Cash (Used In) Provided By Financing Activities		(8,259	)		1,575
Net increase (decrease) in cash and cash equivalents		1,704			(1,264	)
Effect of exchange rate changes on cash		484			(359	)
Cash and cash equivalents at beginning of period		11,801			4,921
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	13,989		$	3,298

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

5

CHART INDUSTRIES, INC. AND SUBSIDIARIES
Notes to Unaudited Condensed Consolidated Financial Statements — September 30, 2002
(Dollars and shares in thousands, except per share amounts)

NOTE A — Basis of Preparation

         The accompanying unaudited condensed consolidated financial statements of Chart Industries, Inc. and subsidiaries (the “Company”) have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Certain prior year amounts have been reclassified to conform to the current year presentation. Operating results for the three-month and nine-month periods ended September 30, 2002 are not necessarily indicative of the results that may be expected for the year ending December 31, 2002. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2001.

         Nature of Operations: The Company is a leading global supplier of standard and custom-engineered products and systems serving a wide variety of low-temperature and cryogenic applications. The Company has developed an expertise in cryogenic systems and equipment, which operate at low temperatures sometimes approaching absolute zero. The majority of the Company’s products, including vacuum-insulated containment vessels, heat exchangers, cold boxes and other cryogenic components, are used throughout the liquid-gas supply chain for the purification, liquefaction, distribution, storage and use of industrial gases and hydrocarbons. Headquartered in Cleveland, Ohio, the Company has domestic operations located in 11 states and international operations located in Australia, China, the Czech Republic, Germany and the United Kingdom.

         Use of Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

         Revenue Recognition: For the majority of the Company’s products, revenue is recognized when products are shipped, title has transferred and collection is reasonably assured. For these products, there is also persuasive evidence of an arrangement, and the selling price to the buyer is fixed or determinable. For product lines in the Process Systems and Equipment segment, engineered tanks and liquefied natural gas fueling stations, the Company uses the percentage of completion method of accounting. Earned revenue is based on the percentage that incurred costs to date bear to total estimated costs at completion after giving effect to the most current estimates. The cumulative impact of revisions in total cost estimates during the progress of work is reflected in the period in which these changes become known. Earned revenue reflects the original contract price adjusted for agreed upon claims and change orders, if any. Losses expected to be incurred on contracts in process, after consideration of estimated minimum recoveries from claims and change orders, are charged to operations as soon as such losses are known.

NOTE B — Accounting Changes

         Effective January 1, 2002, the Company adopted Financial Accounting Standards Board (“FASB”) Statement of Financial Accounting Standards (“SFAS”) No. 141, “Business Combinations,” and SFAS No. 142, “Goodwill and Other Intangible Assets,” which establish financial accounting and reporting for acquired goodwill and other intangible assets and supersede Accounting Principles Board (“APB”) Opinion No. 16, “Business Combinations,” and APB Opinion No. 17, “Intangible Assets.” Under SFAS No. 142, goodwill and indefinite lived intangible assets are no longer amortized but are reviewed at least annually for impairment. Intangible assets that have finite useful lives will continue to be amortized over their useful lives.

         SFAS No. 142 requires that indefinite lived intangible assets be tested for impairment and that goodwill be tested for impairment at the reporting unit level at the date of adoption and at least annually thereafter. The company determines the fair value of any indefinite lived intangible assets, compares the fair value to its carrying value and records an impairment loss if the carrying value exceeds its fair value. Goodwill is tested utilizing a two-step approach. After recording any impairment losses for indefinite lived intangible assets, the company is required to determine the fair value of each reporting unit and compare the fair value to its carrying value, including goodwill, of such reporting unit (step one). If the fair value exceeds the carrying value, no impairment loss would be recognized. If the carrying value of the reporting unit exceeds its fair value, the goodwill of this unit may be impaired. The amount of the impairment, if any, would then be measured in step two, which compares the implied fair value of reporting unit goodwill with the carrying amount of that goodwill.

6

CHART INDUSTRIES, INC. AND SUBSIDIARIES
Notes to Unaudited Condensed Consolidated Financial Statements — September 30, 2002
(Dollars and shares in thousands, except per share amounts)

NOTE B — Accounting Changes - Continued

         As part of adopting this standard as of January 1, 2002, the Company determined that it has one indefinite lived intangible asset in addition to goodwill. The Company evaluated the impairment of its one indefinite lived intangible asset during the first quarter of 2002 and determined that it was not impaired. The Company completed step one of the transitional impairment test for goodwill during the second quarter of 2002 and determined there were no indicators of impairment as of January 1, 2002. As such, the Company was not required to record a cumulative effect charge as of January 1, 2002 for the adoption of SFAS No. 142.

         Prior to the adoption of SFAS No. 142, amortization expense was recorded for goodwill and other intangible assets. The following table sets forth a reconciliation of net loss and earnings per share information adjusted in 2001 for the non-amortization provisions of SFAS No. 142:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2002			2001			2002			2001
Reported loss before cumulative effective of change in     accounting principle	$	(722	)	$	(1,170	)	$	(3,816	)	$	(1,101	)
Add back goodwill and indefinite lived intangible asset     amortization, net of tax					1,301						3,964
Adjusted (loss) income before cumulative effect of change in     accounting principle		(722	)		131			(3,816	)		2,863
Cumulative effect of change in accounting principle, net of tax											88
Adjusted net (loss) income	$	(722	)	$	131		$	(3,816	)	$	2,775
Basic and diluted earnings per share:
Reported loss before cumulative effect of change in        accounting principle	$	(0.03	)	$	(0.05	)	$	(0.15	)	$	(0.05	)
Add back goodwill and indefinite lived intangible asset        amortization, net of tax					0.05						0.16
Adjusted (loss) income before cumulative effect of change in        accounting principle		(0.03	)		0.00			(0.15	)		0.11
Cumulative effect of change in accounting principle, net of tax											0.00
Adjusted net (loss) income	$	(0.03	)	$	0.00		$	(0.15	)	$	0.11
Weighted average shares – basic and assuming dilution		25,129			24,634			24,977			24,519

         The following table displays the gross carrying amount and accumulated amortization for intangible assets that continue to be subject to amortization as well as intangible assets not subject to amortization.

	September 30, 2002					December 31, 2001
	Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization
Amortized intangible assets
Existing technology	$	7,690	$	(4,659	)	$	7,690	$	(3,649	)
Patents		2,090		(873	)		1,977		(676	)
	$	9,780	$	(5,532	)	$	9,667	$	(4,325	)
Unamortized intangible assets
Know-how and intellectual property	$	6,275	$	(1,569	)	$	5,824	$	(1,456	)
Goodwill		183,938		(14,683	)		182,865		(14,583	)
	$	190,213	$	(16,252	)	$	188,689	$	(16,039	)

         Differences in gross carrying amounts between September 30, 2002 and December 31, 2001 are attributable to exchange rate changes on Pound Sterling intangible assets.

7

CHART INDUSTRIES, INC. AND SUBSIDIARIES
Notes to Unaudited Condensed Consolidated Financial Statements — September 30, 2002
(Dollars and shares in thousands, except per share amounts)

NOTE B — Accounting Changes - Continued

         Amortization expense for intangible assets subject to amortization was $389 and $1,161 for the three-month and nine-month periods ended September 30, 2002, respectively, and is estimated to be approximately $1,500 annually for fiscal years 2002 through 2004, and approximately $200 annually for fiscal years 2005 and 2006.

         Effective January 1, 2002, the Company adopted SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” which addresses financial accounting and reporting for the impairment or disposal of long-lived assets. Effective May 15, 2002, the Company adopted SFAS No. 145, “Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections,” which rescinds, amends and clarifies certain previously issued FASB statements. Initial adoption of SFAS No. 144 and No. 145 had no effect on the Company’s financial statements.

NOTE C — Recently Issued Accounting Standards

         In August 2001, the FASB issued SFAS No. 143, “Accounting for Asset Retirement Obligations,” which amends SFAS No. 19, “Financial Accounting and Reporting by Oil and Gas Producing Companies,” and is effective for all companies. This statement addresses the financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. SFAS No. 143 is effective for fiscal years beginning after June 15, 2002. The Company does not expect this statement to have a material impact on the Company’s financial position, liquidity, cash flows or results of operations.

         In July 2002, the FASB issued SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal Activities,” which nullifies Emerging Issues Task Force Issue No. 94-3, “Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring).” SFAS No. 146 is effective for exit or disposal activities that are initiated after December 31, 2002. The Company does not expect this statement to have a material impact on the Company’s financial position, liquidity, cash flows or results of operations.

NOTE D — Inventories

The components of inventory consist of the following:

	September 30, 2002			December 31, 2001
Raw materials and supplies	$	27,457		$	31,004
Work in process		16,418			14,639
Finished goods		9,826			10,997
LIFO reserve		(150	)		(150	)
	$	53,551		$	56,490

NOTE E — Debt and Credit Arrangements

         In March 1999 the Company negotiated a consolidated credit and revolving loan facility (the “Credit Facility”), which originally provided for term loans of up to $250,000 and a revolving credit line of $50,000, which may also be used for the issuance of letters of credit. The Company entered into the Series 1 Incremental Revolving Credit Facility in November 2000 and the Series 2 Incremental Revolving Credit Facility in April 2001 (collectively, the “Incremental Credit Facility”), providing a revolving credit line of $10,000 in addition to the credit line available under the Credit Facility. At September 30, 2002, the Company had borrowings of $216,897 and $35,400 on the term loan and revolving credit portions of its Credit Facility, and borrowings of $9,941 on its Incremental Credit Facility. The Credit Facility and Incremental Credit Facility were amended in March 2002 (the “March 2002 Amendments”) to modify certain covenants until March 31, 2003, to defer $25,747 of term loan amortization payments from scheduled payment dates in 2002 to primarily 2005 and to extend the Incremental Credit Facility to March 31, 2003. The March 2002 Amendments resulted in an increase in interest rates of 0.25 percent, the addition of one financial covenant and scheduled reductions in the commitment amounts of the revolving credit lines of the Credit Facility and the Incremental Credit Facility.

8

CHART INDUSTRIES, INC. AND SUBSIDIARIES
Notes to Unaudited Condensed Consolidated Financial Statements — September 30, 2002
(Dollars and shares in thousands, except per share amounts)

NOTE E — Debt and Credit Arrangements - Continued

         The March 2002 Amendments call for the Company to prepay borrowings under the Credit Facility and Incremental Credit Facility in an aggregate amount of at least $75,000 (“Minimum Prepayment Amount”) from the net proceeds of an equity investment, sale of assets and other sources of new capital. The March 2002 Amendments also call for the Company’s interest rates to increase by 0.25 percent if the Minimum Prepayment Amount is not achieved by September 30, 2002, and by an additional 0.25 percent each quarter thereafter that the Minimum Prepayment Amount is not made. If the Minimum Prepayment Amount is achieved, these additional interest rate increases will be eliminated. Since the Minimum Prepayment Amount was not achieved by September 30, 2002, the Company’s interest rates will increase by 0.25 percent beginning in the fourth quarter of 2002.

         The March 2002 Amendments also provided for the issuance of market-priced warrants to the lenders for the purchase of two percent of the Company’s Common Stock at June 28, 2002. Accordingly, the Company was obligated to issue to its lenders at June 28, 2002 warrants to purchase, in the aggregate, 513,559 shares of Chart Common Stock at an exercise price of $2.425 per share. These warrants were valued at $729 and are being amortized to financing costs amortization expense over the remaining term of the Company’s Credit Facility, which expires in March 2006. In addition, the March 2002 Amendments provide for the issuance of market-priced warrants to the lenders for the purchase of an additional five percent and three percent of the Company’s Common Stock if the Minimum Prepayment Amount is not made by September 30 or December 31, 2002, respectively. The Company did not achieve the Minimum Prepayment Amount at September 30, 2002. Accordingly, the Company was obligated to issue to its lenders at September 30, 2002 warrants to purchase, in the aggregate, 1,353,531 shares of Chart Common Stock at an exercise price of $0.898 per share. These warrants have been valued at $1,228 and will be amortized to financing costs amortization expense over the remaining term of the Company’s Credit Facility. If the Minimum Prepayment Amount is not made by December 31, 2002, the lenders will be issued market-priced warrants (which may be priced above or below $0.898 per share, depending on the market prices of the Company’s Common Stock for the ten trading days preceding December 31, 2002) for the purchase of the additional three percent of the Company’s Common Stock. If at least $50,000 of the Minimum Prepayment Amount is made from the net proceeds of an equity investment by December 31, 2002, no warrants will be required to be issued to the lenders on that date.

         Under the terms of the Credit Facility, as modified by the March 2002 Amendments, term loans and revolving credit bear interest, at the Company’s option, at rates equal to the prime rate plus incremental margins or LIBOR plus incremental margins. The incremental margins vary based on the Company’s financial position and currently range from 2.0 percent to 4.75 percent. At September 30, 2002, the Company’s average interest rate for borrowings on the Credit Facility was 6.37 percent. The Company entered into two interest rate derivative contracts to manage interest rate risk exposure relative to the term loan portions of the Credit Facility. One of these contracts expired and was settled on June 28, 2002. The other collar covering $30,797 of the debt outstanding at September 30, 2002 expires in March 2006. The Company is also required to pay a commitment fee of 0.5 percent per annum on the unused amount of the revolving credit portion of the Credit Facility. At September 30, 2002, the Company had letters of credit outstanding and bank guarantees totaling $14,129 supported by the Credit Facility.

         The Credit Facility, as modified by the March 2002 Amendments, contains certain covenants and conditions which impose limitations on the Company and its operating units, including meeting certain financial tests and the quarterly maintenance of certain financial ratios on a consolidated basis such as: minimum net worth, maximum leverage, minimum pre-tax interest coverage ratio, minimum fixed charge coverage ratio and minimum earnings before interest, taxes, depreciation, amortization and restructuring charges. Certain of these covenants became more restrictive effective September 30, 2002 and will again become more restrictive as of December 31, 2002. The Company is permitted to pay cash dividends not exceeding $7,200 in any fiscal year after January 1, 2001, but only if at both the time of payment of the dividend and immediately thereafter there is no event of default under the Credit Facility. The Company, however, has not paid dividends since the second quarter of 1999. As of September 30, 2002, the Company was in compliance with the covenants and conditions of the Credit Facility.

NOTE F — Net Loss per Share

         The calculations of basic and diluted net loss per share for the three-month and nine-month periods ended September 30, 2002 and 2001 are set forth below. The assumed conversion of the Company’s potentially dilutive securities (employee stock options and warrants) was not dilutive for the three-month and nine-month periods ended September 30, 2002 and 2001. As a result, the calculations of diluted net loss per share for the three-month and nine-month periods ended September 30, 2002 and 2001 set forth below do not reflect any assumed conversion. The amount of potentially dilutive securities is presented in the table for all periods, however, to give an indication of the potential dilution that may occur in future periods.

9

CHART INDUSTRIES, INC. AND SUBSIDIARIES
Notes to Unaudited Condensed Consolidated Financial Statements — September 30, 2002
(Dollars and shares in thousands, except per share amounts)

NOTE F — Net Loss per Share – Continued

	Three Months Ended September 30,						Nine Months Ended September 30,
	2002			2001			2002			2001
Loss before cumulative effect of change in accounting principle	$	(722	)	$	(1,170	)	$	(3,816	)	$	(1,101	)
Cumulative effect of change in accounting principle, net of tax											88
Net loss	$	(722	)	$	(1,170	)	$	(3,816	)	$	(1,189	)
Weighted-average common shares		25,129			24,634			24,977			24,519
Effect of dilutive securities:
Employee stock options and warrants		76			130			76			160
Dilutive potential common shares		25,205			24,764			25,053			24,679
Net loss per common share – basic and assuming dilution:
Loss before cumulative effect of change in accounting        principle	$	(0.03	)	$	(0.05	)	$	(0.15	)	$	(0.05	)
Cumulative effect of change in accounting principle, net of        tax											0.00
Net loss per common share	$	(0.03	)	$	(0.05	)	$	(0.15	)	$	(0.05	)

NOTE G — Comprehensive Income (Loss)

         The Company reports comprehensive loss in its consolidated statement of shareholders’ equity. The components of accumulated other comprehensive loss are as follows:

	September 30, 2002		December 31, 2001
Foreign currency translation adjustments	$	1,233	$	6,492
Minimum pension liability adjustments, net of taxes of $737		1,178		1,178
	$	2,411	$	7,670

         Total comprehensive income (loss) for the three-month periods ended September 30, 2002 and 2001 was $(630) and $1,270, respectively. Total comprehensive income (loss) for the nine-month periods ended September 30, 2002 and 2001 was $1,443 and $(1,998), respectively.

NOTE H — Employee Separation and Plant Closure Costs

         During the three-month and nine-month periods ended September 30, 2002, the Company recorded employee separation and plant closure costs primarily related to the closure of its Costa Mesa, California, Columbus, Ohio, and Denver (East), Colorado manufacturing facilities and also including severance for certain other employees. The Company also recorded non-cash inventory valuation charges included in cost of sales for the write-off of inventory at these sites. The following tables summarize the Company’s employee separation and plant closure costs activity for the three-month and nine-month periods ended September 30, 2002.

10

CHART INDUSTRIES, INC. AND SUBSIDIARIES
Notes to Unaudited Condensed Consolidated Financial Statements — September 30, 2002
(Dollars and shares in thousands, except per share amounts)

NOTE H — Employee Separation and Plant Closure Costs – Continued

	Activity for the Three Months Ended September 30, 2002
	Denver			Columbus			Costa Mesa			Other			Total
July 1, 2002 reserve	$	923								$	265		$	1,188
Employee separation and plant closure costs:
Facility related closure costs		20		$	334		$	755						1,109
Severance and other benefits					411			122			533			1,066
		20			745			877			533			2,175
Non-cash inventory write-offs in cost of sales		5			213			365						583
		25			958			1,242			533			2,758
Reserve usage		(252	)		(289	)		(702	)		(96	)		(1,339	)
September 30, 2002 reserve	$	696		$	669		$	540		$	702		$	2,607

	Activity for the Nine Months Ended September 30, 2002
	Denver			Columbus			Costa Mesa			Other			Total
January 1, 2002 reserve										$	486		$	486
Employee separation and plant closure costs:
Facility related closure costs	$	1,016		$	334		$	755						2,105
Severance and other benefits		326			411			122			519			1,378
		1,342			745			877			519			3,483
Non-cash inventory write-offs in cost of sales		260			213			365						838
		1,602			958			1,242			519			4,321
Reserve usage		(906	)		(289	)		(702	)		(303	)		(2,200	)
September 30, 2002 reserve	$	696		$	669		$	540		$	702		$	2,607

         The employee separation and plant closure costs reserve at September 30, 2002 consists of $1,752 for lease termination and facility-related closure costs and $855 for severance and other benefits. The Company’s employee separation and plant closure costs for the three-month and nine-month periods ended September 30, 2001 principally related to the Cryogenic Services business, as the Ottawa Lake, Michigan facility and two smaller sites were closed.

NOTE I — Operating Segments

         The Company has the following three reportable segments: applied technologies (“Applied Technologies”), distribution and storage equipment (“Distribution and Storage”) and process systems and equipment (“Process Systems”). The reportable segments are each managed separately because they manufacture and distribute distinct products with different production processes and sales and marketing approaches. The Applied Technologies segment sells products including liquefied natural gas (“LNG”) alternative fuel systems, telemetry products, magnetic resonance imaging (“MRI”) cryostat components, bulk liquid CO2 systems, medical products, biological storage systems, cryogenic systems and components and stainless steel tubing. The Distribution and Storage segment sells cryogenic bulk storage systems, cryogenic packaged gas systems and cryogenic services to various companies for the storage and transportation of both industrial and natural gases. The Process Systems segment sells heat exchangers and coldboxes to natural gas, petrochemical processing and industrial gas companies who use them for the liquefaction and separation of natural and industrial gases. Due to the nature of the products that each segment sells, there are no intersegment sales.

         The Company evaluates performance and allocates resources based on operating income (loss), which is defined as profit or loss from operations before gain (loss) on sale of assets, net interest expense, deferred financing costs amortization expense, derivative contracts valuation income (expense), income taxes, minority interest and cumulative effect of change in accounting principle.

11

CHART INDUSTRIES, INC. AND SUBSIDIARIES
Notes to Unaudited Condensed Consolidated Financial Statements — September 30, 2002
(Dollars and shares in thousands, except per share amounts)

NOTE I — Operating Segments – Continued

	Three Months Ended September 30, 2002
	Applied Technologies		Distribution & Storage		Process Systems		Corporate			Total
Sales	$	33,202	$	26,426	$	14,597				$	74,225
Operating income (loss) (A) (B) (C)		5,304		2,217		287	$	( 4,286	)		3,522

	Three Months Ended September 30, 2001
	Applied Technologies		Distribution & Storage		Process Systems			Corporate		Total
Sales	$	36,160	$	32,739	$	11,696				$	80,595
Operating income (loss) (D)		4,027		1,179		( 1,233	)	$	2,674		6,647

	Nine Months Ended September 30, 2002
	Applied Technologies		Distribution & Storage		Process Systems		Corporate			Total
Sales	$	98,896	$	77,128	$	45,089				$	221,113
Operating income (loss) (A) (B) (C)		14,946		2,695		2,926	$	( 12,279	)		8,288

	Nine Months Ended September 30, 2001
	Applied Technologies		Distribution & Storage		Process Systems		Corporate		Total
Sales	$	108,524	$	100,446	$	45,454			$	254,424
Operating income (D)		15,464		4,583		1,003	$	529		21,579

(A) Applied Technologies operating income for the three and nine months ended September 30, 2002 includes $1,622 of employee separation and plant closure costs and $578 in inventory valuation charges related to the closure of the Company’s Costa Mesa, California, and Columbus, Ohio, manufacturing facilities.

(B) Distribution and Storage operating income for the three and nine months ended September 30, 2002 includes $20 and $1,342 respectively, of employee separation and plant closure costs and $5 and $260 respectively, in inventory valuation charges related to the closure of the Company’s Denver, Colorado mobile equipment manufacturing facility.

(C) Corporate operating loss for the three and nine months ended September 30, 2002 includes $407 of severance costs and $218 and $3,756 respectively, of professional fees incurred in obtaining the latest amendments to the Company’s credit facilities.

(D) Corporate operating income (loss) for the three and nine months ended September 30, 2001 excludes $2,187 and $6,550, respectively, of corporate expenses allocated to the operating segments as follows:

	Three Months Ended September 30, 2001		Nine Months Ended September 30, 2001
Applied Technologies	$	873	$	2,597
Distribution & Storage		923		2,768
Process Systems		391		1,185
	$	2,187	$	6,550

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CHART INDUSTRIES, INC. AND SUBSIDIARIES
Notes to Unaudited Condensed Consolidated Financial Statements — September 30, 2002
(Dollars and shares in thousands, except per share amounts)

NOTE J — Contingencies

         The Company’s operating units are parties, in the ordinary course of their businesses, to various legal actions related to performance under contracts, product liability and other matters, several of which actions claim substantial damages. The Company believes these legal actions will not have a material adverse effect on the Company’s financial position or liquidity. The Company is subject to federal, state and local environmental laws and regulations concerning, among other matters, waste water effluents, air emissions and handling and disposal of hazardous materials such as cleaning fluids.

         The Company has been named as a defendant in several similar civil cases pending related to an accident occurring on December 7, 2000 at a nursing home outside Dayton, Ohio. A nitrogen tank was connected to the nursing home’s oxygen system resulting in the death of five elderly patients and injuries to five additional patients from inhaling the nitrogen. The claims against the Company in these cases include negligence, strict product liability, failure to warn, negligence per se, breach of warranty, punitive damages, wrongful death, loss of consortium and negligent infliction of emotional distress. The allegations underlying the claims include defective or deficient manufacture, construction, design, labeling, formulation and warnings with regard to a cylinder. The plaintiffs in these cases are seeking, in total, $28,500 in compensatory damages, $30,000 in punitive damages, $2,000 for loss of consortium damages, prejudgment and post-judgment interest and costs and fees from the Company and other defendants named in the claims. The Company is vigorously defending all of these cases and has filed its answer, denied all liability and cross-claimed for contribution from certain co-defendants. Certain co-defendants have filed cross-claims against the Company claiming contribution. All of these cases have been settled with the other defendants. The Company was not involved in any of the mediation or settlement negotiations, in part because the Company has not received any settlement demands. Additionally, the Company believes that the claims made against it are the most tenuous of any defendant and that the plaintiffs will be unable to articulate a plausible negligence claim based on product liability. Of further significance is the fact that some of the co-defendants have been criminally indicted in this matter. The Company, however, has not been so indicted. The trial in the matter of the State of Ohio vs. BOC Gases, et al., the first of the criminal actions, was heard in May 2002. The trial lasted three days and resulted in a directed verdict in favor of the defendants. A second criminal trial, State of Ohio vs. I.H.S. Carriage-by-the-Lake concluded in early October. I.H.S. Carriage-by-the-Lake, Inc. (“IHS”) plead guilty to four counts of involuntary manslaughter. IHS was fined $60 and ordered to undergo a three-year court-ordered operational change. If IHS is found to be in compliance in three years, the guilty plea will be lifted. It is expected the judge will set a date for an initial pre-trial for the civil matters in the near future. At this time, the civil cases continue to be stayed pending the outcome of the criminal matters. The Company has been dismissed from two of the civil cases. After testimony provided during the first of the criminal proceedings, counsel for the Plaintiff in the matter of Kenneth D. Reynolds, Administrator of the Estate of Darla Jean Reynolds vs. Integrated Health Services, et al. felt that Ohio law would no longer support a claim against the Company. Defense counsel forwarded this Reynolds entry to all remaining plaintiffs requesting dismissal. Counsel for Gayleen Waldspurger, Individually and as the executor of the estate of Pauline Tays, has also agreed to voluntarily dismiss the case against the Company. The remaining plaintiffs, however, have advised that they intend to pursue discovery before considering dismissal of claims against the Company. Accordingly, defense counsel will prepare the appropriate motions to request a summary judgment.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Market Overview

         The Company’s operating income of $3.5 million for the third quarter of 2002 was lower than operating income of $5.5 million in the second quarter of 2002, on a sales decline of six percent and a gross profit decline of seven percent. During the third quarter of 2002, the Company continued its plans to restructure its organization and consolidate its manufacturing facilities to remove excess capacity and lower fixed overhead costs. A total of $2.8 million of restructuring charges were included in employee separation and plant closure costs and cost of sales related to these initiatives. Excluding these charges, the Company’s operating income would have been $6.3 million in the third quarter of 2002, an improvement over the second quarter of 2002.

         The Process Systems and Equipment (“PS&E”) segment recorded strong order intake during the third quarter of 2002, led by the award of significant orders from Bechtel for heat exchangers and cold boxes to equip a large liquid natural gas (“LNG”) facility. These orders increased the PS&E backlog to $41.8 million as of September 30, 2002, the highest backlog level for this segment in two years. Sales for the PS&E segment were below management’s expectations for the quarter, however, due to timing and mix of shipments. The gross margin level was abnormally depressed during the third quarter of 2002 due to some non-cash inventory write-offs and under-absorption of fixed manufacturing facility costs caused by low production volume in the Company’s heat exchanger business.

         The Distribution and Storage (“D&S”) segment was below plan in orders and sales for the third quarter of 2002. Macro-economic indicators suggest that portions of the economy are currently experiencing another slowdown in economic growth. The D&S segment experienced the beginning of a recovery in the second quarter of 2002 and then a sudden downturn in industrial demand in the third quarter of 2002. This resulted in sales and earnings growth compared to recent quarters, but at growth rates lower than the Company’s earlier expectations. Gross profit and gross margin improved in the third quarter of 2002, but on a lower sales volume than anticipated.

         The Applied Technologies (“AT”) segment performed as anticipated in the third quarter of 2002. Although sales were somewhat below management’s expectations, gross margin performance continued to improve and operating profit was better than expected. Excellent performance in the biomedical product lines provided the uplift. Order intake for this segment was down, primarily due to timing delays on LNG fueling opportunities.

         Based upon the Company’s understanding of current economic conditions, management anticipates a slight increase in sales and gross profit in the fourth quarter of 2002 compared with the third-quarter 2002 levels. However, anticipated continued softness in the D&S segment and the impact of delayed order-bookings for LNG fueling products will hinder the Company’s ability to improve operating performance significantly during the fourth quarter. This operating outlook, combined with the more restrictive financial covenants in effect under the Company’s Credit Agreement as of December 31, 2002, will make it challenging for the Company to comply with these covenants in the fourth quarter of 2002.

Three and Nine Months Ended September 30, 2002 and 2001

         Sales for the third quarter of 2002 were $74.2 million versus $80.6 million for the third quarter of 2001, a decrease of $6.4 million, or 7.9 percent. AT segment sales in the third quarter of 2002 were $33.2 million, down 8.2 percent from the third-quarter 2001 sales of $36.2 million. Record quarterly sales of GE/MRI products and strong biomedical sales were offset by weak cryogenic systems and beverage systems sales. D&S segment sales decreased 19.3 percent from the third quarter of 2001, with third-quarter 2002 sales of $26.4 million. The decline primarily occurred in the standard tank and packaged gas businesses, with customers continuing to delay purchases due to overall economic uncertainty. PS&E segment sales increased 24.8 percent to $14.6 million in the third quarter of 2002 from sales of $11.7 million in the third quarter of 2001. The improved hydrocarbon processing market for heat exchangers and cold boxes contributed to this increase.

         Sales for the first nine months of 2002 were $221.1 million versus $254.4 million for the first nine months of 2001, a decrease of $33.3 million, or 13.1 percent. Sales decreased in all three of the Company’s operating segments, and the change was most significant in the D&S segment, where sales decreased $23.3 million from $100.4 million in the first nine months of 2001 to $77.1 million in the first nine months of 2002. This decrease was evidenced in overall lower sales of standard cryogenic tanks and packaged gases, due to the continued softness in the U.S. and European metal fabrication industries and related businesses, and a decrease in oil field equipment sales, which were particularly strong in the first nine months of 2001. AT sales were $98.9 million in the first nine months of 2002 compared with $108.5 million in the first nine months of 2001, a decrease of 8.9 percent. This decrease primarily occurred due to weak cryogenic systems sales. PS&E sales decreased $0.4 million to $45.1 million in the first nine months of 2002, as sales to the relatively strong hydrocarbon-processing markets in 2002 replaced the slightly stronger sales of heat exchangers and cold boxes for a large LNG project which occurred in the first nine months of 2001.

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         Gross profit for the third quarter of 2002 was $19.2 million versus $21.2 million for the third quarter of 2001, a decrease of $2.0 million, or 9.4 percent. Gross profit margin for the third quarter of 2002 was 25.8 percent versus 26.3 percent for the third quarter of 2001. Gross profit for the first nine months of 2002 was $56.5 million versus $69.8 million in the first nine months of 2001, a decrease of $13.3 million, or 19.1 percent. Gross profit margin for the first nine months of 2002 was 25.6 percent versus 27.4 percent for the first nine months of 2001. Under-absorption of manufacturing facility fixed costs driven by low production volumes, particularly in the D&S segment, continue to drive these lower gross profit margin levels. Gross profit in the AT segment has improved in each successive quarter in 2002 due to strong production levels of biomedical and GE/MRI products, but was reduced by $0.6 million in the third quarter and first nine months of 2002 for the non-cash write-off of inventory at Costa Mesa, California and Columbus, Ohio as a result of manufacturing consolidations. Gross profit in the PS&E segment was reduced by $1.1 million during the third quarter of 2002 related to inventory write-offs and increased warranty expense related to certain contracts.

         In March 2002, the United States Government instituted various levels of tariffs on certain imported steel products. These tariffs would have had the impact of increasing the manufactured cost of certain of the Company’s D&S segment bulk storage tanks by between 8 and 18 percent. In June 2002, the United States Government excluded certain steel products, including 9 percent nickel steel used in the Company’s bulk storage tanks, from these tariffs. At this time, the Company does not expect increases in its manufactured cost of bulk tanks due to the tariff exclusion for 9 percent nickel steel.

         SG&A expense for the third quarter of 2002 was $13.6 million versus $13.2 million for the third quarter of 2001. SG&A expense as a percentage of sales was 18.3 percent for the third quarter of 2002 versus 16.4 percent for the third quarter of 2001. SG&A expense in the third quarter of 2002 included $0.2 million of expenses related to the Company’s pursuit of investor capital and the completion of plant consolidation studies and unfavorable medical claims experience of $0.5 million, while third-quarter 2001 SG&A expense reflected the effect of strong accounts receivable collection activity, resulting in a reduction in the Company’s allowance for doubtful accounts. Although exceeding prior year levels, the Company has lowered its SG&A expense in each successive quarter in 2002, and the current and planned organization restructuring initiatives are expected to continue to drive additional decreases.

         SG&A expense for the first nine months of 2002 was $45.1 million versus $43.1 million for the first nine months of 2001, an increase of $2.0 million, or 4.8 percent. SG&A expense as a percentage of sales was 20.4 percent for the first nine months of 2002 versus 16.9 percent for the first nine months of 2001. Included in SG&A expense in the first nine months of 2002 is $3.8 million of expenses related to the Company’s pursuit of investor capital and the completion of plant consolidation studies, which increased SG&A expense as a percentage of sales by almost 2.0 percent. SG&A expense in the first nine months of 2001 reflects several positive items, including a favorable financial settlement with a tenant in Europe and positive experience on medical and workers’ compensation claims.

         The Company has embarked on an aggressive manufacturing facility reduction plan designed to consolidate excess capacity and reduce overall operating costs. The first step of this plan was the closure of the Company’s Denver-East facility, which was substantially completed in the second quarter of 2002. The second step in this plan, announced in July 2002, was the closure of the Company’s Costa Mesa, California and Columbus, Ohio manufacturing facilities. The expenses of closing these two facilities are approximately $2.3 million. Management anticipates annual savings of over $3 million and a recovery of one-time costs for the closure of these two facilities in less than one year. In the third quarter of 2002 the Company requested bank approval to proceed with the third phase of its restructuring plan, which includes the closure of several additional manufacturing facilities and will involve the sale of significant assets. While the Company anticipates approval of this request, it has not yet been given authorization to proceed. When approved, these closures will result in further restructuring expenses and will put some negative short-term pressure on sales. The recoupment of restructuring expenses from operating improvements related to this step is expected to take about one year.

         The Company recorded $2.2 million and $3.5 million of employee separation and plant closure costs primarily related to these manufacturing facility reduction efforts during the three-month and nine-month periods ended September 30, 2002, respectively. The total nine-month charges included $2.1 million for lease termination and facility-related closure costs and $1.4 million for severance and other benefits related to terminating certain employees at these and other sites. In the three-month and nine-month periods ended September 30, 2002, the Company also recorded non-cash inventory valuation charges included in cost of sales of $0.6 million and $0.8 million, respectively, for the write-off of inventory at these sites. At September 30, 2002, the Company had a reserve of $2.6 million remaining for the closure of these facilities, primarily for lease termination and severance costs.

         The Company incurred $0.2 million and $1.7 million of employee separation and plant closure costs during the three-month and nine-month periods ended September 30, 2001, respectively, related primarily to the Cryogenic Services business as the Ottawa Lake, Michigan, facility and two smaller sites were closed. The 2001 closure costs primarily included the write-off of leasehold improvements, equipment, and severance costs. The Company also incurred $0.8 million of inventory charges during the nine-month period ended September 30, 2001 related to these sites, which was included in cost of sales.

15

         The Company recorded $1.2 million and $3.8 million of goodwill amortization in the third quarter and first nine months of 2001, respectively. Due to the Company’s adoption of SFAS No. 142 in the first quarter of 2002, the Company is no longer recording goodwill amortization. During the second quarter of 2002, the Company completed the transitional impairment tests of SFAS No. 142 and determined there were no indicators of impairment for its reporting units with goodwill. As such, the Company was not required to record a cumulative effect charge as of January 1, 2002 for the adoption of SFAS No. 142.

         The Company recorded $0.1 million of equity income in its Coastal Fabrication joint venture in the third quarters of both 2002 and 2001, and $0.4 million of equity income in the first nine months of both 2002 and 2001, respectively.

         The Company sold its cryogenic pump product line during the second quarter of 2002 for net proceeds of $2.3 million and recorded a gain of $1.4 million in other income. The Company sold its minority interest in Restaurant Technologies Inc. for net proceeds of $2.4 million during the third quarter of 2001, resulting in a gain of $0.5 million in other income.

         Net interest expense was $4.3 million and $5.3 million for the third quarters of 2002 and 2001, respectively, and $13.1 million and $17.5 million for the nine months ended September 30, 2002 and 2001, respectively, reflecting lower overall interest rates. The Company manages its interest rate exposure through the use of interest rate collars on a portion of the term debt and to a lesser extent by varying LIBOR maturities in the entire Credit Facility. An interest rate collar covering $76.0 million of the Company’s term debt expired and was settled on June 28, 2002. The Company’s remaining interest rate collar covering $30.8 million of term debt expires on March 31, 2006. The Company’s interest rate collars do not qualify as hedges under the provisions of SFAS No. 133 “Accounting for Derivative Instruments and Hedging Activities,” which the Company adopted effective January 1, 2001. This statement requires such collars to be recorded in the consolidated balance sheet at fair value. Changes in their fair value must be recorded in the consolidated statement of operations. Accordingly, the Company recorded a charge to operations as of January 1, 2001 as a cumulative effect of a change in accounting principle, net of income taxes. The interest rate collars are valued using the market standard methodology of discounting the expected future cash payments based on an expectation of future interest rates derived from observed market forward interest rate yield curves. These valuations resulted in derivative contracts valuation expense of $0.7 million and $1.6 million in the third quarters of 2002 and 2001 respectively, and $1.1 million and $2.7 million for the nine months ended September 30, 2002 and 2001, respectively. The liability relating to the collar outstanding of $1.6 million is recorded by the Company in accrued interest in the consolidated balance sheet at September 30, 2002, and represents the estimated payments to be made over the life of the collar.

         The Company recorded $0.6 million and $0.4 million of financing costs amortization expense in the third quarters of 2002 and 2001 respectively, and $2.4 million and $1.1 million of financing costs amortization expense in the nine months ended September 30, 2002 and 2001, respectively. The first nine months 2002 financing costs amortization expense includes $1.0 million related to the Company obtaining waivers of certain financial covenants to March 15, 2002. Under its current capital structure, the Company expects financing costs amortization expense to be approximately $0.8 million for the fourth quarter of 2002.

         The Company recorded $0.7 million of foreign currency remeasurement loss in the first nine months of 2002, compared with $0.5 million of foreign currency remeasurement loss in the third quarter and first nine months of 2001, respectively. These foreign currency remeasurement losses result from certain of the Company’s subsidiaries entering into transactions in currencies other than their functional currency.

         Income tax benefit of $1.4 million for the third quarter of 2002 and $3.7 million for the first nine months of 2002 was recorded based on the Company’s estimated 2002 annual effective tax rate. Upon finalization of the Company’s 2002 actual taxable income, however, the Company may experience a significant change in its effective annual income tax rate. This could result in an effective income tax rate during the fourth quarter of 2002 that is significantly different than the rate used for the nine-month period ended September 30, 2002. The Company recorded income tax expense of $0.5 million for the third quarter of 2001 and $1.3 million for the first nine months of 2001.

         As a result of the foregoing, the Company reported a net loss of $0.7 million, or $0.03 per diluted share, for the third quarter of 2002 compared with a net loss of $1.2 million, or $0.05 per diluted share, for the third quarter of 2001. The Company reported a net loss of $3.8 million, or $0.15 per diluted share, for the nine months ended September 30, 2002, compared with a net loss of $1.2 million, or $0.05 per diluted share, for the nine months ended September 30, 2001. If the non-amortization provisions of SFAS No. 142 were in effect for 2001, the Company’s third-quarter 2001 net income would have been $0.1 million, or $0.00 per diluted share, and the Company’s net income for the nine months ended September 30, 2001 would have been $2.8 million, or $0.11 per diluted share.

16

Liquidity and Capital Resources

         Cash provided by operations in the first nine months of 2002 was $8.9 million compared with $0.5 million in the first nine months of 2001. The Company received an income tax refund of $9.3 million in the third quarter of 2002 due to the new tax law allowing for a five-year carry-back of net operating losses.

         Capital expenditures for the first nine months of 2002 were $2.4 million compared with $5.7 million in the first nine months of 2001. The Company presently does not have any large capital projects in process and anticipates a low level of capital expenditures for the fourth quarter of this year.

         At September 30, 2002, the Company had borrowings of $216.9 million and $35.4 million on the term loan and revolving credit portions of its Credit Facility, respectively, and borrowings of $9.9 million on its Incremental Credit Facility. At September 30, 2002, the Company had letters of credit outstanding and bank guarantees totaling $14.1 million supported by the Credit Facility. The Credit Facility and Incremental Credit Facility were amended in March 2002 (the “March 2002 Amendments”) to modify certain covenants until March 31, 2003, to defer $25.7 million of term loan amortization payments from scheduled payment dates in 2002 to primarily 2005 and to extend the Incremental Credit Facility to March 31, 2003. The March 2002 Amendments resulted in an increase in interest rates of 0.25 percent, the addition of one financial covenant and scheduled reductions in the commitment amounts of the revolving credit lines of the Credit Facility and the Incremental Credit Facility.

         The March 2002 Amendments call for the Company to prepay borrowings under the Credit Facility and Incremental Credit Facility in an aggregate amount of at least $75.0 million (“Minimum Prepayment Amount”) from the net proceeds of an equity investment, sale of assets and other sources of new capital. The March 2002 Amendments also call for the Company’s interest rates to increase by 0.25 percent if the Minimum Prepayment Amount is not achieved by September 30, 2002, and by an additional 0.25 percent each quarter thereafter that the Minimum Prepayment Amount is not made. If the Minimum Prepayment Amount is achieved, these additional interest rate increases will be eliminated. Since the Minimum Prepayment Amount was not achieved by September 30, 2002, the Company’s interest rates will increase by 0.25 percent beginning in the fourth quarter of 2002.

         The March 2002 Amendments also provided for the issuance of market-priced warrants to the lenders for the purchase of two percent of the Company’s Common Stock at June 28, 2002. Accordingly, the Company was obligated to issue to its lenders at June 28, 2002 warrants to purchase, in the aggregate, 513,559 shares of Chart Common Stock at an exercise price of $2.425 per share. These warrants were valued at $0.7 million and are being amortized to financing costs amortization expense over the remaining term of the Company’s Credit Facility, which expires in March 2006. In addition, the March 2002 Amendments provided for the issuance of market-priced warrants to the lenders for the purchase of an additional five percent and three percent of the Company’s Common Stock if the Minimum Prepayment Amount is not made by September 30 or December 31, 2002, respectively. The Company did not achieve the Minimum Prepayment Amount at September 30, 2002. Accordingly, the Company was obligated to issue to its lenders at September 30, 2002 warrants to purchase, in the aggregate, 1,353,531 shares of Chart Common Stock at an exercise price of $0.898 per share. These warrants have been valued at $1.2 million and will be amortized to financing costs amortization expense over the remaining term of the Company’s Credit Facility. If the Minimum Prepayment Amount is not made by December 31, 2002, the lenders will be issued market-priced warrants (which may be priced above or below $0.898 per share, depending on the market prices of the Company’s Common Stock for the ten trading days preceding December 31, 2002) for the purchase of the additional three percent of the Company’s Common Stock. If at least $50.0 million of the Minimum Prepayment Amount is made from the net proceeds of an equity investment by December 31, 2002, no warrants will be required to be issued to the lenders on that date.

         The Credit Facility, as modified by the March 2002 Amendments, contains certain covenants and conditions which impose limitations on the Company and its operating units, including meeting certain financial tests and the quarterly maintenance of certain financial ratios on a consolidated basis such as: minimum net worth, maximum leverage, minimum pretax interest coverage ratio, minimum fixed charge coverage ratio and minimum earnings before interest, taxes, depreciation, amortization and restructuring charges. Certain of these covenants became more restrictive effective September 30, 2002 and will again become more restrictive as of December 31, 2002. The Company is permitted to pay cash dividends not exceeding $7.2 million in any fiscal year after January 1, 2001, but only if at both the time of payment of the dividend and immediately thereafter there is no event of default under the Credit Facility. The Company, however, has not paid dividends since the second quarter of 1999. As of September 30, 2002, the Company was in compliance with the covenants and conditions of the Credit Facility. As a result of its current operating outlook for the fourth quarter of 2002, however, the Company cannot provide assurance that it will be in compliance with these covenants at the end of the fourth quarter.

         The Company had total debt of $270.6 million and $272.1 million at September 30, 2002 and December 31, 2001, respectively. The increase in the current portion of long-term debt, from $13.0 million at December 31, 2001 to $42.2 million at September 30, 2002, is due to increasing quarterly amortization on the term loan portions of the Credit Facility and the expiration of the Incremental Credit Facility at March 31, 2003.

17

         Management is actively pursuing several financial restructuring initiatives in order to improve the Company’s financial condition and reduce its leverage. These include a potential substantial equity investment in the Company, and management is in advanced negotiations with one investor group toward that end. Management is also considering alternatives with the Company’s senior lenders regarding a restructuring of the Company’s outstanding senior debt. Management is optimistic that the Company will reach agreement on an equity investment and/or debt restructuring in the fourth quarter of 2002. At the same time, the Company has advanced the possible sale of several non-core assets, the proceeds from which will be used to reduce debt. The Company can provide no assurance that it will be able to complete any of these transactions.

         The Company recently has been notified by the New York Stock Exchange (“NYSE”) that its Common Stock is below the NYSE’s criteria for continued listing because the average closing price of its stock over a consecutive 30-trading-day period before notification was less than $1.00. Under NYSE guidelines, the Company must return its share price and average share price back above $1.00 by six months following receipt of the NYSE’s notification, or promptly after its next annual meeting of stockholders if the Company implements a stockholder approved corporate action in order to return to compliance. If the Company fails to return to compliance during this time period, the NYSE has notified the Company that it will commence suspension and delisting procedures. There can be no assurance that the Company will be able to cure this deficiency. If the Company’s Common Stock is delisted from the NYSE, the Company would expect to pursue an alternative national trading venue. Nevertheless, delisting could have a material adverse affect on the price and/or liquidity of the Company’s Common Stock and on the Company’s ability to raise capital in the future from the sale or issuance of its securities.

         The Company currently believes that cash forecasted to be generated by operations will be sufficient to satisfy its working capital, capital expenditure and debt repayment requirements for 2002.

Orders and Backlog

         Chart’s consolidated orders for the third quarter of 2002 totaled $87.8 million, compared with orders of $77.2 million for the second quarter of 2002. Chart’s consolidated firm order backlog at September 30, 2002 was $78.3 million, an increase of $9.5 million from $68.8 million at June 30, 2002.

         AT orders for the third quarter of 2002 totaled $35.0 million, compared with $37.5 million for the second quarter of 2002. Third-quarter orders were strong in GE/MRI and biomedical products, while LNG fueling stations and vehicle tanks were weak due to delays in orders.

         D&S orders for the third quarter of 2002 totaled $23.2 million, compared with $25.3 million for the second quarter of 2002. The D&S segment experienced a drop off in orders for packaged gas equipment and engineered tanks, compared with the second quarter of 2002, largely as a result of the continued slow global industrial gas market.

         PS&E orders for the third quarter of 2002 totaled $29.6 million, compared with $14.5 million in the second quarter of 2002. Order activity was very strong in the hydrocarbon processing market, with the inclusion of significant orders from Bechtel for heat exchangers and cold boxes to equip a large LNG facility. PS&E backlog at September 30, 2002 was $41.8 million, up from $28.1 million at June 30, 2002.

Critical Accounting Policies

         The Company’s condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States. As such, some accounting policies have a significant impact on amounts reported in these condensed consolidated financial statements. A summary of those significant accounting policies can be found in the Company’s 2001 Annual Report on Form 10-K, filed on April 1, 2002, in Note A of the Notes to the Consolidated Financial Statements and under the caption “Critical Accounting Policies” within Management’s Discussion and Analysis of Financial Condition and Results of Operations. In particular, judgment is used in areas such as revenue recognition for long-term contracts, determining the allowance for doubtful accounts and inventory valuation reserves, derivatives, debt covenants, pensions and deferred tax assets.

         In addition to those policies set forth in the Form 10-K, as a result of the adoption of SFAS No. 142, as discussed in Note B to the unaudited condensed consolidated financial statements in this Form 10-Q, the Company also considers the accounting for its goodwill, which is a significant asset to the Company, to be a critical accounting policy. Changes in management’s judgments and estimates could significantly affect the Company’s analysis of the impairment of goodwill. To test goodwill for impairment, the Company is required to estimate the fair market value of each of its reporting units. Using management judgments, the Company developed a model to estimate the fair market value of its reporting units. This fair market value model incorporated the Company’s estimates of future cash flows, estimated allocations of certain assets and cash flows among reporting units, estimates of future growth rates and management’s judgment regarding the applicable discount rates to use to discount those estimated cash flows. Changes to these judgments and estimates could

18

result in a significantly different estimate of the fair market value of the reporting units, which could result in an impairment of goodwill.

Accounting Changes and Recently Issued Accounting Standards

         Effective January 1, 2002, the Company adopted Financial Accounting Standards Board (“FASB”) SFAS No. 141, “Business Combinations,” and SFAS No. 142, “Goodwill and Other Intangible Assets,” which establish financial accounting and reporting for acquired goodwill and other intangible assets and supersede Accounting Principles Board (“APB”) Opinion No. 16, “Business Combinations,” and APB Opinion No. 17, “Intangible Assets.” Under SFAS No. 142, goodwill and indefinite lived intangible assets are no longer amortized but are reviewed at least annually for impairment. Intangible assets that have finite useful lives will continue to be amortized over their useful lives. As part of adopting this standard as of January 1, 2002, the Company determined that it has one indefinite lived intangible asset in addition to goodwill. The Company evaluated the impairment of its one indefinite lived intangible asset during the first quarter of 2002 and determined that it was not impaired. The Company completed step one of the transitional impairment tests for goodwill during the second quarter of 2002 and determined there were no indicators of impairment as of January 1, 2002. As such, the Company was not required to record a cumulative effect charge as of January 1, 2002 for the adoption of SFAS No. 142.

         Effective January 1, 2002, the Company adopted SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” which addresses financial accounting and reporting for the impairment or disposal of long-lived assets. Effective May 15, 2002, the Company adopted SFAS No. 145, “Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections,” which rescinds, amends and clarifies certain previously issued FASB statements. Initial adoption of SFAS No. 144 and No. 145 had no effect on the Company’s financial statements.

         In August 2001, the FASB issued SFAS No. 143, “Accounting for Asset Retirement Obligations” which amends SFAS No. 19, “Financial Accounting and Reporting by Oil and Gas Producing Companies,” and is effective for all companies. SFAS No. 143 addresses the financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs and is effective for fiscal years beginning after June 15, 2002. The Company does not expect SFAS No. 143 to have a material impact on the Company’s financial position, liquidity, cash flows or results of operations.

         In July 2002, the FASB issued SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal Activities,” which nullifies Emerging Issues Task Force Issue No. 94-3, “Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring).” SFAS No. 146 is effective for exit or disposal activities that are initiated after December 31, 2002. The Company does not expect this statement to have a material impact on the Company’s financial position, liquidity, cash flows or results of operations.

Forward-Looking Statements

         The Company is making this statement in order to satisfy the “safe harbor” provisions contained in the Private Securities Litigation Reform Act of 1995. This Quarterly Report on Form 10-Q includes forward-looking statements relating to the business of the Company. In some cases, forward-looking statements may be identified by terminology such as “may,” “will,” “should,” “expects,” “anticipates,” “believes,” “projects,” “forecasts,” “continue” or the negative of such terms or comparable terminology. Forward-looking statements contained herein or in other statements made by the Company are made based on management’s expectations and beliefs concerning future events impacting the Company and are subject to uncertainties and factors relating to the Company’s operations and business environment, all of which are difficult to predict and many of which are beyond the control of the Company, that could cause actual results of the Company to differ materially from those matters expressed or implied by forward-looking statements or could reduce the liquidity of the Company’s Common Stock. The Company believes that the following factors, among others, could affect its future performance, reduce the liquidity of the Company’s Common Stock and cause actual results of the Company to differ materially from those expressed or implied by forward-looking statements made by or on behalf of the Company: (a) general economic, political, business and market conditions and foreign currency fluctuations; (b) competition; (c) decreases in spending by its industrial customers; (d) the loss of a major customer or customers; (e) the timing and effectiveness of operational changes and restructuring initiatives expected to increase efficiency and productivity and reduce operating costs; (f) the ability of the Company to manage its fixed-price contract exposure; (g) the Company’s relations with its employees; (h) the extent of product liability claims asserted against the Company; (i) variability in the Company’s operating results; (j) the ability of the Company to attract and retain key personnel; (k) the costs of compliance with environmental matters; (l) the ability of the Company to protect its proprietary information; (m) the ability of the Company to access additional sources of capital and sell certain assets and the ultimate terms and conditions of any such transactions; (n) the ability of the Company to satisfy debt covenants, pay down its debt and restructure its debt arrangements, and the ultimate terms and conditions of any such restructuring; (o) the ability of the Company to satisfy the NYSE’s continued listing requirements and remain listed on the NYSE; and (p) the threat of terrorism and the impact of responses to that threat. The Company does not assume any obligation to update any of these forward-looking statements.

19

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

         In the normal course of business, operations of the Company are exposed to continuing fluctuations in foreign currency values and interest rates that can affect the cost of operating and financing. Accordingly, the Company addresses a portion of these risks through a program of risk management.

         The Company’s primary interest rate risk exposure results from the Credit Facility’s various floating rate pricing mechanisms. This interest rate exposure is managed by the use of interest rate collars on a portion of the term debt and to a lesser extent by varying LIBOR maturities in the entire Credit Facility. An interest rate collar covering $76.0 million of the Company’s debt expired and was settled on June 28, 2002. The Company’s remaining interest rate collar covering $30.8 million of debt expires on March 31, 2006. The fair value of the contract related to the collar outstanding at September 30, 2002 is a liability of $1.6 million. If interest rates were to increase 200 basis points (2 percent) from September 30, 2002 rates, and assuming no changes in debt from the September 30, 2002 levels, the additional annual expense would be approximately $5.0 million on a pretax basis.

         The Company has assets, liabilities and cash flows in foreign currencies creating foreign exchange risk, the primary foreign currencies being the British Pound, the Czech Koruna and the Euro. Monthly measurement, evaluation and foreign currency forward exchange contracts are employed as methods to reduce this risk. The Company enters into foreign currency forward exchange contracts to hedge anticipated and firmly committed foreign currency transactions. The Company does not hedge foreign currency translation or foreign currency net assets or liabilities. The terms of the derivatives are one year or less. If the value of the U.S. dollar were to strengthen 10 percent relative to the currencies in which the Company has foreign currency forward exchange contracts at September 30, 2002, the result would be a loss in fair value of approximately $0.1 million.

Item 4. Controls and Procedures

         Our principal executive and financial officers have evaluated our disclosure controls and procedures within 90 days prior to the filing of this Quarterly Report on Form 10-Q and have determined that such disclosure controls and procedures are effective to ensure that information required to be disclosed in our filings under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.

         There have been no significant changes in internal controls or in other factors that could significantly affect internal controls, including any corrective actions with regard to significant deficiencies and material weaknesses, subsequent to our evaluation.

20

PART II.      OTHER INFORMATION

Item 1. Legal Proceedings

         The Company’s operating units are parties, in the ordinary course of their businesses, to various legal actions related to performance under contracts, product liability and other matters, several of which actions claim substantial damages. The Company believes these legal actions will not have a material adverse effect on the Company’s financial position or liquidity. The Company is subject to federal, state and local environmental laws and regulations concerning, among other matters, waste water effluents, air emissions and handling and disposal of hazardous materials such as cleaning fluids.

         The Company has been named as a defendant in several similar civil cases pending related to an accident occurring on December 7, 2000 at a nursing home outside Dayton, Ohio. A nitrogen tank was connected to the nursing home’s oxygen system resulting in the death of five elderly patients and injuries to five additional patients from inhaling the nitrogen. The claims against the Company in these cases include negligence, strict product liability, failure to warn, negligence per se, breach of warranty, punitive damages, wrongful death, loss of consortium and negligent infliction of emotional distress. The allegations underlying the claims include defective or deficient manufacture, construction, design, labeling, formulation and warnings with regard to a cylinder. The plaintiffs in these cases are seeking, in total, $28.5 million in compensatory damages, $30.0 million in punitive damages, $2.0 million for loss of consortium damages, prejudgment and post-judgment interest and costs and fees from the Company and other defendants named in the claims. The Company is vigorously defending all of these cases and has filed its answer, denied all liability and cross-claimed for contribution from certain co-defendants. Certain codefendants have filed cross-claims against the Company claiming contribution. All of these cases have been settled with the other defendants. The Company was not involved in any of the mediation or settlement negotiations, in part because the Company has not received any settlement demands. Additionally, the Company believes that the claims made against it are the most tenuous of any defendant and that the plaintiffs will be unable to articulate a plausible negligence claim based on product liability. Of further significance is the fact that some of the codefendants have been criminally indicted in this matter. The Company, however, has not been so indicted. The trial in the matter of the State of Ohio vs. BOC Gases, et al., the first of the criminal actions, was heard in May 2002. The trial lasted three days and resulted in a directed verdict in favor of the defendants. A second criminal trial, State of Ohio vs. I.H.S. Carriage-by-the-Lake concluded in early October. I.H.S. Carriage-by-the-Lake, Inc. (“IHS”) plead guilty to four counts of involuntary manslaughter. IHS was fined $.06 million and ordered to undergo a three-year court-ordered operational change. If IHS is found to be in compliance in three years, the guilty plea will be lifted. It is expected the judge will set a date for an initial pre-trial for the civil matters in the near future. At this time, the civil cases continue to be stayed pending the outcome of the criminal matters. The Company has been dismissed from two of the civil cases. After testimony provided during the first of the criminal proceedings, counsel for the Plaintiff in the matter of Kenneth D. Reynolds, Administrator of the Estate of Darla Jean Reynolds vs. Integrated Health Services, et al. felt that Ohio law would no longer support a claim against the Company. Defense counsel forwarded this Reynolds entry to all remaining plaintiffs requesting dismissal. Counsel for Gayleen Waldspurger, Individually and as the executor of the estate of Pauline Tays, has also agreed to voluntarily dismiss the case against the Company. The remaining plaintiffs, however, have advised that they intend to pursue discovery before considering dismissal of claims against the Company. Accordingly, defense counsel will prepare the appropriate motions to request a summary judgment.

Item 2. Changes in Securities and Use of Proceeds.

         As of September 30, 2002, the Company was obligated to issue to its lenders warrants to purchase an aggregate of 1,353,531 shares of common stock under the March 2002 Amendments to the Company’s Credit Facility. No additional consideration was received by the Company for the issuance of the warrants. The warrants are exercisable upon issuance at an exercise price of $0.898 per share, expire on the third anniversary after issuance, and include customary anti-dilution provisions, registration rights and tag-along rights. The issuance of warrants was made in reliance on the exemption from the registration requirements of the Securities Act of 1933 provided by Section 4(2) thereunder, on the basis that the transaction did not involve a public offering. A copy of the warrant agreement pursuant to which the warrants were issued is attached as an exhibit to this Form 10-Q.

Item 6. Exhibits and Reports on Form 8-K

         (a)      Exhibits.

See the Exhibit Index on page 24 of this Form 10-Q.

         (b)      Reports on Form 8-K.

During the quarter ended September 30, 2002, the Company filed current reports on Form 8-K, dated July 2, 2002, July 11, 2002, and September 26, 2002, respectively, furnishing news releases pursuant to Regulation FD.

21

SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Chart Industries, Inc.

(Registrant)

Date: November 13, 2002	/s/ MICHAEL F. BIEHL
	Michael F. Biehl Chief Financial Officer and Treasurer (Duly Authorized Principal Financial Officer and Chief Accounting Officer)

Certifications

I, Arthur S. Holmes, Chairman and Chief Executive Officer of Chart Industries, Inc. certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Chart Industries, Inc.;
2.	Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
3.	Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4.	The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant, and we have:

a)	designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
b)	evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and
c)	presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

a)	all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and
b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

22

6. The registrant’s other certifying officers and I have indicated in this quarterly report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: November 13, 2002	/s/ ARTHUR S. HOLMES
	Arthur S. Holmes Chairman and Chief Executive Officer

I, Michael F. Biehl, Chief Financial Officer and Treasurer of Chart Industries, Inc. certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Chart Industries, Inc.;
2.	Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
3.	Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4.	The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant, and we have:

a)	designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
b)	evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and
c)	presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

a)	all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and
b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

6. The registrant’s other certifying officers and I have indicated in this quarterly report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: November 13, 2002	/s/ MICHAEL F. BIEHL
	Michael F. Biehl Chief Financial Officer and Treasurer

23

EXHIBIT INDEX

Exhibit Number	Description of Document
10.1	Warrant Agreement, dated as of September 30, 2002, by and among the Company and the Holders signatory thereto (filed herewith)
10.2	Agreement of Separation, Release and Noncompetition, dated as of September 4, 2002, by and between the Company and James R. Sadowski (filed herewith)
10.3	Employment Agreement, dated as of July 1, 2002, by and between the Company and G. Jan F. Van Glabbeek (filed herewith)

24

EX-10.1

                                                                    EXHIBIT 10.1

                                                                  EXECUTION COPY

                ================================================================

                              WARRANT AGREEMENT

                                   Between

                            CHART INDUSTRIES, INC.

                                    and

                           THE HOLDERS PARTY HERETO

                        Dated as of September 30, 2002

                ================================================================



                                TABLE OF CONTENTS

                                                                            Page

ARTICLE I  DEFINITIONS AND ACCOUNTING MATTERS..................................1
         SECTION 1.01.  Definitions............................................1
         SECTION 1.02.  Terms Generally........................................7
         SECTION 1.03.  Accounting Terms and Determinations....................8

ARTICLE II  PURCHASE AND SALE OF WARRANTS......................................8
         SECTION 2.01.  Authorization and Issuance of Warrant Stock and
         Warrants..............................................................8
         SECTION 2.02.  Issuance of Warrants...................................8
         SECTION 2.03.  Purchase for Initial Holders' Account..................9
         SECTION 2.04.  Securities Act Compliance..............................9
         SECTION 2.05.  Listing...............................................10

ARTICLE III  REPRESENTATIONS AND WARRANTIES...................................10
         SECTION 3.01.  Existence; Qualification..............................10
         SECTION 3.02.  No Breach.............................................10
         SECTION 3.03.  Corporate Action......................................10
         SECTION 3.04.  Approvals.............................................11
         SECTION 3.05.  Investment Company Act................................11
         SECTION 3.06.  Public Utility Holding Company Act....................11
         SECTION 3.07.  Capitalization........................................11
         SECTION 3.09.  Litigation............................................12
         SECTION 3.10.  Brokers...............................................12
         SECTION 3.11.  SEC Documents; Financial Statements...................13

ARTICLE IV  RESTRICTIONS ON TRANSFERABILITY...................................13
         SECTION 4.01.  Transfers Generally...................................13
         SECTION 4.02.  Transfers of Restricted Securities Pursuant to
         Registration Statement and Exemptions................................13
         SECTION 4.03.  Restrictive Legends...................................13
         SECTION 4.04.  Termination of Restrictions...........................14
         SECTION 4.05.  Dispositions of Warrants and Warrant Stock............15
         SECTION 4.06.  Provisions Applicable to Regulated Holders............15
         SECTION 4.07.  Provisions Applicable to Related Persons..............15

ARTICLE V  ADJUSTMENTS OF STOCK UNITS.........................................17
         SECTION 5.01.  Subdivisions and Combinations.........................17
         SECTION 5.02.  Issuance of Common Stock..............................18
         SECTION 5.03.  Issuance of Other Securities, Rights or Obligations...18
         SECTION 5.04.  Superseding Adjustment................................19
         SECTION 5.05.  Other Provisions Applicable to Adjustments............20

                                      (i)




         SECTION 5.06.  Merger, Consolidation or Disposition of Assets........21
         SECTION 5.07.  Other Action Affecting Common Stock...................21
         SECTION 5.08.  Exclusions from Adjustment............................21
         SECTION 5.09.  Notice of Adjustments.................................22
         SECTION 5.10.  Notice of Certain Corporate Action....................22

ARTICLE VI  REGISTRATION RIGHTS...............................................23
         SECTION 6.01.  Demand and Piggyback Registrations....................23
         SECTION 6.02.  Hold-Back Agreements; Cutbacks........................25
         SECTION 6.03.  Registration Procedures...............................27
         SECTION 6.04.  Registration Expenses.................................30
         SECTION 6.05.  Indemnification.......................................31
         SECTION 6.06.  No Other Registration Rights..........................33

ARTICLE VII  TAG-ALONG SALE...................................................33
         SECTION 7.01.  Tag-Along Rights......................................33
         SECTION 7.02.  Procedures............................................35
         SECTION 7.03.  Amendment of Article VII..............................35

ARTICLE VIII  HOLDERS' RIGHTS.................................................35
         SECTION 8.01.  Delivery Expenses.....................................36
         SECTION 8.02.  Taxes.................................................36
         SECTION 8.03.  Replacement of Instruments............................36
         SECTION 8.04.  Indemnification.......................................36
         SECTION 8.05.  Inspection Rights.....................................37

ARTICLE IX  OTHER COVENANTS OF THE ISSUER.....................................37
         SECTION 9.01.  Financial Statements, Etc.............................37
         SECTION 9.02.  Related Party Transactions............................38
         SECTION 9.03.  Restrictions on Performance...........................38
         SECTION 9.04.  Modification of Other Equity Documents................38
         SECTION 9.05.  Reservation and Authorization of Common Stock.........38
         SECTION 9.06.  Notice of Expiration Date.............................39
         SECTION 9.07.  Documentation of Subsequent Warrants..................39

ARTICLE X  MISCELLANEOUS......................................................39
         SECTION 10.01.  Waiver...............................................40
         SECTION 10.02.  Notices..............................................40
         SECTION 10.03.  Expenses, Etc........................................40
         SECTION 10.04.  Amendments, Etc......................................40
         SECTION 10.05.  Successors and Assigns...............................41
         SECTION 10.06.  Survival.............................................41
         SECTION 10.07.  Specific Performance.................................41
         SECTION 10.08.  Captions.............................................41
         SECTION 10.09.  Counterparts.........................................41

                                      (ii)



         SECTION 10.10.  Governing Law........................................41
         SECTION 10.11.  Severability.........................................41
         SECTION 10.12.  Entire Agreement.....................................42
         SECTION 10.13.  Rights of Holders of Warrants........................42

SCHEDULES
- ---------

Schedule 2.02         -    Allocation of Warrants
Schedule 3.07(a)      -    Existing Convertible Securities and Options
Schedule 3.07(b)      -    Existing Registration Rights

ANNEXES
- -------

Annex 1               -    Form of Warrant
Annex 2               -    Form of Assignment
Annex 3               -    Form of Joinder Agreement

                                      (iii)



                  WARRANT AGREEMENT dated as of September 30, 2002 between CHART
INDUSTRIES, INC., a company duly organized and validly existing under the laws
of the State of Delaware (the "Issuer"), and each Person named under the caption
"INITIAL HOLDERS" on the signature pages hereof (each an "Initial Holder" and,
collectively, the "Initial Holders").

                  WHEREAS, the Issuer, certain of its subsidiaries and the
Initial Holders (or their respective affiliates) are parties to a Credit
Agreement dated as of April 12, 1999 (as amended and in effect, the "Credit
Agreement"; references to the Credit Agreement herein shall apply whether or not
the Credit Agreement is then in force and without regard to amendments thereto
unless such amendments thereto have been consented to by the Required Holders),
providing, subject to the terms and conditions thereof, for the extension of
credit by the Initial Holders (or such affiliates) to the Issuer.

                  WHEREAS, pursuant to the requirements of Section 6.12 of the
Credit Agreement and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Issuer has agreed to issue one
or more Warrants (as hereinafter defined) to each Initial Holder providing for
the purchase of shares of Common Stock (as hereinafter defined), in the manner
hereinafter provided.

             NOW, THEREFORE, the parties hereto agree as follows:

                                   ARTICLE I

                     DEFINITIONS AND ACCOUNTING MATTERS
                     ----------------------------------

                  SECTION 1.01.  Definitions.   As used in this Agreement, the
following terms shall have the following meanings:

                  "Affiliate" means, with respect to a specified Person, another
Person that directly, or indirectly through one or more intermediaries, Controls
or is Controlled by or is under common Control with the Person specified.

                  "Board" means the Board of Directors of the Issuer.

                  "Business Day" means any day that is not a Saturday, Sunday or
other day on which commercial banks in New York City are authorized or required
by law to remain close.

                  "Commission" means the Securities and Exchange Commission or
any other similar or successor agency of the federal government administering
the Securities Act and/or the Exchange Act.

                              Warrant Agreement
                              -----------------




                                      2

                  "Common Stock" means the Issuer's Common Stock, par value $.01
per share, as constituted on the Issuance Date and any stock into which such
Common Stock may thereafter be converted or changed, and also shall include any
other stock of the Issuer of any other class, which is not preferred as to
dividends or assets over any other class of any other stock of the Issuer.
References herein and in the Warrants to the Common Stock outstanding "on a
fully diluted basis" at any time means the number of shares of Common Stock then
issued and outstanding, assuming full conversion, exercise and exchange of all
Convertible Securities and "in the money" Options (as of the relevant date of
determination) that are exchangeable for, or exercisable or convertible into,
Common Stock, including the Warrants. All references to Common Stock herein
shall be subject to appropriate adjustment by reason of any stock dividend,
split, reverse split, combination, recapitalization or any similar corporate
transaction.

                  "Control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by contract or
otherwise. "Controlling" and "Controlled" shall have meanings correlative
thereto.

                  "Convertible Securities" means evidences of indebtedness,
interests or other securities or rights which are exchangeable for or
exercisable or convertible into shares of Common Stock either immediately or
upon the arrival of a specified date or the occurrence of a specified event, but
shall not include Options.

                  "Credit Agreement" has the meaning specified in the recital of
this Agreement.

                  "Current Market Value" means, on any date, (i) the average of
the daily market prices for each day during the 10 consecutive trading days
ending on the last trading day prior to such date or (ii) if the applicable
securities are not publicly traded or are not registered under the Exchange Act,
the fair value of such securities as reasonably determined in good faith by the
Board. The market price for each such Business Day shall be the last sale price
on such day as reported in the Consolidated Transaction Reporting System or as
reported for such day by The Wall Street Journal, as applicable, or if such last
sale price is not available, the average of the closing bid and asked prices as
reported in either such system, or in any other case in which such price is not
available, the average of the closing bid and asked prices quoted for such day
as reported by The Wall Street Journal and the National Quotation Bureau pink
sheets.

                  "Current Warrant Price" means, as at any date, the amount per
share of Common Stock equal to the quotient resulting from dividing the Exercise
Price per Stock Unit in effect on such date by the number of shares (including
any fractional share) of Common Stock comprising a Stock Unit on such date.

                  "Demand Notice" has the meaning specified in Section 6.01(a).

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                                      3

                  "Demand Registration" has the meaning specified in Section
6.01(a).

                  "Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.

                  "Exercise Price" has the meaning specified in the form of the
Warrant attached as Annex 1.

                  "Expiration Date" has the meaning specified in the form of the
Warrant attached as Annex 1.

                  "Financial Statements" has the meaning specified in Section
3.11.

                  "GAAP" means generally accepted accounting principles,
consistently applied throughout the specified period.

                  "Governmental Authority" means the government of the United
States of America, any other nation or any political subdivision thereof,
whether state or local, and any agency, authority, instrumentality, regulatory
body, court, central bank or other entity exercising executive, legislative,
judicial, taxing, regulatory, monetary or administrative powers or functions of
or pertaining to government.

                  "Holder" means any Person (including, without limitation, each
Initial Holder) who acquires Warrants or Warrant Stock pursuant to the
provisions of this Agreement, including any transferees of Warrants or Warrant
Stock, and any successor thereto; provided that a holder of Warrants or Warrant
Stock purchased pursuant to an effective registration statement, pursuant to
Rule 144 or pursuant to any other sale of securities in a public trading market
shall not be deemed a Holder. No Person shall be a Holder unless a Warrant has
been effectively assigned to such Person.

                  "Immediate Family" means, with respect to any Person who is a
natural person, such Person's children, siblings and parents, but only if such
child, sibling or parent lives in such Person's home.

                  "Indemnified Party" has the meaning specified in Section
6.05(c).

                  "Indemnifying Party" has the meaning specified in Section
6.05(c).

                  "Initial Holder" has the meaning specified in the preamble of
this Agreement.

                  "Issuance Date" means September 30, 2002.

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                              -----------------



                                      4

                  "Issuer" has the meaning specified in the preamble of this
Agreement.

                  "Joinder Agreement" has the meaning specified in Section
7.01(c).

                  "Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of such
asset. For purposes of this Agreement, a Person shall be deemed to own subject
to a Lien any asset which it has acquired or holds subject to the interest of a
vendor or lessor under any conditional sale agreement, capital lease or other
title retention agreement relating to such asset.

                  "Loans" has the meaning assigned to such term in the Credit
Agreement.

                  "Losses" has the meaning specified in Section 6.05(a).

                  "NASD" means the National Association of Securities Dealers.

                  "Notes" means the promissory notes of the Issuer issued
pursuant to the Credit Agreement.

                  "NYSE" means the New York Stock Exchange.

                  "Option" means any warrant, option or other right to subscribe
for or purchase shares of Common Stock.

                  "Option Plans" means any stock option plan, stock grant plan,
restricted stock plan, stock bonus plan, stock purchase, stock option or
employment arrangement or any other equity compensation arrangement approved
from time to time by the Board.

                  "Other Equity Documents" means the certificate of
incorporation of the Issuer, the by-laws of the Issuer and any other instrument
or document of organization or governance of the Issuer.

                  "Other Holder" means any Person who acquires Other Warrants or
Other Warrant Stock, including any transferees of Other Warrants or Other
Warrant Stock; provided that a holder of Other Warrants or Other Warrant Stock
purchased pursuant to an effective registration statement, pursuant to Rule 144
or pursuant to any other sale of securities in a public trading market shall not
be deemed an Other Holder.

                  "Other Warrant" and "Other Warrants" means (i) the warrants to
purchase Common Stock issued pursuant to the Warrant Agreement dated as of June
28, 2002 between the Issuer and the holders party thereto and (ii) the warrants
to purchase Common Stock, if any, issued by the Issuer after the date hereof in
accordance with Section 6.12 of the Credit Agreement and pursuant to the
documentation contemplated by Section 9.07.

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                              -----------------



                                      5

                  "Other Warrant Stock" means all shares of Common Stock
issuable from time to time upon exercise of the Other Warrants.

                  "Person" means any natural person, corporation, limited
liability company, trust, joint venture, association, company, partnership,
Governmental Authority or other entity.

                  "Piggyback Notice" has the meaning specified in Section
6.01(a).

                  "Piggyback Registration" has the meaning specified in Section
6.01(a).

                  "Principal Shareholder" means, at any time, any Shareholder
which either alone or together with its Related Parties owns 20% or more of the
Common Stock on a fully diluted basis.

                  "Registration Expenses" has the meaning specified in Section
6.04.

                  "Related Parties" means (a) with respect to any Person who is
a natural person, (i) such Person's spouse, any member of such Person's
Immediate Family and any trust or similar arrangement for the benefit of such
Person, such Person's spouse or any member of such Person's Immediate Family and
(ii) any other Person (other than the Issuer or any of its Subsidiaries or any
Person organized for charitable purposes) that is not a natural person and of
which such Person owns or controls at least 20% of the voting equity interests,
and (b) with respect to any Person who is not a natural person, any Subsidiary
or Affiliate of such Person (other than the Issuer or any of its Subsidiaries or
any Person organized for charitable purposes); provided that "Related Parties"
shall not include any employee benefit plan.

                  "Related Person" has the meaning specified in Section 4.07.

                  "Required Holders" means the holders of a majority of the sum
of (a) Warrant Stock issued or issuable upon exercise of the Warrants and held
by the Holders and (b) Other Warrant Stock issued or issuable upon exercise of
the Other Warrants and held by Other Holders. For purposes of giving notices,
waivers and consents hereunder, holders of Warrants shall be deemed holders of
the Warrant Stock issued on exercise thereof and holders of Other Warrants shall
be deemed holders of the Other Warrant Stock issued on exercise thereof.

                  "Restricted Certificate" means a certificate for Warrant Stock
or Warrants bearing or required to bear the restrictive legend set forth in
Section 4.03.
                  "Restricted Securities" means Restricted Warrant Stock and
Restricted Warrants.

                  "Restricted Warrants" means Warrants evidenced by a Restricted
Certificate.

                              Warrant Agreement
                              -----------------



                                      6

                  "Restricted Warrant Stock" means Warrant Stock evidenced by a
Restricted Certificate.

                  "Revolving Credit Loan" has the meaning assigned to such term
in the Credit Agreement.

                  "Rights Agreement" means the Rights Agreement, dated as of May
1, 1998, as amended, between the Issuer and National City Bank, as rights agent.

                  "Rule 144" means Rule 144 promulgated by the Commission under
the Securities Act (or any successor or similar rule then in force).

                  "Rule 144A" means Rule 144A promulgated by the Commission
under the Securities Act (or any successor or similar rule then in force).

                  "SEC Documents" has the meaning specified in Section 3.11.

                  "Securities" means the Common Stock and any other equity
securities of the Issuer of any kind or class.

                  "Securities Act" means the Securities Act of 1933, as amended,
or any similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.

                  "Seller" has the meaning specified in Section 6.01(a).

                  "Seller Notice" has the meaning specified in Section 6.01(a).

                  "Shareholder" means any Person who directly or indirectly owns
any shares of Common Stock (including Warrant Stock issued upon exercise of a
Warrant).

                  "Stock Unit" means one share of Common Stock, as such Common
Stock is constituted on the date hereof, and thereafter means such number of
shares (including any fractional shares) of Common Stock and other securities,
cash or other property as shall result from the adjustments specified in Article
V.

                  "Subsidiary" means, with respect to any Person (the "parent")
at any date, any corporation, limited liability company, partnership,
association or other entity the accounts of which would be consolidated with
those of the parent in the parent's consolidated financial statements if such
financial statements were prepared in accordance with GAAP as of such date, as
well as any other corporation, limited liability company, partnership,
association or other entity (a) of which securities or other ownership interests
representing more than

                              Warrant Agreement
                              -----------------



                                      7

50% of the equity or more than 50% of the ordinary voting
power or, in the case of a partnership, more than 50% of the general partnership
interests are, as of such date, owned, controlled or held, or (b) that is, as of
such date, otherwise Controlled, by the parent or one or more subsidiaries of
the parent or by the parent and one or more subsidiaries of the parent.

                  "Tag-Along Participation Notice" has the meaning specified in
Section 7.02.

                  "Tag-Along Sale" has the meaning specified in Section 7.01(a).

                  "Tag-Along Sale Notice" has the meaning specified in Section
7.02.

                  "Tag-Along Seller" has the meaning specified in Section
7.01(a).

                  "Term Loans" has the meaning assigned to such term in the
Credit Agreement.

                  "underwritten registration" or "underwritten offering" means a
registration in which securities of the Issuer are sold to an underwriter for
reoffering to the public.

                  "Warrant" and "Warrants" means the Warrants issued by the
Issuer pursuant to this Agreement as of September 30, 2002, evidencing rights to
purchase up to an aggregate of 1,353,531 Stock Units (which Warrants (together
with the Other Warrants and Other Warrant Stock issued before the date hereof)
represent, as of September 30, 2002, 7% in the aggregate of the outstanding
shares of Common Stock on a fully diluted basis), and all Warrants issued upon
transfer, division or combination of, or in substitution for, any such Warrants
issued pursuant to this Agreement.

                  "Warrant Stock" means all shares of Common Stock, as
constituted on the Issuance Date, issuable from time to time upon exercise of
the Warrants.

                  SECTION 1.02. Terms Generally. The definitions of terms herein
shall apply equally to the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
The word "will" shall be construed to have the same meaning and effect as the
word "shall". Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any Person (other than a Holder) shall be construed
to include such Person's successors and assigns, (c) the words "herein",
"hereof" and "hereunder", and words of similar import, shall be construed to
refer to this Agreement in its entirety and not to any particular provision
hereof, (d) all references herein to Articles, Sections, Exhibits, Annexes and
Schedules shall be construed to refer to Articles and Sections of, and

                              Warrant Agreement
                              -----------------



                                      8

Exhibits, Annexes and Schedules to, this Agreement or the Warrant, as the case
may be, and (e) the words "asset" and "property" shall be construed to have the
same meaning and effect and to refer to any and all tangible and intangible
assets and properties, including cash, securities, accounts and contract rights.

                  SECTION 1.03. Accounting Terms and Determinations. Except as
otherwise may be expressly provided herein, all accounting terms used herein
shall be interpreted, and all financial statements and certificates and reports
as to financial matters required to be delivered to the Holders hereunder shall
be prepared, in accordance with GAAP. All calculations made for the purposes of
determining compliance with the terms of this Agreement shall (except as
otherwise may be expressly provided herein) be made by application of GAAP.

                                 ARTICLE II

                        PURCHASE AND SALE OF WARRANTS

                  SECTION 2.01. Authorization and Issuance of Warrant Stock and
Warrants. The Issuer has authorized: (a) the issuance of Warrants evidenced by
warrant certificates in the form of Annex 1; and (b) the issuance of such number
of shares of Common Stock as shall be necessary to permit the Issuer to comply
with its obligations to issue shares of Common Stock pursuant to the Warrants.

                  SECTION 2.02.  Issuance of Warrants.  As of September 30,
2002, in satisfaction of the Issuer's obligations under Section 6.12(a)(ii) of
the Credit Agreement:

                  (a) the Issuer shall issue to each Initial Holder (or its
         Affiliate or nominee), for no additional consideration, a Warrant
         evidencing the right to purchase such number of Stock Units as is set
         forth opposite the name of such Initial Holder (or its Affiliate or
         nominee) on Schedule 2.02;

                  (b) the Issuer shall deliver to each Initial Holder a single
         certificate for the Warrants issued pursuant to clause (a) above,
         registered in the name of such Initial Holder, except that, if any
         Initial Holder shall notify the Issuer in writing prior to such
         issuance that it desires certificates for such Warrants to be issued in
         other denominations or registered in the name or names of any
         Affiliate, nominee or nominees of such Initial Holder (other than a
         Related Person), then the certificates for such Warrants shall be
         issued to such Initial Holder in the denominations and registered in
         the name or names specified in such notice (and each such Affiliate or
         nominee shall be deemed a Holder); and

                              Warrant Agreement
                              -----------------



                                      9

                  (c) the Issuer shall deliver to the Initial Holders a legal
         opinion from counsel to the Issuer, addressed to the Initial Holders
         and in form and substance satisfactory to JPMorgan Chase Bank.

                  SECTION 2.03.  Purchase for Initial Holders' Account.  Each
Initial Holder represents and warrants to the Issuer as follows:

                  (a) Such Initial Holder is acquiring the Warrants and the
         Warrant Stock for investment for its own account, without a view to, or
         for resale in connection with, any distribution thereof in violation of
         the Securities Act or other applicable securities laws, all without
         prejudice, however, to the right of such Initial Holder at any time, in
         accordance with this Agreement, lawfully to sell or otherwise to
         dispose of all or any part of the Warrants or the Warrant Stock held by
         it.

                  (b) Such Initial Holder (i) is an "accredited investor" within
         the meaning of Regulation D promulgated under the Securities Act and
         (ii) is in a financial position to hold the Warrant to be issued to it
         hereunder and the Warrant Stock relating thereto for an indefinite time
         and is able to bear the economic risk and withstand a complete loss of
         its investment in the Issuer.

                  (c) All documents, records or books pertaining to this
         investment have been made available for inspection by such Initial
         Holder, its attorneys and/or its accountants. Such Initial Holder
         understands that such Initial Holder and/or its representatives have
         had the opportunity to ask questions of, and receive answers from, the
         Issuer or one or more persons acting on the Issuer's behalf concerning
         the offering of the Warrants and the Warrant Stock and the business of
         the Issuer and all such questions have been answered to such Initial
         Holder's full satisfaction.

                  (d) Such Initial Holder is not the "beneficial owner", either
         alone or together with its "affiliates" or "associates" (as those terms
         are defined in the Exchange Act), of 5% or more of the outstanding
         shares of Common Stock as constituted on the Issuance Date.

                  SECTION 2.04. Securities Act Compliance. Such Initial Holder
understands that the Issuer has not registered the Warrants or the Warrant Stock
under the Securities Act or applicable state securities laws, and such Initial
Holder agrees that neither the Warrants nor the Warrant Stock shall be sold or
transferred or offered for sale or transfer without registration or
qualification under the Securities Act or applicable state securities laws or
the availability of an exemption therefrom, all as more fully provided in
Article IV, and such Initial Holder understands that the Warrants and the
Warrant Stock will bear a legend to such effect and the Issuer will make a
notation on its transfer books to such effect.

                              Warrant Agreement
                              -----------------



                                      10

                  SECTION 2.05. Listing. Prior to the issuance of Warrant Stock
upon the exercise of a Warrant, the Issuer shall use best efforts to secure the
listing of such shares of Warrant Stock upon each of the national securities
exchange or automated quotation system, if any, upon which shares of Common
Stock are then listed (subject to official notice of issuance upon the exercise
of such Warrant) and shall maintain, so long as any other shares of Common Stock
shall be so listed, such listing of all shares of Warrant Stock from time to
time issuable upon the exercise of a Warrant; and the Issuer shall use best
efforts to so list on each national securities exchange or automated quotation
system, and shall maintain such listing of, any other shares of capital stock of
the Issuer issuable upon the exercise of a Warrant if and so long as shares of
the same class shall be so listed on such national securities exchange or
automated system.

                                 ARTICLE III

                       REPRESENTATIONS AND WARRANTIES
                       ------------------------------

                  The Issuer represents and warrants as follows:

                  SECTION 3.01. Existence; Qualification. The Issuer is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization. The Issuer is duly qualified, licensed or
admitted to do business and is in good standing as a foreign corporation in
every jurisdiction where the failure to be so qualified would have a material
adverse effect on the business, financial condition, operations, assets,
prospects, liabilities or capitalization of the Issuer and has all requisite
corporate power and authority to transact its business as now conducted in all
such jurisdictions.

                  SECTION 3.02. No Breach. Assuming the truth and accuracy of
the Initial Holders' representation contained in Section 2.03(d), the execution,
delivery and performance of this Agreement and the Warrants by the Issuer and
the consummation by it of the transactions contemplated hereby and thereby will
not (a) violate the certificate of incorporation or by-laws or any other
instrument or document of organization or governance of the Issuer, (b) violate,
or result in a breach of or default under, any other material instrument or
agreement to which the Issuer is a party or is bound, (c) violate any judgment,
order, injunction, decree or award against or binding upon the Issuer, (d)
result in the creation of any material Lien upon any of the properties or assets
of the Issuer, or (e) (assuming the truth and accuracy of the Initial Holders'
representations contained in Sections 2.03 and 2.04) violate any law, rule or
regulation relating to the Issuer.

                  SECTION 3.03. Corporate Action. Assuming the truth and
accuracy of the Initial Holders' representation contained in Section 2.03(d),
the Issuer has all necessary corporate power and authority to execute, deliver
and perform its obligations under this Agreement and the

                              Warrant Agreement
                              -----------------



                                      11

Warrants; the execution, delivery and performance by the Issuer of this
Agreement and the Warrants have been duly authorized by all necessary action
(including all Shareholder action) on the part of the Issuer; this Agreement and
the Warrants being issued on the date hereof have been duly executed and
delivered by the Issuer and constitute the legal, valid and binding obligations
of the Issuer, enforceable against the Issuer in accordance with their
respective terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors rights generally and by general equitable principles
(regardless of whether such enforceability is considered in a proceeding in
equity or law); the Warrant Stock covered by the Warrants has been duly and
validly authorized and reserved for issuance and shall, when paid for, issued
and delivered in accordance with the Warrants, be duly and validly issued, fully
paid and nonassessable and free and clear of any Liens (other than those imposed
by applicable securities laws); and none of the Warrant Stock issued pursuant to
the terms hereof will be in violation of any preemptive rights of any
Shareholder.

                  SECTION 3.04. Approvals. Assuming the truth and accuracy of
the Initial Holders' representation contained in Section 2.03(d), except (a) in
connection with the registration of the Warrant Stock pursuant to Article VI or
(b) for any necessary stock exchange approvals, no authorizations, approvals or
consents of, and no filings or registrations with, any Governmental Authority or
any other Person (except for Persons who are Principal Shareholders or Related
Parties thereof who shall be required to enter into a Joinder Agreement on or
after the date of execution of this Agreement) are necessary for the execution,
delivery or performance by the Issuer of this Agreement or the Warrants or for
the validity or enforceability thereof. Any such action required to be taken as
a condition to the execution and delivery of this Agreement, or the execution,
issuance and delivery of the Warrants, has been duly taken by all such
Governmental Authorities or other Persons, as the case may be.

                  SECTION 3.05.  Investment Company Act.  The Issuer is not an
"investment company", or a company "controlled by" an "investment company",
within the meaning of the Investment Company Act of 1940, as amended.

                  SECTION 3.06. Public Utility Holding Company Act. The Issuer
is not a "holding company", or an "affiliate" of a "holding company" or a
"subsidiary company" of a "holding company", within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
                  SECTION 3.07. Capitalization. (a) As of the date hereof, the
authorized capital stock of the Issuer consists of 60,000,000 shares of Common
Stock, par value $.01 per share, and 1,000,000 shares of Preferred Stock, par
value $.01 per share, of which 25,244,152 shares of Common Stock have been
issued and are outstanding (and 122,348 shares of Common Stock are held in
treasury). Except (i) for the Warrants issued hereunder, (ii) as set forth in
Schedule 3.07(a) and (iii) Section 6.12 of the Credit Agreement, the Issuer does
not have outstanding any Convertible Securities or Options exercisable or
convertible into or exchangeable for any

                              Warrant Agreement
                              -----------------



                                      12

interests or other equity rights of the Issuer, nor does it have outstanding any
agreements providing for the issuance of, or any commitments to issue, any
Convertible Securities or Options.

                  (b) Other than this Agreement, Section 6.12 of the Credit
Agreement, the Warrant Agreement dated as of June 28, 2002 between the Issuer
and the holders party thereto or as set forth in Schedule 3.07(b), there is not
in effect on the date hereof any agreement by the Issuer pursuant to which any
holders of debt or equity securities of the Issuer have a right to cause the
Issuer to register such securities under the Securities Act. None of the
agreements listed on Schedule 3.07(b) contains any provision that conflict or
are inconsistent with the rights granted under Article VI.

                  (c) Except for this Agreement, there is not in effect on the
date hereof any agreement by the Issuer or any of its Shareholders that (i)
restricts the transferability of the Warrants and/or the Warrant Stock (whether
or not in connection with a transfer of the Loans), (ii) restricts the
transferability of the right of the Holder in this Agreement to any transferee
of all or a portion of the Holder's Warrants and/or Warrant Stock, or (iii)
requires any consent or other approval of any Person to the exercise of the
Warrant by the Holder or the issuance of Warrant Stock upon such exercise.

                  SECTION 3.08. Private Offering. Assuming the truth and
accuracy of the Initial Holders' representations and warranties contained in
Sections 2.03 and 2.04, the issuance and sale of the Warrants to the Holders
hereunder are exempt from the registration and prospectus delivery requirements
of the Securities Act.

                  SECTION 3.09. Litigation. (a) There is no action, suit,
proceeding or investigation pending or, to the knowledge of the Issuer,
threatened against the Issuer or any of its Subsidiaries before any Governmental
Authority seeking to enjoin the transactions contemplated by this Agreement or
the Warrants or that involve this Agreement or the transactions contemplated
herein.

                  (b) Except for the matters disclosed in Schedule IV to the
Credit Agreement or the SEC Documents, there are no actions, suits or
proceedings by or before any arbitrator or Governmental Authority now pending
against or, to the knowledge of the Issuer, threatened against or affecting the
Issuer or any of its Subsidiaries as to which there is a reasonable possibility
of an adverse determination and that, if adversely determined, could reasonably
be expected, individually or in the aggregate, to result in a material adverse
effect on the business, assets, liabilities, operations, material contracts,
prospects or condition, financial or otherwise, of the Issuer and its
Subsidiaries taken as a whole.

                  SECTION 3.10. Brokers. All negotiations relative to this
Agreement and the transactions contemplated hereby have been carried out by the
Issuer directly with the Initial

                              Warrant Agreement
                              -----------------



                                      13

Holders without the intervention of any Person on behalf of the Issuer in such
manner as to give rise to any valid claim by any Person against the Initial
Holders or any other Holder for a finder's fee, brokerage commission or similar
payment.

                  SECTION 3.11. SEC Documents; Financial Statements. The Issuer
has filed in a timely manner all documents that the Issuer was required to file
since January 1, 2000 with the Commission under Sections 13, 14(a) and 15(d) of
the Exchange Act. As of their respective filing dates, all documents filed by
the Issuer since January 1, 2000 with the Commission (the "SEC Documents")
complied in all material respects with the requirements of the Exchange Act or
the Securities Act, as applicable. None of the SEC Documents as of their
respective dates contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which they were
made, not misleading. The financial statements of the Issuer included in the SEC
Documents (the "Financial Statements") comply as to form in all material
respects with applicable accounting requirements and with the published rules
and regulations of the Commission with respect thereto. The Financial Statements
have been prepared in accordance with GAAP and fairly present the consolidated
financial position of the Issuer and its Subsidiaries at the dates thereof and
the consolidated results of their operations and consolidated cash flows for the
periods then ended (subject, in the case of unaudited statements, to the lack of
full footnote disclosure and to normal, recurring adjustments).

                                 ARTICLE IV

                       RESTRICTIONS ON TRANSFERABILITY

                  SECTION 4.01. Transfers Generally. The Restricted Securities
shall be transferable only upon the conditions specified in this Article IV and
in Article VI, which conditions are intended to ensure compliance with the
provisions of the Securities Act and applicable state securities laws in respect
of the transfer of any Restricted Securities.

                  SECTION 4.02. Transfers of Restricted Securities Pursuant to
Registration Statement and Exemptions. The Restricted Securities may be offered
or sold by the Holder thereof pursuant to an effective registration statement
under the Securities Act and applicable state securities laws or a valid
exemption therefrom (including, without limitation, to the extent applicable,
Rule 144 or Rule 144A and applicable exemptions from state securities laws).

                  SECTION 4.03. Restrictive Legends. Unless and until otherwise
permitted by this Article IV, each certificate for the Warrants issued under
this Agreement, each certificate for any Warrants issued to any subsequent
transferees of any such certificate, each certificate for any Warrant Stock
issued upon exercise of any Warrant and each certificate for any Warrant Stock
issued to any subsequent transferee of any such certificate, shall be stamped or
otherwise imprinted with a legend in substantially the following form:

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                                      14

                  "THE TRANSFER OF THE SECURITIES REPRESENTED BY THIS
                  CERTIFICATE IS SUBJECT TO THE RESTRICTIONS SPECIFIED IN THAT
                  CERTAIN WARRANT AGREEMENT DATED AS OF SEPTEMBER 30, 2002 (THE
                  "WARRANT AGREEMENT") BETWEEN CHART INDUSTRIES, INC., A
                  DELAWARE CORPORATION (THE "ISSUER"), AND THE HOLDERS PARTY
                  THERETO FROM TIME TO TIME AS MODIFIED AND SUPPLEMENTED AND IN
                  EFFECT FROM TIME TO TIME, AND NO TRANSFER OF THE SECURITIES
                  REPRESENTED BY THIS CERTIFICATE SHALL BE VALID OR EFFECTIVE
                  UNTIL SUCH RESTRICTIONS HAVE LAPSED OR BEEN FULFILLED,
                  RELEASED OR WAIVED. A COPY OF THE FORM OF THE WARRANT
                  AGREEMENT IS ON FILE AND MAY BE INSPECTED AT THE PRINCIPAL
                  EXECUTIVE OFFICE OF THE ISSUER. THE HOLDER OF THIS
                  CERTIFICATE, BY ACCEPTANCE OF THIS CERTIFICATE, AGREES TO BE
                  BOUND BY THE PROVISIONS OF THE WARRANT AGREEMENT.

                  THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
                  REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
                  APPLICABLE STATE SECURITIES LAWS, AND ACCORDINGLY, SUCH
                  SECURITIES MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED
                  OF EXCEPT IN COMPLIANCE WITH THE REGISTRATION OR QUALIFICATION
                  PROVISIONS OF APPLICABLE FEDERAL AND STATE SECURITIES LAWS OR
                  APPLICABLE EXEMPTIONS THEREFROM."

                  SECTION 4.04. Termination of Restrictions. All of the
restrictions imposed by this Article IV upon the transferability of the
Restricted Securities shall cease and terminate as to any particular Restricted
Security when such Restricted Security shall have been effectively registered
under the Securities Act and applicable state securities laws and sold by the
Holder thereof in accordance with such registration or sold under and pursuant
to Rule 144 or is eligible to be sold under and pursuant to paragraph (k) of
Rule 144. Whenever the restrictions imposed by this Article IV shall terminate
as to any Restricted Security as hereinabove provided, the Holder thereof shall,
upon written request, be entitled to receive from the Issuer, without expense, a
new certificate evidencing such Restricted Security not bearing the restrictive
legend otherwise required to be borne by a certificate evidencing such
Restricted Security, provided that the Holder thereof shall have furnished the
Issuer with such certificates and opinions as the Issuer shall have reasonably
requested.

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                                      15

                  SECTION 4.05. Dispositions of Warrants and Warrant Stock. (a)
Subject to compliance with the Securities Act, applicable state securities laws
and the requirement as to placement of a legend on certificates for Restricted
Securities specified in Section 4.03, any Holder shall have the right to
transfer any or all of its Restricted Securities to any Person. The Person to
which Restricted Securities are transferred pursuant to the immediately
preceding sentence shall be deemed to be a Holder of such Restricted Securities
and bound by the provisions of this Agreement applicable to the Holders so long
as such Person continues to own any of the Restricted Securities so transferred
to it.

                  (b) In connection with any transfer of any Warrant, the Holder
shall surrender such Warrant to the Issuer, together with a written assignment
of such Warrant duly executed by the Holder hereof or such Holder's agent or
attorney-in-fact. Such written assignment shall be in the form of the Assignment
attached as Annex 2. Upon such surrender and receipt by the Issuer of a written
agreement, in form reasonably satisfactory to the Issuer, of the assignee
agreeing to be bound by this Agreement to the same extent as such Holder was so
bound, the Issuer shall execute and deliver a new Warrant or Warrants in the
name of the assignee and in the denominations specified in such instrument of
assignment, and the original Warrant shall promptly be canceled.

                  (c) Any Warrant may be exchanged for other Warrants of the
same series upon presentation to the Issuer, together with a written notice
specifying the denominations in which new Warrants are to be issued, signed by
the Holder thereof. The Issuer shall execute and deliver a new Warrant or
Warrants to such Holder in exchange for the Warrant or Warrants to be divided or
combined in accordance with such notice. The Issuer shall pay all expenses and
other charges (including taxes, to the extent required by Section 8.02) payable
in connection with the preparation, issuance, delivery, transfer or exchange of
the Warrants.

                  (d) The Issuer shall maintain books for the registration and
transfer of the Warrants, and shall allow each Holder of Warrants to inspect
such books at such reasonable times as such Holder shall request.

                  SECTION 4.06. Provisions Applicable to Regulated Holders. (a)
Notwithstanding anything in this Agreement or the Warrants to the contrary, no
Holder that is subject to the provisions of 12 USC 24 (Seventh) or a similar
provision of state law or any regulation that generally limits the ability of a
bank to own equity interests of another Person, or that is subject to Regulation
Y of the Board of Governors of the Federal Reserve System (or any successor
regulation thereto) ("Regulation Y") or that is affiliated with any entity
subject to the provisions of Regulation Y (if such Affiliate directly or
indirectly holds securities of the Issuer) (any such Holder being referred to
herein as a "Regulated Holder") and no transferee of such Regulated Holder may
exercise the Warrants for a number of shares of Warrant Stock that would permit
such Regulated Holder, together with its Affiliates and transferees, to own or
control a number of shares of Warrant Stock greater than that permitted by
applicable law including

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                                      16

Regulation Y (and, for purposes of this restriction, a
reasoned opinion of counsel to such Holder and reasonably acceptable to the
Issuer based on facts and circumstances deemed appropriate by such counsel to
the effect that such Holder may lawfully own or control such number of shares
shall be conclusive).

                  (b) The Issuer shall not, without 15 days' prior written
notice to each Holder, directly or indirectly, purchase, redeem, retire or
otherwise acquire any shares of Common Stock if, as a result of such purchase,
redemption, retirement or other acquisition and after giving effect to the
exercise of all outstanding Warrants, a Holder, together with its Affiliates,
shall own or control, or shall be deemed to own or control, in the aggregate a
greater number of securities of any kind issued by the Issuer than are permitted
under applicable law, including Regulation Y.

                  (c) In the event of any underwritten public offering of
Restricted Securities in which a Regulated Holder is participating, the Issuer
shall provide reasonable assistance to the underwriter in ensuring that any
Warrants or Warrant Stock sold by such Holder are widely disseminated.

                  (d) In the event that a Regulated Holder determines that there
is a Regulatory Problem (as defined below), the Issuer agrees to use
commercially reasonable efforts to take all such actions as are within its
control and reasonably required by such Regulated Holder in order (i) to
effectuate and facilitate any transfer by any Regulated Holder (or any of its
Affiliates) of any Warrant or Warrant Stock then held by such Regulated Holder
to any Person designated by such Regulated Holder and (ii) to permit such
Regulated Holder (or any of its Affiliates) to exchange all or a portion of any
voting security then held by it on a share-for-share basis for shares of a
non-voting security of the Issuer, which non-voting security shall convey
equivalent economic benefits to those of such Warrants or Warrant Stock and
include equivalent anti-dilution protection and otherwise shall be identical in
all respects to the voting security exchanged for it, except that it shall be
non-voting and shall be convertible into a voting security on such terms as are
required by such Regulated Holder in light of regulatory considerations then
prevailing. Such actions may include, but shall not necessarily be limited to,
entering into such additional agreements, adopting such amendments to the
certificate of incorporation and bylaws of the Issuer subject to required
Shareholder approvals and taking such additional actions as are reasonably
requested by any Regulated Holder in order to effectuate the intent of the
foregoing. For purposes of this Agreement, a "Regulatory Problem" means any set
of facts or circumstances wherein it has been asserted by any Governmental
Authority (or any Regulated Holder believes that there is a substantial risk of
such assertion) that any Regulated Holder is not entitled to hold, or exercise
any significant right with respect to, any Warrant or Warrant Stock held by it.
Any exchange referred to in clause (ii) above shall occur as soon as reasonably
practicable but in any event within 60 days after written notice by the affected
Regulated Holder to the Issuer (or such earlier date if required to comply with
applicable law so long as such Regulated Holder has provided reasonable prior
notice of such date to the Issuer).

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                                      17

                  (e) At the request of the Issuer, at the time of the exercise
of any Warrant by any Holder such Holder shall notify the Issuer in writing as
to (i) whether such Holder is a Regulated Holder and (ii) if such Holder is a
Regulated Holder, the aggregate amount of Common Stock, Convertible Securities
and Options then owned or controlled by such Holder and its Affiliates, provided
that any failure or delay by any Holder in providing such notification shall not
affect in any way the obligations of the Issuer hereunder or with respect to any
Warrant or Warrant Stock.

                  SECTION 4.07. Provisions Applicable to Related Persons.
Notwithstanding any other provision of this Agreement or a Warrant, no Holder
may exercise a Warrant (or any substitute security issued under Section 4.06(d))
if such Holder is then the "beneficial owner", either alone or together with its
"affiliates" and "associates" (as those terms are defined in the Exchange Act),
of 5% or more of the then outstanding shares of Common Stock as constituted on
the Issuance Date (a "Related Person"), unless (a) such transaction is approved
by the Shareholders in accordance with Article VI of the Issuer's certificate of
incorporation or (b) the Issuer's certificate of incorporation previously has
been amended to remove such Article and its requirements. If reasonably
requested by such Related Person in writing, and subject to applicable fiduciary
duties of the Board, the Issuer will use commercially reasonable efforts to
secure the approval of the Shareholders to such exercise under such Article at
the next regularly scheduled Shareholder meeting of the Issuer, provided that
such Related Person provides all information to the Issuer about such Related
Person and such transaction reasonably required under the Exchange Act to be
included in the Issuer's proxy statement for such meeting and, if required,
consents to the inclusion of such information in such proxy statement.

                                  ARTICLE V

                         ADJUSTMENTS OF STOCK UNITS

                  SECTION 5.01.  Subdivisions and Combinations.  If at any time
the Issuer shall:

                  (a)  pay a dividend or other distribution of Common Stock;

                  (b)  subdivide or reclassify its outstanding shares of Common
     Stock into a larger number of shares of Common Stock; or

                  (c)  combine its outstanding shares of Common Stock into a
     smaller number of shares of Common Stock;

then immediately after the occurrence of any such event the number of shares of
Warrant Stock comprising a Stock Unit shall be adjusted so as to equal the
number of shares of Warrant Stock which each Holder would have been entitled to
receive with respect to such Stock Unit if such Holder had exercised the Warrant
immediately prior to the occurrence of such event (or, in the case of any such
dividend or distribution, immediately prior to the record date therefor).

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                                      18

                  SECTION 5.02. Issuance of Common Stock. In case at any time
the Issuer (i) shall issue or sell shares of Common Stock and (ii) the
consideration per share of Common Stock to be paid upon such issuance or sale is
less than the Current Market Value per share of Common Stock in effect on the
date of such issuance or sale, then the number of shares of Warrant Stock
comprising a Stock Unit shall be adjusted to be that number determined by
multiplying the number of shares of Warrant Stock comprising a Stock Unit
immediately prior to the date of such issuance or sale by a fraction (not to be
less than one) (A) the numerator of which shall be equal to the product of (x)
the number of shares of Common Stock outstanding after giving effect to such
issuance or sale and (y) the Current Market Value per share of Common Stock
determined immediately prior to the date of such issuance or sale and (B) the
denominator of which shall be equal to the sum of (x) the product of (1) the
number of shares of Common Stock outstanding immediately prior to the date of
such issuance or sale and (2) the Current Market Value per share of Common Stock
determined immediately prior to the date of such issuance or sale and (y) the
aggregate consideration to be received by the Issuer for the total number of
shares of Common Stock to be issued or sold. Aggregate consideration for
purposes of the preceding clause (B)(y) shall be determined as follows: in case
any shares of Common Stock shall be issued or sold for cash, the consideration
received therefor shall be deemed to be the amount payable to the Issuer
therefor (without deduction therefrom of any expenses incurred or any
underwriting commissions or concessions or discounts or, in the case of a
private placement thereof, finders' fees or commissions paid or allowed by the
Issuer in connection therewith). In case any shares of Common Stock shall be
issued or sold for a consideration other than cash payable to the Issuer, the
consideration received therefor shall be deemed to be the fair market value
thereof as reasonably determined in good faith by the Board (without deduction
therefrom of any expenses incurred or any underwriting commissions or
concessions or discounts or, in the case of a private placement thereof,
finders' fees or commissions paid or allowed by the Issuer in connection
therewith). In case any shares of Common Stock shall be issued in connection
with any merger of another corporation into the Issuer, the amount of
consideration therefor shall be deemed to be the fair market value of such
portion of the assets of such merged corporation as the Board shall reasonably
determine to be attributable to such shares of Common Stock.

                  SECTION 5.03. Issuance of Other Securities, Rights or
Obligations. In case at any time the Issuer (i) shall issue or sell options to
purchase or rights to subscribe for Common Stock or securities directly or
indirectly convertible into or exchangeable for Common Stock (or options or
rights with respect to such securities) and (ii) the consideration per share for
which Common Stock is deliverable upon exercise of such options or rights or
conversion or exchange of such securities (determined by dividing (x) the total
amount received or receivable by the Issuer in consideration of such issuance or
sale, plus the aggregate amount of consideration (if any) payable to the Issuer
upon such exercise, conversion or exchange, by (y) the total number of shares of
Common Stock necessary to effect the exercise, conversion or exchange of all
such options, rights or securities) shall be less than the Current Market Value
per share of Common Stock in effect on the date of such issuance or sale, then
the number of shares of Warrant Stock

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                                      19

comprising a Stock Unit shall be adjusted on the date of such issuance or sale
to be that number determined by multiplying the number of shares of Warrant
Stock comprising a Stock Unit immediately prior to the date of such issuance or
sale by a fraction (not to be less than one) (i) the numerator of which shall
be equal to the product of (A) the total number of shares of Common Stock
outstanding after giving effect to the exercise, conversion or exchange of all
such options, rights or securities to be issued in such transaction and (B) the
Current Market Value per share of Common Stock determined immediately before
such date and (ii) the denominator of which shall be equal to the sum of (A)
the product of (1) the total number of shares of Common Stock outstanding
immediately prior to the date of such issuance or sale and (2) the Current
Market Value per share of the Common Stock determined immediately prior to the
date of such issuance or sale and (B) the aggregate consideration per share
(determined as set forth in subsection (ii)(x) and (y) above) for which Common
Stock is deliverable upon exercise, conversion or exchange of such options,
rights or securities. Aggregate consideration for purposes of the preceding
clause (B) shall be determined as follows: In case any options, rights or
convertible or exchangeable securities (or options or rights with respect
thereto) shall be issued or sold, or exercisable, convertible or exchangeable
for cash, the consideration received therefor shall be deemed to be the amount
payable to the Issuer (determined as set forth in subsection (ii)(x) and (y)
above) therefor (without deduction therefrom of any expenses incurred or any
underwriting commissions or concessions or discounts or, in the case of a
private placement thereof, finders' fees or commissions paid or allowed by the
Issuer in connection therewith). In case any such options, rights or securities
shall be issued or sold, or exercisable, convertible or exchangeable for a
consideration other than cash payable to the Issuer, the consideration received
therefor (determined as set forth in subsection (ii)(x) and (y) above) shall be
deemed to be the fair market value thereof as reasonably determined in good
faith by the Board (without deduction therefrom of any expenses incurred or any
underwriting commissions or concessions or discounts or, in the case of a
private placement thereof, finders' fees or commissions paid or allowed by the
Issuer in connection therewith). In case any such options, rights or securities
shall be issued or sold, or exercisable, convertible or exchangeable in
connection with any merger of another corporation into the Issuer, the amount
of consideration therefor shall be deemed to be the fair market value of such
portion of the assets of such merged corporation as the Board shall reasonably
determine to be attributable to such options, rights or securities.

                  SECTION 5.04. Superseding Adjustment. If at any time after any
adjustment in the number of shares of Warrant Stock comprising a Stock Unit
shall have been made on the basis of the issuance of any options or rights, or
convertible or exchangeable securities (or options or rights with respect to
such securities) pursuant to Section 5.03:

                  (a)  the options or rights shall expire prior to exercise or
     the  right to convert or exchange any such securities shall terminate; or

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                              -----------------



                                      20

                  (b) the consideration per share for which shares of Common
         Stock are issuable pursuant to the terms of such options or rights or
         convertible or exchangeable securities shall be increased or decreased,
         other than under or by reason of provisions designed to protect against
         dilution,

such previous adjustment shall be rescinded and annulled, and thereupon a
recomputation shall be made of the effect of such options or rights or
convertible or exchangeable securities with respect to shares of Common Stock on
the basis of:

                           (A)    treating the number of shares of Common
                                  Stock, if any, theretofore actually issued
                                  or issuable pursuant to the previous
                                  exercise, conversion or exchange of such
                                  options, rights or securities as having been
                                  issued on the date or dates of such
                                  exercise, conversion or exchange and for the
                                  aggregate consideration actually received
                                  and receivable therefor, and

                           (B)    treating any such options, rights or
                                  securities which then remain outstanding as
                                  having been granted or issued immediately
                                  after the time of such increase or decrease
                                  for the aggregate consideration per share
                                  for which shares of Common Stock are
                                  issuable upon exercise, conversion or
                                  exchange of such options, rights or
                                  securities.

To the extent called for by the foregoing provisions of this Section 5.04 on the
basis aforesaid, a new adjustment in the number of shares of Warrant Stock
comprising a Stock Unit shall be made in accordance with Section 5.03,
determined using the Current Market Value as determined at the time of the
previous adjustment, which new adjustment shall supersede the previous
adjustment so rescinded and annulled. If the exercise, conversion or exchange
price provided for in any such option, right or security shall decrease at any
time under or by reason of provisions designed to protect against dilution and
there has been no anti-dilution adjustment under this Article V related to the
same event, then in the case of the delivery of shares of Common Stock upon the
exercise, conversion or exchange of any such option, right or security, the
Stock Unit purchasable upon the exercise of a Warrant shall forthwith be
adjusted (using a weighted average basis in accordance with the formula set
forth in Section 5.03 and using the Current Market Value as determined at the
time of initial issuance or sale thereof) in the manner which would have been
obtained had the adjustment made upon issuance of such option, right or security
been made upon the basis of the issuance of (and the aggregate consideration
received for) the shares of Common Stock delivered as aforesaid.

                  SECTION 5.05. Other Provisions Applicable to Adjustments. The
following provisions shall be applicable to the making of adjustments of the
number of shares of Warrant Stock comprising a Stock Unit:

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                                      21

                  (a) The sale or other disposition of any issued shares of
         Common Stock owned or held by or for the account of the Issuer (other
         than to the Holders hereunder) shall be deemed to be an issuance
         thereof for purposes of this Article V.

                  (b) In computing adjustments under this Article V, fractional
         interests in Common Stock shall be taken into account to the nearest
         one-thousandth of a share.

                  (c) If the Issuer shall take a record of the holders of its
         Common Stock for the purpose of entitling them to receive a dividend or
         distribution or subscription or purchase rights and shall, thereafter
         and before the distribution thereof, abandon its plan to pay or deliver
         such dividend, distribution, subscription or purchase rights, then no
         adjustment shall be required by reason of the taking of such record and
         any such adjustment previously made in respect thereof shall be
         rescinded and annulled.

                  SECTION 5.06. Merger, Consolidation or Disposition of Assets.
If the Issuer shall merge or consolidate with another Person, or shall sell,
transfer or otherwise dispose of all or substantially all of its assets to
another Person and pursuant to the terms of such merger, consolidation or
disposition of assets, cash, shares of common stock or other securities of the
successor or acquiring Person, or property of any nature is to be received by or
distributed to the holders of Common Stock, then each outstanding Warrant shall
automatically (effective as of the consummation of such merger, consolidation or
sale, transfer or disposition), without any further action on the part of the
Holder thereof, be converted into the right to receive (whether or not such
Holder exercises such Warrant) the amount of cash or other consideration it
would have been entitled to receive if such Holder had exercised such Warrant
(to the extent not previously exercised) immediately prior to the occurrence of
such merger, consolidation, sale, transfer or disposition, net of the aggregate
exercise price of such Warrant, and such Warrant shall thereupon be deemed to
have been exercised and be canceled.

                  SECTION 5.07. Other Action Affecting Common Stock. If at any
time or from time to time the Issuer shall take any action affecting its Common
Stock, other than an action described in any of the foregoing subsections of
this Article V or an action taken in the ordinary course of the Issuer's
business and consistent with past practice, then, unless in the reasonable
opinion of the Board such action will not have a material adverse effect upon
the rights of the Holders of the Warrants, the number of shares of Warrant Stock
comprising a Stock Unit shall be adjusted in such manner and at such time as the
Board shall in good faith determine to be equitable in the circumstances.

                  SECTION 5.08. Exclusions from Adjustment. Anything to the
contrary herein notwithstanding, no adjustment to the number of shares of
Warrant Stock comprising a Stock Unit shall be made as a result of, or in
connection with, the issuance of (a) any Common Stock, Convertible Security or
Option pursuant to an Option Plan or any Common Stock or Convertible Securities
issuable or issued upon the conversion, exchange or exercise of any such
Convertible

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                                      22

Security or Option (so long as the issuance, conversion, exchange or exercise
price for such Common Stock, Convertible Security or Option is not less than
the closing price for the Common Stock on the date of grant or the next
preceding trading day on which a trade occurred), (b) any Common Stock issued
pursuant to the Issuer's Amended and Restated 1997 Stock Bonus Plan as in
effect on the date hereof, (c) any Common Stock or other securities pursuant to
the exercise, conversion or exchange of Convertible Securities or Options
outstanding on the Issuance Date and listed in Schedule 3.07(a), (d) any Common
Stock, Convertible Securities or Options pursuant to any merger transaction
involving the Issuer or any of its Subsidiaries or as consideration for the
acquisition by the Issuer or any of its Subsidiaries of the capital stock or
assets of any other Person (or any securities issued upon exercise or
conversion thereof), (e) any rights to purchase securities issued with respect
to each share of Common Stock pursuant to the Rights Agreement or (f) any Other
Warrants or any Common Stock or other securities issued upon the exercise or
conversion of the Warrants or the Other Warrants.

                  SECTION 5.09. Notice of Adjustments. Whenever the number of
shares of Warrant Stock comprising a Stock Unit shall be adjusted pursuant to
this Agreement, the Issuer shall forthwith obtain a certificate signed by the
Issuer's chief financial officer, setting forth, in reasonable detail, the event
requiring the adjustment and the method by which such adjustment was calculated
and specifying the number of shares of Warrant Stock comprising a Stock Unit,
after giving effect to such adjustment. The Issuer shall promptly cause a signed
copy of such certificate to be delivered to each Holder. The Issuer shall keep
at its office copies of all such certificates and cause the same to be available
for inspection at said office during normal business hours by any Holder or any
prospective purchaser of Warrants designated by any Holder.

                  SECTION 5.10. Notice of Certain Corporate Action. If the
Issuer shall propose (i) to pay any dividend to the holders of its Common Stock
or to make any other distribution to the holders of its Common Stock; (ii) to
offer to all holders of its Common Stock rights to subscribe for or to purchase
any additional shares of its Common Stock (or options or rights with respect
thereto) (other than rights under the Rights Agreement); (iii) to effect any
reclassification of its Common Stock; (iv) to effect any capital reorganization;
(v) to effect any consolidation, merger or sale, transfer or other disposition
of all or substantially all of its assets; (vi) to effect the liquidation,
dissolution or winding up of the Issuer; or (vii) to take any other action which
would require an adjustment to the number of shares of Warrant Stock comprising
a Stock Unit to be made in accordance with this Article V, then, in each such
case, the Issuer shall give to each Holder of Warrants a notice of such proposed
action as soon as reasonably practicable prior to the date of the relevant
transaction, which shall specify the date on which a record is to be taken for
the purposes of such dividend, distribution or rights offer, or the date on
which such reclassification, issuance, reorganization, consolidation, merger,
sale, transfer, disposition, liquidation, dissolution or winding up is to take
place and the date of participation therein by the holders of Common Stock, if
any such date is to be fixed, and shall also set forth such facts with respect
thereto as shall be reasonably necessary to indicate the effect of such action
on the

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                                      23

Common Stock, and the number of shares of Warrant Stock which will comprise a
Stock Unit after giving effect to any adjustment which will be required as a
result of such action. The failure to give such notice, or any defect therein,
shall not affect the legality or validity of any dividend, distribution, right,
option, warrant, reclassification, reorganization, consolidation, merger, sale,
transfer, disposition, liquidation, dissolution or winding up, or the vote upon
any such action.

                                  ARTICLE VI

                             REGISTRATION RIGHTS

                  SECTION 6.01. Demand and Piggyback Registrations. (a) Either
(i) upon receipt of notice (a "Demand Notice") from the Holders and/or Other
Holders of at least 25% of the sum of (I) the Warrant Stock issued or issuable
upon exercise of the Warrants (for which purpose, Holders of Warrants shall be
deemed holders of the Warrant Stock issued on exercise thereof) and (II) the
Other Warrant Stock issued or issuable upon exercise of the Other Warrants (for
which purpose, Other Holders of Other Warrants shall be deemed holders of the
Other Warrant Stock issued on exercise thereof) given at any time requesting
that the Issuer effect the registration of such Warrant Stock and Other Warrant
Stock held by such Holders and/or Other Holders, or (ii) whenever the Issuer
gives notice (a "Piggyback Notice") that it proposes to effect the registration
of all or any part of the Common Stock under the Securities Act (except pursuant
to registrations on Form S-4 or Form S-8 promulgated by the Commission or any
successor or similar forms thereto) (whether for its own account or for the
benefit of Shareholders other than holders of the Warrants, the Warrant Stock,
Other Warrants or Other Warrant Stock), the Issuer shall promptly, and in any
event at least 20 days prior to the effective date of the proposed registration
statement, give written notice of such proposed registration to all Holders and
Other Holders. Each Holder or Other Holder that wishes to register its Warrant
Stock or Other Warrant Stock, as the case may be, in such registration (each, a
"Seller") shall, within 15 days after receipt of such notice from the Issuer,
deliver to the Issuer a notice (a "Seller Notice") stating that such Seller
wishes to participate therein and setting forth the number of shares of Warrant
Stock or Other Warrant Stock that such Seller desires to include in such
registration. The Issuer thereupon shall, subject to Section 6.01(b) as
expeditiously as practicable, use its best efforts to effect the registration
under the Securities Act of such Warrant Stock and Other Warrant Stock (any such
registration effected or undertaken pursuant to a Demand Notice being herein
referred to as a "Demand Registration" and any such registration of Warrant
Stock or Other Warrant Stock effected in connection with a Piggyback Notice
being herein referred to as a "Piggyback Registration"); provided that (w) the
Issuer shall not be required to effect more than three Demand Registrations (and
each Demand Registration effected under the registration rights of the Other
Holders evidenced by the agreements under which the Other Warrants are issued
shall be considered a Demand Registration for purposes of the limitation set
forth in this clause (w)), (x) there shall be no limit on the number of
Piggyback Registrations, (y) no Demand Registration or Piggyback Registration
shall be available hereunder at any time after the fifth anniversary of

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                                      24

the Issuance Date and (z) the Issuer shall not be required to honor a request
for a Demand Registration pursuant to which a registration statement would be
declared effective prior to the expiration of 120 days following the last
effective date of any previous registration statement pursuant to Section
6.01(a) (or pursuant to a comparable provision in an agreement under which
Other Warrants are issued). In the event that (i) the amount of securities
proposed to be sold by Sellers pursuant to a Demand Notice shall be reduced
pursuant to Section 6.02(a) to an amount which is less than 75% of the amount
of securities originally proposed to be sold by Sellers, or (ii) any Demand
Notice shall be withdrawn by the Holders and Other Holders originally giving
such Demand Notice at any time prior to the filing by the Issuer of a
preliminary registration statement in connection with such Demand Notice, then,
in such event, no right to a Demand Registration shall be deemed to have been
exercised or forfeited and such Demand Notice shall not operate to reduce the
Issuer's obligation to effect Demand Registrations on the terms provided herein.

                  (b) The Issuer may defer the filing (but not the preparation)
of a registration statement required by Section 6.01(a)(i) until a date not
later than 105 days after the date of the Demand Notice if at the time the
Issuer receives the Demand Notice, (i) the Issuer is conducting or is actively
pursuing a public offering of equity securities, (ii) the Issuer or any of its
Subsidiaries is engaged in confidential negotiations or other confidential
business activities, disclosure of which would be required in such registration
statement, and the Board determines in good faith that such disclosure would be
materially detrimental to the Issuer and its Shareholders or would have a
material adverse effect on any such confidential negotiations or other
confidential business activities or (iii) the Board determines in good faith
that there is a valid business purpose or reason for delaying filing. A deferral
of the filing of a registration statement pursuant to this Section 6.01(b) shall
be lifted, and the requested registration statement shall be filed forthwith, if
the event which resulted in such deferral is terminated (or, in the case of
negotiations of the type referred to in clause (ii) above, such negotiations are
disclosed). In order to defer the filing of a registration statement pursuant to
this Section 6.01(b), the Issuer shall promptly (but in any event within 10
days), upon determining to seek such deferral, deliver to each Seller a
certificate signed by an executive officer of the Issuer setting forth a
statement of the reason for such deferral and an approximation of the
anticipated delay, which information the Sellers shall treat as confidential.
Within 20 days after receiving such certificate, Sellers holding a majority in
interest of the Warrant Stock and Other Warrant Stock for which registration was
previously requested may withdraw such request by giving notice of such
withdrawal to the Issuer; if withdrawn, the Demand Notice shall be deemed not to
have been made for all purposes of this Agreement. The Issuer may not invoke its
right to defer the filing of a registration statement under this Section 6.01(b)
more than once in any twelve-month period.

                  (c) Neither the Issuer nor any of its security holders (other
than holders of the Warrants, the Warrant Stock, the Other Warrants or the Other
Warrant Stock) shall have the right to include any of the Issuer's securities in
a registration statement to be filed as part of a Demand Registration unless (i)
such securities are of the same class or series as the securities covered by

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                                      25

such registration statement and (ii) if such Demand Registration is an
underwritten offering, the Issuer or such security holders, as applicable,
agree in writing to sell, subject to Section 6.02, their securities on the same
terms and conditions as apply to the securities being sold. If any security
holders of the Issuer (other than holders of the Warrants, the Warrant Stock,
the Other Warrants or the Other Warrant Stock) register securities in a Demand
Registration in accordance with this Section 6.01(c), such holders shall pay
the fees and expenses of their own counsel and their pro rata share, on the
basis of the respective amounts of the securities included in such registration
on behalf of each such security holder, of the expenses to be paid pursuant to
Section 6.04 if such expenses are not paid by the Issuer for any reason.

                  (d) If a Demand Registration involves an underwritten
offering, the Issuer shall have the right to select the investment banker(s) and
managing underwriter(s) to administer such offering, which investment banker(s)
or managing underwriter(s), as the case may be, shall be reasonably acceptable
to the holders of at least 50% of the Warrant Stock and Other Warrant Stock to
be included in such Demand Registration.

                  SECTION 6.02. Hold-Back Agreements; Cutbacks. (a) Each holder
of Warrant Stock or Other Warrant Stock that is covered by a registration
statement filed pursuant to Section 6.01 agrees, if requested by the managing
underwriters in an underwritten offering, not to effect any public sale or
distribution of securities of the Issuer of the same class as the securities
included in such registration statement, including a sale pursuant to Rule 144
under the Securities Act (except as part of such underwritten registration),
during the 15-day period prior to, and during the 90-day period beginning on,
the closing date of each underwritten offering made pursuant to such
registration statement, to the extent timely notified in writing by the Issuer
or the managing underwriters; provided that such holders of Warrant Stock and
Other Warrant Stock shall be subject to the hold-back restrictions of this
Section 6.02(a) (i) only once during any twelve-month period and (ii) unless
such underwriter(s) otherwise agree, only if each holder of equity securities of
the Issuer which is a party to a registration rights agreement with the Issuer
entered into on or after the date hereof, and each holder of equity securities
purchased from the Issuer (which is party to a registration rights agreement
with the Issuer entered into) at any time after the date of this Agreement
(other than in a public offering), shall have agreed, to the extent permitted by
law, not to effect any such public sale or distribution of such securities
(including a sale under Rule 144), during such period, except as part of such
underwritten registration.

                  The foregoing provisions shall not apply to any Holder of
Warrant Stock or Other Holder of Other Warrant Stock if such holder is prevented
by applicable statute or regulation from entering into any such agreement;
provided that such holder shall undertake, in its request to participate in any
such underwritten offering, not to effect any public sale or distribution of any
Warrant Stock or Other Warrant Stock held by such holder and covered by a
registration statement commencing on the date of sale of the Warrant Stock or
Other Warrant Stock, as the

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                                      26

case may be, unless it has provided 45 days prior written notice of such sale
or distribution to the underwriter or underwriters.

                  (b) The Issuer agrees not to effect any public or private
offer, sale or distribution of any of its equity securities or any class or
series of its capital stock having a preference in liquidation or with respect
to dividends, including a sale pursuant to Regulation D under the Securities Act
(other than any such sale or distribution of such securities in connection with
any merger or consolidation by the Issuer or any subsidiary of the Issuer or the
acquisition by the Issuer or a subsidiary of the Issuer of the capital stock or
substantially all the assets of any other Person or in connection with any
employee stock option or other benefit plan), during the 10-day period prior to,
and during the 90-day period beginning with, the effectiveness of a registration
statement filed under Section 6.01 to the extent timely notified in writing by
any Holder of Warrant Stock, any Other Holder of Other Warrant Stock or the
managing underwriters in an underwritten offering (except as part of such
offering if permitted, or pursuant to registrations on Forms S-4 or S-8 or any
successor form to such registration Forms).

                  (c) In connection with any registration hereunder in which
more than one security holder has a right to request registration of its Common
Stock, in the event that such registration involves an underwritten offering and
the managing underwriter or underwriters participating in such offering advise
the security holders participating in such offering that the total number of
shares of Common Stock to be included in such offering exceeds the amount that
can be sold in (or during the time of) such offering without delaying or
jeopardizing the success of such offering (including the price per share of
Common Stock), then the total number of shares of Warrant Stock, Other Warrant
Stock and all other shares of Common Stock which have registration rights with
respect to such registration to be offered for the account of all security
holders shall be reduced to a number deemed satisfactory by such managing
underwriter or underwriters, provided that the shares of Common Stock to be
excluded shall be determined in the following sequence: there shall be excluded
(i) first, shares of Common Stock held by security holders of the Issuer
requesting and legally entitled to include such shares of Common Stock in such
registration pursuant to a "piggyback" registration (other than the holders of
Warrant Stock and/or Other Warrant Stock), on a pro rata basis (based upon the
number of shares of Common Stock requested (or proposed) to be registered by
each such holder, (ii) second, to the extent requesting to be included pursuant
to a Piggyback Registration, Warrant Stock and Other Warrant Stock, on a pro
rata basis (based upon the number of shares of Warrant Stock and Other Warrant
Stock requested to be included in such registration), (iii) third, shares of
Common Stock held by security holders of the Issuer requesting and legally
entitled to include such shares of Common Stock in such registration pursuant to
a "demand" registration (other than the holders of Warrant Stock and/or Other
Warrant Stock), on a pro rata basis (based upon the number of shares of Common
Stock requested (or proposed) to be registered by each such holder and (iv)
fourth, to the extent requesting to be included pursuant to a Demand
Registration, Warrant Stock and Other Warrant Stock, on a pro rata basis (based
upon the number of shares of Warrant Stock and Other Warrant Stock requested to
be included in such registration).

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                                      27

                  SECTION 6.03. Registration Procedures. If and whenever the
Issuer is required by the provisions of Section 6.01(a)(i) or, with respect to
subsections (d), (g), (h), (i), (j), (k) and (n) of this Section 6.03, by the
provisions of Section 6.01(a)(i) or 6.01(a)(ii), to use its best efforts to
effect the registration of any of its securities under the Securities Act, the
Issuer shall, as expeditiously as possible,

                  (a) prepare and file with the Commission a registration
         statement with respect to such securities and use its best efforts to
         cause such registration statement to become and remain effective for a
         period of not less than 90 days to permit the sale of such securities
         in accordance with the plan of distribution chosen by the Seller or
         Sellers and the underwriter, if any;

                  (b) prepare and file with the Commission such amendments and
         supplements to such registration statement and the prospectus used in
         connection therewith as may be necessary to keep such registration
         statement effective and to comply with the provisions of the Securities
         Act with respect to the sale or other disposition of all securities
         covered by such registration statement;

                  (c)  promptly notify each Seller and the underwriter or
         underwriters, if any:

                           (i) when such registration statement or any
                  prospectus used in connection therewith, or any amendment or
                  supplement thereto, has been filed and, with respect to such
                  registration statement or any post-effective amendment
                  thereto, when the same has become effective;

                           (ii) of any written comments from the Commission with
                  respect to any filing referred to in clause (i) above and of
                  any written request by the Commission for amendments or
                  supplements to such registration statement or prospectus;

                           (iii) of the notification to the Issuer by the
                  Commission of its initiation of any proceeding with respect to
                  the issuance by the Commission of, or of the issuance by the
                  Commission of, any stop order suspending the effectiveness of
                  such registration statement; and

                           (iv) of the receipt by the Issuer of any notification
                  with respect to the suspension of the qualification of any
                  securities for sale under the applicable securities or blue
                  sky laws of any jurisdiction;

                  (d) furnish to each Seller such registration statement and of
         each amendment and supplement thereto (including all exhibits and
         documents incorporated by reference therein) and such numbers of copies
         of a prospectus, including a preliminary prospectus, in conformity with
         the requirements of the Securities Act, and such other documents, as

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                                      28

         such Seller may reasonably request in order to facilitate the public
         sale or other disposition of the securities owned by such Seller;

                  (e) use its best efforts to register or qualify the securities
         covered by such registration statement under such other securities or
         blue sky laws of such jurisdictions within the United States as each
         Seller shall reasonably request, and do such other reasonable acts and
         things as may be requested of it to enable such Seller to consummate
         the public sale or other disposition in such jurisdictions of the
         securities owned by such Seller, except that the Issuer shall not for
         any such purpose be required to qualify to do business as a foreign
         corporation in any jurisdiction wherein it is not otherwise required to
         be so qualified;

                  (f) use its best efforts to cause the securities covered by
         such registration statement to be registered with or approved by such
         other governmental agencies or authorities as may be necessary to
         enable the Seller or Sellers thereof to consummate the disposition of
         such securities;

                  (g) notify each Seller of any securities covered by such
         registration statement, at any time when a prospectus relating thereto
         is required to be delivered under the Securities Act, of the Issuer's
         becoming aware that the prospectus included in such registration
         statement, as then in effect, includes an untrue statement of a
         material fact or omits to state any material fact required to be stated
         therein or necessary to make the statements therein not misleading in
         the light of the circumstances under which they were made (upon receipt
         of which each Seller agrees to forthwith cease making offers and sales
         of such securities pursuant to such prospectus and to deliver to the
         Issuer any copies of such prospectus then in the possession of such
         Seller), and at the request of any such Seller promptly prepare and
         furnish to such Seller a reasonable number of copies of a prospectus
         supplemented or amended so that, as thereafter delivered to the
         purchasers of such securities, such prospectus shall not include an
         untrue statement of a material fact or omit to state a material fact
         required to be stated therein or necessary to make the statements
         therein not misleading in the light of the circumstances under which
         they were made;

                  (h) make available to its security holders, as soon as
         reasonably practicable, an earnings statement covering the period of at
         least twelve months, but not more than eighteen months, beginning with
         one of the first three months after the effective date of the
         registration statement, which earnings statement shall satisfy the
         provisions of Section 11(a) of the Securities Act;

                  (i)  otherwise use its best efforts to comply with all
         applicable rules and regulations of the Commission;

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                                      29

                  (j) use its best efforts to list such securities on any
         securities exchange on which the Common Stock is then listed, or, if
         not so listed, on a national securities exchange, if the listing of
         such securities is then permitted under the rules of such exchange;

                  (k) provide a transfer agent and registrar for all the
         securities covered by such registration statement not later than the
         effective date of such registration statement;

                  (l) enter into such agreements and take such other actions as
         the Seller or Sellers shall reasonably request in order to expedite or
         facilitate the disposition of such securities;

                  (m) obtain an opinion from the Issuer's counsel and a "cold
         comfort" letter from the Issuer's independent public accountants in
         customary form and covering such matters as the Seller or Sellers shall
         reasonably request;

                  (n) make available for inspection by any Seller of securities
         covered by such registration statement, by any underwriter
         participating in any disposition to be effected pursuant to such
         registration statement and by any attorney, accountant or other agent
         retained by any such Seller or any such underwriter, all pertinent
         financial and other records, pertinent corporate documents and
         properties of the Issuer, and cause all of the Issuer's officers,
         directors and employees to supply all information reasonably requested
         by any such Seller, underwriter, attorney, accountant or agent in
         connection with such registration statement; and

                  (o) permit any Seller of securities covered by such
         registration statement to require the insertion therein of material,
         furnished to the Issuer in writing, which in the reasonable judgment of
         such Seller should be included.

If any such registration or comparable statement refers to any Seller by name or
otherwise as the holder of any securities of the Issuer, then such Seller shall
have the right to require (x) the insertion therein of language, in form and
substance satisfactory to such Seller, to the effect that the holding by such
Seller of such securities is not to be construed as a recommendation by such
Seller of the investment quality of the Issuer's securities covered thereby and
that such holding does not imply that such Seller will assist in meeting any
future financial requirements of the Issuer, or (y) in the event that such
reference to such Seller by name or otherwise is not required by the Securities
Act or the Commission, the deletion of the reference to such Seller.

                  The Issuer may require each Seller of securities to, and each
such Seller, as a condition to including securities in such registration, shall,
furnish the Issuer with such information and affidavits regarding such Seller
and the distribution of such securities as the Issuer may from time to time
reasonably request in writing in connection with such registration. No Seller
may participate in any underwritten registration hereunder unless such Seller

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                                      30

(x) agrees to sell such Seller's securities on the basis provided in any
underwriting arrangements approved by the Persons entitled hereunder to approve
such arrangements and (y) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements and these
registration rights.

                  Each Seller of securities agrees that upon receipt of any
notice from the Issuer of the happening of any event of the kind described in
Section 6.03(g), such Seller will forthwith discontinue such Seller's
disposition of securities pursuant to the registration statement relating to
such securities until such Seller's receipt of the copies of the supplemented or
amended prospectus contemplated by Section 6.03(g) and, if so directed by the
Issuer, will deliver to the Issuer (at the Issuer's expense) all copies, other
than permanent file copies, then in such Seller's possession of any prospectus
relating to such securities at the time of receipt of such notice.

                  SECTION 6.04. Registration Expenses. All expenses incident to
the Issuer's performance of or compliance with this Article VI, including
without limitation all (i) registration and filing fees, fees and expenses
associated with filings required to be made with the NYSE or NASD, (ii) fees and
expenses of compliance with securities or blue sky laws (including reasonable
fees and disbursements of counsel for the underwriters, if any, or selling
holders in connection with blue sky qualifications of the Warrant Stock and
Other Warrant Stock and determination of their eligibility for investment under
the laws of such jurisdictions as the managing underwriters, if any, or holders
of a majority of the Warrant Stock and the Other Warrant Stock being sold may
reasonably designate, provided that the Holders and the Other Holders
collectively shall be entitled to reimbursement for only one counsel in
connection with each registration), (iii) printing expenses (including expenses
of printing certificates for the Warrant Stock and the Other Warrant Stock in a
form eligible for deposit with The Depository Trust Company and of printing
prospectuses), (iv) fees and disbursements of counsel for the Issuer and
customary out of pocket expenses and fees paid by issuers to the extent provided
for in an underwriting agreement or otherwise (excluding discounts, commissions
or fees of underwriters, selling brokers, dealer managers or similar securities
industry professionals relating to the distribution of the Warrant Stock and
Other Warrant Stock, transfer taxes or legal expenses of any Person other than
the Issuer and the selling holders), (v) the cost of securities acts liability
insurance if the Issuer so desires and (vi) fees and expenses of other Persons
retained by the Issuer (all such expenses being herein called "Registration
Expenses") will be borne by the Issuer regardless of whether the Registration
Statement becomes effective. Each holder of Warrant Stock and Other Warrant
Stock will pay any fees or disbursements of counsel to such holder and all
underwriting discounts and commissions and transfer taxes, if any, and other
fees, costs and expenses of such holder (other than Registration Expenses)
relating to the sale or disposition of such holder's Warrant Stock or Other
Warrant Stock, as the case may be. The Issuer, in any event, will pay the
Issuer's own internal expenses (including, without limitation, all salaries and
expenses of its officers and employees performing legal or accounting duties),
the expense of any annual audit, the fees and expenses incurred in connection
with the listing of the

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                                      31

securities to be registered on each securities exchange on which similar
securities issued by the Issuer are then listed, rating agency fees and the
fees and expenses of any Person, including special experts, retained by the
Issuer.

                  SECTION 6.05. Indemnification. (a) In the event of any
registration of any of its securities under the Securities Act pursuant to this
Article VI, the Issuer shall, to the full extent permitted by law, indemnify and
hold harmless each Seller of such securities, its directors, officers and
employees, and each other Person, if any, who controls such Seller within the
meaning of Section 15 of the Securities Act, against any losses, claims,
damages, liabilities or expenses ("Losses") to which such Seller or any such
director, officer or controlling Person may become subject under the Securities
Act or otherwise, insofar as such Losses (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in any registration statement under which such
securities were registered under the Securities Act, any preliminary prospectus,
final prospectus or summary prospectus contained therein, or any amendment or
supplement thereto, or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein (in the case of a prospectus, in light of the circumstances under which
there were made) not misleading, and shall reimburse such Seller or such
director, officer or controlling Person for any legal or any other expenses
reasonably incurred by such Seller or such director, officer or controlling
Person in connection with investigating or defending any such Loss; provided
that the Issuer shall not be liable in any such case to the extent that any such
Loss arises out of or is based upon any untrue statement or alleged untrue
statement or omission or alleged omission made in such registration statement,
preliminary prospectus, final prospectus, summary prospectus or amendment or
supplement in reliance upon and in conformity with written information furnished
by such Seller to the Issuer stating that it is for inclusion therein by such
Seller; provided further that with respect to any untrue statement or omission
or alleged untrue statement or omission made in any preliminary prospectus, the
indemnity agreement contained in this paragraph shall not apply to the extent
that any such Loss results from the fact that a current copy of the prospectus
was not sent or given to the Person asserting any such Loss at or prior to the
written confirmation of the sale of the securities concerned to such Person if
the Issuer had prior thereto given such Seller the notice referred to in Section
6.03(g) and provided to such Seller a supplemented or amended prospectus as
contemplated by Section 6.03(g), and such current copy of the prospectus would
have cured the defect giving rise to such Loss. Such indemnity shall remain in
full force and effect regardless of any investigation made by or on behalf of
such Seller or such director, officer or controlling Person, and shall survive
the transfer of such securities by such Seller.

                  (b) Each Seller of securities which are included in a
registration statement hereunder, as a condition to including securities in such
registration statement, shall, to the full extent permitted by law, indemnify
and hold harmless the Issuer, its directors and officers and each other Person,
if any, who controls the Issuer within the meaning of Section 15 of the
Securities Act, against any Losses to which the Issuer or any such director,
officer or controlling

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                                      32

Person may become subject under the Securities Act or otherwise, insofar as
such Losses (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
such registration statement, any preliminary prospectus, final prospectus or
summary prospectus contained therein, or any amendment or supplement thereto,
or any omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein (in the case
of a prospectus, in the light of the circumstances under which they were made)
not misleading, if such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity with
written information furnished by such Seller to the Issuer stating that it is
specifically for use therein; provided, however, that the obligation to provide
indemnification pursuant to this Section 6.05(b) shall be several, and not
joint and several, among such Sellers on the basis of the number of securities
included by each in such registration statement and the aggregate amount which
may be recovered from any holder of securities pursuant to the indemnification
provided for in this Section 6.05(b) in connection with any sale of securities
shall be limited to the total proceeds received by such holder from the sale of
such securities. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of the Issuer or any such
other Person and shall survive the transfer of such securities by such Seller.

                  (c) Promptly after receipt by any Person entitled to
indemnification under this Section (an "Indemnified Party") of notice of the
commencement of any action, such Person shall, if a claim in respect thereof is
to be made against any other Person (an "Indemnifying Party") for indemnity
under this Section 6.05, notify the Indemnifying Party in writing of the
commencement thereof; but the omission so to notify the Indemnifying Party shall
not relieve it from any liability which it may have to any Indemnified Party,
except to the extent that the Indemnifying Party is prejudiced thereby. The
Indemnifying Party may, upon being notified of such action, assume the defense
thereof, with counsel satisfactory to such Indemnified Party, and, after such
assumption, the Indemnifying Party shall not be liable to such Indemnified Party
under this Section 6.05 for any legal expenses of other counsel or any other
expenses, in each case subsequently incurred by such Indemnified Party, in
connection with the defense thereof; provided, however, that the Indemnifying
Party may not assume the defense of the action, and shall remain liable to the
Indemnified Party for its legal expenses of counsel and other expenses, in the
event that the Indemnified Party reasonably determines that a conflict of
interest may exist between the Indemnified Party and the Indemnifying Party. No
Indemnifying Party shall consent to entry of any judgment or enter into any
settlement of the relevant claim or litigation without the consent of the
Indemnified Party which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party of a release from
all liability in respect to such claim or litigation.

                  (d) If the indemnification provided for in this Section 6.05
is unenforceable although available, or insufficient to hold harmless an
Indemnified Party hereunder for any Losses (or actions in respect thereof) in
respect of which the provisions of Section 6.05(a) or (b)

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                                      33

would otherwise apply by their terms, then the Indemnifying Party shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such Losses (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party on the one
hand and the Indemnified Party on the other hand in connection with the
statements or omissions which resulted in such Losses (or actions in respect
thereof), as well as any other relevant equitable considerations. The relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact relates to information
supplied by the Indemnifying Party on the one hand or such Indemnified Party on
the other hand and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The parties agree that it would not be just and equitable if contribution
pursuant to this subsection were determined by pro rata allocation or by any
other method of allocation which does not take account of the equitable
considerations referred to in this subsection. The amount paid or payable as a
result of the Losses (or actions in respect thereof) referred to above in this
subsection shall be deemed to include any legal or other expenses reasonably
incurred by such Indemnified Party in connection with investigating or
defending any such action or claim. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.

                  SECTION 6.06. No Other Registration Rights. The Issuer shall
not hereafter, without the consent of the Required Holders, grant any
registration rights to any holder of Securities in respect of such Securities if
such registration rights would rank senior to, or otherwise adversely affect,
the registration rights granted in this Article VI. This Section 6.06 shall not
prohibit the grant of registration rights to others on a "pari passu" basis with
those granted in this Article VI.

                                 ARTICLE VII

                               TAG-ALONG SALE

                  SECTION 7.01. Tag-Along Rights. (a) If at any time prior to
the third anniversary of the Issuance Date any Principal Shareholder or any
Related Party thereof (each a "Tag-Along Seller") shall enter into an agreement
to effect, or effect or propose to effect, any sale, transfer or other
disposition of Common Stock owned by such Principal Shareholder or Related Party
to any other Person (a "Tag-Along Sale"), each Holder of Warrants or Warrant
Stock shall have the right, but not the obligation, to participate in such
Tag-Along Sale by selling up to the number of shares (on an aggregate basis) of
Warrant Stock issued upon exercise of Warrants equal to the product of (i) the
total number of shares (on an aggregate basis) of Common Stock proposed to be
sold in the proposed Tag-Along Sale multiplied by (ii) a fraction, the numerator
of which is equal to the number of shares (on an aggregate basis) of Warrant
Stock owned by such Holder immediately prior to such Tag-Along Sale, and the
denominator of which is equal to (A) the number of shares (on an aggregate
basis) of Common Stock (and Common Stock then issuable under Options and
Convertible Securities) owned by the Tag-Along Seller immediately prior to such
Tag-Along Sale plus (B) the number of shares (on an aggregate basis) of Warrant
Stock owned by such Holder together with the number of shares (on an aggregate
basis) of Common Stock (and Common

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                                      34

Stock then issuable under Options and Convertible Securities) owned by any
holder thereof who has similar "tag-along" rights and elects to exercise such
rights in connection with the Tag-Along Sale, in each case immediately prior to
the Tag-Along Sale. Any such sales by such Holder shall be on the same terms
and conditions as the proposed Tag-Along Sale by the Tag-Along Seller, except
such Holder shall not be required to make any representations or warranties
other than with respect to (x) its title to and ownership of the shares of
Warrant Stock to be sold by it in such Tag-Along Sale, (y) such Holder's power
and authority to effect such transfer and (z) such matters pertaining to
compliance with securities law as the transferee of such Warrant Stock may
reasonably require. As a condition to participating in such Tag-Along Sale, any
such Holder proposing to sell Warrant Stock in such sale must exercise its
Warrants to acquire Common Stock representing such Warrant Stock. No Person
shall have the right to sell Warrants in any Tag-Along Sale.

                  (b)  Notwithstanding the foregoing, the provisions of Sections
7.01(a) and 7.02 shall not apply to the following:

                  (I) any transfer, sale or disposition of any shares of Common
         Stock by any Principal Shareholder or any Related Party thereof:

                           (i) to any Related Party of such Principal
                  Shareholder (or, in the case of any such Related Party, to
                  such Principal Shareholder), provided that prior to the
                  consummation of such transfer, sale or disposition, the
                  transferee (if not already party to a Joinder Agreement) shall
                  have entered into a Joinder Agreement);

                           (ii) in connection with any tender offer or other
                  disposition of Common Stock in connection with any business
                  combination involving the Issuer in which the Shareholders
                  generally shall have the right to participate;

                           (iii) by gift, to trusts and family partnerships for
                  estate or charitable planning purposes, by will or as a result
                  of inheritance laws;

                           (iv) in a registered public offering; and

                  (II) any other transfer, sale or disposition of any shares of
         Common Stock by any Principal Shareholder or any Related Party thereof
         (other than those permitted under clause (I) above); provided that the
         total aggregate number of shares transferred, sold or disposed of by
         such Principal Shareholder and its Related Parties under this clause
         (II) after the Issuance Date shall not be more than 10% of the then
         issued and outstanding Common Stock on a fully diluted basis.

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                              -----------------



                                      35

                  (c) On the date of execution of this Agreement the Issuer
shall deliver to the Initial Holders a joinder agreement substantially in the
form attached hereto as Annex 3 (a "Joinder Agreement"), executed by each
Principal Shareholder and each Related Party of such Principal Shareholder that
owns Common Stock, pursuant to which such parties will agree to be bound by the
provisions of this Article VII. As a condition to the validity of any sale,
disposition or other transfer of any Common Stock by any Person which has
executed and delivered a Joinder Agreement pursuant to this Section 7.01(c) to
any other Person which, after giving effect thereto, together with its Related
Parties would constitute a Principal Shareholder, such other Person (and each of
its Related Parties that owns Common Stock) shall execute and deliver to the
Issuer and each Holder a Joinder Agreement.

                  SECTION 7.02. Procedures. If a Tag-Along Seller is
participating in a Tag-Along Sale, at least 30 days before the proposed date
thereof, the Issuer shall provide each Holder of Warrants or Warrant Stock with
written notice of such Tag-Along Sale (a "Tag-Along Sale Notice") setting forth
in reasonable detail the consideration per share to be paid by the transferee,
the number of shares to be sold and the other terms and conditions of the
Tag-Along Sale. Each Holder of Warrants or Warrant Stock wishing to participate
in the Tag-Along Sale shall provide written notice (a "Tag-Along Participation
Notice") to such Tag-Along Seller and to the Issuer within 15 days of the date
the Tag-Along Sale Notice is deemed to have been received by such Holder. The
Tag-Along Participation Notice shall set forth the number of shares (on an
aggregate basis) of Warrant Stock, if any, such Holder elects to include in the
Tag-Along Sale. If a Holder, or Holders, of Warrants or Warrant Stock has
elected to participate in a Tag-Along Sale, the Tag-Along Seller shall reduce,
to the extent necessary, the number of shares of Common Stock that it is
entitled to sell in the Tag-Along Sale to permit the Holder, or Holders, of
Warrants or Warrant Stock to participate in the Tag-Along Sale and the Holder,
or Holders, of Warrant or Warrant Stock so electing shall sell in the Tag-Along
Sale such number of shares identified in its Tag-Along Participation Notice. If
the Tag-Along Participation Notice is not received from a Holder within the
15-day period specified above, the Tag-Along Seller shall have the right to sell
or otherwise transfer the shares of Common Stock to the proposed transferee
without any participation by such Holder, but only (i) on the terms and
conditions stated in the Tag-Along Sale Notice, and (ii) if the sale or transfer
of such shares of Common Stock is consummated not later than 60 days after the
end of such 15-day period specified above.

                  SECTION 7.03. Amendment of Article VII. No provision of this
Article VII may be amended without the written consent of each of the Principal
Shareholders and its Related Parties which is subject to the requirements of
this Article VII.

                                ARTICLE VIII

                               HOLDERS' RIGHTS

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                              -----------------



                                      36

                  SECTION 8.01. Delivery Expenses. If any Holder surrenders any
certificate for Warrants or Warrant Stock to the Issuer or a transfer agent of
the Issuer for exchange for instruments of other denominations or registered in
another name or names, the Issuer shall cause such new instruments to be issued
and shall pay the cost of delivering to or from the office of such Holder from
or to the Issuer or its transfer agent, duly insured, the surrendered instrument
and any new instruments issued in substitution or replacement for the
surrendered instrument.

                  SECTION 8.02. Taxes. The Issuer shall pay all taxes (other
than federal, state, local or foreign income, gross receipts, excise, severance,
capital stock, franchise, profits, withholding, personal property, sales, use,
transfer, registration, value added and alternative or add-on minimum taxes)
which may be payable in connection with the execution and delivery of this
Agreement or the issuance of the Warrants and Warrant Stock hereunder or in
connection with any modification of this Agreement or the Warrants and shall
hold each Holder harmless without limitation as to time against any and all
liabilities with respect to all such taxes. The obligations of the Issuer under
this Section 8.02 shall survive any redemption, repurchase or acquisition of
Warrants or Warrant Stock by the Issuer, any termination of this Agreement, and
any cancellation or termination of the Warrants.

                  SECTION 8.03.  Replacement of Instruments.  Upon receipt by
the Issuer of evidence reasonably satisfactory to it of the ownership of and the
loss, theft, destruction or mutilation of any certificate or instrument
evidencing any Warrants or Warrant Stock, and

                 (a) in the case of loss, theft or destruction, of indemnity
         reasonably satisfactory to it (provided that if the Common Stock is not
         at the time publicly traded and the owner of the same is any Holder or
         an institutional lender or investor, its own agreement of indemnity
         shall be deemed to be satisfactory), or

                 (b)  in the case of mutilation, upon surrender or cancellation
         thereof, the Issuer, at its expense, shall execute, register and
         deliver, in lieu thereof, a new certificate or instrument for (or
         covering the purchase of) an equal number of Warrants or Warrant Stock.

                  SECTION 8.04. Indemnification. The Issuer shall indemnify and
hold harmless each of the Holders and each of their respective directors,
officers, employees, shareholders, Affiliates and agents (each, an "indemnified
person") on demand from and against any and all losses, claims, damages,
liabilities (or actions or other proceedings commenced or threatened in respect
thereof) and expenses that arise out of, result from, or in any way relate to,
any claim, proceeding or other action made, brought or threatened against an
indemnified person relating to this Agreement or the Warrants, or in connection
with the other transactions contemplated hereby, and to reimburse each
indemnified person, upon its demand, for any reasonable legal or other expenses
incurred in connection with investigating, defending or participating in the

                              Warrant Agreement
                              -----------------



                                      37

defense of any such loss, claim, damage, liability, action or other proceeding
(whether or not such indemnified person is a party to any action or proceeding
out of which any such expenses arise), other than any of the foregoing claimed
by any indemnified person to the extent incurred by reason of the gross
negligence or willful misconduct of such indemnified person. No indemnified
person shall be responsible or liable to either the Issuer or any other Person
for any damages which may be alleged as a result of or relating to this
Agreement or the Warrants (other than in connection with a breach of this
Agreement), or in connection with the other transactions contemplated hereby and
thereby. Any claim for indemnity in connection with or relating to a
registration of securities pursuant to Article VI shall be governed by Section
6.05, without regard to the provisions of this Section 8.04. No indemnified
person shall consent to entry of any judgment or enter into any settlement of
the relevant claim or litigation without the consent of the Issuer (such consent
not to be unreasonably withheld) that does not include as an unconditional term
thereof the giving by the claimant or plaintiff to the Issuer of a release from
all liability in respect to such claim or litigation.

                  SECTION 8.05. Inspection Rights. At any time prior to the
fifth anniversary of the Issuance Date, the Issuer shall afford, and shall cause
its Subsidiaries to afford, any Holder or its authorized agents, access, at
reasonable times, upon reasonable prior notice, (a) to inspect the books and
records of the Issuer and its Subsidiaries, (b) to discuss with management of
the Issuer and its Subsidiaries the business and affairs of the Issuer and its
Subsidiaries and (c) to inspect the properties of the Issuer and its
Subsidiaries, subject in each case to the provisions of Section 10.12(b) of the
Credit Agreement. At the request of the Issuer, if a Holder is not bound by such
Section 10.12(b), such Holder shall execute and deliver a confidentiality
agreement with the Issuer on substantially the same terms as set forth in said
Section 10.12(b).

                                 ARTICLE IX

                        OTHER COVENANTS OF THE ISSUER

         The Issuer agrees with each Holder that, so long as any of the Warrants
and/or Warrant Stock shall be outstanding and held by a Holder, provided that
the covenants set forth below shall expire not later than the fifth anniversary
of the Issuance Date:

                  SECTION 9.01. Financial Statements, Etc. The Issuer covenants
that it will file the reports required to be filed by it under the Securities
Act and the Exchange Act and the rules and regulations adopted by the Commission
thereunder (or, if it is not required to file such reports, it will, upon the
request of the Required Holders, make publicly available other information so
long as necessary to permit sales pursuant to Rule 144 under the Securities
Act), and it will take such further action as any Holder may reasonably request,
all to the extent required from time to time to enable such Holder to sell
Warrants or Warrant Stock without registration under the Securities Act within
the limitation of the exemptions provided by (a) Rule

                              Warrant Agreement
                              -----------------



                                      38

144 under the Securities Act, as such Rule may be amended from time to time, or
(b) any similar rule or regulation hereafter adopted by the Commission. Upon
the request of any Holder, the Issuer will deliver to such Holder a written
statement as to whether it has complied with such information and filing
requirements.

                  SECTION 9.02. Related Party Transactions. The Issuer and its
Subsidiaries shall not, directly or indirectly, enter into any agreement or
transaction with any stockholder owning 10% or more of the Common Stock then
outstanding, officer or director of the Issuer, or any "affiliate" or
"associate" of such persons (as such terms are defined in rules and regulations
promulgated under the Securities Act), including, without limitation, any
agreement or transaction providing for the transfer of assets to, transfer of
opportunities in the Issuer's business to, rental of property from, or otherwise
requiring payments to, any such person or entity, without in each case the
approval of at least a majority of the members of the Board or a committee
thereof duly appointed to act with respect to such matter on behalf of the Board
having no interest in such agreement or transaction.

                  SECTION 9.03. Restrictions on Performance. The Issuer shall
not at any time enter into an agreement or other instrument limiting in any
manner its ability to perform its obligations under this Agreement or the
Warrants, or making such performance or the issuance of Warrant Stock upon the
exercise of any Warrant a default under any such agreement or instrument.

                  SECTION 9.04. Modification of Other Equity Documents. The
Issuer shall not amend or consent to any modification, supplement or waiver of
any provision of any Other Equity Documents in any manner which would have a
material adverse effect on the holders of Warrants or Warrant Stock, in each
case without the prior written consent of the Required Holders. Without limiting
the generality of the foregoing, the Issuer shall not amend, or consent to any
modification, supplement or waiver of any provision of any Other Equity
Documents in a way which would (i) restrict the transferability of the Warrants
or the Warrant Stock, (ii) restrict the transferability of the rights of any
Holder in this Agreement to any transferee of all or a portion of such Holder's
Warrants and/or Warrant Stock or (iii) require any consent or other approval of
any Person to the exercise of the Warrants by any Holder or the issuance of
Warrant Stock upon such exercise.

                  SECTION 9.05. Reservation and Authorization of Common Stock.
The Issuer shall at all times reserve and keep available for issue upon the
exercise or conversion of Warrants such number of its authorized but unissued
shares of Common Stock as will be sufficient to permit the exercise in full of
all outstanding Warrants. The Issuer shall not amend the provisions of its
certificate of incorporation governing the Common Stock other than (i) to
increase or decrease the number of shares of authorized capital stock (subject
to the provisions of the preceding sentence) or (ii) to decrease the par value
of any shares of Common Stock. All shares of Common Stock which shall be so
issuable, when issued upon exercise of any Warrant and

                              Warrant Agreement
                              -----------------



                                      39

payment of the applicable Exercise Price therefor in accordance with the terms
of this Warrant, shall be duly and validly issued, fully paid and nonassessable
and free and clear of any Liens (other than those arising under operation of
applicable securities laws).

                  Before taking any action which would result in an adjustment
in the number of shares of Common Stock comprising a Stock Unit or which would
cause an adjustment reducing the Current Warrant Price per share of Common Stock
below the then par value, if any, of the shares of Common Stock issuable upon
exercise of the Warrants, the Issuer shall take any corporate action which is
necessary in order that the Issuer may validly and legally issue fully paid and
nonassessable shares of Common Stock free and clear of any Liens (other than
those arising under operation of applicable securities laws) upon the exercise
of all the Warrants immediately after the taking of such action.

                  Before taking any action which would result in an adjustment
in the number of shares of Common Stock comprising a Stock Unit or in the
Current Warrant Price per share of Common Stock, the Issuer shall obtain all
such authorizations or exemptions thereof, or consents thereto, as may be
necessary from any public regulatory body or bodies having jurisdiction thereof.

                  Promptly following the execution of this Agreement, the Issuer
will use best efforts to list on each national securities exchange on which any
Common Stock may at any time be listed, subject to official notice of issuance
upon exercise of the Warrants, and will maintain such listing of, all shares of
Common Stock from time to time issuable upon the exercise of the Warrants, and
as soon as reasonably practicable following completion of each such listing the
Issuer will notify the Holders thereof.

                  SECTION 9.06. Notice of Expiration Date. The Issuer shall give
                                -------------------------
to each Holder notice of the Expiration Date. Such notice may be given by the
Issuer not less than 30 days but not more than 60 days prior to the Expiration
Date; provided that if the Issuer fails to give timely notice, the Expiration
Date will be extended to the date which is 30 days after the day on which such
notice is deemed received.

                  SECTION 9.07. Documentation of Subsequent Warrants. The Issuer
                                ------------------------------------
and the Initial Holders agree that the Issuer shall document any additional
warrants to purchase shares of Common Stock granted hereafter pursuant to
Section 6.12 of the Credit Agreement in substantially the same form as the
Warrants issued hereunder and pursuant to a warrant agreement in substantially
the same form as this Agreement.

                                    ARTICLE X

                                  MISCELLANEOUS
                                  -------------

                                  Warrant Agreement
                                  -----------------



                                      40

                  SECTION 10.01. Waiver. No failure on the part of any Holder to
                                 ------
exercise and no delay in exercising, and no course of dealing with respect to,
any right, power or privilege under this Agreement or the Warrants shall operate
as a waiver thereof, nor shall any single or partial exercise of any right,
power or privilege under this Agreement or the Warrant preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
The remedies provided herein are cumulative and not exclusive of any remedies
provided by law.

                  SECTION 10.02. Notices. (a) All notices, requests and other
                                 -------
communications provided for herein and in the Warrants (including any waivers or
consents under this Agreement and the Warrants) shall be given or made in
writing, (i) to any party hereto, delivered to the intended recipient at the
"Address for Notices" specified below its name on the signature pages hereof;
or, as to any party, at such other address as shall be designated by such party
in a written notice to each other party, or (ii) to any other Person who is the
registered Holder of any Warrants or Warrant Stock, to the address for such
Holder as it appears in the stock or warrant ledger of the Issuer.

                  (b) All such notices, requests and other communications shall
be deemed received on the date on which they are personally delivered, sent by
courier guaranteeing overnight delivery or sent by registered or certified mail,
return receipt requested, postage prepaid, in each case given or addressed as
aforesaid.

                  SECTION 10.03. Expenses, Etc. The Issuer agrees to pay or
                                 --------------
reimburse the Holders for: (a) all reasonable out-of-pocket costs and expenses
of the Holders (including the reasonable fees and expenses of Milbank, Tweed,
Hadley & McCloy LLP, special New York counsel to JPMorgan Chase Bank and its
Affiliates, but not the fees and expenses of counsel to any other Holder), in
connection with (i) the negotiation, preparation, execution and delivery of this
Agreement and the issuance of Warrants hereunder and (ii) any amendment,
modification or waiver of (or consents in respect of) any of the terms of this
Agreement and/or the Warrants; and (b) all costs and expenses of the Holders
(including reasonable legal fees and expenses) in connection with (i) any
default by the Issuer hereunder or under the Warrants or any enforcement
proceedings resulting therefrom and (ii) the enforcement of this Section 10.03.

                  SECTION 10.04. Amendments, Etc. Except as otherwise expressly
                                 ----------------
provided in this Agreement, any provision of this Agreement and any Warrant or
Warrant certificate issued hereunder may be amended or modified only by an
instrument in writing signed by the Issuer and the Required Holders; provided
                                                                     --------
that (a) the consent of the holders of any class of Warrant Stock or Warrants
shall not be required with respect to any amendment or waiver which does not
affect the rights or benefits of such class under this Agreement, and (b) no
such amendment or waiver shall, without the written consent of all Holders of
such Warrant Stock and Warrants at the time outstanding, amend this Section
10.04.

                                  Warrant Agreement
                                  -----------------



                                      41

                  SECTION 10.05.  Successors and Assigns.  This Agreement shall
                                  ----------------------
 be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns.

                  SECTION 10.06. Survival. All representations and warranties
                                 --------
made by the Issuer herein or in any certificate or other instrument delivered by
it or on its behalf under this Agreement shall be considered to have been relied
upon by the Holders and shall survive the issuance of the Warrants or the
Warrant Stock regardless of any investigation made by or on behalf of the
Holders. All statements in any such certificate or other instrument so delivered
shall constitute representations and warranties by the Issuer hereunder. All
representations and warranties made by the Holders herein shall be considered to
have been relied upon by the Issuer and shall survive the issuance to the
Holders of the Warrants or the Warrant Stock regardless of any investigation
made by the Issuer or on its behalf.

                  SECTION 10.07. Specific Performance. Damages in the event of
                                 --------------------
breach of this Agreement by a Holder or the Issuer would be difficult, if not
impossible, to ascertain, and it is therefore agreed that each Holder and the
Issuer, in addition to and without limiting any other remedy or right it may
have, will have the right to an injunction or other equitable relief in any
court of competent jurisdiction, enjoining any such breach, and enforcing
specifically the terms and provisions hereof, and each Holder and the Issuer
hereby waives any and all defenses it may have on the ground of lack of
jurisdiction or competence of the court to grant such an injunction or other
equitable relief. The existence of this right will not preclude the Holders or
the Issuer from pursuing any other rights and remedies at law or in equity which
the Holders or the Issuer may have.

                  SECTION 10.08. Captions. The captions and section headings
                                 --------
appearing herein are included solely for convenience of reference and are not
intended to affect the interpretation of any provision of this Agreement.

                  SECTION 10.09. Counterparts. This Agreement may be executed in
                                 ------------
any number of counterparts, all of which when taken together shall constitute
one and the same instrument and any of the parties hereto may execute this
Agreement by signing any such counterpart signature page or counterpart.

                  SECTION 10.10. Governing Law. This Agreement shall be governed
                                 -------------
by, and construed in accordance with, the law of the State of New York without
giving effect to the conflicts of law principles thereof, except to the extent
that New York conflicts of laws principles would apply the Delaware General
Corporation Law to matters relating to corporations organized thereunder.

                  SECTION 10.11. Severability. If any provision of this
                                 ------------
Agreement is held to be illegal, invalid or unenforceable under any present or
future law, and if the rights or obligations

                                  Warrant Agreement
                                  -----------------



                                      42

of any party hereto under this Agreement will not be materially and adversely
affected thereby, (a) such provision will be fully severable, (b) this
Agreement will be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part hereof, (c) the remaining
provisions of this Agreement will remain in full force and effect and will not
be affected by the illegal, invalid or unenforceable provision or by its
severance herefrom and (d) in lieu of such illegal, invalid or unenforceable
provision, there will be added automatically as a part of this Agreement a
legal, valid and enforceable provision as similar in terms to such illegal,
invalid or unenforceable provision as may be possible.

                  SECTION 10.12. Entire Agreement. This Agreement supersedes all
                                 ----------------
prior discussions and agreements between the parties with respect to the subject
matter hereof and, together with the Warrants, contains the sole and entire
agreement between the parties hereto with respect to the subject matter hereof.

                  SECTION 10.13. Rights of Holders of Warrants. Nothing herein
                                 -----------------------------
or in any Warrant shall be construed as conferring upon any Holder of Warrants
in its capacity as such (prior to the exercise of such Warrants) the right to
vote or to consent or to receive notice as a Shareholder in respect of meetings
of Shareholders or the election of directors of the Issuer or any other matter,
or any rights whatsover as Shareholders.

                                  Warrant Agreement
                                  -----------------



                                      43

                  IN WITNESS WHEREOF, the parties hereto have duly executed this
Warrant Agreement as of the date first above written.

                                               CHART INDUSTRIES, INC.

                                               By___________________________

                                                  Name:
                                                  Title:

                                               Address for Notices:
                                               -------------------

                                               Chart Industries, Inc.
                                               5885 Landerbrook Dr.
                                               Suite 150
                                               Mayfield Heights, OH 44124
                                               Attention: Chief Financial
                                               Officer

                                  Warrant Agreement
                                  -----------------



                                      44

                                               INITIAL HOLDERS
                                               ---------------

                                               JPMORGAN CHASE BANK

                                               By___________________________

                                                  Name:
                                                  Title:

                                               Address for Notices:
                                               -------------------

                                               JP Morgan Chase Bank
                                               270 Park Avenue, 20th Floor
                                               New York, New York 10017

                                  Warrant Agreement
                                  -----------------



                                      45

                                               NATIONAL CITY BANK

                                               By___________________________

                                                  Name:
                                                  Title:

                                               Address for Notices:
                                               -------------------

                                               National City Bank
                                               1900 East Ninth Street - Loc.
                                               2083
                                               Cleveland, OH 44114-3484

                                  Warrant Agreement
                                  -----------------



                                      46

                                               BANK ONE, MICHIGAN

                                               By___________________________

                                                  Name:
                                                  Title:

                                               Address for Notices:
                                               -------------------

                                               Bank One NA
                                               IL1-0631
                                               1 Bank One Plaza
                                               Chicago, IL 60670

                                               Attn: Gaye Plunkett

                                  Warrant Agreement
                                  -----------------



                                      47

                                               VAN KAMPEN PRIME RATE INCOME
                                               TRUST

                                               By: Van Kampen Advisory
                                               Investment Corp.

                                               By___________________________

                                                  Name:
                                                  Title:

                                               Address for Notices:
                                               -------------------

                                               Van Kampen
                                               One Parkview Plaza
                                               Oakbrook Terrace, IL 60181

                                               Attn: Brian Buscher

                                               -and-

                                               State Street Bank & Trust
                                               Corporate Trust Department
                                               P.O. Box 778
                                               Boston, MA 02102

                                               Attn: Anne Chlebnik

                                  Warrant Agreement
                                  -----------------



                                      48

                                               SENIOR DEBT PORTFOLIO

                                               By: Boston Management and
                                               Research,
                                                   as Investment Advisor

                                               By___________________________

                                                  Name:
                                                  Title:

                                               Address for Notices:
                                               -------------------

                                               Senior Debt Portfolio
                                               c/o Boston Management and
                                               Research
                                               255 State Street, 6th Floor
                                               Boston, MA 02109

                                  Warrant Agreement
                                  -----------------



                                      49

                                               U.S. BANK NATIONAL ASSOCIATION

                                               By___________________________

                                                  Name:
                                                  Title:

                                               Address for Notices:
                                               -------------------

                                               Greg Wilson
                                               U.S. Bank
                                               U.S. Bancorp Center
                                               800 Nicollet Mall
                                               Minneapolis, MN 55402

                                  Warrant Agreement
                                  -----------------



                                      50

                                               UNION BANK OF CALIFORNIA, N.A.

                                               By___________________________

                                                  Name:
                                                  Title:

                                               Address for Notices:
                                               -------------------

                                               Union Bancal Equities
                                               Attention: Corinne Heyning, V.P.
                                               445 South Figueroa Street, 21st
                                               Floor
                                               Los Angeles, CA 90071
                                               (213) 236-6566

                                  Warrant Agreement
                                  -----------------



                                      51

                                               FLEET NATIONAL BANK

                                               By___________________________

                                                  Name:
                                                  Title:

                                               Address for Notices:
                                               -------------------

                                               John J. Quintal
                                               FleetBoston Financial Corp.
                                               175 Federal St., 10th Floor
                                               Boston, MA 02110

                                  Warrant Agreement
                                  -----------------



                                      52

                                               GENERAL ELECTRIC CAPITAL
                                               CORPORATION

                                               By___________________________

                                                  Name:
                                                  Title:

                                               Address for Notices:
                                               -------------------

                                               Amanda J. vanHeyst
                                               General Electric Capital
                                               Corporation
                                               6 High Ridge Park, Building 6C
                                               Stamford, CT 06927

                                               -and-

                                               Jordan Dickstein
                                               UBS Paine Webber
                                               1285 Avenue of the Americas
                                               20th Floor
                                               New York, NY 10019-6028

                                  Warrant Agreement
                                  -----------------



                                      53

                                               HARRIS TRUST AND SAVINGS BANK

                                               By___________________________

                                                  Name:
                                                  Title:

                                               Address for Notices:
                                               -------------------

                                               Lending Services
                                               111 W. Monroe
                                               17W
                                               Chicago, IL 60603

                                  Warrant Agreement
                                  -----------------



                                      54

                                               THE HUNTINGTON NATIONAL BANK

                                               By___________________________

                                                  Name:
                                                  Title:

                                               Address for Notices:
                                               -------------------

                                               David F. Isler
                                               Senior Vice President
                                               Huntington National Bank
                                               41 S. High Street
                                               HC 0733
                                               Columbus, OH 43215

                                  Warrant Agreement
                                  -----------------



                                      55

                                               ENDEAVOUR, LLC
                                                 by PPM America, Inc, its
                                                 attorney-in-fact

                                               By___________________________

                                                  Name:
                                                  Title:

                                               Address for Notices:
                                               -------------------

                                               PPM America, Inc.
                                               225 W. Wacker Drive
                                               Suite 1200
                                               Chicago, IL 60606

                                  Warrant Agreement
                                  -----------------



                                      56

                                               CITIZENS BANK OF MASSACHUSETTS

                                               By___________________________

                                                  Name:
                                                  Title:

                                               Address for Notices:
                                               -------------------

                                               Citizens Bank of Massachusetts
                                               53 State Street / MBS 970
                                               Boston, MA 02109

                                               Telephone: 617-994-7135
                                               Fax: 617-742-9471

                                  Warrant Agreement
                                  -----------------



                                      57

                                               BANK AUSTRIA CREDITANSTALT
                                               CORPORATE FINANCE, INC.

                                               By___________________________

                                                  Name:
                                                  Title:

                                               By___________________________
                                                  Name:
                                                  Title:

                                               Address for Notices:
                                               -------------------

                                               HVB Credit Advisors -
                                               Special Asset Advisory
                                               150 East 42nd Street
                                               New York, NY 10017-6707

                                  Warrant Agreement
                                  -----------------



                                      58

                                               FIRST MERIT BANK N.A.

                                               By___________________________

                                                  Name:
                                                  Title:

                                               Address for Notices:
                                               -------------------

                                               FirstMerit Bank
                                               101 W. Prospect
                                               Suite 350
                                               Cleveland, OH 44115

                                               Attn: J. Neumann

                                  Warrant Agreement
                                  -----------------



                                      59

                                               KEYBANK NATIONAL ASSOCIATION

                                               By___________________________

                                                  Name:
                                                  Title:

                                               Address for Notices:
                                               -------------------

                                               Attn: Nadine Eames
                                               OH-01-27-0504
                                               127 Public Square
                                               Cleveland, OH 44114-1306

                                  Warrant Agreement
                                  -----------------



                                      60

                                               KZH RIVERSIDE LLC

                                               By___________________________

                                                  Name:
                                                  Title:

                                               Address for Notices:
                                               -------------------

                                               Virginia Conway
                                               KZH RIVERSIDE LLC
                                               c/o JPMorgan Chase Bank
                                               140 East 45th Street 11th Floor
                                               New York, NY 10017
                                               Tel: 212-622-9353
                                               Fax: 212-622-0123
                                               E-Mail: virginia.r
                                               conway@jpmorgan.com

                                  Warrant Agreement
                                  -----------------



                                      61

                                               KZH STERLING LLC

                                               By___________________________

                                                  Name:
                                                  Title:

                                               Address for Notices:
                                               -------------------

                                               Virginia Conway KZH
                                               STERLING LLC c/o JPMorgan
                                               Chase Bank 140 East 45th
                                               Street 11th Floor New York,
                                               NY 10017 Tel: 212-622-9353
                                               Fax: 212-622-0123
                                               E-Mail: virginia.r
                                               conway@jpmorgan.com

                                  Warrant Agreement
                                  -----------------



                                      62

                                               KZH CYPRESSTREE - 1 LLC

                                               By___________________________

                                                  Name:
                                                  Title:

                                               Address for Notices:
                                               -------------------

                                               Virginia Conway
                                               KZH CypressTree-1 LLC
                                               c/o JPMorgan Chase Bank
                                               140 East 45th Street 11th Floor
                                               New York, NY 10017
                                               Tel: 212-622-9353
                                               Fax: 212-622-0123
                                               E-Mail: virginia.r
                                               conway@jpmorgan.com

                              Warrant Agreement
                              -----------------



                                      63

                                                     J.P. MORGAN SECURITIES
                                                     INC., as agent for JPMorgan
                                                     Chase Bank

                                                     By

                                                       -------------------------

                                                        Name:
                                                        Title:

                                                     Address for Notices:
                                                     -------------------

                                                     Vincent Catiis
                                                     1 Chase Manhattan Plaza
                                                     8th Floor
                                                     New York, NY 10081

                              Warrant Agreement
                              -----------------


                                                                   Schedule 2.02


                           Allocation of Warrants
                           ----------------------

Each Initial Holder (or its Affiliate or nominee) shall receive Warrants to
purchase that number of Stock Units set forth below opposite such Initial
Holder's (or its Affiliate's or nominee's) name:

- ------------------------------------------------------ ----------------------
INITIAL HOLDER                                         NUMBER OF STOCK UNITS
- ------------------------------------------------------ ----------------------
JPMORGAN CHASE BANK                                    113,544
- ------------------------------------------------------ ----------------------
NATIONAL CITY BANK                                     112,254
- ------------------------------------------------------ ----------------------
BANK ONE, NA                                           97,722
- ------------------------------------------------------ ----------------------
VAN KAMPEN PRIME RATE INCOME TRUST                     123,417
- ------------------------------------------------------ ----------------------
SENIOR DEBT PORTFOLIO                                  92,009
- ------------------------------------------------------ ----------------------
U.S. BANK NATIONAL ASSOCIATION                         85,558
- ------------------------------------------------------ ----------------------
UNION BANCAL EQUITIES, INC.                            73,907
- ------------------------------------------------------ ----------------------
FSC CORP.                                              64,706
- ------------------------------------------------------ ----------------------
GE CAPITAL CFE, INC.                                   69,007
- ------------------------------------------------------ ----------------------
NORM & CO.                                             62,556
- ------------------------------------------------------ ----------------------
THE HUNTINGTON NATIONAL BANK                           64,706
- ------------------------------------------------------ ----------------------
ENDEAVOUR, LLC                                         62,556
- ------------------------------------------------------ ----------------------
CITIZENS FINANCIAL GROUP, INC.                         64,706
- ------------------------------------------------------ ----------------------
BANK AUSTRIA CREDITANSTALT CORPORATE FINANCE, INC.     41,704
- ------------------------------------------------------ ----------------------
FIRSTMERIT BANK, N.A.                                  53,868
- ------------------------------------------------------ ----------------------
KEYBANK NATIONAL ASSOCIATION                           41,704
- ------------------------------------------------------ ----------------------

                    Schedule 2.02 to Warrant Agreement
                    ----------------------------------



                                      2

KZH RIVERSIDE LLC                                      46,004
- ------------------------------------------------------ ----------------------
KZH STERLING LLC                                       46,004
- ------------------------------------------------------ ----------------------
KZH CYPRESSTREE - 1 LLC                                23,002
- ------------------------------------------------------ ----------------------
JPMORGAN CHASE BANK                                    14,597
- ------------------------------------------------------ ----------------------
                                                       TOTAL:  1,353,531
- ------------------------------------------------------ ----------------------

                    Schedule 2.02 to Warrant Agreement
                    -------------------------------------



                                                                Schedule 3.07(a)

                 Existing Convertible Securities and Options

1.  Convertible Securities and/or Options:
    --------------------------------------

a.   Warrants held by Chase Manhattan Bank to purchase an aggregate of 10,742
     shares of Common Stock.

b.   Warrants held by CIT Group/Equity Investments, Inc. to purchase an
     aggregate of 12,434 shares of Common Stock.

c.   Warrants held by the holders party to the Warrant Agreement dated as of
     June 28, 2002, to purchase an aggregate of 513,559 shares of Common Stock.

d.   Rights under the Rights Agreement.

2.  Options:
    --------
                                                            Shares Subject to
                                                            -----------------
         Plan                                              Outstanding Options
         ----                                              -------------------
a.   Key Employees Stock Option Plan and
     Second Amended and Restated 1997 Stock Option
     and Incentive Plan                                            1,535,931

b.   2000 Executive Incentive Stock Option Plan                      324,166

c.   1994 Stock Option Plan for Outside Directors                      4,500

d.   1995 Stock Option Plan for Outside Directors                      7,500

e.   1996 Stock Option Plan for Outside Directors                    236,250

f.   Rights under the Rights Agreement.

3.  Amended and Restated Voluntary Deferred Income Plan:  75,037 shares
    ---------------------------------------------------

4.  Commitments to issue securities:
    -------------------------------

a.   Contingent commitment to issue warrants to purchase an aggregate of
     1,000,000 shares of Common Stock pursuant to the Indemnification and
     Warrant Purchase Agreement, dated April 12, 1999, between the Issuer, MVE
     Holdings, Inc. and each of the former members of MVE Investors, LLC.

                    Schedule 3.07(a) to Warrant Agreement
                    -------------------------------------



                                      2

b.   Contingent commitment to issue warrants to purchase shares of Common Stock
     pursuant to Section 6.12 of the Credit Agreement.

c.   Contingent and non-contingent commitments to issue securities pursuant to
     the Issuer's 401(k) Investment and Savings Plan, 1996 Stock Option Plan for
     Outside Directors and Amended and Restated 1997 Stock Bonus Plan.

d.   Customary offers before the date hereof to grant Options to employees in
     connection with an offer of employment.

e.   Obligations to issue securities under the Rights Agreement.

                    Schedule 3.07(a) to Warrant Agreement
                    -------------------------------------



                                                                Schedule 3.07(b)

                          Existing Registration Rights
                          ----------------------------

1.       Registration rights granted to Chase Manhattan Bank and The CIT
         Group/Equity Investments, Inc. pursuant to the Registration Rights
         Agreement, dated August 30, 1991, among Cryenco Holdings, Inc, The CIT
         Group/Equity Investments, Inc. and Chemical Bank.

2.       Registration rights granted to the former members of MVE Investors LLC
         pursuant to the Warrant Agreement, dated as of April 12, 1999, between
         the Issuer and the parties thereto.

                    Schedule 3.07(b) to Warrant Agreement
                    -------------------------------------



                                                   Annex 1 to Warrant Agreement

                               [Form of Warrant]

                                    WARRANT

         THE TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS
         SUBJECT TO THE RESTRICTIONS SPECIFIED IN THAT CERTAIN WARRANT AGREEMENT
         DATED AS OF SEPTEMBER 30, 2002 (THE "WARRANT AGREEMENT") BETWEEN CHART
         INDUSTRIES, INC., A DELAWARE CORPORATION (THE "ISSUER"), AND THE
         HOLDERS PARTY THERETO FROM TIME TO TIME AS MODIFIED AND SUPPLEMENTED
         AND IN EFFECT FROM TIME TO TIME, AND NO TRANSFER OF THE SECURITIES
         REPRESENTED BY THIS CERTIFICATE SHALL BE VALID OR EFFECTIVE UNTIL SUCH
         RESTRICTIONS HAVE LAPSED OR BEEN FULFILLED, RELEASED OR WAIVED. A COPY
         OF THE FORM OF THE WARRANT AGREEMENT IS ON FILE AND MAY BE INSPECTED AT
         THE PRINCIPAL EXECUTIVE OFFICE OF THE ISSUER. THE HOLDER OF THIS
         CERTIFICATE, BY ACCEPTANCE OF THIS CERTIFICATE, AGREES TO BE BOUND BY
         THE PROVISIONS OF THE WARRANT AGREEMENT.

         THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
         UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
         SECURITIES LAWS, AND ACCORDINGLY, SUCH SECURITIES MAY NOT BE
         TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT IN COMPLIANCE WITH
         THE REGISTRATION OR QUALIFICATION PROVISIONS OF APPLICABLE FEDERAL AND
         STATE SECURITIES LAWS OR APPLICABLE EXEMPTIONS THEREFROM.

No. of Stock Units Covered Hereby: [__]                          Warrant No. [_]

                                    WARRANT

                          to Purchase Common Stock of

                             CHART INDUSTRIES, INC.

                  THIS IS TO CERTIFY THAT [___________], or its registered
assigns (the "Holder"), is entitled to purchase in whole or in part from time to
time from CHART INDUSTRIES, INC., a Delaware corporation (the "Issuer"), at any
time prior to 5:00 p.m., New York time, on the third anniversary of the date
hereof (as it may be extended pursuant to Section


                                     Warrant
                                     -------



                                      -2-

9.06 of the Warrant Agreement, the "Expiration Date"),[____] Stock Units at a
purchase price of $0.898 per Stock Unit (the "Exercise Price"), subject to the
terms and conditions hereinbelow provided. All capitalized terms unless
otherwise defined herein shall have the meanings set forth in the Warrant
Agreement.

         On and after the date hereof and until 5:00 p.m., New York time, on the
Expiration Date, the Holder may exercise this Warrant, on one or more occasions,
on any Business Day, in whole or in part, by delivering to the Issuer:

                  (a)      a written notice of the Holder's election to exercise
         this Warrant, which notice shall specify the number of Stock Units to
         be purchased (the "Exercise Notice");

                  (b)      payment of the aggregate Exercise Price for the
         number of Stock Units as to which this Warrant is being exercised
         (payable as set forth below); and

                  (c)      this Warrant.

                  The Exercise Price shall be payable (a) in cash or by
certified or official bank check payable to the order of the Issuer or by wire
transfer of immediately available funds to the account of the Issuer, (b) by
delivery (or causing to be delivered) to the Issuer of Loans held by the Holder
(or any of its Affiliates) and outstanding under, and the Note, if any,
evidencing the same issued pursuant to, the Credit Agreement (provided that, if
such Holder (or any such Affiliate or Affiliates) shall hold both Term Loans and
Revolving Credit Loans, such Loans so delivered by such Holder shall consist of
a ratable portion of the Term Loans and Revolving Credit Loans held by such
Holder and/or its Affiliates; and any such Loans so delivered shall deemed to be
paid for purposes of the Credit Agreement, with such payment in the case of such
Term Loans being applied in inverse order of the maturity thereof), with such
securities being credited against the Exercise Price in an amount equal to the
aggregate principal amount of such Loans (plus unpaid and accrued interest) so
delivered, or (c) by delivery of this Warrant Certificate to the Issuer for
cancellation in accordance with the following formula: in exchange for the
number of shares of Common Stock issuable on the exercise of the Warrants that
are being exercised at such time, the Holder shall receive such number of shares
of Common Stock as is equal to the product of (i) the number of shares of Common
Stock issuable upon exercise of the Warrants being exercised at such time
multiplied by (ii) a fraction, the numerator or which is the Current Market
Value per share of Common Stock at such time minus the Exercise Price per share
of Common Stock at such time, and the denominator of which is the Current Market
Value per share of Common Stock at such time. Such Exercise Notice shall be
substantially in the form of Exhibit A hereto. Upon receipt thereof, the Issuer
shall, as promptly as practicable and in any event within 5 Business Days
thereafter, execute or cause to be executed and deliver or cause to be delivered
to the Holder a certificate or certificates representing the aggregate number of
shares of Warrant Stock and other securities issuable upon such exercise and any
other property to which the Holder is entitled.

                  The certificate or certificates for Warrant Stock so delivered
shall be in such denominations as may be specified in the Exercise Notice and
shall be registered in the name of


                                     Warrant
                                     -------



                                      -3-

the Holder or such other name or names as shall be designated in such Exercise
Notice. Such certificate or certificates shall be deemed to have been issued
and the Holder or any other Person so designated to be named therein shall be
deemed to have become a holder of record of Warrant Stock, including, to the
extent permitted by law, the right to vote Warrant Stock or to consent or to
receive notice as a Shareholder, as of the date on which the last of the
Exercise Notice, payment of the Exercise Price and this Warrant is received by
the Issuer as aforesaid, and all taxes required to be paid by the Holder, if
any, pursuant to the Warrant Agreement, prior to the issuance of Stock Units
have been paid. If this Warrant shall have been exercised only in part, the
Issuer shall, at the time of delivery of the certificate or certificates
representing Warrant Stock and other securities, execute and deliver to the
Holder a new Warrant evidencing the rights of the Holder to purchase the
unpurchased Stock Units called for by this Warrant, which new Warrant shall in
all other respects be identical with this Warrant, or, at the request of the
Holder, appropriate notation may be made on this Warrant and the same returned
to the Holder.

                  The Issuer shall not be required to issue a fractional amount
of Warrant Stock upon exercise of this Warrant. As to any fraction of a share of
Warrant Stock which the Holder would otherwise be entitled to purchase upon such
exercise, the Issuer shall pay a cash adjustment in respect of such final
fraction in an amount equal to the same fraction of the Current Market Value per
share of Warrant Stock on the date of exercise.

                  If reasonably requested by the Issuer in connection with the
exercise of this Warrant, the Holder shall deliver to the Issuer a certification
of taxpayer identification number or similar form so requested by the Issuer.

                  This Warrant shall be governed by, and construed in accordance
with, the law of the State of New York without giving effect to the conflicts of
law principles thereof, except to the extent that New York conflicts of laws
principles would apply the Delaware General Corporation Law to matters relating
to corporations organized thereunder.

                                     Warrant
                                     -------



                                      -4-

                  IN WITNESS WHEREOF, the Issuer has duly executed this Warrant.

Dated:  September 30, 2002

                                            CHART INDUSTRIES, INC.

                                            By ________________________

                                                Name:

                                                Title:

Attest:

- ------------------

Secretary

                                     Warrant
                                     -------



                                                           Exhibit A to Warrant

                                FORM OF EXERCISE
                                ----------------

                (To be executed by the registered holder hereof)

                  The undersigned registered owner of this Warrant irrevocably
exercises this Warrant for the purchase of [___] Stock Units of CHART
INDUSTRIES, INC., a Delaware corporation, and herewith makes payment therefor
[in cash, as provided in clause (a) of the third paragraph of this Warrant] [by
delivery of any Loans, as provided in clause (b) of the third paragraph of this
Warrant] [by delivery of the Warrant Certificate(s) for cancellation in
accordance with the formula provided in clause (c) of the third paragraph of
this Warrant], all at the price and on the terms and conditions specified in
this Warrant, and requests that certificates for the shares of Common Stock be
issued in accordance with the instructions given below, and, if such Stock Units
shall not include all of the Stock Units to which the Holder is entitled under
this Warrant, that a new Warrant of like tenor and date for the unpurchased
balance of the Stock Units issuable hereunder be delivered to the undersigned.

Dated: _____________, 200_

                                        ---------------------------------

                                        (Signature of Registered Holder)

Instructions for issuance and

registration of Common Stock:

- --------------------------------

Name of Registered Holder

(please print)

Social Security or Other Identifying

Number: _________________________

Please deliver certificate to

the following address:

- ------------------------------------

                Street


                                Form of Exercise
                                ----------------



- ------------------------------------

        City, State and Zip Code

                                Form of Exercise
                                ----------------



                                                   Annex 2 to Warrant Agreement

                               FORM OF ASSIGNMENT
                               ------------------

                (To be executed by the registered holder hereof)

                  FOR VALUE RECEIVED, the undersigned registered owner of this
Warrant hereby sells, assigns and transfers unto the assignee named below all
the rights of the undersigned under this Warrant and the related Warrant
Agreement with respect to the number of shares of Warrant Stock covered thereby
set forth hereinbelow unto:

Name of Assignee          Address           Number of Stock Units
- -----------------------------------------------------------------

Dated: ____________, 200_

                                                 -------------------------------

                                                 Signature of Registered Holder

                                                 -------------------------------

                                                 Name of Registered Holder

                                                 (Please Print)

Witness:

- -------------------


                               Form of Assignment
                               ------------------



                                                   Annex 3 to Warrant Agreement

                           [Form of Joinder Agreement]

         JOINDER AGREEMENT, dated as of [_______], 200[_] between CHART
INDUSTRIES, INC., a Delaware corporation (the "Issuer"), and the other parties
                                               ------
signatories hereto (this "Joinder Agreement").
                          -----------------

         A.   Reference is made to that certain Warrant Agreement dated as of
              September 30 2002 (as modified and supplemented and in effect from
              time to time, the "Warrant Agreement"), between the Issuer and the
              Initial Holders. Each capitalized term used but not defined herein
              shall have the meaning assigned to such term in the Warrant
              Agreement; and

         B.   Section 7.01(c) of the Warrant Agreement requires that the Issuer
              shall deliver to the Initial Holders this Joinder Agreement
              executed by the Issuer, each Principal Shareholder and each
              Related Party thereof that owns Common Stock.

         In consideration of the foregoing and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
undersigned hereby agrees that:

         1.    The undersigned: (a) is delivering this Joinder Agreement
pursuant to Section 7.01(c) of the Warrant Agreement and (b) acknowledges
receipt of a copy of the Warrant Agreement.

         2. The undersigned hereby agrees to be bound by the provisions of
Article VII of the Warrant Agreement (but no other provisions thereof).

         IN WITNESS WHEREOF, the undersigned has signed this Joinder Agreement
as of the date first above written.

                                            [________________]

                                            By:______________________

                                                  Name:

                                                  Title:


                           Form of Joinder Agreement
                           -------------------------



                                      -2-

Acknowledged and Agreed to as

of the date first above written:

CHART INDUSTRIES, INC.

By:____________________________

      Name:

      Title:


                            Form of Joinder Agreement
                            -------------------------

EX-10.2

                                                                    EXHIBIT 10.2

              AGREEMENT OF SEPARATION, RELEASE, AND NONCOMPETITION

THIS AGREEMENT OF SEPARATION, RELEASE, AND NONCOMPETITION ("Agreement"), is made
and entered into by and between CHART INDUSTRIES, INC., a Delaware corporation,
having a place of business at 5885 Landerbrook Drive, Cleveland, Ohio 44124
("Company") and James R. Sadowski having a place of residence at 65 Solether
Lane, Chagrin Falls, OH 44022 ("Employee"). Company and Employee are hereinafter
collectively referred to as the "Parties" or forms thereof.

                              W I T N E S S E T H:

                  WHEREAS, Employee has been employed by the Company; and

                  WHEREAS, Employee's employment has been terminated effective
July 1, 2002 (the "Date of Separation"); and

                  WHEREAS, the Employee has an EMPLOYMENT AGREEMENT under which
employee is be entitled to severance pay and other severance benefits; and

                  WHEREAS, the Company and Employee wish to resolve all matters
and issues between them arising from or relating to Employee's employment by the
Company and Employee's termination from employment by the Company.

                  NOW, THEREFORE, in consideration of the mutual promises and
covenants contained herein, Employee and the Company hereby agree as follows:

                                    ARTICLE I
                   PAYMENTS EARNED THROUGH DATE OF SEPARATION

                  Section 1.1. Salary Through Date of Separation. The Company
shall pay to Employee the amount of Employee's annual salary payable through the
pay period of the Date of Separation, less federal and state withholding taxes
and other deductions required by law, as per the Company's regular payroll
practice.

                  Section 1.2. "Paid Time Off". The Company will pay Employee
for Employee's earned but unused vacation time of seven (7) days and other paid
time off in connection with Employee's employment with the Company through the
Date of Separation, less federal and state withholding taxes and other
deductions required by law. Such payment shall be made within seven business
days following the Effective Date of this Agreement, as set forth in (S) 6.7 of
the Agreement.

                                   ARTICLE II
                                  SEVERANCE PAY

         Section 2.1. Severance Pay. Upon the Effective Date of this Agreement
as set forth in Section 4.4 herein, the Company shall pay Employee twelve (12)
months severance pay ($263,000) as described in this Section 2.1. This pay is
separate and independent of the pay in Section 1.1 above. Employee will be paid
bi-weekly starting with the pay period ending July 12, 2002 through the pay
period ending February 7, 2003. This amounts to 16 pays of $10,115.39 or

                                        1



a total of $161,846.24. The remaining balance of $101,153.76 will be distributed
to Employee in a lump sum within fifteen (15) days of February 7, 2003. All
amounts shall be less standard payroll deductions and/or withholdings (including
taxes and Employee contributions under benefit programs to the extent continued
pursuant to this Agreement).

         Section 2.2 Calculation of Severance Pay. Any and all severance
payments shall be based on at Employee's rate immediately preceding Employee's
termination, less applicable payroll taxes and withholdings (including Employee
contributions under benefit programs to the extent continued pursuant to this
Agreement).

                                   ARTICLE III
                            ADDITIONAL CONSIDERATION

                  Section 3.1  Additional Consideration. In addition to the
severance payments described in (S)2.1, the Company shall provide Employee with
the "Additional Consideration" described in Attachment A hereto, which is
expressly incorporated herein by reference.

                  Section 3.2. Adequacy of Consideration. Employee hereby agrees
and acknowledges that the Additional Consideration described in Attachment A to
this Agreement constitutes consideration that is over and above any
entitlements, severance payments or otherwise, that Employee may have by reason
of his separation from employment with the Company, and that such payments and
amounts constitute adequate consideration and are accepted in exchange for
Employee's covenants and obligations, including but not limited to Employee's
full release of all claims, as set forth in this Agreement. The Parties further
agree that Attachment A (Additional Consideration), Attachment B
(Confidentiality and Non-competition Agreement) and Attachment C (Reason for
Termination) are necessary and integral to this Agreement, and are hereby
incorporated into this Agreement by reference and made a part hereof.
Capitalized terms not otherwise defined in Attachment A, Attachment B or
Attachment C respectively, shall have the meanings given to such terms in this
Agreement.

                          ARTICLE IV, RELEASE OF CLAIMS

                  Section 4.1. General Release. In exchange for consideration
of the promises and agreements set forth herein, and for good and other valuable
consideration, the adequacy and receipt of which is hereby acknowledged by
Employee, Employee does hereby for himself and for his heirs, executors,
successors and assigns, release and forever discharge the Company, its
shareholders, subsidiaries, divisions, and all of the Company's affiliated
businesses, whether directly or indirectly related to Company, if any, together
with its and their respective officers, directors, shareholders, management,
representatives, agents, employees, successors, assigns, and attorneys, both
known and unknown, in both their personal and agency capacities (collectively,
the "Company Entities") of and from any and all claims, demands, damages,
actions or causes of action, suits, claims, charges, complaints, contracts,
whether oral or written, express or implied and promises, at law or in equity,
of whatsoever kind or nature, including but not limited to any alleged violation
of any state or federal anti-discrimination statutes or regulations, including
but not limited to Title VII of The Civil Rights Act of 1964 as amended, 42
U.S.C.(S)2000e et seq.; the Employee Retirement Income Security Act of 1974, 29
U.S.C.(S)1001 et seq.; the Americans With Disabilities Act, 42 U.S.C.(S)12101 et
seq.; any claims for breach of any express or implied contract or promise,
wrongful discharge, violation of public policy, or tort, all demands for
attorney's fees, back pay, holiday pay, vacation pay, bonus, group insurance;
any claims for reinstatement, employee benefits and claims for money, out of
pocket

                                        2



expenses (excluding those approved by Mark Ludwig), any claims for emotional
distress, defamation and humiliation, that Employee might now have or may
subsequently have against the Company Entities, whether known or unknown,
suspected or unsuspected, by reason of any matter or thing, arising out of or in
any way connected with, directly or indirectly, any acts or omissions which have
occurred prior to and on the Effective Date of this Agreement, except those
matters specifically set forth herein and except for any pension or retirement
benefits which may have vested on Employee's behalf, if any, and any rights or
claims that may not be released or waived as a matter of law.

         Section 4.2. Age Discrimination in Employment Act/Older Workers Benefit
Protection Act Release. Employee waives and releases all rights, remedies,
claims and causes of action, known and unknown, he has or may have against the
Company Entities for any matter related to his employment and the termination of
that employment under the Age Discrimination in Employment Act of 1967, 29
U.S.C. (S)(S)621, et seq., as amended by the Older Worker Benefit Protection
Act, 29 U.S.C. (S) 623, by reason of any matter or thing arising out of, or in
any way connected with, directly or indirectly, any acts or omissions which have
occurred prior to and including the Effective Date of this Agreement. In other
words, by signing this Agreement, Employee will have none of the legal rights
against the aforementioned that Employee would otherwise have under these laws.

                  Section 4.3. Right to Consult With Counsel; Consideration
Period. The Company hereby notifies Employee of Employee's right to consult with
Employee's chosen legal counsel before signing this Agreement. The Company shall
afford, and Employee acknowledges receiving, not less than twenty-one (21)
calendar days in which to consider this Agreement to ensure that Employee's
execution of this Agreement is knowing and voluntary. In signing below, Employee
expressly acknowledges that Employee has been afforded the opportunity to take
twenty-one (21) days to consider this Agreement and that Employee's execution of
same is with full knowledge of the consequences thereof and is of Employee's own
free act and will. Notwithstanding the fact that the Company is allowing
Employee twenty-one (21) days to consider this Agreement, Employee may elect to
execute this Agreement prior to the end of such twenty-one (21) day period. If
Employee elects to execute this Agreement prior to the end of such twenty-one
(21)-day period, then, by Employee's signature below, Employee represents that
his decision to accept this shortening of the time was done knowingly and
voluntarily and was not induced by fraud, misrepresentation, or any threat to
withdraw or alter the benefits provided by the Company herein, or by the Company
providing different terms to any similarly-situated employee executing this
Agreement prior to end of such twenty-one (21) day consideration period. The
parties agree changes, whether material or immaterial, to this Agreement shall
not restart the running of the twenty-one (21)-day time period.

                  Section 4.4  Revocation Period. Both the Company and Employee
agree and recognize that, for a period of seven (7) calendar days following
Employee's execution of this Agreement, Employee may revoke this Agreement by
providing written notice revoking the same, within this seven (7) day period,
delivered by hand or by certified mail, addressed to Mark Ludwig, 5885
Landerbrook Drive, Cleveland, OH 44124 delivered or postmarked within such seven
(7) day period. In the event Employee so revokes this Agreement, each Party will
receive only those entitlements and/or benefits that they would have received
regardless of this Agreement.

                  Section 4.5. Acknowledgments.  Employee acknowledges that
Employee has carefully read and fully understands all of the provisions of this
Agreement, that Employee has

                                        3



not relied on any representations of the Company or any of its representatives,
directors, officers, employees and/or agents to induce Employee to enter into
this Agreement, other than as specifically set forth herein and that Employee is
fully competent to enter into this Agreement and has not been pressured, coerced
or otherwise unduly influenced to enter into this Agreement and that Employee
has voluntarily entered into this Agreement and the same is Employee's own free
will act.

                                    ARTICLE V

                          OTHER OBLIGATIONS OF EMPLOYEE

                  Section 5.1.  Noncompetition Agreement. Employee agrees to the
Confidentiality and Noncompetition Agreement set forth in Attachment B to this
Agreement, which is expressly incorporated herein.

                  Section 5.2. Company Property. Upon or before execution of
this Agreement, Employee shall return all property belonging to the Company
(excluding laptop), including, but not limited to, all confidential and/or
proprietary information, keys, business equipment, computer software and/or
hardware, and technical manuals and other information.

                                   ARTICLE VI

                            MISCELLANEOUS PROVISIONS

                  Section 6.1. Entire Agreement. This Agreement, together with
its Attachment A, Attachment B and Attachment C contains the entire agreement
and understanding by and between the Parties hereto and replaces and supersedes
any prior agreements (including the EMPLOYMENT AGREEMENT, dated January 24,
2001, as amended, between the Company and Employee), contracts and/or promises,
whether written or oral, with respect to the subject matters included herein.
There are no other agreements nor representations between the Parties except as
expressly provided for in this Agreement. This Agreement may not be changed
orally, but only in writing, signed by each of the Parties hereto.

                  Section 6.2. Warranty/Representation. Employee and the Company
each warrant and represent that, prior to and including the Effective Date of
this Agreement, no claim, demand, cause of action, or obligation which is
subject to this Agreement has been assigned or transferred to any other person
or entity, and no other person or entity has or has had any interest in any such
claims, demands, causes of action or obligations, and that each has the sole
right to execute this Agreement.

                  Section 6.3. Invalidity. The Parties to this Agreement agree
that, if any provision of this Agreement (including the provisions of
Attachments A, B or C) is determined by a court of last resort, or a lower court
if no appeal is taken, to be unlawful, invalid or unenforceable, the balance of
this Agreement shall remain in full force and effect. In such event the parties
agree to meet and confer for the purpose of a reaching agreement to amend the
offending provision, or, if the parties cannot agree on the terms of amendment,
all provisions shall be enforced to the extent that is determined reasonable by
the appropriate court. However, if such amendment or enforcement cannot be
achieved without materially altering the releases of claims given by Employee to
the Company, then this Agreement shall be void, and Employee

                                        4



promptly shall return all monies and other things received under this Agreement
(including its attachments).

                  Section 6.4. Assignment. This Agreement is personal in nature
and shall not be assigned by Employee. All payments and benefits provided
Employee herein shall be made to Employee's wife Elaine Sadowski and if not
living Employee's estate in the event of Employee's death prior to Employee's
receipt thereof. This Agreement shall inure to the benefit of and be binding
upon the successors and assigns of the Company, including, without limitation,
any person acquiring directly or indirectly all or substantially all of the
assets of the Company, whether by merger, consolidation, sale or otherwise (and
such successor shall thereafter be deemed the "Company" for the purposes of this
Agreement).

                  Section 6.5. Originals. Two (2) copies of this Agreement shall
be executed as "originals" so that both Employee and the Company may possess an
"original" fully executed document. The Parties hereto expressly agree and
recognize that each of these fully executed "originals" shall be binding and
enforceable as an original document representing the agreements set forth
herein. Headings are for convenience only and shall be given no legal effect.

                  Section 6.6. Jurisdiction. This Agreement, including
Attachments A and B hereto, shall be governed under the laws of the State of
Ohio, without giving effect to the conflict of law principles of such State.
Employee and the Company each agree that the state and federal courts located in
Cleveland, Ohio shall have jurisdiction in any action, suit or proceeding
against Executive or the Company based on or arising out of this Agreement
(including its Attachments) and each of Executive and the Company hereby (a)
submits to the personal jurisdiction of such courts, (b) consents to service of
process in connection with any such action, suit or proceeding and (c) waives
any other requirement (whether imposed by statute, rule of court or otherwise)
with respect to personal jurisdiction, venue or service of process.

                  Section 6.7. Effective Date of this Agreement. This Agreement
shall become effective only upon (a) execution of this Agreement by Employee
after the expiration of the twenty-one (21) day consideration period described
in Section 4.3 of this Agreement, unless such consideration period is shortened
as set forth therein; and (b) the expiration of the seven (7) day period for
revocation of this Agreement by Employee as described in Section 4.4 of this
Agreement. The date on which this Agreement so becomes effective is referred to
herein as the "Effective Date of this Agreement."

                                        5



                              CAUTION TO EMPLOYEE:

READ BEFORE SIGNING. THIS DOCUMENT CONTAINS A RELEASE OF ALL CLAIMS AGAINST THE
COMPANY ENTITIES PRIOR TO THE EFFECTIVE DATE OF THIS AGREEMENT.

         IN WITNESS WHEREOF, Employee and the Company agree as set forth above:

DATE OF EXECUTION BY EMPLOYEE:            AGREED TO AND ACCEPTED BY:

9/4/02                                    /s/ James R. Sadowski
- --------------------------------          --------------------------------------
                                          JAMES R. SADOWSKI


                                          EXECUTION WITNESSED BY:

                                          /s/ Patricia A. Switzer
                                          --------------------------------------


DATE OF EXECUTION BY COMPANY:             AGREED TO AND ACCEPTED BY

                                          CHART INDUSTRIES, INC.


9/4/02                                    BY:  /s/ Mark Ludwig
- --------------------------------             -----------------------------------

                                          TITLE: Corporate Director, Human
                                                --------------------------------
                                          Resources
                                          --------------------------------------


                                          EXECUTION WITNESSED BY:

                                          /s/ Patricia A. Switzer
                                          --------------------------------------

                                        6




                                  ATTACHMENT A

                            ADDITIONAL CONSIDERATION

                  In addition to the severance payments described in (S)2.1 of
the Agreement of Separation, Release, and Noncompetition (the "Agreement")
between CHART INDUSTRIES, INC., a Delaware corporation ("the Company"), and
James R. Sadowski ("Employee"), into which Agreement this Attachment A is
incorporated, the Company and Employee agree as follows:

                                    ARTICLE I

                             ENHANCED SEVERANCE PAY

         Section 1A. Enhanced Severance Pay. In consideration of Employee's
covenants and obligations set forth in the Agreement and the attachments
thereto, the Company shall pay Employee an additional three (3) months of
enhanced severance pay (the "Enhanced Severance Pay"). Employee acknowledges
said enhanced severance payments are over and above that to which Employee is
otherwise entitled under any employment agreement or otherwise and are being
given as additional consideration in exchange for Employee's agreement to the
terms and conditions of the Agreement (including this Attachment and Attachment
B thereto).

         Section 1B. Calculation of Enhanced Severance Pay. The Enhanced
Severance Pay shall be paid to Employee as a lump sum of $65,750.00, which will
be combined with the remaining lump sum balance of the severance pay of
$101,153.76 provided for under Section 2.1 of the Agreement and paid within
fifteen (15) days of February 7, 2003. Therefore, the total amount of the lump
sum payment to be paid at such time is $166,903.76. Thus the total severance to
be paid to Employee under Section 2.1 of the Agreement and this Section 1B,
including severance pay and Enhanced Severance Pay, consists of $161,846.24 in
16 bi-weekly payments and a total of $166,903.76 in lump sum payments, for a
total not to exceed $328,750.00 in aggregate severance payments. All amounts
shall be less standard payroll deductions and/or withholdings (including taxes
and Employee contributions under benefit programs to the extent continued
pursuant to this Agreement).

                                   ARTICLE II

                                    BENEFITS

         Section 2A. Health, Dental and Vision Benefits. For a period of 25
months following the Date of Separation, through and including July 2004, the
Company will maintain the Employee's current coverage under the Company's
health, dental and vision insurance. During such period, Employee will be
responsible to pay the normal employee share of the applicable premiums for such
coverage.

         Section 2B. Other Welfare Benefits. For a period of 12 months following
the Date of Separation, through and including June 2003, life insurance coverage
will be maintained. If the Company is unable to continue Employee's existing
life insurance coverage during such 12-month period, the Company agrees to
obtain comparable life insurance coverage for Employee during such 12-month
period.

                                        1



         Section 2C. Cessation of Benefits. All of the benefits referenced in
Sections 2A, 2B, 2D and 2E will cease if Employee obtains such coverage from
another employer at anytime during the respective periods of continuation. All
other Employee benefits not referenced above cease as of July 31, 2002. The
Company shall have the right to modify, amend or terminate any benefits provided
to Employee following the Date of Separation and Employee's continued
participation therein, if any, shall be subject to such modification, amendment
or termination if such modification, amendment or termination applies generally
to the then-current participants in such plan.

         Section 2D. COBRA Election Health Benefits. Upon completion of the 25
month period following the Date of Separation, and effective August 1, 2004, the
Company will afford Employee the opportunity to continue Employee's coverage
under the Company's health, dental and vision insurance, at Employee's expense,
for an additional 18 months, so long as Employee timely elects (within 45 days
of August 1, 2004) to receive coverage under the federal Consolidated Omnibus
Budget Reconciliation Act, as amended ("COBRA"), Part VI of Subtitle B of Title
I of the Employee Retirement Income Security Act of 1974, as amended ("ERISA");
and Internal Revenue Code (S) 4980(B)(f) and otherwise complies with conditions
of continuation of benefits under COBRA.

         Section 2E. Outplacement Services. Company will provide an executive
full service outplacement program to Employee for up to six (6) months following
the Date of Separation. The service provider will be of Employee's own choosing
and the cost of the outplacement service will be reimbursed to employee or the
service provider, up to a maximum of $15,000. Employee can elect to receive cash
compensation in lieu of outplacement services up to a maximum of $15,000.

         Section 2F. Automobile Use. Company will continue to provide Employee
with the use of the automobile assigned to Employee as of the Date of Separation
and Employee will have use of such automobile through December 31, 2002.
Employee shall return such automobile to Company in good condition, reasonable
wear and tear excepted, by December 31, 2002. From the period of October 1, 2002
and thereafter, it is the Employee's responsibility to insure the automobile
with the same limits as when insured by Chart and to name the Company as a named
insured. For any period following October 1, 2002 Employee shall be solely
responsible for any damages or claims of, or losses incurred by, third persons
as a result of Employee's possession and/or use of such automobile in the period
until Employee returns such automobile to the Company, and the Company shall
have no responsibility or liability for any such damages, claims or losses, and
Employee agrees to indemnify and reimburse the Company for any such damages,
claims or losses asserted against the Company.

         Section 2G. Extension of Term of Stock Options. Effective as of the
Effective Date of this Agreement, and through an action by its Board of
Directors or any appropriate committee thereof, the Company agrees to extend the
period of time after the Date of Separation during which Employee may exercise
his stock options to acquire Company common stock, to the extent that any of
those options was exercisable on the Date of Separation, from three (3) months
after the Date of Separation (as provided absent such extension) to fifteen (15)
months after the Date of Separation (i.e., to September 30, 2003), but not later
than the expiration date of the option. Employee acknowledges that all stock
options shall expire not later than September 30,

                                        2



2003. Notwithstanding the foregoing, (a) the normal expiration date of stock
options shall not be extended, so that any stock option that would have
terminated before September 30, 2003 had Employee remained employed with the
Company until that time shall terminate on the date on which it would have
terminated had Employee remained so employed, (b) any stock option that had not
become fully exercisable before the Date of Separation shall terminate on the
Date of Separation to the extent that such option was not then exercisable, and
(c) this Section 2H shall not be interpreted to require the Company to
accelerate the exercisability of any of Employee's stock options, and except as
set forth in the first sentence of this Section 2H, the terms of Employee's
stock options shall remain unchanged. Employee acknowledges that the extension
of the period after termination of employment during which he may exercise a
stock option intended to qualify as an incentive stock option under Section 422
of the Internal Revenue Code of 1986, as amended, may cause such option not to
qualify as an incentive stock option but instead to be treated as a nonqualified
stock option. Employee consents to such extension and to the disqualification of
any such incentive stock option as a result thereof.

       Section 2H. Country Club Membership Reimbursement. Reimbursement by the
Company for Employee's Country Club membership dues will be terminated as of
July 1, 2002, and Employee will have no further right to such benefit.

                       ACCEPTED AND AGREED TO BY EMPLOYEE:

                                             EMPLOYEE

                                    /s/ James R. Sadowski
                                    --------------------------------------------
                                    JAMES R. SADOWSKI

                                             CHART INDUSTRIES, INC.

                                    By:    /s/ Mark Ludwig
                                           -------------------------------------
                                    Title: Corporate Director, Human Resources
                                           -------------------------------------

                                        3




                                  ATTACHMENT B

                  CONFIDENTIALITY AND NONCOMPETITION AGREEMENT

                  FOR INDEPENDENT, VALUABLE CONSIDERATION, in the form of
payments and benefits provided for in my Agreement of Separation, Release, and
Noncompetition (the "Agreement") with CHART INDUSTRIES, INC., a Delaware
corporation (the "Company") and Attachment A thereto and more specifically
described in this Attachment B thereto, the receipt and sufficiency of which are
hereby acknowledged, I, James R. Sadowski having a place of residence at 65
Solether Lane, Chagrin Falls, OH 44022 ("Employee"), and the Company hereby
further agree as follows:

                                    RECITALS

WHEREAS, Employee acknowledges that during his employment with the Company he
has held a position of trust and confidence and has had access to and has become
familiar with the products, methods, technology, services and procedures used by
the Company; and

WHEREAS, Employee acknowledges that the Company (1) has expended significant
time and money on promotion, advertising, and the development of goodwill and a
sound business reputation; (2) has developed a list of customers and spent time
and resources to learn the customers' needs for the Company's products and
services; (3) has entered into business relationships designed to discover
likely future customers; and further, that all of the foregoing are valuable,
special and unique assets of the Company's business, that the Company's customer
lists, including future changes to the customer lists, are confidential
information which should not be disclosed to persons outside of the Company
organization or used by Employee for his own benefit or the benefit of others;
and

WHEREAS, Employee acknowledges that the Company (1) has expended significant
time and money on technology, research and development; (2) has developed
products, processes, technologies and services, which are valuable, special and
unique assets of the Company's business; and further, that the products,
processes technologies and services, including future changes thereto, are
confidential information which should not be disclosed to persons outside of the
Company organization or used by Employee for his own benefit or the benefit of
others; and

WHEREAS, Employee recognizes that the disclosure to or use by third parties of
any of the Company's confidential or proprietary information, trade secrets, or
Employee's unauthorized use of such information would seriously harm the
Company's business and cause monetary loss that would be difficult, if not
impossible, to measure; and

WHEREAS, Employee wishes to receive the independent consideration referred to
above in exchange for the promises and covenants contained herein.

Employee and the Company AGREE as follows:

1. Independent Consideration.  The independent consideration which Employee
   shall be entitled to receive upon execution of the Agreement (including its
   attachments) shall consist of the three (3) months of enhanced severance pay,
   enhanced medical, dental, vision and life



     insurance benefits, the executive outplacement services provided for in
     Section 2F of Attachment A, automobile use, and the extension of the period
     during which Employee can exercise certain stock options, all of which are
     described in and governed by other provisions of the Agreement (including
     Attachment A, ADDITIONAL CONSIDERATION). While such independent
     consideration is given in exchange for Employee's covenants and agreements
     under this Attachment B, such independent consideration is also given in
     exchange for Employee's covenants and agreements (including releases) under
     other provisions of the Agreement.

2.   Confidential Information. "Confidential Information" means information
     belonging to the Chart Group of a special and unique nature and value,
     including, but not limited to, such matters as the Chart Group's personnel
     and compensation information; accounts; trade secrets; procedures; manuals;
     financial cost and sales data; supply sources and resources; contracts;
     price lists, accounting and bookkeeping practices; office policies and
     practices; financial information; marketing and strategic plans; business
     plans; prospect names and lists; existing and potential business
     opportunities; confidential reports; customer lists and contracts;
     customers' needs for the Chart Group's products and services; litigation
     and other legal matters; as well as information specific to the Chart
     Group's products, such as source code, coding standards, programming
     techniques, processes and system; computer programs, algorithms,
     techniques, processes, designs, specifications, diagrams, flow charts,
     ideas, systems and methods of operation of such programs; and research and
     development work. As used herein, the term "Chart Group" means,
     collectively, the Company and each group, division and subsidiary (whether
     or not wholly owned) of the Company.

     Employee acknowledges that the Company has taken reasonable measures to
     preserve the secrecy of its Confidential Information, including, but not
     limited to, requiring Employee to execute this Agreement in exchange for
     the independent consideration provided for herein. Employee agrees that he
     or she will not disclose to any other person or entity the Chart Group's
     Confidential Information which Employee has learned or acquired during his
     employment or use said Confidential Information for Employee's own benefit
     or for the benefit of another. Upon or before the execution of the
     Agreement, Employee will deliver to the Company all property and
     Confidential Information, including work in progress, originals and copies
     of business forms, computer files, diskettes, source codes, manuals,
     including training and sales materials, catalogs, customer lists, financial
     information, strategic planning information, computer equipment, office
     equipment, and all other materials in Employee's possession or control
     which belong to the Company or contain information subject to this
     Agreement.

3.   Noncompetition. Employee agrees that during the fifteen (15) month period
     commencing on the date of his cessation of employment with the Company (the
     "Noncompetition Period"), he will not, without the prior written consent of
     the Company, either directly or indirectly, in any capacity whatsoever, (a)
     solicit business from, or compete with the Chart Group for the business of,
     any customer of the Chart Group by whatever method or (b) operate, control,
     advise, be employed and/or engaged by, perform any consulting services for,
     invest in, or otherwise become associated with any person, company or other
     entity (other than the purchase of no more than 2% of the publicly traded
     securities of a company whose securities are traded on a national stock
     exchange) who or which, at any time during the Noncompetition Period, is or



     may be in competition with, or engaged in the same or similar conduct,
     activities, or business as the Chart Group was, such as the development of
     and the sale of cryogenic products, equipment and services in the
     geographical area in which the Chart Group maintains offices, sales agents,
     or otherwise conducts business, or where the Chart Group has customers or
     other persons or entities with whom the Chart Group had prior contacts. If
     the Employee requests the Company in writing to waive the noncompetition
     obligations of Employee under this Paragraph 3 with respect to Employee's
     proposed employment with a specified competitor or potential competitor of
     the Chart Group, the Company agrees not to withhold its consent to
     Employee's being so employed if such employment (including the scope of the
     activities in which Employee proposes to engage) were not likely to be
     adverse to the economic or other business interests of the Chart Group,
     provided, however, that Employee shall not be entitled to request to be
     employed by Taylor-Wharton (or its successor) or any parent, subsidiary or
     affiliate of Taylor-Wharton (or its successor).

4.   Workforce Protection. Employee will not, during the fifteen (15) month
     period commencing on the date of his cessation of employment with the
     Company, directly or indirectly hire any of the Chart Group's employees, or
     solicit any of the Chart Group's employees for the purpose of hiring them
     or inducing them to leave their employment with the Chart Group, nor will
     Employee own, manage, operate, join, control, consult with, participate in
     the ownership, management, operation or control of, be employed by, or be
     connected in any manner with any person or entity which engages in the
     conduct proscribed by this paragraph during such fifteen (15) month period.

5.   Severability. In the event that any of the provisions of this Attachment B
     shall be found by a court of competent jurisdiction to be invalid or
     unenforceable as written as a matter of law, the Parties hereto agree that
     such court may exercise its discretion in reforming such provision(s) to
     the end that Employee shall be subject to a covenant that is reasonable
     under the circumstances and enforceable by the Company.

6.   Acknowledgment. Employee specifically acknowledges that the covenants set
     forth herein are reasonable, appropriate, and necessary as to duration,
     scope, and geographic area in view of the nature of the relationship
     between Employee and the Company and the investment by the Company of
     significant time and resources in the training, development, and employment
     of Employee. Employee warrants and represents that Employee is able to
     engage in other activities for the purpose of earning a livelihood.



                  Employee further acknowledges that the remedy at law for any
breach of this covenant, including monetary damages to which the Company may be
entitled, will be inadequate and that the Company, its successors and/or
assigns, shall be entitled to injunctive relief against any breach without bond.
Such injunctive relief shall not be exclusive, but shall be in addition to any
other rights or remedies, which the Company may have for any such breach.

Dated this 4th day of September, 2002.


                                /s/ James R. Sadowski
                                ------------------------------------------------
                                EMPLOYEE

                                CHART INDUSTRIES, INC.

                                By:      /s/ Mark Ludwig
                                         -----------------------------------
                                Title:   Corporate Director, Human Resources
                                         -----------------------------------

EX-10.3

                                                                    EXHIBIT 10.3
                                                                  EXECUTION COPY

                              EMPLOYMENT AGREEMENT

                  This Employment Agreement (this "Agreement") is made as of
July 1, 2002 by and between CHART INDUSTRIES, INC., a Delaware corporation (the
"Company"), and G. JAN F. VAN GLABBEEK ("Executive").

                  WHEREAS, the Company desires to employ Executive in the
position of Vice President - Strategic Development of the Company, and the
Executive desires to accept such employment, on the terms and subject to the
conditions hereinafter set forth; and

                  WHEREAS, Executive is being employed hereunder to assist the
Company in developing and executing the plans of the Company for operational
reorganization, restructuring and asset divestiture (the "Assignment") and the
Assignment is temporary in nature, it being understood that Executive's
employment will cease after the Assignment has been substantially completed.

                  NOW, THEREFORE, in consideration of the respective covenants
and agreements of the parties herein contained, the Company and Executive agree
as follows:

                  1.  Term of Employment. The Company hereby agrees to employ
Executive, and Executive hereby agrees to serve the Company, on the terms and
conditions set forth herein for the period (the "Employment Period") commencing
as of June 3, 2002 and expiring on the earlier of (a) July 15, 2005, the date of
Executive's 65th birthday, or (b) the 30th calendar day after the Company has
given to Executive written notice that the Board of Directors of the Company has
determined in good faith that the Assignment has been substantially completed,
but in no event will the Employment Period expire before December 31, 2003 under
this Section 1(b). The Employment Period may be extended upon mutual agreement
in writing signed by Executive and an officer of the Company specifically
designated by the Board of Directors of the Company to execute such writing. In
any case, the Employment Period may be terminated earlier under the terms and
conditions set forth herein.

                  2.  Position and Duties. During the Employment Period,
Executive shall serve as Vice President - Strategic Development of the Company
and report to the Chief Executive Officer of the Company. Executive shall have
responsibility for developing and executing the plans of the Company for
operational reorganization, restructuring, asset divestiture and other special
projects identified by the Company, and the performance of such other executive
services and duties as shall be reasonably assigned to and requested of him by,
and subject to the direction and supervision of, the Chief Executive Officer or
the Board of Directors of the Company. Executive shall devote substantially all
his working time and efforts to the business and affairs of the Company and
serve the Company in its business and perform his duties to the best of his
ability.

                  3.  Compensation.

                  (a) Salary. During the Employment Period, Executive shall
receive a base salary at the rate of Two Hundred Fifty Thousand Dollars
($250,000) per year (the "Base Salary Amount"). Executive's salary shall be
reviewed on an annual basis by the Board of Directors of



the Company or any authorized Committee thereof. Executive's salary may be
adjusted based upon such annual review, although any such adjustment shall be at
the sole discretion of the Board of Directors or any authorized Committee
thereof. Notwithstanding the foregoing, in no event shall Executive's salary be
adjusted below the Base Salary Amount. Such salary shall be payable in bi-weekly
installments or otherwise in accordance with the normal policies of the Company
for payment of corporate officers.

                  (b) Benefits. During the Employment Period, Executive shall be
eligible to participate in any employee benefits plans which are maintained or
established by the Company for its corporate officers, subject, however, to all
of the terms and conditions thereof, including any eligibility requirements
therefor, including: (i) medical, dental and vision insurance coverage; (ii)
life insurance coverage; (iii) 401(k) Retirement Plan; (iv) four weeks of paid
vacation annually (three weeks in 2002 and prorated proportionately in any other
year in which Executive is employed by the Company for less than the full year)
to be taken at such time or times as are chosen by Executive; and (v) the use of
a leased automobile (including insurance).

                  (c) Incentive Plan and Option Plan. During the Employment
Period, Executive also shall be eligible to participate in the following,
subject to all of the terms and conditions thereof including any eligibility
requirements therefor: (i) the Management Incentive Compensation Plan or any
successor plan (the "Incentive Plan"); and (ii) any stock option plan of the
Company in which the Company's corporate officers generally are eligible to
participate (the "Option Plan"). Payment under the Incentive Plan shall be
determined by, and awarded in the sole discretion of, the Board of Directors of
the Company or any authorized Committee thereof and shall be dependent upon the
Company's financial performance and Executive's performance toward established
goals. Executive's annual bonus potential under the Incentive Plan shall be up
to 100% of Executive's Base Salary Amount but there shall be no guaranteed
awards, except that solely for fiscal year 2002 Executive's bonus award under
the Incentive Plan shall be not less than Fifty Thousand Dollars ($50,000). On
an annual basis, the Board of Directors of the Company or any authorized
Committee thereof may in its sole discretion grant Executive options to purchase
common stock of the Company under the Option Plan in addition to any option
previously granted to Executive.

                  (d) Expenses. The Company shall reimburse Executive for
reasonable expenses incurred by him on behalf of the Company in the performance
of his duties during the Employment Period. Executive shall furnish the Company
with such documentation as is requested by the Company in order for it to comply
with the Internal Revenue Code of 1986, as amended, and regulations thereunder
in connection with the proper deduction of such expenses.

                  4.  Termination of Employment.

                  (a) Events of Termination. The Employment Period shall
terminate immediately upon the occurrence of any of the following events: (i)
expiration of the Employment Period under Section 1(a) or 1(b); (ii) the death
of Executive; (iii) the expiration of the 30th calendar day (the "Disability
Effective Date") after the Company gives Executive written notice of its
election to terminate Executive's employment upon the Disability of Executive,
if before the expiration of such 30-day period Executive has not returned to the

                                        2



performance of his duties hereunder on a full-time basis; (iv) voluntary
termination by Executive of his employment with the Company without Good Reason,
a right reserved to Executive hereunder; (v) the Company's discharge of
Executive for Good Cause; (vi) the Company's discharge of Executive at any time
without Good Cause, for any reason or no reason; or (vii) voluntary termination
by Executive of his employment with the Company for Good Reason. Section 5 sets
forth the benefits to which Executive is entitled, if any, upon termination of
Executive's employment upon the occurrence of one of the foregoing events.

                  (b) Notice of Termination. Any termination by the Company for
Good Cause, or by Executive for Good Reason, shall be communicated by Notice of
Termination to the other party hereto given in accordance with Section 10. 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) sets forth in reasonable detail the facts and circumstances claimed
to provide a basis for termination of Executive's employment under the provision
so indicated and (iii) specifies the Date of Termination (as defined below). The
failure by Executive or the Company to set forth in the Notice of Termination
any fact or circumstance which contributes to a showing of Good Reason or Good
Cause shall not waive any right of Executive or the Company, respectively,
hereunder or preclude Executive or the Company, respectively, from asserting
such fact or circumstance in enforcing Executive's or the Company's rights
hereunder.

                  (c) Date of Termination. "Date of Termination" means (i) if
Executive's employment is terminated by the Company for Good Cause, or by
Executive for Good Reason, the date of termination of employment that is set
forth in the Notice of Termination (which shall not be earlier than the date on
which such notice is given), (ii) if Executive's employment is terminated by the
Company other than for Good Cause or Disability, or Executive resigns without
Good Reason, the date on which the Company or Executive notifies Executive or
the Company, respectively, of such termination, or such later date as may be
specified by the terminating party in such notice, and (iii) if Executive's
employment is terminated by reason of death, Disability or expiration of the
Employment Period under Section 1(a) or 1(b), the date of death of Executive,
the Disability Effective Date or the date of expiration of the Employment Period
under Section 1(a) or 1(b), as the case may be.

                  5.  Obligations of the Company upon Termination.

                  (a) Discharge Without Good Cause or Resignation for Good
Reason. If, during the Employment Period,

         (x) the Company terminates Executive's employment under Section 4(a)
         (vi) without Good Cause, or

         (y) Executive terminates his employment under Section 4(a)(vii) for
         Good Reason,

then, in lieu of further base salary or bonus payments, the Company shall pay to
Executive in a lump sum in cash within 30 calendar days after the Date of
Termination an amount equal to the sum of:

                                        3



                           (i)  the sum of (A) Executive's annual base salary at
         the rate then in effect through the Date of Termination to the extent
         not previously paid, (B) Executive's Earned Bonus Amount for the
         calendar year in which the Date of Termination occurs (the "Current
         Year") to the extent not previously paid and (C) any cash bonus under
         the Incentive Plan determined and awarded to Executive under Section
         3(c) before the Date of Termination for the calendar year before the
         Current Year to the extent not previously paid (the sum of (A), (B) and
         (C) is referred to herein as the "Accrued Obligations"); and

                           (ii) the product of (A) the lesser of (1) the number
         of months (including fractions thereof) remaining from the Date of
         Termination until Executive's 65th birthday or (2) six (such applicable
         number of months after the Date of Termination hereinafter referred to
         as the "Section 5(a) Continuation Period") and (B) one-twelfth (1/12th)
         of Executive's annual base salary at the rate then in effect.

Executive shall not be entitled to any payment under this Section 5(a) if
Executive is entitled to the benefits of Section 5(b).

                  (b)      Discharge Without Good Cause or Resignation for Good
Reason After a Change in Control. If a Change in Control occurs during the
Employment Period, and during the Employment Period

         (x) the Company terminates Executive's employment under Section
         4(a)(vi) without Good Cause after such Change in Control (or after the
         Company or any Significant Stockholder has entered into a definitive
         agreement with a third party resulting in such Change in Control), or

         (y) Executive terminates his employment under Section 4(a)(vii) for
         Good Reason after such Change in Control,

then, in lieu of further base salary or bonus payments and in lieu of any
payment under Section 5(a), the Company shall pay to Executive in a lump sum in
cash within 30 calendar days after the Date of Termination an amount equal to
the sum of:

                           (i)  the Accrued Obligations; and

                           (ii) the product of (A) the lesser of (1) the number
         of months (including fractions thereof) remaining from the Date of
         Termination until Executive's 65th birthday or (2) twelve (such
         applicable number of months after the Date of Termination hereinafter
         referred to as the "Section 5(b) Continuation Period") and (B)
         one-twelfth (1/12th) of Executive's annual base salary at the rate then
         in effect.

                  (c)      Additional Provisions Concerning Discharge Without
Good Cause or Resignation for Good Reason. If, during the Employment Period, the
Company terminates Executive's employment under Section 4(a)(vi) without Good
Cause or Executive terminates his employment under Section 4(a)(vii) for Good
Reason, then this Section 5(c) shall apply. As used in this Section 5(c), the
"Applicable Continuation Period" shall mean the Section 5(a) Continuation Period
if Executive is entitled to the benefits of Section 5(a) or the Section 5(b)
Continuation Period if Executive is entitled to the benefits of Section 5(b). In
no case shall Executive be entitled to the benefits of both Sections 5(a) and
5(b).

                                        4



                    (i)   For purposes of Section 5(a) or 5(b), as applicable,
any amounts of compensation deferred by Executive under a deferral plan of the
Company or any of its affiliates shall be deemed to have been paid on the date
of deferral, and all such deferred amounts shall be payable as governed by the
terms of the applicable deferral plan.

                    (ii)  For the duration of the Applicable Continuation
Period, Executive shall be eligible to participate in the employee benefits
plans referred to in Sections 3(b)(i) and (ii) as if he were still employed by
the Company, to the extent and at the level of Executive's participation
thereunder immediately prior to the Date of Termination, but all Company
contributions or payments under any such employee benefit plans shall be subject
to Executive's fulfillment of his contribution requirements thereunder, and
Company provision of the benefits listed in Sections 3(b)(i) and (ii) shall
cease if Executive obtains such coverage, if any, from another employer during
the Applicable Continuation Period.

                    (iii) Executive shall be entitled to receive any other
benefits provided for in Sections 3(b) and 3(c) which have accrued up to and
including the Date of Termination (including payment at Executive's then-current
base salary rate for any unused vacation time accrued during the Current Year),
to the extent not otherwise provided by this Section 5 but subject to the terms
and conditions of the benefit plans referenced in Sections 3(b) and 3(c), and
reimbursement of reasonable expenses incurred up to and including the Date of
Termination under the terms of Section 3(d).

                (d) Death or Disability; Discharge for Good Cause; Resignation
Without Good Reason. Executive shall be entitled to the severance benefits
specified in this Section 5(d) if, during the Employment Period, Executive's
employment with the Company (i) terminates under Section 4(a)(ii) as a result of
Executive's death or under Section 4(a)(iii) as a result of Executive's
Disability, (ii) is terminated under Section 4(a)(v) by the Company for Good
Cause, or (iii) is terminated by Executive on a voluntary basis under Section
4(a)(iv) without Good Reason. In any such case, Executive shall be entitled to
payment of base salary only for the remainder of the month in which such
termination occurs and thereafter such salary shall end and cease to be payable.
In addition, in any such case, Executive shall be entitled to receive any
benefits provided for in Sections 3(b) and 3(c) which have accrued up to and
including the Date of Termination, subject to the terms and conditions of the
benefit plans referenced in Sections 3(b) and 3(c), and reimbursement of
reasonable expenses incurred up to and including the Date of Termination under
the terms of Section 3(d).

                (e) Expiration of the Employment Period. If Executive's
employment with the Company terminates under Section 4(a)(i) in connection with
the expiration of the Employment Period under Section 1(a) or 1(b), Executive
shall be entitled to (i) payment of base salary only through the Date of
Termination, and thereafter such salary shall end and cease to be payable, (ii)
receive, subject to the terms and conditions of the benefit plans referenced in
Sections 3(b) and 3(c), any benefits provided for in Sections 3(b) and 3(c)
which have accrued up to and including the Date of Termination, and (iii)
reimbursement of reasonable expenses incurred up to and including the Date of
Termination under the terms of Section 3(d).

                 6. Full  Settlement.  The Company's obligation to make the
payments provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be

                                        5



affected by any set-off, counterclaim, recoupment, defense or other claim, right
or action which the Company may have against Executive or others. In no event
shall Executive be obligated to seek other employment or take any other action
by way of mitigation of the amounts payable to Executive under any of the
provisions of this Agreement.

                  7.  Indemnification. The Company shall indemnify Executive and
his representatives, successors and estate against claims arising in connection
with Executive's status as an officer, employee or agent of the Company, in
accordance with the Company's Certificate of Incorporation, By-Laws and policies
for its executive officers, subject to applicable law.

                  8.  Restrictive Covenants.

                  (a) Non-Competition. During the Employment Period and until
the end of the Post-Termination Covered Period, Executive shall not, directly or
indirectly, own, manage, operate, control or participate in the ownership,
management, operation or control of, or be connected as an officer, employee,
partner or director with, or have any financial interest in, any business which
is in substantial competition with any business conducted by the Chart Group, in
any area where such business is being conducted at the time of such termination
of employment. Ownership of 5% or less of the voting stock of any corporation
which is required to file periodic reports with the Securities and Exchange
Commission under the Exchange Act shall not constitute a violation hereof. As
used herein, the "Post-Termination Covered Period" shall mean a period of time
commencing on the Date of Termination and ending on the first anniversary of the
Date of Termination, except that if Executive's employment terminates under
circumstances in which he is entitled to a payment under Section 5(a) (but not
entitled to a payment under Section 5(b)), then such period instead shall end
six months after the Date of Termination.

                  (b) Non-Solicitation. Executive shall not directly or
indirectly, at any time during the Employment Period and until the end of the
Post-Termination Covered Period, solicit or induce or attempt to solicit or
induce any customer, employee or sales representative of the Chart Group to
terminate his, her or its customer, employment, or representation relationship
with the Chart Group or in any way directly or indirectly interfere with such a
relationship.

                  (c) Confidentiality. Executive shall keep in strict
confidence, and shall not, directly or indirectly, at any time during the
Employment Period and for one year after the Date of Termination, disclose,
furnish, publish, disseminate, make available or, except in the course of
performing his duties of employment hereunder, use any Confidential Information.
Executive specifically acknowledges that all Confidential Information, in
whatever media or form maintained and whether compiled by the Chart Group or
Executive, derives independent economic value from not being readily known to or
ascertainable by proper means by others who can obtain economic value from its
disclosure or use, that reasonable efforts have been made by the Chart Group to
maintain the secrecy of such information, that such information is the sole
property of the Chart Group and that any disclosure or use of such information
by Executive during the Employment Period (except in the course of performing
his duties and obligations hereunder) or within one year after the Date of
Termination shall constitute a misappropriation of the Chart Group's trade
secrets. Notwithstanding the foregoing, Executive shall not be

                                        6



prohibited from disclosing Confidential Information to the extent that he is
required to do so by or under applicable law.

                  9.  Binding Agreement; Successors. This Agreement shall inure
to the benefit of and be binding upon Executive's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. If Executive should die while any amounts would still be
payable to him hereunder, all such amounts, unless otherwise provided herein,
shall be paid in accordance with this Agreement to the person, persons, entity
or entities as Executive shall have designated, in a writing in form of Exhibit
1 attached hereto or otherwise satisfactory to the Company, and filed with the
Secretary of the Company. Executive shall be free to amend, alter or change such
designation, provided, however, that any such amendment, alteration or change
shall be made by a writing in form of Exhibit 1 attached hereto or otherwise
satisfactory to the Company and shall be filed with the Secretary of the
Company. In the event there is no beneficiary designated pursuant to this
Section 9 or such designation is not effective for the amounts payable on behalf
of Executive under this Agreement, or if no such beneficiary shall survive
Executive, then such amounts shall be paid to Executive's spouse, if his spouse
survives him, or if his spouse does not survive him, to the executor or
administrator of his estate for distribution as part of his estate. This
Agreement shall inure to the benefit of and be binding upon the successors and
assigns of the Company, including, without limitation, any person acquiring
directly or indirectly all or substantially all of the assets of the Company,
whether by merger, consolidation, sale or otherwise (and such successor shall
thereafter be deemed the "Company" for the purposes of this Agreement). The
Company shall require any such successor to assume and agree to perform this
Agreement.

                  10. Notice. All notices, requests and other communications
under this Agreement shall be in writing and shall be deemed to have been duly
given (a) when hand delivered, (b) one business day after being sent by
recognized overnight delivery service, or (c) three business days after being
sent by registered or certified mail, return receipt requested, postage prepaid,
and in each case addressed as follows (or addressed as otherwise specified by
notice under this Section):

                      (i)      If to the Company, to:

                               Chart Industries, Inc.
                               5885 Landerbrook Drive
                               Suite 150
                               Cleveland, Ohio  44124
                               Attention:  General Counsel

                               With a copy to:

                               Calfee, Halter & Griswold LLP
                               1400 McDonald Investment Center
                               800 Superior Avenue
                               Cleveland, Ohio  44114
                               Attention:  Thomas F. McKee

                                        7



                      (ii)      If to Executive, to:

                                G. Jan F. Van Glabbeek
                                6375 Lacey Road
                                Bellevue, Michigan  49021

                                With a copy to:

                                Chriszt McGarry Co., LPA
                                Cort Shoe Building, 4th Floor
                                1265 West 6th Street
                                Cleveland, Ohio  44113
                                Attention:  James R. Chriszt

                  11. Withholding.  The Company may withhold from any amounts
payable under or in connection with this Agreement all federal, state, local and
other taxes as may be required to be withheld by the Company under applicable
law or governmental regulation or ruling.

                  12. Amendments; Waivers. No provision of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing, and is signed by Executive and an officer of the Company
specifically designated by the Board of Directors of the Company to execute such
writing. No waiver by either party hereto at any time of any breach by the other
party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.

                  13. Jurisdiction. The validity, interpretation, construction
and performance of this Agreement shall be governed by the laws of the State of
Ohio, without giving effect to the conflict of law principles of such State.
Executive and the Company each agree that the state and federal courts located
in the State of Ohio shall have jurisdiction in any action, suit or proceeding
against Executive or the Company based on or arising out of this Agreement and
each of Executive and the Company hereby (a) submits to the personal
jurisdiction of such courts, (b) consents to service of process in connection
with any such action, suit or proceeding and (c) waives any other requirement
(whether imposed by statute, rule of court or otherwise) with respect to
personal jurisdiction, venue or service of process.

                  14. Equitable Relief. Executive and the Company acknowledge
and agree that the covenants contained in Section 8 are of a special nature and
that any breach, violation or evasion by Executive of the terms of Section 8
shall result in immediate and irreparable injury and harm to the Company, for
which there is no adequate remedy at law, and shall cause damage to the Company
in amounts difficult to ascertain. Accordingly, the Company shall be entitled to
the remedy of injunction, as well as to all other legal or equitable remedies to
which the Company may be entitled (including, without limitation, the right to
seek monetary damages), for any breach, violation or evasion by Executive of the
terms of Section 8.

                  15. Validity.  The invalidity or unenforceability of any
provision or provisions of this Agreement shall not affect the validity or
enforceability of any other provision of this

                                        8



Agreement, which shall remain in full force and effect. In the event that any
provision of Section 8 is found by a court of competent jurisdiction to be
invalid or unenforceable as against public policy, such court shall exercise its
discretion in reforming such provision to the end that Executive shall be
subject to such restrictions and obligations as are reasonable under the
circumstances and enforceable by the Company.

                    16.  Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original but all of
which together shall constitute one and the same instrument.

                    17.  Headings; Definitions. The headings contained herein
are for reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement. Certain capitalized terms used in this
Agreement are defined on Schedule A attached hereto.

                    18.  No Assignment. This Agreement may not be assigned by
either party without the prior written consent of the other party, except as
provided in Section 9.

                    19.  Entire Agreement. This Agreement contains the entire
agreement between the parties with respect to the employment of Executive and
supersedes any and all other agreements, either oral or in writing, with respect
to the employment of Executive.

                    IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.

                                CHART INDUSTRIES, INC.


                                By: /s/ Arthur S. Holmes
                                    --------------------------------------------
                                    Arthur S. Holmes
                                    Chairman and Chief Executive Officer



                                /s/ G. Jan F. van Glabbeek
                                ------------------------------------------------
                                G. JAN F. VAN GLABBEEK
                                ("Executive")

                                        9



                                   Schedule A
                              Certain Definitions

         As used in this Agreement, the following capitalized terms shall have
the following meanings:

         "Change in Control" shall mean the occurrence at any time of any of the
         following events:

                           (a) The Company is merged or consolidated or
         reorganized into or with another corporation or other legal person or
         entity, other than a Related Person, and as a result of such merger,
         consolidation or reorganization less than 60% of the combined voting
         power of the then-outstanding securities of such corporation, person or
         entity immediately after such transaction is held in the aggregate by
         the holders of Voting Stock immediately prior to such transaction;

                           (b) The Company sells or otherwise transfers all or
         substantially all of its assets to any other corporation or other legal
         person or entity, other than a Related Person, and less than 60% of the
         combined voting power of the then-outstanding securities of such
         corporation, person or entity immediately after such sale or transfer
         is held in the aggregate by the holders of Voting Stock immediately
         prior to such sale or transfer;

                           (c) There is a report filed on Schedule 13D or
         Schedule TO (or any successor schedule, form or report), each as
         promulgated pursuant to the Exchange Act, disclosing that any person
         (as the term "person" is used in Section 13(d)(3) or Section 14(d)(2)
         of the Exchange Act) other than a Related Person has become the
         beneficial owner (as the term "beneficial owner" is defined under Rule
         l3d-3 or any successor rule or regulation promulgated under the
         Exchange Act) of securities representing 40% or more of the Voting
         Power;

                           (d) The Company files a report or proxy statement
         with the Securities and Exchange Commission pursuant to the Exchange
         Act disclosing in response to Form 8-K or Schedule 14A (or any
         successor schedule, form or report or item therein) that a change in
         control of the Company has or may have occurred or shall or may occur
         in the future pursuant to any then-existing contract or transaction
         other than a contract or transaction with a Related Person; or

                           (e) If during any period of two consecutive years,
         individuals, who at the beginning of any such period, constitute the
         Directors cease for any reason to constitute at least a majority
         thereof, unless the nomination for election by the Company's
         shareholders of each new Director was approved by a vote of at least a
         majority of the Directors then in office who were Directors at the
         beginning of any such period.

                           Notwithstanding the foregoing provisions of
         paragraphs (c) and (d) of this definition, a "Change in Control" shall
         not be deemed to have occurred for purposes of this Agreement (i)
         solely because (A) the Company, (B) a Related Person, (C) a Subsidiary,
         or (D) any Company-sponsored employee stock ownership plan or other
         employee benefit plan of the Company or any Subsidiary, or any entity
         holding shares of Voting Stock for or pursuant to the terms of any such
         plan, either files or becomes



          obligated to file a report or proxy statement under or in response to
          Schedule 13D, Schedule TO, Form 8-K or Schedule 14A (or any successor
          schedule, form or report or item therein) under the Exchange Act,
          disclosing beneficial ownership by it of shares of Voting Stock or
          because the Company reports that a change in control of the Company
          has or may have occurred or shall or may occur in the future by reason
          of such beneficial ownership, (ii) solely because the Company or any
          other person, group or entity directly involved in the restructuring
          of the Company's capital and debt arrangements related to the
          Company's Credit Agreement, dated as of April 12, 1999, as amended,
          either files or becomes obligated to file a report on Schedule 13D,
          Schedule TO, Form 8-K or Schedule 14A (or any successor schedule, form
          or report) under the Exchange Act, disclosing beneficial ownership by
          it of shares of Voting Stock acquired from the Company in connection
          with such restructuring or because the Company reports that a change
          in control of the Company has or may have occurred or shall or may
          occur in the future by reason of such transaction, but only if both
          (A) the transaction giving rise to such filing or obligation is
          approved in advance of consummation thereof by the Company's Board of
          Directors and (B) at least a majority of the Voting Power immediately
          after such transaction is held in the aggregate by the holders of
          Voting Stock immediately prior to such transaction, or (iii) solely
          because of a change in control of any Subsidiary.

          "Chart Group" means, collectively, the Company and each group,
          division and Subsidiary of the Company.

         "Confidential Information" means confidential business information of
         the Chart Group and its customers and vendors, without limitation as to
         when or how Executive may have acquired such information. Such
         Confidential Information shall include, without limitation, the Chart
         Group's manufacturing, selling and servicing methods and business
         techniques, customer, vendor and product information, product
         development plans, internal financial statements, sales and
         distribution information, business plans and opportunities, corporate
         alliances, processes and techniques, and other information concerning
         the Chart Group's actual or anticipated business or products, or which
         is received in confidence by or for the Chart Group from any other
         person.

         "Director" means a member of the Board of Directors of the Company.

         "Disability" means the inability of Executive for a continuous period
         of three months to perform the essential functions of his position
         hereunder on an active full-time basis with or without reasonable
         accommodations by reason of a disability condition. A certificate from
         a physician acceptable to both the Company and Executive to the effect
         that Executive is or has been disabled and incapable of performing the
         essential functions of his position with or without reasonable
         accommodations for the Company as previously performed shall be
         conclusive of the fact that Executive is incapable of performing such
         services and is, or has been, disabled for the purposes of this
         Agreement. The Company and Executive acknowledge and agree that the
         essential functions of Executive's position are unique and critical to
         the Company and that a disability condition that causes Executive to be
         unable to perform the essential functions of his position under the
         circumstances described above shall constitute an undue hardship on the
         Company.

                                       A-2



         "Earned Bonus Amount" means an amount equal to the product of (a) the
         Achieved Target Bonus and (b) a fraction, the numerator of which is the
         number of days in the Current Year through the Date of Termination, and
         the denominator of which is 365; provided, however, that if the Date of
         Termination occurs on or before December 31, 2002, then the Earned
         Bonus Amount instead shall mean $50,000. As used herein, "Achieved
         Target Bonus" means an amount equal to the portion of Executive's
         target cash bonus for the Current Year under the Incentive Plan
         achieved by Executive based upon the Company's financial performance
         and Executive's performance (through the Date of Termination and
         assuming such performance would continue at the same level for the
         entire Current Year) toward reaching the objective goals established
         for achieving such target cash bonus, all as determined by the Board of
         Directors of the Company or any authorized Committee thereof under the
         Incentive Plan in good faith.

         "Exchange Act" means the Securities Exchange Act of 1934, as amended,
         and the rules and regulations thereunder, as such law, rules and
         regulations may be amended from time to time.

         "Good Cause" means a determination by the Board of Directors (without
         the participation of Executive) of the Company, pursuant to the
         exercise of its business judgment, that any one of the following events
         has occurred and not been cured by Executive within 60 calendar days
         after the Company first gave Executive written notice thereof:

               (a) Executive has been indicted by a state or federal grand jury
         of committing a felony;

               (b) the Board receives proof satisfactory to it of the commission
         by Executive of theft or embezzlement from the Company, or any other
         crime against the Company;

               (c) Executive has materially breached the provisions of Section 8
         or any other material provision of this Agreement; or

               (d) Executive's failure, refusal or inability to perform his
         services and duties to the Company as set forth in Section 2, any act
         of gross negligence, corporate waste, disloyalty, or unfaithfulness to
         the Company which adversely affects the business of the Company, or
         any other act or course of conduct which could reasonably be expected
         to have an adverse affect on the business of the Company such as, by
         way of example only, intentionally causing the Company to violate
         federal, state or local environmental, labor, antitrust, or other
         similar laws, or sexual or other illegal harassment of employees.

         "Good Reason" means a determination by Executive made in good faith
         that either of the following events has occurred, without Executive's
         express written consent, and not been cured by the Company within 15
         calendar days after Executive first gave the Company written notice
         thereof: (a) a significant reduction in the nature or scope of the
         title, authority or responsibilities of Executive from those held by
         Executive upon

                                       A-3



         commencement of the Employment Period; (b) a reduction in Executive's
         base salary below the Base Salary Amount.

         "Related Person" means (a) Arthur S. Holmes, (b) Charles S. Holmes, (c)
         any person, group or entity controlled directly, or indirectly through
         one or more intermediaries, by Arthur S. Holmes or Charles S. Holmes or
         both of them, and (d) any of the foregoing acting alone or in concert.

         "Significant Stockholder" means any person who is now or hereafter
         becomes the beneficial owner (as the term "beneficial owner" is defined
         under Rule l3d-3 or any successor rule or regulation promulgated under
         the Exchange Act) of securities representing 25% or more of the Voting
         Power.

         "Subsidiary" means a corporation, company or other entity (a) more than
         50% of whose outstanding shares or securities (representing the right
         to vote for the election of directors or other managing authority) are,
         or (b) which does not have outstanding shares or securities (as may be
         the case in a partnership, joint venture or unincorporated
         association), but more than 50% of whose ownership interest
         representing the right generally to make decisions for such other
         entity is, now or hereafter, owned or controlled, directly or
         indirectly, by the Company.

         "Voting Power" means, at any time, the total votes relating to the
         then-outstanding securities entitled to vote generally in the election
         of Directors.

         "Voting Stock" means, at any time, the then-outstanding securities
         entitled to vote generally in the election of Directors.

                                       A-4


                                   Exhibit 1

                           DESIGNATION OF BENEFICIARY

                  As of July 1, 2002, I, the undersigned, entered into an
Employment Agreement with Chart Industries, Inc. Pursuant to Section 9 of said
Agreement, I have the right to designate the beneficiary(ies) to receive certain
payments in the event of my death. I, therefore, exercise this right and
designate ________________________________, to receive any such payments. Any
and all previous designations of beneficiary with respect to such payments made
by me are hereby revoked, and I hereby reserve the right to revoke this
designation of beneficiary under the terms described in Section 9 of said
Agreement.

                                                   _____________________________
                                                   G. Jan F. van Glabbeek

Dated:  __________________, 20___

                  Receipt of this Designation of Beneficiary is acknowledged by
the undersigned on behalf of Chart Industries, Inc.

                                             CHART INDUSTRIES, INC.


                                             By________________________________
                                               _________________

Dated:  ___________________, 20___