Document:

Form of Stock Option Agreement under 2004 Stock Option and Incentive Plan

 EXHIBIT 10.28 
  
 FORM OF STOCK OPTION AGREEMENT 
  
 THIS STOCK OPTION AGREEMENT is entered into as of the      day of
        , 20    , by and between Chart Industries, Inc., a Delaware corporation (the “Company”), and
                     (the “Optionee”). 
  
 WITNESSETH: 
  
 WHEREAS, the Compensation Committee of the Board of Directors (the “Committee”) is authorized to administer the Company’s 2004 Stock Option
and Incentive Plan (the “Plan”); and 
  
 WHEREAS, the
Committee has determined that the Optionee, as a key employee of the Company or one of its Affiliates, should be granted a stock option under the Plan upon the terms and conditions set forth in this Agreement, and for the number of shares of Common
Stock, par value $.01 per share, of the Company (the “Shares”) set forth herein below; 
  
 NOW, THEREFORE, the Company and the Optionee hereby agree as follows: 
  
 1. Definitions. Capitalized terms shall have the meanings set forth in the Plan (as defined below) unless otherwise
specifically set forth below or elsewhere herein: 
  

	 	(a)	The word “Agreement” shall mean this instrument. 

  

	 	(b)	The words “Credit Agreement” shall mean that certain Amended and Restated Revolving Credit Agreement dated as of September 15, 2003, by and among the Company, its lenders
and the other parties thereto identified on the signature pages of said Agreement. 

  

	 	(c)	The word “EBITDAR” shall have the same meaning as “Consolidated EBITDA” as defined in the Credit Agreement. 

  

	 	(d)	The words “Family Group” shall mean with respect to the Optionee such person’s spouse, siblings and descendants (whether or not adopted) and any trust, family limited
partnership or limited liability company that is and remains solely for the benefit of such person and/or such person’s spouse, siblings and/or descendants. 

  

	 	(e)	The word “Option” shall mean the right and option of the Optionee to purchase Shares pursuant to the terms of this Agreement. 

  

	 	(f)	The words “Option Price” shall mean the price at which Shares may be acquired upon the exercise of any Option. 

  

	 	(g)	The words “Option Shares” shall mean (i) the Shares and any other capital stock or equity securities of the Company acquired by the Optionee or his
successors by virtue of the exercise of the Option and (ii) any capital stock or other equity securities issued or issuable directly or indirectly with respect to the securities referred to in clause (i) above by way of stock dividend or split or in
connection with a combination of shares, recapitalization, merger, consolidation or other reorganization. As to any particular 

 shares constituting Option Shares, such shares shall cease to be Option Shares when they have been sold
to the public pursuant to a resale offering registered under the Securities Act or to the public through a broker dealer or market maker pursuant to the provisions of Rule 144 adopted under the Securities Act. 
  

	 	(h)	The words “Personal Representative” shall mean, following the Optionee’s death, the person who shall have acquired, by will or by the laws of descent and
distribution, the right to exercise any Option. 

  

	 	(i)	The word “Plan” shall mean the Company’s 2004 Stock Option and Incentive Plan, as in effect on the date of this Agreement (a copy of which is attached as Exhibit A).

  

	 	(j)	The words “Public Offering” shall mean a public offering and sale of capital stock or equity securities of the Company pursuant to an effective registration statement
under the Securities Act. 

  

	 	(k)	The words “Qualified Public Offering” shall mean a Public Offering which results in aggregate proceeds to the Company and/or the Stockholders (as defined in the Investor
Rights Agreement) of at least $50,000,000. 

  

	 	(l)	The words “Securities Act” shall mean the Securities Act of 1933, as amended or any similar federal law in force. 

  

	 	(m)	The words “Successor Agreement” shall mean an agreement in the form attached hereto as Exhibit B under which any prospective transferee of Option Shares agrees to be bound
by the obligations imposed hereunder on a holder of Option Shares. 

  
 2. Grant of Option. Effective as of the date of this Agreement, the Company grants to the Optionee, upon the terms and conditions set forth hereinafter, the right and option to purchase all or any number of an
aggregate of              Shares. All of the Shares shall be subject to a nonqualified stock option at an Option Price of
$             per Share. 
  
 3. Term of Option. The term of the Option shall be for a period of ten (10) years from the date hereof. The Option shall expire at the close of regular business hours at the Company’s principal business
office, on the last day of the term of the Option, or, if earlier, on the applicable expiration date provided for in Sections 5, 6 and 7 hereof. 
  
 4. Exercise Dates. The Optionee shall be entitled to exercise the Option only to the extent the Option becomes exercisable under the terms and
conditions of the vesting schedule attached hereto as Exhibit C. To the extent that the Option becomes exercisable with respect to any Shares, as provided on Exhibit C, the Option may thereafter be exercised by the Optionee either with respect to
all or any number of such Shares at any time or from time to time prior to the expiration of the Option. Except as provided in Sections 5 and 6 hereof, the Option may not be exercised at any time unless the Optionee shall be an employee or director
of the Company or one of its Affiliates (an “Eligible Participant”) at such time.  
  
 5. Termination of Employment. So long as the Optionee shall continue to be an Eligible Participant, the Option shall not be affected by (a) any
temporary leave of absence approved in writing by the Company or an Affiliate of the Company, or (b) any change of duties or position (including transfer to or from a subsidiary or other Affiliate). If the Optionee ceases to be an Eligible
Participant for any reason other than death, the Option may be exercised only to the extent of the purchase rights, if any, which, pursuant to Section 4 hereof, existed as of the date the Optionee ceases to be an Eligible Participant and 

 

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 which have not theretofore been exercised; provided, however, that the Committee may in its absolute discretion determine
(but shall not be under any obligation to determine) that such purchase rights shall be deemed to include additional Shares which are subject to the Option. Subject to the provisions of Section 6, upon an Optionee’s ceasing to be an Eligible
Participant, such purchase rights shall in any event terminate upon the earlier of (a) three (3) months after the date the Optionee ceased to be such, or (b) the last day of the term of the Option. Nothing in this Agreement shall confer upon any
Optionee any right to continue in the employ or service of the Company or an Affiliate of the Company, or to interfere with or limit either the right of the Company or an Affiliate of the Company to terminate his employment or service at any time or
the right of the stockholders of the Company or an Affiliate of the Company to remove him as a member of the Board of Directors of the Company or an Affiliate of the Company in any of the foregoing cases with or without cause. 
  
 6. Death of Optionee. If the Optionee dies while he is an Eligible
Participant, or within three (3) months of the Optionee’s having ceased to be such, the Optionee’s Personal Representative may exercise the Option to the extent of the purchase rights, if any, which, pursuant to Section 4 hereof, existed
as of the date of the Optionee’s death and which have not theretofore been exercised; provided, however, that the Committee may in its absolute discretion determine (but shall not be under any obligation to determine) that such purchase rights
shall be deemed to include additional Shares which are subject to the Option. Such purchase rights shall in any event terminate upon the earlier of (a) the first anniversary of the date the Optionee ceased to be an Eligible Participant; or (b) the
last day of the term of the Option. 
  
 7. Change in
Control. In the event of a Change in Control (as defined under the terms of the Plan) the Optionee shall have the immediate right (notwithstanding the provisions of Section 4 hereof) to exercise the Option with respect to all Shares covered by
the Option. 
  
 8. Exercise of Option. The Option
may be exercised by delivering to the Treasurer of the Company at its principal business office a completed Notice of Exercise of Option (obtainable from the Treasurer of the Company) setting forth the number of Shares with respect to which the
Option is being exercised. Such Notice shall be accompanied by payment in full for the Shares. Such payment shall be made by certified or cashier’s check payable to the Company in the amount of the aggregate purchase price for such Shares, or,
if permitted by the Committee, in whole or in part in Shares having a Fair Market Value on the date the Option is exercised equal to that portion of the purchase price for which payment in cash is not made, or by any other method prescribed by the
Committee that it determines to be consistent with applicable law and the purposes of the Plan. 
  
 9. Issuance of Share Certificates. Subject to the last sentence of this Section 9 and to Sections 16 and 17, upon receipt by the Company prior to
expiration of the Option of a duly completed Notice of Exercise of Option to exercise the Option accompanied by full payment for the Shares being purchased pursuant to such Notice (and, with respect to any Option exercised pursuant to Section 6 or
Section 11 hereof by someone other than the Optionee, accompanied in addition by proof satisfactory to the Committee of the right of such person to exercise the Option), the Company shall promptly cause to be made or otherwise delivered to the
Optionee, a certificate for the number of shares so purchased. The Optionee shall not have any of the rights of a stockholder with respect to the Shares which are subject to the Option unless and until a certificate representing such Shares is
issued to the Optionee. The Company shall not be required to issue any certificates for Shares upon the exercise of an Option granted under the Plan prior to (i) obtaining any approval from any governmental agency which the Committee shall, in its
sole discretion, determine to be necessary or advisable, (ii) the admission of such Shares to listing on any securities exchange (if any) on which the Shares may then be listed or quoted, and (iii) completion of any registration or other
qualification of the Shares under any state, federal or other law or ruling or regulations of any governmental body which the Committee shall, in its sole discretion, determine to be necessary or advisable, or the determination by the Committee, in
its sole discretion, that any registration or other qualification of the Shares is not necessary or advisable. 
  

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 10. Restrictions on Transfer of Option Shares. 
  
 10.1 Transfer Restrictions. No holder of Option Shares may sell,
transfer, assign, pledge or otherwise directly or indirectly dispose of (whether with or without consideration and whether voluntarily or involuntarily or by operation of law) (a “Transfer”) any Option Shares or interest therein, except
any Exempt Transfer (as defined below) of Option Shares pursuant to and in accordance with Section 10.2. 
  
 10.2 Exempt Transfers. The restrictions set forth in this Section 10.1 above shall not apply to any of the following Transfers: 
  
 (a) subject to the final paragraph of this Section 10.2, (1) a Transfer of
Option Shares by will or pursuant to the applicable laws of descent and distribution, (2) a Transfer of Option Shares among the transferor’s Family Group, or (3) a Transfer pursuant to a qualified domestic relations order as defined in the
Code; or 
  
 (b) a Transfer that has been approved
in advance by the Committee, in its sole discretion, subject to such terms and conditions as the Committee may impose on such Transfer, in its sole discretion, including requiring the transferee to become subject to the transfer restrictions
provided for in this Agreement. 
  
 A transferee of Option Shares
pursuant to a Transfer described in clause (a) above is sometimes referred to herein as a “Permitted Transferee.” Not less than five business days prior to any Transfer of Option Shares pursuant to the foregoing clause (a), the transferor
shall deliver a written notice to the Company, which notice shall disclose in reasonable detail the nature of the proposed Transfer and the identity of the proposed transferee(s). Notwithstanding the foregoing, the restrictions contained in this
Agreement shall continue to be applicable to the Option Shares following any Transfer to a Permitted Transferee, and no Transfer to a Permitted Transferee may be consummated unless prior thereto the transferor thereof shall have complied with
Section 10.3 below. In addition, and notwithstanding the foregoing, no holder of Option Shares may avoid the provisions of this Agreement by making one or more transfers to one or more Permitted Transferees and then disposing of all or any portion
of such Person’s interest in any such Permitted Transferee, and any Transfer or attempted Transfer in violation of this covenant shall be void and otherwise subject to Section 10.3 below. Any Transfer permitted pursuant to this Section 10.2 is
referred to in this Agreement as an “Exempt Transfer.” 
  
 10.3 Successor Agreement; Void Transfers. Prior to consummating, or committing to consummate, any Transfer of Option Shares to any Person (including any Permitted Transferee), the transferor of such Option Shares shall
cause each prospective transferee thereof to execute and deliver to the Company a Successor Agreement. Any Transfer or attempted Transfer of any Option Shares in violation of the foregoing or any other provision of this Agreement shall be void, and
the Company shall not record such Transfer on its books or treat any purported transferee of such Option Shares as the owner of such shares for any purpose. 
  

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 10.4 Termination. The restrictions on the Transfer of Option Shares set forth in Sections 10.1 and
10.3, and the legend requirement set forth in Section 10.6, shall expire and terminate with respect to each Option Share upon the earliest to occur of (i) the consummation of a Qualified Public Offering, (ii) the occurrence of a Change of Control,
(iii) the consummation of an Approved Sale (as defined in the Investor Rights Agreement), or (iv) such time as the Committee may determine, in its sole discretion, that such restrictions shall cease to apply. 
  
 10.5 Resales of Option Shares. In addition to the restrictions imposed
above, no holder of Option Shares shall, directly or indirectly, offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or
otherwise Transfer any Option Shares during the seven days prior to and the 180-day period beginning on the effective date of the Company’s initial primary Public Offering (i.e., the initial Public Offering for the Company’s own account)
consummated after the date hereof, any underwritten Demand Registration or any underwritten Piggyback Registration (as such terms are defined in the Investor Rights Agreement) (except as part of such underwritten registration), unless the
underwriters managing such registered Public Offering otherwise agree in writing. 
  
 10.6 Legend. Each certificate evidencing Option Shares and each certificate issued in exchange for or upon the transfer of any Option Shares (if such shares remain Option Shares as defined herein
after such Transfer) shall be stamped or otherwise imprinted with a legend in substantially the following form: 
  
 “THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN TRANSFER RESTRICTIONS PURSUANT TO A STOCK OPTION AGREEMENT DATED AS OF
            , 200_, AMONG THE ISSUER OF SUCH SECURITIES (THE “COMPANY”) AND THE HOLDER OF SUCH SECURITIES. A COPY OF SUCH STOCK OPTION AGREEMENT WILL BE FURNISHED WITHOUT
CHARGE BY THE COMPANY TO THE HOLDER HEREOF UPON WRITTEN REQUEST TO THE COMPANY’S CHIEF FINANCIAL OFFICER.” 
  
 The legend set forth above shall be promptly removed from the certificates evidencing any Option Shares for which the restrictions contained in Sections
10.1 and 10.3 have terminated in accordance with Section 10.4 hereof. 
  
 11. Successors in Interest, Etc. This Agreement shall be binding upon and inure to the benefit of any successor of the Company and the heirs, estate, and Personal Representative of the Optionee. The Option shall not be transferable
other than by will or the laws of descent and distribution, and the Option may be exercised during the lifetime of the Optionee only by the Optionee provided that a guardian or other legal representative who has been duly appointed for such Optionee
may exercise the Option on behalf of the Optionee. A deceased Optionee’s Personal Representative shall act in the place and stead of the deceased Optionee with respect to exercising an Option or taking any other action pursuant to this
Agreement. 
  
 12. Provisions of Plan Control. This
Agreement is subject to all of the terms, conditions, and provisions of the Plan and to such rules, regulations, and interpretations relating to the Plan as may be adopted by the Committee and as may be in effect from time to time. A copy of the
Plan is attached hereto as Exhibit A and is incorporated herein by reference. In the event and to the extent that this Agreement conflicts or is inconsistent with the terms, conditions, and provisions of the Plan, the Plan shall control, and this
Agreement shall be deemed to be modified accordingly. Any action or determination that may be taken or made by the Committee under this Agreement alternatively may be taken or made by the Board of Directors of the Company, which shall be deemed to
act as the “Committee” for purposes of this Agreement in so taking or making any such action or determination. 
  

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 13. No Liability Upon Distribution of Shares. The liability of the Company under this Agreement
and any distribution of Shares made hereunder is limited to the obligations set forth herein with respect to such distribution and no term or provision of this Agreement shall be construed to impose any liability on the Company or the Committee in
favor of any person with respect to any loss, cost or expense which the person may incur in connection with or arising out of any transaction in connection with this Agreement. 
  
 14. Withholding. The Optionee agrees that the Company and any Affiliate of the Company may make appropriate provision
for tax withholding with respect to the transactions contemplated by this Agreement including such withholding as may be appropriate with respect to income and social security taxes. Optionee must, no later than the date as of which the value of the
Option first becomes includible in the gross income of the Optionee for income tax purposes, pay to the Company, or make arrangements satisfactory to the Company regarding payment of, any federal, state or local taxes of any kind required by law or
other amounts to be withheld with respect to the Option. The obligations of the Company under this Agreement are conditioned on such payment, and the Company, to the extent permitted by law, has the right to deduct any such taxes or other amounts
from any payment of any kind otherwise due to the Optionee. 
  
 15. Voluntary Award. The Optionee acknowledges and agrees that the Option granted hereunder is granted on a voluntary basis and without creating legal rights on the part of the Optionee for the future. 
  
 16. Compliance with Regulatory Matters. The Optionee acknowledges that
the issuance of capital stock is subject to limitations imposed by federal and state law, and the Optionee hereby agrees that the Company shall not be obligated to issue any shares of Common Stock upon exercise of the Option that would cause the
Company to violate any rule, regulation, order or consent decree of any regulatory authority (including without limitation the Securities and Exchange Commission and the principal securities exchange (if any) upon which the Common Stock is then
traded or quoted) having jurisdiction over the affairs of the Company. The Optionee agrees that he will provide the Company with such information as is reasonably requested by the Company or its counsel to determine whether the issuance of shares of
Common Stock complies with the provisions described by this Section 16.  
  
 17. Investment Representation. The Optionee hereby represents and warrants that any Shares which he may acquire by virtue of the exercise of the Option shall be acquired solely for his own account, for
investment purposes only, and not with a view to distribution or resale; provided, however, that this restriction shall become inoperative in the event the Shares which are subject to the Option shall be registered under the Securities Act, part of
a class of shares registered under Section 12 of the Exchange Act, and exempt from the registration requirements of applicable state securities laws, or in the event there is presented to the Company an opinion of counsel satisfactory to the Company
to the effect that the offer or sale of the Shares which are subject to the Option may lawfully be made without registration under the Securities Act and applicable state securities laws. The Optionee agrees to sign a certificate to such effect at
the time of exercising the Option and agrees that the certificate for the Shares so purchased may be inscribed with the following legend to ensure compliance with the Securities Act and applicable state securities laws: 
  
 “THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR APPLICABLE STATE SECURITIES LAWS, AND MAY 
  

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 NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS A REGISTRATION STATEMENT UNDER THE SECURITIES
ACT WITH RESPECT TO SUCH SHARES HAS BECOME EFFECTIVE AND ANY APPLICABLE REQUIREMENTS OF STATE SECURITIES LAWS ARE MET, OR UNLESS THE STOCKHOLDER ESTABLISHES TO THE SATISFACTION OF THE CORPORATION THAT AN EXEMPTION FROM SUCH REGISTRATION IS
AVAILABLE.” 
  
 18. Restricted Securities. The
Optionee understands and acknowledges that (a) unless registered under the Securities Act, all of the Option Shares will constitute “restricted securities” as defined in Rule 144 under the Securities Act, (b) the Option Shares may not be
transferred unless they become registered under the Securities Act or unless the holder thereof establishes to the satisfaction of the Company that an exemption from such registration is available, (c) the Company will have no obligation to provide
any such registration or take such steps as are necessary to permit sale of the Option Shares without registration pursuant to Rule 144 or otherwise, (d) at such time as the Option Shares may be disposed of in routine sales without registration in
reliance on Rule 144 under the Securities Act, such disposition may be made only in such amounts and in accordance with all of the terms and conditions applicable under Rule 144, and (e) if the Rule 144 exemption is not available, compliance with
some other exemption from registration will be required. 
  
 19.
Captions. The captions and section numbers appearing in this Agreement are inserted only as a matter of convenience. They do not define, limit, construe or describe the scope or intent of the provisions of this Agreement. 
  
 20. Number. The use of the singular or plural herein shall not be
restrictive as to number and shall be interpreted in all cases as the context shall require. 
  
 21. Gender. The use of the feminine, masculine or neuter pronoun shall not be restrictive as to gender and shall be interpreted in all cases as the context may require. 
  
 22. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware, without giving effect to the conflict of law principles of such State. 
  
  

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 IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on its behalf by its duly
authorized officer, and the Optionee has hereunto set his hand, all as of the day and year first above written. 
  

			
	 CHART INDUSTRIES, INC.

	 (“Company”)

		
	 By:
	 	  

	 	 	 Its:

	
	OPTIONEE:
	
	  

  
  

 8 

 EXHIBIT A 
  
 CHART INDUSTRIES, INC. 2004 STOCK OPTION AND INCENTIVE PLAN 

 EXHIBIT B 
  

FORM OF SUCCESSOR AGREEMENT 
  
 This notice is being delivered to Chart Industries, Inc., a Delaware corporation (the “Company”), pursuant to Section 10.3 of that
certain Stock Option Agreement, dated as of         , 20     (as amended from time to time, the “Stock Option Agreement”), by and between the Company and
                    . Capitalized terms used herein shall have the meanings assigned to such terms in the Stock Option Agreement. 

 
 The undersigned hereby notifies the Company that [name of
transferor] has transferred to the undersigned          shares of Common Stock that are Option Shares. In connection with such transfer, the undersigned hereby agrees to be bound by Sections 10, 11,
17 and 18 of the Stock Option Agreement and such other provisions of the Stock Option Agreement imposing obligations on a holder of Option Shares. 
  
 Any notice required under the Stock Option Agreement should be delivered to the undersigned at the address set forth below: 
  

	
	 _____________________________

	
	 _____________________________

	
	 Facsimile: _____________________

	
	 Attention: _____________________

  

	
	 Dated: _________________

  

	
	 __________________________

	                                  [Transferee]

 EXHIBIT C 
  

VESTING SCHEDULE 
  
 The Optionee shall be entitled to exercise the Option only upon satisfaction of the terms set forth on this Schedule. 
  
 I. Vesting Based on Continuing in Service. 
  
 The Optionee shall be entitled to exercise the Option with respect to one
half of the Shares (the “Service Shares”) based on his continuing as an employee of the Company or one of its Affiliates. The Optionee shall be entitled to exercise the Option with respect to the number of Service Shares indicated below on
or after the date indicated opposite such number below: 
  

					
	 Annual Number
 of Service Shares with
 Respect to which
 Option may
 be Exercised

	 	 Total Service Shares with
 Respect to which
 Option may be
 Exercised

	 	 Date Beginning
 on which Option
 may be Exercised
 for such Service Shares

	 	 	 	 	            , 20    
	 	 	 	 	            , 20    
	 	 	 	 	            , 20    
	 	 	 	 	            , 20    

  
 II. Vesting Based on Satisfaction of
Financial Goals. 
  
 The Optionee shall be entitled to exercise
the Option with respect to one half of the Shares (the “Financial Goal Shares”) based on the Company’s realization of certain financial targets set forth below. If the Committee determines that the Company has achieved the EBITDAR
Minimum Target for a specified period set forth below, then the Optionee shall be entitled to exercise the Option with respect to the number of Financial Goal Shares indicated below opposite such specified period on and after the date of such
determination: 
  

							
	 Annual Number of
 Financial Goal Shares
 with respect to which
 Option may be
 Exercised

	 	 Total Financial
 Goal Shares with
 respect to which
 Option may be
 Exercised

	 	 Period after which
 Option may be
 Exercised for such
 Financial Goal
 Shares

	 	 EBITDAR
 Minimum
 Target

	 	 	 	 	Fiscal Year 20    	 	 
	 	 	 	 	Fiscal Year 20    	 	 
	 	 	 	 	Fiscal Year 20    	 	 
	 	 	 	 	Fiscal Year 20    	 	 

  
 The Committee shall
determine whether the Company has achieved the EBITDAR Minimum Target for the specified period no later than 10 calendar days after the audited financial statements of the Company and its consolidated subsidiaries are completed for the fiscal year
ending on the same day on which such period ends. If the Committee determines that the Company has not achieved the EBITDAR Minimum Target for the specified period, then all of the Financial Goal Shares set forth opposite such period in the table
above shall be forfeited and the Optionee shall never be entitled to exercise the Option with respect to any of such Financial Goal Shares. After the Optionee is entitled to exercise the Option with respect to any Financial Goal Shares, the Optionee
shall not forfeit such right based solely on the financial performance of the Company for succeeding periods. 

 The Committee shall have the authority to determine EBITDAR for each specified period. In making such
determination, the Committee shall be entitled to rely on the determination of EBITDAR under the Credit Agreement for periods coinciding with such specified period. 
  

 C-2Amendment to Lease

 EXHIBIT 10(uu) 
  
 TO FORM 10-K OF 
 WELLS REAL ESTATE FUND VII, L.P. 
  
  
  
  
 FOURTH AMENDMENT TO LEASE 
  
 THIS
FOURTH AMENDMENT TO LEASE (this “Amendment”), dated as of the 15th day of August, 2004 (the “Effective Date of Amendment”), by and between FUND VII AND VIII ASSOCIATES, a Georgia joint venture (“Landlord”),
and CH2M HILL, a Florida corporation (“Tenant”). 
  
 BACKGROUND 
  
 The original lease agreement
was entered into with an effective date of September 20, 1994, by and between Wells Real Estate Fund VII, L.P. a Georgia limited partnership (“Fund VII”) and Tenant, with respect to those premises situated in that certain building located
at 3011 SW Williston Road, Gainesville, Florida 32608, being more particularly described on Exhibit “A” attached hereto (the “Property”). The original lease was then amended pursuant to that certain First Amendment to Lease dated
November 14, 1994, that certain Second Amendment dated January 12, 1995 and that certain Third Amendment dated June 30, 1995 (the original lease, together with all amendments, is called the “Lease”). Subsequently, Fund VII contributed the
Property into a joint venture pursuant to that certain Joint Venture Agreement of Fund VII and Fund VIII Associates dated February 10, 1995 between Fund VII and Wells Real Estate Fund VIII, a Georgia limited partnership (“Fund VIII”), as
amended by that certain First Amendment to Joint Venture Agreement of Fund VII and Fund VIII Associates dated April 1, 1996. 
  
 Landlord and Tenant now wish to amend the Lease as described below. 
  
 AGREEMENT 
  
 NOW, THEREFORE, for and in consideration of the mutual covenants and benefits herein contained, Landlord and Tenant do hereby agree as follows:

  
 1. Definitions. Capitalized terms used in this
Amendment but not otherwise defined herein shall have the meanings given in the Lease. 
  
 2. Demised Premises. From and after September 1, 2004 (the “Extension Date”) the Demised Premises shall mean that certain premises in the Building located on the Land more particularly described on
Exhibit “B” attached hereto, which consist of approximately 50,877 square feet of Rentable Floor Area, having been measured according to BOMA standards. In addition, the Rentable Floor Area of the Building is 61,494, so that Tenant’s
Share is 82.73%. 
  
 3. Termination of Lease as to Surrendered
Space. Landlord and Tenant agree that Tenant’s obligation to pay Rent pursuant to the Lease shall be terminated as it relates to the approximately 5,500 square feet more particularly described on Exhibit “C” attached hereto (the
“Surrendered Space”) effective as of 11:59 p.m. on August 31, 2004 (the “Termination Date”). 

 
Notwithstanding the foregoing, Tenant shall remain in the Surrendered Space subject to the Lease until Landlord has completed Leasehold Improvements as per
Paragraph 7 of this Fourth Amendment to Lease. Upon completion of such Leasehold Improvements, Tenant will vacate and surrender possession of the Surrendered Space to Landlord pursuant to Section 30 of the Lease. From and after such vacating and
surrender, Tenant will have no further right to occupy the Surrendered Space, the Lease as it relates to the Surrendered Space will be terminated, and Tenant will have no further obligations for the Surrendered Space. 
  
 4. Extension of Lease Term. Commencing on the Extension Date the Lease
Term shall hereby be extended for a period of seventy-five (75) months and shall expire on November 30, 2010 (the “Expiration Date”) unless renewed or extended as otherwise provided herein. 
  
 5. Base Rental Rate. From and after the Extension Date, the Base
Rental Rate will be a gross payment of base rent and operating expenses, and such payment shall be due and payable as set forth in Section 5 of the Lease as modified herein in the following amounts, subject to adjustments as specified within this
Fourth Amendment to Lease. 
  

										
	 Months

	  	Per Square Foot

	  	Operating
Expenses

	  	 	  	Per Square Foot

	 9/1/04 - 11/30/05
	  	 	  	 	  	 	  	$	16.42
	 12/1/05 - 11/30/06
	  	12.00	  	7.00	  	0.20	  	$	19.20
	 12/1/06 - 11/30/07
	  	12.36	  	7.00	  	0.20	  	$	19.56
	 12/1/07 - 11/30/08
	  	12.73	  	7.00	  	0.20	  	$	19.93
	 12/1/08 - 11/30/09
	  	13.12	  	7.00	  	0.20	  	$	20.32
	 12/1/09 - 11/30/10
	  	13.51	  	7.00	  	0.20	  	$	20.71

  
 6. Tenant’s
Additional Rental. Section 7(b) of the Lease is hereby amended so that Tenant’s Share of Operating Expenses shall be defined as Tenant’s Share of the total dollar increase, if any, in Operating Expenses paid or incurred by Landlord in
each calendar year over the Operating Expenses paid or incurred by Landlord in the calendar year 2005 (the “Base Year”). Notwithstanding the foregoing, Landlord shall limit the Operating Expenses effective 9/1/2004 through 12/31/2005 at an
annual rate of $7.00/square foot, and for subsequent years during the term of the lease, Landlord shall limit annual increases to Operating Expenses to 3%, except as provided herein. Landlord’s limit of Operating Expenses shall not include
electrical costs, real estate taxes or insurance expense and any other expenses outside the reasonable control of Landlord (the “Excluded Operating Expenses”), however, such Excluded Operating Expenses shall be limited to actual expenses
as reasonably incurred by the Landlord in the normal operation of the Building and the Property. 
  
 7. Leasehold Improvements. 
  
 (a) Except as set forth in this Section, Tenant accepts the Demised Premises in their “as is” condition on the date that this
Amendment is entered into. Landlord agrees to 
  

 2 

 
complete certain work (the “Work”), at Landlord’s cost and expense, consisting of the following items: (i) installing carpet on the floors and
painting the walls of the Demised Premises, using Building standard materials or as otherwise noted in this Amendment; (ii) installing card access security systems to control eight (8) access points; (iii) and constructing six (6) demised offices
pursuant to space plans, (collectively, the “Plans”), attached hereto as Exhibit “D”. All changes, additions and modifications to the Work or the Plans shall be at Tenant’s sole cost and expense (including, without
limitation, materials above Building standard and compliance issues necessitated by Tenant’s use and occupancy of the Demised Premises). All changes in the Work or the Plans must receive the prior written approval of Landlord, and the cost
thereof shall be borne solely by Tenant. It shall be a condition precedent to Landlord’s commencement of the Work that Tenant remit to Landlord payment for all any additional costs due to changes of the Work or Plans and any failure to do so
shall be a delay caused by Tenant. 
  
 (b)
Landlord shall also provide to Tenant an additional allowance, payable by Landlord to Tenant upon execution of this Fourth Amendment to Lease, the sum of $52,000 for Tenant’s use as Tenant requires for moving, cabling and any other costs and
expenses related to this Fourth Amendment to Lease. 
  
 8.
Right of First Offer. Section 49 (a) and (b) of the Lease is deleted and replaced with the following: 
  
 “(a) So long as (i) there are more than twenty-four (24) months remaining in the Lease Term, and (ii) a period of one (1) year has expired since the
Effective Date of this Amendment, at such time or times that all of the space described in Exhibit “E” (the “First Offer Space”) becomes vacant, Landlord will notify Tenant in writing of the availability of such space. So long as
Tenant provides written notice to Landlord, within ten (10) days after receipt of Landlord’s notice, of Tenant’s election to expand the Demised Premises to include the First Offer Space (the “Election Notice”), then the parties
hereto shall proceed to execute an amendment to this Lease to add the First Offer Space to the Demised Premises within thirty (30) days of Landlord’s receipt of the Election Notice. If Tenant fails to (i) deliver the Election Notice to Landlord
on or before the expiration of such ten (10) day period described above, or (ii) execute an amendment to the Lease to add the entire First Offer Space to the Demised Premises within such thirty (30) day period, Tenant will be deemed to have waived
its Right of First Offer and, for a period of one (1) year from such failure, Landlord may lease all or a portion of the First Offer Space to any third party without notice to Tenant or without Tenant’s consent. If such one (1) year period
expires before Landlord leases all or any portion of the First Offer Space to a third party, then Landlord must notify Tenant that the First Offer Space is available and repeat the process above before leasing all or any portion of the First Offer
Space to any third party. This Right of First Offer is personal to Tenant and is not transferable by Tenant. 
  
 (b) If Tenant leases the First Offer Space pursuant to this Right of First Offer, the same will be added to the Demised Premises as of the date of
Landlord’s receipt of the Election Notice, and all of the terms and conditions of the Lease, including the Lease Term and the then current Rent, will apply to the First Offer Space; provided, however, Landlord will not be obligated to grant any
concessions or allowances with respect to the First Option Space. Upon the effective date of any amendment to the Lease entered into as a result of Tenant’s Right of 
  

 3 

 
First Offer, Tenant’s Share, Rent and any other calculation pertaining to the Rentable Floor Area of the Demised Premises will be recalculated based on
the addition of the First Offer Space to the same. 
  
 (c) Tenant
will not have any rights according to this Section if, at the time Tenant is obligated to give its Election Notice, or at the time Landlord delivers possession of the First Offer Space, either (1) an Event of Default then exists, or (2) an event has
occurred which with the passage of time or the giving of notice, or both, would be an Event of Default.” 
  
 9. Option to Renew. Section 48 of the Lease is hereby deleted and replaced with the following: 
  
 “Option to Renew. 
  
 (a) So long as there is no Event of Default under this Lease, either at the
time of exercise or at the time the extended term commences, Tenant will have the option to extend the Lease Term for two (2) additional periods of five (5) years (each, an “Option Period”) on the same terms, covenants, and conditions of
this Lease, except that the Base Rental during such Option Period will be ninety-five percent (95%) of the then-fair market rental value of the Demised Premises, determined pursuant to subsection (b). Tenant will exercise its option (if at all) by
giving Landlord written notice (the “Option Notice”) at least two hundred seventy (270) days but not more than three hundred sixty (360) days prior to the expiration of then current Lease Term. 
  
 (b) The Base Rental for the Option Period will be determined in this way:

  
 (1) Landlord and Tenant will have fifteen (15) days after
Landlord receives the Option Notice within which to agree on the then-fair market rental value of the Demised Premises, as defined in subsection (b)(3), and rental increases to the Base Rental for the Option Period. If they agree on the Base Rental
and rental increases for the Option Period within fifteen (15) days, they will amend this Lease by stating the Base Rental and rental increases for the Option Period. 
  
 (2) If they are unable to agree on the Base Rental and rental increases for the Option Period within fifteen (15) days,
then, the Base Rental for the Option Period will be ninety-five percent (95%) of the then-fair market rental value of the Demised Premises as determined in accordance with subsection (b)(4) and the periodic rental increases will be consistent with
current market standards for rent increases at that time, in amounts and at frequencies determined by the appraisers pursuant to subsection (b)(4). 
  
 (3) The “then-fair market rental value of the Demised Premises” means what a landlord under no compulsion to Lease the Demised Premises and a
tenant under no compulsion to Lease the Demised Premises would determine as rents (including Base Rental and rental increases) for the Option Period, as of the commencement of the Option Period, taking into consideration the uses permitted under
this Lease, the quality, size, design and location of the Demised Premises, and the rent for comparable buildings located in the vicinity of Gainesville, Florida. The Base Rental and the rental increases in the Base Rental for the Option Period will
not be less than that provided during the initial Term. 
  

 4 

 (4) Within seven (7) days after the expiration of the fifteen (15) day period, Landlord and Tenant will
each appoint a real estate broker with at least five (5) years’ full-time commercial brokerage experience in the area in which the Demised Premises are located to appraise the then-fair market rental value of the Demised Premises. If either
Landlord or Tenant does not appoint a broker within ten (10) days after the other has given notice of the name of its broker, the single broker appointed will be the sole broker and will set the then-fair market rental value of the Demised Premises.
If two (2) brokers are appointed pursuant to this paragraph, they will meet promptly and attempt to set the then-fair market rental value of the Demised Premises. If they are unable to agree within thirty (30) days after the second broker has been
appointed, they will attempt to elect a third broker meeting the qualifications stated in this paragraph within ten (10) days after the last day the two (2) brokers are given to set the then-fair market rental value of the Demised Premises. If they
are unable to agree on the third broker, either Landlord or Tenant, by giving ten (10) days’ prior notice to the other, can apply to the then-presiding judge of the Lee County Court for the selection of a third broker who meets the
qualifications stated in this paragraph. Landlord and Tenant will bear one-half (2) of the cost of appointing the third broker and of paying the third broker’s fee. The brokers must be people who have not previously acted in any capacity for
either Landlord or Tenant. 
  
 Within thirty (30) days after the
selection of the third broker, a majority of the brokers will set the then-fair market rental value of the Demised Premises. If a majority of the brokers are unable to set the then-fair market rental value of the Demised Premises within thirty (30)
days after selection of the third broker, the three (3) appraisals will be averaged and the average will be the then-fair market rental value of the Demised Premises.” 
  
 10. Future Contraction of the Demised Premises. 
  
 (a) From and after the end of the thirtieth (30th) month of the Lease Term, Tenant may terminate this Lease as to the
portion of the Demised Premises consisting of 5,000 usable square feet and shown on Exhibit “F” attached hereto (the “Contraction Space”) by giving Landlord at least ninety (90) days prior written notice (the “Contraction
Notice”) of its election to do so. The Contraction Notice will state: (i) Tenant’s election to exercise its option under this Section; (ii) the date on which Tenant will surrender the Contraction Space (the “Contraction Date”).

  
 (b) Tenant’s rights under this Section are conditioned
upon: (i) no material Event of Default exists either on the date the Contraction Notice is given or on the Contraction Date; (ii) Tenant has not assigned this Lease or sublet all or any part of the Demised Premises; (iii) Tenant has not exercised
its right of first refusal in Section 8 of this Amendment or option to renew set forth in Section 9 of this Amendment; and (iv) Tenant’s performance of all of its obligations under this Section. 
  
 (c) Tenant will pay Landlord an amount equal to the sum of the following (the
“Contraction Fee”) the calculation of which is attached hereto as Exhibit “G”: (i) the amount of $25,000 for the cost to perform all work necessary to separate the Contraction Space from the 
  

 5 

 
balance of the Demised Premises (the “Remaining Premises”); (ii) the then-present value of the unamortized portion of the tenant improvement
allowance and brokerage commission paid by Landlord in connection with this Lease as it pertains to the Contraction Space; and (iii) the product of $1,190.00 multiplied by 18 months to reimburse Landlord for its cost in providing the additional
parking required by Tenant for the Contraction Space. The Contraction Fee will be paid by Tenant contemporaneously with the giving of the Contraction Notice subject to Landlord’s confirmation of Tenant’s calculations. 
  
 (d) Landlord will prepare a memorandum confirming the effect of Tenant’s
exercise of its contraction of the Demised Premises on the Lease, including without limitation: (i) the Contraction Date; (ii) the Remaining Premises (which shall thereafter be the Demised Premises); (iii) the Base Rental; (iv) Tenant’s Share
of Operating Expenses; and (v) other matters that vary with the size of the Demised Premises. The Base Rental will be a pro rata share of the Base Rental reduced by that proportionate of it that the Contraction Space bears to the Demised Premises.
Landlord and Tenant will execute the amendment prior to the Contraction Date. 
  
 (e) Tenant will perform all of its obligations regarding the Contraction Space (including without limitation) the payment of Base Rental allocable to it and Tenant’s Share of Operating Expenses allocable to it
through the Contraction Date. All of the obligations of Tenant with regard to the Contraction Space that have accrued prior to the Contraction Date will survive the Contraction Date. 
  
 11. Parking. No rights to specific parking spaces are granted under this Lease; however, subject to Landlord’s
rights pursuant to the remainder of this Section, Tenant shall be entitled to use up to five (5) spaces per each 1,000 square feet of Rentable Floor Area in the Demised Premises (260 total spaces) in the parking facilities located on the Property.
All parking spaces provided to Tenant shall be unreserved and are to be used by Tenant, its employees and invitees in common with the other tenants of the Building and their employees and invitees. Landlord reserves the right to build improvements
upon, reduce the size of, relocate, reconfigure, eliminate, and/or make alterations or additions to such parking facilities at any time. The use of the parking spaces is provided by Landlord to Tenant without additional charge. Notwithstanding the
foregoing, during the entire term of this Lease and any renewals thereof, Landlord will consistently provide five (5) spaces per each 1,000 square feet of Rentable Floor Area in the Demised Premises to Tenant for its use, and any other use of
parking spaces on the Property by any others shall not in any manner reduce the number of spaces available to Tenant for Tenant’s employees and invitees to less than five (5) spaces per 1,000 square feet of rentable Floor Area in the Demised
Premises. 
  
 12. Tenant’s Right of First Refusal to
Purchase. Section 50 of the Lease, granting Tenant a Right of First Refusal to purchase the Building and the Land, is hereby deleted in its entirety and is no longer of any force or effect. 
  
 13. Broker Representation. Landlord and Tenant hereby represent and
warrant to each other that neither Landlord nor Tenant have utilized the service of any broker with regard to this Amendment that requires the payment of a commission to such broker, except for Coldwell Banker/M.M. Parrish Realtors, acting solely as
Tenant’s broker (“Tenant’s Broker”). Tenant’s Broker will be paid a commission by Landlord pursuant to the terms and conditions of such 
  

 6 

 
agreement. In the event Tenant or Landlord has utilized the services of a broker that are not disclosed herein, it is agreed that Tenant or Landlord, as
applicable, will be responsible for any and all commissions payable to said broker. 
  
 14. Interpretation. If any conflict between the terms of this Amendment and the terms of the Lease occurs, the terms of this Amendment shall govern and control in all respects. It is the intention of Landlord
and Tenant with respect to the subject matter hereof that the terms of this Amendment shall supersede and replace in each and every respect the terms and provisions of the Lease and Memorandum of Lease which the parties intend to modify pursuant to
the terms hereof. 
  
 15. Binding Effect; Headings; Applicable
Law. All the terms and provisions of this Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. The headings in this Amendment are for convenience of reference only and shall
not limit or otherwise affect the meaning hereof. This Amendment shall be governed by and construed in accordance with the laws of the State of Georgia. 
  
 16. Ratification. Except as hereinabove set forth, the Lease shall remain unmodified and in full force and effect, and Landlord and Tenant do
hereby ratify and confirm the Lease, as modified and amended herein. 
  
 17. Counterparts. This Amendment may be executed in multiple counterparts, each of which is to be deemed original for all purposes. 
  
 [Signatures begin on the following page.] 
  

 7 

 IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment under seal as of the date
first above written. 
  

					
	 Signed, sealed and delivered
 in the presence
of:
	 	TENANT:
		
	  

	 	 CH2M HILL, INC.
  

	Unofficial Witness	 	By:	 	  

	  

 Notary
Public
	 	 Name:
  
 Title:
	 	  

  

	  
                                     (NOTARIAL
SEAL)
	 	 	 	  
 [CORPORATE SEAL]

	  
 My Commission Expires:
	 	 	 	 
			
	  

	 	 	 	 

  
 [Signatures
continue on the following page.] 

													
	 Signed, sealed and delivered
 in the presence
of:
	 	 	  	LANDLORD:
			
	 	 	 	  	FUND VII and FUND VIII ASSOCIATES
	  

	 	 	  	 	  	A Georgia Joint Venture
	Unofficial Witness	 	 	  	 	  	 	  	 	  	 	  	 
	 	 	 	  	 	  	WELLS REAL ESTATE FUND VII, L.P.
	 	 	 	  	 	  	a Georgia Limited Partnership
					
	
	 	 	  	 	  	By:	  	Wells Partners, L.P.
	Notary Public	 	 	  	 	  	 	  	a Georgia limited partnership,
	 	 	 	  	 	  	 	  	as general partner
	(NOTARIAL SEAL)	 	 	  	 	  	 	  	 	  	 	  	 
	 	 	 	  	 	  	 	  	By:	  	Wells Capital, Inc.,
	My Commission Expires:	 	 	  	 	  	 	  	 	  	a Georgia corporation,
	 	 	 	  	 	  	 	  	 	  	as general partner
	
	 	 	  	 	  	 	  	 	  	 	  	 
	 	 	 	  	 	  	 	  	 	  	By:	  	  

	 	 	 	  	 	  	 	  	 	  	Name:	  	  

	 	 	 	  	 	  	 	  	 	  	Title:	  	  

							
	 	 	 	  	 	  	 	  	 	  	 	  	(Corporate Seal)
				
	 	 	 	  	 	  	WELLS REAL ESTATE FUND VIII, L.P.
	 	 	 	  	 	  	a Georgia Limited Partnership
					
	 	 	 	  	 	  	By:	  	Wells Partners, L.P.
	 	 	 	  	 	  	 	  	a Georgia limited partnership,
	 	 	 	  	 	  	 	  	as general partner
						
	 	 	 	  	 	  	 	  	By:	  	Wells Capital, Inc.,
	 	 	 	  	 	  	 	  	 	  	a Georgia corporation,
	 	 	 	  	 	  	 	  	 	  	as general partner
							
	 	 	 	  	 	  	 	  	 	  	By:	  	  

	 	 	 	  	 	  	 	  	 	  	Name:	  	  

	 	 	 	  	 	  	 	  	 	  	Title:	  	  

							
	 	 	 	  	 	  	 	  	 	  	 	  	(Corporate Seal)

  
 [End of
Signatures.] 

 EXHIBIT “A” 
  
 LEGAL DESCRIPTION OF PROPERTY 
  

 10 

 EXHIBIT “B” 
  
 SITE PLAN OF DEMISED PREMISES 
  

 11 

 EXHIBIT “C” 
  
 SITE PLAN OF SURRENDERED SPACE 
  

 12 

 EXHIBIT “D” 
  
 PLANS 
  
 [TO BE ATTACHED UPON COMPLETION BY THE ARCHITECT] 
  

 13 

 EXHIBIT “E” 
  
 SITE PLAN OF FIRST OFFER SPACE 
  

 14 

 EXHIBIT “F” 
  
 SITE PLAN OF CONTRACTION SPACE 
  

 15 

 EXHIBIT “G” 
  
 CALCULATION OF CONTRACTION FEE 
  

									
	 Section 10(c)(i) - Cost of demising the Contraction Space
	  	Estimated at $5.00 per square foot of the Contraction Space	  	 	 	  	$	25,000.00
				
	 Section 10(c)(ii) - Unamortized tenant improvement allowance and broker’s commission
	  	 TI Allowance
 Broker’s Commission
 Total
 Per Square Foot, Demised Premises
 Total for Contraction Space
 Discounted to Present Value at 8%
	  	$
$
$
$
$
 	502,000
305,885.24
807,885.24
15.88
79,400
             	  	$	TBD
				
	 Section 10(c)(iii) - Monthly rental payments for excess parking
	  	18 months @ $1,190 per month	  	 	 	  	$	21,420.00

  

 16

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