10-K

Securities and Exchange Commission

Washington, D.C. 20549

Form 10-K

(Mark One)

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2002

OR

¨ 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	34-1712937
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)
5885 Landerbrook Drive, Suite 150,	44124
Cleveland, Ohio	(Zip Code)
(Address of principal executive offices)

Registrant’s telephone number, including area code: (440) 753-1490

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
Common Stock, par value $.01 per share	New York Stock Exchange(1)

Securities registered pursuant to Section 12(g) of the Act: None

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 for 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  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.    x

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

As of March 31, 2003, the registrant had 25,893,876 shares of Common Stock outstanding.

As of June 30, 2002, the aggregate market value of 17,350,240 shares of Common Stock of the registrant held by non-affiliates was $33,485,963 (based upon the closing price of $1.93 per share of Common Stock on the New York Stock Exchange on June 30, 2002). For purposes of this calculation, the registrant deems the 7,674,999 shares of Common Stock held by all of its Directors and executive officers as of such date to be the shares of Common Stock held by affiliates.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s definitive Proxy Statement to be used in connection with its Annual Meeting of Stockholders planned to be held on June 5, 2003 are incorporated by reference into Part III of this Form 10-K.

Except as otherwise stated, the information contained in this Form 10-K is as of December 31, 2002.

(1) As of April 9, 2003, the registrant’s Common Stock was subject to delisting from the New York Stock Exchange as described in this Form 10-K.

PART I

ITEM 1. BUSINESS

General

Chart Industries, Inc. (the “Company” or “Chart”) was organized in June 1992 as a Delaware corporation to serve as a holding company for the operations described herein. As used herein, the terms “Company” or “Chart” mean Chart Industries, Inc., its subsidiaries and its predecessors, unless the context otherwise indicates. The Company’s executive offices are located at 5885 Landerbrook Drive, Suite 150, Cleveland, Ohio 44124, and its telephone number is (440) 753-1490.

The Company manufactures standard and custom-built industrial process equipment primarily used for 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 (0° Kelvin; -273° Centigrade; -459° Fahrenheit). 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.

Management anticipates that demand for the Company’s products will increase over the next several years. The Company has initiatives to pursue multiple new products focused on the end-user equipment markets for low-temperature and cryogenic liquids. The use of liquid natural gas (“LNG”) as a vehicle fuel and power generating feedstock, the migration from high pressure cylinders to micro bulk distribution and telemetry to improve distribution logistics each in their own right offer considerable market potential. In addition, the Company plans to continue to focus on its worldwide presence as global industrialization and heightened environmental standards are expected to result in higher demand for high purity industrial gases, which are generally produced, stored and distributed in a cryogenic state. The mergers of several global industrial gas producers and distributors have temporarily reduced the demand for new process and distribution equipment that the Company offers to industrial gas markets. The pressures for increased efficiency in the industry, however, are expected to result in renewed demand for newer equipment and increased service of existing equipment. The Company is well positioned to benefit from both of these developments. In the energy and chemicals markets, management expects strong domestic and international growth, stemming in part from increased global natural gas and ethylene production. Oil producing countries are newly committed to capturing and marketing flared methane that previously was a waste product of the crude oil production process. This increased availability of economically priced hydrocarbons is expected to result in greater demand for equipment to liquefy, process and transport these gases.

Segments and Products

The Company’s operations are organized within three segments: Biomedical, Distribution and Storage and Energy and Chemicals. The Company changed its operating segments, effective October 1, 2002, to reflect the Company’s new organization. All segment information included in this Annual Report on Form 10-K has been restated to conform to the current year presentation. Further information about these segments is found in Note J to the Company’s consolidated financial statements included in Item 8 of this Annual Report on Form 10-K.

Biomedical Segment

The Biomedical segment, which accounted for 23 percent of the Company’s sales in 2002, consists of various product lines built around the Company’s core competencies in cryogenics but with a focus on the medical and biological end users of the liquids and gases instead of the large producers and distributors of cryogenic liquids. The Company’s products in the Biomedical segment include the following:

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Medical Products

The medical oxygen product line is comprised of a limited range of medical respiratory products, including liquid oxygen systems, ambulatory oxygen systems and oxygen concentrators, all of which are used for the in- home supplemental oxygen treatment of patients with chronic obstructive pulmonary diseases, such as bronchitis, emphysema and asthma.

Individuals for whom supplemental oxygen is prescribed generally purchase or rent an oxygen system from a home healthcare provider or medical equipment dealer. The provider/dealer or physician usually selects which type of oxygen system to recommend to its customers: liquid oxygen systems, oxygen concentrators or high-pressure oxygen cylinders. Of these modalities, liquid oxygen is believed to offer greater long-term therapeutic benefits by providing the option of increased patient ambulation.

The Company’s primary competitor in the medical products line is Puritan-Bennett, a division of Tyco. The Company believes that competition for liquid oxygen systems is based primarily upon product performance, reliability, ease-of-service and price and focuses its marketing strategies on these considerations.

Biological Storage Systems

This product line consists of vacuum-insulated containment vessels for the storage of biological materials. The primary markets for this product line include medical laboratories, pharmaceutics, research facilities, blood and tissue banks, veterinary laboratories, large-scale repositories and artificial insemination, particularly in the beef and dairy industry.

The number of competitors for biological storage systems includes only a few companies worldwide. These products are sold through multiple channels of distribution specifically applicable to each market sector. The distribution channels range from highly specialized cryogenic storage systems providers to general supply and catalogue distribution operations to breeding service providers. Historically, competition in this field has been focused on design, reliability and price. Additionally, the Company believes its understanding of the end-user’s applications and concerns enables the Company to sell a “total value” package. Alternatives to vacuum insulated containment vessels include mechanical, electrically powered refrigeration.

Magnetic Resonance Imaging (“MRI”) Cryostat Components

The basis of the MRI technique is that the magnetic properties of certain nuclei of the human body can be detected, measured and converted into images for analysis. MRI equipment uses high-strength magnetic fields, applied radio waves and high-speed computers to obtain cross-sectional images of the body. The major components of the MRI assembly are a series of concentric thermal shields and a supercooled electromagnet immersed in a liquid helium vessel (a “cryostat”) that maintains a constant, extremely low temperature (4° Kelvin; -452° Fahrenheit) to achieve superconductivity. The Company manufactures large cryostats, various cryogenic interfaces, electrical feed-throughs and various other MRI components that are used to transfer power and/or cryogenic fluids from the exterior of the MRI unit to the various layers of the cryostat and superconducting magnet.

The Company currently sells all of its MRI cryostats to General Electric Company (“GE”), a leading worldwide manufacturer of MRI equipment.

Telemetry Products

The Company has developed this product line as a new business model that focuses primarily on providing distribution routing data to distributors of home health care oxygen and beverage carbon dioxide (“CO₂”). The Company expects this business will expand into other areas of liquid distribution, such as micro-bulk industrial gases, as the product gains market visibility. The routing data provided has proven to lower distribution costs and make the supply of liquid oxygen and liquid CO₂ more competitive than the existing modes of supply. The Company pursues this opportunity through its CoolTel^® (“CoolTel”) business unit.

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Distribution and Storage Segment

Representing 46 percent of the Company’s sales in 2002, the products supplied by the Distribution and Storage segment are driven primarily by the large and growing installed base of users of cryogenic liquids as well as new applications and distribution technologies for cryogenic liquids. The Company’s products span the entire spectrum of the industrial gas market from small customers requiring cryogenic packaged gases to large users requiring custom engineered cryogenic storage systems and include the following:

Cryogenic Bulk Storage Systems

The Company is a leading supplier of cryogenic bulk storage systems of various sizes ranging from 500 gallons to 100,000 gallons. Using sophisticated vacuum insulation systems placed between inner and outer vessels, these bulk storage systems are able to store and transport liquefied industrial gases and hydrocarbon gases at temperatures from -100° Fahrenheit to temperatures nearing absolute zero. The Company has experienced growth in its bulk storage systems sales as the demand for liquefied industrial gases and liquefied hydrocarbon gases has increased. End use customers for the Company’s cryogenic storage tanks include industrial gas producers, chemical producers, manufacturers of electrical components and businesses in the oil and natural gas industries. Prices for the Company’s cryogenic bulk storage systems range from $20,000 to $500,000. Global industrial gas producers, including Air Liquide, Air Products and BOC, are the principal customers for the Company’s cryogenic bulk storage systems. Additionally, in the North American market industrial gas distributors such as Airgas are significant customers. On a worldwide basis, the Company competes primarily with Harsco in this product area. In the European and Asian markets, the Company competes with several suppliers owned by global industrial gas producers.

Cryogenic Packaged Gas Systems

The Company is a leading supplier of cryogenic packaged gas systems of various sizes ranging from 160 liters to 1,500 liters. Cryogenic liquid cylinders are used extensively in the packaged gas industry to allow smaller quantities of liquid to be easily delivered to the customers of the industrial gas distributors on a full-for-empty basis. Principal customers for the Company’s liquid cylinders are the same global industrial gas producers and the North American industrial gas distributors who purchase the Company’s cryogenic bulk storage systems. The Company competes on a worldwide basis primarily with Harsco in this product area. The Company has developed two new technologies in the packaged gas product area: ORCA^® Micro-Bulk systems and Tri-fecta^® Laser Gas assist systems. ORCA^® Micro-Bulk systems bring the ease of use and distribution economics of bulk gas supply to customers formerly supplied by high pressure or cryogenic liquid cylinders. The ORCA^® Micro-Bulk system growth has exceeded Company expectations and is the substantial market leader in this growing segment. The Tri-fecta^® Laser Gas assist system was developed to meet the “assist gas” performance requirements for new high powered lasers being used in the metal fabrication industry. Growth of this product has also exceeded Company expectations.

Cryogenic Systems and Components

The Company’s line of cryogenic components, including vacuum-insulated pipe and specialty components, are recognized in the market for their reliability, quality and performance. These products are sold to the Company’s heat exchanger and cold box customers in the industrial gas and hydrocarbon processing industries, as well as to a diverse group of customers in those and other industries. The Company competes with a number of suppliers of cryogenic components, including Cryogenic Industries, CCI and Acme Cryogenics.

Beverage Liquid CO₂ Systems

This product line consists primarily of vacuum-insulated, bulk liquid CO₂ containers used for beverage carbonation in restaurants, convenience stores and cinemas, in sizes ranging from 100 pounds to 600 pounds of liquid CO₂ storage. The Company also manufactures and markets non-insulated, bulk flavored syrup containers

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for side-by-side installation with its CO₂ systems. The Company’s beverage systems are sold to food franchisers, soft drink companies and CO₂ distributors. The Company’s primary competitors for its bulk liquid CO₂ beverage delivery systems are producers of high-pressure gaseous CO₂ systems and sellers of bulk liquid CO₂ beverage systems.

The Company has also begun to market cryogenic and non-cryogenic nitrogen dispensing systems to be used in conjunction with the Company’s beverage liquid CO₂ systems for the dispensing of draught beer. These mixed gas dispense systems serve a major share of the beverage market in the United Kingdom, and the Company is leading the market penetration of these systems in North America.

Cryogenic Services

The Company operates three locations providing installation, service and maintenance of cryogenic products including storage tanks, liquid cylinders, cryogenic trailers, cryogenic pumps and vacuum-insulated pipe.

Energy and Chemicals Segment

The Company’s principal products within the Energy and Chemicals segment, which accounted for 31 percent of sales in 2002, are focused on the process equipment, primarily heat exchangers, coldboxes and LNG fuel systems, used by the major natural gas, petrochemical processing and industrial gas companies in the production of their products.

Heat Exchangers

The Company is the leading designer and manufacturer of cryogenic heat exchangers. Using technology pioneered by the Company, heat exchangers are incorporated into systems such as cold boxes to facilitate the progressive cooling and liquefaction of air or hydrocarbon mixtures for the subsequent recovery or purification of component gases. In hydrocarbon processing industries, heat exchangers allow producers to obtain purified hydrocarbon by-products, such as methane, ethane, propane and ethylene, which are commercially marketable for various industrial or residential uses. In the industrial gas market, heat exchangers are used to obtain high purity atmospheric gases, such as oxygen, nitrogen and argon, which have numerous diverse industrial applications. Heat exchangers are customized to the customer’s requirements and range in price from approximately $30,000 for a relatively simple unit to as high as $10 million for a major project.

Management anticipates the return of demand for its heat exchangers in 2003, resulting substantially from increased activity in the petrochemical and natural gas segments of the hydrocarbon processing market. In particular, management believes that continuing efforts by petroleum producing countries to make better use of stranded natural gas and previously flared gases, as well as efforts to broaden their industrial base, present a promising source of demand for the Company’s heat exchangers and cold box systems. Demand for heat exchangers in developed countries is expected to continue as firms upgrade their facilities for greater efficiency and regulatory compliance. Historic demand for heat exchangers has cycled to very low levels and typically recovered to new peak requirements. To more effectively balance the Company’s production capacity with worldwide demand, the Company now operates only one heat exchanger facility, located in the United States. The Company closed its heat exchanger manufacturing facility in Wolverhampton, United Kingdom, in the first quarter of 2003.

The Company’s principal competitors for heat exchangers are Linde, Sumitomo, Kobe and Nordon. Management believes that the Company is the only producer of large brazed aluminum heat exchangers in the United States and is the leader in the global heat exchanger market. Major customers for the Company’s heat exchangers in the industrial gas market include Air Liquide, Air Products, Linde/BOC, MG Industries and Praxair. In the hydrocarbon processing market, major customers include BP Amoco/Arco, Exxon/Mobil, Chevron/Texaco, Conoco/Phillips and contractors such as ABB Lummus, Bechtel and Kellogg, Brown and Root.

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Cold Boxes

The Company is a leading designer and fabricator of cold boxes. Cold boxes are highly engineered systems used to significantly reduce the temperature of gas mixtures to the point where component gases liquefy and can be separated and purified for further use in multiple industrial, scientific and commercial applications. In the industrial gas market, cold boxes are used to separate air into its major atmospheric components, including nitrogen, oxygen and argon, where the gases are used in a diverse range of applications such as the quick-freezing of food, wastewater treatment and industrial welding. In the hydrocarbon processing market, the Company’s cold box systems are used in natural gas processing and in the petrochemical industry. The construction of a cold box generally consists of one or more heat exchangers and other equipment packaged in a “box” consisting of metal framing and a complex system of piping and valves. Cold boxes, which are designed and fabricated to order, sell in the price range of $500,000 to $10 million, with the majority of cold boxes priced between $1 million and $2 million.

The Company has a number of competitors for fabrication of cold boxes, including Linde, Air Products and many smaller fabrication-only facilities around the world. Principal customers for the Company’s cold boxes include Air Liquide, ABB Lummus, BP Amoco/Arco, Bechtel, Lurgi, Stone and Webster, and Kellogg, Brown and Root.

LNG Alternative Fuel Systems

This product line consists of vacuum-insulated containers for LNG storage, cryogenic pumps and liquid dispensers for vehicle fueling systems and LNG and liquid/compressed natural gas (“LCNG”) refueling systems for centrally fueled fleets of vehicles powered by natural gas, such as fleets operated by metropolitan transportation authorities, refuse haulers and heavy-duty truck fleets. Competition for LNG fueling and storage systems is based primarily on product design, customer support and service, dependability and price. Although there are alternatives to LNG as a fuel, the Company is not aware of any viable alternatives to vacuum-insulated containers for LNG fueling and storage systems. The Company pursues this opportunity through its NexGen Fueling^® (“NexGen”) business unit.

Stainless Steel Tubing

The Company produces small diameter stainless steel tubing for sale to distributors to satisfy their customers’ requirements for quick delivery. The Company’s manufacturing strategy is to focus on custom sizes and smaller production runs, which management believes gives the Company a competitive advantage in providing a superior quality product while meeting customer demands for dependable, fast delivery. With its production and marketing efforts directed principally to customers relying on prompt delivery, the Company is able to compete primarily on the basis of service rather than price. Numerous manufacturers of stainless steel tubing are able to compete with the Company in this market.

Market Overview

The Company serves a wide variety of markets through its emphasis on providing equipment for end-users of cryogenic liquids. These markets include beverage bottling and dispensing, alternative transportation fuels, biomedical research, medical test equipment, home healthcare and electronics testing, to name just a few. With such a wide variety of markets, the Company has reduced the effect that fluctuations in the overall industrial gas and hydrocarbon markets have on its profitability.

Despite its cyclicality, management believes that the global expansion of the industrial gas and hydrocarbon processing markets presents attractive opportunities for growth. To date, the sources of the Company’s international business principally have been its large domestic-based customers, who are aggressively expanding into international markets, and large foreign-based companies with significant U.S. operations. In 2002, approximately 33 percent of the Company’s sales were destined for use at job sites outside the United States

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compared to 34 percent in 2001 and 33 percent in 2000. Further information about the Company’s international business is found in Note A to the Company’s consolidated financial statements included in Item 8 of this Annual Report on Form 10-K.

The industrial gas market is the largest market served by the Company. The top world producers of industrial gases have been among the Company’s largest customers for each of the last three years. Producers of industrial gases separate atmospheric air into its component gases using cryogenic processes. The resultant liquid gases are then stored and transported for ultimate use by a wide variety of customers in the petrochemical, electronics, glass, paper, metals, food, fertilizer, welding, enhanced oil recovery and medical industries. Industrial gas producers use heat exchangers and cold boxes to produce liquid gases. Cryogenic tanks and components, including pumps, valves and piping, are also used to store, transport and distribute liquid gases to end users.

The hydrocarbon processing market consists of petrochemical and natural gas processors. Natural gas processing involves the separation and purification of natural gas for the production of liquid gas end products such as methane, ethane, propane and butane, and by-products such as helium, all of which have numerous commercial and industrial applications. In the petrochemical industry, cryogenic separation and purification processes are required to produce ethylene (the basic building block of plastics), propylene and numerous other primary hydrocarbons having industrial uses. Like the industrial gas market, the hydrocarbon processing market uses all of the categories of the Company’s cryogenic products in the gas separation and purification processes and the subsequent storage and distribution of liquid gases. Major customers for the Company’s products in the hydrocarbon processing markets are large multinational firms in the oil and gas industry, and large engineering and construction concerns.

Engineering and Product Development

The Company’s engineering and product development activities are focused on developing new and improved solutions and equipment for the users of cryogenic liquids. The Company’s engineering, technical and marketing employees actively assist customers in specifying their needs and in determining appropriate products to meet those needs. Portions of the Company’s engineering expenditures typically are charged to customers, either as separate items or as components of product cost.

Competition

Management believes the Company can compete effectively around the world and that it is a leading competitor in its markets. Competition is based primarily on performance and the ability to provide the design, engineering and manufacturing capabilities required in a timely and cost-efficient manner. Contracts are usually awarded on a competitive bid basis. Quality, technical expertise and timeliness of delivery are the principal competitive factors within the industry. Price and terms of sale are also important competitive factors. Because reliable market share data is not available, it is difficult to estimate the Company’s exact position in its markets, although the Company believes it ranks among the leaders in each of the markets it serves.

Marketing

The Company markets its products and services throughout the world primarily through 161 direct sales personnel and through independent sales representatives and distributors. The technical and custom design nature of the Company’s products requires a professional, highly trained sales force. While each salesperson and sales representative is expected to develop a highly specialized knowledge of one product or group of products within a segment of the Company, each salesperson and certain sales representatives are now able to sell many products from different segments to a single market. The Company uses independent sales representatives and distributors to market its products and services in certain foreign countries that the Company serves and in certain North American markets. These independent sales representatives supplement the Company’s direct sales force in dealing with language and cultural matters. The Company’s domestic and foreign independent sales representatives earn commissions on sales, which vary by product type.

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Orders and Backlog

The Company considers orders to be those for which the Company has received a signed purchase order or other written contract from the customer. Such orders are included in backlog until recognized as revenue or cancelled. The table below sets forth orders and backlog by segment for the last three fiscal years.

	Years Ended December 31,
	2002		2001		2000
	(Dollars in thousands)
Orders
Biomedical	$	66,265	$	59,536	$	55,430
Distribution and Storage		129,083		167,061		211,421
Energy and Chemicals		111,447		85,091		108,710
Total	$	306,795	$	311,688	$	375,561
Backlog
Biomedical	$	1,790	$	4,291	$	3,148
Distribution and Storage		23,311		28,042		46,435
Energy and Chemicals		44,239		32,479		39,291
Total	$	69,340	$	64,812	$	88,874

During 2002, the Biomedical segment continued its recent annual trend of increasing order performance primarily fueled by strong demand for MRI and medical products. The Company expects the strong medical products demand to continue throughout 2003, even though the Biomedical backlog is at its lowest level in the past three years. Orders in the Distribution and Storage segment significantly decreased in 2002 compared with 2001 due to the continued worldwide slowdown experienced by the manufacturing sectors of the industrialized world and the further reductions in capital expenditures in the consolidating global industrial gas industry. The Energy and Chemicals segment showed a significant increase in orders in 2002 after a cyclical order low in 2001. Strengthening of the worldwide hydrocarbon market, as evidenced by the large order received in 2002 from Bechtel for additional phases of the Trinidad LNG project, led this resurgence in orders. The Company expects this trend in demand to continue in 2003.

During 2001, the Biomedical segment continued with very strong order performance in each of its product lines. The Distribution and Storage segment experienced a reduction in orders across its product portfolio in 2001 compared with 2000 due to the worldwide slowdown experienced by the manufacturing sectors of the industrialized world and a slowdown in cryogenic systems mainly for the electronics industry. The Energy and Chemicals segment returned to a cyclical order low in 2001 after being buoyed in 2000 by several orders related to the Trinidad LNG project.

Almost all of the Company’s December 31, 2002 backlog is scheduled to be recognized as sales during 2003. The Company’s backlog fluctuates from time to time, and the amounts set forth above are not necessarily indicative of future backlog levels or the rate at which backlog will be recognized as sales. The increased focus within the Company on the Biomedical and Distribution and Storage segments will generally reduce backlog, as products within these segments tend to have shorter lead times than those in the Energy and Chemicals segment.

Customers

Sales to the Company’s top ten customers accounted for 41 percent of consolidated sales in 2002. The Company’s sales to particular customers fluctuate from period to period. In 2002, approximately 33 percent of sales were destined to be used in foreign countries. The Company’s customers are spread across the industrial

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gas, hydrocarbon and chemical processing industries in several countries. The Company’s management has established certain credit requirements that its customers must meet before sales credit is extended. The Company monitors the financial condition of its customers to help ensure collections and to minimize losses. For certain domestic and foreign customers, the Company requires customer advances, letters of credit and other such guarantees of payment. Certain customers require the Company to issue letters of credit or performance bonds, particularly in instances where customer advances are involved, as a condition of placing the order. The Company believes its relationships with its customers are generally good, but have been strained by the Company’s current leverage situation and the delays in successfully completing a restructuring of the Company’s senior debt.

Patents and Trademarks

Although the Company has a number of patents, trademarks and licenses related to its business, no one of them or related group of them is considered by the Company to be of such importance that its expiration or termination would have a material adverse effect on the Company’s business. In general, the Company depends upon technological capabilities, manufacturing quality control and application of know-how, rather than patents or other proprietary rights, in the conduct of its business.

Raw Materials and Suppliers

The Company manufactures most of the products it sells. The raw materials used in manufacturing include aluminum sheets, bars, plate and piping, stainless steel strip, heads, plate, piping, valves and gauges, palladium oxide, carbon steel heads and plate and nine percent nickel steel heads and plate. Most raw materials are available from multiple sources of supply. In March 2002, the United States Government instituted various levels of tariffs on certain imported steel products, which would have had the impact of increasing the manufactured cost of certain of the Company’s Distribution and Storage segment bulk storage tanks by between 8 percent and 18 percent due to the Company’s use of nine percent nickel steel plate. Nine percent nickel steel plate was subsequently granted an exclusion from the tariffs in June 2002, and the Company did not experience cost increases.

Commodity metals used by the Company have experienced fluctuations in price. The Company has generally been able to recover the costs of price increases through its contracts with customers. The Company foresees no acute shortages of any raw materials that would have a material adverse effect on its operations.

Employees

As of December 31, 2002, the Company had 2,022 employees, including 1,407 domestic employees and 615 international employees. These employees consisted of 631 salaried, 432 union hourly and 959 non-union hourly employees. The salaried employees included 112 engineers and draft-persons and 519 other professional, technical and clerical personnel.

The Company is a party to three collective bargaining agreements through its operating subsidiaries. The agreement with the International Association of Machinists and Aerospace Workers covering 160 employees at the Company’s La Crosse, Wisconsin heat exchanger facility expires February 3, 2004. The agreement with the International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers covering 66 employees at the Company’s Plaistow, New Hampshire facility expires August 31, 2003. The agreement with the United Steel Workers covering 206 employees at the Company’s New Prague, Minnesota facility expires January 15, 2006. Since the acquisition of each of its operating units, the Company has not had any work stoppages or strikes. The Company believes its employee relations are good.

Environmental Matters

The Company’s operations involve and have involved the handling and use of substances, such as various cleaning fluids used to remove grease from metal, that are subject to federal, state and local environmental laws and regulations. These regulations impose limitations on the discharge of pollutants into the soil, air and water,

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and establish standards for their handling, management, use, storage and disposal. The Company monitors and reviews its procedures and policies for compliance with environmental laws and regulations. The Company’s management is familiar with these regulations, and supports an ongoing program to maintain the Company’s adherence to required standards.

The Company is involved with environmental compliance, investigation, monitoring and remediation activities at certain of its operating facilities, and, except for these continuing remediation efforts, believes it is currently in substantial compliance with all known environmental regulations. The Company accrues for certain environmental remediation-related activities for which commitments or remediation plans have been developed and for which costs can be reasonably estimated. These estimates are determined based upon currently available facts regarding each facility. Actual costs incurred may vary from these estimates due to the inherent uncertainties involved. Future expenditures relating to these environmental remediation efforts are expected to be made over the next ten years as ongoing costs of remediation programs. Although the Company believes it has adequately provided for the cost of all known environmental conditions, the applicable regulatory agencies could insist upon different and more costly remediative measures than those the Company believes are adequate or required by existing law. The Company believes that any additional liability in excess of amounts accrued which may result from the resolution of such matters will not have a material adverse effect on the Company’s financial position, liquidity, cash flows or results of operations.

Available Information

The Company’s Internet website address is www.chart-ind.com. The Company makes available free of charge on www.chart-ind.com its annual, quarterly and current reports, proxy statements and other documents as soon as reasonably practical after the Company electronically files such material with, or furnishes it to, the SEC. However, the information found on the Company’s website is not part of this or any other report. The public may read and copy any material that the Company files with the SEC at the SEC’s Public Reference Room located at 450 Fifth Street, NW, Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. Additionally, the SEC maintains a website, www.sec.gov, that contains all reports, proxy statements and other information filed by the Company with the SEC.

ITEM 2.    PROPERTIES

The Company occupies 29 principal facilities totaling approximately 2.1 million square feet, with the majority devoted to manufacturing, assembly and storage. Of these manufacturing facilities, approximately 1.7 million square feet are owned and 0.4 million square feet are occupied under operating leases. The Company considers its manufacturing facilities more than sufficient to meet its current and planned operational needs. The Company leases approximately 11,400 square feet for part of its corporate offices in Cleveland, Ohio. The Company’s owned facilities in the United States are subject to mortgages securing the Company’s consolidated credit and revolving loan facility.

As further described in Note D to the Company’s consolidated financial statements included in Item 8 of this Annual Report on Form 10-K, as a result of its operational restructuring activities, the Company has closed its Biomedical segment warehouse and sales office in Solingen, Germany, its Distribution and Storage manufacturing facilities in Denver, Colorado, Columbus, Ohio and Costa Mesa, California and its Energy and Chemicals manufacturing facility in Wolverhampton, United Kingdom. The Company has fully provided for all remaining lease obligations related to the leased facilities in this category as part of its employee separation and plant closure costs and is attempting to buy out the leases at reduced terms and/or find sub-lease tenants to improve cash flow related to these facilities. The Company is currently attempting to sell its Wolverhampton, United Kingdom facility. The proceeds of such sale will most likely be used to satisfy obligations of the Company’s insolvent United Kingdom subsidiary, which is more fully described in “Item 3. Legal Proceedings.”

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The following table sets forth certain information about the Company’s facilities:

Location	Segment	Sq. Ft.	Ownership	Use
Burnsville, Minnesota	Biomedical	91,700	Owned	Manufacturing/Office
Denver, Colorado	Biomedical	109,000	Owned	Manufacturing/Office
Middlesex, United Kingdom	Biomedical	7,500	Leased	Warehouse
Solingen, Germany(1)	Biomedical	2,600	Leased	Office/Warehouse
Yennora, Australia	Biomedical	7,000	Leased	Office/Warehouse
Plaistow, New Hampshire	Distribution & Storage	164,400	Owned	Manufacturing/Office
Canton, Georgia	Distribution & Storage	138,000	Owned	Manufacturing/Office
Denver, Colorado(1)	Distribution & Storage	124,300	Leased	Manufacturing/Office
Houston, Texas	Distribution & Storage	22,000	Leased	Manufacturing
Holly Springs, Georgia	Distribution & Storage	6,000	Leased	Manufacturing
New Prague, Minnesota	Distribution & Storage	200,000 15,000 6,000 16,000 8,000	Owned Owned Owned Leased Owned	Manufacturing Manufacturing Manufacturing Office Manufacturing
Columbus, Ohio(1)	Distribution & Storage	46,200	Leased	Manufacturing/Office
Costa Mesa, California(1)	Distribution & Storage	42,000	Leased	Manufacturing/Office
Lonsdale, Minnesota	Distribution & Storage	13,500	Leased	Manufacturing/Office
Decin, Czech Republic	Distribution & Storage	493,000	Owned	Manufacturing/Office
Zhangiajang, China	Distribution & Storage	30,000	Leased	Manufacturing
Changzhou, China	Distribution & Storage	21,500	Leased	Manufacturing/Office
La Crosse, Wisconsin	Energy and Chemicals	149,000	Owned	Manufacturing/Office
Westborough, Massachusetts	Energy and Chemicals	18,500	Leased	Office
New Iberia, Louisiana(2)	Energy and Chemicals	62,400	Leased	Manufacturing
Wolverhampton, United Kingdom(1)	Energy and Chemicals	190,200	Owned	Manufacturing/Office
Houston, Texas	Energy and Chemicals	13,100	Leased	Office
Clarksville, Arkansas	Energy and Chemicals	110,000	Owned	Manufacturing/Office
Greenville, Pennsylvania	Energy and Chemicals	2,100	Leased	Office
Cleveland, Ohio	Corporate Headquarters	11,400	Leased	Office

(1) Recently closed or subject to closure and/or sale as described above.

(2) Leased by a joint venture in which the Company has a 50 percent interest.

ITEM 3.     LEGAL PROCEEDINGS

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 immediate death of four elderly patients and injuries to three additional patients from inhaling the nitrogen. The seven claims originally filed 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. Certain co-defendants were criminally indicted in this matter. The Company, however, has not been so indicted. The court originally granted stays in all of these cases pending the outcome of the criminal charges. The trial in the criminal matter of the State of Ohio vs. BOC Gases, et al., 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 October 2002. I.H.S. Carriage-by-the-Lake, Inc. (“IHS”) plead guilty to four counts of involuntary manslaughter. IHS was fined $60,000 and ordered to undergo a three-year court-ordered operational change. The Company has been dismissed from three of the civil cases. The

11

four remaining plaintiffs, however, have advised that they intend to pursue discovery before considering dismissal of claims against the Company. The plaintiffs in the remaining four open cases are seeking, in total, $15.0 million in compensatory damages, $15.0 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. These four remaining cases have been settled with the other defendants. While the Company is open to the possibility of good faith settlement negotiations, 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. Additionally, the Company believes that the claims made against it are the most tenuous of any defendant.

In March 2003, the Company completed the closure of its Wolverhampton, United Kingdom manufacturing facility, operated by Chart Heat Exchangers Limited (“CHEL”), and all future heat exchanger manufacturing will be conducted by the Company’s LaCrosse, Wisconsin facility. On March 28, 2003, CHEL filed for a voluntary administration under the U.K. Insolvency Act 1986. CHEL’s application for voluntary administration was approved on April 1, 2003 and an administrator was appointed. CHEL’s net pension plan obligations have increased significantly, primarily due to a decline in plan asset values and interest rates, resulting in an estimated plan deficit of approximately $12 million. Based on the Company’s present financial condition, it has determined not to advance funds at this time to CHEL in amounts necessary to fund CHEL’s obligations. CHEL does not have the necessary funds to enable it to fund its net pension plan deficit, pay remaining severance due to former employees or pay other creditors. As a result, the trustees of the CHEL pension plan terminated this plan in April 2003. At the present time, the Company is unable to determine the impact on its 2003 pension expense or cash funding requirements for the April 1, 2003 approval of insolvency administration for CHEL and the related termination of the Company’s United Kingdom pension plan. The Company can provide no assurance that claims will not be asserted against the Company for these obligations of CHEL. To the extent the Company has significant liability with respect to CHEL’s obligations as a result of CHEL’s insolvency, such liability would have a material adverse impact on the Company’s liquidity and its financial position.

The Company is a party to other legal proceedings incidental to the normal course of its business. Based on the Company’s historical experience in litigating these actions, as well as the Company’s current assessment of the underlying merits of the actions and applicable insurance, management believes that the final resolution of these matters will not have a material adverse affect on the Company’s financial position, liquidity, cash flows or results of operations.

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

Not applicable.

Executive Officers of the Registrant

Certain information as of March 31, 2003 regarding each of the Company’s executive officers is set forth below:

Name	Age	Position
Arthur S. Holmes	62	Chairman, Chief Executive Officer, President and a Director
Michael F. Biehl	47	Chief Financial Officer and Treasurer
Charles R. Lovett	59	Vice President of Manufacturing

Arthur S. Holmes has been Chairman and Chief Executive Officer of the Company since its formation in June 1992, and reassumed the title of President in July 2002 upon elimination of the position of Chief Operating Officer. Mr. Holmes served as President of ALTEC International, Inc. from 1985 through 1989. From 1978 through 1985, he served in a variety of managerial capacities for Koch Process Systems, Inc., the predecessor of Process Systems International, Inc., an operating unit of the Company, most recently as Vice President-Manager of the Gas Processing Division. Mr. Holmes is the co-inventor of the Company’s patented Ryan/Holmes technology. Mr. Holmes holds a BS and an MS in Chemical Engineering from the Pennsylvania State University and an MBA from Northeastern University.

Michael F. Biehl has been the Chief Financial Officer and Treasurer of the Company since July 2001. Prior to joining the Company, Mr. Biehl served as Vice President, Finance and Treasurer at Oglebay Norton Company,

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a publicly held company that provides industrial minerals to a broad range of industries. He joined Oglebay Norton in 1992 as Corporate Controller, was promoted to Treasurer and Director of Finance in 1994 and to Vice President, Finance in 1998. Prior to joining Oglebay Norton, he worked in the audit practice of Ernst & Young, LLP in Cleveland, Ohio from 1978 to 1992. Mr. Biehl, a Certified Public Accountant, holds a BBA in Accounting from Ohio University and an MBA from Northwestern University’s Kellogg Graduate School of Management.

Charles R. Lovett has been Vice President of Manufacturing for the Company since October 2002. Mr. Lovett has served in various roles with the Company and its predecessors since 1978, including Vice President, Manufacturing, Koch Process Systems, Inc. until 1988, Vice President, Operations, AMW Industries until January 1991, President, Process Systems International, Inc. until 1994, President, Process Engineering, Inc. until 1999, and Vice President, Operations, Ferox a.s. in the Czech Republic. Mr. Lovett holds a Bachelors degree in Mechanical Engineering Technology from the University of Dayton.

PART II

ITEM 5.    MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

Quarterly Stock Prices and Dividends

The high and low sales prices for the Company’s Common Stock reported on the New York Stock Exchange for each quarterly period within the most recent two years are set forth in the table below:

Quarter	High		Low
2002
1st	$	2.70	$	1.90
2nd		2.75		1.93
3rd		1.85		0.74
4th		1.23		0.61

Quarter	High		Low
2001
1st	$	5.88	$	4.00
2nd		5.15		3.15
3rd		4.00		2.76
4th		3.00		1.84

The Company did not pay any dividends in 2002 or 2001.

Limitations on the Payment of Dividends

The Company is permitted to pay cash dividends not exceeding $7.2 million in any fiscal year, 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.

Related Stockholder Matters

Prior to April 4, 2003, Chart Industries common stock was traded on the New York Stock Exchange (“NYSE”) under the symbol “CTI.” The Company was notified on April 4, 2003 that its common stock was being immediately suspended from trading on the NYSE and that the delisting of the Company’s common stock from the NYSE is pending the completion of applicable procedures, including any appeal by the Company, due to the Company’s inability to meet the NYSE continued listing criteria. Subsequent to this date, Chart Industries common stock has been traded on the over-the-counter market pink sheets under the symbol “CTIT.” The Company is currently seeking an additional trading venue for its common stock.

Shareholders of record on March 31, 2003 numbered 1,706. The Company estimates that an additional 5,000 shareholders own stock held for their accounts at brokerage firms and financial institutions.

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ITEM 6.    SELECTED FINANCIAL DATA

The following table sets forth selected financial data of the Company for each of the five years in the period ended December 31, 2002. The data was derived from the annual audited consolidated financial statements of the Company for the relevant years and includes the operations of acquired businesses after their date of acquisition, including for periods after April 12, 1999, the operations of MVE Holdings, Inc. (“MVE”).

SELECTED FINANCIAL DATA

(Dollars in thousands, except per share amounts)

	Years Ended December 31,
	2002			2001			2000			1999			1998
Statement of Operations Data:
Sales	$	296,284		$	327,990		$	325,700		$	292,937		$	229,423
Gross profit		76,297			86,361			96,029			77,381			77,657
Goodwill impairment charge(1)		92,379
Employee separation and plant closure costs (income)		13,887			2,375			(614	)		11,982
Operating (loss) income		(97,601	)		20,933			32,269			(11,189	)		44,166
Interest expense—net		(17,612	)		(21,589	)		(26,676	)		(15,854	)		(901	)
Net (loss) income		(130,785	)		(5,158	)		2,155			(36,280	)		28,215
(Loss) Earnings per Common Share:
Net (loss) income	$	(5.22	)	$	(0.21	)	$	0.09		$	(1.53	)	$	1.17
Net (loss) income—assuming dilution	$	(5.22	)	$	(0.21	)	$	0.09		$	(1.53	)	$	1.16
Other Financial Data:
Depreciation and amortization	$	11,709		$	16,712		$	16,717		$	16,909		$	7,026
Cash provided by (used in) operating activities		8,890			13,273			14,646			(5,514	)		30,934
Cash provided by (used in) investing activities		1,116			(6,494	)		(427	)		(82,194	)		(45,270	)
Cash (used in) provided by financing activities		(15,864	)		504			(9,759	)		87,019			(5,484	)
Dividends											2,370			4,821
Dividends per share										$	0.10		$	0.20
Balance Sheet Data:
Cash and cash equivalents	$	7,225		$	11,801		$	4,921		$	2,314		$	2,169
Working capital (deficit)(2)		(202,663	)		56,276			42,524			50,087			25,326
Total assets		279,294			408,980			429,843			424,570			158,205
Total debt		263,900			272,083			269,870			278,672			11,325
Shareholders’ (deficit) equity		(81,617	)		49,340			54,844			55,512			93,154

(1) In 2002, the Company recorded a non-cash impairment charge of $92.4 million to write off non-deductible goodwill of the Distribution and Storage segment. Further information about this charge is found in Note A to the Company’s consolidated financial statements included in Item 8 of this Annual Report on Form 10-K.

(2) As of December 31, 2002, the Company was in default on its senior debt due to violations of financial covenants. In April 2003, the Company’s senior lenders waived all defaults existing at December 31, 2002 and through April 30, 2003. Since the waiver of defaults does not extend until January 1, 2004, this debt is classified as a current liability on the Company’s consolidated balance sheet as of December 31, 2002, causing a working capital deficit as of such date. Further information about the Company’s debt and credit arrangements is found in Note C to the Company’s consolidated financial statements included in Item 8 of this Annual Report on Form 10-K.

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ITEM 7.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

           RESULTS OF OPERATIONS.

General

The markets the Company serves did not experience the recovery in 2002 that the Company was expecting. Sales in the Distribution and Storage segment decreased 25 percent from 2001 levels, reflecting the continued economic slowdown in the consolidating global industrial gas industry. Energy and Chemicals segment sales, although slightly up from 2001, did not experience the originally projected improvement in the industrial gas markets of its business. Sales in the Biomedical segment in 2002 represented the only sizable increase compared with 2001, increasing by 17 percent.

As a result of the continued weakness in the Company’s core markets, its high debt level and management’s dissatisfaction with overall operating performance and shareholder returns, the Company undertook a significant operational restructuring in 2002. The Company closed several manufacturing facilities that were operating well below capacity and consolidated production in remaining manufacturing facilities in an effort to eliminate fixed costs. The Company flattened out its organizational structure by eliminating the separate office of the President and by consolidating its various businesses into three distinct operational groups, each reporting directly to the Chief Executive Officer. The Company also reviewed its sales and administrative personnel ranks and made many reductions in headcount to generate additional savings. The Company’s management believes these operational restructuring efforts, which will continue in 2003, will position the Company for significant improvements in operating performance and enable the Company to better weather future downturns in its markets.

In addition to the operational restructuring activities undertaken by the Company, during 2002 management focused substantial effort on identifying a long-term solution to improving the Company’s financial condition and reducing its leverage. These efforts included discussions with potential equity investors (two of which performed substantial due diligence), negotiating with the Company’s senior lenders for a restructuring of the Company’s senior debt and considering the sales of several non-core assets. Management of the Company is extremely disappointed that it was unable to solve the Company’s leverage situation prior to December 31, 2002, but remains committed to achieving a long-term solution in 2003.

The completion of planned manufacturing consolidations and operational restructuring activities in the first half of 2003 should position the Company for improved operating performance. Finally, expected resolution of the Company’s debt restructuring in 2003 should remove the aura of uncertainty that characterized the Company’s financial situation in 2002.

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Operating Results

The following table sets forth the percentage relationship that each line item in the Company’s consolidated statements of operations represents to sales in the last three fiscal years.

	Years Ended December 31,
	2002		2001		2000
Sales	100	%	100.0	%	100.0	%
Cost of sales(1)	74.2		73.7		70.5
Gross profit	25.8		26.3		29.5
Selling, general and administrative expense(2)	22.9		17.8		18.2
Goodwill impairment charge	31.2
Goodwill amortization expense			1.5		1.5
Employee separation and plant closure costs (income)	4.7		0.7		(0.2	)
Equity income in joint venture	(0.1	)	(0.1	)
Operating (loss) income	(32.9	)	6.4		10.0
Gain on sale of assets	0.5		0.2		0.3
Interest expense, net	(5.9	)	(6.6	)	(8.2	)
Financing costs amortization	(1.1	)	(0.5	)	(0.4	)
Derivative contracts valuation expense	(0.5	)	(0.8	)
Foreign currency loss	(0.4	)	(0.1	)	(0.1	)
Income tax expense	3.8		0.1		0.9
(Loss) income before cumulative effect of change in accounting principle and extraordinary item	(44.1	)	(1.5	)	0.7
Cumulative effect of change in accounting principle, net of taxes			(0.1	)
Extraordinary item, net of taxes
Net (loss) income	(44.1	)	(1.6	)	0.7

(1) Includes non-cash inventory valuation charges of $1.5 million, $2.6 million and $1.5 million, representing 0.5 percent, 0.8 percent and 0.5 percent of sales, in 2002, 2001 and 2000, respectively.

(2) Includes $4.9 million and $0.3 million, representing 1.7 percent and 0.1 percent of sales, of professional fees incurred by the Company related to its debt restructuring activities in 2002 and 2001, respectively.

Segment Information

The following table sets forth sales, gross profit and gross profit margin for the Company’s three operating segments for the last three fiscal years.

	Years Ended December 31,
	2002			2001			2000
	(Dollars in thousands)
Sales
Biomedical	$	67,657		$	57,957		$	53,519
Distribution and Storage		135,549			179,830			192,253
Energy and Chemicals		93,078			90,203			79,928
Total	$	296,284		$	327,990		$	325,700
Gross Profit
Biomedical	$	25,312		$	20,336		$	20,351
Distribution and Storage		30,610			45,112			51,996
Energy and Chemicals		20,375			20,913			23,682
Total	$	76,297		$	86,361		$	96,029
Gross Profit Margin
Biomedical		37.4	%		35.1	%		38.0	%
Distribution and Storage		22.6	%		25.1	%		27.0	%
Energy and Chemicals		21.9	%		23.2	%		29.6	%
Total		25.8	%		26.3	%		29.5	%

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Years Ended December 31, 2002 and 2001

Sales for 2002 were $296.3 million versus $328.0 million for 2001, a decrease of $31.7 million, or 9.7 percent. A significant decrease of $44.3 million in Distribution and Storage segment sales, primarily driven by lower volume resulting from the continued economic slowdown experienced in 2002 in the industrial sectors of the worldwide economy, was slightly offset by sales growth in the Biomedical and Energy and Chemicals segments of $9.7 million and $2.9 million, respectively.

The Biomedical segment sales increase was largely driven by a $4.7 million increase in sales of medical oxygen products and biological storage systems, combined with an increase of $5.0 million in MRI cryostat components. Sales in the Distribution and Storage segment decreased significantly in 2002 when compared to 2001, with declines of $25.2 million and $12.3 million in cryogenic bulk storage systems and cryogenic systems and components, respectively, combined with a decrease of $7.2 million in cryogenic packaged gas systems and beverage liquid CO₂ systems. The Energy and Chemicals segment sales, while improving slightly compared with 2001, still reflect the significant and extended downturn in new production equipment for the industrial gas market. Heat exchanger and cold box system sales, the largest product lines within this segment, increased $5.2 million from 2001 driven by volume and price increases in the hydrocarbon processing market, while stainless steel tubing sales declined $2.6 million from 2001. Sales of LNG fueling systems, still a relatively new product line for the Company, were flat in 2002 when compared with 2001.

Gross profit for 2002 was $76.3 million versus $86.4 million for 2001. Gross profit margin decreased slightly, from 26.3 percent in 2001 to 25.8 percent in 2002, although the changes by operating segment varied. The Biomedical segment 2002 gross profit margin increased two points compared with 2001 primarily due to the inclusion in 2001 of a non-cash inventory valuation charge of $1.9 million included in cost of sales for the write-down to fair value of inventory related to a product line that was sold by the Company. Gross profit margin in the Distribution and Storage segment in 2002 declined approximately two points when compared with 2001 primarily due to lower manufacturing volume in the cryogenic bulk storage systems and cryogenic systems and components product lines. In spite of higher volumes in the heat exchanger and cold box product lines, the Energy and Chemicals segment experienced a one point gross profit margin decline in 2002 due to the lower prices on highly competitive projects and the inclusion in 2002 of a non-cash inventory valuation charge of $0.6 million included in cost of sales for the write-down to fair value of inventory at the Company’s Wolverhampton, United Kingdom facility.

In March 2002, the United States Government instituted various levels of tariffs on certain imported steel products, which would have had the impact of increasing the manufactured cost of certain of the Company’s Distribution and Storage segment cryogenic bulk storage tanks by between 8 percent and 18 percent due to the Company’s use of nine percent nickel steel plate. Nine percent nickel steel plate was subsequently granted an exclusion from the tariffs in June 2002, and the Company did not experience cost increases in this area.

Selling, general and administrative (“SG&A”) expense for 2002 was $68.0 million versus $58.6 million for 2001, an increase of $9.4 million, or 16.0 percent. As a percentage of sales, SG&A expense was 22.9 percent for 2002, up from 17.8 percent for 2001. In 2002 the Company recorded $4.9 million, or 1.7 percent of sales, of professional expenses related to its efforts to restructure its senior debt, compared with $0.3 million, or 0.1 percent of sales, in 2001. The Company also recorded $3.7 million of environmental remediation expense in 2002, or 1.2 percent of sales, as the Company increased its reserve for potential environmental remediation activities based upon the results of a recently completed Phase II environmental review in connection with a business the Company is considering selling. Additionally, overall increases in medical and workers’ compensation costs in 2002 added an additional $0.8 million of SG&A expense when compared with 2001.

17

Due to the Company’s adoption of SFAS No. 142, “Goodwill and Other Intangible Assets,” in the first quarter of 2002, the Company is no longer recording goodwill amortization. In 2001, the Company recorded goodwill amortization expense of $5.0 million. During the second quarter of 2002, the Company completed the transitional impairment tests of SFAS No. 142 and determined that the fair value of each reporting unit exceeded the carrying value, including goodwill, of such reporting unit 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.

The Company performed its annual impairment test of goodwill as of October 1, 2002 using discounted cash flow techniques and values of comparable businesses. These tests resulted in the fair value of the Company’s Distribution and Storage reporting unit being less than its carrying value including goodwill, which caused the Company to advance to step two of SFAS No. 142 and engage a valuation specialist to provide valuations of the Distribution and Storage reporting unit’s tangible and identifiable intangible assets. Although those procedures confirmed the value of the reporting unit’s tangible assets exceeded their carrying value, goodwill of the Distribution and Storage reporting unit was determined to be impaired. As a result, in 2002 the Company recorded a non-cash impairment charge of $92.4 million, or $3.69 per diluted share, to write off non-deductible goodwill. This non-cash charge was due to the combination of a reduction in the overall estimated enterprise value of the Company, attributable to Chart’s leverage situation and recent financial performance, and a reduction in the specific estimated value of the Distribution and Storage reporting unit, caused by the worldwide slowdown experienced by the manufacturing sectors of the industrialized world, reductions in capital expenditures in the consolidating global industrial gas industry, and a lowering of expectations for future performance of this segment for these same reasons. Goodwill comprised 27.7 percent and 41.1 percent of total assets as December 31, 2002 and 2001, respectively, and arose primarily from the Company’s acquisition of MVE in 1999.

In response to the continued weakness of the Company’s core markets and its poor overall operating performance, in 2002 the Company 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, Colorado Distribution and Storage segment manufacturing facility, which was substantially completed during the second quarter of 2002. The second step in this plan, announced in July 2002, was the closure of the Company’s Distribution and Storage segment manufacturing facilities in Costa Mesa, California and Columbus, Ohio. The Costa Mesa plant closure was finalized in the fourth quarter of 2002, and the Columbus plant closure was completed in the first quarter of 2003. The third step of this plan, announced in December 2002, was the closure of the Company’s Energy and Chemicals segment manufacturing facility in Wolverhampton, United Kingdom. Closure of this plant was completed in the first quarter of 2003, with a sale of the land and buildings at this site possibly occurring in the second half of 2003. In addition to these plant closures, during 2002 the Company reduced headcount in many SG&A departments throughout the Company. The Company is considering the closure of up to two more manufacturing facilities. If completed, these closures will result in further employee separation and plant closure costs and may put some negative short-term pressure on sales. The recoupment of closure expenses from operational improvements related to the closure of these two additional facilities is expected to take approximately one year.

During 2002, the Company recorded employee separation and plant closure costs of $13.9 million related to the manufacturing facility reduction efforts and overall headcount reduction programs described above. The total charges included $6.8 million for lease termination and other facility-related closure costs, $4.2 million for severance and other benefits related to terminating certain employees at these and other sites and $2.9 million of actuarially determined pension expense related to the curtailment of the Wolverhampton, United Kingdom defined benefit pension plan. Additionally, in 2002 the Company recorded non-cash inventory valuation charges of $1.5 million included in cost of sales for the write-off of inventory at these sites. At December 31, 2002, the Company had a reserve of $8.8 million remaining for the closure of these facilities, primarily for lease termination and severance costs. A table summarizing the employee separation and plant closure costs recorded by the Company in 2002 and the remaining reserve for each facility is located in Note D of the Company’s consolidated financial statements.

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During 2001, the Company recorded employee separation and plant closure costs of $2.4 million. The total charges included $1.6 million related to the closure of the Company’s Ottawa Lake, Michigan facility and two smaller sites within the cryogenic services business of the Distribution and Storage segment, $0.4 million for terminating 25 employees at the Company’s Wolverhampton, United Kingdom, heat exchanger manufacturing facility and $0.4 million for terminating 45 other employees throughout the Company. The cryogenic services business charges of $1.6 million included $0.5 million for lease termination and facility-related closure costs, $0.6 million for writing off certain leasehold improvements and fixed assets, $0.1 million for terminating 32 employees, and $0.4 million for moving costs and other charges. At December 31, 2001, the Company had a reserve of $0.5 million remaining, primarily for lease termination costs.

The Company recorded $0.4 million of equity income in its Coastal Fabrication joint venture in 2002, compared with equity income of $0.5 million in 2001. The Company also received a $0.5 million cash dividend distribution from the joint venture in 2002.

The Company sold its cryogenic pump product line in 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 in 2001, resulting in a gain of $0.5 million in other income.

Net interest expense for 2002 was $17.6 million compared with $21.6 million for 2001, reflecting lower overall interest rates. The Company manages its interest rate risk 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. These agreements are generally described as collars and result in putting a cap on the base LIBOR interest rate at approximately 7.0 percent and a floor at approximately 5.0 percent on certain portions of the Company’s floating rate term debt. 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.” The 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 cumulative effect of a change in accounting principle, net of income taxes, as an adjustment to operations as of January 1, 2001. 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 $29.8 million of debt expires on March 31, 2006. The fair value of the contract related to the collar outstanding at December 31, 2002 is a liability of $2.1 million and is recorded in accrued interest. The change in fair value of the contracts related to the collars during 2002 and 2001 of $1.6 million and $2.9 million, respectively, is recorded in derivative contracts valuation expense.

The Company recorded $1.1 million and $0.1 million of foreign currency remeasurement loss in 2002 and 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.

The Company recorded income tax expense of $11.1 million and $0.4 million, respectively, in 2002 and 2001. The expected income tax benefit on the Company’s 2002 pre-tax loss is completely offset by a charge of $32.6 million to increase the valuation allowance to fully reserve all of the Company’s net deferred tax assets resulting from the Company’s performance, its cumulative tax loss position and management’s assessment that it is more likely than not that the net deferred tax assets will not be realized. Although these net deferred tax assets have been fully reserved, they are still available to be utilized by the Company to offset income taxes payable should the Company generate sufficient taxable income in the future.

As a result of the foregoing, the Company incurred a net loss of $130.8 million in 2002, compared with a net loss of $5.2 million in 2001.

Years Ended December 31, 2001 and 2000

Sales for 2001 were $328.0 million versus $325.7 million for 2000, an increase of $2.3 million, or 0.7 percent. With minimal price changes in 2001, the increase in sales was primarily volume driven and resulted from sales growth in the Biomedical and Energy and Chemicals segments of $4.4 million and $10.3 million, respectively, offset by a $12.4 million decrease in Distribution and Storage segment sales.

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The Biomedical segment sales increase was largely driven by a $4.5 million increase in medical oxygen product shipments and $3.8 million in biological storage systems shipments, offset by a $3.7 million decline in MRI cryostat components. Sales by the Distribution and Storage segment were significantly impacted by the general economic slowdown in the second half of 2001. Declines of $4.3 million and $8.4 million in standard tanks and packaged gas liquid cylinders, respectively, more than offset the increased number of ORCA^® Micro-Bulk delivery systems and other mobile equipment sold. Sales of cryogenic systems and components also declined $4.8 million in 2001. The Energy and Chemicals segment sales, which improved slightly in 2001, reflected the significant and extended downturn in new production equipment for the industrial gas market. A $5.7 million increase in heat exchanger and cold box systems sales, combined with a $5.6 million increase in LNG alternative fuel system sales, drove the increase in this segment.

Gross profit for 2001 was $86.4 million versus $96.0 million for 2000. Gross profit was negatively impacted by non-cash inventory valuation charges included in cost of sales of $1.9 million in the Biomedical segment and $0.7 million in the Distribution and Storage segment related to the Company’s decisions to exit a product line and close certain cryogenic services business sites. Gross profit margin for 2001 was 26.3 percent versus 29.5 percent for 2000. The Biomedical segment 2001 gross profit margin decreased three percentage points compared with 2000 due to the non-cash inventory valuation charge for exiting a product line. Gross profit margin in the Distribution and Storage segment in 2001 declined when compared with 2000 primarily due to lower manufacturing volume in the cryogenic bulk and packaged gas areas. The Energy and Chemicals segment experienced declining margins in 2001 due to the lower prices on highly competitive projects, which were only partially offset by the impact of increased volume in this segment.

SG&A expense for 2001 was $58.6 million versus $59.5 million for 2000, a decrease of $0.9 million, or 1.5 percent. As a percentage of sales, SG&A expense was 17.8 percent for 2001, down from 18.2 percent for 2000. The decreases in both total SG&A expense and SG&A expense as a percentage of sales largely reflect the headcount reduction efforts of the Company during the year.

Goodwill amortization expense for 2001 was $5.0 million compared with $4.9 million for 2000. Goodwill comprised 41.1 percent and 40.3 percent of total assets at December 31, 2001 and 2000, respectively, and arose primarily from the Company’s acquisition of MVE in 1999. The Company applied the new rules on accounting for goodwill and other intangible assets under SFAS No. 141 “Business Combinations,” and SFAS No. 142, “Goodwill and Other Intangible Assets,” effective January 1, 2002. Under the new rules, goodwill and intangible assets deemed to have indefinite lives are no longer amortized but are subject to impairment tests in accordance with SFAS No. 142.

During 2001, the Company recorded employee separation and plant closure costs of $2.4 million. The charges included $1.6 million related to the closure of the Ottawa Lake, Michigan facility and two smaller sites within the cryogenic services business of the Distribution and Storage segment, $0.4 million for terminating 25 employees at the Company’s Wolverhampton, United Kingdom, heat exchangers manufacturing facility of the Energy and Chemicals segment and $0.4 million for terminating 45 other employees throughout the Company. The cryogenic services business charges of $1.6 million included $0.5 million for lease termination and facility-related closure costs, $0.6 million for writing off certain leasehold improvements and fixed assets, $0.1 million for terminating 32 employees, and $0.4 million for moving costs and other charges. At December 31, 2001, the Company had a reserve of $0.5 million remaining, primarily for lease termination costs.

The Company recorded $0.5 million of equity income in its Coastal Fabrication joint venture in 2001, compared with equity income of $0.04 million in 2000. The joint venture did not make any cash distributions to the Company or the other joint venture partner in 2001 or 2000.

In 2001, the Company recorded a $0.5 million gain on the sale of its minority investment in Restaurant Technologies, Inc. for cash proceeds of $2.4 million.

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Net interest expense for 2001 was $21.6 million compared with $26.7 million for 2000, reflecting lower interest rates due to decreases by the Federal Reserve in base interest rates. 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, for the adoption of SFAS No. 133. As a result of the significant interest rate decreases and an expectation that the forward interest rate yield curve would remain flat, the Company was required to record non-cash charges of $2.9 million in 2001 related to an estimated decline in fair value of the Company’s interest rate collars. There were no comparable non-cash charges in 2000. The fair value of the interest rate collars is determined by the expectation of future interest rates and is, therefore, difficult to predict. The liability relating to the collars of $2.3 million was recorded by the Company in accrued interest in the consolidated balance sheet at December 31, 2001, and represented the estimated payments to be made over the life of the collars.

The effective income tax rate for 2001 reflects the interaction of a book loss and taxable income, which was primarily the result of non-deductible goodwill amortization. The Company had net deferred tax assets of $15.1 million at December 31, 2001.

As a result of the foregoing, the Company incurred a net loss of $5.2 million in 2001, compared with net income of $2.2 million in 2000.

Liquidity and Capital Resources

Cash provided by operations in 2002 was $8.9 million compared with $13.3 million and $14.6 million provided in 2001 and 2000, respectively. The Company’s 2002 operating cash flow resulted primarily from the receipt of an income tax refund of $9.3 million, due to the new tax law allowing a five-year carry-back of net operating losses, as the Company managed its normal working capital requirements to an approximately neutral position in 2002. In 2001 the Company generated cash flow from positive cash earnings as well as reductions in both inventory and accounts receivable. In 2000, the Company increased inventory in several of its short lead-time items to service increasing sales volumes and to reduce orders lost due to backlog. If orders recover in the Energy and Chemicals segment and grow in the other segments as expected by the Company, there could be large fluctuations in operating cash flows depending on negotiated payment terms with customers.

Capital expenditures in 2002, 2001 and 2000 were $3.0 million, $8.1 million and $5.6 million, respectively. The Company limited its capital expenditures in 2002 to a maintenance level in order to conserve cash. The Company’s 2001 capital expenditures relate primarily to the Distribution and Storage segment, where new equipment was necessary as a result of the Company’s reorganization plan initiated in 1999. The Company expects capital expenditures in 2003 to be similar in magnitude to the 2002 amount.

In order to finance the acquisition of MVE, 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 $250.0 million and a revolving credit line of $50.0 million, which may also be used for the issuance of letters of credit. Due to scheduled reductions in the commitment amount, at December 31, 2002 the Credit Facility provides a revolving credit line of $49.0 million. The Credit Facility provides a secured interest in substantially all of the assets of the Company to the agent bank as representative of the senior lenders. 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”), which originally provided a revolving credit line of $10.0 million in addition to the credit line available under the Credit Facility. Due to scheduled reductions in the commitment amount, at December 31, 2002 the Incremental Credit Facility provides a revolving credit line of $9.8 million. Borrowings on the Incremental Credit Facility are secured by the same collateral as the Credit Facility. The Incremental Credit Facility expires on April 30, 2003. At December 31, 2002, the Company had borrowings of $213.7 million outstanding under the term loan portion of the Credit Facility, borrowings of $33.4 million outstanding under the revolving credit portion of the Credit Facility, borrowings of $9.8 million outstanding under the Incremental Credit Facility and letters of credit outstanding and bank guarantees totaling $15.1 million supported by the Credit Facility, leaving only $0.5 million of availability under the respective facilities.

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As of December 31, 2002, the Company was in default under its Credit Facility and its Incremental Credit Facility due to violations of financial covenants more fully described in Note C to the Company’s consolidated financial statements. Following December 31, 2002, the Company also was in default under the Credit Facility as a result of its failure to make principal payments when due and the insolvency of CHEL. The Company’s senior lenders amended the Credit Facility and Incremental Credit Facility in April 2003 to waive all defaults existing at December 31, 2002 and through April 30, 2003 and to defer until April 30, 2003 $6.5 million in scheduled term debt amortization and $9.8 million in Incremental Credit Facility amortization originally due on March 31, 2003. In addition, the amendment requires the Company to reach agreement with its senior lenders on the final terms of a debt restructuring by April 30, 2003. If a negotiated term sheet can be reached by April 30, 2003, the waiver of defaults and deferral of debt payments will be extended until June 30, 2003. The amendment also grants approval for certain small asset sales, the proceeds of which will be used to fund senior debt interest payments, restructuring related activities and working capital requirements. Receipt of this amendment prevents the Company from classifying its debt outstanding under its Credit Facility and Incremental Credit Facility totaling $256.9 million as “in default” on its consolidated balance sheet as of December 31, 2002. Since the waiver of defaults does not extend until January 1, 2004, this debt is classified as a current liability as of December 31, 2002.

Throughout 2002 the Company had been actively pursuing several alternatives to improve its financial condition and reduce its leverage, including a substantial equity investment in the Company and a restructuring of the Company’s debt outstanding with its senior lenders. In the fourth quarter of 2002, the Company commenced negotiations with its senior lenders regarding such a restructuring and negotiations continue. Although the terms of such restructuring remain under negotiation, the Company expects this restructuring will result in an exchange of a portion of such debt for a substantial equity ownership position in the Company and substantial dilution of current shareholders’ ownership interests in the Company. The Company can give no assurance that it will be able to consummate such a restructuring transaction or otherwise renegotiate its debt outstanding under the Credit Facility or Incremental Credit Facility. If the Company is unable to do so, it may be required to pursue other restructuring alternatives. These alternatives could have a material adverse effect on the Company’s financial position, liquidity, cash flows or results of operations. The consolidated financial statements do not include any adjustments to the amounts or classifications of assets or liabilities to reflect this uncertainty.

The Credit Facility was amended in August 1999, October 2000, October 2001 and December 2001 at costs to the Company of $1.2 million, $1.0 million and $0.8 million in 1999, 2000 and 2001, respectively. The Credit Facility and Incremental Credit Facility were subsequently amended in March 2002 (the “March 2002 Amendments”) at a cost of approximately $1.9 million to modify certain covenants until March 31, 2003, to defer $25.7 million of Term A and Term B amortization payments from scheduled payment dates in 2002 to 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 called 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 called for the Company’s interest rates to increase by 0.25 percent if the Minimum Prepayment Amount was not achieved by September 30, 2002, and by an additional 0.25 percent each quarter thereafter that the Minimum Prepayment Amount was not made through March 31, 2003.

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-

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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 was not made by September 30 or December 31, 2002, respectively. The Company did not achieve the Minimum Prepayment Amount at September 30, 2002 or December 31, 2002. Accordingly, the Company was obligated to issue to its lenders at September 30, 2002 and December 31, 2002 warrants to purchase, in the aggregate, 1,353,531 and 773,133 shares of Chart common stock at an exercise price of $0.898 and $0.75 per share, respectively. The September 30, 2002 and December 31, 2002 warrants have been valued at $1.2 million and $0.4 million, respectively, and will be amortized to financing costs amortization expense over the remaining term of the Company’s Credit Facility. All of these warrants are exercisable for a period of ten years from the respective dates of issuance.

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. As of December 31, 2002, the Company was in default under its Credit Facility and Incremental Credit Facility due to violations of financial covenants, but received a waiver of such defaults at December 31, 2002 and through April 30, 2003, with the possibility of the waiver being extended to June 30, 2003 as previously discussed. The Company is permitted to pay cash dividends not exceeding $7.2 million in any fiscal year, 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’s contractual obligations as of December 31, 2002 are as follows:

	Payments Due by Period
	Total		2003		2004-2005		2006-2007		Beyond 2008
	(Dollars in thousands)
Current portion of long-term debt	$	218,741	$	218,741
Current maturities of long-term debt		45,159		43,998	$	941	$	220
Operating leases		8,063		2,932		4,521		608	$	2
Total contractual cash obligations	$	271,963	$	265,671	$	5,462	$	828	$	2

The Company’s commercial commitments as of December 31, 2002, which include letters of credit and bank guarantees, represent potential cash outflows resulting from contingent events that require performance by the Company or its subsidiaries pursuant to funding commitments, and are as follows:

	Total		2003		2004-2005
	(Dollars in thousands)
Standby letters of credit	$	13,157	$	12,513	$	644
Guarantees		1,932		1,488		444
Total commercial commitments	$	15,089	$	14,001	$	1,088

Consistent with previously announced plans, in March 2003, the Company completed the closure of its Wolverhampton, United Kingdom manufacturing facility, operated by Chart Heat Exchangers Limited (“CHEL”), and all future heat exchanger manufacturing will be conducted by the Company’s LaCrosse, Wisconsin facility. On March 28, 2003, CHEL filed for a voluntary administration under the U.K. Insolvency Act 1986. CHEL’s application for voluntary administration was approved on April 1, 2003 and an administrator was appointed. CHEL’s net pension plan obligations have increased significantly, primarily due to a decline in plan asset values and interest rates, resulting in an estimated plan deficit of approximately $12 million. Based on the Company’s present financial condition, it has determined not to advance funds at this time to CHEL in amounts necessary to fund CHEL’s obligations. CHEL does not have the necessary funds to enable it to fund its

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net pension plan deficit, pay remaining severance due to former employees or pay other creditors. As a result, the trustees of the CHEL pension plan terminated this plan in April 2003. At the present time, the Company is unable to determine the impact on its 2003 pension expense or cash funding requirements for the April 1, 2003 approval of insolvency administration for CHEL and the related termination of the Company’s United Kingdom pension plan. The Company can provide no assurance that claims will not be asserted against the Company for these obligations of CHEL. To the extent the Company has significant liability with respect to CHEL’s obligations as a result of CHEL’s insolvency, such liability would have a material adverse impact on the Company’s liquidity and its financial position.

In November 1996, the Board of Directors authorized a program to repurchase 2,250,000 shares of the Company’s common stock. The amount and timing of any share purchases will depend on market conditions, share price and other factors. The Company reserves the right to discontinue the repurchase program at any time. In 2002, 2001 and 2000, the Company acquired 130,400, 50,000, and 37,200 shares, respectively, under the program to provide shares of common stock for use in making the Company’s employer match contribution under its defined contribution pension plan. As of December 31, 2002, 127,067 shares remain available for repurchase under the program.

The Company did not pay any dividends in 2002, 2001 or 2000. Any future declarations of dividends are at the sole discretion of the Company’s Board of Directors, subject to the conditions of the Credit Facility. No assurance can be given as to whether dividends will be declared in the future, and if declared, the amount and timing of such dividends.

The Company was notified in the fourth quarter of 2002 by the New York Stock Exchange (“NYSE”) that its common stock was 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. At December 31, 2002, the Company has a shareholders’ deficit of $81.6 million, which is below the NYSE’s continued listing criteria pertaining to shareholders’ equity, which requires a minimum of $50.0 million shareholders’ equity given Chart’s recent market capitalization. The Company was notified on April 4, 2003 that its common stock was being immediately suspended from trading on the NYSE and that the delisting of the Company’s common stock is pending the completion of applicable procedures, including any appeal by the Company, due to failure to maintain these listing requirements. Subsequent to this date, the Company’s common stock has been traded on the over-the-counter market pink sheets. The Company is currently seeking an additional trading venue for its common stock.

Contingencies

The Company is involved with environmental compliance, investigation, monitoring and remediation activities at certain of its operating facilities, and accrues for these activities when commitments or remediation plans have been developed and when costs can be reasonably estimated. Historical annual cash expenditures for these activities have been less than $0.5 million, and have been charged against the related environmental reserves. Future expenditures relating to these environmental remediation efforts are expected to be made over the next ten years as ongoing costs of remediation programs. The Company believes that any additional liability in excess of amounts accrued which may result from the resolution of such matters will not have a material adverse effect on the Company’s financial position, liquidity, cash flows or results of operations.

The Company has been named as a defendant in several similar cases pending related to an accident occurring on December 7, 2000 at a nursing home outside Dayton, Ohio. Additionally, as previously mentioned, CHEL filed for a voluntary administration under the U.K. Insolvency Act of 1986. It is uncertain whether the Company will be subject to any significant liability resulting from CHEL’s insolvency administration. These proceedings are more fully described in “Item 3. Legal Proceedings.”

The Company, like other manufacturers, is occasionally subject to various legal actions related to performance under contracts, product liability and other matters, several of which actions claim substantial

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damages, in the ordinary course of its business. Based on the Company’s historical experience in litigating these actions, as well as the Company’s current assessment of the underlying merits of the actions and applicable insurance, the Company believes the resolution of these legal actions will not have a material adverse effect on the Company’s financial position, liquidity, cash flows or results of operations.

Foreign Operations

During 2002, the Company had operations in Australia, China, the Czech Republic, Germany and the United Kingdom, which accounted for 17 percent of consolidated revenues and 22 percent of total assets at December 31, 2002. Functional currencies used by these operations include the Australian Dollar, the Chinese Renminbi Yuan, the Czech Koruna, the Euro and the British Pound. The Company is exposed to foreign currency exchange risk as a result of transactions by these subsidiaries in currencies other than their functional currencies, and from transactions by the Company’s domestic operations in currencies other than the U.S. Dollar. The majority of these functional currencies and the other currencies in which the Company records transactions are fairly stable. The use of these currencies, combined with the use of foreign currency forward purchase and sale contracts, has enabled the Company to be sheltered from significant gains or losses resulting from foreign currency transactions. This situation could change if these currencies experience significant fluctuations in their value as compared to the U.S. Dollar.

Application of Critical Accounting Policies

The Company’s consolidated financial statements are based on the selection and application of significant accounting policies, which require management to make estimates and assumptions. The Company, after discussion with members of the Company’s audit committee, believes the following are some of the more critical judgmental areas in the application of its accounting policies that affect its financial position and results of operations.

Allowance for Doubtful Accounts:    The Company evaluates the collectibility of accounts receivable based on a combination of factors. In circumstances where the Company is aware of a specific customer’s inability to meet its financial obligations (e.g., bankruptcy filings, substantial downgrading of credit scores), a specific reserve is recorded to reduce the receivable to the amount the Company believes will be collected. For all other customers, the Company records allowances for doubtful accounts based on the length of time the receivables are past due and historical experience. If circumstances change (e.g., higher-than-expected defaults or an unexpected material adverse change in a customer’s ability to meet its financial obligations), the Company’s estimates of the collectibility of amounts due could be reduced by a material amount.

Inventory Valuation Reserves:    The Company values its inventory based on a combination of factors. In circumstances where the Company is aware of a specific problem in the valuation of a certain item, a specific reserve is recorded to reduce the item to its net realizable value. For all other inventory, the Company recognizes reserves based on the actual usage in recent history and projected usage in the near-term. If circumstances change (e.g., lower-than-expected usage), estimates of the net realizable value could be reduced by a material amount.

Goodwill and Indefinite Lived Intangibles:    As a result of the adoption of SFAS No. 142, the Company evaluates goodwill and indefinite lived intangible assets for impairment on an annual basis. To test for impairment, the Company is required to estimate the fair market value of each of its reporting units. Using management’s judgment, the Company developed a model to estimate the fair market value of its reporting units. This fair market value model incorporates the Company’s estimates of future cash flows, estimates of 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 result in a significantly different estimate of the fair market value of the reporting units, which could result in a different assessment of the recoverability of goodwill and indefinite lived intangible assets.

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Deferred Tax Assets:    As of December 31, 2002, the Company has a net deferred tax liability of $1.7 million resulting from gross deferred tax assets of $46.3 million, offset by a valuation allowance of $38.2 million and deferred tax liabilities of $9.7 million. These deferred tax assets and liabilities relate principally to various accruals and reserves and loss carryforwards. The realization of these assets is based upon estimates of future taxable income. In preparing estimates of future taxable income, the Company has used the same assumptions and projections utilized in its internal forecasts. Based on these projections, its cumulative tax loss position and management’s assessment, the Company believes that it is more likely than not that the net deferred tax assets will not be realized. Accordingly, the Company established a full valuation allowance against net deferred tax assets that would not be offset by taxable income generated by deferred tax liabilities. Estimates of future earnings are based on management’s expectations and beliefs concerning future events 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.

Pensions:    The Company accounts for its defined benefit pension plans in accordance with SFAS No. 87, “Employers’ Accounting for Pensions,” which requires that amounts recognized in financial statements be determined on an actuarial basis. The Company’s funding policy is to contribute at least the minimum funding amounts required by law. SFAS No. 87 and the policies used by the Company, notably the use of a calculated value of plan assets (which is further described below), generally reduce the volatility of pension expense from changes in pension liability discount rates and the performance of the pension plans’ assets.

A significant element in determining the Company’s pension expense in accordance with SFAS No. 87 is the expected return on plan assets. The Company has assumed that the expected long-term rate of return on plan assets as of December 31, 2002 will be 8.75 percent for the United States plans and 6.75 percent for the United Kingdom plan. These expected return assumptions were developed using a simple averaging formula based upon the United States plans’ and United Kingdom plan’s respective investment guidelines and the historical returns of equities and bonds as indicated by the SEC in their 2002 study on average annual returns for the United States plans and by the actuary for the United Kingdom plan. Over the long term, the investment strategy employed with the Company’s pension plan assets has earned in excess of such rates; therefore, the Company believes its assumptions are reasonable. The assumed long-term rate of return on assets is applied to the market value of plan assets. This produces the expected return on plan assets that is included in pension expense. The difference between this expected return and the actual return on plan assets is deferred. The net deferral of past asset gains or losses affects the calculated value of plan assets and, ultimately, future pension expense. The plan assets have earned a rate of return substantially less than the assumed rates in the last two years. Should this trend continue, future pension expense will likely increase.

At the end of each year, the Company determines the rate to be used to discount plan liabilities. The discount rate reflects the current rate at which the pension liabilities could be effectively settled at the end of the year. In estimating this rate, the Company looks to rates of return on high quality, fixed-income investments that receive one of the two highest ratings given by a recognized rating agency. At December 31, 2002, the Company determined this rate to be 6.75 percent for the United States plans and 5.75 percent for the United Kingdom plan. Changes in discount rates over the past three years have not materially affected pension expense, and the net effect of changes in the discount rate, as well as the net effect of other changes in actuarial assumptions and experience, have been deferred as allowed by SFAS No. 87.

At December 31, 2002, the Company’s consolidated net pension liability recognized was $3.1 million, a slight decrease from $3.2 million at December 31, 2001. The decrease was principally due to significant reductions in the number of plan participants based upon the facility closures and other terminations made throughout the Company. For the year ended December 31, 2002, the Company recognized consolidated pretax pension expense of $4.8 million, up from $0.9 million in 2001. The increase in 2002 pension expense is primarily due to the Company recognizing $2.9 million of expense related to the curtailment of the United Kingdom plan resulting from the termination of substantially all of the plan participants, and due to the lower return on plan assets and discount rates when compared to 2001. The Company currently expects that pension expense for its United States plans in 2003 will be at approximately the same level as 2002. At the present time, the Company is

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unable to determine the impact on its 2003 pension expense for the April 1, 2003 approval of insolvency administration for its CHEL subsidiary and the related termination of the Company’s United Kingdom pension plan.

Environmental Remediation obligations:    The Company’s obligations for known environmental problems at its current and former manufacturing facilities have been recognized based on estimates of the cost of investigation and remediation at each site. If the estimate can only be estimated as a range of possible amounts, with no specific amount being most likely, the minimum of the range is accrued. Management reviews its environmental remediation sites quarterly to determine if additional cost adjustments or disclosures are required. The characteristics of environmental remediation obligations, where information concerning the nature and extent of clean-up activities is not immediately available and changes in regulatory requirements frequently occur, result in a significant risk of increase to the obligations as they mature. Expected future expenditures are not discounted to present value. Potential insurance recoveries are not recognized until realized.

Product Warranty Costs:    The Company estimates product warranty costs and accrues for these costs as products are sold. Estimates are principally based upon historical product warranty claims experience over the warranty period for each product line. Due to the uncertainty and potential volatility of these warranty estimates, changes in assumptions could materially affect net income.

Revenue Recognition—Long-Term Contracts:    The Company recognizes revenue and profit as work on long-term contracts progresses using the percentage of completion method of accounting, which relies on estimates of total expected contract revenues and costs. The Company follows this method since reasonably dependable estimates of the revenue and costs applicable to various stages of a contract can be made. Since the financial reporting of these contracts depends on estimates, which are assessed continually during the term of the contract, recognized revenues and profit are subject to revisions as the contract progresses toward completion. Revisions in profit estimates are reflected in the period in which the facts that give rise to the revision become known. Accordingly, favorable changes in estimates result in additional profit recognition, and unfavorable changes in estimates result in the reversal of previously recognized revenue and profits. When estimates indicate a loss is expected to be incurred under a contract, cost of sales is charged with a provision for such loss. As work progresses under a loss contract, revenue and cost of sales continue to be recognized in equal amounts, and the excess of costs over revenues is charged to the contract loss reserve.

Debt Covenants:    The Company’s Credit Facility requires it to maintain certain financial ratios and a minimum level of net worth as discussed in Liquidity and Capital Resources and in Note C to the consolidated financial statements. The Company’s results of operations for the year ended December 31, 2002 would not have been in compliance with the financial covenants of the Credit Facility. Accordingly, the Company negotiated amendments in the first quarter of 2003 that waived such non-compliance at December 31, 2002 and through April 30, 2003. This waiver may be extended through June 30, 2003 if a term sheet for a restructuring of the Company’s senior debt can be negotiated with the senior lenders by April 30, 2003. If results of operations erode further or the Company is unable to obtain future amendments or waivers from its lenders, then the Company would be in default under the Credit Facility and the lenders could accelerate debt obligations so that all debt obligations outstanding under the Credit Facility and Incremental Credit Facility would be immediately due and payable. Expectations of future operating results and continued compliance with debt covenants cannot be assured and the lenders’ actions are not under the control of the Company. If projections of future operating results are not achieved and debt is placed in default, the Company would experience a material adverse impact on its reported financial position and results of operations.

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.

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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.

In November 2002, the FASB issued Interpretation (“FIN”) No. 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others.” FIN No. 45 elaborates on the disclosures to be made by a guarantor in its interim and annual financial statements about its obligations under certain guarantees that it has issued, including product warranties. It also clarifies that a guarantor is required to recognize, at the inception of a guarantee, a liability for the fair value of the obligation undertaken in issuing the guarantee. The initial recognition and initial measurement provisions of FIN No. 45 are applicable on a prospective basis to guarantees issued or modified after December 31, 2002 irrespective of the guarantor’s fiscal year end. The disclosure requirements in FIN No. 45 are effective for financial statements of interim or annual periods ending after December 15, 2002, and the Company has made the required disclosures in Note A of the consolidated financial statements. The Company does not expect this interpretation to have a material impact on the Company’s financial position, liquidity, cash flows or results of operations.

In December 2002, the FASB issued SFAS No. 148, “Accounting for Stock-Based Compensation—Transition and Disclosure.” SFAS No. 148 amends the disclosure provisions of SFAS No. 123 and requires expanded and more prominent disclosure of the effects of an entity’s accounting policy with respect to stock-based employee compensation. The disclosure requirements in SFAS No. 148, which have been made in Note G to the consolidated financial statements, are effective for financial statements for fiscal years ending after December 15, 2002 and for financial reports containing condensed consolidated financial statements for interim periods beginning after December 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 January 2003, the FASB issued Interpretation No. 46, “Consolidation of Variable Interest Entities.” FIN No. 46 provides guidance for identifying a controlling interest in a variable interest entity (“VIE”) established by means other than voting interests. FIN No. 46 also requires consolidation of a VIE by an enterprise that holds such a controlling interest. The effective date for FIN No. 46 will be July 1, 2003. The Company does not expect this interpretation to have a material impact on the Company’s financial position, liquidity, cash flows or results of operations.

Certain Factors That May Affect Future Results and Financial Condition

In addition to other information in this Annual Report on Form 10-K, the following factors could cause results and financial condition to differ materially from those anticipated or otherwise expressed or implied by forward-looking statements made in this Annual Report on Form 10-K and presented elsewhere by the Company’s management from time to time.

The Company’s Losses from Operations and Working Capital Deficiency Raise Substantial Doubt About its Ability to Continue as a Going Concern:    The Company incurred a net loss of $130.8 million in 2002. The independent auditor’s report to the Company for the year ended December 31, 2002 concludes that the Company’s working capital deficiency and shareholders’ deficit, among other factors, raise substantial doubt about the Company’s ability to continue as a going concern. The Company is currently engaged in negotiations with its senior lenders regarding a restructuring of its senior debt outstanding under its Credit Facility and Incremental Credit Facility. There can be no assurance, however, that the Company will be able to consummate a debt restructuring transaction or obtain additional capital from other sources on reasonable terms or at all. The inability of the Company to satisfactorily resolve these negotiations with its senior lenders and/or access other sources of capital on a timely basis could result in a liquidity crisis for the Company, and would have a material adverse impact on the Company’s financial condition. Such an event would leave the Company with

28

substantially negative working capital and could result in the Company’s inability to operate as a going concern. If the Company is unable to continue as a going concern, the Company may file, or may be forced to file, bankruptcy or insolvency proceedings, or may pursue a sale of assets to satisfy creditors.

Satisfying Debt Covenants and Paying Down Debt Under the Credit Facility:    The Company’s Credit Facility requires it to maintain certain financial ratios and a minimum level of net worth as discussed in Liquidity and Capital Resources and Note C to the consolidated financial statements. The Company was not in compliance with the financial covenants of the Credit Facility at December 31, 2002. Accordingly, the Company negotiated an amendment as of April 2, 2003 that waives the violations at December 31, 2002 and through April 30, 2003. The Company’s expectations of future operating results indicate that it will not be able to remain in compliance with debt covenants and make required debt payments. Accordingly, the Company is seeking to reduce its leverage by restructuring the Credit Facility and Incremental Credit Facility as previously discussed. If the Company does not reach an agreement regarding such restructuring with its senior lenders by April 30, 2003, the Company will be in default under its Credit Facility. Upon default by the Company, the senior lenders could accelerate all debt obligations outstanding under the Credit Facility and Incremental Credit Facility, which would have a material adverse impact on the Company’s liquidity, its financial position and ability to continue as a going concern.

Recovery of Core Businesses, Negative Publicity and Current Economic Conditions:    Certain of the Company’s core businesses have been underperforming over the past few years. While the Company expects to see an upturn in 2003 in the various markets its underperforming core businesses serve, there can be no assurance that such an upturn will occur or that the businesses’ performance will be markedly improved in 2003. The publicity surrounding the Company’s financial condition and suspension of trading of its common stock on the NYSE could affect the Company’s reputation with its customers and suppliers, could cause the Company to lose potential orders for significant projects and could have a negative impact on the Company’s liquidity, financial condition and results of operations. Finally, current world economic and political conditions may reduce the willingness of the Company’s customers and prospective customers to commit funds to purchase its products and services.

Insolvency Proceeding of the Company’s Subsidiary:    On March 28, 2003, the Company’s CHEL subsidiary, which previously operated the closed Wolverhampton, United Kingdom manufacturing facility, filed for a voluntary administration under the U.K. Insolvency Act 1986. CHEL’s application for voluntary administration was approved on April 1, 2003 and an administrator was appointed. CHEL’s net pension plan obligations have increased significantly, primarily due to a decline in plan asset values and interest rates, resulting in an estimated plan deficit of approximately $12 million. Based on the Company’s present financial condition, it has determined not to advance funds at this time to CHEL in amounts necessary to fund CHEL’s obligations. CHEL does not have the necessary funds to enable it to fund its net pension plan deficit, pay remaining severance due to former employees or pay other creditors. As a result, the trustees of the CHEL pension plan terminated this plan in April 2003. The Company is unable to determine at this point whether it will have any liability with regard to CHEL’s net pension plan obligations or severance payments. To the extent the Company has significant liability with respect to CHEL’s obligations as a result of CHEL’s insolvency, such liability would have a material adverse impact on the Company’s liquidity and its financial position.

Ability to Qualify the Company’s Common Stock for Trading in a National Trading Venue:    The Company was notified on April 4, 2003 that its common stock was being immediately suspended from trading on the NYSE and is subject to delisting pending the completion of applicable procedures, including any appeal by the Company, due to the Company’s inability to meet the NYSE continued listing criteria. Subsequent to this date, Chart Industries common stock has been traded on the over-the-counter market pink sheets under the symbol “CTIT.” The Company is currently seeking an additional trading venue for its common stock, although there can be no assurance that the Company will be able to meet applicable standards. The inability to trade in a national trading venue will make it difficult for the Company to raise funds through the sale of the Company’s securities. Additionally, the Company’s shareholders may have difficulty disposing of, or acquiring, the Company’s common stock which may negatively impact the market price for the shares.

29

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 Annual Report on Form 10-K 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. The Company believes that the following factors, among others (including those described above under “Certain Factors That May Affect Future Results and Financial Condition”), could affect its future performance and 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 effectiveness of operational changes expected to increase efficiency and productivity; (f) the ability of the Company to manage its fixed-price contract exposure; (g) the ability of the Company to pass on increases in raw material prices, including as a result of tariffs; (h) the Company’s relations with its employees; (i) the extent of product liability claims asserted against the Company; (j) variability in the Company’s operating results; (k) the ability of the Company to attract and retain key personnel; (l) the costs of compliance with environmental matters; (m) the ability of the Company to protect its proprietary information; (n) the ability of the Company to sell certain assets and/or access additional sources of capital; (o) the ability of the Company to qualify its common stock for trading in a national trading venue; (p) the ability of the Company to satisfy debt covenants, pay down its debt and restructure its debt arrangements; (q) the insolvency of CHEL and the commencement of its administration proceedings in the United Kingdom, including the potential liability of the Company with respect to CHEL’s obligations; and (r) the war in Iraq and the threat of terrorism and the impact of responses to that threat.

ITEM 7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

In the normal course of business, the Company’s operations 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 certain portions of the term debt and to a lesser extent by varying LIBOR maturities in the entire Credit Facility. The fair value of the contract related to the interest rate collar outstanding at December 31, 2002 is a liability of $2.1 million. If interest rates were to increase 200 basis points (2 percent) from December 31, 2002 rates, and assuming no changes in debt from the December 31, 2002 levels, the additional annual expense would be approximately $5.2 million on a pre-tax 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 forward exchange contracts are employed as methods to reduce this risk. The Company enters into foreign exchange forward 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 exchange forward contracts at December 31, 2002, the result would be a loss in fair value of approximately $0.1 million.

30

ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

REPORT OF INDEPENDENT AUDITORS

To the Shareholders and Board of Directors of Chart Industries, Inc.

We have audited the accompanying consolidated balance sheets of Chart Industries, Inc. and subsidiaries as of December 31, 2002 and 2001, and the related consolidated statements of operations, shareholders’ (deficit) equity and cash flows for each of the three years in the period ended December 31, 2002. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Chart Industries, Inc. and subsidiaries at December 31, 2002 and 2001, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 2002, in conformity with accounting principles generally accepted in the United States.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As more fully described in Notes A and C, the Company has a shareholders’ deficit and a working capital deficiency. In addition, the Company has received an amendment waiving violations of covenants under its debt and credit arrangements as of December 31, 2002 and through April 30, 2003, or conditionally through June 30, 2003. It is likely that the Company will be in violation of covenants under its debt and credit arrangements upon expiration of the waiver, and a new amendment or waiver to the Company’s debt and credit arrangements will need to be obtained in order for the debt not to be in default at May 1, 2003, or conditionally at July 1, 2003. These circumstances raise substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amount and classification of liabilities that may result from the outcome of this uncertainty.

As discussed in Note A to the consolidated financial statements, on January 1, 2002 and January 1, 2001, the Company changed its method of accounting for goodwill and derivative financial instruments, respectively.

/s/    ERNST & YOUNG LLP

Cleveland, Ohio

April 9, 2003

31

CHART INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	December 31,
	2002			2001
	(Dollars in thousands, except per share amounts)
ASSETS
Current Assets
Cash and cash equivalents	$	7,225		$	11,801
Accounts receivable, net of allowances of $2,167 and $1,401		44,732			45,427
Inventories, net		51,914			56,490
Unbilled contract revenue		10,622			7,391
Deferred income taxes					10,170
Prepaid expenses		2,426			1,735
Other current assets		14,540			6,766
Total Current Assets		131,459			139,780
Property, plant and equipment, net		56,889			62,070
Goodwill, net of accumulated amortization of $6,428 and $14,583		77,232			168,282
Other assets, net		13,714			38,848
TOTAL ASSETS	$	279,294		$	408,980
LIABILITIES AND SHAREHOLDERS’ (DEFICIT) EQUITY
Current Liabilities
Accounts payable	$	23,084		$	25,634
Customer advances and billings in excess of contract revenue		10,037			9,290
Accrued salaries, wages and benefits		10,937			12,353
Warranty reserves		4,032			3,492
Other current liabilities		23,293			19,772
Current maturities of long-term debt		43,998			10,803
Current portion of long-term debt		218,741			2,160
Total Current Liabilities		334,122			83,504
Long-term debt		1,161			259,120
Other long-term liabilities		25,628			17,016
Shareholders’ (Deficit) Equity
Preferred stock, 1,000,000 shares authorized, none issued or outstanding
Common stock, par value $.01 per share—60,000,000 shares authorized; 25,707,709 and 24,917,187 shares issued at December 31, 2002 and 2001, respectively		257			249
Additional paid-in capital		45,792			42,832
Retained (deficit) earnings		(116,086	)		14,699
Accumulated other comprehensive loss		(10,799	)		(7,670	)
Treasury stock, at cost, 153,648 and 109,437 shares at December 31, 2002 and 2001, respectively		(781	)		(770	)
		(81,617	)		49,340
TOTAL LIABILITIES AND SHAREHOLDERS’ (DEFICIT) EQUITY	$	279,294		$	408,980

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

32

CHART INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

	Years ended December 31,
	2002			2001			2000
	(Dollars and shares in thousands, except per share amounts)
Sales	$	296,284		$	327,990		$	325,700
Cost of sales		219,987			241,629			229,671
Gross profit		76,297			86,361			96,029
Selling, general and administrative expense		68,001			58,561			59,488
Goodwill impairment charge		92,379
Goodwill amortization expense					5,017			4,921
Employee separation and plant closure costs (income)		13,887			2,375			(614	)
Equity income in joint venture		(369	)		(525	)		(35	)
		173,898			65,428			63,760
Operating (loss) income		(97,601	)		20,933			32,269
Other income (expense):
Gain on sale of assets		1,420			538			1,041
Interest expense, net		(17,612	)		(21,589	)		(26,676	)
Financing costs amortization		(3,159	)		(1,475	)		(1,147	)
Derivative contracts valuation expense		(1,564	)		(2,876	)
Foreign currency loss		(1,081	)		(92	)		(203	)
		(21,996	)		(25,494	)		(26,985	)
(Loss) income before income taxes, minority interest and cumulative effect of change in accounting principle		(119,597	)		(4,561	)		5,284
Income tax expense (benefit):
Current		953			1,034			985
Deferred		10,183			(636	)		2,027
		11,136			398			3,012
(Loss) income before minority interest and cumulative effect of change in accounting principle		(130,733	)		(4,959	)		2,272
Minority interest, net of taxes		(52	)		(111	)		(117	)
(Loss) income before cumulative effect of change in accounting principle		(130,785	)		(5,070	)		2,155
Cumulative effect of change in accounting principle, net of taxes					(88	)
Net (loss) income	$	(130,785	)	$	(5,158	)	$	2,155
Net (loss) income per common share—basic and assuming dilution:
(Loss) income before cumulative effect of change in accounting principle	$	(5.22	)	$	(0.21	)	$	0.09
Cumulative effect of change in accounting principle, net of taxes					0.00
Net (loss) income per common share—basic and assuming dilution	$	(5.22	)	$	(0.21	)	$	0.09
Shares used in per share calculations		25,073			24,573			24,110
Shares used in per share calculations—assuming dilution		25,073			24,573			24,326

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

33

CHART INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ (DEFICIT) EQUITY

	Common Stock				Additional Paid-in Capital			Retained Earnings (Deficit)			Accumulated Other Comprehensive Loss			Treasury Stock			Total Shareholders’ Equity (Deficit)
	Shares Outstanding		Amount
	(Dollars and shares in thousands, except per share amounts)
Balance at January 1, 2000	23,817		$	244	$	43,219		$	17,702		$	(661	)	$	(4,992	)	$	55,512
Net income									2,155									2,155
Other comprehensive loss:
Foreign currency translation adjustment												(5,063	)					(5,063	)
Comprehensive loss																		(2,908	)
Treasury stock acquisitions	(37	)													(156	)		(156	)
Stock options, including tax benefit	50					(259	)								398			139
Contribution of stock to employee benefit plans	523			1		(794	)								3,076			2,283
Other						(26	)											(26	)
Balance at December 31, 2000	24,353			245		42,140			19,857			(5,724	)		(1,674	)		54,844
Net loss									(5,158	)								(5,158	)
Other comprehensive loss:
Foreign currency translation adjustment												(768	)					(768	)
Minimum pension liability adjustment, net of taxes of $737												(1,178	)					(1,178	)
Comprehensive loss																		(7,104	)
Treasury stock acquisitions	(50	)													(181	)		(181	)
Stock options, including tax benefit	17			1		50												51
Contribution of stock to employee benefit plans	488			3		620									1,085			1,708
Other						22												22
Balance at December 31, 2001	24,808			249		42,832			14,699			(7,670	)		(770	)		49,340
Net loss									(130,785	)								(130,785	)
Other comprehensive loss:
Foreign currency translation adjustment												6,828						6,828
Minimum pension liability adjustment, net of taxes of $737												(9,957	)					(9,957	)
Comprehensive loss																		(133,914	)
Treasury stock acquisitions	(130	)													(219	)		(219	)
Stock options, including tax benefit	3					(7	)								10			3
Contribution of stock to employee benefit plans	873			8		1,012									198			1,218
Issuance of warrants to lenders						1,957												1,957
Other						(2	)											(2	)
Balance at December 31, 2002	25,554		$	257	$	45,792		$	(116,086	)	$	(10,799	)	$	(781	)	$	(81,617	)

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

34

CHART INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Years ended December 31,
	2002			2001			2000
	(Dollars in thousands)
OPERATING ACTIVITIES
Net (loss) income	$	(130,785	)	$	(5,158	)	$	2,155
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Cumulative effect of change in accounting principle					88
Financing costs amortization		3,159			1,475			1,147
Financing costs expensed		4,911			261
Employee separation and plant closure costs (income)		3,858			1,403			(704	)
Gain on sale of assets		(1,420	)		(538	)		(1,041	)
Goodwill impairment charge		92,379
Depreciation and amortization		11,709			16,712			16,717
Equity income from joint venture		(369	)		(525	)		(35	)
Foreign currency transaction loss		1,081			92			203
Minority interest		83			182			190
Deferred income tax expense (benefit)		10,183			(636	)		2,027
Contribution of stock to employee benefit plans		1,217			1,708			2,283
Increase (decrease) in cash resulting from changes in operating assets and liabilities:
Accounts receivable		2,178			7,207			5,141
Inventory and other current assets		293			13,268			(26,322	)
Accounts payable and other current liabilities		974			(27,027	)		11,487
Income tax refund		9,258
Billings in excess of contract revenue and customer advances		181			4,761			1,398
Net Cash Provided By Operating Activities		8,890			13,273			14,646
INVESTING ACTIVITIES
Capital expenditures		(3,028	)		(8,145	)		(5,581	)
Dividends received from joint venture		492
Proceeds from sale of assets		2,300			2,365			5,000
Other investing activities		1,352			(714	)		154
Net Cash Provided By (Used In) Investing Activities		1,116			(6,494	)		(427	)
FINANCING ACTIVITIES
Borrowings on revolving credit facilities		46,354			106,740			112,254
Repayments on revolving credit facilities		(48,634	)		(89,945	)		(102,693	)
Principal payments on long-term debt		(6,657	)		(15,313	)		(18,288	)
Financing costs paid		(6,733	)		(848	)		(1,015	)
Purchases of treasury stock		(219	)		(181	)		(156	)
Other financing activities		25			51			139
Net Cash (Used In) Provided By Financing Activities		(15,864	)		504			(9,759	)
Net (decrease) increase in cash and cash equivalents		(5,858	)		7,283			4,460
Effect of exchange rate changes on cash		1,282			(403	)		(1,853	)
Cash and cash equivalents at beginning of year		11,801			4,921			2,314
CASH AND CASH EQUIVALENTS AT END OF YEAR	$	7,225		$	11,801		$	4,921

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

35

CHART INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)

Note A—Nature of Operations and Summary of Significant Accounting Policies

Nature of Operations:    Chart Industries, Inc. (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 an international presence in Australia, China, the Czech Republic, Germany and the United Kingdom.

Principles of Consolidation:    The consolidated financial statements include the accounts of the Company and its subsidiaries. Intercompany accounts and transactions are eliminated in consolidation. Investments in affiliates where the Company’s ownership is between 20 percent and 50 percent, or where the Company does not have control but has the ability to exercise significant influence over operations or financial policy, are accounted for under the equity method.

Basis of Presentation:    The Company’s consolidated financial statements have been presented on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

As of December 31, 2002, the Company was in default under its consolidated credit and revolving loan facility (the “Credit Facility”) and its Series 1 Incremental Credit Facility and Series 2 Incremental Credit Facility (collectively, the “Incremental Credit Facility”) due to violations of financial covenants more fully described in Note C. The Company’s senior lenders amended the Credit Facility and Incremental Credit Facility in April 2003 to waive all defaults existing at December 31, 2002 and through April 30, 2003 and to defer until April 30, 2003, $6,549 in scheduled term debt amortization and $9,793 in Incremental Credit Facility amortization originally due on March 31, 2003. In addition, the amendment requires the Company to reach agreement with its senior lenders on the terms of a debt restructuring by April 30, 2003. If a negotiated term sheet can be reached by April 30, 2003, the waiver of defaults and deferral of debt payments will be extended until June 30, 2003. The amendment also grants approval for certain asset sales, the proceeds of which will be used to fund senior debt interest payments, restructuring related activities and working capital requirements. Receipt of this amendment prevents the Company from classifying its debt outstanding under its Credit Facility and Incremental Credit Facility totaling $256,874 as “in default” on its consolidated balance sheet as of December 31, 2002. Since the waiver of defaults does not extend until January 1, 2004, however, this debt is classified as a current liability as of December 31, 2002.

The Company is in the process of negotiating with its senior lenders to reduce its leverage by restructuring the Company’s debt outstanding under the Credit Facility and Incremental Credit Facility. Although the terms of such restructuring remain under negotiation, the Company expects this restructuring will result in an exchange of a portion of such debt for a substantial equity ownership position in the Company and substantial dilution of current shareholders’ ownership interests in the Company. The Company can give no assurance that it will be able to agree with its senior lenders or consummate such a restructuring transaction or otherwise renegotiate its debt outstanding under the Credit Facility or Incremental Credit Facility. If the Company is unable to do so, it may be required to pursue other restructuring alternatives. These alternatives could have a material adverse effect on the Company’s financial position, liquidity, cash flows or results of operations. The consolidated financial statements do not include any adjustments to the amounts or classifications of assets or liabilities to reflect this uncertainty.

36

CHART INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Dollars in thousands, except per share amounts)

Note A—Nature of Operations and Summary of Significant Accounting Policies—Continued

Reclassifications:    Certain prior year amounts have been reclassified to conform to current year presentation.

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.

Cash and Cash Equivalents:    The Company considers all investments with an initial maturity of three months or less when purchased to be cash equivalents. The December 31, 2002 and 2001 balances include money market investments and cash.

Concentrations of Credit Risks:    Financial instruments that potentially subject the Company to concentrations of credit risks primarily consist of temporary cash investments and trade receivables. The Company places its temporary cash investments with high credit quality financial institutions and limits the amount of credit exposure to any one financial institution. The concentration of trade receivable credit risk is generally limited due to the Company’s customers being spread across the industrial gas, hydrocarbon and chemical processing industries in several countries. The Company’s management has established certain credit requirements that its customers must meet before sales credit is extended. The Company monitors the financial condition of its customers to help ensure collections and to minimize losses. For certain domestic and foreign customers, the Company requires customer advances, letters of credit and other such guarantees of payment.

Allowance for Doubtful Accounts:    The Company evaluates the collectibility of accounts receivable based on a combination of factors. In circumstances where the Company is aware of a specific customer’s inability to meet its financial obligations (e.g., bankruptcy filings, substantial downgrading of credit scores), a specific reserve is recorded to reduce the receivable to the amount the Company believes will be collected. For all other customers, the Company records allowances for doubtful accounts based on the length of time the receivables are past due and historical experience. The Company recorded expense for doubtful accounts of $1,614 and $381 in 2002 and 2000, respectively, and income related to doubtful accounts of $322 in 2001.

Inventories:    Inventories are stated at the lower of cost or market with cost being determined by the last-in, first-out (“LIFO”) method (approximately 11 percent and 13 percent of total inventory at December 31, 2002 and 2001, respectively), and the first-in, first-out (“FIFO”) method. The components of inventory are as follows:

	December 31,
	2002			2001
Raw materials and supplies	$	27,046		$	31,004
Work in process		13,382			14,639
Finished goods		11,556			10,997
LIFO reserve		(70	)		(150	)
	$	51,914		$	56,490

Property, Plant and Equipment:    Property, plant and equipment are stated on the basis of cost. Expenditures for maintenance, repairs and renewals are charged to expense as incurred, whereas major improvements are capitalized. The cost of applicable assets is depreciated over their estimated useful lives.

37

CHART INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Dollars in thousands, except per share amounts)

Note A—Nature of Operations and Summary of Significant Accounting Policies—Continued

Depreciation is computed using the straight-line method for financial reporting purposes and accelerated methods for income tax purposes. Depreciation expense was $10,019, $9,722 and $9,796 in 2002, 2001, and 2000, respectively. The following table shows original costs and the estimated useful lives by classification of assets:

		December 31,
Classification	Expected Useful Life	2002		2001
Land and buildings	20-35 years (buildings)	$	42,645	$	39,010
Machinery and equipment	3-12 years		53,122		50,612
Furniture and fixtures	3-5 years		11,337		9,523
Construction in process			403		3,279
			107,507		102,424
Less accumulated depreciation			50,618		40,354
Total property, plant and equipment, net		$	56,889	$	62,070

Property, plant and equipment and finite lived intangible assets are evaluated for impairment if an indicator of impairment exists. The Company assesses whether impairment exists for each of its assets or groups of assets by comparing estimated undiscounted future cash flows against the carrying value of such assets. If the future undiscounted cash flows are less than the carrying value of the assets, an impairment reserve is recorded. The amount of impairment is calculated by comparing estimated future discounted cash flows, asset appraisals or market values of similar assets to the related carrying value.

Goodwill and Other Intangible Assets:    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 established financial accounting and reporting for acquired goodwill and other intangible assets and superseded 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.

38

CHART INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Dollars in thousands, except per share amounts)

Note A—Nature of Operations and Summary of Significant Accounting Policies—Continued

Prior to the adoption of SFAS No. 142, the Company recorded amortization expense for goodwill and other intangible assets. The following table sets forth a reconciliation of net loss and earnings per share information adjusted in 2001 and 2000 for the non-amortization provisions of SFAS No. 142:

	Years Ended December 31,
	2002			2001			2000
Reported (loss) income before cumulative effective of change in accounting principle	$	(130,785	)	$	(5,070	)	$	2,155
Add back goodwill and indefinite lived intangible asset amortization, net of tax					5,266			5,187
Adjusted (loss) income before cumulative effect of change in accounting principle		(130,785	)		196			7,342
Cumulative effect of change in accounting principle net of tax					88
Adjusted net (loss) income	$	(130,785	)	$	108		$	7,342
Basic and diluted earnings per share:
Reported (loss) income before cumulative effect of change in accounting principle	$	(5.22	)	$	(0.21	)	$	0.09
Add back goodwill and indefinite lived intangible asset amortization, net of tax					0.21			0.21
Adjusted (loss) income before cumulative effect of change in accounting principle		(5.22	)		0.00			0.30
Cumulative effect of change in accounting principle, net of tax					0.00
Adjusted net (loss) income	$	(5.22	)	$	0.00		$	0.30
Weighted average shares—basic		25,073			24,573			24,110
Weighted average shares—assuming dilution		25,073			24,573			24,326

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. Under SFAS No. 142, a 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, a 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 the reporting 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.

As part of adopting this standard as of January 1, 2002, the Company determined that it had one indefinite lived intangible asset in addition to goodwill. The Company evaluated the impairment of such 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 that the fair value of each reporting unit exceeded the carrying value, including goodwill, of such

39

CHART INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Dollars in thousands, except per share amounts)

Note A—Nature of Operations and Summary of Significant Accounting Policies—Continued

reporting unit 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.

The Company performed its annual impairment test of goodwill as of October 1, 2002 using discounted cash flow techniques and values of comparable businesses. These tests resulted in the fair value of the Company’s Distribution and Storage reporting unit being less than its carrying value including goodwill, which caused the Company to advance to step two of SFAS No. 142 and engage a valuation specialist to provide valuations of the Distribution and Storage reporting unit’s tangible and identifiable intangible assets. Although those procedures confirmed the value of the reporting unit’s tangible assets exceeded their carrying value, goodwill of the Distribution and Storage reporting unit was determined to be impaired. As a result, in 2002 the Company recorded a non-cash impairment charge of $92,379, or $3.69 per diluted share, to write off non-deductible goodwill. This non-cash charge was due to the combination of a reduction in the overall estimated enterprise value of the Company, attributable to Chart’s leverage situation and recent financial performance, and a reduction in the specific estimated value of the Distribution and Storage reporting unit, caused by the worldwide slowdown experienced by the manufacturing sectors of the industrialized world, reductions in capital expenditures in the consolidating global industrial gas industry and a lowering of expectations for future performance of this segment for these same reasons. Changes to the judgments and estimates used to determine the fair values, including estimates of future cash flows, sales, profitability growth, and discount rates, could result in a significantly different estimate of the fair value of the reporting units, which could result in a different assessment of the recoverability of goodwill.

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.

	December 31, 2002					December 31, 2001
	Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization
Amortizable intangible assets
Existing technology	$	7,690	$	(4,996	)	$	7,690	$	(3,649	)
Patents		2,131		(1,024	)		1,977		(676	)
	$	9,821	$	(6,020	)	$	9,667	$	(4,325	)
Non-Amortizable intangible assets
Know-how and intellectual property	$	6,439	$	(1,610	)	$	5,824	$	(1,456	)
Goodwill		83,660		(6,428	)		182,865		(14,583	)
	$	90,099	$	(8,038	)	$	188,689	$	(16,039	)

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

40

CHART INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Dollars in thousands, except per share amounts)

Note A—Nature of Operations and Summary of Significant Accounting Policies—Continued

The changes in the carrying amount of net goodwill by operating segment for the year ended December 31, 2002 are as follows:

	Biomedical		Distribution and Storage			Energy and Chemicals		Total
Balance as of January 1, 2002	$	40,555	$	115,147		$	12,580	$	168,282
Foreign currency exchange rate changes on prior balance							1,329		1,329
Goodwill impairment charge				(92,379	)				(92,379	)
Balance as of December 31, 2002	$	40,555	$	22,768		$	13,909	$	77,232

Amortization expense for intangible assets subject to amortization was $1,690, $6,990 and $6,921 in 2002, 2001, and 2000, respectively, and is estimated to be approximately $1,500 annually for fiscal years 2003 through 2004, and approximately $200 annually for fiscal years 2005 through 2007.

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.

Financial Instruments:    The fair values of cash equivalents, accounts receivable and short-term bank debt approximate their carrying amount because of the short maturity of these instruments. The fair value of long-term debt is estimated based on the present value of the underlying cash flows discounted at the Company’s estimated borrowing rate. Under such method the Company’s long-term debt approximated its carrying value at December 31, 2002 and 2001. The Company, however, believes that its long-term debt has traded on the open market at a significant discount. Additionally, the Company is in the process of negotiating with its senior lenders to reduce its leverage by restructuring the Company’s debt outstanding under the Credit Facility and Incremental Credit Facility. Because the terms of such restructuring are not yet finalized, it is not practical to estimate the impact this restructuring will have on the fair value of the Company’s long-term debt.

Derivative Instruments:    Effective January 1, 2001, the Company adopted SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities,” as amended by SFAS No. 138. The standard requires that all derivative instruments be recorded on the balance sheet at fair value and establishes criteria for designation and effectiveness of the hedging relationships.

The Company utilizes certain derivative financial instruments to enhance its ability to manage risk, including interest rate and foreign currency exposures that exist as part of ongoing business operations. Derivative instruments are entered into for periods consistent with related underlying exposures and do not constitute positions independent of those exposures. The Company does not enter into contracts for speculative purposes, nor is it a party to any leveraged derivative instrument.

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. These agreements are

41

CHART INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Dollars in thousands, except per share amounts)

Note A—Nature of Operations and Summary of Significant Accounting Policies—Continued

generally described as collars and result in putting a cap on the base LIBOR interest rate at approximately 7.0 percent and a floor at approximately 5.0 percent on certain portions of the Company’s floating rate term debt. The Company’s interest rate collars do not qualify as hedges under the provisions of SFAS No. 133. The 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 cumulative effect of a change in accounting principle, net of income taxes, as an adjustment to operations as of January 1, 2001. An interest rate collar covering $76,000 of the Company’s debt expired and was settled on June 28, 2002. The Company’s remaining interest rate collar covering $29,813 of debt expires on March 31, 2006. The fair value of the contract related to the collar outstanding at December 31, 2002 is a liability of $2,093 and is recorded in accrued interest. The fair value of the contracts related to the collars outstanding at December 31, 2001 is a liability of $2,278 and is recorded in accrued interest. The change in fair value during 2002 and 2001 of $1,564 and $2,876, respectively, is recorded in derivative contracts valuation expense.

The Company is exposed to foreign currency exchange risk as a result of transactions in currencies other than the functional currency of certain subsidiaries. The Company utilizes foreign currency forward purchase and sale contracts to manage the volatility associated with foreign currency purchases and certain intercompany transactions in the normal course of business. Contracts typically have maturities of less than one year. Principal currencies include the Euro, British Pound and Czech Koruna.

The Company’s foreign currency forward contracts do not qualify as hedges under the provisions of SFAS No. 133. Accordingly, the Company recorded a cumulative effect of a change in accounting principle, net of income taxes, as an adjustment to net income as of January 1, 2001. Gains and losses recorded by the Company related to foreign currency forward contracts during 2002, 2001 and 2000 were not material.

The Company held foreign exchange forward contracts for notional amounts as follows:

	December 31,
	2002		2001
	Sell		Sell
United States Dollars			$	500
Euros	$	78		1,358
	$	78	$	1,858
Fair Value	$	78	$	1,865

Product Warranties:    The Company provides product warranties with varying terms and durations for the majority of its products. The Company records warranty expense in cost of sales. The changes in the Company’s consolidated warranty reserve during 2002, 2001 and 2000 are as follows:

	Years Ended December 31,
	2002			2001			2000
Balance as of January 1	$	3,492		$	6,150		$	8,255
Warranty expense		2,875			266			2,655
Warranty usage		(2,335	)		(2,924	)		(4,760	)
Balance as of December 31	$	4,032		$	3,492		$	6,150

42

CHART INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Dollars in thousands, except per share amounts)

Note A—Nature of Operations and Summary of Significant Accounting Policies—Continued

Shareholders’ (Deficit) Equity: The Company reports comprehensive loss in its consolidated statement of shareholders’ (deficit) equity. The components of accumulated other comprehensive loss are as follows:

	December 31,
	2002			2001
Foreign currency translation adjustments	$	(336	)	$	6,492
Minimum pension liability adjustments, net of taxes of $737		11,135			1,178
	$	10,799		$	7,670

The deferred tax asset of $2,848 related to the increase in the minimum pension liability in 2002 has an equal and offsetting valuation allowance recorded in other comprehensive loss.

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 heat exchangers, cold boxes, liquefied natural gas fueling stations and engineered tanks, 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. Earned revenue on contracts in process at December 31 totaled $44,817, $39,344 and $33,815 in 2002, 2001 and 2000, respectively. Timing of amounts billed on contracts varies from contract to contract causing significant variation in working capital needs. Amounts billed on percentage of completion contracts in process at December 31 totaled $37,981, $38,407 and $25,045 in 2002, 2001, and 2000, respectively. 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.

Distribution Costs:    The Company records distribution costs, including warehousing and freight related to product shipping, in cost of sales.

Advertising Costs:    The Company incurred advertising costs of $2,991, $2,678 and $3,108 in 2002, 2001 and 2000, respectively. These costs are expensed as incurred.

Research and Development Costs:    The Company incurred research and development costs of $5,245, $4,101, and $3,671 in 2002, 2001 and 2000, respectively. These costs are expensed as incurred.

Foreign Currency Translation:    The functional currency for the majority of the Company’s foreign operations is the applicable local currency. The translation from the applicable foreign currencies to U.S. dollars is performed for balance sheet accounts using exchange rates in effect at the balance sheet date and for revenue and expense accounts using a weighted average exchange rate during the period. The resulting translation adjustments are recorded as a component of shareholders’ equity. Gains or losses resulting from foreign currency transactions are charged to operations as incurred.

43

CHART INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Dollars in thousands, except per share amounts)

Note A—Nature of Operations and Summary of Significant Accounting Policies—Continued

Deferred Income Taxes:    The Company and its subsidiaries file a consolidated federal income tax return. Deferred income taxes are provided for temporary differences between financial reporting and the consolidated tax return in accordance with the liability method. A valuation allowance is provided against net deferred tax assets when conditions indicate that it is more likely than not that the benefit related to such assets will not be realized.

Employee Stock Options:    The Company has elected to follow the intrinsic value method of Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” (“APB 25”) and related interpretations in accounting for its employee stock options. Under APB 25, because the exercise price of the Company’s employee stock options equals the market price of the underlying stock on the date of grant, the Company does not recognize compensation expense. The Company is accounting for the 400,000 performance related options issued as part of the 2000 Executive Incentive Stock Option Plan as a variable plan. The Company has not recognized any compensation expense under this plan as the market value of the Company’s stock was less than the option exercise price when the performance criteria were met.

The Company adopted SFAS No. 148, “Accounting for Stock-Based Compensation—Transition and Disclosure,” in December 2002. SFAS No. 148 amends the disclosure provisions of SFAS No. 123 and requires expanded and more prominent disclosure of the effects of an entity’s accounting policy in respect to stock-based employee compensation. The impact of not using the fair value provisions of SFAS No. 123 on net income (loss) and earnings (loss) per share are disclosed in Note G.

44

CHART INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Dollars in thousands, except per share amounts)

Note A—Nature of Operations and Summary of Significant Accounting Policies—Continued

Earnings Per Share:    The following table sets forth the computation of basic and diluted earnings per share. The assumed conversion of the Company’s potentially dilutive securities (employee stock options and warrants), before giving effect to the cumulative effect of a change in accounting principle, was anti-dilutive for 2002 and 2001, respectively. As a result, the calculation of diluted net loss per share for 2002 and 2001 set forth below does not reflect any assumed conversion. The amount of potentially dilutive securities is presented in the table for all years, however, to give an indication of the potential dilution that may occur in future years.

	Years Ended December 31,
	2002			2001			2000
	(Shares in thousands)
(Loss) income before cumulative effect of change in accounting principle	$	(130,785	)	$	(5,070	)	$	2,155
Cumulative effect of change in accounting principle, net of taxes					(88	)
Net (loss) income	$	(130,785	)	$	(5,158	)	$	2,155
Weighted-average common shares		25,073			24,573			24,110
Effect of dilutive securities:
Employee stock options and warrants		76			141			216
Dilutive potential common shares		25,149			24,714			24,326
Net (loss) income per common share:
(Loss) income before cumulative effect of change in accounting principle	$	(5.22	)	$	(0.21	)	$	0.09
Cumulative effect of change in accounting principle, net of taxes					0.00
Net (loss) income per common share	$	(5.22	)	$	(0.21	)	$	0.09
Net (loss) income per common share—assuming dilution:
(Loss) income before cumulative effect of change in accounting principle	$	(5.22	)	$	(0.21	)	$	0.09
Cumulative effect of change in accounting principle, net of taxes					0.00
Net (loss) income per common share—assuming dilution	$	(5.22	)	$	(0.21	)	$	0.09

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.

45

CHART INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Dollars in thousands, except per share amounts)

Note A—Nature of Operations and Summary of Significant Accounting Policies—Continued

In November 2002, the FASB issued Interpretation (“FIN”) No. 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others.” FIN No. 45 elaborates on the disclosures to be made by a guarantor in its interim and annual financial statements about its obligations under certain guarantees that it has issued, including product warranties. It also clarifies that a guarantor is required to recognize, at the inception of a guarantee, a liability for the fair value of the obligation undertaken in issuing the guarantee. The initial recognition and initial measurement provisions of FIN No. 45 are applicable on a prospective basis to guarantees issued or modified after December 31, 2002 irrespective of the guarantor’s fiscal year end. The disclosure requirements in FIN No. 45 are effective for financial statements of interim or annual periods ending after December 15, 2002. The Company does not expect this interpretation to have a material impact on the Company’s financial position, liquidity, cash flows or results of operations.

In January 2003, the FASB issued Interpretation No. 46, “Consolidation of Variable Interest Entities.” FIN No. 46 provides guidance for identifying a controlling interest in a variable interest entity (“VIE”) established by means other than voting interests. FIN No. 46 also requires consolidation of a VIE by an enterprise that holds such a controlling interest. The effective date for FIN No. 46 is July 1, 2003. The Company does not expect this interpretation to have a material impact on the Company’s financial position, liquidity, cash flows or results of operations.

Note B—Balance Sheet Components

	December 31,
	2002		2001
Other current assets:
Deposits	$	566	$	511
Investment in leases		245		518
Deferred financing costs, net		7,204
Other receivables		6,525		5,737
	$	14,540	$	6,766
Other assets, net:
Deferred financing costs, net	$	335	$	7,253
Existing technologies, net		2,694		4,041
Patents, trademarks and intellectual property, net		5,675		5,397
Equity investment in Coastal Fabrication joint venture		1,171		1,295
Investment in leases		494		883
Cash value life insurance		1,335		1,881
Prepaid pension cost		1,146		1,330
Deferred income taxes				14,624
Other		864		2,144
	$	13,714	$	38,848

46

CHART INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Dollars in thousands, except per share amounts)

Note B—Balance Sheet Components—Continued

	December 31,
	2002		2001
Other current liabilities:
Accrued interest	$	2,167	$	5,108
Accrued income taxes		4,879		2,371
Accrued other taxes		1,424		1,713
Accrued rebates		1,478		1,852
Accrued employee separation and plant closure costs		8,815		486
Deferred income taxes		380		3,307
Accrued other		4,150		4,935
	$	23,293	$	19,772
Other long-term liabilities:
Deferred income taxes	$	1,297	$	6,412
Accrued environmental		6,627		3,189
Accrued pension cost		16,125		6,480
Minority interest		1,106		858
Other		473		77
	$	25,628	$	17,016

Note C—Debt and Credit Arrangements

The following table shows the components of the Company’s borrowings at December 31, 2002 and 2001, respectively.

	December 31,
	2002		2001
Term loan A, originally due March 2005, quarterly principal payments, average interest rate of 5.94% at December 31, 2002	$	97,933	$	100,000
Term loan B, originally due March 2006, quarterly principal payments, average interest rate of 5.94% at December 31, 2002		115,748		118,191
Revolving Credit Facility, originally due March 2005, average interest rate of 6.0% at December 31, 2002		33,400		34,400
Series 1 and Series 2 Incremental Revolving Credit Facilities, originally due March 2003, average interest rate of 6.19% at December 31, 2002		9,793		9,000
Industrial Development Revenue Bonds, originally due August 2006, monthly payments, average interest rate of 6.33% at December 31, 2002		2,160		2,684
Industrial Development Revenue Bonds, due June 2006, semi-annual principal payments, average interest rate of 1.80% at December 31, 2002		1,540		1,980
Revolving foreign credit facility		2,528		4,042
Several notes payable with varying principal and interest payments		798		1,786
Total debt		263,900		272,083
Less: current maturities		43,998		10,803
Less: current portion		218,741		2,160
Long-term debt	$	1,161	$	259,120

47

CHART INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Dollars in thousands, except per share amounts)

Note C—Debt and Credit Arrangements—Continued

In order to finance the acquisition of MVE Holdings, Inc. (“MVE”), in March 1999 the Company negotiated 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. Due to scheduled reductions in the commitment amount, at December 31, 2002 the Credit Facility provides a revolving credit line of $48,967. The Credit Facility provides a secured interest in substantially all of the assets of the Company to the agent bank as representative of the senior lenders.

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”), which originally provided a revolving credit line of $10,000 in addition to the credit line available under the Credit Facility. Due to scheduled reductions in the commitment amount, at December 31, 2002 the Incremental Credit Facility provides a revolving credit line of $9,793. Borrowings on the Incremental Credit Facility are secured by the same collateral as the Credit Facility and bear interest, at the Company’s option, at rates equal to the prime rate (4.25 percent at December 31, 2002) plus 3.5 percent or LIBOR plus 1.7 percent. The Company is also required to pay a commitment fee of 0.75 percent per annum on the average daily unused amount. The Incremental Credit Facility expires on April 30, 2003.

As of December 31, 2002, the Company was in default under its Credit Facility and its Incremental Credit Facility due to violations of financial covenants. Following December 31, 2002, the Company also was in default under the Credit Facility as a result of its failure to make principal payments when due and the insolvency of a United Kingdom subsidiary, which is more fully described in Note I. The Company’s senior lenders amended the Credit facility and Incremental Credit Facility in April 2003 to waive all defaults existing at December 31, 2002 and through April 30, 2003 and to defer until April 30, 2003, $6,549 in scheduled term debt amortization and $9,793 in Incremental Credit Facility amortization originally due on March 31, 2003. In addition, the amendment requires the Company to reach agreement with its senior lenders on the terms of a debt restructuring by April 30, 2003. If a negotiated term sheet can be reached by April 30, 2003, the waiver of defaults and deferral of debt payments will be extended until June 30, 2003. The amendment also grants approval for certain asset sales, the proceeds of which will be used to fund senior debt interest payments, restructuring related activities and working capital requirements. Receipt of this amendment prevents the Company from classifying its debt outstanding under its Credit Facility and Incremental Credit Facility totaling $256,874 as “in default” on its consolidated balance sheet as of December 31, 2002. Since the waiver of defaults does not extend until January 1, 2004, however, this debt is classified as a current liability as of December 31, 2002.

The Company is in the process of negotiating with its senior lenders to reduce its leverage by restructuring the Company’s debt outstanding under the Credit Facility and Incremental Credit Facility. Although the terms of such restructuring remain under negotiation, the Company expects this restructuring will result in an exchange of a portion of such debt for a substantial equity ownership position in the Company and substantial dilution of current shareholders’ ownership interests in the Company. The Company can give no assurance that it will be able to consummate such a restructuring transaction or otherwise renegotiate its debt outstanding under the Credit Facility or Incremental Credit Facility. If the Company is unable to do so, it may be required to pursue other restructuring alternatives. These alternatives could have a material adverse effect on the Company’s financial position, liquidity, cash flows or results of operations. The consolidated financial statements do not include any adjustments to the amounts or classifications of assets or liabilities to reflect this uncertainty.

The Credit Facility was amended in August 1999, October 2000, October 2001 and December 2001 at costs to the Company of $1,156, $1,015 and $848 in 1999, 2000 and 2001, respectively. The Credit Facility and Incremental Credit Facility were subsequently amended in March 2002 (the “March 2002 Amendments”) at a

48

CHART INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Dollars in thousands, except per share amounts)

Note C—Debt and Credit Arrangements—Continued

cost of approximately $1,900 to modify certain covenants until March 31, 2003, to defer $25,747 of Term A and Term B amortization payments from scheduled payment dates in 2002 to 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 called 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 called for the Company’s interest rates to increase by 0.25 percent if the Minimum Prepayment Amount was not achieved by September 30, 2002, and by an additional 0.25 percent each quarter thereafter that the Minimum Prepayment Amount was not made through March 31, 2003.

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 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 was not made by September 30 or December 31, 2002, respectively. The Company did not achieve the Minimum Prepayment Amount at September 30, 2002 or December 31, 2002. Accordingly, the Company was obligated to issue to its lenders at September 30, 2002 and December 31, 2002 warrants to purchase, in the aggregate, 1,353,531 and 773,133 shares of Chart Common Stock at an exercise price of $0.898 and $0.75 per share, respectively. The September 30, 2002 and December 31, 2002 warrants have been valued at $1,228 and $430, respectively, and will be amortized to financing costs amortization expense over the remaining term of the Company’s Credit Facility. All of these warrants are exercisable for a period of ten years from the respective dates of issuance.

Under the terms of the Credit Facility, as modified by the March 2002 Amendments, term loans and revolving credit bear interest at rates that equaled the prime rate plus incremental margins or LIBOR plus incremental margins. At March 31, 2003, the Company’s term loans and revolving credit bear interest at rates equal to the prime rate 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. 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 $29,812 of the debt outstanding at December 31, 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 portion of the Credit Facility. At December 31, 2002, the Company had letters of credit outstanding and bank guarantees totaling $15,089 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. As of December

49

CHART INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Dollars in thousands, except per share amounts)

Note C—Debt and Credit Arrangements—Continued

31, 2002, the Company was in violation of the financial covenants of the Credit Facility but received a waiver of such defaults as of December 31, 2002 and through April 30, 2003. The Company is permitted to pay cash dividends not exceeding $7,200 in any fiscal year, 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.

Borrowings of the Credit Facility and Incremental Credit Facility outstanding at December 31, 2002 are classified as a current liability in the Company’s consolidated balance sheet. The scheduled annual maturities of debt and credit arrangements at December 31, 2002, are as follows:

Year	Amount
2003	$	262,739
2004		501
2005		440
2006		220
	$	263,900

Interest paid was $20,553, $23,996 and $25,859 in 2002, 2001 and 2000 respectively.

Note D—Employee Separation and Plant Closure Costs

During 2002, the Company recorded employee separation and plant closure costs primarily related to the termination of various salaried employees throughout the Company and for the closure of its Biomedical segment warehouse and sales office in Solingen, Germany, its Distribution and Storage segment manufacturing facilities in Costa Mesa, California, Columbus, Ohio and Denver, Colorado, and its Energy and Chemicals manufacturing segment in Wolverhampton, United Kingdom. The Company also recorded non-cash inventory valuation charges included in cost of sales for the write-off of inventory at these sites.

The Company’s Solingen, Germany warehouse and Costa Mesa, California, Columbus, Ohio and Denver, Colorado manufacturing facilities are closed, but the Company continues to have lease obligations for these sites. The Company completed its closure of the Wolverhampton, United Kingdom facility in March 2003 and expects to sell the land and buildings at this facility in 2003. Accordingly, these assets are classified as held for sale, and the Company recognized a loss of $1,630, included in employee separation and plant closure costs, to write these assets down to their estimated fair value. The proceeds of such sale will most likely be used to satisfy obligations of the Company’s insolvent United Kingdom subsidiary, which is more fully described in Note I.

50

CHART INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Dollars in thousands, except per share amounts)

Note D—Employee Separation and Plant Closure Costs —Continued

The following table summarizes the Company’s employee separation and plant closure costs activity for 2002.

	Year Ended December 31, 2002
	Solingen			Costa Mesa			Columbus			Denver			Wolverhampton			Other			Total
Restructuring reserve as of January 1, 2002																$	486		$	486
Facility related closure costs	$	205		$	1,369		$	364		$	2,379		$	2,440						6,757
Severance and other benefits		12			105			415			276			5,777			545			7,130
		217			1,474			779			2,655			8,217			545			13,887
Non-cash inventory valuation in cost of sales					352			212			287			631						1,482
		217			1,826			991			2,942			8,848			545			15,369
Reserve usage		(54	)		(827	)		(569	)		(1,119	)		(1,046	)		(504	)		(4,119	)
Pension curtailment														(2,921	)					(2,921	)
Restructuring reserve as of December 31, 2002	$	163		$	999		$	422		$	1,823		$	4,881		$	527		$	8,815

The employee separation and plant closure costs reserve at December 31, 2002 consists of $5,214 for lease termination and facility-related closure costs and $3,601 for severance and other benefits.

During 2001, the Company recorded employee separation and plant closure costs of $2,375. These costs included $1,566 related to the closure of the Ottawa Lake, Michigan facility and two smaller sites within the cryogenic services business of the Distribution and Storage segment, $363 for terminating 25 employees at the Company’s Wolverhampton, United Kingdom heat exchangers business facility of the Energy and Chemicals segment and $446 for terminating 45 other employees throughout the Company. The cryogenic services business charges of $1,566 included $556 for lease termination and facility closure-related costs, $566 for writing off certain leasehold improvements and fixed assets, $62 for terminating 32 employees, and $382 for moving costs and other charges. At December 31, 2001, the employee separation and plant closure costs reserve of $486 related primarily for lease termination costs.

Note E—Income Taxes

Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. At December 31, 2002, the Company has domestic net operating loss carryforwards of $33,865, which expire in years 2003 through 2022, capital loss carryforwards of $14,837, which expire in 2006, and research and development credits and other credits of $884, which expire in 2004 through 2021. Additionally, the Company has foreign net operating loss carryforwards of $6,349 at December 31, 2002, which have an indefinite carryforward period. Based upon management’s assessment, it is more likely than not that the net deferred tax assets will not be realized. Accordingly, the Company has established a valuation allowance of $38,248 at December 31, 2002. The valuation allowance of $2,766 at December 31, 2001 relates to foreign net operating loss carryforwards.

51

CHART INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Dollars in thousands, except per share amounts)

Note E—Income Taxes—Continued

Significant components of the Company’s deferred tax assets and liabilities are as follows:

	December 31,
	2002			2001
Deferred tax assets:
Accruals and reserves	$	17,365		$	16,647
Net operating loss and credit carryforwards		24,350			9,362
Pensions		3,585			737
Other—net		1,012			16
		46,312			26,762
Valuation allowance		(38,248	)		(2,766	)
Total deferred tax assets		8,064			23,996
Deferred tax liabilities:
Property, plant and equipment		6,258			5,832
Intangibles		1,940			2,222
Inventory		1,543			835
Other—net					32
Total deferred tax liabilities		9,741			8,921
Net deferred taxes	$	(1,677	)	$	15,075

The Company has not provided for U.S. federal income taxes on approximately $1,975 of foreign subsidiaries’ undistributed earnings as of December 31, 2002 because such earnings are intended to be reinvested indefinitely. The amount of U.S. federal income tax that would result had such earnings been repatriated would approximate $691.

Income (loss) before income taxes, minority interest, cumulative effect of change in accounting principle and extraordinary item consists of the following:

	Years ended December 31,
	2002			2001			2000
United States	$	(110,235	)	$	(6,618	)	$	1,517
Foreign		(9,362	)		2,057			3,767
	$	(119,597	)	$	(4,561	)	$	5,284

52

CHART INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Dollars in thousands, except per share amounts)

Note E—Income Taxes—Continued

Significant components of the provision for income taxes are as follows:

	Years Ended December 31,
	2002		2001			2000
Current:
State	$	389	$	100		$	40
Foreign		564		934			945
		953		1,034			985
Deferred:
Federal		9,959		(1,120	)		1,612
State							(142	)
Foreign		224		484			557
		10,183		(636	)		2,027
	$	11,136	$	398		$	3,012

The reconciliation of income taxes computed at the U.S. federal statutory tax rates to income tax expense is as follows:

	Years Ended December 31,
	2002			2001			2000
Income tax (benefit) expense at U.S. statutory rates	$	(41,859	)	$	(1,596	)	$	1,849
State income taxes, net of federal tax benefit		253			65			(67	)
Loss related to foreign subsidiary		(12,200	)
Effective tax rate differential of earnings outside of U.S.		481			(386	)		(16	)
Federal tax benefit of Foreign Sales		(315	)		(310	)		(388	)
Non-deductible goodwill		32,333			1,506			1,451
Valuation allowance		32,634			1,074			393
Other—net		(191	)		45			(210	)
	$	11,136		$	398		$	3,012

The Company received net income tax refunds of $9,097 and $1,693 in 2002 and 2000, respectively, and paid income taxes of $2,272 in 2001.

Note F—Employee Benefit Plans

The Company has five defined benefit pension plans covering certain hourly and salary employees. The defined benefit plans provide benefits based primarily on the participants’ years of service and compensation. The Company’s funding policy is to contribute at least the minimum funding amounts required by law. Plan assets consist primarily of listed common stocks and bonds. The United States plans held 250,549 shares of the Company’s Common Stock with fair values of $165 and $589 at December 31, 2002 and 2001, respectively.

In December 2002 the Company announced the planned closure of its Wolverhampton, United Kingdom manufacturing facility, which was completed in March 2003. This closure results in the termination in 2003 of substantially all employees of this facility and eliminates for the terminated employees the accrual of defined benefits for any future service under the United Kingdom defined benefit pension plan. As a result of the

53

CHART INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Dollars in thousands, except per share amounts)

Note F—Employee Benefit Plans—Continued

substantial terminations, the United Kingdom plan is considered to be curtailed in December 2002 under the provisions of SFAS No. 88, “Employers’ Accounting for Settlements and Curtailments of Defined Benefit Pension Plans and for Termination Benefits.” Accordingly, the Company recognized $2,921 of expense related to this curtailment, which is recorded in employee separation and plant closure costs in the Company’s statement of operations. The trustees of the Company’s United Kingdom pension plan terminated this plan in April 2003 as more fully described in Note I.

The actuarially computed combined pension cost included the following components:

	Years Ended December 31,
	2002			2001			2000
Service cost	$	1,834		$	1,716		$	1,659
Interest cost		3,242			2,829			2,625
Expected return on plan assets		(3,385	)		(3,515	)		(3,310	)
Net amortization and deferrals		165			(153	)		(241	)
Curtailment loss		2,921
Total pension cost	$	4,777		$	877		$	733

The following table sets forth changes in the benefit obligation, plan assets, funded status of the plans and amounts recognized in the consolidated balance sheets as of December 31:

	2002						2001
	U.S. Plans			U.K. Plan			U.S. Plans			U.K. Plan
Change in benefit obligation:
January 1 benefit obligation	$	27,111		$	19,241		$	22,552		$	17,076
Exchange rate changes					1,992						(458	)
Service cost		1,219			615			1,078			638
Interest cost		1,992			1,250			1,828			1,001
Benefits paid		(706	)		(589	)		(700	)		(811	)
Loss due to curtailment					2,921
Actuarial losses (gains) and plan changes		2,791			(540	)		2,353			1,795
December 31 benefit obligation	$	32,407		$	24,890		$	27,111		$	19,241
Change in plan assets:
Fair value at January 1	$	18,665		$	18,902		$	19,321		$	23,021
Exchange rate changes					1,895						(528	)
Actual return		(4,771	)		(1,487	)		(1,670	)		(2,836	)
Employer contributions		4,248			611			1,714			4
Employee contributions					53						52
Benefits paid		(706	)		(589	)		(700	)		(811	)
Fair value at December 31	$	17,436		$	19,385		$	18,665		$	18,902
Net amount recognized:
Funded status of the plans	$	(14,971	)	$	(5,505	)	$	(8,446	)	$	(339	)
Unrecognized actuarial loss		13,133			3,119			3,881			524
Unrecognized prior service cost		1,108						1,145
Net pension (liability) asset recognized	$	(730	)	$	(2,386	)	$	(3,420	)	$	185
Prepaid benefit cost	$	1,146					$	1,145		$	185
Accrued benefit liability		(11,084	)	$	(5,050	)		(6,480	)
Accumulated other comprehensive loss		9,208			2,664			1,915
Net pension (liability) asset recognized	$	(730	)	$	(2,386	)	$	(3,420	)	$	185

54

CHART INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Dollars in thousands, except per share amounts)

Note F—Employee Benefit Plans—Continued

A minimum pension liability adjustment was required as the actuarial present value of accumulated benefit obligations exceeded plan assets and accrued pension liabilities.

The assumptions used in determining pension cost and funded status information for the years ended December 31, 2002 and 2001 are as follows:

	2002		2001
United States Plans
Discount rate	6.75	%	7.50	%
Weighted average rate of increase in compensation	3.00	%	3.50	%
Expected long-term weighted average rate of return on plan assets	8.75	%	9.25	%
United Kingdom Plan
Discount rate	5.75	%	6.00	%
Weighted average rate of increase in compensation	3.70	%	3.90	%
Expected long-term weighted average rate of return on plan assets	6.75	%	7.50	%

The Company presently makes contributions to two union supported multi-employer pension plans resulting in expense of $235, $227 and $206 in 2002, 2001 and 2000, respectively.

The Company has defined contribution savings plans that cover most of its employees. Company contributions to the plans are based on employee contributions and the level of Company match and discretionary contributions. Expenses under the plans totaled $1,774, $2,009 and $2,184 for the years 2002, 2001 and 2000, respectively.

Note G—Stock Option Plans

In July 1992, the Company adopted a Key Employee Stock Option Plan (the “Key Employee Plan”), which, as amended, allows for the issuance of 1,383,750 shares of Common Stock. In May 1997, shareholders approved the Company’s 1997 Stock Option and Incentive Plan (the “1997 Plan”). In May 2001, shareholders approved an amendment to the 1997 plan to increase the number of shares available for issuance under this plan by 600,000, increasing the maximum number of shares available for award to 1,462,500 shares of Common Stock. Each of these plans provides for the granting of options to purchase shares of Common Stock to certain key employees of the Company. These nonqualified stock options vest in equal annual installments over a five-year period from the date of grant and are exercisable for up to 10 years at an option price determined by the Compensation Subcommittee of the Board of Directors.

In May 2000, shareholders approved an amendment to the 1996 Stock Option Plan for Outside Directors to increase the number of shares available for issuance under this plan by 210,000, supplementing the previously authorized 1995 and 1994 Stock Option Plans for Outside Directors (collectively, the “Directors Plan”). The amendment increases the maximum number of shares available for awards under the Directors Plan to a total of 446,250 shares. The option price for options granted under the Directors Plan will be equal to the fair market value of a share of Common Stock on the date of grant. These nonqualified stock options become fully vested and exercisable on the first anniversary of the date of grant and are exercisable for a period of ten years.

In May 2000, shareholders approved the 2000 Executive Incentive Stock Option Plan (the “Executive Plan”), which provides for the granting of options to purchase up to 600,000 shares of Common Stock to executive employees of the Company. These nonqualified stock options are exercisable for a period of ten years

55

CHART INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Dollars in thousands, except per share amounts)

Note G—Stock Option Plans—Continued

and have two different vesting schedules: 200,000 options vest in equal annual installments over a five-year period and 400,000 options vest in equal annual installments over a five year period based upon the achievement of specific operating performance goals in that five year period as determined by the Compensation Subcommittee of the Board of Directors. The Company is accounting for these 400,000 performance related options as a variable plan. The operating performance goal for the year ended December 31, 2000 was met, and 80,000 options vested. The Company did not recognize any compensation expense under the Executive Plan, as the market value of the Company’s stock was less than the exercise price when the performance criteria were met. The operating performance goals for the years ended December 31, 2001 and 2002 were not met, and the related options were canceled in the first quarters of 2002 and 2003, respectively.

Certain information for 2002, 2001 and 2000 relative to the Company’s stock option plans is summarized below:

	2002				2001				2000
	Number of Shares		Weighted Average Exercise Price		Number of shares		Weighted Average Exercise Price		Number of Shares		Weighted Average Exercise Price
Outstanding at beginning of year	2,149,519		$	5.41	2,106,855		$	5.62	1,397,475		$	6.26
Granted	388,750			1.83	206,250			2.78	843,250			4.52
Exercised	(3,500	)		08	(16,875	)		2.44	(49,625	)		2.05
Expired or canceled	(310,072	)		5.51	(146,711	)		5.10	(84,245	)		7.30
Outstanding at end of year	2,224,697		$	4.78	2,149,519		$	5.41	2,106,855		$	5.62
Exercisable at end of year	1,349,596				1,162,933				826,760
Weighted-average fair value of options granted during the year			$	1.81			$	1.73			$	2.93
Participants at end of year	88				88				93
Available for future grant at end of year	807,253				892,931				356,720

Exercise prices for options outstanding as of December 31, 2002 ranged from $0.95 to $21.74. The weighted-average remaining contractual life of such options is 5.8 years. Certain information for ranges of exercise prices is summarized below:

	Outstanding				Exercisable
Exercise Price	Number of Shares	Weighted Average Exercise Price		Weighted Average Contractual Life	Number of Shares	Weighted Average Exercise Price
Less than $2.50	575,250	$	1.91	6.6	203,750	$	2.34
$2.50 to less than $5.00	742,791		3.80	6.3	408,940		3.76
$5.00 to less than $7.50	478,500		5.85	5.3	356,250		5.99
$7.50 to less than $10.00	381,670		8.15	4.5	334,170		8.21
Equal to or greater than $10.00	46,486		17.38	5.1	46,486		17.38
	2,224,697	$	4.78	5.8	1,349,596	$	5.71

56

CHART INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Dollars in thousands, except per share amounts)

Note G—Stock Option Plans—Continued

Pro forma information regarding net income and earnings per share is required by SFAS No. 123, “Accounting for Stock-Based Compensation,” which also requires that the information be determined as if the Company had accounted for its employee stock options granted subsequent to December 31, 1994 under the fair value method of SFAS No. 123. The fair value for these options was estimated at the date of grant using a Black-Scholes option pricing model with the following weighted-average assumptions for 2002, 2001 and 2000:

	2002	2001	2000
Risk free interest rate	3.6%	4.2%	5.2%
Dividend yield	0.0%	0.0%	0.0%
Market price volatility factor	194.4%	58.3%	57.8%
Expected life of key employee options	7 years	7 years	7 years
Expected life of directors options	7 years	7 years	5 years
Expected life of executive options	7 years	7 years	7 years

The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility. Because the Company’s Key Employee Plan, 1997 Plan, Directors Plan and Executive Plan stock options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management’s opinion, the existing models do not necessarily provide a reliable single measure of the fair value of these stock options.

The Company’s pro forma disclosures showing the estimated fair value of the options, amortized to expense over the options’ vesting periods, are as follows:

	Years Ended December 31,
	2002			2001			2000
Reported (loss) income before cumulative effective of change in accounting principle	$	(130,785	)	$	(5,070	)	$	2,155
Pro-forma stock-based employee compensation cost, net of tax		(553	)		(831	)		(1,082	)
Pro-forma (loss) income before cumulative effect of change in accounting principle		(131,338	)		(5,901	)		1,073
Cumulative effect of change in accounting principle net of tax					88
Pro-forma net (loss) income	$	(131,338	)	$	(5,989	)	$	1,073
Basic and diluted earnings per share:
Reported (loss) income before cumulative effect of change in accounting principle	$	(5.22	)	$	(0.21	)	$	0.09
Pro-forma stock-based employee compensation cost, net of tax		(0.02	)		(0.03	)		(0.05	)
Pro-forma (loss) income before cumulative effect of change in accounting principle		(5.24	)		(0.24	)		0.04
Cumulative effect of change in accounting principle, net of tax					(0.00	)
Pro-forma net (loss) income	$	(5.24	)	$	(0.24	)	$	0.04
Weighted average shares—basic		25,073			24,573			24,110
Weighted average shares—assuming dilution		25,073			24,573			24,326

57

CHART INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Dollars in thousands, except per share amounts)

Note H—Lease Commitments

The Company incurred $6,637, $5,657 and $3,702 of rental expense under operating leases in 2002, 2001 and 2000, respectively. At December 31, 2002, future minimum lease payments for non-cancelable operating leases for the next five years total $8,061 and are payable as follows: 2003—$2,932; 2004—$2,590; 2005—$1,931; 2006—$530; and $2007—$78.

Note I—Contingencies

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 is involved with environmental compliance, investigation, monitoring and remediation activities at certain of its operating facilities, and, except for these continuing remediation efforts, believes it is currently in substantial compliance with all known environmental regulations. At December 31, 2002 and 2001, the Company had accrued environmental reserves of $6,627 and $3,189, respectively, recorded in other long-term liabilities. The Company accrues for certain environmental remediation-related activities for which commitments or remediation plans have been developed and for which costs can be reasonably estimated. These estimates are determined based upon currently available facts regarding each facility. Actual costs incurred may vary from these estimates due to the inherent uncertainties involved. Future expenditures relating to these environmental remediation efforts are expected to be made over the next ten years as ongoing costs of remediation programs. Although the Company believes it has adequately provided for the cost of all known environmental conditions, the applicable regulatory agencies could insist upon different and more costly remediative measures than those the Company believes are adequate or required by existing law. The Company believes that any additional liability in excess of amounts accrued which may result from the resolution of such matters will not have a material adverse effect on the Company’s financial position, liquidity, cash flows or results of operations.

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 immediate death of four elderly patients and injuries to three additional patients from inhaling the nitrogen. The seven claims originally filed 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. Certain co-defendants were criminally indicted in this matter. The Company, however, has not been so indicted. The court originally granted stays in all of these cases pending the outcome of the criminal charges. The trial in the criminal matter of the State of Ohio vs. BOC Gases, et al., 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 October 2002. 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. The Company has been dismissed from three of the civil cases. The four remaining plaintiffs, however, have advised that they intend to pursue discovery before considering dismissal of claims against the Company. The plaintiffs in the remaining four open cases are seeking, in total, $15,025 in compensatory damages, $15,025 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. These four remaining cases have been settled with the other defendants. While the Company is open to the possibility of good faith settlement negotiations, 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. Additionally, the Company believes that the claims made against it are the most tenuous of any defendant.

58

CHART INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Dollars in thousands, except per share amounts)

Note I—Contingencies—Continued

In March 2003, the Company completed the closure of its Wolverhampton, United Kingdom manufacturing facility, operated by Chart Heat Exchangers Limited (“CHEL”), and all future heat exchanger manufacturing will be conducted by the Company’s LaCrosse, Wisconsin facility. On March 28, 2003, CHEL filed for a voluntary administration under the U.K. Insolvency Act 1986. CHEL’s application for voluntary administration was approved on April 1, 2003 and an administrator was appointed. CHEL’s net pension plan obligations have increased significantly, primarily due to a decline in plan asset values and interest rates, resulting in an estimated plan deficit of approximately $12,000. Based on the Company’s present financial condition, it has determined not to advance funds at this time to CHEL in amounts necessary to fund CHEL’s obligations. CHEL does not have the necessary funds to enable it to fund its net pension plan deficit, pay remaining severance due to former employees or pay other creditors. As a result, the trustees of the CHEL pension plan terminated this plan in April 2003. At the present time, the Company is unable to determine the impact on its 2003 pension expense or cash funding requirements for the April 1, 2003 approval of insolvency administration for CHEL and the related termination of the Company’s United Kingdom pension plan. The Company can provide no assurance that claims will not be asserted against the Company for these obligations of CHEL. To the extent the Company has significant liability with respect to CHEL’s obligations as a result of CHEL’s insolvency, such liability would have a material adverse impact on the Company’s liquidity and its financial position.

The Company, like other manufacturers, is occasionally subject to various other legal actions related to performance under contracts, product liability and other matters, several of which actions claim substantial damages, in the ordinary course of its business. Based on the Company’s historical experience in litigating these actions, as well as the Company’s current assessment of the underlying merits of the actions and applicable insurance, the Company believes the resolution of these legal actions will not have a material adverse effect on the Company’s financial position, liquidity, cash flows or results of operations.

Note J—Operating Segments

The Company changed the structure of its internal organization effective October 1, 2002, resulting in the following three reportable segments: biomedical (“Biomedical”), distribution and storage (“Distribution and Storage”) and energy and chemicals (“Energy and Chemicals”). All segment information for all periods presented has been restated to conform to the current year presentation. The Company’s reportable segments are business units that offer different products. The reportable segments are each managed separately because they manufacture and distribute distinct products with different production processes and sales and marketing approaches. The Biomedical segment sells medical products, biological storage systems, magnetic resonance imaging (“MRI”) cryostat components and telemetry products. The Distribution and Storage segment sells cryogenic bulk storage systems, cryogenic packaged gas systems, cryogenic systems and components, beverage liquid CO₂ systems and cryogenic services to various companies for the storage and transportation of both industrial and natural gases. The Energy and Chemicals segment sells heat exchangers, cold boxes and liquefied natural gas (“LNG”) alternative fuel systems to natural gas, petrochemical processing and industrial gas companies who use them for the liquefaction and separation of natural and industrial gases and stainless steel tubing to distributors servicing these industries. Due to the nature of the products that each operating segment sells, there are no intersegment sales.

The Company evaluates performance and allocates resources based on profit or loss from operations before gain on sale of assets, net interest expense, financing costs amortization expense, derivative contracts valuation expense, foreign currency loss, income taxes, minority interest and cumulative effect of change in accounting principle. The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies.

59

CHART INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Dollars in thousands, except per share amounts)

Note J—Operating Segments—Continued

Information for the Company’s three reportable segments and its corporate headquarters, and product and geographic information for the Company, is presented below:

	2002
	Reportable Segments
	Biomedical		Distribution and Storage			Energy and Chemicals			Corporate			Total
Revenues from external customers	$	67,657	$	135,549		$	93,078					$	296,284
Employee separation and plant closure costs		333		4,898			8,244		$	412			13,887
Depreciation and amortization expense		1,810		6,433			2,570			896			11,709
Goodwill impairment charge				92,379									92,379
Equity income in joint venture							369						369
Operating income (loss) (A)		17,177		(89,104	)		(4,209	)		(21,465	)		(97,601	)
Total assets (B)		79,874		119,710			64,605			15,105			279,294
Capital expenditures		791		1,636			529			72			3,028

	2001
	Reportable Segments
	Biomedical		Distribution and Storage		Energy and Chemicals		Corporate			Total
Revenues from external customers	$	57,957	$	179,830	$	90,203				$	327,990
Employee separation and plant closure costs		58		1,934		379	$	4			2,375
Depreciation and amortization expense		4,010		8,204		3,507		991			16,712
Equity income in joint venture						525					525
Operating income (loss) (A)		9,137		15,743		6,799		(10,746	)		20,933
Total assets (B)		103,431		202,296		60,036		43,217			408,980
Capital expenditures		2,686		4,145		538		776			8,145

	2000
	Reportable Segments
	Biomedical		Distribution and Storage			Energy and Chemicals		Corporate			Total
Revenues from external customers	$	53,519	$	192,253		$	79,928				$	325,700
Employee separation and plant closure costs				(614	)							(614	)
Depreciation and amortization expense		3,762		7,598			4,527	$	830			16,717
Equity income in joint venture							35					35
Operating income (loss)		11,471		24,034			7,557		(10,793	)		32,269
Total assets (B)		98,385		226,239			71,766		33,453			429,843
Capital expenditures		1,012		3,566			442		561			5,581

(A) Corporate operating (loss) income for the years ended December 31, 2002 and 2001 includes $4,911 and $261, respectively, of professional fees incurred by the Company related to its debt restructuring activities.

(B) Corporate assets consist primarily of deferred income taxes, deferred financing costs and cash and cash equivalents.

60

CHART INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Dollars in thousands, except per share amounts)

Note J—Operating Segments—Continued

A reconciliation of the total of the reportable segments’ operating income (loss) to consolidated (loss) income before income taxes, minority interest and cumulative effect of change in accounting principle is presented below:

	Years Ended December 31,
	2002			2001			2000
Operating (loss) income	$	(97,601	)	$	20,933		$	32,269
Other income (expense):
Gain on sale of assets		1,420			538			1,041
Interest expense, net		(17,612	)		(21,589	)		(26,676	)
Financing costs amortization		(3,159	)		(1,475	)		(1,147	)
Derivative contracts valuation expense		(1,564	)		(2,876	)
Foreign currency loss		(1,081	)		(92	)		(203	)
(Loss) income before income taxes, minority interest and cumulative effect of change in accounting principle	$	(119,597	)	$	(4,561	)	$	5,284

	Years Ended December 31,
Product Revenue Information:	2002		2001		2000
Biomedical Segment
Medical products, biological storage systems and MRI cryostat components	$	67,640	$	57,949	$	53,519
Telemetry products		17		8
		67,657		57,957		53,519
Distribution and Storage Segment
Cryogenic bulk storage systems		61,701		86,899		86,007
Cryogenic packaged gas systems and beverage liquid CO2 systems		47,775		55,004		63,691
Cryogenic systems and components		14,441		26,751		31,555
Cryogenic services		11,632		11,176		11,000
		135,549		179,830		192,253
Energy and Chemicals Segment
Heat exchangers and cold boxes		62,519		57,304		51,557
LNG alternative fuel systems		10,446		10,197		4,586
Stainless steel tubing		20,113		22,702		23,785
		93,078		90,203		79,928
	$	296,284	$	327,990	$	325,700

Geographic Information:	2002				2001				2000
	Revenues		Long-Lived Assets		Revenues		Long-Lived Assets		Revenues		Long-Lived Assets
United States	$	247,125	$	109,583	$	274,410	$	232,987	$	279,449	$	237,072
Non U.S. countries		49,159		38,252		53,580		36,213		46,251		36,637
Total	$	296,284	$	147,835	$	327,990	$	269,200	$	325,700	$	273,709

61

CHART INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Dollars in thousands, except per share amounts)

Note K—Quarterly Data (Unaudited)

Selected quarterly data for the years ended December 31, 2002 and 2001 are as follows:

	Year Ended December 31, 2002
	First Quarter			Second Quarter			Third Quarter			Fourth Quarter			Total
Sales	$	67,708		$	79,180		$	74,225		$	75,171		$	296,284
Gross profit		16,759			20,591			19,152			19,795			76,297
Goodwill impairment charge											92,379			92,379
Employee separation and plant closure costs		(1,143	)		(165	)		(2,175	)		(10,404	)		(13,887	)
Operating (loss) income		(781	)		5,547			3,522			(105,889	)		(97,601	)
Net (loss) income		(3,453	)		359			(722	)		(126,969	)		(130,785	)
Net (loss) income per share		(0.14	)		0.01			(0.03	)		(5.01	)		(5.22	)
Net (loss) income per share—assuming dilution		(0.14	)		0.01			(0.03	)		(5.01	)		(5.22	)

In the third quarter of 2002, the Company recorded a non-cash inventory valuation charge included in cost of sales of $583 ($350 net of taxes) for the write-off of inventory related to the closure of the Columbus, Ohio and Costa Mesa, California facilities.

In the fourth quarter of 2002, the Company recorded a non-cash inventory valuation charge included in cost of sales of $650 ($390 net of taxes) for the write-off of inventory related to the closure of the Denver, Colorado and Wolverhampton, United Kingdom facilities, a non-cash impairment charge of $92,379 to write off non-deductible goodwill and a non-cash income tax charge of $32,634 to increase the Company’s valuation allowance for net deferred tax assets based upon management’s assessment that it is more likely than not that the net deferred tax assets will not be realized.

	Year Ended December 31, 2001
	First Quarter		Second Quarter			Third Quarter			Fourth Quarter			Total
Sales	$	89,032	$	84,797		$	80,595		$	73,566		$	327,990
Gross profit		27,069		21,531			21,180			16,581			86,361
Employee separation and plant closure costs				(1,539	)		(198	)		(638	)		(2,375	)
Operating income (loss)		8,994		5,938			6,647			(646	)		20,933
Net income (loss)		405		(424	)		(1,170	)		(3,969	)		(5,158	)
Net income (loss) per share		0.02		(0.02	)		(0.05	)		(0.16	)		(0.21	)
Net income (loss) per share—assuming dilution		0.02		(0.02	)		(0.05	)		(0.16	)		(0.21	)

In the second quarter of 2001, the Company recorded a non-cash inventory valuation charge included in cost of sales of $745 ($447 net of taxes) for the write-off of inventory at cryogenic services business sites closed by the Company.

In the fourth quarter of 2001, the Company recorded a non-cash inventory valuation charge included in cost of sales of $1,874 ($1,153 net of taxes) for the write-down to fair value of inventory related to a product line that was sold by the Company.

62

ITEM 9.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND

FINANCIAL DISCLOSURE.

Not applicable.

PART III

ITEM 10.    DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

The information appearing under the captions “Election of Directors” and “Section 16(a) Beneficial Ownership Reporting Compliance” in the registrant’s definitive Proxy Statement to be used in connection with the Annual Meeting of Stockholders to be held on June 5, 2003 (the “2003 Proxy Statement”) is incorporated herein by reference. Information regarding executive officers of the registrant is set forth in Part I of this Annual Report on Form 10-K.

ITEM 11.    EXECUTIVE COMPENSATION.

The information appearing under the captions “Election of Directors” and “Executive Compensation” (other than the Compensation Subcommittee Report on Executive Compensation) in the 2003 Proxy Statement is incorporated herein by reference.

ITEM 12.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

The information appearing under the caption “Stock Ownership of Principal Holders and Management” in the 2003 Proxy Statement is incorporated herein by reference.

ITEM 13.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

The information appearing under the caption “Other Matters” in the 2003 Proxy Statement is incorporated herein by reference.

ITEM 14.    CONTROLS AND PROCEDURES

Within the 90 days prior to the date of this Form 10-K, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures. Based on that evaluation, the Company’s management, including the Chief Executive Officer and Chief Financial Officer, concluded that the Company’s disclosure controls and procedures are operating effectively as designed. There have been no significant changes in the Company’s internal controls or in other factors that could significantly affect internal controls subsequent to the date the Company carried out its evaluation.

63

PART IV

ITEM 15.    EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.

(a)(1)	Report of Independent Auditors	31
	Consolidated Balance Sheets at December 31, 2002 and 2001	32
	Consolidated Statements of Operations for the Years ended December 31, 2002, 2001 and 2000	33
	Consolidated Statements of Shareholders’ (Deficit) Equity for the Years ended December 31, 2002, 2001 and 2000	34
	Consolidated Statements of Cash Flows for the Years ended December 31, 2002, 2001 and 2000	35
	Notes to Consolidated Financial Statements	36

(a)(2) Financial Statement Schedules.

No financial statement schedules required.

(a)(3) Exhibits

See the Exhibit Index at page 68 of this Annual Report on Form 10-K.

(b) Reports on Form 8-K.

During the quarter ended December 31, 2002, the Company filed a Current Report on Form 8-K, dated November 5, 2002, and a Current Report on Form 8-K, dated December 4, 2002, furnishing press releases pursuant to Regulation FD.

64

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.
By:	/s/    ARTHUR S. HOLMES
	Arthur S. Holmes, Chairman, Chief Executive Officer and President

Date:    April 10, 2003

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature	Title	Date
/s/    ARTHUR S. HOLMES         Arthur S. Holmes	Chairman, Chief Executive Officer, President and a Director (Principal Executive Officer)	April 10, 2003
/s/    MICHAEL F. BIEHL         Michael F. Biehl	Chief Financial Officer, Chief Accounting Officer and Treasurer (Principal Financial and Principal Accounting Officer)	April 10, 2003
/s/    THOMAS F. MCKEE         Thomas F. McKee	Director	April 10, 2003
/s/    LAZZARO G. MODIGLIANI         Lazzaro G. Modigliani	Director	April 10, 2003
/s/    ROBERT G. TURNER, JR.         Robert G. Turner, Jr.	Director	April 10, 2003

65

Certifications

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

1. I have reviewed this annual report on Form 10-K of Chart Industries, Inc.;

2. Based on my knowledge, this annual 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 annual report;

3. Based on my knowledge, the financial statements, and other financial information included in this annual 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 annual 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 annual 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 annual report (the “Evaluation Date”); and

c) presented in this annual 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 annual 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.

/s/    ARTHUR S. HOLMES        

Arthur S. Holmes

Chairman, Chief Executive Officer and President

Date:    April 10, 2003

66

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

1. I have reviewed this annual report on Form 10-K of Chart Industries, Inc.;

2. Based on my knowledge, this annual 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 annual report;

3. Based on my knowledge, the financial statements, and other financial information included in this annual 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 annual 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 annual 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 annual report (the “Evaluation Date”); and

c) presented in this annual 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 annual 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.

By:	/s/    MICHAEL F. BIEHL
	Michael F. Biehl Chief Financial Officer, Chief Accounting Officer and Treasurer

Date: April 10, 2003

67

EXHIBIT INDEX

Exhibit No.	Description
2.1	Plan and Agreement of Merger, dated April 30, 1997, by and among the Company, Greenville Tube Corporation, Chart Acquisition Company, Inc. and Cryenco Sciences, Inc	(D	)
2.2	Agreement for the Sale and Purchase of the Industrial Heat Exchanger Group, dated March 5, 1998, by and among the Company, IMI Kynoch Limited, IMI Marston Limited, IMI plc and Chart Marston Limited	(E	)
2.3	Agreement and Plan of Merger, dated as of February 16, 1999, by and among the Company, Chart Acquisition Company and MVE Holdings, Inc.	(H	)
2.4	Agreement and Plan of Merger, dated as of February 25, 1999, by and among the Company, Chart Acquisition Company and MVE Investors, LLC	(H	)
3.1	Amended and Restated Certificate of Incorporation of the Company, as filed with the Secretary of State of Delaware on December 3, 1992	(A	)
3.1.1	Certificate of Designation of Series A Junior Participating Preferred Stock of the Company	(M	)
3.1.2	Certificate of Amendment, amending the Amended and Restated Certificate of Incorporation of the Company	(N	)
3.2	Amended and Restated By-Laws of the Company, effective May 3, 2001	(N	)
4.1	Specimen certificate of the Common Stock of the Company	(M	)
4.2	Form of Warrant Agreements of various dates by and between Cryenco Sciences, Inc. and various warrant holders	(D	)
4.3	Form of Amendment No. 1 to Warrant Agreement by and among the Company, Cryenco Sciences, Inc. and various warrant holders	(D	)
4.4	Form of Warrant Certificate	(D	)
4.5	Rights Agreement, dated as of May 1, 1998, by and between the Company and National City Bank, as Rights Agent	(F	)
4.6	Amendment No. 1 to Rights Agreement, dated as of February 8, 2001, by and between the Company and National City Bank, as Rights Agent.	(M	)
*10.1	Form of Indemnity Agreement
*10.2	Key Employees Stock Option Plan	(B	)
*10.2.1	Amendment No. 1 to Key Employees Stock Option Plan	(R	)
*10.2.2	Amendment No. 2 to Key Employees Stock Option Plan	(R	)
*10.3	1994 Stock Option Plan for Outside Directors	(C	)
*10.3.1	1995 Stock Option Plan for Outside Directors	(M	)
*10.3.2	1996 Stock Option Plan for Outside Directors	(R	)
*10.3.3	Amendment No. 1 to the 1996 Stock Option Plan for Outside Directors	(J	)
*10.4	Second Amended and Restated 1997 Stock Option and Incentive Plan	(N	)
*10.5	Amended and Restated 1997 Stock Bonus Plan	(S	)
*10.6	Trust Agreement by and between Chart Industries, Inc. and Fidelity Management Trust Company relating to the Deferred Compensation Plan	(G	)
*10.7	2000 Executive Incentive Stock Option Plan	(J	)
*10.7.1	Form of Stock Option Agreement under the 2000 Executive Incentive Stock Option Plan	(J	)

68

Exhibit No.	Description
10.8	License Agreement, dated August 30, 1991, by and between Koch Industries, Inc. and PSI relating to the Ryan/Holmes Technology	(B	)
10.9	Permitted User Agreement, dated as of March 27, 1998, by and between Chart Marston Limited and IMI Marston Limited	(E	)
10.10	IAM Agreement 2001-2004, effective February 4, 2001, by and between Chart Heat Exchangers, L.P. and Local Lodge 2191 of District Lodge 66 of the International Association of Machinists and Aerospace Workers, AFL-CIO	(N	)
10.11	Agreement, effective September 1, 2002 through August 31, 2003, by and between Chart Storage Systems and The International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers & Helpers Local Lodge No. 752 of the AFL-CIO
10.12	Agreement, effective November 17, 2002 through January 15, 2006, by and between the Company and the United Steel Workers
*10.13	Employment Agreement, dated as of November 13, 2001, by and between the Company and Arthur S. Holmes	(R	)
*10.14	Agreement of Separation, Release and Noncompetition, dated as of September 4, 2002, by and between the Company and James R. Sadowski	(T	)
*10.15	Employment Agreement, dated October 17, 2002 by and between the Company and Michael F. Biehl
*10.16	Employment Agreement, dated October 1, 2002, by and between the Company and John T. Romain, and Addendum to Employment Agreement
*10.17	Employment Agreement, dated as of July 1, 2002, by and between the Company and G. Jan F. van Glabbeek	(T	)
10.18	Credit Agreement, dated as of April 12, 1999, by and among the Company, the Subsidiary Borrowers, the Subsidiary Guarantors, the Lenders (all as defined therein), The Chase Manhattan Bank, as Administrative Agent, and National City Bank, as Documentation Agent	(H	)
10.18.1	Amendment No. 1, dated as of August 24, 1999, to the Credit Agreement, dated as of April 12, 1999, by and among the Company, the Subsidiary Borrowers, the Subsidiary Guarantors, the Lenders signatory thereto (all as defined therein), The Chase Manhattan Bank, as Administrative Agent, and National City Bank, as Documentation Agent	(I	)
10.18.2	Amendment No. 2, dated as of October 10, 2000, to the Credit Agreement, dated as of April 12, 1999, by and among the Company, the Subsidiary Borrowers, the Subsidiary Guarantors, the Lenders signatory thereto (all as defined therein), The Chase Manhattan Bank, as Administrative Agent, and National City Bank, as Documentation Agent	(K	)
10.18.3	Series 1 Incremental Revolving Credit Agreement, dated as of November 29, 2000, by and among the Company, the Subsidiary Borrowers, the Subsidiary Guarantors, the Series 1 Lenders signatory thereto (all as defined therein), and The Chase Manhattan Bank, as Administrative Agent	(L	)
10.18.4	Series 2 Incremental Revolving Credit Agreement, dated as of April 17, 2001, by and among the Company, the Subsidiary Borrowers, the Subsidiary Guarantors, the Series 2 Lenders signatory thereto (all as defined therein), and The Chase Manhattan Bank, as Administrative Agent	(O	)
10.18.5	Amendment No. 3, dated as of October 12, 2001, to the Credit Agreement, dated as of April 12, 1999, by and among the Company, the Subsidiary Borrowers, the Subsidiary Guarantors, the Lenders signatory thereto (all as defined therein), The Chase Manhattan Bank, as Administrative Agent, and National City Bank, as Documentation Agent	(P	)

69

Exhibit No.	Description
10.18.6	Amendment No. 1, dated as of October 12, 2001, to the Series 1 Incremental Revolving Credit Agreement, dated as of November 29, 2000, by and among the Company, the Subsidiary Borrowers, the Subsidiary Guarantors, the Series 1 Lenders signatory thereto (all as defined therein), and The Chase Manhattan Bank, as Administrative Agent	(R	)
10.18.7	Amendment No. 1, dated as of October 12, 2001, to the Series 2 Incremental Revolving Credit Agreement, dated as of April 17, 2001, by and among the Company, the Subsidiary Borrowers, the Subsidiary Guarantors, the Series 2 Lenders signatory thereto (all as defined therein), and The Chase Manhattan Bank, as Administrative Agent	(R	)
10.18.8	Amendment No. 2, dated as of December 18, 2001, to the Series 1 Incremental Revolving Credit Agreement, dated as of November 29, 2000, by and among the Company, the Subsidiary Borrowers, the Subsidiary Guarantors, the Series 1 Lenders signatory thereto (all as defined therein), and JPMorgan Chase Bank, as Administrative Agent	(Q	)
10.18.9	Amendment No. 2, dated as of December 18, 2001, to the Series 2 Incremental Revolving Credit Agreement, dated as of April 17, 2001, by and among the Company, the Subsidiary Borrowers, the Subsidiary Guarantors, the Series 2 Lenders signatory thereto (all as defined therein), and JPMorgan Chase Bank, as Administrative Agent	(Q	)
10.18.10	Amendment No. 4, dated as of December 31, 2001, to the Credit Agreement, dated as of April 12, 1999, by and among the Company, the Subsidiary Borrowers, the Subsidiary Guarantors, the Lenders signatory thereto (all as defined therein), JPMorgan Chase Bank, as Administrative Agent, and National City Bank, as Documentation Agent	(Q	)
10.18.11	Amendment No. 5, dated as of March 15, 2002, to the Credit Agreement, dated as of April 12, 1999, by and among the Company, the Subsidiary Borrowers, the Subsidiary Guarantors, the Lenders signatory thereto (all as defined therein), JPMorgan Chase Bank, as Administrative Agent, and National City Bank, as Documentation Agent	(R	)
10.18.12	Amendment No. 3, dated as of March 15, 2002, to the Series 1 Incremental Revolving Credit Agreement, dated as of November 29, 2000, by and among the Company, the Subsidiary Borrowers, the Subsidiary Guarantors, the Series 1 Lenders signatory thereto (all as defined therein), and JPMorgan Chase Bank, as Administrative Agent	(R	)
10.18.13	Amendment No. 3, dated as of March 15, 2002, to the Series 2 Incremental Revolving Credit Agreement, dated as of April 17, 2001, by and among the Company, the Subsidiary Borrowers, the Subsidiary Guarantors, the Series 2 Lenders signatory thereto (all as defined therein), and JPMorgan Chase Bank, as Administrative Agent	(R	)
10.18.14	Amendment No. 6, dated as of November 22, 2002, to the Credit Agreement, dated as of April 12, 1999, by and among the Company, the Subsidiary Borrower, the Subsidiary Guarantors, the Lenders signatory thereto (all as defined therein), and JPMorgan Chase Bank, as Administrative Agent	(U	)
10.18.15	Amendment No. 7, dated as of April 2, 2003, to the Credit Agreement, dated as of April 12, 1999, by and among the Company, the Subsidiary Guarantors, the Lenders signatory thereto (all as defined therein), and JPMorgan Chase Bank, as Administrative Agent	(V	)
10.19	Indemnification and Warrant Purchase Agreement, dated as of April 12, 1999, by and among the Company, MVE Holdings, Inc. and each of the former members of MVE Investors, LLC listed on the signature pages thereto	(H	)
10.20	Form of Promissory Note	(H	)
10.21	Form of Mortgage, Assignment of Rents, Security Agreement and Fixture Filing	(H	)
10.22	Warrant Agreement, dated as of April 12, 1999, between the Company and each of the persons listed on the signature pages thereto	(H	)

70

Exhibit No.	Description
10.23	Escrow Agreement, dated as of April 12, 1999, by and among the Company, MVE Holdings, Inc., Chart Acquisition Company, ACI Capital I, LLC, in its own capacity and, with respect to the Class B Escrow Amount (as defined therein), as agent and attorney-in-fact for each of the former members of MVE Investors, LLC listed therein, and Firstar Bank of Minnesota, N.A.	(H	)
10.24	Warrant Agreement, dated as of June 28, 2002, between the Company and the holders party thereto	(S	)
10.25	Warrant Agreement, dated as of September 30, 2002, between the Company and the holders party thereto	(T	)
10.26	Warrant Agreement, dated as of December 31, 2002, between the Company and the holders party thereto
21.1	Subsidiaries of the Registrant
23.1	Consent of Ernst & Young LLP

* Management contract or compensatory plan or arrangement identified pursuant to Item 14(a)(3) of this Annual Report on Form 10-K.

(A) Incorporated herein by reference to the appropriate exhibit to the Company’s Registration Statement on Form S-3 (Reg. No. 333-35321).

(B) Incorporated herein by reference to the appropriate exhibit to the Company’s Registration Statement on Form S-1 (Reg. No. 33-52754).

(C) Incorporated herein by reference to the appropriate exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 1999 (Commission File No. 1-11442).

(D) Incorporated herein by reference to the appropriate exhibit to the Company’s Current Report on Form 8-K, dated July 31, 1997 (Commission File No. 1-11442).

(E) Incorporated herein by reference to the appropriate exhibit to the Company’s Current Report on Form 8-K, dated March 27, 1998 (Commission File No. 1-11442).

(F) Incorporated herein by reference to the appropriate exhibit to the Company’s Registration Statement on Form 8-A, filed June 3, 1998 (Commission File No. 1-11442).

(G) Incorporated herein by reference to the appropriate exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 1998 (Commission File No. 1-11442).

(H) Incorporated herein by reference to the appropriate exhibit to the Company’s Current Report on Form 8-K, dated April 12, 1999 (Commission File No. 1-11442).

(I) Incorporated herein by reference to the appropriate exhibit to the Company’s Current Report on Form 8-K, dated August 24, 1999 (Commission File No. 1-11442).

(J) Incorporated herein by reference to the appropriate exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2000 (Commission File No. 1-11442).

(K) Incorporated herein by reference to the appropriate exhibit to the Company’s Current Report on Form 8-K, dated October 10, 2000 (Commission File No. 1-11442).

(L) Incorporated herein by reference to the appropriate exhibit to the Company’s Current Report on Form 8-K, dated November 29, 2000 (Commission File No. 1-11442).

(M) Incorporated herein by reference to the appropriate exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 2000 (Commission File No. 1-11442).

(N) Incorporated herein by reference to the appropriate exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2001 (Commission File No. 1-11442).

(O) Incorporated herein by reference to the appropriate exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2001 (Commission File No. 1-11442).

(P) Incorporated herein by reference to the appropriate exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2001 (Commission File No. 1-11442).

71

(Q) Incorporated herein by reference to the appropriate exhibit to the Company’s Current Report on Form 8-K, dated December 31, 2001 (Commission File No. 1-11442).

(R) Incorporated herein by reference to the appropriate exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 2001 (Commission File No. 1-11442).

(S) Incorporated herein by reference to the appropriate exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2002 (Commission File No. 1-11442).

(T) Incorporated herein by reference to the appropriate exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2002 (Commission File No. 1-11442).

(U) Incorporated herein by reference to the appropriate exhibit to the Company’s Current Report on Form 8-K, dated November 22, 2002 (Commission File No. 1-11442).

(V) Incorporated herein by reference to the appropriate exhibit to the Company’s Current Report on Form 8-K, dated April 2, 2003 (Commission File No. 1-11442).

72

EX-10.1

                                                                    EXHIBIT 10.1

                             CHART INDUSTRIES, INC.


                            INDEMNIFICATION AGREEMENT

               THIS INDEMNIFICATION AGREEMENT (this "Agreement") is made and
entered into effective as of the 1st day of August, 2002 by and between CHART
INDUSTRIES, INC., a Delaware corporation (the "Corporation"), and ______________
("Indemnitee"), a Director and/or Officer of the Corporation.

               WHEREAS, it is essential to the Corporation to retain and attract
as Directors and/or Officers the most capable persons available such as
Indemnitee; and

               WHEREAS, the prevalence of corporate litigation subjects
directors and officers to expensive litigation risks and it is the policy of the
Corporation to indemnify its Directors and/or Officers so as to provide them
with the maximum possible protection permitted by law; and

               WHEREAS, in addition, because the statutory indemnification
provisions of the Delaware General Corporation Law (the "DGCL") expressly
provide that such statutory indemnification provisions are non-exclusive, it is
the policy of the Corporation to indemnify its Directors and Officers who, on
behalf of the Corporation, have entered into settlements of derivative suits
provided they have not breached the applicable statutory standard of conduct;
and

               WHEREAS, Indemnitee does not regard the protection available
under the Corporation's Certificate of Incorporation (the "Certificate"),
By-laws (the "By-laws"), and insurance, if any, as adequate in the present
circumstances, and considers it necessary and desirable to his or her service as
a Director and/or Officer to have adequate protection, and the Corporation
desires to provide such protection to induce Indemnitee to serve in such
capacity; and

               WHEREAS, the DGCL provides that indemnification of directors and
officers of a corporation may be authorized by agreement, and thereby
contemplates that contracts of this nature may be entered into between the
Corporation and Indemnitee.

               NOW, THEREFORE, for good and valuable consideration, the adequacy
of which is hereby acknowledged, the Corporation and Indemnitee do hereby agree
as follows:

               1.    Agreement to Serve. Indemnitee agrees to serve or continue
to serve as a Director and/or Officer of the Corporation for so long as he or
she is duly elected or appointed or until such time as he or she tenders his or
her resignation in writing or is otherwise terminated or properly removed from
office.

               The Corporation expressly confirms and agrees that (i) it has
entered into this agreement and assumed the obligations imposed on the
Corporation hereby in order to induce Indemnitee to continue to serve as a
Director and/or Officer of the Corporation and (ii) the



obligations imposed on the Corporation hereby cover service by Indemnitee during
and after the period with respect to Indemnitee's service on the Board of
Directors, or as an Officer, of the Corporation, including, specifically, the
period prior to the date of this Agreement. The Corporation acknowledges that
Indemnitee is relying upon this Agreement in continuing in his or her capacity
as a Director and/or Officer of the Corporation.

               2.    Definitions. As used in this Agreement:

               (a)   The term "Proceeding" shall include any threatened,
         pending, or completed action, suit, arbitration or proceeding, whether
         brought by or in the right of the Corporation or otherwise and whether
         of a civil, criminal, administrative or investigative nature, in which
         Indemnitee may be or may have been involved as a party or otherwise, by
         reason of the fact that Indemnitee is or was a Director and/or Officer
         of the Corporation or any subsidiary of the Corporation, by reason of
         any action taken by Indemnitee or of any inaction on his or her part
         while acting as such a Director and/or Officer, or by reason of the
         fact that he or she is or was serving at the request of the Corporation
         as a director, officer, member or manager, partner, trustee, employee,
         agent, or fiduciary of another corporation (domestic or foreign,
         nonprofit or for profit), limited liability company, partnership, joint
         venture, trust or other enterprise; in each case whether before or
         after the date of this Agreement and whether or not he or she is acting
         or serving in any such capacity at the time any liability or expense is
         incurred for which indemnification or reimbursement can be provided
         under this Agreement.

               (b)   The term "Expenses" shall include, without limitation,
         expenses of investigations, judicial or administrative proceedings or
         appeals, attorneys' fees and disbursements and any expenses of
         establishing a right to indemnification under Paragraph 8 of this
         Agreement, but shall not include the amount of judgments, fines or
         penalties against or settlements paid by Indemnitee.

               (c)   References to "other enterprise" shall include, without
         limitation, employee benefit plans; references to "fines" shall
         include, without limitation, any excise tax assessed with respect to
         any employee benefit plan; references to "serving at the request of the
         Corporation" shall include, without limitation, any service as a
         Director and/or Officer of the Corporation which imposes duties on, or
         involves services by, such Director and/or Officer with respect to an
         employee benefit plan, its participants or beneficiaries; and a person
         who acted in good faith and in a manner he or she reasonably believed
         to be in the best interests of the participants and beneficiaries of an
         employee benefit plan shall be deemed to have acted in a manner "not
         opposed to the best interests of the Corporation" as referred to in
         this Agreement.

               3.    Indemnity in Third-Party Proceedings. The Corporation shall
indemnify Indemnitee in accordance with the provisions of this Paragraph 3 if
Indemnitee is a party to or threatened to be made a party to or otherwise
involved in any Proceeding (other than a Proceeding by or in the right of the
Corporation to procure a judgment in its favor) by reason of the fact that
Indemnitee is or was a Director and/or Officer of the Corporation or a
subsidiary of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, member or manager, partner, trustee,
employee, agent, or fiduciary of another corporation

                                        2



(domestic or foreign, nonprofit or for profit), limited liability company,
partnership, joint venture, trust or other enterprise, in each case whether
before or after the date of this Agreement, against all Expenses, judgments,
settlements, fines and penalties, actually and reasonably incurred by Indemnitee
in connection with the defense or settlement of such Proceeding, but only if
Indemnitee acted in good faith and in a manner which he or she reasonably
believed to be in or not opposed to the best interests of the Corporation and,
in the case of a criminal proceeding, had no reasonable cause to believe that
his or her conduct was unlawful. The termination of any such Proceeding by
judgment, order of court, settlement, conviction or upon a plea of nolo
contendere, or its equivalent, shall not, of itself, create a presumption that
Indemnitee did not act in good faith and in a manner which he or she reasonably
believed to be in or not opposed to the best interests of the Corporation, and
with respect to any criminal proceeding, that such person had reasonable cause
to believe that his or her conduct was unlawful.

               4.    Indemnity for Expenses in Proceedings by or in the Right of
the Corporation. The Corporation shall indemnify Indemnitee in accordance with
the provisions of this Paragraph 4 if Indemnitee is a party to or threatened to
be made a party to any Proceeding by or in the right of the Corporation to
procure a judgment in its favor by reason of the fact that Indemnitee is or was
a Director and/or Officer of the Corporation or a subsidiary of the Corporation,
or is or was serving at the request of the Corporation as a director, officer,
member or manager, partner, trustee, employee, agent, or fiduciary of another
corporation (domestic or foreign, nonprofit or for profit), limited liability
company, partnership, joint venture, trust or other enterprise, in each case
whether before or after the date of this Agreement, against all Expenses
actually and reasonably incurred by Indemnitee in connection with the defense of
such Proceeding, but only if he or she acted in good faith and in a manner which
he or she reasonably believed to be in or not opposed to the best interests of
the Corporation, except that no indemnification for Expenses shall be made under
this Paragraph 4 in respect of any claim, issue or matter as to which Indemnitee
shall have been adjudged by court order or judgment to be liable to the
Corporation, unless and only to the extent that any court in which such
Proceeding was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the case,
Indemnitee is fairly and reasonably entitled to indemnity for such expenses as
such court shall deem proper.

               5.    Indemnity for Amounts Paid in Settlement in Proceedings by
or in the Right of the Corporation. The Corporation shall indemnify Indemnitee
in accordance with the provisions of this Paragraph 5 if Indemnitee is a party
to or threatened to be made a party to any Proceeding by or in the right of the
Corporation to procure a judgment in its favor by reason of the fact that
Indemnitee is or was a Director and/or Officer of the Corporation or a
subsidiary of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, member or manager, partner, trustee,
employee, agent, or fiduciary of another corporation (domestic or foreign,
nonprofit or for profit), limited liability company, partnership, joint venture,
trust or other enterprise, in each case whether before or after the date of this
Agreement, against all amounts actually and reasonably paid in settlement by
Indemnitee in connection with any such Proceeding, but only if he or she acted
in good faith and in a manner which he or she reasonably believed to be in or
not opposed to the best interests of the Corporation.

               6.    Indemnification of Expenses of Successful Party.
Notwithstanding any other provision of this Agreement, to the extent that
Indemnitee has been successful on the

                                        3



merits or otherwise in defense of any Proceeding or in defense of any claim,
issue or matter therein, including dismissal without prejudice, Indemnitee shall
be indemnified against all Expenses incurred in connection therewith.

               7.    Advances of Expenses. Any Expenses incurred by or on behalf
of Indemnitee pursuant to Paragraphs 3 or 4 in any Proceeding shall be paid by
the Corporation in advance upon the written request of Indemnitee if Indemnitee
shall undertake to (a) repay such amount to the extent that it is ultimately
determined that Indemnitee is not entitled to indemnification hereunder, and (b)
reasonably cooperate with the Corporation concerning the action, suit or
proceeding giving rise to the Expenses. Any advances to be made under this
Paragraph 7 shall be paid by the Corporation to Indemnitee within 30 days
following delivery of a written request therefor by Indemnitee to the
Corporation.

               8.    Procedure. Any indemnification and advances provided for in
Paragraph 3, 4, 5 and 6 shall be made no later than 30 days after receipt of the
written request of Indemnitee. If a claim under this Agreement, under any
statute, or under any provision of the Corporation's Certificate or its By-laws
providing for indemnification, is not paid in full by the Corporation within 30
days after a written request for payment thereof has first been received by the
Corporation, Indemnitee may, but need not, at any time thereafter bring an
action against the Corporation to recover the unpaid amount of the claim and,
subject to the other provisions of this Agreement, Indemnitee shall also be
entitled to be paid for the Expenses of bringing such action. It shall be a
defense to any such action (other than an action brought to enforce a claim for
expenses incurred in connection with any action, suit or proceeding in advance
of its final disposition) that Indemnitee has not met the standards of conduct
that make it permissible under applicable law for the Corporation to indemnify
Indemnitee for the amount claimed, but the burden of proving such defense shall
be on the Corporation and Indemnitee shall be entitled to receive advance
payments of expenses pursuant to Paragraph 7 hereof unless and until such
defense may be finally adjudicated by court order or judgment from which no
further right of appeal exists. It is the parties' intention that if the
Corporation contests Indemnitee's right to indemnification, the question of
Indemnitee's right to indemnification shall be for the court or arbitrator, as
applicable, to decide, and neither the failure of the Corporation (including its
Board of Directors, any committee or subgroup of the Board of Directors,
independent legal counsel or its stockholders) to have made a determination that
indemnification of Indemnitee is proper in the circumstances because Indemnitee
has met the applicable standard of conduct required by applicable law, nor an
actual determination by the Corporation (including its Board of Directors, any
committee or subgroup of the Board of Directors, independent legal counsel, or
its stockholders) that Indemnitee has not met such applicable standard of
conduct, shall create a presumption that Indemnitee has or has not met the
applicable standard of conduct.

               9.    Allowance for Compliance with SEC Requirements. Indemnitee
acknowledges that the Securities and Exchange Commission ("SEC") has expressed
the opinion that indemnification of directors and officers from liabilities
under the Securities Act of 1933, as amended (the "Act"), is against public
policy as expressed in the Act and, is therefore, unenforceable. Indemnitee
hereby agrees that it will not be a breach of this Agreement for the Corporation
to undertake with the SEC in connection with the registration for sale of any
stock or other securities of the Corporation from time to time that, in the
event a claim for indemnification against such liabilities (other than the
payment by the Corporation of expenses

                                        4



incurred or paid by a director or officer of the Corporation in the successful
defense of any action, suit or proceeding) is asserted in connection with such
stock or other securities being registered, the Corporation will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of competent jurisdiction on the question of whether or not
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue. Indemnitee further
agrees that such submission to a court of competent jurisdiction shall not be a
breach of this Agreement.

               10.   Indemnification Hereunder Not Exclusive. The
indemnification provided by this Agreement shall not be deemed exclusive of any
other rights to which Indemnitee may be entitled under the Certificate or the
By-laws of the Corporation, any agreement, any vote of stockholders or
disinterested directors, the DGCL, or otherwise, both as to action in his or her
official capacity and as to action in another capacity while holding such
office.

               The indemnification under this Agreement for any action taken or
not taken while serving in an indemnified capacity shall continue as to
Indemnitee even though he or she may have ceased to be a Director and/or Officer
and shall inure to the benefit of the heirs, executors and personal
representatives of Indemnitee.

               11.   Partial Indemnification. If Indemnitee is entitled under
any provision of this Agreement to indemnification by the Corporation for some
claims, issues or matters, but not as to other claims, issues or matters, or for
some or a portion of the Expenses, judgments, fines or penalties actually and
reasonably incurred by Indemnitee or amounts actually and reasonably paid in
settlement by Indemnitee in the investigation, defense, appeal or settlement of
any Proceeding, but not for the total amount thereof, the Corporation shall
nevertheless indemnify Indemnitee for the portion of such claims, issues or
matters or Expenses, judgments, fines, penalties or amounts paid in settlement
to which Indemnitee is entitled.

               12.   No Rights of Continued Employment. Nothing contained in
this Agreement is intended to create in Indemnitee any right to continued
employment.

               13.   Reimbursement to Corporation by Indemnitee; Limitation on
Amounts Paid by Corporation. To the extent Indemnitee has been indemnified by
the Corporation hereunder and later receives payments from any insurance carrier
covering the same Expenses, judgments, fines, penalties or amounts paid in
settlement so indemnified by the Corporation hereunder, Indemnitee shall
immediately reimburse the Corporation hereunder for all such amounts received
from the insurer.

               Notwithstanding anything contained herein to the contrary,
Indemnitee shall not be entitled to recover amounts under this Agreement which,
when added to the amount of indemnification payments made to, or on behalf of,
Indemnitee, under the Certificate or By-laws of the Corporation, in the
aggregate exceed the Expenses, judgments, fines, penalties and amounts paid in
settlement actually and reasonably incurred by Indemnitee ("Excess Amounts"). To
the extent the Corporation has paid Excess Amounts to Indemnitee, Indemnitee
shall be obligated to reimburse the Corporation for such Excess Amounts.

                                        5



               Notwithstanding anything contained herein to the contrary, the
Corporation shall not be obligated under the terms of this Agreement, to
indemnify Indemnitee:

               (a)   or advance expenses to Indemnitee with respect to
proceedings or claims initiated or brought voluntarily by Indemnitee and not by
way of defense, except with respect to Proceedings brought to establish or
enforce a right to indemnification under this Agreement or any other statute or
law or otherwise as required under Section 145 of the DGCL, but such
indemnification or advancement of expenses may be provided by the Corporation in
specific cases if the Board of Directors finds it appropriate;

               (b)   if it is proved by final judgment in a court of law or
other final adjudication to have been based upon or attributable to Indemnitee
in fact having gained any personal profit or advantage to which he or she was
not legally entitled;

               (c)   for any expenses incurred by Indemnitee with respect to any
proceeding instituted by Indemnitee to enforce or interpret this Agreement, if a
court of competent jurisdiction determines that each of the material assertions
made by Indemnitee in such proceeding was not made in good faith or was
frivolous;

               (d)   for a disgorgement of profits made from the purchase and
sale by the Indemnitee of securities pursuant to Section 16(b) of the Securities
Exchange Act of 1934, as amended, or similar provisions of any state statutory
law or common law; or

               (e)   for any judgment, fine or penalty which the Corporation is
prohibited by applicable law from paying as indemnity or for any other reason.

               14.   Scope. Notwithstanding any other provision of this
Agreement, the Corporation hereby agrees to indemnify Indemnitee to the fullest
extent permitted by law, notwithstanding that such indemnification is not
specifically authorized by the other provisions of this Agreement, the
Corporation's Certificate, its By-laws, or by statute. In the event of any
change, after the date of this Agreement, in any applicable law, statute, or
rule which expands the right of a Delaware corporation to indemnify a member of
its board of directors or an officer, such change shall be deemed to be within
the purview of Indemnitee's rights and the Corporation's obligations under this
Agreement. In the event of any change in any applicable law, statute or rule
which narrows the right of a Delaware corporation to indemnify a member of its
board of directors or an officer, such change, to the extent not otherwise
required by such law, statute or rule to be applied to this Agreement, shall
have no effect on this Agreement or the parties' rights and obligations
hereunder.

               15.   Notice to Insurers. If, at the time of the receipt of a
written request of Indemnitee pursuant to Paragraph 8 hereof, the Corporation
has director and officer liability insurance in effect, the Corporation shall
give prompt notice of the commencement of such proceeding to the insurers in
accordance with the procedures set forth in the respective policies. The
Corporation shall thereafter take all necessary or desirable action to cause
such insurers to pay, on behalf of Indemnitee, all amounts payable as a result
of such proceeding in accordance with the terms of such policies.

                                        6



               16.   Selection of Counsel. In the event the Corporation shall be
obligated under Paragraphs 3, 4, 5, or 6 hereof to pay the expenses of any
Proceeding against Indemnitee, the Corporation, if appropriate, shall be
entitled to assume the defense of such Proceeding, with counsel approved by
Indemnitee, which approval shall not be unreasonably withheld or delayed, upon
delivery to Indemnitee of written notice of the Corporation's election to do so.
After delivery of such notice, approval of such counsel by Indemnitee and the
retention of such counsel by the Corporation, the Corporation will not be liable
to Indemnitee under this Agreement for any fees of counsel subsequently incurred
by Indemnitee with respect to the same proceeding, provided that: (a) Indemnitee
shall have the right to employ his or her own counsel in any such proceeding at
Indemnitee's expense; and (b) if (i) the employment of counsel by Indemnitee has
been previously authorized by the Corporation, or (ii) the Corporation shall
not, in fact, have employed counsel to assume the defense of such proceeding,
then the fees and expenses of Indemnitee's counsel shall be at the expense of
the Corporation.

               17.   Arbitration. With the exception of the provisions of
Paragraph 9 hereof, any dispute, controversy or claim between Indemnitee and the
Corporation arising out of or relating to or concerning the provisions of this
Agreement, shall be finally settled by arbitration in the City of Cleveland,
State of Ohio, before a single arbitrator agreeable to both parties. If the
parties cannot agree on a designated arbitrator, arbitration shall proceed in
the City of Cleveland, State of Ohio, before an arbitrator appointed by the
American Arbitration Association (the "AAA"). In either case, the arbitration
proceeding shall commence promptly in accordance with the commercial arbitration
rules of the AAA then in effect and the arbitrator shall be an attorney other
than an attorney who has, or is associated with a firm having associated with it
an attorney who has been retained by or performed services for the Corporation
or Indemnitee at any time during the five years preceding the commencement of
the arbitration. The award shall be rendered in such form that judgment may be
entered thereon in any court having jurisdiction thereof.

               18.   Continuation of Rights and Obligations. All rights and
obligations of the Corporation and Indemnitee hereunder shall continue in full
force and effect despite the subsequent amendment or modification of the
Corporation's Certificate or By-laws, as such are in effect on the date hereof,
and such rights and obligations shall not be affected by any such amendment or
modification, any resolution of directors or stockholders of the Corporation, or
by any other corporate action which conflicts with or purports to amend, modify,
limit or eliminate any of the rights or obligations of the Corporation and/or
Indemnitee hereunder.

               19.   Amendment and Modification. This Agreement may only be
amended, modified or supplemented by the written agreement of the Corporation
and Indemnitee.

               20.   Assignment. This Agreement shall not be assigned by the
Corporation or Indemnitee without the prior written consent of the other party
thereto, except that the Corporation may freely assign its rights and
obligations under this Agreement to any subsidiary for whom Indemnitee is
serving as a director and/or officer thereof; provided, however, that no
permitted assignment shall release the assignor from its obligations hereunder.
Subject to the foregoing, this Agreement and all of the provisions hereof shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, including, without limitation, any successor
to the Corporation by way of merger, consolidation and/or sale or disposition of
all or substantially all of the capital stock of the Corporation.

                                        7



               21.   Saving Clause. If this Agreement or any portion thereof
shall be invalidated on any ground by any court of competent jurisdiction, the
Corporation shall nevertheless indemnify Indemnitee as to Expenses, judgments,
fines, penalties and amounts paid in settlement with respect to any Proceeding
to the full extent permitted by any applicable portion of this Agreement that
shall not have been invalidated or by any other applicable law.

               22.   Counterparts. This Agreement may be executed in two or more
fully or partially executed counterparts each of which shall be deemed an
original binding the signer thereof against the other signing parties, but all
counterparts together shall constitute one and the same instrument. Executed
signature pages may be removed from counterpart agreements and attached to one
or more fully executed copies of this Agreement. The parties may execute and
deliver this Agreement by facsimile signature, which shall have the same binding
effect as an original ink signature.

               23.   Notice and Information. Indemnitee shall, as a condition
precedent to his or her right to be indemnified under this Agreement, give to
the Corporation notice in writing as soon as practicable of any claim made
against him or her for which indemnity will or could be sought under this
Agreement. Notice to the Corporation shall be directed to the Corporation at
5885 Landerbrook Drive, Suite 150, Cleveland, Ohio 44124 Attention: President
(or such other address as the Corporation shall designate in writing to
Indemnitee). Notice shall be deemed received three days after the date
postmarked if sent by prepaid mail, properly addressed. In addition, Indemnitee
shall give the Corporation such information and cooperation as it may reasonably
require within Indemnitee's power.

               24.   Applicable Law. All matters with respect to this Agreement,
including, without limitation, matters of validity, construction, effect and
performance shall be governed by the internal laws of the State of Delaware
applicable to contracts made and to be performed therein between the residents
thereof (regardless of the laws that might otherwise be applicable under
principles of conflicts of law).

                           [Signature Page to Follow.]

                                        8



                  IN WITNESS WHEREOF, the parties hereby have caused this
Agreement to be duly executed and signed as of the day and year first above
written.


                                          THE CORPORATION:



                                          CHART INDUSTRIES, INC.



                                          By:___________________________________
                                             Arthur S. Holmes, Chairman and
                                             Chief Executive Officer



                                          INDEMNITEE:



                                          ______________________________________
                                          Print Name: __________________________

                                        9

EX-10.11

                                                                   EXHIBIT 10.11

                                    AGREEMENT







                                     Between
                              CHART STORAGE SYSTEMS
                             Plaistow, New Hampshire
          member of Chart Industries Cryogenic Storage Systems Division




                                     and the




                          International Brotherhood of
                        Boilermakers, Iron Ship Builders,
                         Blacksmiths, Forgers & Helpers
                       Local Lodge No. 752 of the AFL-CIO
                             Plaistow, New Hampshire






                                 Effective date:
                    September 1, 2002 through August 31, 2003





ARTICLE INDEX
PAGE
                                                                             
     I. Union Recognition ....................................................   1
    II. Function of Management ...............................................   1
   III. Relationship .........................................................   2
    IV. Definitions ..........................................................   2
     V. Non-Discrimination ...................................................   2
    VI. New - Temporary Employees . ..........................................   3
   VII. Union Security .......................................................   4
  VIII. Payroll Deduction of Union Dues ......................................   4
    IX. Work Schedules .......................................................   5
     X. Job Openings .........................................................   6
    XI. Shift Operations .....................................................   7
   XII. Wages ................................................................   8
  XIII. Overtime .............................................................  10
   XIV. Holidays .............................................................  11
    XV. Vacation .............................................................  13
   XVI. Hospitalization, Medical and Dental ..................................  15
  XVII. Pension ..............................................................  17
 XVIII. Safety and Sanitation - First Aid ....................................  18
   XIX. Seniority, Lay-Off ...................................................  20
    XX. Attendance ...........................................................  21
   XXI. Disciplinary Action ..................................................  23
  XXII. Grievance Procedure ..................................................  24
 XXIII. Arbitration ..........................................................  25
  XXIV. Union Representatives ................................................  25
   XXV. Sub-Contracting ......................................................  27
  XXVI. Maintenance of Work Operations .......................................  27
 XXVII. Information to Union .................................................  28
XXVIII. 401 (k) Savings and Investment Program ...............................  29
  XXIX. Profit Sharing .......................................................  29
   XXX. Severance Pay ........................................................  31
  XXXI. Contract Limitations .................................................  32
Appendix A. Training Program .................................................  34
Schedule A. Notes ............................................................  36
Schedule B. Wage Rates .......................................................  37


                                      -i-





ARTICLE INDEX by TOPIC                                                    PAGE
                                                                   
401(k) Savings and
     Investment Program.................Article XXVIII..................... 29

                                              A
Arbitration..............................Article XXIII..................... 25
Attendance..................................Article XX.................. 21-23

                                              B
Bereavement Benefit...............Article VII, (Sec 9)...................... 9

                                              C
Contract Limitations......................Article XXXI..................... 32

                                              D
Definitions.................................Article IV...................... 2
Dental, Medical and
     Hospitalization......................Article XVI................... 15-17
Disciplinary Action........................Article XXI..................... 23

                                              E

Employees, New
     and Temporary..........................Article VI.................... 3-4

                                              F

First Aid -
     Safety and Sanitation...............Article XVIII.................. 18-20
Function of Management......................Article II...................... 1

                                              G
Grievance Procedure.......................Article XXII..................... 24

                                              H
Holidays...................................Article XIV.................. 11-12
Hospitalization, Medical
     and Dental............................Article XVI.................. 15-17

                                              I
Information to the Union.................Article XXVII..................... 28


                                       ii





ARTICLE INDEX by TOPIC                                              PAGE
                                                                 
                                        J
Job Classifications ...................Article X..................... 7
Job Openings ..........................Article X................... 6-7

                                        L
Layoff - Seniority ..................Article XIX................. 20-21

                                        M

Maintaining of Work
     Operations ....................Article XXVI.................... 27
Management, Function of ..............Article II..................... 1
Medical, Hospitalization
     and Dental .....................Article XVI................. 15-17

                                        N

New and Temporary
     Employees .......................Article VI................... 3-4
Non-discrimination ....................Article V..................... 2
Notes ..............................Schedule "A".................... 36

                                        O
Overtime ...........................Article XIII................. 10-11

                                        P
Payroll Deductions of
     Union Dues ....................Article VIII................... 4-5
Pension ............................Article XVII.................... 17
Premium Machines ...................Schedule "A".................... 39
Profit Sharing .....................Article XXIX................. 29-30

                                        R

Relationship ........................Article III..................... 1
Representatives, Union .............Article XXIV................. 25-27


                                      iii





ARTICLE INDEX by TOPIC                                        .....PAGE
                                                           
                                        S
Safety and Sanitation -
     First Aid .....................Article XVIII ............... 18-20
Security, Union ......................Article VII ................... 4
Seniority - Layoff ...................Article XIX ............... 20-21
Severance Pay ........................Article XXX .................. 31
Shift Operations ......................Article XI ................... 7
Signature Page ..................................................... 33
Sub-contracting ......................Article XXV .................. 27

                                        T

Table of Contents ................................................... I
Training Program ......................Appendix A ............... 34-35

                                        U
Union Recognition ......................Article I ................... 1
Union, Information to ..............Article XXVII .................. 28
Union - Representatives .............Article XXIV ............... 25-27
Union Security .......................Article VII ................... 4
Union Dues,

     Payroll Deductions of ..........Article VIII ................. 4-5

                                        V
Vacation ..............................Article XV ............... 13-15

                                        W
Wages ................................Article XII ................ 8-10
Wage Rates, Union ...................Schedule "B" .................. 37
Work Schedules ........................Article IX ................. 5-6
Work Operations,
     Maintaining of .................Article XXVI .................. 27


                                      -iv-



                                    ARTICLE I
                                UNION RECOGNITION

Section 1. The Employer recognizes the Union as the sole collective bargaining
agency for all employees coming within the category of the appropriate unit with
such respect to wages, hours and working conditions. Such appropriate unit is as
follows:

All production and maintenance Employees including Working Leadmen, Truck
Drivers, but excluding Draftsmen, Technical Engineers, Foremen, Assistant
Foremen, Supervisory Employees having the right to hire and fire, and Office and
Clerical Employees.

Section 2. The Employer agrees to employ only Employees in the classifications
set forth in Schedule "B" in the performance of the work included within the
scope of this agreement.

Section 3. No Foremen or Assistant Foremen shall work with the tools except for
the purpose of instructing or correcting Employees. The following Supervisors
are exempt from this requirement: Test Supervisor to operate Mass Spectrometer
only; Maintenance Supervisor and Assistant Supervisor for breakdown, repair and
installation of new equipment.

                                   ARTICLE II
                             FUNCTION OF MANAGEMENT

Section 1. The Union agrees that the function of Management rests solely with
the Company, and further agrees that it will not interfere with the Company's
free exercise of this right except where the Company specifically is limited in
the Articles or Sections of this Contract.

Section 2. Foremen, Assistant Foremen, Supervisors, Coaches, Lead persons, Group
Leaders, and Team leaders in all departments shall be selected by the Employer.

                                   ARTICLE III
                                  RELATIONSHIP

Section 1. The parties of the Agreement recognize that stability in wages and
working conditions and competency of workers are essential to the best interest
of the industry and public, and agree to strive to eliminate all factors which
tend toward unstabilizing these conditions. The parties further agree to
cooperate fully in carrying out the intent of this Section.

                                        1



Section 2. It is hereby agreed that a Committee consisting of two (2)
representatives of the Company, the Plant Manager and two (2) representatives of
the International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths,
Forgers and Helpers of America, AFL-CIO, Local 752, and Employees of the Company
to be known as the Labor Management Production Committee, shall be established
and meet to discuss and devise ways and means to effectuate maximum production
which is mutually desired. A meeting shall be called by the Plant Manager at
least once a quarter and he shall preside as Chairman.

                                   ARTICLE IV
                                   DEFINITIONS

Section 1. As used in the Agreement, the term "Employee" means an Employee who
is included in the appropriate unit as above defined and the term "Employees"
means two (2) or more such employees.

                                    ARTICLE V
                               NON-DISCRIMINATION

Section 1. The Company or the Union shall not discriminate against employees
because of color, race, sex, religious affiliation, nationality, age, sexual
orientation, handicap or status as a disabled veteran or Vietnam era veteran, as
prescribed by applicable state or federal law. Pronouns in the male gender
appearing in this Agreement are intended to include the female gender.

                                   ARTICLE VI
                           NEW AND TEMPORARY EMPLOYEES

Section 1. The Company agrees that all new Employees shall be given a copy of
this Agreement.

Section 2. All new employees shall complete their first ninety (90) days of work
as Probationary Employees and shall be subject to discharge within that period
at the discretion of the Employer without recourse to the grievance procedure of
the Agreement.

Section 3. New Employees are not eligible for a paid holiday until completing
thirty (30) days of work.

Section 4. New Employees may be retained on the first shift for a period of
thirty (30) days of work. Thereafter they shall be subject to the seniority
rules. No Employee shall be transferred to another shift to accommodate any new
hire.

                                       -2-



Section 5. New Employees become covered for benefits on the first of the month
following completion of forty-five (45) days of work.

Section 6. Temporary employees shall be defined as employees who are hired to
fill short term production work not to exceed (6) six calendar months. This
process is not meant to replace the regular hiring process. Temporary employees
may become full time employees if a need exists beyond (6) six calendar months.

Temporary employees will be hired under the following conditions:

1.  Where a need exists within a classification, temporary employees may be
    hired to fill the need provided no employees within the classification are
    on layoff, and there are no qualified employees within the other
    classifications working or on lay-off.

2.  The probationary period for temporary employees will be no longer than 6
    calendar months.

3.  Temporary employees will not be subject to Union dues in the first 30 days
    and shall not participate in the following specific contractual benefits,
    namely: Holiday pay, vacation pay, pension benefits, insurance benefits,
    sickness and accident coverages (except statutory Worker's Compensation) and
    hospitalization coverage.

4.  All qualified employees will be given the opportunity to work overtime
    before temporary employees are asked to work overtime.

5.  Temporary employees may be assigned to first shift for up to 30 days for
    orientation. Thereafter, they will be assigned to another shift as
    production needs dictate. No full time employee will be displaced from their
    regular shift by a temporary employee.

                                   ARTICLE VII
                                 UNION SECURITY

Section 1. As a condition of employment, all present Employees must become and
remain members of the Union thirty (30) days after the signing of this
Agreement, and all future Employees hired by the Company.

                                        3



                                  ARTICLE VIII
                        PAYROLL DEDUCTIONS OF UNION DUES

Section 1. The Company shall, upon the written order signed by any Employee
directing the Company to do so, deduct from the second pay of such Employees for
each month, the amount of dues payable by such Employee to the Union for the
succeeding months. This written order, being signed voluntarily, shall be
irrevocable unless such rights be waived by the Union concerned, for a term of
this Agreement, and is in compliance with the applicable laws. The amount of the
Union's dues will be set forth under the Seal of The Union and presented to the
Company immediately subsequent to the signing of this agreement. The Company
shall, on or before the first day of each succeeding month, remit the amount
thereof to the proper officers of the Union. The Union shall, from time to time,
furnish the Company a certificate of the president or other qualified officers
of the Union to whom such amounts shall be remitted.

Section 2. In the application of Section 1 above, when the Employer is notified
by the Union in writing that an Employee is delinquent in the payment of Union
dues, reinstatement fee, or has failed to make proper application or pay the
initiation fee required, the Employer shall, upon notice from the local Union,
terminate such Employee.

Section 3. The Union shall hold the Company harmless from any and all liability
resulting from the Company's discharge of any Employee at the request of the
Union as defined in Section 2, Article VIII above.

                                   ARTICLE IX
                                 WORK SCHEDULES

Section 1. Employees must be at their regular work station at the start of the
shift.

Section 2. The normal work week shall consist of five (5) days: Monday through
Friday inclusive for the first and second shift; and Sunday through Thursday
inclusive for the third shift. it is understood that all hours and days of work
shall be consecutive.

Section 3. Shift work will be permitted in all classifications. A 10% premium
over and above the hourly rate shall be allowed for second and third shifts.

                                        4



The shifts may consist of one day and two night shifts. The regular working
hours are as follows:

  1st Shift ..............................   6:30 a.m. - 3:00 p.m.

  2nd Shift ..............................  3:00 p.m. - 11:30 p.m.

  3rd Shift ..............................  10:30 p.m. - 7:00 a.m.
Unpaid lunch periods:

  1st Shift .............................. 12:00 noon - 12:30 p.m.

  2nd Shift ..............................   8:00 p.m. - 8:30 p.m.

  3rd Shift ..............................   2:30 a.m. - 3:00 a.m.

If more than 120 employees are on a shift, the employer may stagger lunch
periods.

Section 4. A 10-minute coffee break will be allowed during the first half of
each shift.

Section 5. Employees shall be permitted five (5) minutes to put away their tools
and wash up at the end of each shift.

                                    ARTICLE X
                                  JOB OPENINGS

Section 1. The Company shall post all job openings except in the General
Helper's classification for a period of one (1) week. All bids shall be closed
at the end of this week. The senior employee shall have preference for these
jobs providing he/she has the qualifications to do the job with a minimum amount
of in-house training by the Company. Job bids must be submitted in duplicate by
the Employee to the Personnel Manager with the Shop Steward retaining a copy. In
the event the successful job bidder cannot perform the job with a minimum amount
of in-house training by the Company, (not less than three (3) weeks) he/she
shall then be returned to the classification and area he/she came from.

A successful job bidder shall retain his/her seniority in his/her old
classification for one (1) year before his/her past seniority is applicable to
his/her new classification.

An employee must have one (1) year or more of service in his/her classification
to exercise a job bid.
If an Employee's qualifications are in dispute, the Company will then resolve
this matter

                                        5



with the Shop Committee. This Section is not intended, and shall not be
construed to deny the Company the right to hire qualified employees for job
openings if, in the opinion of the Company, no qualified Employee exists within
its employ.

In the event the Company hires from the outside to fill a job bid where no
qualified Employee was available, the Company shall show the new hire's record
and qualifications to the Shop Committee for their verification prior to the new
hire reporting for work.

                                   ARTICLE XI
                               JOB CLASSIFICATIONS

Section 1. Although all employees have specific job classifications, any
employee may be assigned to any job and will be paid at their regular rate. An
employee may be assigned to any job and will be paid at their regular rate. An
employee may request a Shop Committee hearing after three (3) months in a job
outside of his classification if unsatisfied with the work. The Company will
work with the individual to satisfy his concerns and will transfer him back to
their classification no more than two (2) months after the hearing.

                                   ARTICLE XII
                                SHIFT OPERATIONS

Section 1. When an Employee has his/her shift changed during the work week
he/she shall receive time and one-half for the first day of the new shift. When
he/she returns to his/her original shift he/she receives only straight time.
There shall be no time and one-half for any shift change occurring over the
weekend. Shift assignment shall be by seniority in a classification. The Company
shall give forty-eight (48) hours' notice to any Employee who is being
transferred to another shift. Employees may exercise shift preference every
twelve (12) months if so desired. Transfer must be made within a two (2) week
period. An employee must have been employed one (1) year before exercising shift
preference.

Employees who will be so assigned by management to a different shift because of
a need for skills and efficiency of the operation will do so for no more than
120 calendar days.

                                        6



                                  ARTICLE XIII
                                      WAGES

Section 1. Effective September 1, 2002 through August 31, 2003, base wages will
be increased 2.5%/hr. across the board.

Section 2. The Employer agrees to pay to its Employees, and the Union agrees
that it will accept, the wage scale for the various classifications set forth
and contained in the Schedule of Wages in Schedule "B" attached hereto.

Section 3. There shall be no reduction in wages during the life of this
agreement.

Section 4. All Union requests for Wage Increases will be submitted by the Union
and administered by the Company as to approval or disapproval within two (2)
weeks after being submitted.

Section 5. Employees properly reporting for work shall receive a minimum of four
(4) hours' pay. This Section shall not apply where Employees are not put to work
by reason of an Act of God or on occasions when the Company has acted promptly
to proceed with the necessary repairs to factory buildings and/or equipment. The
foregoing requirements shall not be applicable where the Employee voluntarily
quits, is discharged, goes home sick, or is excused from work for personal
reasons, in which event he/she shall be paid only for actual hours worked.

Section 6. All work performed away from the plant requiring overnight stays will
be paid at the rate of $1.00/hour above the applicable shop rate. Work performed
away from the plant during day trips will be paid at the rate of $.50/hour above
the applicable shop rate. Mileage, if an employee's car is used, will be paid at
the rate allowed by the IRS per mile [current rate (9/02) is $0.365/mile].

Section 7. Management will review the wages of each Employee under the maximum
of their classification for each six (6) months period in which the Employee has
not had a wage increase. Should an Employee not demonstrate, during the six (6)
month review period, sufficient improvement over his/her last review to justify
an increase he/she shall be reviewed again in ninety (90) days. The minimum
increase, if granted, shall be fifteen cents ($0.15) per hour.

Shop Stewards, when requesting a Review, must make the request two (2) weeks in
advance of the requested effective date. The increase, if granted, shall be
retroactive to the requested effective date. Each Employee has a right to
challenge his/her review with his/her Supervisor or Coach.

                                        7



In order to ensure the orderly progression of new employees through the Job
classification apprentice training process, the actions in Appendix A will be
taken.

Section 8. When an Employee is called to Jury Duty the Company shall make up the
difference in pay at the Employee's regular rate. A day of Jury Duty is defined
as any day for which the Employee is required to appear, regardless of having
served, certified by a written statement from the Court.

Section 9. An employee beyond the probationary period, who is working at the
time, will be granted three (3) regular working days off with pay in the event
of a death in the employee's immediate family. Immediate family is defined as
the employee's wife, husband, father, mother, son, daughter, brother, sister,
foster parents, father-in-law or mother-in-law.

An employee may take the time off with pay later than the day of death or
funeral if circumstances warrant and are a direct result of the death. An
employee beyond the probationary period, who is working at the time, will be
granted one (1) regular work day off with pay to attend the funeral of a
grandparent or grandchild of the employee.

An absence for the purpose of attending the funeral of a relative, when evidence
is acceptable to Personnel, shall be excused.

Section 11. Employees who have given long and faithful service and have become
unable to handle heavy work due to age shall be given preference in such light
work as they may be able to perform at a rate of pay commensurate with the
classification in which they will be employed.

                                   ARTICLE XIV
                                    OVERTIME

Section 1. All work in excess of eight (8) hours in any one work day, forty (40)
hours in any one week, or on Saturday shall be paid at the rate of time and
one-half; all work performed on Sundays shall be paid at the rate of double
time; on a paid holiday, time and one-half extra if worked. No Employee shall be
paid both daily and weekly overtime for the same hours worked.

Section 2. Should an Employee be required to work over ten (10) hours in any one
day he/she will be allowed one-half (1/2) hour paid lunch period.

Section 3. The Company will attempt to distribute all overtime work as equally
as possible among the Employees in their respective shifts. All overtime shall
be worked on a voluntary basis. Where there are no qualified Employees available
to perform the work the Company will authorize other means to get the work done.
Before taking action, the

                                        8



Company will consult with the Chief Steward or in his/her absence, an available
Steward who, with the Company, will mutually attempt to make available the
qualified Employee(s) necessary to perform the work.

It is agreed that any Employee who has agreed to report for overtime work after
having been asked, but does not report for work as agreed to, shall forfeit
his/her right to overtime work for one (1) month unless he/she can offer an
acceptable, reasonable excuse to the Company. Any Employee who refuses overtime
work when requested shall be considered as having worked, for the purpose of
overtime distribution.

Section 4. If there is overtime work on a job that an Employee or Employees have
been working straight time on, these Employees will continue on the job and
receive the overtime, including Saturday and Sunday. The Chief Steward or
Business Manager shall receive a complete list of all Employees scheduled to
work on Saturday, Sunday and holidays.

Section 5. There shall be one (1) Steward for each twenty (20) employees working
a Saturday, Sunday or holiday. If a Steward within the group refuses the work,
any Union Official within the group may be counted towards meeting the above
requirements, or the Union may designate an Acting Steward from among those
Union Employees at work. In no event shall the total number of Stewards working
exceed the number of Stewards in the Shop. When Employees are asked to work
overtime and there are no Stewards working the Shift they are held over to, the
provisions above for Saturday, Sunday and holiday work shall apply.

Section 6. Any Employee called to work at any other time than his/her regular
shift shall be paid time and one-half for work.

Section 7. Employees shall not be required to take time off because of overtime
work unless required to do so by state or federal regulations. When an Employee,
due to lack of work, is temporarily assigned to another classification carrying
a lower rate, his/her wage rate shall not be reduced for a period of thirty (30)
days of work. At the expiration of this period the Employee shall have the
option to accept the lower rate of pay or take a lay-off due to lack of work in
his/her classification. Temporary assignment to lower paying jobs shall be by
seniority only.

Section 8. When overtime is requested, the Employee shall be given three (3)
hours' notice except in case of emergency or where it was impossible to inform
the Employee within the time limit.

                                        9



                                   ARTICLE XV
                                    HOLIDAYS

Section 1. The following shall be recognized holidays with pay.

========================================================================
           HOLIDAY            2002       2003
- ------------------------------------------------------------------------
New Year's Day              ---        Jan 1
- ------------------------------------------------------------------------
Washington's Birthday       ---        Feb 17
- ------------------------------------------------------------------------
Memorial Day                ---        May 26
- ------------------------------------------------------------------------
Independence Day            ---        July 4
- ------------------------------------------------------------------------
Labor Day                   Sept. 2
- ------------------------------------------------------------------------
Columbus Day                Oct. 14
- ------------------------------------------------------------------------
Veterans' Day               Nov. 11
- ------------------------------------------------------------------------
Thanksgiving Day            Nov. 28
- ------------------------------------------------------------------------
Day After Thanksgiving      Nov. 29
- ------------------------------------------------------------------------
Day Before (or after)       Dec. 24
Christmas
- ------------------------------------------------------------------------
Christmas Day               Dec. 25
- ------------------------------------------------------------------------
Floating Holiday            ---        ---
========================================================================

All holidays shall be observed on the nationally recognized day of celebration
(Federal Statute). Agreed upon holidays under the terms of this Contract when
occurring on a Saturday shall be observed on the Friday immediately preceding;
when occurring on a Sunday shall be observed on the Monday immediately
following.

Employees must work their last scheduled work day before and their first
scheduled work day after any paid holiday to be eligible to receive pay for that
holiday unless just cause is shown proving his/her absence. If an Employee is
absent for one (1) week or more for any cause, he/she will not receive pay for
the holiday.

                                       10



The floating holiday is to be taken at a time selected by the individual
employee. When scheduling a floating holiday, 24 hours notice is required, and,
where multiple requests for the same day will adversely affect production,
seniority rules will apply.

                                   ARTICLE XVI
                                    VACATION

Section 1. Subject to the following conditions, every Employee eligible
therefore under the following schedule shall, each year, receive paid vacation
in accordance with such schedule, provided the Employee's service is continuous.

Effective 7/1/02, The vacation "year" is based upon the employee's seniority
date/employment anniversary.

ADDENDUM: Section 1(a) & 1(b) effective 8/30/99:

(a)  New Hires will begin accruing .769 vacation hours per week as of their date
     of hire for a total of a 40 vacation hours by their first employment
     anniversary.

(b)  Upon their first employment anniversary, Employees will start accruing
     1.538 hrs vacation per week for a total of 80 vacation hours by their
     second employment anniversary. Thereafter one's eligibility for additional
     vacation days will be based upon their seniority/employment anniversary as
     outlined below in Section 1 (c) and Table II.

(c)  Employees who will have accrued seniority of six (6) years will receive
     vacation in accordance with the following Table. Employees with a greater
     length of service or seniority will be given preference whenever possible.

     Employees hired prior to August 27, 1993 will achieve a maximum accrued
     vacation of 25 days per Table I.

(d)  Vacation may be taken in 1/2 day increments with 24 hour notice except for
     extreme circumstances.

(e)  Employees may carry a vacation balance equal to twice their current annual
     allotment. Accrued vacation time in excess of this maximum must be used
     prior to the next vacation period or it will be forfeited.

                                       11



                                     TABLE I

     Seniority (Years)         Number of
                             Vacation Days

          6                        11
          7                        12
          8                        13
          9                        14
         10                        15
         16                        16
         17                        17
         18                        18
         19                        19
         20                        20
         26                        21
         27                        22
         28                        23
         29                        24
         30                        25


(f)  Employees hired after August 27, 1993 will achieve a maximum accrued
     vacation of 20 days per Table II:

                                    TABLE II

       Seniority (Years)       Number of
                             Vacation days

                6                 11
                7                 12
                8                 13
                9                 14
               10                 15
               16                 16
               17                 17
               18                 18
               19                 19
               20                 20

(g)  Should the need for a plant shutdown exist (one (1) or two (2) weeks) for
     reasons other than reduced business conditions during the month of July or
     August, the Company will notify the Union ninety (90) days in advance of
     such a need.

                                       12



     Employees will take additional earned vacation time consecutively unless
     otherwise mutually agreed to by the employee and the Company.

If an Employee is off from work for more than thirty (30) days on an excused
absence for any reason other than industrial injury or regular S & A coverage,
he/she shall cease to accrue vacation time until he/she returns to work and when
he/she does, the vacation he/she would otherwise have been entitled to for that
year shall be reduced in proportion to the number of days of excused absence in
excess of thirty days. Employees who have less than two (2) weeks vacation
eligibility may, at the convenience of the Company, be requested to work for the
balance of the shutdown when work is available.

When an Employee is asked to work his/her vacation weeks, it shall then be the
Employee's and the Company's mutual decision as to when he/she will take his/her
vacation. In the absence of a mutual agreement, the Employee shall not be
required to work.

VACATION ELIGIBILITY IN EXCESS OF 10 DAYS MAY BE TAKEN ONE DAY AT A TIME. (CAN
BE USED IN LIEU OF SICK DAYS IF EMPLOYEE DESIRES).

In such cases where the number of employees selecting a given day(s) as a
vacation day(s) would seriously affect the continuity of production, the Company
will follow seniority with respect to those that will be allowed to take that
day(s) as Vacation.

If an Employee dies without receiving his/her vacation or compensation in lieu
thereof, the amount shall immediately be paid to his/her beneficiary or estate
upon proper proof.

(h)  The eligible accrued, unused vacation balance will be paid out to any
     employee who has been laid off, discharged or resigned

                                  ARTICLE XVII
                       HOSPITALIZATION, MEDICAL AND DENTAL

Section 1. The Company shall provide a health care program covering hospital and
surgical expenses for all employees and their qualifying dependents. If an
employee elects not to utilize the Company health care program, he shall not pay
any monthly premiums for the same.

Employees electing health insurance will pay 10% of the Chart Basic Plan
Premium. Employees who enroll in the more generous health plans (ie. Chart Plus
or the HMO) will pay the 10% as stated above plus 100% of the cost above the
Chart Basic Plan.

                                       13



The Company will make available to Employees a Dental Insurance Program. If an
Employee elects not to utilize the Company Dental Plan, he shall not pay any
monthly premiums for the same.

Employees who elect Dental coverage will pay monthly; $9.30 for Single, $18.60
for Two person, and $27.90 for Family coverage plus 100% of any Dental premium
increases.

The employee may decline or "opt-out" of any of Chart's medical plans (HMO
included) if the employee has coverage through another group medical plan. This
does not apply to the dental plan. If the employee chooses to opt-out of medical
coverage, he/she will receive a payment of $1,000. The opt out bonus will be
paid weekly through the Company payroll system.

The Company and the Union agree to discuss any type of National Health Care
legislation that is enacted during the term of this contract with the goal of
providing similar levels of benefits (coverage) to employees at a lower cost to
both the Company and its employees.

Employees who retire from the Company at age 62 years or over who accumulated a
term of employment of twenty (20) years at the time of retirement shall be
covered by a $4,000.00 Life Insurance Benefit. An Employee shall be deemed as
retired if he/she is eligible and is participating in the Boilermakers' Pension
Plan.

At the time of retirement, an employee may choose to continue as a member of the
Company's group Hospital/Medical Plan in accordance with the following
conditions:

     He/she is at least 62 years old but less than 65.

     Such membership terminates at the end of the month in which the former
     employee reaches 65 and is, therefore, eligible for Medicare.

     A payment equivalent to 100% of the Company's established premium must be
     paid to Chart Storage Systems, by the first of each month.

     Failure to make such monthly payment in a given month removes the former
     employee from the Group.

The Company shall continue to cooperate in expediting settlement of accident and
health insurance claims.

                                       14



LIFE INSURANCE. Company paid, equivalent to one times the employee's annual base
wage. *. *(Base Wage = Rate/hr. X 2080 hrs.)

MAJOR MEDICAL. - $1,000,000.00

SICKNESS & ACCIDENT. The Company shall provide Sickness and Accident coverage at
the rate of 60% of the base wage with a minimum of $180/week and a maximum of
$400/week for the life of this Agreement.

The parties will continue to apply the use of the Section 125 Plan where
beneficial to the employees.

The negotiated Health and Accident coverage shall apply regardless of the State
in which the Employee resides.

                                  ARTICLE XVIII
                                     PENSION

The Company will contribute per hour per employee to the Boilermakers Pension
Fund as follows:

     $.85/hr for year 2003

Contributions shall be made for hours worked inclusive of vacation and holidays
and shall not exceed forty (40) hours per week.

                                   ARTICLE XIX
                       SAFETY AND SANITATION -- FIRST AID

Section 1. The Company and the Union agree to work within, and to cooperate in
compliance with the "Federal Occupational Safety and Health Act of 1970" as
amended.

Section 2. The Company agrees to provide and maintain such safety and sanitary
needs as are necessary to protect and preserve the health and welfare of all
employees.

Section 3. The Company shall install bells, gongs or other warning devices on
the overhead cranes which shall be actuated when the crane is in motion.

Section 4. The Company shall retain in a tool crib the welding sleeves for those
welders who wish to use them.

Section 5. The Company shall reimburse each Employee up to one hundred fifty
($150.00) Dollars every two years for the purchase of Safety Shoes upon proof of

                                       15



purchase. To be eligible an Employee must have completed his/her forty-five (45)
work day period. All weather gear shall be furnished by the Company to those
Employees who are required to work outside the plant during inclement weather.

Section 6. The Company agrees to provide Safety Glasses including prescription
lenses to Employees. If lenses or frames are damaged at work they will be
replaced at no cost to the Employee. Lenses will be replaced if prescription is
changed by a physician. Lenses and frames will be furnished from a Company
selected grouping. For selection of lenses and frame different than those
provided by the Company the Employee will pay the difference.

Section 7. The Company will make inspections of the toilets and washrooms with
an union official to make changes to conform with this section. All toilets and
washrooms shall be kept clean and in a sanitary condition, properly heated and
ventilated, and suitable quarters with heat shall be provided for employees to
change clothes and eat their lunch. All stagings, walks, ladders, and safety
appliances shall be constructed and installed in a safe and proper manner. In
case of spray painting, the Employer shall provide proper protection against
fumes caused by paint spray.

Section 8. The Company will train a minimum of two (2) volunteers in First-Aid
for each shift. The Company will pay for tuition, books required by the school,
and mileage to and from classes.

Section 9. Prompt ambulance service and first-aid to sick or injured employees
shall be provided at Company expense on all shifts. Ambulance service will be
complimented by a taxi service to insure prompt delivery of injured Employee to
the hospital. In the event a taxi specified by the Company is not immediately
available, the First-Aid Person or another designated Employee shall take the
injured Employee to the hospital and return immediately. It is noted here that
First-Aid Person is not a classification.

Section 10. The Company shall post notices to the effect that it is the duty of
Employees to immediately report to his/her Foreman, Supervisor and/or Coach,
anything that in their opinion is dangerous to the safety of the Employees. Any
one of those named who receive such reports shall immediately investigate, or
cause to be investigated, the complaint of the Employee. Not reporting unsafe
events, observances or conditions immediately to one's Supervisor or Coach is
grounds for disciplinary action up to and including discharge.

Any Employee who is injured at work shall report the injury to his/her Foreman,
Supervisor, or Coach immediately and complete, at the earliest opportunity, a
"Notice of Accidental Injury or Occupational Disease," provided by the Company
and forward to the Personnel Department.

                                       16



Section 11. Any Employee working inside a vessel with only a manway as a means
of entrance or exit shall have an Employee stationed at the manway whose sole
purpose will be to insure the well-being of the Employee inside, the only
exception being when the employee inside is in communication with the Employee
outside via a communication medium. No Employee shall be compelled to work where
injurious fumes or unsafe conditions prevail.

Section 12. Any Employees who are injured during the hours of work and who are
to receive treatment for said injury after the day of the accident shall receive
all necessary medical treatment without loss of time.

Section 13. In case any Employee is injured at work and is compelled by the
seriousness of such injury to lose time, he/she shall be paid for the full eight
(8) hours shift on which he/she was injured, plus any premium that might be due
from his/her shift.

Section 14. For electric arc flashes during the working hours, the Employees
shall receive treatment at the Plant by the First-Aid person. In cases where the
Employees feel no effect until their return home after working hours, it is
mutually agreed that if their eyes are inflamed the following day and they are
suffering, they shall be given immediate treatment by the First-Aid person at
the Plant. The First-Aid person and the Employee's immediate Foreman, Supervisor
and/or Coach, shall jointly decide whether the Employee should go home. In the
case of dispute, the Employee shall be sent to the hospital and returned home at
his/her own expense without loss of time for that day only.

                                   ARTICLE XX
                               SENIORITY - LAY-OFF

Section 1. Seniority within job classification shall be the determining factor
for lay-offs.

Seniority, relative skill, and ability within job classifications will be the
determining factors for recalls.

Section 2. For the purpose of this Article the length of service of any Employee
of the Company shall be computed from the date on which he/she first began to
work in the shop, except that the length of service record of any Employee in
the Company shall be broken, and no prior period of his/her employment shall be
counted if:

(a)  Such Employee quits his/her employment.
(b)  The Employee is discharged.
(c)  The Employee is laid off for period exceeding eighteen (18) months.
(d)  The Employee is laid off and re-called for work and fails to report for
     work within five (5) work days after receipt of such notification by
     Registered Mail, Return

                                       17



     Receipt Requested.

Loss of time due to sickness or lay-off, not to exceed eighteen (18) months,
shall not be construed as to interfere with the Employee's seniority. Employees
suffering accident or injury while engaged in their employment in the shop and
being unable to work because of said accident or injury shall maintain and
accumulate their seniority up to maximum of twenty-four (24) months.

An active employee whose S & A benefits have expired will continue to be
eligible for health insurance for a period not exceeding twelve (12) months from
the start of their S & A benefit.

Those employees on Workers Compensation leave will continue to be covered by the
group health insurance for up to the earlier of twenty-four (24) months or until
such time as they reach their maximum medical improvement (MMI) provided that
they continue to make timely payments of their portion of the health insurance
premiums. MMI must be determined by their attending physician or physician
performing a medical exam at the request of the Company or it's insurer. Should
an employee not return to work after MMI has been determined, employment will
cease. Company provided group and health insurance will be discontinued and the
former employee may apply for benefits under COBRA law.

Employees on lay-off shall accumulate seniority during any period of lay-off but
shall not be eligible for fringe benefits accorded to Employees currently active
on the Company's roll.

Employees to be laid off shall be given a three (3) day notice except in cases
of emergency. The day that the Notice of Lay-off is issued shall be considered
the first day of notice of lay-off.

Section 3. Employees accepting Managerial positions shall have their shop
seniority frozen on the date they accept and transfer into such position. Their
seniority will then be reduced by an equal amount of time that such employee
holds a Managerial position.
3a) In the event that employees who have transferred into a managerial position
return to the bargaining unit, they shall return to the job classification held
at the time of the transfer, providing they have the seniority to do so, he/she
will be placed on layoff status but will be permitted to bid on any job
opening(s) that may be available.
3b) Should the employee elect to return to the bargaining unit within six months
of transferring to a Managerial position, no loss of seniority will be incurred.
3c) Employees accepting Managerial positions prior to September 1, 2002 will
have their shop seniority frozen on the date they accepted and were transferred
into such position with no further reduction.

                                       18



                                   ARTICLE XXI
                                   ATTENDANCE

Section 1. The Company shall grant a leave of absence, not to exceed thirty (30)
days, to any Employee who has serious and compelling personal reasons to require
such leave, provided the reasons are verified and are acceptable to the Company.
The Company's approval shall not be unreasonably withheld.

Section 2a. To maintain efficient production schedules, the parties of the
Agreement will insist on regular and punctual attendance of all Union Employees.

Section 2b. Excessive Absenteeism. Each two (2) days of absence in a single
month of a rolling 12 month period shall be considered an offense and shall
subject the offending Employee to the disciplinary action below, on a
progressive basis. Illness absences on consecutive days shall be considered a
single day's absence.

Being absent from work due to Union business, hospitalization, jury duty,
military duty, industrial accident, funerals covered in the Bereavement Clause,
leave of absence (personal, medical or sickness and accident) or illness
absences of two (2) or more consecutive days verifiable to the Personnel
Department on the first day of return to work, shall not be considered as
chargeable absences.

In each month, lost time due to leaving the plant early shall be additive and
for each twelve (12) hours of such lost time the Employee shall be charged with
one (1) day's absence for that month.

Excessive Tardiness: For each tardiness occurrence in excess of five (5) in one
(1) month of rolling 12 month period, the offending Employee shall be subject to
the below disciplinary action(s) on a progressive basis:

Violations in absenteeism and tardiness as provided for hereinabove shall
subject the offending Employee to discipline as follows:

     Step 1: Verbal warning in the presence of the Shop Steward.
     Step 2: Written warning with a copy to the Steward.
     Step 3: One (1) week's suspension without pay.
     Step 4: Discharge.

The above-mentioned criteria on absences and shall not limit the Company's right
to administer disciplinary action where an Employee is absent prolonged or
frequent periods of time, yet not in violation of such criteria.

                                       19



Before the Company exercises this right, a joint meeting of the Shop Committee,
the Employee involved and the Company shall be convened to lay out the
Employee's record and ways and means to correct. No disciplinary action shall be
taken at this meeting. A continued pattern by the Employee in the future of
absenteeism shall subject him/her to disciplinary action. An absence during
which an Employee is admitted as an "inpatient" to a hospital, or under a
doctor's care for a condition which he/she was previously hospitalized, shall
not be counted in the disciplinary process.

The above-mentioned provisions on absenteeism and tardiness shall become
applicable on the effective date of this agreement and all records shall be
continuous thereafter.

Section 2c. This section in its entirety will in no way prevent the Company from
disciplining an Employee for other breaches of conduct.

NOTE: Any time an Employee has an unscheduled absence he/she is required to call
the Company and notify the Personnel Department (603-382-6551, Ext. 2212) within
one (1) hour of the start of the shift.

                                  ARTICLE XXII
                               DISCIPLINARY ACTION

Section 1. Disciplinary action, suspensions and discharges will be taken only
for just cause. All suspensions and discharges shall be reviewed with the Shop
Committee as to just cause, before being awarded. Employee shall be notified
within one scheduled work week of the occurrence of any violations.

This in no way, however, abridges the Company's right to send an Employee home
for the remainder of his/her shift pending a hearing with the Shop Committee the
following work day. All Employees may be present at their hearing with the Shop
Committee.

Section 2. It is further agreed that any Employee found guilty, after a fair
hearing conducted by the Employer and the Shop Committee, of instigating,
fomenting or actively supporting or giving leadership to any action which will
create dissension or impair the morale of other Employees, thus curtailing
production, or which violate, disturb or attempt to disturb the relations or
terms o this Agreement, shall be dismissed from the service of the Employer.

                                       20



                                  ARTICLE XXIII
                               GRIEVANCE PROCEDURE

Section 1. A Grievance is any difference of opinion or dispute between the
Employer and an Employee or Union Representative regarding the interpretation or
operation of any provision of this Agreement and shall be dealt with as follows:

Section 1. The Steward, with the Employee(s), shall present the grievance in
writing on forms supplied by the Union to the immediate Foreman/Department Head
in the Department of the grieving Employee(s) within three (3) work days of its
occurrence of/or first knowledge; otherwise, it shall be deemed waived.

Section 2. If the grievance is not settled in Step 1 within three (3) work days,
then it shall be submitted to the General Foreman. The General Foreman and Chief
Steward shall meet to attempt to resolve the grievance. The aggrieved may be
present if he/she so desires. If not satisfactorily resolved within three (3)
work days, it shall be referred to Step 3.

Section 3. If not settled within three (3) work days, the grievance shall be
referred to the bargaining agent of the Company and the International
Representative of the Union for their consideration in conference with the Shop
Committee and Chief Steward. This conference shall be held as expeditiously as
possible but in no event later than ten (10) work days.

NOTE: The Grievance procedure is a four step procedure.

     1. Supervisor or Coach
     2. Designee of President
     3. Bargaining Agent of the Company and International Representative
     4. Arbitration

All grievance shall be deemed settled unless, within ten (10) work days of the
conference between the above parties, either party requests in writing that the
dispute be referred to arbitration.

                                  ARTICLE XXIV
                                   ARBITRATION

Section 1. Grievance involving the interpretation or application of the
provisions of this Agreement, if not resolved by the parties through the
foregoing steps, may be submitted to Arbitration for final and binding
determination. The Arbitrator shall have no power to add to, subtract from,
change or modify any of the provisions of this Agreement, but his authority
shall be limited solely to the interpretation or application of the provisions
of this Agreement. The decision of the Arbitrator shall be final and binding on
all parties.

                                       21



Section 2. After proper notice of desire to Arbitrate, either party may request
the American Arbitration Association to submit a list of names from which an
Arbitrator shall be selected. If the parties fail to select an Arbitrator within
ten (10) days after receipt of list, either party may request the American
Arbitration Association to appoint an Arbitrator.

The Company and the Union shall share equally the fee and expenses of the
Arbitrator.

Section 3. In the event a discharged or suspended Employee is reinstated through
an arbitration award, the reinstated Employee shall receive back pay as
determined by the Arbitrator. In no case, however, will back pay be awarded for
the period of time where the Union requests a postponement in the arbitration
hearing date.

Back pay shall be paid within one (1) work week of return to work or within one
(1) work week of receipt of the Arbitrator's ruling as appropriate.

                                   ARTICLE XXV
                              UNION REPRESENTATIVES

Section 1. It is agreed that Stewards will be Employees of the Employer and that
the Union will notify the Employer in writing of the Officers and Stewards
authorized to act on behalf of the Union.

Section 2. The Business Manager and two (2) members of the Negotiating Committee
shall make up the Shop Committee.

Section 3. The loss of time by authorized Union Officials during the regular
work day in Contract negotiations thirty (30) days prior to the expiration of
the contract and time spent on the three (3) steps of the Grievance Procedure
shall be paid for by the Employer at the day rate of their job. The Business
Manager and Chief Steward shall work on the first shift only.

Section 4. The Company shall allow the Business Manager, President, Chief
Steward and Stewards to meet once a week to evaluate grievances and related
grievance matters. The meeting shall be held each Thursday starting at 12:30
p.m. and ending when the related grievance matters are resolved or 2:00 p.m.
whichever is earlier. When an Employee attending the meeting is holding up
production by his/her absence from work, he/she may be called out of the meeting
by the Plant Manager. For the time lost in the above meetings the Company shall
compensate all Employees involved at their regular rate of pay.

                                       22



Section 5. Any member of the Union selected as an Officer or Delegate shall,
upon request, be granted a leave of absence without pay but without loss of
cumulative seniority while on Union business.

Section 6. Bulletin boards will be provided by the Company for use by the Union.
All notices to be posted thereon shall be limited to official Union business and
shall be cleared through the Business Manager and posted by him. This provision
in no way limits the Company from removing any notice it deems inappropriate
after notifying the Business Manager of its intent.

Section 7. It is further understood and agreed that Local Union 752 shall
designate the local representatives who is duly authorized and will be consulted
in all matters pertaining to the application of this Agreement. It being
specifically understood that the International Union will only be liable for the
acts of said agent when such acts have been approved in writing by the
International President's office.

Section 8. Under no circumstances shall the Shop Committee or any employee make
arrangements with Foremen or Management that will change or conflict in any way
with any Section or terms of this Agreement.

Section 9. Nothing contained herein shall be construed as limiting or abridging
the right of the International Union to assign an International Representative
to work with or assist any local Union Agent or Employee in the negotiation or
grievance procedure or application of terms and conditions of this Agreement.

Section 10. The International Officers and Business Representatives of the Union
represented shall have access to the Employees of the Shop by applying for
permission through the office, provided they do not interfere or cause workmen
to neglect their work.

                                  ARTICLE XXVI
                                 SUB-CONTRACTING

Section 1. The Company shall not sub-contract work out normally performed by the
bargaining unit when men and machines are available to do the work.

                                       23



                                  ARTICLE XXVII
                         MAINTENANCE OF WORK OPERATIONS

Section 1. During the life of this Agreement neither Local 752 nor the
International Union will authorize or ratify a strike, work slow-down, or work
stoppage except because of violation of this Agreement by the Employer, and then
only after strict compliance with Article XI of the Subordinate Lodge
Constitution.

Section 2. Any Employee entering into an unauthorized and unratified work
stoppage will be discharged and not subject to the Grievance Procedure provided
for herein.

Section 3. The Employer agrees that there will be no lockout for any cause
during the life of this Agreement except for violation of this Agreement by
Local 752 or the International Union. Discharge of any Employee for infraction
of Company rules shall not be considered as a lockout for such Employee.

Section 4. It is further agreed that the Employer will not claim damage against
Local Union 752 of the International Union because of any strike which was not
ratified in accordance with the provisions of Section 1 of this Article.

                                 ARTICLE XXVIII
                            INFORMATION TO THE UNION

Section 1. A card bearing the name, number, classification and rate of all new
Employees shall be given the Chief Steward within one (1) week of date of hire.

Section 2. Death notices received by the Company shall be forwarded immediately
to the Chief Steward or Business Manager. If the deceased is a member of the
Employee's immediate family, a Union Representative shall attend the funeral and
receive straight-time pay.

Section 3. During the term of this Agreement the Employer shall immediately
advise the Union of all changes of status of Employees in the bargaining unit
including, but not limited to, promotions, demotions, re-classifications,
transfer, leave of absence and retirement.

Section 4. On request of the Union, the Employer will, as soon as possible,
supply all data relating to wage rates, pension data and group insurance data
and other data essential to policing this Agreement once in each year of the
Contract.

Section 5. Three (3) months prior to the termination of the Agreement or the
reopening provision, the Employer will provide the Union with the following
data:

                                       24



1.   Name, individual wage rate, date of employment, seniority standing for each
     employee in the bargaining unit, including a seniority list for purposes of
     re-call of laid off employees.

2.   Job classification, including the number of Employees in each
     classification.

3.   The average straight-time hourly earnings of the bargaining unit for the
     preceding year, including shift premiums or other pay premiums except
     overtime premiums.

4.   The average hourly cost for each fringe benefit item and other
     Employer-paid benefits; i.e., unemployment compensation, etc.

                                  ARTICLE XXIX
                      401(k) SAVINGS AND INVESTMENT PROGRAM

A 401(k) Savings and Investment Program will be established effective January 1,
1994. A match to the 401(k) Savings and Investment Program will be made
effective September 1, 1994. The match will be made on a maximum of 6% of the
base wage saved in the 401(k) Plan during a given year. The match will be 25% of
the % of base payments made by hourly employees to the hourly 401(k) Plan. The
match will be in the form of Chart Industries stock.

The Company must have a minimum EBIT of $500,000 before the match will occur
(EBIT = Earnings Before Interest and Taxes).

                                   ARTICLE XXX
                                 PROFIT SHARING

Pursuant to Bargaining Amendment dated April 11, 2001, Profit Sharing will be
implemented for the hourly personnel on the following basis:

1.   Minimum Company EBIT - The activation level of Chart SSD profit sharing is
     a minimum EBIT of $500,000 for the full fiscal (calendar) year. Once
     minimum EBIT is achieved, profit sharing will be paid on profit dollars,
     including the first $500,000.

2.   Ebit Pool Multipliers - Once the EBIT profit level is achieved, the EBIT
     will be used as follows to develop the profit sharing pool:

                                       25



                                           % Profit
                             EBIT          Sharing
                             ----          -------
     After EBIT is met     0 - $2,500,000       4%
                            ** $2,500,000       5%


3.   Distribution of EBIT Hourly Profit Sharing Pool:

     a. The profit sharing will be made as a % of individual annual base wages
        except for exclusions (1) noted below.

        The base wage distribution % is determined as follows:

        Base Wage
          Profit Sharing % =        EBIT Pool $
                             ------------------
                           Total Chart SSD Annual
                           Base Wage Payroll /(1)/

     /(1)/ Excluded from base wage are overtime, service trip premium, sick pay.
           Also, officers salaries will not be included as those individuals
           will not share in this pool.

           EBIT pool shall include all Chart SSD employees except excluded
           above.

     b. Profit sharing will be distributed annually within 45 days of the end of
        the fiscal year.

           For example, 2002 profit sharing would be paid on or before February
           15, 2003.

        At management discretion, partial payment could be made earlier in the
        year.

4.   Eligibility for Profit Sharing

     Employees are eligible to receive profit sharing if:

     a) they are still employed on 12/31

                                       or

     b) they have retired from employment during the year.

** Denotes greater than

                                       26



                                  ARTICLE XXXI
                                  SEVERANCE PAY

Should the Company cease operations completely in Plaistow, New Hampshire, or
move operations to a location more than fifty (50) miles from the present
location, severance pay shall be paid at the following rate:

     1 week's wages for a full five (5) years' seniority

     2 week's wages for a full ten (10) years' seniority

     3 week's wages for a full fifteen (15) years seniority

     4 week's wages for a full twenty (20) years or more

to employees currently employed at the time such action is taken. In the case of
a move, this allowance shall apply only to those employees who find it
inconvenient to continue employment because of the move.

                                  ARTICLE XXXII
                              CONTRACT LIMITATIONS

Section 1. The Employer and Union expressly agree that no prior understandings
or agreements and no subsequent agreements or understanding shall modify the
provisions of this Agreement unless reduced in writing, signed by the parties
hereto, and made an express amendment to this Agreement.

Section 2. The officials executing this Agreement in behalf of the Union hereby
warrant and guarantee that they have the authority to act for, bind, and
collectively bargain in behalf of the organization which they represent, and
members of such organizations, upon approval of the International president.

Section 3. Should any part hereof or any provisions herein contained be rendered
or declared invalid by reason of:

1. Any existing or subsequently enacted legislation, or

2. Any decree of a court of competent jurisdiction, or

3. Any ruling of any governmental agency having jurisdiction.

                                       27



such invalidation of such part or portion of this Agreement shall not invalidate
the remaining portions hereof, and they shall remain in full force and effect.

Section 4. Contract proposals will be exchanged between the Company and the
Union at a meeting no later than thirty (30) days prior to the end of the
Contract.

The terms and provisions of this agreement shall be come effective as of the
30th day of August, 1999, and continue in effect through August 30, 2002, and
from year to year thereafter, unless sixty (60) days' written notice is given by
either party prior to the expiration of any such year that changes, amendments
or revisions are desired.

                                       28



NOTE: The expiration for this Agreement and future agreements is the last Friday
in August.

AGREED TO THIS 29th DAY OF August, 2002.


CHART STORAGE SYSTEMS DIVISION - PLAISTOW








BOILERMAKER'S INTERNATIONAL
LOCAL LODGE NO. 752

                                       29



                                   APPENDIX A
                                TRAINING PROGRAM

All new employees will be hired as general helpers, unless skill requirements
and actual qualifications dictate otherwise.

Within two (2) weeks after the probationary period, the foreman and employee
will discuss the employee's job classification preference. (Example: machinist,
welder, welder/fitter, radiographic technician, test technician, etc.) If a need
exists, the employee were to indicate a preference for welding, such employee
would be assigned as a general helper/welder with work assignments in this job
classification whenever possible.

All new employees in the apprentice training program will be reviewed every
three (3) months as to progress of their training. Progress will be evaluated on
the basis of specific job skills developed since the last review. The foreman
will conduct the review as to progress and deficiencies in development of job
skills using input from other trainers. Such employees will be paid increases
per review if progress is satisfactory.

An employee can advance in job classification skill level by on-the-job training
and job-related classroom instruction (example: blueprint reading, math, etc.)

There is no prescribed or minimum time for an employee to advance to a job
classification skill level. if the employee does not obtain the skills to
perform the job classification requirements within a two (2) year period after
probation, such employee will be re-classified as a general helper.

When an employee completes the training for a job classification, such employee
will be paid the rate for that classification provided a need exists for work in
that classification.

Specific criteria for evaluation of progress within a specific job
classification will be developed. Employees will be advised of the basis for
review and progression within a job classification at the start of the training
cycle.

The Company will lay off in accordance with the present agreement dated August
29, 2002, on the basis of job classification. It is the intent of the Company to
retain the most senior employee in the job classification in preference to
retaining a shorter service employee in the general helper classification.

Concerning those individuals who were part of the Bargaining unit on or before
the Contract amendment of April 11, 2001 and employed in "Semi-Skilled"
Manufacturing classifications as set forth in such amendment, the Company will
review each individuals ire to train and work in a "Skilled Manufacturing"
classification. If the individual shows interest in pursuing such training, the
Company will initiate the cross training providing there is a good probability
that these additional skills will be utilized in the foreseeable future.

                                       30



SCHEDULE "A"

                                     NOTES:

Combination Welder must weld three (3) or more metals by three (3) or more
processes.

Leadmen receive one dollar ($1.00) per hour above the highest Contract rate for
the classification.

Team Leader: Employees qualified in the craft of "Team" leadership may receive
up to Fifty cents ( $0.50) above their regular rate.

Group Leaders receive Thirty cents ($0.30) per hour above the highest rate for
the classification.

Carbon Arcing, when performed in a confined space, shall carry a Twenty-five
cents ($0.25) per hour premium while Employee is so engaged.

Confined space work where a permit is required shall carry a one dollar ($1.00)
per hour premium for the individual entering the manway, for hours worked
performing this operation.

Glass Bead Sandblasting shall carry a one dollar ($1.00) per hour premium while
the employee is so engaged.

Fifty cent ($.50) per hour premium will apply while "Weld Tech" duties are being
performed as set forth by the Weld Lab Engineer.

When a Pipefitter/Welder receives a welder certification stamp and has passed
the proper tests, he/she will receive the Welder/Fitter rate.

New Hampshire Radiation Safety Officer: Employees qualified and practicing the
craft of RSO will receive Fifty cents ($0.50) above their regular rate.

ASME Level III Radiographer: Employees qualified and practicing the craft of
Level III Radiography will be paid Fifty cents ($0.50) above their regular rate.


PREMIUM MACHINES:

Vertical Boring Mill - Twenty-Five Cents ($0.25) per hour.

These premiums are to be added after night differential or overtime has been
figured.

                                       31



            --------------------------------------------------------------------
                                         Schedule "B"
                                         Union Wages
            --------------------------------------------------------------------
                                                                9/1/2002
                                                           Min            Max
            --------------------------------------------------------------------
            All Around Fill-In Machinist                  $14.65         $19.24
            --------------------------------------------------------------------
            All Around Machinist                          $13.89         $18.63
            --------------------------------------------------------------------
            Chief Storekeeper                             $13.42         $17.22
            --------------------------------------------------------------------
            Combination Welder                            $13.89         $18.63
            --------------------------------------------------------------------
            Fitter Mechanic                               $13.89         $18.63
            --------------------------------------------------------------------
            General Helper                                $ 8.22         $15.75
            --------------------------------------------------------------------
            Inspector                                     $13.42         $18.63
            --------------------------------------------------------------------
            Machine Operator BR&S                         $13.49         $17.22
            --------------------------------------------------------------------
            Machine Operator MS                           $13.22         $16.41
            --------------------------------------------------------------------
            Machine Operator-Other                        $13.89         $17.58
            --------------------------------------------------------------------
            Maintenance Electrician                       $13.89         $18.63
            --------------------------------------------------------------------
            Maintenance Mechanic                          $13.89         $18.63
            --------------------------------------------------------------------
            Material Handler                              $13.22         $16.41
            --------------------------------------------------------------------
            Painter                                       $13.49         $17.22
            --------------------------------------------------------------------
            Perliter                                      $ 8.22         $15.75
            --------------------------------------------------------------------
            Pipefitter Welder                             $13.89         $18.63
            --------------------------------------------------------------------
            Radiographic Technician                       $13.42         $18.63
            --------------------------------------------------------------------
            SandBlaster                                   $13.49         $17.22
            --------------------------------------------------------------------
            Storekeeper                                   $13.22         $16.41
            --------------------------------------------------------------------
            Test Technician                               $13.42         $18.63
            --------------------------------------------------------------------
            Truck Driver                                  $13.42         $17.22
            --------------------------------------------------------------------
            Welder                                        $13.49         $18.28
            --------------------------------------------------------------------
            Welder Fitter                                 $14.17         $18.90
            --------------------------------------------------------------------

                                       32

EX-10.12

                                                                   EXHIBIT 10.12

                                    AGREEMENT

This agreement is made and entered into by and between Chart Industries, Inc.,
hereinafter referred to as the "Employer", and the United Steelworkers of
America, hereinafter referred to as the "Union".

This Agreement covers those employees of the Employer as defined in Article I -
RECOGNITION of the Agreement for the purpose of wages, benefits, hours of work
and conditions of employment.

                                    PREAMBLE

The purpose of this Agreement is to set forth certain standards governing
matters of wages, hours, terms and conditions of employment; and furthermore to
promote and ensure harmonious relations between the Union, the Employer and its
employees, to provide for the operation of the plant in a manner that will
foster to the fullest extent possible the safety, welfare and health of
employees, economy of operation, quality and quantity of output, cleanliness of
the plant, protection of the property and maintain and improve the competitive
position of the Employer. It is recognized by this Agreement to be the duty of
the Employer, Union and the employees to cooperate individually and collectively
for the advancement of these objectives.

The parties recognize the attainment of these objectives is furthered by the
introduction of new equipment and product designs, new organization and
production methods, the enforcement of discipline for just cause, safety and
health measures, and the diligent efforts of all employees. The parties
recognize and agree that nothing in this Agreement shall be construed to
interfere with or prevent the accomplishment of the principles set forth above.

                                    ARTICLE I
                         Responsibilities of the Parties

1.01 Each of the parties acknowledges the rights and responsibilities of the
other party and agrees to discharge its responsibilities under this Agreement.

1.02 The Employer, Union and its Local agree not to discriminate against any
employee or applicant because of race, creed, color, sex, age, national origin,
disability, Veterans' status, union membership or activity or any other
characteristic protected under any other federal, state or local statute,
administrative regulation or ordinance.

                                                                               1



It is the intent of the parties that any claim of discrimination under this
article will be processed through the Grievance/Arbitration provisions of this
Agreement before any charge is filed with any governmental agency.

1.03 All provisions of this Agreement shall apply alike to male and female
employees (masculine pronouns or references in the Agreement shall be deemed to
include feminine pronouns or references).

                                   ARTICLE II
                                   Recognition

2.01 The Employer agrees to recognize the Union as the sole and exclusive
collective bargaining agent for all full-time and regular part-time production
and maintenance employees of the Employer at its New Prague and Lonsdale,
Minnesota facilities except those classified as managers, supervisors, guards,
clerical and all other employees, as defined in the National Labor Relations
Act, as amended, as per certification by the National Labor Relations Board Case
No. 18-RC-16092.

2.02 The Employer shall not enter into any agreement with any employees covered
by this Agreement, individually or collectively, which in any way conflicts with
the terms and provisions of this Agreement.

                                   ARTICLE III
                         Retention of Management Rights

3.01 Except as expressly modified or restricted by a specific provision of the
Agreement, all statutory and inherent managerial rights prerogatives and
functions are retained and vested exclusively with the Employer, including, but
not limited to, the rights in accordance with the Employer's sole and exclusive
judgment and discretion:

     1.   to reprimand, suspend, discharge, or otherwise discipline employees
          for just cause;
     2.   to determine the number of employees to be employed and the location
          of jobs;
     3.   to hire employees, determine their qualifications and assign and
          direct their work
     4.   to promote, demote for just cause, lay off, transfer or recall to work
          employees;
     5.   to maintain the efficiency of operations;
     6.   to set the standards of productivity and/or services as to quality and
          quantity to be rendered;
     7.   to determine the personnel, methods, means and facilities by which
          operations are conducted;

                                                                               2



     8.   to set the starting and quitting time and number of hours and shifts
          to be worked in accordance with Article XI;
     9.   to expand, reduce, alter, transfer, assign jobs, departments or
          operations in compliance with this Agreement;
     10.  to close down or relocate the Employer's operations or any part
          thereof;
     11.  to control and regulate the use of machinery, facilities, equipment,
          supplies and other property of the Employer;
     12.  to introduce new equipment or improved methods, production,
          distribution, procedures, processes and maintenance methods,
          materials, machinery and equipment;
     13.  to determine the number, location and operation of departments,
          divisions and other units of the Employer;
     14.  to require the observance of safety rules, operating procedures and
          policy;
     15.  to determine the methods of compliance with various federal and state
          regulations; and to take whatever action is either necessary or
          advisable to determine, manage and fulfill the mission of the Employer
          and to direct the Employer's employees;
     16.  upon notification to the Union to issue, amend, revise, abolish and
          enforce reasonable policies, rules, regulations and practices for the
          operation of the plant and conduct of the employees. Any differences
          of opinion over the reasonableness of such policies, rules,
          regulations or practices shall be subject to the grievance procedure
          commencing at Step 4 within seven (7) days after the Employer's
          notification.

     In exercising these rights the Employer agrees to observe the other
     provisions of the Agreement.

3.02 The Employer's or the Union's failure to exercise any right, prerogative or
function hereby reserved to it or the Employer's or Union's exercise of any such
right, prerogative or function in a particular way, shall not be considered a
waiver of the Employer's or Union's right to exercise such right, prerogative or
function or preclude it from exercising the same in some other way not in
conflict with express provisions of this Agreement.

3.03 The Employer and the Union agree the Employer shall not contract out work
or services that would affect bargaining unit employees without first, notifying
the Union of such and second, meeting with representatives of the local Union
(upon their request within ten (10) workdays of said notification) to confer and
look at possible alternatives. The Employer agrees that it will give due
consideration to the Union's suggested alternatives.

3.04 If no prior notification is given to the Union, the senior most employee(s)
in the classification who could have performed the work shall be paid the
equivalent hours worked at the employee's straight time hourly rate. The number
of senior employees paid shall be determined by the number of contract people
used to perform the work. Additionally, if contracted out work is performed on
the weekend or holiday, appropriate premium shall be paid. This provision shall
not

                                                                               3



apply if bargaining unit employees decline to perform the said work and/or
refuse to work with the contractor's employees.

                                   ARTICLE IV
                                Union Membership

4.01 The Employer agrees that it will not interfere with the right of its
employees to become members of the Union and will not exercise discrimination,
interference, restraint or coercion against any employee because of membership
or non-membership in the Union.

4.02 The Employer agrees to allow two (2) union representatives, either from the
International Union or the Local Union, to meet quarterly on the Employer's
premises with bargaining unit employees during non-work time in a designated
non-work area to solicit membership in the Union. Attendance at such a meeting
shall be voluntary.

4.03 The Union, its officers, members, agents or representatives shall not
intimidate or coerce employees into membership in the Union, nor shall they
discriminate against any employee because of non-membership in the Union.

                                    ARTICLE V
                                 Dues Check Off

5.01 The Employer agrees to deduct union dues and initiation or service fees
(for employees electing not to become union members), each as designated by the
International Secretary-Treasurer, from wages of employees, who voluntarily
execute and provide the Employer with a written authorization to make such
deductions. The written authorization shall be irrevocable for a period of not
more than one (1) year, or beyond the termination date of this Agreement,
whichever occurs sooner. Deductions shall be made from the employee's wages the
first (1st) pay period of the month in which the payment is due. Withheld
amounts will be forwarded to the Union together with a record of the amount and
those for whom deductions have been made.

5.02 The Union shall indemnify and hold the Employer harmless against any and
all claims, demands, suits or other forms of liability that shall arise out of,
or by reason of action taken or not taken by the Employer for the purpose of
complying with any of the provisions of Article V., Dues Check Off, or in
reliance on any list, notice or assignment furnished under any such provisions.

5.03 Any refunds due an employee because of duplicate or incorrect payment to
the Union will be refunded to the employee by the Union.

                                                                               4



5.04 Where an employee has insufficient earnings for the complete deduction in
the pay period agreed upon, no deduction of any amount shall be made. In other
cases, where the Union informs the Employer in writing of the omission of a
properly authorized deduction, the deduction shall be made in the next month's
pay period.

5.05 The provisions of this Article shall be effective in accordance and
consistent with applicable provisions of federal and state law.

5.06 All the Employer's obligation under this Article of the Agreement to deduct
dues or fees and to forward dues/fees to the Union shall end upon the expiration
of this Agreement.

                                   ARTICLE VI
                             NO STRIKE - NO LOCKOUT

6.01 During the term of this Agreement, the Union, it's officers,
representatives, stewards, grievance persons, committee members and other
employees shall not, in any way, directly or indirectly, instigate, authorize,
cause, assist, encourage, condone, engage in or participate in any strike,
sympathy strike, slowdown, picketing or any interruption of work at any of the
Employer's operations for any reason whatsoever. The Employer agrees there shall
be no lockout of employees.

6.02 In the event of an unauthorized strike, sympathy strike, slowdown,
picketing or any interruption of work in any form by the employees, a
representative of the International and local Union shall immediately, upon
request of the Employer, by public notice disavow the unauthorized cessation of
work or disruptive activity and the Union shall take immediate action to induce
such employees to return to work and cease such activities.

6.03 The failure or refusal on the part of any employee to comply with section
6.01 of this Article shall result in immediate discipline up to and including
discharge and such discipline shall be subject to the grievance procedure in
Article XVII only as to the question of fact as to whether or not such
employee(s) did engage in such activities. The failure or refusal by a Union
officer, representative, steward, grievance person or committee person to comply
with the provisions of Section 6.01 of this Article constitutes leading or
instigating a violation of Section 6.01, it being specifically agreed that the
Union officers, agents, representatives, stewards, grievance persons or
committee persons, by accepting such positions have assumed responsibility of
affirmatively preventing violations of Section 6.01 of this Article by reporting
to work and performing work as scheduled and/or required by the Employer.

                                                                               5



                                   ARTICLE VII
                                  SUCCESSORSHIP

7.01 In the event of a transfer, sale, assignment or closure of the Employer's
New Prague and/or Lonsdale operations, the Union shall be notified as soon as
practical in advance of such action. Upon written request of the Union, the
Employer agrees to meet and confer about the effects of such transfer, sale,
assignment or closure upon the bargaining unit employees.

                                  ARTICLE VIII
                              Bargaining Unit Work

8.01 Persons whose regular jobs are not in the bargaining unit shall not perform
work so as to replace regular workers or operators on the job, except for the
purposes of instruction or management training, in which case such trainees
shall not displace or replace any employees in any classification.
Non-bargaining unit employees may perform experimental, development and research
work as deemed necessary by the Employer.

8.02 It is understood that up to twenty five (25) Coordinator positions and
future Coordinator positions may continue to perform bargaining unit work as
they previously performed prior to the existence of the collective bargaining
agreement. It is further understood that the parties agree that the Employer may
increase the number of Coordinators by one (1) for every twenty (20) newly
created bargaining unit positions.

8.03 It is further understood that non-bargaining unit employees may perform
bargaining unit work in response to emergency situations.

8.04 In consideration of the above, the Employer in case of reduction of the
work force, in accordance with Article XV - Seniority and Lay Off, shall reduce
the number of Coordinators by one (1) for every twenty (20) bargaining unit
employees layed off.

                                   ARTICLE IX
                                       Pay

9.01 The Employer agrees to pay all bargaining unit employees weekly. The
specific payday, check distribution and method shall be established by the
Employer.

9.02 Unless notified not to report at least two (2) hours prior to the start of
their shift, employees who are scheduled and report to work and are prevented
from working by conditions outside the control of the Employer to include but
not

                                                                               6



limited to acts of God or power outages shall be granted two (2) hours Report
Pay at the employee's regular straight time hourly rate. However, this shall not
apply to an employee(s) who are absent without approval on such previous
scheduled workday. Report Pay shall be considered as time worked for purposes of
overtime calculation.

9.03  At the Employer's discretion, an employee called back to work after
completion of his regularly scheduled shift, shall be granted two (2) hour
Recall Pay at the employee's regular straight time hourly rate or may be
assigned two (2) more hours work. Recall Pay shall be considered as time worked
for purposes of overtime.

9.04  Effective with the first pay period following ratification of this
agreement pay rates will be increased by forty-five (45) cents per hour.
Effective January 4, 2004 pay rates will be increased by forty-seven (47) cents
per hour. Effective January 2, 2005 pay rates will be increased fifty (50) cents
per hour.

                                    ARTICLE X
                               Job Classifications

10.01 Each employee covered by this Agreement shall be classified by the
Employer and receive the hourly rate in accordance with Appendix A of this
Agreement.

10.02 During the term of this Agreement, the Employer shall retain the sole
discretion to establish, modify and determine the job content of any new or
existing job/classification. In the event the Employer establishes a new job or
changes an existing job, the Employer will provide written notice to the Union
in advance of such Employer action.

10.03 Upon written request from the Union, the Employer shall meet and discuss
with the Union the wage rate (pay group) established for the new or changed job
classification and the rate (pay group) agreed upon shall become part of the
Agreement. Such meeting shall be on non-work time unless determined otherwise by
the Employer.

10.04 The Employer retains the right to assign employees to perform any work
within any pay group. If an employee is temporarily assigned to a lower pay
group, the employee shall retain their current rate of pay. If an employee is
temporarily assigned to a higher pay group, the employee shall receive the rate
of pay of that pay group effective with the start of the second (2/nd/) pay
period.

10.05 The Employer retains the discretion to hire anywhere within the pay group
range.

                                                                               7



10.06 There shall be automatic three (3) month incremental increases unless
Documented deficiencies in performance or skill issues exist which may call for
increase deferrals not to exceed thirty (30) days. Employer shall notify the
Union of any such deferrals.

                                   ARTICLE XI
                                  Hours of Work

11.01 The employee's current work day is the following:
      A.  The day shift commences at 5:45 a.m. and is concluded in eight (8)
          hours at 2:15 p.m., Monday through Friday.
      B.  The night shift commences at 2:45 p.m. and is concluded in ten (10)
          hours at 12:45 a.m., Monday through Thursday.

11.02 All day shift employees will receive a thirty (30) minute unpaid lunch
break. Employees leaving the premises for lunch must clock out and clock in upon
return. Employees are not permitted to work through their lunch period.

11.03 The Employer shall provide two (2) paid fifteen (15) minute day shift
breaks. Night shift employees shall receive three (3) fifteen (15) minute paid
breaks with no lunch period. Employees who leave the facility during their break
must clock out and in upon return. Employees scheduled to work overtime of two
(2) hours or more prior to the start of their regular scheduled shift, shall
receive an additional fifteen (15) minute break immediately preceding the start
of their regular shift. Employees scheduled to work overtime two (2) or more
hours after the completion of their regular shift, shall receive an additional
fifteen (15) minute break prior to the start of the overtime work.

11.04 The hours worked each day or per week will be established to meet work
requirements and will be at the sole discretion of the Employer and may be
changed from time to time with seven (7) calendar days advance notice when
reasonable and practical to provide such notice.

11.05 This Article shall not be construed to be a guarantee of hours of work per
day or per week.

11.06 The term full time employee shall be defined for purposes of this
Agreement as an employee who is in a schedule consisting of 40 hours per week.

11.07 Employees scheduled to work the second shift shall receive a fifty (50)
cent per hour shift premium added to their regular hourly base rate. Employees
scheduled to work the thirty-six (36) hour weekend shift shall receive an 11.1%
increase in hourly base rate as shift premium.

                                                                               8



                                   ARTICLE XII
                                     Holiday

12.01 The Employer shall provide the following paid holidays: New Year's Day,
Memorial Day, Good Friday, Fourth of July, Labor Day, Thanksgiving Day, Friday
after Thanksgiving, Christmas Eve Day, Christmas Day and Two (2) Floating
Holidays.

12.02 If the holidays fall on a Saturday or Sunday, the Employer will designate
either the preceding Friday or the following Monday as the day of observance.

12.03 A full-time employee, who is not on a leave of absence or lay off, shall
receive as holiday pay his regularly scheduled hours of work at his straight
time rate provided:

          A.   The employee is on the active payroll of the Employer and has
               worked 30 calendar days for the Employer.

          B.   The employee works the scheduled workday immediately preceding
               and immediately following the holiday unless the employee has an
               approved absence or approved time off. Requests for absence or
               time off must be made and approved no later than twenty-four (24)
               hours prior to the requested time off.

          C.   An employee returning to work after the holiday may upon occasion
               be late to start his/her work shift. Such "late start", not to
               exceed ten (10) minuets, may be judged as a day worked for
               purposes of satisfying the requirements of 12.03B. Additionally,
               during the term of this Agreement, due to extenuating
               circumstances, one absence or tardy, not to exceed four (4)
               hours, may be judged as a day worked under this section of
               Article XII. The absence/tardy shall, however, be counted as an
               unplanned absence. The provisions of this Section shall not be
               subject to the grievance and arbitration articles of this
               Agreement.

12.04 Should a holiday occur within an employee's vacation period, it shall not
be counted as part of such vacation. A day may be added to the vacation period,
at the discretion of the employee, provided the employee works his scheduled
shift prior to and after the vacation period.

12.05 Unless otherwise agreed upon, employees shall not receive holiday pay for
holidays which occur after the expiration of this Agreement and before the
execution of any succeeding Agreement.

                                                                               9



                                  ARTICLE XIII
                                Leave of Absence

13.01 Leaves of absence without pay may be granted at the sole discretion of the
Employer. When the leave is not approved the reason for denial shall be in
writing. The Union shall be provided a copy of the approved leave request. If
PTO is required to cover a leave of absence, in no case will the employee's last
twenty-four (24) hours of PTO be required to be used.

13.02 Any employee on leave of absence who shall take such leave for the purpose
of employment elsewhere shall be considered as having voluntarily quit.

13.03 A leave of absence will be granted to an employee to work with the
International Union for a period not to exceed two (2) years and may be renewed
for a period of time not to exceed one (1) year. Only one (1) employee may be on
International Union leave at one time. An employee on International Union leave
shall not earn or accrue seniority for the period of the leave. Upon termination
of the leave, the employee will be returned to a similar position and pay group
to the one they left.

13.04 The Employer and the Union agree to comply with the provisions of the
Americans with Disabilities Act, Family Medical Leave Act and Veterans
Reemployment Act.

13.05 An employee who has been elected or appointed by the Union to attend an
International, District or State Convention or Steelworker Educational
Program(s) will be granted by the Employer a leave of absence without pay for
this purpose. Not more that five (5) employees will be granted such leave three
(3) times a year and they must give the Employer a minimum of two (2) weeks
written notice. This notice must be confirmed by the local union. Each leave
will not exceed one (1) week duration.

13.06 A full time seniority employee requiring time off due to the death in the
immediate family (spouse, mother, father, child, brother, sister, stepmother,
stepfather, stepchild, and current mother-in-law, father-in-law, daughter-in-law
and son-in-law) may be granted a leave of absence with pay for the hours the
employee may have worked up to a maximum of three (3) consecutive working days.
A maximum of one (1) day leave of absence with pay may be granted in the event
of the death of the employee's grandmother, grandfather and current
grandmother-in-law, grandfather-in-law, brother-in-law, sister-in-law or
grandchild.

13.07 Such leave of absence shall be counted as time worked for purposes of
computing overtime pay.

13.08 Upon Employer request, the employee may be required to provide validation
of death in order to be paid for such time off.

                                                                              10



13.09 An employee who is required to report for jury duty on a day the employee
is scheduled to work shall be excused from work on that day. The employee must
notify his supervisor immediately upon receiving notice. The Employer shall pay
the difference between the employee's jury duty pay and the employee's regular
straight time pay. In order to receive such pay, the employees must submit to
the Human Resources Department valid written proof indicating the dates, time
served and the amount of compensation for such services.

This section will not apply where an employee voluntarily seeks such service.

13.10 An employee must report to work on all days scheduled when the jury is not
in session. Employees who serve less than four (4) hours of jury duty are
expected to work one-half (1/2) their shift. Those employees who serve four (4)
hours or more of jury duty will be paid for their full shift. Night shift
employees shall be excused early from their work shift when they are required to
report for jury duty the following day. Jury duty shall be counted as time
worked for purposes of overtime calculation.

13.11 Employees will be granted a military training leave of absence if they are
required to take time off for attendance at a summer training camp. Employees
are required to provide to the Employer a copy of any notification requiring
such time off immediately upon receipt by the employee. The Employer will not
pay wages for this time period but the employees may elect to use earned PTO.

                                   ARTICLE XIV
                                    Overtime

14.01 All hours worked in excess of forty (40) in a scheduled work week shall be
paid at one and one-half (1-1/2) times the employee's straight time rate of pay.
An unscheduled day will be paid at the straight time rate up to the forty (40)
hour requirement if not previously satisfied. Unless specified otherwise within
this Agreement, approved paid leaves of absence or paid personal time off shall
be considered as time worked for purposes of overtime calculations.

14.02 An employee assigned to the first shift shall be paid two (2) times his
regular straight time hourly rate for all hours worked on the seventh (7)
consecutive day provided he has worked the equivalent amount of hours on the
sixth (6) consecutive day. If the employee has not worked an equivalent amount
of hours on sixth (6) consecutive day, he will be paid one and one-half (1-1/2)
times his regular straight time hourly rate for all work performed on the
seventh (7) consecutive day.

14.03 An employee assigned to the second (2/nd/) shift shall be paid two (2)
times his regular straight time hourly rate for all hours worked on the seventh
(7/th/) day provided he has worked an equivalent amount of hours on either the
fifth (5/th/) or sixth (6/th/) day. If the employee has not worked an equivalent
amount of hours on

                                                                              11



the fifth (5/th/) or sixth (6/th/) day, he shall be paid one and one-half
(1-1/2) times his regular straight time hourly rate for all work performed on
the seventh (7/th/) day.

14.04 Employees are expected, as a condition of employment, to work overtime.

14.05 When overtime is required, the Employer will make every effort to notify
employees at least two (2) hours prior to the end of the shift or the day before
the employees scheduled day off.

14.06 The Employer will attempt to distribute overtime hours evenly among
qualified employees with preference given to seniority rotation within specific
departments, regardless of shift, when overtime is required. If overtime is
denied, it shall be counted as worked for purposes of evenly distributing
available overtime.

                                   ARTICLE XV
                              Seniority and Lay Off

15.01 All new employees or an employee rehired after loss of seniority shall be
considered to be on probation for the first ninety (90) calendar days of
continued employment with the Employer, measured from the most recent date of
hire. The Employer, upon written notification to the Union, may extend the
probationary period for an additional thirty (30) calendar days. During the
probationary period, such employee(s) may be discharged for any cause at the
discretion of the Employer without recourse to the grievance and arbitration
procedure of the Agreement and without notification to the Union. After an
employee completes his probationary period, the employee shall have seniority
determined in accordance with Section 15.02 of this Article.

15.02 Following completion of the probationary period, an employee shall be
credited with seniority within the plant measured by length of continuous
employment with the Employer at the plant measured from the employee's most
recent date of hire. If two or more employees have the same seniority, the
employee whose name appears earlier on the alphabetical listing of employees
shall be deemed as having more seniority. Seniority shall be applicable only as
expressly provided in this Agreement.

15.03 Seniority and status as an employee shall terminate for any of the
following reasons:

           A. Voluntary quit.
           B. Discharge for just cause.

                                                                              12



          C.   Working for another employer during a leave of absence, in which
               case the employee shall be considered to have voluntarily quit.

          D.   Is absent for three (3) consecutive work days without notifying
               the Employer.

          E.   Exceeds a leave of absence without written approval of the
               Employer.

          F.   Is layed off in excess of twelve (12) months.

          G.   Fails to respond to the Employers notice of recall within two (2)
               days after certified mail of notice to the last address of the
               employee as it appears on the records of the Employer, in which
               case the employee shall be considered to have voluntarily quit.

          H.   Fails to report on the agreed upon scheduled date of return to
               work, in which case the employee shall be considered to have
               voluntarily quit.

          I.   Retired.

15.04 When in the sole judgment of the Employer, it becomes necessary to effect
a reduction in the work force at a plant, the Employer will attempt to make such
reductions at the plant in inverse order of seniority, provided the employees
remaining have the skill, experience, qualifications and abilities to perform
the work available. Recalls from lay off shall be in order of seniority,
provided the employees returning have the skill and abilities to perform the
work available.

15.05 If an employee is transferred to a classification (including a
supervisor/coordinator position) outside the bargaining unit, such employee
shall be excluded from the coverage of this Agreement during the period the
employee is in said classification.

If within twelve (12) months such employee is re-transferred without
interruption in employment with the Employer to a classification within the
bargaining unit, the employee will as of the date of re-transfer be credited
with the seniority which he had at the time of their transfer in addition to all
seniority accumulated during the time the employee worked outside the bargaining
unit.

If following twelve (12) months of such transfer the employee is re-transferred
without interruption in employment with the Employer to a classification within
the bargaining unit, the employee will as of the date of re-transfer, be
considered a new employee for all purposes of this Agreement.

It is understood the Employer may make temporary assignments to other
classifications without regard to seniority.

15.06 On or before January 15/th/ of each calendar year the Employer shall
furnish the Union and post a seniority list. Any employee who disputes the
accuracy of such seniority list shall discuss his concern with the Human
Resource representative within seven (7) calendar days of the posting before
proceeding through Article XVII, Grievance and Arbitration of the labor
Agreement.

                                                                              13



                                   ARTICLE XVI
                                   Job Posting

16.01 Bargaining unit employees will be provided with opportunities for shift
transfer or promotion to classifications covered by this Agreement on the basis
of seniority, providing the employee has the skill, qualifications and ability
to perform the job. An employee signing a posting for a shift transfer within
the classification posted shall be granted the position prior to an employee
signing for promotion. Employees with seniority may bid down to obtain a
different classification or shift.

16.02 Employees shall be made aware of promotional or shift transfer
opportunities through written job notices posted on Employer designated bulletin
boards for seven (7) calendar days. Any employee with six (6) months or more
service in their current job classification or one (1) year or more service on
their current shift wishing to be considered for such vacancies shall indicate
their interest in writing within the posting period. If the Employer
simultaneously posts multiple job notices, the employee may indicate multiple
interests and if selected for more than one position may determine which job he
wishes to accept. Employees not selected for the posted job(s), will be advised
as to the reason the employee was not selected.

16.03 Employees taking a scheduled paid or unpaid leave of absence of three (3)
weeks or more may submit in writing to their supervisor an indication of job
interests they wish to bid on during said leave of absence. Their supervisor
shall enter the employee's name on each such job notice that is posted during
the period of absence. Employees who are absent due to illness or injury may
notify their supervisor in writing of any possible job posting for which they
wish to bid.

16.04 The employee selected to fill the posted job must satisfactorily complete
a thirty (30) work day training period. If during this training period the
Employer determines the employee cannot satisfactory perform the duties of the
job, the employee will be returned to his former position if available or may be
reassigned without loss of seniority.

                                  ARTICLE XVII
                            Grievance and Arbitration

17.01 A grievance is defined as a dispute or disagreement as to the
interpretation or application of the specific terms and conditions of this
Agreement. In the event of a grievance, there shall be no work stoppage or slow
down, and the matter will be settled in accordance with the procedure set forth.

                                                                              14



17.02 Such disputes over the interpretation or application of any terms of this
Agreement shall be a "grievance" and will be processed in the following manner:

       Step 1: The aggrieved employee, with or without his grievance person,
       within three (3) working days after the event giving rise to the
       grievance or after the employee knows or reasonably should know of the
       occurrence to be grieved, will discuss and attempt to settle it with the
       employee's immediate Coordinator and or Area Manager The employee's
       immediate Coordinator and or Area Manager shall have a period of three
       (3) working day within which to respond.

       Any individual employee or group of employees who elect to present their
       grievance(s) to the Employer without the intervention of a bargaining
       representative may do so as long as adjustment is not inconsistent with
       the terms of the Collective Bargaining Agreement and provided further
       that the bargaining representative has been given the opportunity to be
       present at such adjustment.

       Step 2: If the Coordinator's answer is not satisfactory, the Union, no
       later than five (5) working days after the decision of the Coordinator
       may reduce the grievance to writing. Any written grievance must be signed
       and dated by the aggrieved employee and Union representative and set
       forth the facts giving rise to the grievance; a specified reference to
       the provisions of the Agreement alleged to have been violated; the
       names(s) of the aggrieved employee(s); reasons why the verbal answer in
       Step 1 was not satisfactory; and the remedy sought. The grievance shall
       be presented at a meeting with the Coordinator, Area Manager and/or
       Manufacturing Manager or his designee the grievant and two (2) Union
       representatives within five (5) working days after receipt of the
       employee's written grievance. The Employer shall give a written answer to
       the grievant and the Union signed and dated within eight (8) working days
       of the Step 2 meeting.

       Step 3: If the grievance has not been satisfactorily settled in Step 2,
       the grievance may be appealed to the Human Resource Manager, or her
       designee, within three (3) working days after receipt of the Employer's
       written answer in Step 2. The Human Resource Manager or her designee, and
       not more than two (2) management representatives, will meet with the
       grievant and the grievance committee (consisting of not more than two (2)
       persons) of the Union within eight (8) working days after receipt of the
       grievance in an attempt to reach a satisfactory settlement or adjustment
       of the grievance. Within five (5) working days after this meeting, the
       Employer will give its written answer to the staff representative and the
       President of the Local Union. Any of the elected Union representatives
       may be substituted, at the discretion of the Union, in any second or
       third step grievance meeting. It is understood that

                                                                              15



       suspension and discharges shall be filed directly into the third step of
       the grievance procedure.

       Step 4: If any Employer's written answer to Step 3 is not satisfactory to
       the Union, the grievance may be appealed to the Vice President/General
       Manager or his designee within five (5) working days of the receipt of
       the Employer's written answer to Step 3. The Vice President/General
       Manager and not more than three (3) other management representatives will
       meet with the grievant, two (2) Union representatives and the staff
       representative of the Union within ten (10) work days after notification
       in an attempt to resolve the grievance. Within five (5) work days after
       this meeting, the Employer will give a written answer to the Union, which
       answer shall be final on the employee, the Union and the Employer, unless
       it is appealed to arbitration by the Union in accordance with the
       procedures set forth in the Agreement.

17.03 No grievance shall be accepted by the Employer unless it is submitted or
appealed within the time limits set forth in Step 1 of Section 17.02 of this
Agreement. If a grievance is not referred or appealed to the next step within
the specified time limits, it shall be considered settled on the basis of the
Employer's last answer. If the Employer does not provide a written reply to the
Union within the specified time limits outlined in step 2 through step 4 of the
grievance procedure, the grievance shall result in the grievance being settled
in accordance with the request in the grievance. The Union and the Employer
shall observe the specified time limits in answering or appealing a grievance.
Time limits in each step may be extended by mutual agreement in writing.

                                   Arbitration

17.04 If the Union wishes to carry the grievance beyond the fourth step, the
following procedure shall apply:

      A.  The Union, through its staff representative, may appeal the grievance
          to arbitration by giving a written notice to the Human Resource
          Director or his designee within twenty-one (21) calendar days after
          the receipt of the Employers answer to Step 4. The failure to appeal a
          grievance to arbitration within the twenty-one (21) calendar day
          period shall constitute a waiver of the Union's right to appeal to
          arbitration.

      B.  Within ten (10) work days after the notification to take the matter to
          arbitration, the parties shall request the Federal Mediation and
          Conciliation Service (FMCS) to submit a panel of seven (7) qualified
          arbitrators. Upon receipt of the FMCS panel of arbitrators the parties
          shall have ten (10) work days to arrange to select the arbitrator.
          Each party to the dispute shall be entitled to alternately strike a
          name from the list until only one name remains and this panel member
          shall be the neutral arbitrator. The order of striking shall be
          determined by the

                                                                              16



          flip of a coin. The arbitrator shall only have jurisdiction and
          authority to interpret, apply or determine compliance and/or
          application of the express provisions of this Agreement at issue
          between the Union and the Employer. It is understood that the
          arbitrator shall not have jurisdiction or authority to add to, detract
          from or alter in any way the terms of this Agreement. The decision of
          the arbitrator on the merits of any grievance adjudicated within his
          jurisdiction and authority shall be in writing and shall be final and
          binding on the Employer, the Union and the employee(s).

      C.  The Employer and the Union shall bear their own costs of the
          arbitration and shall equally share all expenses and fees of the
          neutral arbitrator. The grievance procedure may be utilized by the
          Union in processing grievances on behalf of the employees, either
          individually or collectively. In processing grievances, the Union
          shall observe the specified time limits in filing and appealing and
          the Employer shall observe the specified time limits in answering.

                                  ARTICLE XVIII
                              Union Representation

18.01 The Employer recognizes the right of the Union to designate not more than
twenty-one (21) Union representatives from the Employer's seniority list.

18.02 A Union representative, when requested by the grievant, shall be
compensated and allowed limited time off for investigating grievances and
participating in Step 1 discussions during working hours at their regular hourly
rate of pay. In such cases, the Union representative shall seek permission from
their immediate Coordinator to leave their assigned duties. The grievant is
encouraged to use his work area Union representative when requesting
representation.

Permission shall not be unreasonably withheld unless the Coordinator believes
there would be a disruption in production or an effect on efficiency of
operations. It is understood that each grievance investigation shall be
conducted by one Union representative.

Upon receiving permission from the Coordinator, Union representative shall clock
out of their job and into the designated indirect account. If the grievance
investigation or Step 1 discussion requires the Union representative to leave
his assigned area, he shall notify the Coordinator of that area prior to
beginning any investigation or discussion. When Union representative leaves the
area, he must notify the Coordinator of that area that he is leaving and
immediately return to his own work area. When entering his own work area, he
shall report immediately to his Coordinator and clock out of the designated
indirect account and clock back

                                                                              17



into his job. Paid time and work time off for such investigation and Step 1
discussion shall not exceed thirty (30) minutes per grievance.

18.03 The Union representative(s) and aggrieved employee(s) participating in
Step 2 grievance meetings shall be paid in accordance with the following: Before
meeting with the Employer, the employees involved shall clock out of their job
and clock into the designated indirect account; at the conclusion of the
meeting, they shall clock back into their job and clock out of the indirect
account. The time consumed by the meetings, not to exceed two (2) hours each
week per Area Manager, shall be paid for by the Employer. Any additional time
spent in such grievance meeting shall be unpaid.

18.04 The Union representative(s) and aggrieved employee(s) participating in
Step 3 or Step 4 grievance meetings shall be paid in accordance with the
following: Before meeting with the Employer, the employees involved shall clock
out of their job and clock into the designated indirect account; at the
conclusion of the meeting, they shall clock back into their job and clock out of
the indirect account. The time consumed by the meeting shall be paid by the
Employer. It is agreed by the parties that the meetings held at these steps
shall be limited to discussion of the facts pertaining to the resolution of the
grievance(s) involved.

18.05 Union representatives or aggrieved employees shall not be paid for any
time spent after Step 4 or at any arbitration proceedings.

18.06 A representative of the International Union, upon request to the Human
Resource Director, shall be granted permission to visit the plant at a mutually
satisfactory time for the purpose of investigating any grievance arising out of
this Agreement. During such visit, the Union representative shall be accompanied
to a designated non-work meeting area, shall comply with all applicable rules of
the Employer and shall not interfere with the operations of the plant nor with
the duties of employees. A Union representative or local union officer who
wishes to meet with the Union representative in the Employer designated area may
so do upon receiving permission from his immediate Coordinator. The paid time
and work time off shall not exceed thirty (30) minutes. Upon receiving
permission, Union representative or local union office shall clock out of his
job and clock into the designated indirect account and upon return to his area
clock into his job and out of the indirect account.

18.07 The Employer acknowledges the right of the Union to appoint or otherwise
select a Negotiation Committee composed of not more than five (5) members who
are regular employees of the Employer. The Union agrees to notify the Employer
in writing as to the members of the negotiating committee. All employee time
participating in negotiations shall be unpaid. The Employer will credit the
Union negotiating committee with pension credit for time spent in negotiation
sessions only.

                                                                              18



                                   ARTICLE XIX
                                 Bulletin Boards

19.01 The Employer shall provide eight (8) bulletin boards situated at agreed
upon locations to be used for the posting of Union notices. The President of the
Local Union or his designated representative shall be the Union officials to
sign and post Union notices. Only the posting of meeting notices, elections,
names of representatives and officers of the Union, and general noncontroversial
matters concerning the business of the Union may be posted. All matters to be
posted shall be presented by the Union representative to the Human Resources
Manager or her designee for review and approval.

                                   ARTICLE XX
                         Personal Time Off and Vacation

20.01 Full-time employees, after satisfactory completing their probationary
period, shall accrue Personal Time Off (PTO) from the first day of the month
following their date of employment. An employee absent from work or layed off in
excess of four (4) weeks will not accrue PTO until the first of the month
following the employee's return to work.

20.02 Eligible employees shall accrue PTO hours as follows:
                Less than one (1) year                5.4 hrs./month
                One (1) through four (4) years        8.7 hrs./month
                Five (5) through seven (7) years      10.1 hrs./month
                Eight (8) through fourteen (14) years 13.4 hrs./month
                Fifteen (15) or more years            16.8 hrs./month

      Employees may accrue a maximum of 240 PTO hours. Employees with balances
      exceeding 240 hours at the beginning of the month shall have until the end
      of that month to bring their balance including the current month accrual
      below the 240 maximum or such hours shall be lost.

20.03 A minimum of two (2) or more consecutive hours of PTO may be requested.
Requests exceeding two (2) hours must be made in whole hour increments. The
Employer will not grant PTO requests that result in a deficit balance. Likewise,
employees having a PTO balance who request time off without pay shall be
required to utilize such PTO first before consideration will be given for time
off without pay.

20.04 Personal Time Off plus time worked cannot total more than the employee's
scheduled hours in a regular straight time work shift.

20.05 Employees requesting PTO of one (1) week or more shall make such request
at least two (2) weeks in advance. For requests of less than one (1)

                                                                              19



week, such request shall be at least equal in advance notice to the amount of
PTO requested.

20.06 Employees, at their discretion, may use all accrued and unused PTO during
any plant shut down or lay off periods. If such periods exceed four (4) weeks,
employees shall have the balance of their accrued and unused PTO paid out.

20.07 Employees who voluntarily terminate or retire shall be paid for all unused
accrued PTO hours through the month preceding their last day worked to a maximum
of 240 hours.

                                   ARTICLE XXI
                                Safety and Health

21.01 The Employer, Union and employees agree to cooperate and to work toward
the continuing objective of reducing accidents and employee health hazards. To
this end, the Employer shall continue its efforts to make provisions and
policies for the safety and health of the employees. The parties recognize their
obligations and/or rights under existing Federal and state laws with respect to
safety and health matters. In this regard, it is the intent of the parties that
any concern of safety or health be processed through the provisions of this
Agreement before any charge be filed with any governmental agency.

21.02 In an effort to provide a safe work environment for all employees, the
Employer shall form a Safety committee. The committee shall be chaired by the
Safety Manager and be comprised of elected bargaining unit employees
representing designated work areas, two bargaining unit employees at large
appointed by the local Union and Employer representatives. The number of
Employer representatives shall not exceed the number of bargaining unit members.
Bargaining unit members shall serve two (2) year terms. Bargaining unit members
on the committee should be elected through nomination and election by bargaining
unit employees in the designated work area. Fifty (50) percent of the committee
shall be selected new each year. The committee shall meet monthly and strive for
pro-active/preventive rather than reactive approaches to safety and health
concerns.

21.03 Standard industrial safety glasses shall be worn in production areas by
all employees and shall be provided by the Employer. The Employer shall provide
lenses and frames for employees who have accrued seniority and require
prescription glasses. Prescription glasses will be replaced if broken in the
course of work activities or every two (2) years provided there is a dramatic
change in the prescription. Employees may be required to verify damage or
prescription change before replacement is provided.

21.04 All employees shall wear hard hats and hearing protection as directed by
the Employer and refrain from wearing rings, loose fitting jewelry, necklaces
and dangling earrings during working time.

                                                                              20



21.05 The Employer at its sole discretion may establish or modify safety
recognition programs. Any changes will be discussed with the Safety Committee
before making a final decision.

21.06 Upon successful completion of the ninety (90) probationary period, all
full-time employees shall be eligible to received annually a total of four (4)
uniform items or in lieu of two (2) uniform items a one hundred (100) dollar
safety shoe allowance may be chosen. All employees are strongly encouraged to
wear the Employer provided uniform.

                                  ARTICLE XXII
                               Tool Accountability

22.01 The Employer shall issue tools and equipment to employees. Employer issued
tools and equipment are the responsibility or the employee and shall be properly
used, maintained and returned to the Employer upon termination, voluntary
separation or lay off. Any employee who fails to return Employer issued tools or
equipment shall have the cost of those tools/equipment withheld from their final
pay check. Any remaining balance due shall be billed directly to the employee.
Tools and equipment supplied by the Employer shall never be removed from the
Employer's premises and shall not be used for personal reasons or projects,
unless specifically authorized in advance by the employee's supervisor. Employer
issued tools/equipment shall be replaced by the Employer upon return of the
originally assigned broken or damaged tool/equipment. Failure to return the
broken or damaged tool/equipment shall result in the employee replacing the tool
or equipment at the employee's cost.

22.02 The Employer shall provide a locked area or locker for employees to secure
Employer issued tools and equipment. Employees shall provide their own locks.

                                  ARTICLE XXIII
                                   Activities

23.01 The Employer shall provide time off with pay for employees who participate
in New Prague volunteer activities as firemen, military honor guards, medical
technicians or ambulance attendants.

23.02 Employees who participate in similar volunteer activities outside of New
Prague may receive time off without pay.

23.03 Employees must request approval for such time off from their supervisors
as far in advance as possible and must return to their scheduled work shift
after the activity if there are two or more remaining hours in their scheduled
work shift. The Employer may request validation of participation in such
activity.

23.04 It is agreed between the parties that the Employer shall retain the sole
discretion to unilaterally modify, revise or eliminate any provisions or
practices

                                                                              21



under this Article. Additionally, the Employer shall retain the sole discretion
to unilaterally modify, revise or eliminate practices and policies that pertain
to the current Employee Recreation Club, Service awards and Improvement
Programs.

23.05 The Employer's only obligation under the provisions of this Article is to
provide the Union ninety (90) days written notification before modifying,
revising or eliminating any practices, policies or provisions under the sections
of this Article.

                                  ARTICLE XXIV
                                  Field Service

24.01 The Employer retains the unilateral right to select and designate certain
qualified employees to be available and willing to perform off-site field
service and repair work. Employees selected shall receive an additional two
dollar and fifty cents ($2.50) per hour Field Service Premium over the hourly
rate of their current classification for all hours worked (off-site) at the
customer location while holding such designation.

24.02 When assigned to work off-site, the employee(s) shall receive their
regular rate of pay on the day of departure for all reasonable time incurred
from the point of departure to the employee's final destination of the day. When
at the customer location, the employee shall earn the Field Service Premium in
addition to their regular rate of pay. On the day of return, the employee(s)
shall receive their regular rate of pay for all reasonable time incurred from
the point of departure and end upon the employee's final point of destination of
the day.

24.03 Employees performing off-site field service and repair work will be
reimbursed a maximum of thirty (30) dollars per day for receipted meals. Lodging
will be reimbursed at the rate equivalent to a moderate priced (Holiday Inn)
motel. Required air transportation and/or automobile rental must be arranged
through the Employer designated travel operator. Employees shall receive the
mileage reimbursement rate corresponding to the published IRS rate when the
employee uses their personal automobile for Employer related business.

24.04 Overtime computation will include all hours worked as defined above. The
Field Service Premium will not roll into the overtime calculation.

                                   ARTICLE XXV
                             Drug and Alcohol Policy

25.01 By reference the parties have negotiated a Drug and Alcohol Policy.

                                                                              22



                                  ARTICLE XXVI
                                 Savings Clause

26.01 Should any provision of this Agreement be declared illegal by any court of
competent jurisdiction, such provision shall immediately become null and void,
leaving the remainder of the Agreement in full force and effect, and the parties
shall thereupon meet and confer in good faith regarding a substitute provision
which is in conformity with the applicable law.

                                                                              23



                                  ARTICLE XXVII
                              Duration of Agreement

27.01 The Agreement shall become effective on November 17, 2002 and shall remain
in effect through January 15, 2006.

Either party desiring to change, modify or terminate the Agreement must notify
the other in writing at least sixty (60) days prior to January 15, 2002, the
expiration date of this Agreement. If such notice is given and the parties fail
to reach agreement by the expiration date of this Agreement, then this Agreement
shall in all respects be deemed void and terminated.

Date __________________ , 2003

UNITED STEELWORKERS OF AMERICA                 CHART INDUSTRIES, INC.

_______________________________________    ______________________________
Leo W. Gerard , President                  Eric Rottier

_______________________________________    ______________________________
James D. English, Secretary-Treasurer      Rick Strand

_______________________________________    ______________________________
Richard H. Davis, Vice Pres. of Admin.     Cheryl Bartusek

_______________________________________    ______________________________
Leon Lynch, Vice Pres. of Human Affairs    Fred Simon

_______________________________________
David A. Foster, District 11 Director

_______________________________________
Tara Widner, Staff Representative

_______________________________________
Rick Kadrlik, Negotiating Committee

_______________________________________
Greg VonBank, Negotiating Committee

_______________________________________
Janet Weiers, Negotiating Committee

_______________________________________
Bruce Efta, Negotiating Committee

_______________________________________
Emil Pexa, Negotiating Committee

                                                                              24



                                   APPENDIX A
                          Classifications and Pay Rates



- -----------------------------------------------------------------------------------------------
                          GROUP 4
- -----------------------------------------------------------------------------------------------
                                                                   
             AI Boxer                  Liquid Penetrant Tester
             AI Light Assembler        Machine Operator
             Parts Washer              Material Handler
             Maintenance Helper        Wrapper
             Welder Helper             Buffer
- -----------------------------------------------------------------------------------------------
             Pay Rate
             11/17/02                1/4/04         1/2/05
Start        9.46                     9.93           10.43
3 months     10.17                    10.64          11.14
6 months     10.88                    11.35          11.85
9 months     11.59                    12.06          12.59
12 months    12.30                    12.77          13.27
15 months    13.01                    13.48          13.98
18 months    13.72                    14.19          14.69
21 months    14.43                    14.90          15.40
Full Rate    15.19                    15.66          16.16
- -----------------------------------------------------------------------------------------------
                               GROUP 5                                     GROUP 6
- -----------------------------------------------------------------------------------------------
             Overhead Crane Operator                          LPV/JPV Roller Operator
             Electro Polisher                                 Maintenance Tech 6
             Inventory Accuracy Coordinator                   Mass Spec/Welding
             Machinist                                        Q.C. Inspector 6
             Maintenance Tech 5                               Specialty Machinist
             Mass Spec/Pumping                                Welder 6
             Painter                                          Straddle Crane Operator
             Pipe Bender                                      Programmable Plasma Cutter
             Plasma Cutter
             Purchase Rec./Inspect Tech
             Q.C. Inspector 5                                 *Rates Paid Above Group 6
             Shear Operator                                   NDE                   $1.00
             Shipping/Receiving Coordinator                   Master Welder         $1.00
             Truck Driver                                     Jig and Fixtures      $1.00
             Welder 5                                         Electrician           $3.00
             AI Liquid Test/Mass Spec Operator                Electronic Tech       $8.78

- -----------------------------------------------------------------------------------------------
             Pay Rate                                         Pay Rate
             11/17/02        1/4/04        1/2/05             11/17/02     1/4/04      1/2/05
Start        10.24            10.71         11.21             10.93         11.40       11.90
3 months     11.02            11.49         11.99             11.77         12.24       12.74
6 months     11.80            12.27         12.77             12.61         13.08       13.58
9 months     12.58            13.05         13.55             13.45         13.92       14.42
12 months    13.36            13.83         14.33             14.29         14.76       15.26
15 months    14.14            14.61         15.11             15.13         15.60       16.10
18 months    14.92            15.39         15.89             15.97         16.44       16.94
21 months    15.70            16.17         16.67             16.81         17.28       17.78
Full Rate    16.48            16.95         17.45             17.65         18.12       18.62
- -----------------------------------------------------------------------------------------------


                                                                              25



                                   APPENDIX B
                                  Lead Persons

     Employees working as Lead Persons shall receive a twenty-five (25) cents
     per hour premium over the top of their rate or the rate of the
     classification they lead, whichever is greater. Effective with the first
     pay period after ratification of this agreement Lead Persons will receive
     an additional twenty-five (25) cents per hour and twenty-five cents per
     hour effective January 4, 2004. Lead Persons shall be selected solely by
     the Employer.

                                   APPENDIX C
                              Tuition Reimbursement

     Full-time employees who have accrued seniority of at least one (1) year
     shall be eligible for tuition and book reimbursement not to exceed $1,500
     per calendar year for work related courses taken at accredited educational
     institutions. Reimbursement shall be made upon verification of
     satisfactorily completing the course along with properly receipted
     expenditures.

                                   APPENDIX D
                                  Pension Plan

     The Employer shall offer a Pension Plan to all bargaining unit employees
     who have satisfactorily completed their probationary period. The benefit
     level for all active eligible employees shall be twenty-five dollars
     ($25.00) for all benefit service earned as defined by the Plan. All aspects
     and operations of this Plan shall be governed by the Plan documents and
     shall not be subject to the grievance and arbitration provisions of this
     Agreement. If any conflict arises between the Plan documents and this
     section of the Agreement, the terms of the Plan's documents shall control.
     Except as to benefit level, the Employer shall retain sole right to modify
     or amend the Plan without notice or bargaining to the extent permitted by
     ERISA, the IRC or other related regulations.

                                   APPENDIX E
                              Life & AD&D Insurance

     The Employer shall provide employees with life insurance equal to one (1)
     times the employee's annual basic earnings as defined by the Plan not to
     exceed fifty (50) thousand dollars. All aspects of this Plan shall be
     governed by the Plan's document and shall not be subject to grievance or
     arbitration. If any conflict arises between the Plan and this section, the
     terms of the Plan's documents shall control.

                                                                              26



     The Employer shall provide employees with Accidental Death and
     Dismemberment Insurance equal to one (1) times the employees annual basic
     earnings as defined by the Plan not to exceed fifty (50) thousand dollars.
     All aspects of this Plan shall be governed by the Plan's document and shall
     not be subject to grievance or arbitration. If any conflict arises between
     the Plan and this section, the terms of the Plan's documents shall control.

                                   APPENDIX F
                                Health Insurance

     All full-time employees, after a prescribed waiting period, shall be
     eligible to participate in the Employers health insurance plan(s) as
     described by the Employee's Group Benefit Plan booklet. Upon thirty (30)
     days written notice and subsequently informing the Union of specific
     changes to the plan(s), the Employer may modify, amend or change carriers,
     benefit levels or terms of coverage without negotiation or approval by the
     Union, provided the employee/Employer cost sharing is the same for all
     employees (union and non-union) regularly assigned and working at the New
     Prague and Lonsdale facilities.

     The Employer's liability in any claim for benefits under these group
     insurance plans is governed by the plan documents and is limited to the
     benefits provided by the specific plan. A copy of these plans shall be
     given to each employee.

                                   APPENDIX G
                                Dental Insurance

     All full-time employees, after a prescribed waiting period, shall be
     eligible to participate in the Employer existing Dental Insurance plan as
     described by the Employee's Group Benefit Plan booklet. Upon thirty (30)
     days written notice and subsequently informing the Union of the specific
     changes to the plan, the Employer may modify, amend or change insurance
     carriers, benefit levels or terms of coverage without negotiation or
     approval by the Union, provided the employee/Employer cost sharing is the
     same for all employees (union or non-union) regularly assigned and working
     at the New Prague or Lonsdale facilities.

     The Employer's liability in any claim for benefits under this group
     insurance program is governed by the plan documents and is limited to the
     benefits provided by the specific plan. A copy of the plan shall be given
     to each employee.

                                                                              27



                                   APPENDIX H
                                    401K Plan

     The Employer shall offer eligible employees a savings plan qualified under
     the Internal Revenue Code ("IRC"). The Employer anticipates continuing to
     match employee contributions at the rate designated by the plan as of
     January 1, 2000 Although the Employer anticipates continuing contributions
     at those rates, the Employer shall retain its current rights under the Plan
     to unilaterally increase, decrease or terminate Employer contributions and
     to determine other aspects of the Plan operation. The Employer shall
     provide the Union thirty (30) days written notice prior to implementing any
     changes in the Plan and shall not terminate the plan without discussing
     such action with the Union.

     All aspects of the Plan, including but not limited to eligibility
     requirements, contribution levels, employer match, borrowing and withdrawal
     shall be governed by the Plan and applicable statutes and regulations.

     Disputes regarding participation and operation of the Plan shall not be
     subject to grievance or arbitration under this Agreement. If any conflict
     arises between the Plan, this Agreement and applicable statutes and
     regulations, the terms of this Plan and the applicable statutes and
     regulations shall control.

                                   APPENDIX I
                              Flex Spending Account

     The Employer shall provide a Flex Spending Account for pre tax payroll
     deductions to be used for out-of-pocket medical and/or day care expenses
     and group insurance premium payments.

                                   APPENDIX J
                                 Incentive Plan

The Employer will provide all non-probationary bargaining unit employees with an
incentive pay plan to better instill a working environment of enhanced
cooperation, teamwork, conduct, positive attitude, performance and commitment.
The Employer shall have complete and sole discretion to design, implement ,
revise or terminate such incentive plan. Any and all Employer payments pursant
to any such plan shall be in addition to the wage rates and benefits provided by
other Articles of this Agreement.

                                                                              28



     The amount of payment, not to exceed one thousand ($1000.00) dollars per
     bargaining unit employee shall be based on criteria consistqant with the
     New Prague management plan. This plan will be effective January 1, 2003,
     and annually thereafter through December 31, 2005. The Union will be
     provided information regarding the terms of the plan, including criteria,
     calculation of payments or amounts of payments for bargaining unit
     employees.

     No terms of or payment or nonpayment pursuant to the plan shall be subject
     to negotiation, the grievance procedure or arbitration provisions of the
     collective bargaining agreement between the parties.

                                   APPENDIX K
                              Short Term Disability

     Effective for all claims filed on January 1, 2003, all full time bargaining
     unit employees are elegible to participate in the Short Term Disability
     (STD) plan at a benefit rate of seventy (70) percent of the straight time
     hourly rate up to twenty six (26) weeks after satasfying all required
     elegibility and waiting periods. STD benefits will be reduced by any other
     disability benefits employees may receive.

                                                                              29



[LOGO]     Storage System Division


                                                           407 Seventh Street NW
                                                            New Prague, MN 56071


                                  June 25, 1998

Mr. Thomas M. Hoffman
Sub District Director
United Steelworkers of America
2829 University Ave. SE
Suite 100
Minneapolis, MN  55414

Dear Mr. Hoffman;

Effective with the commencement date of the Agreement this letter will clarify
MVE's policy with regard to temporary employees, temporary service and seasonal
employees. Employer may keep these people working in bargaining unit jobs for a
period not to exceed ninety (90) calendar days. During this time these people
will not be subject to the terms and conditions of the Agreement. At the
conclusion of the ninety (90) calendar day period they would serve a thirty (30)
calendar day probationary period. Upon the successful completion of the
probationary period they would become full time employees. After the employee
completes his probationary period the employee shall be credited with seniority
measured by the commencement of the most recent ninety (90) day period.

Sincerely,

Scott Brittain
Director of Human Resources

                                                                              30



                                TABLE OF CONTENTS



         Article               Title                                       Page
         -------               -----                                       ----
                                                                     
                               Agreement                                       1
                               Preamble                                        1
          I                    Responsibilities of the Parties                 1
          II                   Recognition                                     2
          III                  Retention of Management Rights                  3
          IV                   Union Membership                                4
          V                    Dues Check Off                                  4
          VI                   No Strike No Lockout                            5
          VII                  Successorship                                   6
          VIII                 Bargaining Unit Work                            6
          IX                   Pay                                             6
          X                    Job Classifications                             7
          XI                   Hours of Work                                   8
          XII                  Holiday                                         9
          XIII                 Leave of Absence                               10
          XIV                  Overtime                                       11
          XV                   Seniority and Lay Off                          12
          XVI                  Job Posting                                    14
          XVII                 Grievance and Arbitration                      15
          XVIII                Union Representation                           17
          XIX                  Bulletin Boards                                19
          XX                   Personal Time Off and Vacation                 19
          XXI                  Safety and Health                              20
          XXII                 Tool Accountability                            21
          XXIII                Activities                                     22
          XXIV                 Field Service                                  22
          XXV                  Drugs and Alcohol                              23
          XXVI                 Savings Clause                                 23
          XXVII                Duration                                       24

          Appendix A           Classifications and Pay Rates                  25
          Appendix B           Lead Persons                                   26
          Appendix C           Tuition Reimbursement                          26
          Appendix D           Pension Plan                                   26
          Appendix E           Life and AD&D Insurance                        26
          Appendix F           Health Insurance                               27
          Appendix G           Dental Insurance                               29
          Appendix H           401K Plan                                      30
          Appendix I           Flex Spending Account                          30
                               Letter of Understanding                        31


                                                                              31

EX-10.15

                                                                   EXHIBIT 10.15


                       [Chart Industries, Inc. Letterhead]


October 17, 2002

Mr. Michael F. Biehl
1303 West Melrose Drive
Westlake, Ohio 44145

Re:      Employment Agreement

Dear Michael:

         This letter agreement (this "Agreement") sets forth the terms under
which you are employed by Chart Industries, Inc. (the "Company") as its Chief
Financial Officer.

1.       Term of Employment. The Company agrees to employ you, and you agree to
serve the Company, on the terms and conditions set forth in this Agreement for
the period commencing as of the date hereof and expiring on the first
anniversary of the date hereof (the "Employment Period"). The Employment Period
shall automatically be extended on the first anniversary of the date hereof, and
on each subsequent anniversary of the date hereof, for a period of one year from
such anniversary unless, not later than 60 days before such anniversary, you or
the Company has given written notice to the other party that you or it, as the
case may be, does not wish to have the Employment Period extended.
Notwithstanding the foregoing, in the event of a Change in Control, the
Employment Period shall automatically be extended for a period beginning on the
date of the Change in Control and expiring on the second anniversary of the date
of such Change in Control, but the Employment Period shall not be extended
further after a Change in Control unless expressly agreed to in writing by the
parties. 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, you shall serve as
the Company's Chief Financial Officer and report to the Chief Executive Officer
of the Company. You shall have responsibility for the accounting, financial
reporting, treasury, internal audit, tax and administrative functions of the
Company, and the performance of such other services and duties as shall be
reasonably assigned to and requested of you by the Chief Executive Officer or
the Board of Directors. You agree to devote substantially all your working time
and efforts to the business and affairs of the Company and serve the Company in
its business and perform your duties to the best of your ability.

3.       Compensation and Benefits.

         (a) Salary. During the Employment Period, you shall receive a base
salary at the rate of Two Hundred Thousand Dollars ($200,000) per year (the
"Base Salary Amount"). Your salary may be adjusted based upon an annual review
by the Board of Directors of the Company or any duly authorized Committee
thereof, although any such adjustment shall be at the sole discretion of the
Board of Directors or such Committee. Notwithstanding the foregoing, in no



Michael F. Biehl
October 17, 2002
Page 2

event shall your 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, you shall be entitled 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 but not limited to: (i) the Management Incentive Compensation Plan or
any other successor plan (the "Incentive Plan"); (ii) any stock option plan of
the Company in which the Company's corporate officers generally are eligible to
participate (the "Option Plan"); (iii) medical, dental and vision insurance
coverage; (iv) life insurance coverage; (v) 401(k) Retirement Plan; (vi) four
weeks of paid vacation annually to be taken at such time or times as are chosen
by you; and (vii) the use of a leased automobile (including insurance).
Notwithstanding the foregoing, you shall not be entitled to participate in the
Company's Severance Benefit Plan or any such successor 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 your performance
toward established goals. There shall be no guaranteed awards under the
Incentive Plan. On an annual basis, the Board of Directors of the Company or any
authorized Committee thereof may in its sole discretion grant you options to
purchase common stock of the Company under the Option Plan in addition to any
option previously granted to you.

         (c) Expenses. The Company shall reimburse you for reasonable expenses
incurred by you on behalf of the Company in the performance of your duties
during the Employment Period. You 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) General. Your employment with the Company shall terminate
automatically upon your death or the expiration of the Employment Period without
extension. In addition, you may terminate your employment with the Company
voluntarily by resigning, and the Company may terminate your employment (i) for
Cause, (ii) without Cause, for any reason or no reason, or (iii) by reason of
your Disability. Any termination by the Company or by you of your employment
hereunder shall be communicated by a written notice to the other party hereto,
which shall indicate the specific termination provision in this Agreement relied
upon, set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of your employment under the provision so
indicated, and specify the effective date of the termination of your employment
(which shall not be earlier than the date on which the notice is given). The
effective date of the termination of your employment is referred to as the
"Termination Date." Notwithstanding Section 1, the Employment Period shall
terminate upon the termination of your employment with the Company.



Michael F. Biehl
October 17, 2002
Page 3

         (b) Expiration of Employment Period, Death, Resignation, Cause or
Disability. If the Employment Period expires without extension or, during the
Employment Period, your employment terminates as a result of your death, you
terminate your employment voluntarily by resigning, or the Company terminates
your employment for Cause or by reason of your Disability, then, in any such
case, Sections 4(c), 4(d) and 4(e) shall not apply and you shall be entitled to
payment of base salary only for the remainder of the month in which such
termination occurs (or only until the Termination Date, if your employment
terminates as a result of the expiration of the Employment Period without
extension) and thereafter such salary shall end and cease to be payable. In
addition, in any such case, and you shall be entitled to receive any benefits
provided for in Section 3(b) which have accrued up to and including the
Termination Date, subject to the terms and conditions of the benefit plans
referenced in Section 3(b), and reimbursement of reasonable expenses incurred up
to and including the Termination Date under the terms of Section 3(c).

         (c) Termination Without Cause. If, during the Employment Period, the
Company terminates your employment without Cause, then, in lieu of further base
salary payments hereunder, the Company shall pay to you within 30 calendar days
after the Termination Date an amount equal to your then current annual base
salary. In addition, in such case, you shall be entitled to receive any benefits
provided for in Section 3(b) which have accrued up to and including the
Termination Date, subject to the terms and conditions of the benefit plans
referenced in Section 3(b), and reimbursement of reasonable expenses incurred up
to and including the Termination Date under the terms of Section 3(c).
Notwithstanding the foregoing, you shall not be entitled to any payment or
benefit under this Section 4(c) if you are entitled to any salary continuation
under Section 4(d), and in no case shall you be entitled to any payments and/or
benefits under both Section 4(c) and Section 4(d).

         (d) Termination Without Cause Following a Change in Control. If (i) a
Change in Control occurs during the Employment Period and (ii) at any time
during the period commencing on the date of such Change in Control and ending on
the date that is six months after such Change in Control the Company terminates
your employment without Cause, then, in lieu of any payment or benefits under
Section 4(c), the Company shall continue to pay to you, in accordance with its
normal payroll practices, your base salary at the rate in effect immediately
prior to the Termination Date (which shall not be less than the Base Salary
Amount) until the second anniversary of such Termination Date. In addition, in
such case, you shall be entitled to receive any benefits provided for in Section
3(b) which have accrued up to and including the Termination Date, subject to the
terms and conditions of the benefit plans referenced in Section 3(b), and
reimbursement of reasonable expenses incurred up to and including the
Termination Date under the terms of Section 3(c). For purposes of clauses (i)
and (ii) of this Section 4(d), any termination of your employment during the
Employment Period by the Company without Cause after or immediately before the
Company enters into a definitive agreement with a third party that results in a
Change in Control shall be deemed to be a termination of your employment by the
Company without Cause immediately after such Change in Control, and such Change
in Control shall be deemed to occur during the Employment Period.



Michael F. Biehl
October 17, 2002
Page 4

         (e) Continuation of Health Benefits. If, during the Employment Period,
the Company terminates your employment without Cause, then for the duration of
the Applicable Continuation Period you shall be eligible to participate in the
Company's medical, dental and vision insurance coverage available to its
employees generally as if you were still employed by the Company, to the extent
and at the level of your participation in that coverage immediately prior to the
Termination Date, but all Company contributions or payments under that coverage
shall be subject to your fulfillment of your contribution requirements under
that coverage, and Company provision of this coverage shall cease if you obtain
comparable coverage from another employer during the Applicable Continuation
Period. If, however, your continued participation in any such insurance coverage
after the Termination Date is not possible under the terms governing such
coverage, the Company may satisfy its obligation to provide such coverage by
providing to you during the Applicable Continuation Period alternative coverage,
comparable to the coverage then available to Company employees generally, on the
terms set forth in the preceding sentence. The "Applicable Continuation Period"
means 12 months after the Termination Date if you are entitled to severance pay
under Section 4(c), and means 24 months after the Termination Date if you are
entitled to severance pay under Section 4(d).

5.       Binding Agreement; Successors. This Agreement shall inure to the
benefit of and be binding upon your personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees. If you should die while any amounts would still be payable to you
hereunder, all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to your spouse, or if your spouse
does not survive you, to your 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.

6.       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.

7.       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 terms used in this Agreement are defined on Appendix A
attached hereto.

8.       Entire Agreement. This Agreement contains the entire agreement between
the parties with respect to your employment and supersedes any and all other
agreements (including the letter agreement, dated July 25, 2001, between the
Company and you relating to severance pay, which is hereby terminated, but
excluding any existing stock option granted to you and any rights you may have
to indemnity), either oral or in writing, with respect to your employment.

9.       General. 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 you and by another officer of the Company. You may not
assign this Agreement without the consent of the Company.



Michael F. Biehl
October 17, 2002
Page 5

This Agreement shall be governed by and construed in accordance with the laws of
the State of Ohio, without giving effect to conflict of law principles.

         If the foregoing correctly reflects our understanding with respect to
the matters described in this letter, please sign this letter below and return
one copy to the undersigned.

                                        CHART INDUSTRIES, INC.



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

Agreed to and Accepted as of
the date set forth above:

/s/ Michael F. Biehl
- -------------------------------
Michael F. Biehl



                                   Appendix A

                              Certain Definitions

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

"Cause" means a determination by the Board of Directors of the Company (without
your participation), pursuant to the exercise of its business judgment, that any
one of the following events has occurred:

         i)       You have been indicted by a state or federal grand jury of
                  committing a felony;

         ii)      The Board receives proof satisfactory to it of your commission
                  of theft or embezzlement from the Company, or any other crime
                  against the Company;

         iii)     You, for yourself or any other person, firm, corporation or
                  other entity, (a) solicit business from customers of the
                  Company, (b) divert or attempt to divert any business from the
                  Company, or otherwise interfere with the business or
                  employment relationship between the Company or any customer,
                  employee or sales representative thereof, or (c) disclose or
                  furnish to any competitor or any person, firm, corporation or
                  other entity, or use on your own behalf, any confidential or
                  secret information or data of or relating to the Company; or

         iv)      You fail or refuse or are unable to perform your services and
                  duties for the Company as Chief Financial Officer, or as
                  reasonably assigned to you by the Chief Executive Officer or
                  the Board of Directors, or commit any act of gross negligence,
                  corporate waste, disloyalty, or unfaithfulness to the Company
                  which adversely affects the business of the Company, any
                  material breach of your employment obligations hereunder, or
                  any other act or course of conduct which could reasonably be
                  expected to have an adverse effect on the Company's business
                  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.

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

         i)       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;

         ii)      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;



         iii)     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;

         iv)      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
                  will 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

         v)       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 (iii) and (iv)
         of this definition, a "Change in Control" shall not be deemed to have
         occurred for purposes of this Agreement (A) solely because (1) the
         Company, (2) a Related Person, (3) a Subsidiary, or (4) 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 will or may occur in the future
         by reason of such beneficial ownership, (B) 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 will or may occur in
         the future by reason of such transaction, but only if both (1) the
         transaction giving rise to such filing or obligation is approved in
         advance of consummation thereof by the Company's Board of Directors and
         (2) 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 (C) solely because of a
         change in control of any Subsidiary.

                                      A-2



         For purposes of this definition of "Change in Control", the following
         capitalized terms shall have the following meanings:

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

               "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.

               "Related Person" means (i) Arthur S. Holmes (ii) Charles S.
               Holmes, (iii) 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 (iv) any of the
               foregoing acting alone or in concert.

               "Subsidiary" means a corporation, company or other entity (i)
               more than 50 percent of whose outstanding shares or securities
               (representing the right to vote for the election of directors or
               other managing authority) are, or (ii) 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 percent 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.

"Disability" means your inability for a continuous period of six months to
perform the essential functions of your 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 you to the effect that you are or have been disabled and incapable
of performing the essential functions of your position with or without
reasonable accommodations for the Company as previously performed shall be
conclusive of the fact that you are incapable of performing such services and
are, or have been, disabled for the purposes of this Agreement. The Company and
you acknowledge and agree that the essential functions of your position are
unique and critical to the Company and that a disability condition that causes
you to be unable to perform the essential functions of your position under the
circumstances described above will constitute an undue hardship on the Company.

"You," "your" and similar derivations of "you" mean and refer to Michael F.
Biehl.

                                      A-3

EX-10.16

                                                                   EXHIBIT 10.16

                              EMPLOYMENT AGREEMENT

               This Employment Agreement (this "Agreement") is made as of
October 1, 2002 by and among CHART INC., a Delaware corporation (the "Company"),
CHART INDUSTRIES, INC., a Delaware corporation (the "Parent"), and JOHN T.
ROMAIN ("Executive").

               WHEREAS, the Company is a wholly owned subsidiary of the Parent;
and

               WHEREAS, effective as of the date of this Agreement, Executive
has been appointed Group President of the Energy and Chemicals Group of the
Parent (the "E&C Group"), a newly created operating group of business lines
carried on by Subsidiaries of the Parent, and in connection with such
appointment Executive will be relocating from his present place of employment in
Cleveland, Ohio to Houston, Texas; and

               WHEREAS, Executive has valuable knowledge and experience
pertaining to the business of the E&C Group, and the parties desire to provide
for his services to the Company and the Parent on the terms set forth herein.

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

               1.    Term of Employment. The Company hereby agrees to employ
Executive, and Executive hereby agrees to continue to serve the Company, on the
terms and conditions set forth herein for the period commencing as of the date
hereof and expiring on September 30, 2004 (the "Employment Period"). The
Employment Period shall automatically be extended on October 1, 2004, and on
October 1 of each subsequent year, for a period of one year from such date
unless, not later than July 31, 2004, or July 31 of any such subsequent year,
the Company or Executive has given notice to the other party that it or he, as
the case may be, does not wish to have the Employment Period extended. In
addition, in the event of a Change in Control, the Employment Period shall
automatically be extended for a period of two years beginning on the date of the
Change in Control and ending on the second anniversary of the date of such
Change in Control (unless further extended under the immediately preceding
sentence). 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 Group President of the E&C Group and report to the
Chief Executive Officer. Executive shall have responsibility for the general
management and operation of the E&C Group and the performance of such other
services and duties as shall be reasonably assigned to and requested of him by
the Chief Executive Officer; provided, however, that such services and duties
shall be reasonably consistent with his position as Group President of the E&C
Group, except that the Parent may, in its sole discretion and from time to time
or at any time, without the consent of Executive, rename the E&C Group or alter
the companies and/or business lines that make up the E&C Group at any given
time. Executive shall devote substantially all his working time and efforts to
the business and affairs of the E&C Group and serve the Company and the Parent
in their businesses and perform his duties to the best of his ability.



               3.    Compensation.

               (a)   Salary. During the Employment Period, until Executive
relocates his household to the Houston, Texas area, Executive shall continue to
receive a base salary at the rate of One Hundred Fifty Thousand Dollars
($150,000) per year (the "Base Salary Amount"). During the Employment Period,
after Executive has relocated his household to the Houston, Texas area,
Executive shall receive a base salary at the rate of One Hundred Sixty-Five
Thousand Dollars ($165,000) per year, which shall thereafter be the Base Salary
Amount. Executive's salary shall be reviewed on an annual basis by the Board of
Directors of the Parent or any duly authorized Committee thereof. Executive's
salary shall be subject to being adjusted based upon such annual review,
although any such adjustment shall be at the sole discretion of the Board of
Directors of the Parent or any duly 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 key employees.

               (b)   Benefits. During the Employment Period Executive shall be
entitled to participate, on a basis consistent with his position and duties
hereunder, in any employee benefits plans which are maintained or established by
the Company for its key employees, subject, however, to all of the terms and
conditions thereof, including any eligibility requirements therefor, including
but not limited to: (i) the Management Incentive Compensation Plan or any other
successor plan (the "Incentive Plan"); (ii) any stock option plan of the Parent
in which the Company's key employees generally are eligible to participate (the
"Option Plan"); (iii) medical, dental and vision insurance coverage; (iv) life
insurance coverage; (v) 401(k) Retirement Plan (which includes a savings plan
component and a profit-sharing pension component); (vi) four weeks of paid
vacation to be taken at such time or times as are chosen by Executive; and (vii)
the use of a leased automobile during Executive's employment comparable to his
presently leased automobile. Notwithstanding the foregoing, during the
Employment Period Executive shall not be entitled to participate in the Parent's
Severance Benefit Plan or any such successor plan. On an annual basis, the Board
of Directors of the Parent or any duly authorized Committee thereof shall review
Executive's level of participation in the Option Plan and, based upon such
review, may in its sole discretion grant Executive additional options to
purchase common stock of the Parent.

               (c)   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. Such reimbursement shall include the
reimbursement (in accordance with the terms of the Parent's Relocation
Reimbursement Policy as currently in effect) of reasonable expenses (not to
exceed $50,000, including allowances) incurred by Executive for the relocation
of Executive's family and household goods from Cleveland, Ohio to the Houston,
Texas area in connection with the appointment of Executive as Group President of
the E&C Group. Executive shall furnish the Company with such documentation as is
requested by the Company in order for it to comply with the Code and regulations
thereunder in connection with the proper deduction of any such expenses.

                                       2



               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; (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 performance of his duties
hereunder on a full-time basis; (iv) voluntary termination by Executive of his
employment with the Company; (v) the Company's discharge of Executive for Good
Cause; (vi) voluntary termination by Executive of his employment with the
Company after a Change in Control for Good Reason; or (vii) the Company's
discharge of Executive at any time without Good Cause.

               (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 9. 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 after a Change in Control, 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 (other than for Good Reason after a Change in Control), 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, the date of death of Executive, the Disability Effective Date or the
date of expiration of the Employment Period, as the case may be.

               5.    Obligations of the Company upon Termination.

               (a)   Discharge Without Good Cause; Resignation for Good Reason
After a Change in Control. Executive shall be entitled to the severance benefits
specified in this Section 5(a) if, during the Employment Period, (x) the Company
terminates Executive's employment under Section 4(a)(vii) without Good Cause or
(y) Executive terminates his employment under Section 4(a)(vi) after a Change in
Control for Good Reason. In either such case:

                                       3



                     (i)    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 the amounts determined under clauses (A) and (B)
below:

               (A)   the sum of (1) Executive's annual base salary at the rate
                     then in effect through the Date of Termination to the
                     extent not previously paid and (2) any unpaid cash bonus
                     under the Incentive Plan for a prior year; and

               (B)   the product of (1) the number of years (including fractions
                     thereof) remaining from the Date of Termination until the
                     end of the Continuation Period and (2) Executive's annual
                     base salary at the rate then in effect.

For purposes of this Section 5(a)(i), 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,
except that no such amounts shall be forfeited under the terms of the applicable
deferral plan as a result of Executive's termination of employment;

                     (ii)   For the duration of the Continuation Period,
Executive shall be eligible to participate in the employee benefits plans
referred to in Sections 3(b)(iii) and (iv) 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 benefits plans shall be subject to Executive's
fulfillment of his contribution requirements thereunder, and Company provision
of the benefits listed in Sections 3(b)(iii) and (iv) shall cease if Executive
obtains such coverage, if any, from another employer during the Continuation
Period. Notwithstanding the foregoing, if Executive's continued participation in
any such employee benefits plan after the Date of Termination is not possible
under the terms governing such employee benefits plan, the Company may satisfy
its obligation to provide such benefits by providing to Executive during the
Continuation Period alternative coverage, comparable to the coverage in question
then maintained for key employees of the Company, on the terms set forth in the
preceding sentence; and

                     (iii)  Executive shall be entitled to receive any other
benefits provided for in Section 3(b) which have accrued up to and including the
Date of Termination, subject to the terms and conditions of the benefit plans
referenced in Section 3(b), and reimbursement of reasonable expenses incurred up
to and including the Date of Termination under the terms of Section 3(c). If
Executive is entitled to severance benefits under this Section 5(a) and
requests, within 60 days after the Date of Termination, to be relocated back to
the Cleveland, Ohio area, then such reimbursement shall include the
reimbursement (in accordance with the terms of the Parent's Relocation
Reimbursement Policy as then in effect) of reasonable expenses (not to exceed
$50,000, including allowances) incurred by Executive for such relocation of
Executive's family and household goods back to the Cleveland, Ohio area.

               (b)   Death or Disability; Discharge for Good Cause; Resignation
Without Good Reason. Executive shall be entitled to the severance benefits
specified in this Section 5(b) if, during the Employment Period, Executive's
employment with the Company (i) terminates

                                       4



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 Section 3(b)
which have accrued up to and including the Date of Termination, subject to the
terms and conditions of the benefit plans referenced in Section 3(b), and
reimbursement of reasonable expenses incurred up to and including the Date of
Termination under the terms of Section 3(c), which in such case shall not
include additional relocation expenses.

               (c)   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, Executive shall be entitled to (i)
payment of base salary only through the Date of Termination, (ii) receive,
subject to the terms and conditions of the benefit plans referenced in Section
3(b), any benefits provided for in Section 3(b) 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(c), which in such case shall not include additional relocation expenses.

               6.    Full Settlement; Legal Fees. The Company's obligation to
make the payments provided for in this Agreement and otherwise to perform its
obligations hereunder shall not be 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. If Executive
is required to enforce any of his rights under this Agreement after a Change in
Control (including as a result of any contest by Executive about the amount of
any payment pursuant to this Agreement), the Company shall reimburse Executive
as incurred for all reasonable legal fees and expenses incurred by him to
enforce such rights, plus interest on any delayed payment at the applicable
federal rate provided for in Section 7872(f)(2)(A) of the Code.

               7.    Restrictive Covenants.

               (a)   Non-Competition. During the Employment Period and for a
period of one year after the Date of Termination, 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 E&C Group or
any other group, business, division or Subsidiary of the Parent for which
Executive has worked or had responsibility within two years before the Date of
Termination, in any area where such business is being conducted at the time of
such termination. 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. If it
is judicially determined that Executive has violated any of his obligations
under this Subsection 7(a), then the period applicable to the obligations that
Executive is determined to have violated shall automatically be

                                       5



extended by a period of time equal in length to the period during which such
violation(s) occurred.

               (b)   Non-Solicitation. Executive shall not directly or
indirectly, at any time during the Employment Period and for one year after the
Date of Termination, 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.

                     (i)    Executive shall keep in strict confidence, and shall
not, directly or indirectly, at any time during or after the Employment Period,
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 after the Date of
Termination shall constitute a misappropriation of the Chart Group's trade
secrets.

                     (ii)   Executive agrees that upon termination of the
Employment Period, for any reason, Executive shall return to the Company, in
good condition, all property of the Chart Group, including, without limitation,
the originals and all copies of any materials, whether in paper, electronic or
other media, that contain, reflect, summarize, describe, analyze or refer or
relate to any items of Confidential Information.

               8.    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 the terms of this Agreement to Executive's
spouse, or if is spouse does not survive him, to Executive's estate. This
Agreement shall inure to the benefit of and be binding upon the successors and
assigns of the Company and the Parent, including, without limitation, any person
acquiring directly or indirectly all or substantially all of the assets of the
Company or the Parent, whether by merger, consolidation, sale or otherwise (and
such successor shall thereafter be deemed the "Company" or the "Parent",
respectively, for the purposes of this Agreement). The Company and the Parent
shall require any such successor to assume and agree to perform this Agreement.

               9.    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

                                       6



(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 or the Parent, to:

                            Chart Industries, Inc.
                            5885 Landerbrook Drive
                            Suite 150
                            Cleveland, Ohio  44124
                            Attention:  Chief Executive Officer

                            With a copy to:

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

                     (ii)   If to Executive, to:

                            John T. Romain
                            __________________________
                            __________________________

               10.   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.

               11.   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
and of the Parent. No waiver by a party hereto at any time of any breach by
another 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.

               12.   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, the Company and the Parent 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, the Company or the Parent based on or arising
out of this Agreement and each of Executive, the Company and the Parent 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.

                                       7



               13.   Equitable Relief. Executive, the Company and the Parent
acknowledge and agree that the covenants contained in Section 7 are of a special
nature and that any breach, violation or evasion by Executive of the terms of
Section 7 will result in immediate and irreparable injury and harm to the
Company and the Parent, for which there is no adequate remedy at law, and will
cause damage to the Company and the Parent in amounts difficult to ascertain.
Accordingly, the Company and the Parent each shall be entitled, collectively or
separately, to the remedy of injunction, as well as to all other legal or
equitable remedies to which the Company or the Parent 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 7.

               14.   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 Agreement, which shall remain in
full force and effect. In the event that any provision of Section 7 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 and/or the Parent.

               15.   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.

               16.   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.

               17.   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 8.

               18.   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 (including the Salary Continuation
Agreement, dated as of May 22, 1996, as amended, by and between the Parent and
Executive, which is hereby terminated, but excluding any existing agreement
evidencing a stock option granted to Executive or rights of Executive to
indemnity), either oral or in writing, with respect to the employment of
Executive.

                                       8



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

                                      CHART INC.


                                      By:   /s/ Arthur S. Holmes
                                            -----------------------------------
                                            Name:  Arthur S. Holmes
                                                   ----------------------------
                                            Title:  Chairman
                                                    ---------------------------


                                      CHART INDUSTRIES, INC.


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


                                      /s/ John T. Romain
                                      -----------------------------------------
                                      JOHN T. ROMAIN

                                       9



                                   Schedule A

                               Certain Definitions

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

         "Affiliate" of a specified entity means an entity that directly, or
         indirectly through one or more intermediaries, controls, or is
         controlled by, or is under common control with, the entity specified.

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

                           (a)   The Parent 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 Parent 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 Parent 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 Parent has or may have occurred or will 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 Parent'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 this
         definition, a "Change in



         Control" shall not be deemed to have occurred for purposes of this
         Agreement (i) solely because (A) the Parent, (B) a Related Person, (C)
         a Subsidiary, or (D) any Parent-sponsored employee stock ownership plan
         or other employee benefit plan of the Parent 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 Parent reports that a change
         in control of the Parent has or may have occurred or will or may occur
         in the future by reason of such beneficial ownership, (ii) solely
         because the Parent or any other person, group or entity directly
         involved in the restructuring of the Parent's capital and debt
         arrangements related to the Parent'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
         Parent in connection with such restructuring or because the Parent
         reports that a change in control of the Parent has or may have occurred
         or will 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
         Parent'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 or a sale
         of the E&C Group, which does not otherwise constitute a "Change in
         Control".

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

         "Chief Executive Officer" means the chief executive officer of the
         Parent, or if there is no such chief executive officer, then the
         president of the Parent.

         "Code" means the Internal Revenue Code of 1986, as amended from time to
         time.

         "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.

         "Continuation Period" means a period of time (not to exceed 24 months
         nor be less than 12 months) beginning on the Date of Termination and
         ending on the earlier of the following dates:

                                      A-2



                           (a)   The date that is 24 months after the Date of
         Termination; or

                           (b)   The date that is the Applicable Number of
         months after the Date of Termination.

         As used in this definition, the term "Applicable Number" shall equal
         the difference of (i) 24 minus (ii) a number equal to the number of
         full months elapsing from October 1, 2002 until the Date of
         Termination. In no case, however, shall the "Applicable Number" be less
         than 12.

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

         "Disability" means the inability of Executive for a continuous period
         of six 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 will constitute an undue hardship on the
         Company.

         "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 Chief Executive Officer, in
         good faith, that any one of the following events has occurred and not
         been cured by Executive within 60 calendar days after the Chief
         Executive Officer first gave Executive written notice thereof:

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

                           (b)   the Chief Executive Officer receives proof
         satisfactory to him of the commission by Executive of theft or
         embezzlement from the Parent or its Subsidiaries, or any other crime
         against the Parent or its Subsidiaries;

                           (c)   Executive has materially breached the
         provisions of Section 7 or any other material provision of this
         Agreement; or

                           (d)   Executive's failure, refusal or inability to
         perform his services and duties as set forth in Section 2, any act of
         gross negligence, corporate waste, disloyalty, or unfaithfulness to the
         Parent or its Subsidiaries which adversely affects the business of the
         Parent or its Subsidiaries, or any other act or course of conduct which
         could reasonably be expected to have an adverse affect on the business
         of the Parent or its Subsidiaries such as, by way of example only,
         intentionally causing the Parent or its

                                      A-3



         Subsidiaries 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 upon or after a Change
         in Control, without Executive's express written consent, and not been
         cured by the Company within 20 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 immediately prior to the Change
         in Control; or (b) a reduction in Executive's base salary rate below
         his base salary rate in effect immediately prior to the Change in
         Control.

         "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.

         "Subsidiary" means a corporation, company or other entity (a) more than
         50 percent 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 percent 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 Parent.

         "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




                                   ADDENDUM TO
                              EMPLOYMENT AGREEMENT

          This Addendum to Employment Agreement (this "Addendum") is made as of
October 1, 2002 by and among CHART INC., a Delaware corporation (the "Company"),
CHART INDUSTRIES, INC., a Delaware corporation (the "Parent"), and JOHN T.
ROMAIN ("Executive").

          WHEREAS, the Company is a wholly owned subsidiary of the Parent; and

          WHEREAS, Executive is entering into an Employment Agreement with the
Company and the Parent, dated as October 1, 2002 (the "Employment Agreement");
and

          WHEREAS, upon Executive's assuming the position and duties described
in the Employment Agreement on the date hereof, Executive ceases to be an
officer of, and ceases to perform any policy-making function for, the Parent;
accordingly, Executive acknowledges that it is no longer appropriate for
Executive to participate in the Parent's 2000 Executive Incentive Stock Option
Plan (the "2000 Plan") with respect to that portion of the stock option granted
to Executive under the 2000 Plan that is not currently exercisable and does not
become exercisable for the Company's 2002 fiscal year; and

          WHEREAS, the Company desires to provide Executive the opportunity for
additional portions of such option to become exercisable, in accordance with and
subject to the existing terms of such option, based on the Company's financial
performance for its 2002 fiscal year, which is expected to be determined by May
1, 2003 (the "Effective Date"), and to provide that any portion of such option
which is not exercisable on the Effective Date will be canceled and terminated
on the Effective Date.

          NOW, THEREFORE, in consideration of the respective covenants and
agreements of the parties contained in the Employment Agreement of which this
Addendum is part, the parties agree as follows:

          1.  Modification of Stock Option. (a) The parties acknowledge that
Executive and the Parent are parties to that certain Stock Option Agreement,
dated as of May 4, 2000 (the "2000 Option Agreement"), issued under the 2000
Plan, subject to the terms of which Executive has the option to purchase up to
100,000 shares of the Parent's common stock (the "2000 Option"). Executive, the
Parent and the Company acknowledge that Executive currently has the right to
exercise the 2000 Option with respect to 26,666 of such shares (the "Vested
Shares") and that Executive has not, as of the date hereof, exercised the 2000
Option with respect to those shares. Executive, the Parent and the Company
further acknowledge that the 2000 Option may become exercisable with respect to
additional shares of the Parent's common stock, subject to the terms of the 2000
Option Agreement, on or before the Effective Date, and that such additional
shares, if any, shall be deemed to be Vested Shares from and after the time at
which the 2000 Option becomes exercisable to purchase such additional shares in
accordance with its terms.

              (b)  Executive, the Parent and the Company agree that the 2000
Option Agreement is hereby amended and modified to provide that Executive may
exercise the 2000




Option, subject to the terms of the 2000 Option Agreement, to purchase up to the
full number of the Vested Shares, but that the 2000 Option shall be deemed
canceled and terminated on the Effective Date with respect to the remaining
shares of the Parent's common stock subject thereto that are not Vested Shares
on the Effective Date (the "Relinquished Shares"). Executive relinquishes all
his rights to purchase the Relinquished Shares under the 2000 Option and the
related 2000 Option Agreement. Accordingly, on and after the Effective Date,
Executive may exercise the 2000 Option, subject to the terms of the 2000 Option
Agreement, to purchase the Vested Shares, and the 2000 Option shall for all
purposes be deemed canceled and terminated with respect to the Relinquished
Shares and Executive shall have no right or option to purchase any of the
Relinquished Shares. Except with respect to such reduction in the number of
shares that Executive may purchase thereunder, the 2000 Option Agreement shall
remain in effect and be unaffected by this Addendum. Executive agrees that the
Parent has the right, in its discretion, to make new grants of stock options to
one or more of its executive employees to purchase the Relinquished Shares under
the 2000 Plan.

              (c)  In no case shall the exercisability of the 2000 Option be
accelerated in the event of a Change in Control (as defined in the 2000 Option
Agreement) that occurs after October 1, 2002.

              (d)  Executive's existing stock options, other than the 2000
Option, shall be unaffected by the terms of this Addendum.

          2.  Miscellaneous. This Addendum shall be considered a part of the
Employment Agreement. In the event of conflict between the terms of the
Employment Agreement and the express terms of this Addendum, the express terms
of this Addendum shall prevail. This Addendum 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.

                  [Remainder of page intentionally left blank.]

                                       2



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

                                       CHART INC.


                                       By:  /s/ Arthur S. Holmes
                                            ------------------------------------
                                            Name:  Arthur S. Holmes
                                                 -------------------------------
                                            Title:  Chairman
                                                  ------------------------------

                                       CHART INDUSTRIES, INC.

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

                                       /s/ John T. Romain
                                       -----------------------------------------
                                       JOHN T. ROMAIN

                                       3

EX-10.26

                                                                   EXHIBIT 10.26

                                                                  EXECUTION COPY




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




                                WARRANT AGREEMENT

                                     Between

                             CHART INDUSTRIES, INC.

                                       and

                            THE HOLDERS PARTY HERETO

                          Dated as of December 31, 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..............................    7

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............................    8
     SECTION 2.04.  Securities Act Compliance........................................    9
     SECTION 2.05.  Listing..........................................................    9

ARTICLE III REPRESENTATIONS AND WARRANTIES...........................................    9
     SECTION 3.01.  Existence; Qualification.........................................   10
     SECTION 3.02.  No Breach........................................................   10
     SECTION 3.03.  Corporate Action.................................................   10
     SECTION 3.04.  Approvals........................................................   10
     SECTION 3.05.  Investment Company Act...........................................   11
     SECTION 3.06.  Public Utility Holding Company Act...............................   11
     SECTION 3.07.  Capitalization...................................................   11
     SECTION 3.08.  Private Offering.................................................   12
     SECTION 3.09.  Litigation.......................................................   12
     SECTION 3.10.  Brokers..........................................................   12
     SECTION 3.11.  SEC Documents; Financial Statements..............................   12

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.......................   14
     SECTION 4.06.  Provisions Applicable to Regulated Holders.......................   15
     SECTION 4.07.  Provisions Applicable to Related Persons.........................   16

ARTICLE V ADJUSTMENTS OF STOCK UNITS.................................................   16
     SECTION 5.01.  Subdivisions and Combinations....................................   17
     SECTION 5.02.  Issuance of Common Stock.........................................   17
     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...................   20
     SECTION 5.07.  Other Action Affecting Common Stock..............................   20
     SECTION 5.08.  Exclusions from Adjustment.......................................   21
     SECTION 5.09.  Notice of Adjustments............................................   21
     SECTION 5.10.  Notice of Certain Corporate Action...............................   21

ARTICLE VI REGISTRATION RIGHTS.......................................................   22
     SECTION 6.01.  Demand and Piggyback Registrations...............................   22
     SECTION 6.02.  Hold-Back Agreements; Cutbacks...................................   24
     SECTION 6.03.  Registration Procedures..........................................   26
     SECTION 6.04.  Registration Expenses............................................   29
     SECTION 6.05.  Indemnification..................................................   29
     SECTION 6.06.  No Other Registration Rights.....................................   32

ARTICLE VII TAG-ALONG SALE...........................................................   32
     SECTION 7.01.  Tag-Along Rights.................................................   32
     SECTION 7.02.  Procedures.......................................................   34
     SECTION 7.03.  Amendment of Article VII.........................................   34

ARTICLE VIII HOLDERS' RIGHTS.........................................................   34
     SECTION 8.01.  Delivery Expenses................................................   34
     SECTION 8.02.  Taxes............................................................   34
     SECTION 8.03.  Replacement of Instruments.......................................   35
     SECTION 8.04.  Indemnification..................................................   35
     SECTION 8.05.  Inspection Rights................................................   36

ARTICLE IX OTHER COVENANTS OF THE ISSUER.............................................   36
     SECTION 9.01.  Financial Statements, Etc........................................   36
     SECTION 9.02.  Related Party Transactions.......................................   36
     SECTION 9.03.  Restrictions on Performance......................................   37
     SECTION 9.04.  Modification of Other Equity Documents...........................   37
     SECTION 9.05.  Reservation and Authorization of Common Stock....................   37
     SECTION 9.06.  Notice of Expiration Date........................................   38
     SECTION 9.07.  Documentation of Subsequent Warrants.............................   38

ARTICLE X MISCELLANEOUS..............................................................   38
     SECTION 10.01. Waiver...........................................................   38
     SECTION 10.02. Notices..........................................................   38
     SECTION 10.03. Expenses, Etc....................................................   39
     SECTION 10.04. Amendments, Etc..................................................   39
     SECTION 10.05. Successors and Assigns...........................................   39
     SECTION 10.06. Survival.........................................................   39
     SECTION 10.07. Specific Performance.............................................   39
     SECTION 10.08. Captions.........................................................   40
     SECTION 10.09. Counterparts.....................................................   40

     

                                      (ii)



                                                                                
     SECTION 10.10. Governing Law....................................................   40
     SECTION 10.11. Severability.....................................................   40
     SECTION 10.12. Entire Agreement.................................................   40
     SECTION 10.13. Rights of Holders of Warrants....................................   40

     

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 December 31, 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).

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

                                Warrant Agreement



                                        3

         "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 December 31, 2002.

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

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

                                Warrant Agreement



                                        4

         "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 issued pursuant to the Warrant Agreement dated as of
September 30, 2002 between the Issuer and the holders party thereto.

         "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.

                                Warrant Agreement



                                        5

         "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.

         "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.

                                Warrant Agreement



                                        6

         "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 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).

                                Warrant Agreement



                                        7

         "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 December 31, 2002, evidencing rights to
purchase up to an aggregate of 773,133 Stock Units (which Warrants (together
with the Other Warrants and Other Warrant Stock issued before the date hereof)
represent, as of December 31, 2002, 10% 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 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.

                                Warrant Agreement



                                        8

                                   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 December 31, 2002, in
satisfaction of the Issuer's obligations under Section 6.12(a)(iii) 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

         (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

                                Warrant Agreement



                                        9

     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.

         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:

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                                       10

         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 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

                                Warrant Agreement


                                       11

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 25,554,061 shares of Common Stock have been
issued and are outstanding (and 153,648 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 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, the Warrant Agreement dated as of September 30,
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.

                                Warrant Agreement


                                       12

              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 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).

                                Warrant Agreement


                                       13

                                   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:

              "THE TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS
              SUBJECT TO THE RESTRICTIONS SPECIFIED IN THAT CERTAIN WARRANT
              AGREEMENT DATED AS OF DECEMBER 31, 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

                                Warrant Agreement



                                       14

              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.

              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

                                Warrant Agreement



                                       15

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 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

                                Warrant Agreement



                                       16

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).

              (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

                                Warrant Agreement



                                       17

              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).

              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

                                Warrant Agreement



                                       18

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 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

                                Warrant Agreement



                                       19

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

              (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

                                Warrant Agreement



                                       20

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:

              (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

                                Warrant Agreement



                                       21

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 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

                                Warrant Agreement



                                       22

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 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

                                Warrant Agreement



                                       23

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 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.

                                Warrant Agreement



                                       24

          (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
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

                                Warrant Agreement



                                       25

statement commencing on the date of sale of the Warrant Stock or Other Warrant
Stock, as the 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).

                                Warrant Agreement



                                       26

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

                                Warrant Agreement



                                       27

          (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;

          (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;

                                Warrant Agreement



                                       28

          (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
(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.

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                                       29

          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 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,

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                                       30

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 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

                                Warrant Agreement



                                       31

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) 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

                               Warrant Agreement



                                       32

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 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

                               Warrant Agreement


                                       33

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.

          (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.


                               Warrant Agreement



                                       34

          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

          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

                               Warrant Agreement



                                       35

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 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.

                               Warrant Agreement


                                       36

          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 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.

                               Warrant Agreement



                                       37

          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 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.

                                Warrant Agreement


                                       38

          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

          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.

                               Warrant Agreement



                                       39

          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.

          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.

                               Warrant Agreement



                                       40

          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 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



                                       41

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

                                  CHART INDUSTRIES, INC.



                                  By  /s/ Michael F. Biehl
                                    --------------------------------------------

                                    Name: Michael F. Biehl
                                    Title: Chief Financial Officer and Treasurer

                                  Address for Notices:

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

                                Warrant Agreement



                                       42

                                  INITIAL HOLDERS

                                  JPMORGAN CHASE BANK



                                  By  /s/ Roger A. Odell
                                     -------------------------------------------

                                     Name:
                                     Title:

                                  Address for Notices:

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

                                Warrant Agreement



                                       43

                                  NATIONAL CITY BANK



                                  By  /s/ Thomas C. LaBrenz
                                    ------------------------------------------

                                    Name: Thomas C. LaBrenz
                                    Title: Senior Vice President

                                  Address for Notices:

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

                                Warrant Agreement



                                       44

                                  BANK ONE NA



                                  By  Gaye C. Plunkett
                                    ----------------------------------------

                                    Name: Gaye C. Plunkett
                                    Title: Vice President

                                  Address for Notices:

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

                                  Attn: Gaye Plunkett

                                Warrant Agreement



                                       45

                                  VAN KAMPEN PRIME RATE INCOME TRUST

                                  By: Van Kampen Advisory Investment Corp.



                                  By  /s/ Christina Jamieson
                                    ------------------------------------------

                                    Name: Christina Jamieson
                                    Title: Vice President

                                  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



                                       46

                                  SENIOR DEBT PORTFOLIO

                                  By: Boston Management and Research,
                                      as Investment Advisor



                                  By /s/ Payson F. Swaffield
                                    ------------------------------------------

                                    Name Payson F. Swaffield
                                    Title: Vice President

                                  Address for Notices:

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

                                Warrant Agreement



                                       47

                                  U.S. BANK NATIONAL ASSOCIATION



                                  By  /s/ James P. Cecil
                                    ----------------------------------------

                                    Name: James P. Cecil
                                    Title: Assistant Vice President

                                  Address for Notices:

                                  James P. Cecil, CFA
                                  AVP
                                  U.S. Bank - Special Assets
                                  BC - MN - H22A
                                  800 Nicollet Mall
                                  Minneapolis, MN 55402
                                  Ph: 612-303-4505
                                  Fax: 612-303-4660
                                  Email: jamesp.cecil@usbank.com

                                Warrant Agreement



                                       48

                                  UNION BANK OF CALIFORNIA, N.A.



                                  By  /s/ George Vetek
                                    -------------------------------------

                                      Name: George Vetek
                                      Title: Vice President

                                  Address for Notices:

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

                                Warrant Agreement



                                       49

                                  GENERAL ELECTRIC CAPITAL CORPORATION



                                  By  /s/ Robert M. Kadlick
                                    -----------------------------------------

                                    Name: Robert M. Kadlick
                                    Title: Duly Authorized Signatory

                                  Address for Notices:

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

                                  -and-

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

                                Warrant Agreement



                                       50

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



                                  By  /s/ David B. Nelson
                                    -----------------------------------------

                                    Name: David B. Nelson
                                    Title: Vice President

                                  Address for Notices:

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

                                Warrant Agreement



                                       51

                                       CITIZENS BANK OF MASSACHUSETTS


                                       By /s/ Christopher G. Daniel
                                         ---------------------------------------
                                         Name: Christopher G. Daniel
                                         Title: Vice President

                                       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



                                       52


                                       BANK AUSTRIA CREDITANSTALT CORPORATE
                                       FINANCE, INC.


                                       By /s/ A. N. Seidel
                                         ---------------------------------------
                                         Name: A. N. Seidel
                                         Title: Senior Vice President


                                       By /s/ Hans Jung
                                         ---------------------------------------
                                         Name: Hans Jung
                                         Title: Associate Director


                                       Address for Notices:

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

                               Warrant Agreement



                                       53

                                       FIRST MERIT BANK N.A.


                                       By /s/ Mary Beth Rittenhour
                                         ---------------------------------------
                                         Name: Mary Beth Rittenhour
                                         Title: Vice President

                                       Address for Notices:

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

                                       Attn: J. Neumann

                               Warrant Agreement



                                       54

                                       KEYBANK NATIONAL ASSOCIATION


                                       By /s/ Nadine M. Eames
                                         ---------------------------------------
                                         Name: Nadine M. Eames
                                         Title: Vice President

                                       Address for Notices:

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

                               Warrant Agreement



                                       55

                                       KZH RIVERSIDE LLC


                                       By /s/ Susan Lee
                                         ---------------------------------------
                                         Name: Susan Lee
                                         Title: Authorized Agent

                                       Address for Notices:

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

                               Warrant Agreement



                                       56

                                       KZH STERLING LLC


                                       By /s/ Susan Lee
                                         ---------------------------------------
                                         Name: Susan Lee
                                         Title: Authorized Agent

                                       Address for Notices:

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

                                Warrant Agreement



                                       57

                                       KZH CYPRESSTREE - 1 LLC


                                       By  /s/ Susan Lee
                                         ---------------------------------------
                                         Name: Susan Lee
                                         Title: Authorized Agent

                                       Address for Notices:

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

                               Warrant Agreement



                                       58

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


                                       By /s/ John Abate
                                          --------------------------------------
                                          Name: John Abate
                                          Title: Authorized Signatory

                                       Address for Notices:

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

                               Warrant Agreement



                                       59

                                       CENTURION CDO I, LIMITED
                                       By: American Express Asset Management
                                       Group Inc. as Collateral Manager


                                       By /s/ Leanne Stavrakis
                                         ---------------------------------------
                                         Name: Leanne Stavrakis
                                         Title: Director - Operations

                                       Address for Notices:

                                       Helen Canky
                                       American Express Asset Management
                                       100 N Sepulveda Blvd. Ste. 650
                                       El Segundo, CA 90245
                                       Tel: 310-744-2405
                                       Fax: 310-615-1088
                                       E-Mail: helen.c.canky@aexp.com

                               Warrant Agreement



                                       60

                                       CENTURION CDO II, LTD.
                                       By: American Express Asset Management
                                       Group Inc. as Collateral Manager


                                       By /s/ Leanne Stavrakis
                                         ---------------------------------------
                                         Name: Leanne Stavrakis
                                         Title: Director - Operations

                                       Address for Notices:

                                       Helen Canky
                                       American Express Asset Management
                                       100 N Sepulveda Blvd. Ste. 650
                                       El Segundo, CA 90245
                                       Tel: 310-744-2405
                                       Fax: 310-615-1088
                                       E-Mail: helen.c.canky@aexp.com

                               Warrant Agreement



                                       61

                                       CENTURION CDO III, Limited
                                       By: American Express Asset Management
                                       Group Inc. as Collateral Manager


                                       By /s/ Leanne Stavrakis
                                         ---------------------------------------
                                         Name: Leanne Stavrakis
                                         Title: Director - Operations

                                       Address for Notices:

                                       Helen Canky
                                       American Express Asset Management
                                       100 N Sepulveda Blvd. Ste. 650
                                       El Segundo, CA 90245
                                       Tel: 310-744-2405
                                       Fax: 310-615-1088
                                       E-Mail: helen.c.canky@aexp.com

                               Warrant Agreement



                                       62

                                       CENTURION CDO VI, LTD.
                                       By: American Express Asset Management
                                       Group Inc. as Collateral Manager


                                       By /s/ Leanne Stavrakis
                                          --------------------------------------
                                          Name: Leanne Stavrakis
                                          Title: Director - Operations

                                       Address for Notices:

                                       Helen Canky
                                       American Express Asset Management
                                       100 N Sepulveda Blvd. Ste. 650
                                       El Segundo, CA 90245
                                       Tel: 310-744-2405
                                       Fax: 310-615-1088
                                       E-Mail: helen.c.canky@aexp.com

                               Warrant Agreement



                                       63

                                       MERRILL LYNCH, PIERCE, FENNER & SMITH
                                                   INCORPORATED


                                       By /s/ Graham Goldsmith
                                         ---------------------------------------
                                         Name: Graham Goldsmith
                                         Title: Managing Director

                                       Address for Notices:

                                       Merrill Lynch, Pierce, Fenner & Smith
                                                   Incorporated
                                       4 World Financial Center
                                       250 Vesey Street, 7th Floor
                                       New York, NY 10080
                                       Attn: Steven Pomerantz

                                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                                               64,856
- ------------------------------------------------------------------------------------------
NATIONAL CITY BANK                                                64,119
- ------------------------------------------------------------------------------------------
BANK ONE, NA                                                      55,819
- ------------------------------------------------------------------------------------------
VAN KAMPEN PRIME RATE INCOME TRUST                                49,555
- ------------------------------------------------------------------------------------------
SENIOR DEBT PORTFOLIO                                             52,555
- ------------------------------------------------------------------------------------------
U.S. BANK NATIONAL ASSOCIATION                                    32,096
- ------------------------------------------------------------------------------------------
UNION BANCAL EQUITIES, INC.                                       42,215
- ------------------------------------------------------------------------------------------
GE CAPITAL CFE, INC.                                              39,416
- ------------------------------------------------------------------------------------------
ENDEAVOUR, LLC                                                    35,732
- ------------------------------------------------------------------------------------------
CITIZENS FINANCIAL GROUP, INC.                                    36,960
- ------------------------------------------------------------------------------------------
BANK AUSTRIA CREDITANSTALT CORPORATE FINANCE, INC.                23,821
- ------------------------------------------------------------------------------------------
FIRSTMERIT BANK, N.A.                                             30,769
- ------------------------------------------------------------------------------------------
KEYBANK NATIONAL ASSOCIATION                                      23,821
- ------------------------------------------------------------------------------------------
KZH RIVERSIDE LLC                                                  5,310
- ------------------------------------------------------------------------------------------
KZH STERLING LLC                                                  26,277
- ------------------------------------------------------------------------------------------
KZH CYPRESSTREE - 1 LLC                                           13,139
- ------------------------------------------------------------------------------------------
JPMORGAN CHASE BANK                                               23,764
- ------------------------------------------------------------------------------------------


                       Schedule 2.02 to Warrant Agreement



                                       2

                                                               
- -------------------------------------------------------------------------------------
CENTURION CDO I, LIMITED                                            2,785
- -------------------------------------------------------------------------------------
CENTURION CDO II, LTD.                                              6,951
- -------------------------------------------------------------------------------------
CENTURION CDO III, LIMITED                                          2,779
- -------------------------------------------------------------------------------------
CENTURION CDO VI, LTD.                                              2,785
- -------------------------------------------------------------------------------------
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED                137,609
- -------------------------------------------------------------------------------------
                                                                  TOTAL: 773,133
- -------------------------------------------------------------------------------------



                       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.   Warrants held by the holders party to the Warrant Agreement dated as of
     September 30, 2002, to purchase an aggregate of 1,353,531 shares of Common
     Stock.

e.   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                                                  1,652,281

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

                     Schedule 3.07(a) to Warrant Agreement



                                        2

     April 12, 1999, between the Issuer, MVE Holdings, Inc. and each of the
     former members of MVE Investors, LLC.

b.   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.

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

d.   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
     DECEMBER 31, 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 9.06 of the Warrant Agreement, the
"Expiration Date"),[____] Stock Units at a purchase price of $0.750 per Stock
Unit (the "Exercise Price"), subject to the terms and conditions hereinbelow

                                     Warrant



                                      - 2 -

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 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

                                     Warrant



                                      - 3 -

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: December 31, 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

_______________________________________

      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 December
        31, 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-21.1

EXHIBIT 21.1

SUBSIDIARIES OF THE REGISTRANT AND JURISDICTION

OF INCORPORATION OR ORGANIZATION

Caire Inc.	Delaware
Chart Asia, Inc.	Delaware
Chart Australia Pty LTD	Australia
Chart BioMedical Limited	U.K.
Chart Cryogenic Equipment (Changzhou) Co., Ltd.	China
Chart Cryogenic Equipment (Zhangjiagang) Co., Ltd.	China
Chart Europe GmbH	Germany
Chart Heat Exchangers Limited	U.K.
Chart Heat Exchangers Limited Partnership	Delaware
Chart Inc. (1)	Delaware
Chart International, Inc. (1)	Delaware
Chart International Holdings, Inc	Delaware
Chart Leasing, Inc. (1)	Ohio
Chart Management Company, Inc. (1)(2)	Ohio
Coastal Fabrication, LLC	Delaware
CoolTel, Inc.	Delaware
Ferox A.S.	Czech Republic
Ferox GmbH	Germany
Greenville Tube, LLC	Delaware
NexGen Fueling, Inc.	Delaware

(1) Direct subsidiary of Registrant. All other subsidiaries are indirect subsidiaries of the Registrant.

(2) General partner for Chart Heat Exchangers Limited Partnership, a Delaware limited partnership.

73

EX-23.1

EXHIBIT 23.1

CONSENT OF INDEPENDENT AUDITORS

We consent to the incorporation by reference in the Registration Statements (Forms S-8 No. 33-58446, No. 33-92346 and No. 333-08665) pertaining to the Chart Industries, Inc. Key Employees Stock Option Plan, (Form S-8 No. 33-92340) pertaining to the Chart Industries, Inc. 1994 Stock Option Plan for Outside Directors and Chart Industries, Inc. 1995 Stock Option Plan for Outside Directors, (Forms S-8 No. 333-08667 and No. 333-57306) pertaining to the Chart Industries, Inc. 1996 Stock Option Plan for Outside Directors, (Form S-8 No. 333-32535) pertaining to the Chart Industries, Inc. 1997 Stock Option and Incentive Plan and the Chart Industries, Inc. 1997 Stock Bonus Plan, (Form S-8 No. 333-57300) pertaining to the Chart Industries, Inc. 2000 Executive Incentive Stock Option Plan, (Form S-8 No. 333-57308) pertaining to the Chart Industries, Inc. Amended and Restated 1997 Stock Option and Incentive Plan, (Form S-8 No. 333-67194) pertaining to the Second Amended and Restated Chart Industries, Inc. 1997 Stock Option and Incentive Plan, and (Form S-8 No. 333-98853) pertaining to the Chart Industries, Inc. Amended and Restated 1997 Stock Bonus Plan of our report dated April 9, 2003, with respect to the consolidated financial statements of Chart Industries, Inc. and subsidiaries included in the Annual Report (Form 10-K) for the year ended December 31, 2002.

/S/    ERNST & YOUNG LLP

Cleveland, Ohio

April 10, 2003

74