10-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTIONS 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

(Mark One)

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

For the fiscal year ended October 31, 2006

OR

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

For the transition period from                    to                   

Commission file number 0-7977

NORDSON CORPORATION

(Exact name of Registrant as specified in its charter)

Ohio	34-0590250
(State of incorporation)	(I.R.S. Employer Identification No.)
28601 Clemens Road Westlake, Ohio	44145
(Address of principal executive offices)	(Zip Code)

(440) 892-1580

(Registrant’s Telephone Number, including area code)

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

Common Shares with no par value

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

None

   Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes x  No o

   Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o     No x  

   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, and (2) has been subject to such filing requirements for the past 90 days. Yes x  No o

   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 whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o  No x

   The aggregate market value of Common Stock, no par value per share, held by nonaffiliates (based on the closing sale price on the Nasdaq) as of April 28, 2006 was approximately $1,509,116,000.

   Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

   Large accelerated filer x  Accelerated filer o  Non-accelerated filer o

   There were 33,454,318 shares of Common Stock outstanding as of December 8, 2006.

DOCUMENTS INCORPORATED BY REFERENCE:

Portions of the Proxy Statement for the 2007 Annual Meeting — Part III

Table of Contents

PART I			2
	Item 1.	Business	2
		General Description of Business	2
		Corporate Purpose and Goals	2
		Financial Information About Operating Segments, Foreign and Domestic Operations and Export Sales	3
		Principal Products and Uses	3
		Manufacturing and Raw Materials	5
		Intellectual Property	5
		Seasonal Variation in Business	5
		Working Capital Practices	5
		Customers	6
		Backlog	6
		Government Contracts	6
		Competitive Conditions	6
		Research and Development	6
		Environmental Compliance	6
		Employees	7
		Available Information	7
	Item 1A.	Risk Factors	7
	Item 1B.	Unresolved Staff Comments	12
	Item 2.	Properties	13
	Item 3.	Legal Proceedings	14
	Item 4.	Submission of Matters to a Vote of Security Holders	15
		Executive Officers of the Company	15
PART II			16
	Item 5.	Market for the Company’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	16
		Market Information and Dividends	16
	Item 6.	Selected Financial Data	17
	Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
		Critical Accounting Policies and Estimates	18
	Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	28
	Item 8.	Financial Statements and Supplementary Data	30
		Consolidated Statements of Income	30
		Consolidated Balance Sheets	31
		Consolidated Statements of Shareholders’ Equity	32
		Consolidated Statements of Cash Flows	33
		Notes to Consolidated Financial Statements	34
		Management’s Report on Internal Control Over Financial Reporting	66
		Report of Independent Registered Public Accounting Firm	67
		Report of Independent Registered Public Accounting Firm	68
	Item 9.	Changes In and Disagreements With Accountants on Accounting and Financial Disclosure	69
	Item 9A.	Controls and Procedures	69
	Item 9B.	Other Information	69

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Table of Contents

PART III			69
	Item 10.	Directors and Executive Officers of the Company	69
	Item 11.	Executive Compensation	70
	Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	70
		Equity Compensation Table	70
	Item 13.	Certain Relationships and Related Transactions	71
	Item 14.	Principal Accounting Fees and Services	71
PART IV			71
	Item 15.	Exhibits and Financial Statement Schedules	71
		(a)(1). Financial Statements	71
		(a)(2) and (c). Financial Statement Schedules	71
		(a)(3) and (b). Exhibits	71
		Signatures	72
		Schedule II — Valuation and Qualifying Accounts and Reserves	74
		Index to Exhibits	75
EX-(4)(C)
EX-10(B)
EX-10(D)(1)
EX-10(E)(1)
EX-21
EX-23
EX-31.1
EX-31.2
EX-32.1
EX-32.2
EX-99(A)
EX-99(B)

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PART I

NOTE REGARDING DOLLAR AMOUNTS

In this annual report, all amounts related to U.S. and foreign currency and to the number of Nordson Corporation’s Common Shares, except for per share earnings and dividend amounts, are expressed in thousands.

Item 1. Business

General Description of Business

Nordson Corporation is one of the world’s leading producers of precision dispensing equipment that applies adhesives, sealants and coatings to a broad range of consumer and industrial products during manufacturing operations, helping customers meet quality, productivity and environmental targets. Nordson also produces technology-based systems for curing and surface-treatment processes, as well as life sciences applications.

Nordson products are used around the world in the appliance, automotive, bookbinding, container, converting, electronics, food and beverage, furniture, life sciences, medical, metal finishing, nonwovens, packaging, semiconductor and other diverse industries.

The company’s strategy for long-term growth is based on a customer-driven focus that is global in scope. Reaching out from its corporate headquarters in Westlake, Ohio, Nordson markets its products through a network of direct operations in 30 countries. Consistent with this strategy, approximately two-thirds of the Company’s revenues are generated outside the United States.

Nordson has more than 3,800 employees worldwide, including employees added as a result of the acquisition of Dage Holdings Limited in fiscal 2007. Principal manufacturing facilities are located in Alabama, California, Florida, Georgia, Ohio, Pennsylvania and Rhode Island in the United States, as well as in China, Germany, India, The Netherlands and the United Kingdom.

Corporate Purpose and Goals

Nordson Corporation strives to be a vital, self-renewing, worldwide organization which, within the framework of ethical behavior and enlightened citizenship, grows and produces wealth for its customers, employees, shareholders and communities.

Nordson operates for the purpose of creating balanced, long-term benefits for all of our constituencies: customers, employees, shareholders and communities.

Our corporate goal for growth is to double the value of the Company over a five-year period, with the primary measure of value set by the market for the Company’s Common Shares.

While external factors may impact value, the achievement of this goal will rest with earnings growth, capital and human resource efficiency and positioning for the future.

Nordson does not expect every quarter to produce increased sales, earnings and earnings per share, or to exceed the comparative prior year’s quarter. We do expect to produce long-term gains. When short-term swings occur, we do not intend to alter our basic objectives in efforts to mitigate the impact of these natural occurrences.

Growth is achieved by seizing opportunities with existing products and markets, investing in systems to maximize productivity and pursuing growth markets. This strategy is augmented through product line additions, engineering, research and development, and acquisition of companies that can serve multinational industrial markets.

We create benefits for our customers through a Package of Values^®, which includes carefully engineered, durable products; strong service support; the backing of a well-established worldwide company with financial and technical strengths; and a corporate commitment to deliver what was promised.

2

We strive to provide genuine customer satisfaction; it is the foundation upon which we continue to build our business.

Complementing our business strategy is the objective to provide opportunities for employee self-fulfillment, growth, security, recognition and equitable compensation. This goal is met through Human Resources’ facilitation of employee training and leadership training and the creation of on-the-job growth opportunities. The result is a highly qualified and professional management team capable of meeting corporate objectives.

We recognize the value of employee participation in the planning process. Strategic and operating plans are developed by all business units and divisions, resulting in a sense of ownership and commitment on the part of employees in accomplishing Company objectives.

Nordson Corporation is an equal opportunity employer.

Nordson is committed to contributing an average of 5 percent of domestic pretax earnings to human services, education and other charitable activities, particularly in communities where the Company has major facilities.

Financial Information About Operating Segments, Foreign and Domestic Operations and Export Sales

In accordance with Statement of Financial Accounting Standards No. 131, “Disclosure about Segments of an Enterprise and Related Information,” Nordson has reported information about the Company’s three operating segments. This information is contained in Note 17 of Notes to Consolidated Financial Statements, which can be found in Part II, Item 8 of this document.

Principal Products and Uses

Nordson offers a full range of equipment that dispenses liquid and powder coatings, adhesives and sealants. Nordson also produces technology-based systems for curing and surface treatment processes. Equipment ranges from manual, stand-alone units for low-volume operations to microprocessor-based automated systems for high-speed, high-volume production lines.

Nordson markets its products in the United States and 57 other countries, primarily through a direct sales force and also through qualified distributors and sales representatives. Nordson has built a worldwide reputation for its creativity and expertise in the design and engineering of high-technology application equipment that meets the specific needs of its customers.

3

The following is a summary of the products produced and markets served by the Company’s various businesses:

1. Adhesive Dispensing Systems

     •  Automotive — Adhesive and sealant dispensing systems used in the automotive, heavy truck and recreational vehicle manufacturing industries. Key markets include power train components, structural components and windshields.

     •  Nonwovens — Equipment for applying adhesives, lotions, liquids and fibers to disposable products. Key markets include adult incontinence products, baby diapers and child-training pants, feminine hygiene products and surgical drapes, gowns, shoe covers and face masks.

     •  Packaging — Automated adhesive dispensing systems used in the food and beverage and packaged goods industries. Key markets include food packages, chocolate wrappers and drink containers.

     •  Paper and Paperboard Converting — Hot melt and cold glue adhesive dispensing systems for the paper and paperboard converting industries. Key markets include bag and sack manufacturing, bookbinding, envelope manufacturing and folding carton manufacturing.

     •  Product Assembly — Adhesive and sealant dispensing systems for bonding or sealing plastic, metal and wood products. Key markets include appliances, automotive components, building and construction materials, electronics and furniture.

     •  Web Coating  — Laminating and coating systems used to manufacture continuous-roll goods in the nonwovens, textile, paper and flexible-packaging industries. Key markets include carpet, labels, tapes and textiles.

2. Advanced Technology Systems

     •  Asymtek — Automated dispensing systems for high-speed, accurate application of a broad range of attachment, protection and coating fluids. Key markets include cell phones, liquid crystal displays, micro hard drives, microprocessors and Radio Frequency Identification (RFID) tags.

     •  EFD — Precision manual and automated dispensers for applying controlled amounts of adhesives, sealants, lubricants and other assembly fluids. Key markets include CDs and DVDs, electronics and medical devices, including pacemakers and stents.

     •  March Plasma — Automated gas plasma treatment systems used to clean and condition surfaces for the semiconductor, medical and printed circuit board industries. Key markets include contact lenses, electronics, medical instruments and devices, printed circuit boards and semiconductors.

     •  UV Curing & Drying — Ultraviolet (UV) equipment used in the curing and drying of inks, coatings, adhesives and paints. Key markets include electronics, graphic arts, plastic containers, printed paper and packaging, and wood and medium-density fibreboard (MDF).

3.  Finishing and Coating Systems

     •  Container Coating and Curing — Automated and manual dispensing and UV curing systems used to treat and cure food and beverage containers. Key markets include beverage containers and food cans.

     •  Liquid Finishing — Automated and manual dispensing systems used to apply liquid paints and coatings to consumer and industrial products. Key markets include automotive components and wheels, decorative hardware, drums, wood doors and cabinets and wood molding.

     •  Powder Coating — Automated and manual dispensing systems used to apply powder paints and coatings to a variety of metal, plastic and wood products. Key markets include agriculture and construction equipment, appliances, automotive components, home and office furniture, lawn and garden equipment and wood and metal shelving.

4

Manufacturing and Raw Materials

Nordson’s production operations include machining and assembly. The Company manufactures specially designed parts and assembles components into finished equipment. Many components are made in standard modules that can be used in more than one product or in combination with other components for a variety of models. The Company has principal manufacturing operations in Amherst, Ohio; St. Petersburg, Florida; Norcross, Swainsboro and Dawsonville, Georgia; Lincoln, Alabama; Carlsbad, California; East Providence, Rhode Island; Easton, Pennsylvania in the United States, as well as in Shanghai, China; Luneburg, Germany; Bangalore, India; Maastricht, The Netherlands and Slough, United Kingdom.

Principal materials used to make Nordson products are metals and plastics, typically in sheets, bar stock, castings, forgings and tubing. Nordson also purchases many electrical and electronic components, fabricated metal parts, high-pressure fluid hoses, packings, seals and other items integral to its products. Suppliers are competitively selected based on cost, quality and service. All significant raw materials that Nordson uses are available through multiple sources.

Nordson’s senior operating executives supervise an extensive quality control program for Nordson equipment, machinery and systems.

Natural gas and other fuels are primary energy sources for Nordson. However, standby capacity for alternative sources is available if needed.

Intellectual Property

The Company maintains procedures to protect its intellectual property (including patents, trademarks and copyrights) both domestically and internationally. Risk factors associated with the Company’s intellectual property are discussed in Item 1A Risk Factors.

Seasonal Variation in Business

Generally, the highest volume of sales occurs in the Company’s fourth fiscal quarter due in large part to the timing of large, engineered systems shipments. First-quarter sales volume is normally the lowest of the year due to customer holiday shutdowns.

Working Capital Practices

No special or unusual practices affect Nordson’s working capital. However, the Company generally requires advance payments as deposits on customized equipment and systems and, in certain cases, requires progress payments during the manufacturing of these products. The Company has initiated a number of new business processes focused on reduction of manufacturing lead times. These initiatives have resulted in lower investment in inventory while maintaining the capability to respond promptly to customer needs.

5

Customers

The Company serves a broad customer base, both in terms of industries and geographic regions. The loss of a single or few customers would not have a material adverse effect on the Company’s business. In fiscal 2006, no single customer accounted for 5 percent or more of sales.

Backlog

The Company’s backlog of open orders from continuing operations decreased to $68,637 at October 31, 2006, from $73,845 at October 30, 2005. The decrease can be traced primarily to the advanced technology segment. All orders in the fiscal 2006 year-end backlog are expected to be shipped to customers in fiscal 2007.

Government Contracts

Nordson’s business neither includes nor depends upon a significant amount of governmental contracts or subcontracts. Therefore, no material part of the Company’s business is subject to renegotiation or termination at the option of the government.

Competitive Conditions

Nordson equipment is sold in competition with a wide variety of alternative bonding, sealing, caulking, finishing and coating techniques. Any production process that requires the application of material to a substrate or surface is a potential use for Nordson equipment.

Many factors influence the Company’s competitive position, including pricing, product quality and service. Nordson enjoys a leadership position in the competitive industrial application systems business by delivering high-quality, innovative products and technologies, as well as after-the-sale service and technical support. Working with customers to understand their processes and developing the application solutions that help them meet their production requirements also contributes to Nordson’s leadership position. Nordson’s worldwide network of direct sales and technical resources also is a competitive advantage.

Research and Development

Investments in research and development are important to Nordson’s long-term growth because they enable the Company to keep pace with changing customer and marketplace needs, and they help to sustain sales improvements year after year. The Company places strong emphasis on technology developments and improvements through its internal engineering and research teams. Research and development expenses related to continuing operations were approximately $24,467 in fiscal 2006, compared with approximately $20,946 in fiscal 2005 and $22,016 in fiscal 2004.

Environmental Compliance

We are subject to extensive federal, state, local and foreign environmental, safety and health laws and regulations concerning, among other things, emissions to the air, discharges to land and water and the generation, handling, treatment and disposal of hazardous waste and other materials. Under certain of these laws, we can be held strictly liable for hazardous substance contamination of any real property we have ever owned, operated or used as a disposal site or for natural resource damages associated with such contamination. We are also required to maintain various related permits and licenses, many of which require periodic modification and renewal. The operation of manufacturing plants unavoidably entails environmental, safety and health risks, and we could incur material unanticipated costs or liabilities in the future if any of these risks were realized in ways or to an extent that we did not anticipate.

6

We believe that we operate in compliance, in all material respects, with applicable environmental laws and regulations. Compliance with environmental laws and regulations requires continuing management effort and expenditures. We have incurred, and will continue to incur, costs and capital expenditures to comply with these laws and regulations and to obtain and maintain the necessary permits and licenses. We believe that the cost of complying with environmental laws and regulations will not have a material affect on our earnings, liquidity or competitive position, but we cannot assure that material compliance-related costs and expenses may not arise in the future. For example, future adoption of new or amended environmental laws, regulations or requirements or newly discovered contamination or other circumstances that require a response on our part may require us to incur costs and expenses that we cannot presently anticipate.

We believe that we have properly designed our policies, practices and procedures to prevent unreasonable risk of material environmental damage arising from our operations. We accrue for estimated environmental liabilities with charges to expense. We believe our environmental accrual is adequate to provide for our portion of the costs of all such known environmental liabilities. Except for the disclosure in Item 3, Legal Proceedings, compliance with federal, state and local environmental protection laws during fiscal 2006 had no material effect on the Company’s capital expenditures, earnings or competitive position. Based upon consideration of currently available information, we believe liabilities for environmental matters will not have a material adverse affect on our financial position, operating results or liquidity, but we cannot assure that material environmental liabilities may not arise in the future.

Employees

As of October 31, 2006, Nordson had 3,645 full- and part-time employees, including 153 at the Company’s Amherst, Ohio, facility that are represented by a collective bargaining agreement that expires on
November 4, 2007. In recent years, no material work stoppages have been experienced at any of the Company’s facilities.

Available Information

The Company’s proxy statement, annual report to the Securities and Exchange Commission (Form 10-K), quarterly reports (Form 10-Q) and current reports (Form 8-K) and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 are available free of charge at http://www.nordson.com/investors/ SEC/ as soon as reasonably practical after the Company electronically files such material with, or furnishes it to, the SEC. Copies of these reports may also be obtained free of charge by sending written requests to Barbara Price, Manager, Shareholder Relations, Nordson Corporation,
28601 Clemens Road, Westlake, Ohio 44145.

Item 1A. Risk Factors

In an enterprise as diverse and complex as Nordson’s, a wide range of factors could affect future performance. We discuss in this section some of the risk factors that, if they actually occurred, could materially and adversely affect the Company’s business, financial condition, value and results of operations. You should consider these risk factors in connection with evaluating the forward-looking statements contained in this Annual Report on Form 10-K because these factors could cause our actual results and financial condition to differ materially from those projected in forward-looking statements. The risks that we highlight below are not the only ones that we face. Additional risks and uncertainties that the Company does not presently know about or that the Company currently believes will be immaterial may also affect the Company’s business.

7

In addition to the factors affecting specific business operations identified in connection with the description of these operations and the financial results of these operations elsewhere in this Report, the significant risk factors affecting our operations include the following:

Changes in U.S. or international economic conditions could adversely affect the profitability of any of our businesses.

In 2006, 33 percent of the Company’s revenue was derived from domestic operations while 67 percent was derived from international operations. The Company’s largest markets include appliance, automotive, bookbinding, container, converting, electronics, food and beverage, furniture, life sciences, medical, metal finishing, nonwovens, packaging and semiconductor. A slowdown in any of these specific end markets could directly affect the Company’s revenue stream and profitability.

A portion of our product sales is attributable to industries and markets, such as the semiconductor and metal finishing industries, which historically have been cyclical and sensitive to relative changes in supply and demand and general economic conditions. The demand for our products depends, in part, on the general economic conditions of the industries or national economies of our customers. Downward economic cycles in our customers’ industries or countries may reduce sales of some of our products. It is not possible to predict accurately the factors that will affect demand for our products in the future.

Any significant downturn in the health of the general economy, either globally, regionally or in the markets in which we sell products could have an adverse effect on our revenues and financial performance.

Political conditions in foreign countries in which we operate could adversely affect us.

The Company conducts its manufacturing, sales and distribution operations on a worldwide basis and is subject to risks associated with doing business outside the United States. In the year ended October 31, 2006, approximately 67 percent of our total sales were to customers outside the U.S. We expect that international operations and U.S. export sales will continue to be important to our business for the foreseeable future. Both the sales from international operations and U.S. export sales are subject in varying degrees to risks inherent in doing business outside the United States. Such risks include, but are not limited to, the following:

     •  unanticipated or unfavorable circumstances arising from host country laws or regulations;

     •  risks of economic instability;

     •  restrictions on the transfer of funds into or out of a country;

     •  currency exchange rate fluctuations;

     •  difficulties in enforcing agreements and collecting receivables through some foreign legal systems;

     •  international customers with longer payment cycles than customers in the United States;

     •  potential negative consequences from changes to taxation policies;

     •  the disruption of operations from foreign labor and political disturbances;

     •  the imposition of tariffs, import or export licensing requirements;

     •  exchange controls or other trade restrictions including transfer pricing restrictions when products produced in one country are sold to an affiliated entity in another country.

Any of these events could reduce the demand for our products, limit the prices at which we can sell our products, or otherwise have an adverse effect on our operating performance.

8

The inability to continue to develop new products could limit the Company’s revenue and profitability.

Innovation is critical to the Company’s success. We believe that we must continue to enhance our existing products and to develop and manufacture new products with improved capabilities in order to continue to be a market leader. We also believe that we must continue to make improvements in our productivity in order to maintain our competitive position. Our inability to anticipate, respond to or utilize changing technologies could have a material adverse effect on our business and our consolidated results of operations.

Our growth strategy includes acquisitions, and we may not be able to make acquisitions of suitable candidates or integrate acquisitions successfully.

Our recent historical growth has also depended, and our future growth is likely to continue to depend, in large part on our acquisition strategy and the successful integration of acquired businesses into our existing operations. We intend to continue to seek additional acquisition opportunities both to expand into new markets and to enhance our position in existing markets throughout the world. We cannot assure, however, that we will be able to successfully identify suitable candidates, prevail against competing potential acquirers, negotiate appropriate acquisition terms, obtain financing that may be needed to consummate such acquisitions, complete proposed acquisitions, successfully integrate acquired businesses into our existing operations or expand into new markets. In addition, we cannot assure that any acquisition, once successfully integrated, will perform as planned, be accretive to earnings, or prove to be beneficial to our operations and cash flow.

The success of any acquisition is subject to other risks and uncertainties, including:

     •  the Company’s ability to realize operating efficiencies, synergies or other benefits expected from an acquisition, and possible delays in realizing the benefits of the acquired company or products;

     •  diversion of management’s time and attention from other business concerns;

     •  difficulties in retaining key employees, customers or suppliers of the acquired business;

     •  difficulties in maintaining uniform standards, controls, procedures and policies throughout acquired companies;

     •  adverse effects on existing business relationships with suppliers or customers;

     •  the risks associated with the assumption of contingent or undisclosed liabilities of acquisition targets;

     •  the ability to generate future cash flows or the availability of financing.

In addition, an acquisition could adversely impact the Company’s results of operations by causing the Company to incur debt or requiring the amortization of acquisition expenses and acquired assets.

We may also face liability with respect to acquired businesses for violations under environmental laws occurring prior to the date of our acquisition, and some or all of these liabilities may not be covered by environmental insurance secured to mitigate the risk or by indemnification from the sellers from which we acquired these businesses. We could incur significant costs, including cleanup costs, natural resources damages, civil or criminal fines and sanctions and third-party claims, as a result of past or future violations of, or liabilities under, environmental laws.

Significant movements in foreign currency exchange rates or change in monetary policy may harm our financial results.

We are exposed to fluctuations in foreign currency exchange rates, particularly with respect to the Euro and the Yen. Any significant change in the value of the currencies of the countries in which we do business against the U.S. dollar could affect our ability to sell products competitively and control our cost structure, which could have a material adverse effect on our business, financial condition and results of operations. For additional detail related to this risk, see Item 7A. Quantitative and Qualitative Disclosure About Market Risk.

9

The majority of our consolidated revenues in 2006 were generated in currencies other than the U.S. dollar, which is our reporting currency. We recognize foreign currency transaction gains and losses arising from our operations in the period incurred. As a result, currency fluctuations between the U.S. dollar and the currencies in which we do business have caused and will continue to cause foreign currency transaction gains and losses, which historically have been material and could continue to be material. We cannot predict the effects of exchange rate fluctuations upon our future operating results because of the number of currencies involved, the variability of currency exposures and the potential volatility of currency exchange rates. We take actions to manage our foreign currency exposure, such as entering into hedging transactions, where available, but we cannot assure that our strategies will adequately protect our consolidated operating results from the effects of exchange rate fluctuations.

We also face risks arising from the imposition of exchange controls and currency devaluations. Exchange controls may limit our ability to convert foreign currencies into U.S. dollars or to remit dividends and other payments by our foreign subsidiaries or businesses located in or conducted within a country imposing controls. Currency devaluations diminish the value of funds denominated in the currency of the country instituting the devaluation and, if they occur or continue for significant periods, could adversely affect our earnings or cash flow.

Inability to access capital could impede growth.

The limits imposed on us by the restrictive covenants contained in our credit facilities could prevent us from making acquisitions or capital improvements or cause us to lose access to these facilities.

Our existing credit facilities contain restrictive covenants that limit our ability to, among other things:

     •  borrow money or guarantee the debts of others;

     •  use assets as security in other transactions;

     •  make investments or other restricted payments or distributions;

     •  change our business or enter into new lines of business;

     •  sell or acquire assets or merge with or into other companies.

In addition, our credit facilities require us to meet financial ratios, including debt to consolidated EBITDA (as defined in the credit facility) and consolidated EBITDA (as defined in the credit facility) to interest expense.

These restrictions could limit our ability to plan for or react to market conditions or meet extraordinary capital needs and could otherwise restrict our financing activities.

Our ability to comply with the covenants and other terms of our credit facilities will depend on our future operating performance. If we fail to comply with such covenants and terms, we will be in default and the maturity of the related debt could be accelerated and become immediately due and payable. We may be required to obtain waivers from our lenders in order to maintain compliance under our credit facilities, including waivers with respect to our compliance with certain financial covenants. If we are unable to obtain any necessary waivers and the debt under our credit facilities is accelerated, our financial condition would be adversely affected.

We may need new or additional financing in the future to expand our business or refinance existing indebtedness. If we are unable to access capital on satisfactory terms and conditions, we may not be able to expand our business or meet our payment requirements under our existing credit facilities. Our ability to obtain new or additional financing will depend on a variety of factors, many of which are beyond our control. We may not be able to obtain new or additional financing because we have substantial debt or because we may not have sufficient cash flow to service or repay our existing or future debt. In addition, depending on market conditions and our financial performance, equity financing may not be available on satisfactory terms or at all.

We could be adversely affected if our debt is downgraded.

10

We could be adversely affected by rapid changes in interest rates.

Any period of unexpected or rapid increase in interest rates may also adversely affect our profitability. At October 31, 2006, we had $117,318 of total debt outstanding, of which approximately 14 percent was priced at interest rates that float with the market. A 1 percent increase in the interest rate on the floating rate debt in 2006 would have resulted in approximately $171 of additional interest expense. A higher level of debt would increase the exposure discussed above. For additional detail related to this risk, see Item 7A. Quantitative and Qualitative Disclosure About Market Risk.

Our inability to protect our intellectual property rights could adversely affect product sales and financial performance.

Difficulties in acquiring and maintaining a proprietary intellectual ownership position could also adversely affect the Company’s business and financial position. Our performance may depend in part on our ability to establish, protect and enforce intellectual property rights with respect to our patented technologies and proprietary rights and to defend against any claims of infringement, which involves complex legal, scientific and factual questions and uncertainties. The Company’s ability to compete effectively with other companies depends in part on its ability to maintain and enforce the Company’s patents and other proprietary rights, which are essential to its business. These measures afford only limited protection, and competitors may gain access to the Company’s intellectual property and proprietary information. The law of patents and trade secrets is constantly evolving and often involves complex legal and factual questions.

Litigation has been and may continue to be necessary to enforce the Company’s intellectual property rights, to protect the Company’s trade secrets and to determine the validity and scope of the Company’s proprietary rights. In addition, we may face claims of infringement that could interfere with our ability to use technology or other intellectual property rights that are material to our business operations. If litigation that we initiate is unsuccessful, we may not be able to protect the value of some of our intellectual property. In the event a claim of infringement against us is successful, we may be required to pay royalties or license fees to continue to use technology or other intellectual property rights that we have been using or we may be unable to obtain necessary licenses from third parties at a reasonable cost or within a reasonable time. If we are unable to obtain licenses on reasonable terms, we may be forced to cease selling or using any of our products that incorporate the challenged intellectual property, or to redesign or, in the case of trademark claims, rename our products to avoid infringing the intellectual property rights of third parties, which may not be possible and, if possible, may be time consuming. Any litigation of this type, whether successful or unsuccessful, could result in substantial costs to us and diversions of some of our resources. Our intellectual property rights may not have the value we believe them to have, which could result in a competitive disadvantage or adversely affect our business and financial performance.

This Form 10-K, particularly “Management’s Discussion and Analysis,” contains forward-looking statements within the meaning of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Such statements relate to, among other things, income, earnings, cash flows, changes in operations, operating improvements, businesses in which Nordson Corporation operates and the U.S. and global economies. Statements in this 10-K that are not historical are hereby identified as “forward-looking statements” and may be indicated by words or phrases such as “anticipates,” “supports,” “plans,” “projects,” “expects,” “believes,” “should,” “would,” “could,” “hope,” “forecast,” “management is of the opinion,” use of the future tense and similar words or phrases.

In light of these risks and uncertainties, actual events and results may vary significantly from those included in or contemplated or implied by such statements. Readers are cautioned not to place undue reliance on such forward-looking statements. These forward-looking statements speak only as of the date made. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

11

The Company may, from time to time, post financial or other information on its Web site, http://www.nordson.com/ Investors/. The Internet address is for informational purposes only and is not intended for use as a hyperlink. The Company is not incorporating any material on its Web site into this Report.

Item 1B. Unresolved Staff Comments

None.

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Item 2. Properties

The following table summarizes the Company’s principal properties as of its fiscal 2006 year end.

		Approximate
Location	Description of Property	Square Feet
Amherst, Ohio(1)(2)(3)	A manufacturing, laboratory and office complex		585,000
	located on 52 acres of land
Norcross, Georgia(1)	A manufacturing, laboratory and office building		150,000
	located on 10 acres of land
Dawsonville, Georgia(1)	A manufacturing, laboratory and office building		143,000
Duluth, Georgia(1)	An office and laboratory building		110,000
Carlsbad, California(2)	Two manufacturing and office buildings (leased)		91,000
East Providence, Rhode Island(2)	A manufacturing, warehouse, distribution and office complex		75,000
Westlake, Ohio	Corporate headquarters located on 25 acres of land		68,000
Swainsboro, Georgia(1)	A manufacturing building		59,000
Lincoln, Rhode Island(2)	A manufacturing building		44,000
Lincoln, Alabama(1)	A manufacturing and office building		27,000
St. Petersburg, Florida(2)	A manufacturing and office building (leased)		20,000
Easton, Pennsylvania(2)	A manufacturing and office building (leased)		8,300
Luneburg, Germany(1)	A manufacturing building and laboratory		130,000
Erkrath, Germany(1)(2)(3)	An office, laboratory and warehouse building (leased)		63,000
Maastricht, The Netherlands (1)(2)(3)	A manufacturing, distribution center and office building (leased)		48,000
Tokyo, Japan(1)(2)(3)	An office, laboratory and warehouse building (leased)		42,000
Milano, Italy(1)(3)	An office, laboratory and warehouse building (leased)		41,000
Shanghai, China(1)(3)	A manufacturing, warehouse and office complex (leased)		30,000
Lagny Sur Marne, France(1)(3)	An office building (leased)		29,000
Bangalore, India(1)(2)(3)	A manufacturing, warehouse and office building		16,000
Slough, U.K(2)	A manufacturing, warehouse and office building (leased)		10,000
Dunstable, U.K(2)	An office and warehouse building		6,000

Business Segment — Property Identification Legend

(1)	Adhesive Dispensing Systems
(2)	Advanced Technology Systems
(3)	Finishing and Coating Systems

The facilities listed above have adequate, suitable and sufficient capacity (production and nonproduction) to meet present and foreseeable demand for the Company’s products.

Other properties at international subsidiary locations and at branch locations within the United States are leased. Lease terms do not exceed 25 years and generally contain a provision for cancellation with some penalty at an earlier date.

In addition, the Company leases equipment under various operating and capitalized leases. Information about leases is reported in Note 8 of Notes to Consolidated Financial Statements that can be found in Part II, Item 8 of this document.

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Item 3. Legal Proceedings

Environmental — The Company has voluntarily agreed with the City of New Richmond, Wisconsin, and other Potentially Responsible Parties (“PRP”) to share costs associated with (1) a feasibility study and remedial investigation (“FS/ RI”) for remediation of the City of New Richmond municipal landfill (the “Site”) and (2) providing clean drinking water to the affected residential properties down gradient of the Site. The PRP group has agreed to an allocation that sets the Company’s share of the cost of remediation at 56.35 percent. The Company has committed and paid $943 towards completing the FS/ RI phase of the project.

The FS/ RI was completed and submitted to the Wisconsin Department of Natural Resources (“WDNR”) in July 2006. The total cost of the Company’s share for remediation efforts (Site and clean drinking water) will not be ascertainable until a remediation plan is approved by the WDNR. Approval is not anticipated to occur before the second quarter of fiscal 2007. However, based upon the range of viable alternatives for Site remediation and providing clean drinking water to residences down gradient of the Site submitted as part of the Feasibility Study, the Company accrued $2,835 of expense in the third quarter of 2006, its best estimate of its obligation with respect to remediation of the Site and providing clean drinking water to residences down gradient of the Site. This amount is recorded in selling and administrative expenses.

The third quarter accrual brought the total liability balance to $2,970. Approximately $2,150 of the liability is classified as long-term, and is expected to be disbursed over the next 10 years. The remaining portion is included in accrued liabilities. If the Site remediation takes longer than expected and clean drinking water must be provided to more residences than expected, the Company has estimated that it could incur additional obligations of up to $2,600.

The liability for environmental remediation represents management’s best estimate of the probable and reasonably estimable undiscounted costs related to known remediation obligations. The accuracy of the Company’s estimate of environmental liability is affected by several uncertainties, such as additional requirements, which may be identified in connection with remedial activities, the complexity and evolution of environmental laws and regulations, and the identification of presently unknown remediation requirements. Consequently, the Company’s liability could be greater than its current estimate. However, the Company does not expect that the costs associated with remediation will have a material adverse effect on its financial condition or results of operations.

The European Union (“EU”) has adopted two Directives to facilitate the recycling of electrical and electronic equipment sold in the EU. The first of these is the Waste Electrical and Electronic Equipment (“WEEE”) Directive, which directs EU Member States to enact laws, regulations and administrative provisions to ensure that producers of electrical and electronic equipment provide for the financing of the collection, treatment, recovery and environmentally sound disposal of WEEE from products placed on the market after August 13, 2005, and from products in use prior to that date that are being replaced. In accordance with the WEEE directive, the Company has identified and labeled its products that are affected by the regulations adopted by Member States. The Company also has developed a strategy to support recycling of the electrical and electronic equipment and has created a section on its Web site to provide customers with information on how to return WEEE-labeled products for proper recycling — http://www.nordson.com/ Corporate/ Recycling/.

The second of these Directives is the Restriction on the Use of Certain Hazardous Substances in Electrical and Electronic Equipment (“RoHS”). The RoHS Directive addresses the restriction on use of certain hazardous substances, such as mercury, lead, cadmium and hexavalent cadmium in electrical and electronic equipment placed on the market after July 1, 2006. The Company has committed to design its future products to meet the standards established by the RoHS Directive.

Costs incurred in 2006 related to these Directives were not material.

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In addition, the Company is involved in various other legal proceedings arising in the normal course of business. Based on current information, the Company does not expect that the ultimate resolution of pending and threatened legal proceedings will have a material adverse effect on its financial condition or results of operations. The Company is not involved in any other legal proceedings that would be required to be disclosed pursuant to Item 103 of Regulation S-K.

Item 4. Submission of Matters to a Vote of Security Holders

None.

Executive Officers of the Company

The executive officers of the Company as of December 31, 2006, were as follows:

					Position or Office with The Company and Business
Name	Age		Officer Since		Experience During the Past Five (5) Year Period
Edward P. Campbell		57		1988	Chairman of the Board of Directors and Chief Executive Officer, 2004 President and Chief Executive Officer, 1997
Peter S. Hellman		57		2000	President, Chief Financial and Administrative Officer, 2004
					Executive Vice President, Chief Financial and Administrative Officer, 2000
John J. Keane		46		2003	Senior Vice President, 2005
					Vice President, 2003
					Vice President, Packaging and Product Assembly Systems, 2000
Douglas C. Bloomfield		47		2005	Vice President, 2005
					Vice President, Automotive and UV, North American Division, 2003
					Vice President, Automotive, North American Division, 2000
Robert A. Dunn Jr.		59		1997	Vice President, 1997
Bruce H. Fields		55		1992	Vice President, Human Resources, 1992
Michael Groos		55		1995	Vice President, 1995
Peter Lambert		46		2005	President, EFD, 2005
					Vice President, Packaging and Product Assembly, 2003 Director, Corporate Development and Global Business Information, 2001
Gregory Merk		35		2006	Vice President, 2006 General Manager, Latin America South, 2000

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PART II

Item 5. Market for the Company’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information and Dividends

(a) The Company’s Common Shares are listed on the Nasdaq Global Select Market under the symbol NDSN. As of December 8, 2006, there were approximately 2,166 registered shareholders. The table below is a summary of dividends paid per Common Share, the range of market prices, and average price-earnings ratios with respect to common shares, during each quarter of fiscal 2006 and 2005. The price-earnings ratios reflect average market prices relative to trailing four-quarter total earnings per share.

				Common
				Share Price
		Dividend						Price-Earnings
Fiscal Quarters		Paid		High		Low		Ratio
2006:
	First	$	.165	$	46.96	$	36.51		18.6
	Second		.165		53.64		43.44		20.1
	Third		.17		57.81		40.80		18.7
	Fourth		.17		48.35		38.70		16.4
2005:
	First	$	.16	$	40.77	$	34.61		20.4
	Second		.16		40.61		30.92		19.2
	Third		.16		35.00		29.45		17.1
	Fourth		.165		38.90		31.68		16.5

(b) Use of Proceeds. Not applicable.

(c) Issuer Purchases of Equity Securities

					Total Number of
	Total				Shares Repurchased
	Number of		Average		as Part of Publicly
	Shares		Price Paid		Announced Plans
	Repurchased		per Share		or Programs(1)
August 1, 2006 to August 31, 2006		47	$	40.01		47
September 1, 2006 to September 30, 2006		199	$	39.79		199
October 1, 2006 to October 31, 2006		24	$	40.14		24
Total		270				270

(1)  In October 2003, the board of directors authorized the Company to repurchase, until October 2006, up to 2,000 of the Company’s Common Shares on the open market. As of October 31, 2006, 651 shares were repurchased under this authorization. In October 2006, the board of directors authorized the Company to repurchase, until October 2009, up to 1,000 of the Company’s Common Shares on the open market or in privately negotiated transactions.

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Item 6. Selected Financial Data

Five-Year Summary

	2006		2005		2004		2003		2002(d)
(In thousands except for per-share amounts)
Operating Data(a)
Sales	$	892,221		832,179		771,450		659,616		627,619
Cost of sales	$	379,800		362,824		334,302		291,297		294,149
% of sales		43		44		43		44		47
Selling and administrative expenses	$	362,179		337,782		318,562		286,900		273,139
% of sales		41		41		41		43		44
Severance and restructuring costs	$	2,627		875		—		2,028		2,499
Operating profit	$	147,615		130,698		118,586		79,391		57,832
% of sales		17		16		15		12		9
Income from continuing operations	$	97,667		84,510		68,307		41,807		25,008
% of sales		11		10		9		6		4
Financial Data(a)
Working capital	$	105,979		61,642		167,362		65,708		21,926
Net property, plant and equipment and other non-current assets	$	475,586		476,810		476,276		489,436		489,899
Total invested capital	$	581,565		538,452		643,638		555,144		511,825
Total assets	$	822,890		790,417		840,548		766,806		764,472
Long-term obligations	$	151,037		207,540		240,305		255,035		242,935
Shareholders’ equity	$	430,528		330,912		403,333		300,109		268,890
Return on average invested capital — %(b)		20		16		14		8		5
Return on average shareholders’ equity — %(c)		26		21		19		15		9
Per-Share Data(a)
Basic earnings per share from continuing operations	$	2.93		2.37		1.92		1.24		0.75
Diluted earnings per share from continuing operations	$	2.86		2.31		1.87		1.23		0.74
Dividends per common share	$	0.67		0.645		0.625		0.605		0.57
Book value per common share	$	12.89		10.05		11.12		8.82		8.00
Average common shares		33,365		35,718		35,489		33,703		33,383
Average common shares and common share equivalents		34,180		36,527		36,546		33,899		33,690

(a)  See accompanying Notes to Consolidated Financial Statements.

(b)  Income from continuing operations plus interest on long-term obligations net of income taxes as a percentage of total assets less current liabilities.

(c)  Income from continuing operations as a percentage of shareholders’ equity.

(d)  2002 includes an inventory write-down of $11,388, which is included in cost of sales.

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

In this annual report, all amounts related to U.S. and foreign currency and to the number of shares of Nordson Corporation Common Shares, except for per share earnings and dividend amounts, are expressed in thousands.

Amounts in the consolidated financial statements as of and for the years ended October 30, 2005, and October 31, 2004, have been reclassified to conform to the presentation used in 2006. See Note 3, “Discontinued Operations,” to the consolidated financial statements for further information regarding the reclassification of financial information for discontinued operations.

Critical Accounting Policies and Estimates

The Company’s consolidated financial statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires the Company’s management to make estimates, judgments and assumptions that affect reported amounts of assets, liabilities, revenues and expenses. On an ongoing basis, the Company evaluates the accounting policies and estimates it uses to prepare financial statements. The Company bases its estimates on historical experience and assumptions believed to be reasonable under current facts and circumstances. Actual amounts and results could differ from these estimates used by management.

Certain accounting policies that require significant management estimates and are deemed critical to the Company’s results of operations or financial position are discussed below. On a regular basis, the Company reviews critical accounting policies with the Audit Committee of the board of directors.

Revenue Recognition — Most of the Company’s revenues are recognized upon shipment, provided that persuasive evidence of an arrangement exists, the sales price is fixed or determinable, collectibility is reasonably assured, and title and risk of loss have passed to the customer. Revenues from contracts with multiple element arrangements, such as those including installation or other services, are recognized as each element is earned based on objective evidence of the relative fair value of each element. If the installation or other services are inconsequential to the functionality of the delivered product, the entire amount of revenue is recognized upon transfer of ownership. Inconsequential installation or other services are those that can generally be completed in a short period of time, at insignificant cost, and the skills required to complete these installations are not unique to the Company. If installation or other services are essential to the functionality of the delivered product, revenues attributable to these obligations are deferred until completed. Amounts received in excess of revenue recognized are included as deferred revenue in the accompanying balance sheets. Revenues deferred in 2006, 2005 and 2004 were not material. A limited number of the Company’s large engineered systems sales contracts were accounted for using the percentage-of-completion method. The amount of revenue recognized in any accounting period was based on the ratio of actual costs incurred through the end of the period to total estimated costs at completion. Cost estimates were updated on a quarterly basis. During 2006, no revenues were recognized under the percentage-of-completion method. During 2005 and 2004, the Company recognized revenue of approximately $5,000 and $7,000, respectively, under this method. These revenues have been reclassified to discontinued operations.

Goodwill — Goodwill represents the excess of purchase price over the fair value of tangible and identifiable intangible net assets acquired. At October 31, 2006, and October 30, 2005, goodwill represented 40 percent and 42 percent, respectively, of the Company’s total assets. The majority of the goodwill resulted from the acquisition of EFD Inc. in fiscal 2001. In accordance with FASB Statement No. 142, “Goodwill and Other Intangible Assets,” goodwill is not amortized but is tested for impairment annually at the reporting unit level, or more often if indications of impairment exist. The estimated fair value of a reporting unit is determined by applying appropriate discount rates to estimated future cash flows and terminal value amounts for the reporting units. The results of the Company’s analyses indicated that no reduction of goodwill is required.

18

Inventories — Inventories are valued at the lower of cost or market. Cost has been determined using the last-in, first-out (LIFO) method for 37 percent of the Company’s consolidated inventories at October 31, 2006, and 35 percent at October 30, 2005, with the first-in, first-out (FIFO) method used for the remaining inventory. On an ongoing basis, the Company tests its inventory for technical obsolescence, as well as for future demand and changes in market conditions. The Company has historically maintained inventory reserves to reflect those conditions when the cost of inventory is not expected to be recovered. The Company also maintains inventory reserves for inventory used for demonstration purposes. Amounts expensed related to inventory reserves were $2,210, $2,896 and $4,421 in 2006, 2005 and 2004, respectively. The reserve balance was $7,499, $7,126 and $7,139 at the end of 2006, 2005 and 2004, respectively.

Pension Plans and Postretirement Medical Plan — The measurement of liabilities related to the Company’s pension plans and postretirement medical plan is based on management’s assumptions related to future factors, including interest rates, return on pension plan assets, compensation increases, mortality and turnover assumptions and health care cost trend rates.

The weighted-average discount rate used to determine the present value of the Company’s domestic pension plan obligations was 6.0 percent at October 31, 2006, compared to 5.8 percent at October 30, 2005. The discount rate for these plans, which comprised 79 percent of the worldwide pension obligations at October 31, 2006, was based on quality fixed income investments with a duration period approximately equal to the period over which pension obligations are expected to be settled. The weighted-average discount rate used to determine the present value of the Company’s various international pension plan obligations was 4.3 percent at October 31, 2006, compared to 4.2 percent at October 30, 2005. The discount rates used for the international plans were determined by using quality fixed income investments.

In determining the expected return on plan assets, the Company considers both historical performance and an estimate of future long-term rates of return on assets similar to those in the Company’s plans. The Company consults with and considers the opinions of financial and other professionals in developing appropriate return assumptions. The expected rate of return (long-term investment rate) on domestic pension assets was 8.5 percent in both 2006 and 2005. The average expected rate of return on international pension assets decreased to 5.4 percent in 2006 from 5.7 percent in 2005.

The assumed rate of compensation increases for domestic employees was 3.3 percent in 2006, the same as 2005. The assumed rate of compensation increases for international employees was 3.1 percent in 2006, also the same as 2005.

Annual expense amounts are determined based on the discount rate used at the end of the prior year. Differences between actual and assumed investment returns on pension plan assets result in actuarial gains or losses that are amortized into expense over a period of years.

With respect to the domestic postretirement medical plan, the discount rate used to value the benefit obligation increased from 5.8 percent at October 30, 2005, to 6.0 percent at October 31, 2006. The annual rate of increase in the per capita cost of covered benefits (the health care cost trend rate) is assumed to be 9 percent in 2007, decreasing gradually to 5 percent in 2011. The health care cost trend rate assumption has a significant effect on the amounts reported. For example, a one-percentage point change in the assumed health care cost trend rate would have the following effects:

	1% Point Increase		1% Point Decrease
Effect on total service and interest cost components in 2006	$	589	$	(471	)
Effect on postretirement obligation as of October 31, 2006	$	7,062	$	(5,745	)

Employees hired after January 1, 2002, are not eligible to participate in the domestic postretirement medical plan.

The Company expects that pension and postretirement expenses in fiscal 2007 will be approximately $1,000 lower than fiscal 2006, primarily reflecting changes in actuarial assumptions.

19

Financial Instruments — Assets, liabilities and commitments that are to be settled in cash and are denominated in foreign currencies are sensitive to changes in currency exchange rates. The Company enters into foreign currency forward contracts, which are derivative financial instruments, to reduce the risk of foreign currency exposures resulting from the collection of receivables, payables and loans denominated in foreign currencies. The maturities of these contracts are usually less than 90 days. Forward contracts are marked to market each accounting period, and the resulting gains or losses are included in other income (expense) on the Consolidated Statement of Income.

Warranties — The Company provides customers with a product warranty that requires the Company to repair or replace defective products within a specified period of time (generally one year) from the date of delivery or first use. An accrual is recorded for expected warranty costs for products shipped through the end of each accounting period. In determining the amount of the accrual, the Company relies primarily on historical warranty claims by product sold. Amounts charged to the warranty reserve were $6,092, $4,090 and $3,732 in 2006, 2005 and 2004, respectively. The reserve balance was $4,917, $3,989 and $3,601 at the end of 2006, 2005 and 2004, respectively.

Long-Term Incentive Compensation Plan (LTIP) — Under the long-term incentive compensation plan, executive officers and selected other employees receive cash or stock awards based solely on corporate performance measures over three-year performance periods. Awards vary based on the degree to which corporate performance equals or exceeds predetermined threshold, target and maximum performance levels at the end of a performance period. No payout will occur unless the Company equals or exceeds certain threshold performance objectives.

Under the performance periods originating in 2004 and 2005, awards will be paid in cash based upon the share price of the Company’s Common Shares at a predetermined date subsequent to the end of each three-year performance period. Over each three-year performance period, costs are accrued based upon current performance projections for the three-year period and the percentage of the requisite service that has been rendered, along with changes in value of the Company’s Common Shares. The method of estimating accrual amounts was revised upon adoption of FAS 123(R), however the cumulative effect of the change was not material. The accruals for these performance periods continue to be classified as liabilities. At October 31, 2006, the liability for the plans originating in 2004 and 2005 was $8,596.

Under the performance period originating in 2006, awards will be settled in Common Shares. The amount of compensation expense is based upon current performance projections for the three-year period and the percentage of the requisite service that has been rendered. The calculation is also based upon the weighted-average value of the Company’s Common Stock at the dates of grant. These awards are recorded in shareholders’ equity. The amount recorded at October 31, 2006, was $1,590.

Compensation expense attributable to the LTIP was $5,456 in 2006, $4,237 for 2005 and $7,004 for 2004.

Discontinued Operations

On October 13, 2006, the Company entered into an agreement to sell its Fiber Systems Group to Saurer Ltd. for $5,966. The Fiber Systems Group was acquired in 1998 as part of the acquisition of J&M Laboratories as a means of expanding the Adhesive Dispensing Systems segment. However, due to the changing competitive environment, the Fiber Systems Group did not meet the Company’s financial performance objectives. The sale will enable the Company to concentrate its activities on better performing or faster-growing businesses. Proceeds of $5,411 were received on the closing date, with the remaining $555 to be paid over an 18-month period following the closing date. In accordance with FASB Statement of Accounting Standards No. 144, the results of this business have been classified as discontinued operations. Accordingly, the revenues, costs and expenses, assets and liabilities, and cash flows of this business have been segregated in the Consolidated Statement of Income, Consolidated Balance Sheet and Consolidated Statement of Cash Flows.

20

Sales of the discontinued operations were $5,919, $6,983 and $22,094 for 2006, 2005 and 2004, respectively. The net loss from operations was $9,882, $6,172 and $4,973 for 2006, 2005 and 2004, respectively. Included in the 2006 loss from discontinued operations was severance expense of $699 related to 27 employees of the Fiber Systems Group that were not hired by Saurer Ltd. Also, included in the 2006 loss from discontinued operations is the recognition of an impairment of an intangible asset of $2,630. A gain of $2,813 was recognized on the sale of the business. The net tax benefit of $1,872 on disposal is the result of $2,867 tax expense on one-time gains resulting from the disposal, offset by $4,739 tax benefit resulting from an excess of tax basis over book basis in Fiber Systems Group assets.

Fiscal Years 2006 and 2005

Sales — Worldwide sales for 2006 were $892,221, an increase of 7.2 percent from 2005 sales of $832,179. Sales volume increased 8.5 percent, offset by unfavorable currency effects of 1.3 percent related to the stronger U.S. dollar.

The Company is organized into three business segments: Adhesive Dispensing Systems, Advanced Technology Systems and Finishing and Coating Systems. All three reported higher sales volume in 2006 compared to 2005. Sales of the adhesive segment were $507,959 in 2006, an increase of $13,277, or 2.7 percent, from 2005. Sales volume was up 4.5 percent, while currency effects reduced reported sales by 1.8 percent. All businesses in this segment, with the exception of automotive, reported higher sales volume. Sales of the advanced technology segment were $239,258 in 2006, an increase of $39,451, or 19.7 percent from 2005. Sales volume increased 20.1 percent, while currency effects reduced sales by 0.4 percent. Within this segment, the Asymtek business was especially strong, with EFD and UV Curing sales volume also increasing significantly. Finishing and coating segment sales in 2006 were $145,004, an increase of $7,314, or 5.3 percent, from the prior year. This increase can be traced to a volume increase of 6.4 percent offset by negative currency effects of 1.1 percent. Volume increases were seen in all businesses within this segment, with liquid system sales being particularly strong. It is estimated that the effect of pricing on total revenue was neutral relative to the prior year.

Nordson’s sales outside the United States accounted for 67.4 percent of total 2006 sales, up slightly from 66.5 percent in 2005. Sales volume in 2006 exceeded that of 2005 in all five geographic regions, with the largest increase generated in the Asia Pacific region, where sales volume increased 27.4 percent. Sales volume was up 4.4 percent in the United States, 6.8 percent in the Americas, 7.6 percent in Europe and 3.8 percent in Japan. These increases can be traced largely to the advanced technology segment.

Operating profit — Cost of sales in 2006 was $379,800, up 4.7 percent from 2005, due primarily to a volume increase of 5.5 percent, offset by currency effects that reduced cost of sales by 0.8 percent. Gross margins, expressed as a percent of sales, increased to 57.4 percent in 2006 from 56.4 percent in 2005. The increase was driven by favorable product mix and productivity improvements. Currency effects reduced the margin rate by approximately 0.3 percent.

Selling and administrative expenses were $362,179 in 2006, an increase of $24,397, or 7.2 percent, from 2005. The increase is primarily due to compensation increases and higher employee benefit costs. Other charges, totaling $6,510 for stock option expense and for remediation costs related to a Wisconsin landfill, also impacted 2006 selling and administrative expenses. Selling and administrative expenses were 40.6 percent of sales in both 2006 and 2005, reflecting ongoing Lean efforts and revenue increases that were supported by existing capacity. Currency effects reduced selling and administrative expenses by 1.0 percent.

21

Effective in 2006, the Company adopted the fair value recognition provisions of FAS 123(R) using the modified prospective transition method, resulting in stock option expenses of $3,675 for the year. Under the modified prospective transition method, compensation costs in 2006 include cost for options granted prior to but not vested as of October 31, 2005, and unvested options granted in 2006. Compensation expense is being recognized in selling and administrative expenses on a straight-line basis over the total requisite service period of each option grant. Prior to 2006, the Company accounted for its stock options under the recognition and measurement principles of APB Opinion No. 25, “Accounting for Stock Issued to Employees.” No stock option expense was reflected in net income, as all options granted under these plans had an exercise price equal to the fair market value of the underlying Common Shares on the date of grant. Results for prior periods have not been restated. As of October 31 2006, there was $5,553 of total unrecognized compensation cost related to nonvested stock options. That cost is expected to be amortized over a weighted average period of approximately 1.4 years.

The Company has voluntarily agreed with the City of New Richmond, Wisconsin, and other Potentially Responsible Parties (“PRP”) to share costs associated with (1) a feasibility study and remedial investigation (“FS/RI”) for remediation of the City of New Richmond municipal landfill (the “Site”) and (2) providing clean drinking water to the affected residential properties down gradient of the Site. The PRP group has agreed to an allocation that sets the Company’s share of the cost of remediation at 56.35 percent.

The FS/ RI was completed and submitted to the Wisconsin Department of Natural Resources (“WDNR”) in July 2006. The total cost of the Company’s share for remediation efforts (Site and clean drinking water) will not be ascertainable until a remediation plan is approved by the WDNR. Approval is not anticipated to occur before the second quarter of fiscal 2007. However, based upon the range of viable alternatives for Site remediation and providing clean drinking water to residences down gradient of the Site submitted as part of the Feasibility Study, the Company recorded $2,835 of expense in the third quarter of 2006, its best estimate of its obligation with respect to remediation of the Site and providing clean drinking water to residences down gradient of the Site. If the Site remediation takes longer than expected and clean drinking water must be provided to more residences than expected, the Company has estimated that it could incur additional obligations of up to $2,600.

Operating profit margins, expressed as a percent of sales, were 16.5 percent in 2006 compared to 15.7 percent in 2005. Segment operating profit margins in 2006 and 2005 were as follows:

Segment	2006			2005
Adhesive Dispensing Systems		22	%		22	%
Advanced Technology Systems		24	%		21	%
Finishing and Coating Systems		6	%		1	%

Operating capacity for each of our segments can support increases or decreases in order activity without significant changes in operating costs. Also, currency translation affects reported operating margins. Operating margins for each of our segments were negatively impacted from a stronger dollar during the year.

During the second quarter of 2006, the Company realigned the management of its adhesive dispensing segment, which resulted in the elimination of nine positions. These actions better positioned the segment to achieve its growth objectives. Total costs attributed to the position eliminations were $429, of which $398 was paid in 2006. The remaining $31 will be paid in 2007.

Sales volume of the advanced technology segment improved at a rate greater than operating costs, resulting in an increase in the operating profit percentage. As a result of a slowdown in customer demand in the UV Curing business within the advanced technology segment, the Company eliminated 13 positions in the second half of 2006. Total severance costs of $380 were paid in 2006.

22

The improvement in the finishing and coating segment operating profit is primarily due to sales volume increasing at a rate greater than operating costs. In addition, during the fourth quarter of 2005, the Company announced a number of restructuring actions to improve performance and reduce costs in its finishing and coating segment. These actions, which included operational consolidations and approximately 60 personnel reductions, were completed in the fourth quarter of fiscal 2006. As a result of these actions, resources are more effectively aligned with shifting patterns of global demands, enabling the segment to operate both with lower costs and better capability to serve customers in the faster growing emerging markets. Total restructuring costs were $2,693, of which $875 was recorded in the fourth quarter of 2005, and the remainder was recorded in 2006. Substantially all of the $2,693 of expense was associated with cash expenditures for severance payments to terminated employees. Cash of $4 was paid during the fourth quarter of 2005, and $2,640 was paid in 2006. The remaining $49 will be paid in 2007.

Interest and other — Interest expense in 2006 was $12,017, a decrease of 13.1 percent from 2005 due to lower borrowing levels. Interest and investment income in 2006 was $1,867, up from $1,826 in the prior year. Interest income of $898 on an income tax refund in 2006 was offset by lower interest income from cash equivalents and marketable securities. Other expense was $1,031 in 2006, as opposed to other income of $1,586 in 2005. Included in these amounts were currency losses of $1,796 in 2006, and $705 in 2005.

Net income — The Company’s effective income tax rate on continuing operations was 28.4 percent in 2006, down from 29.7 percent in 2005. The 2006 rate reflects the approval by the Joint Committee on Taxation of an income tax refund of approximately $3,100, which was treated as a discrete event in the third quarter. The 2005 tax rate was impacted by the reversal of a valuation allowance on foreign tax credits of $7,367, offset somewhat by a lower extraterritorial income exclusion and a higher state income tax provision. Net income from continuing operations was $97,667, or $2.86 per diluted share in 2006. This compares to net income from continuing operations of $84,510, or $2.31 per diluted share in 2005. This represents a 15.6 percent increase in income from continuing operations and a 23.8 percent increase in earnings per share from continuing operations. The per-share increase was impacted by the repurchase of approximately 10 percent of the Company’s outstanding common shares in September 2005.

Accounting changes — In November 2004, the FASB issued Statement of Financial Accounting Standard No. 151, “Inventory Costs.” No. 151 amends Accounting Research Bulletin No. 43, Chapter 4, “Inventory Pricing,” to clarify the accounting for abnormal amounts of idle facility expense, freight, handling costs and wasted material. This Statement requires that those items be recognized as current-period charges and requires that allocation of fixed production overheads to the costs of conversion be based on the normal capacity of the production facilities. The Company adopted No. 151 at the beginning of fiscal 2006. The adoption did not impact the Company’s consolidated financial position or results of operations.

In December 2004, the FASB issued Statement of Financial Accounting Standard No. 123(R) (revised 2004), “Share-Based Payment.” This Statement replaced FASB Statement No. 123 and superseded APB Opinion No. 25. No. 123(R) eliminates the ability to account for share-based compensation transactions using the intrinsic method currently used by the Company. No. 123(R) requires such transactions be accounted for using a fair-value-based method that would result in expense being recognized in the Company’s financial statements. As discussed in Note 13, the Company adopted No. 123(R) at the beginning of fiscal 2006.

In March 2005, the FASB issued Interpretation No. 47, “Accounting for Conditional Asset Retirement Obligations.” This interpretation states that the term “conditional asset retirement obligation,” as used in paragraph A23 of SFAS No. 143, refers to a legal obligation to perform an asset retirement in which the timing and (or) method of settlement are conditional on a future event that may or may not be within the control of the entity. The obligation to perform the asset retirement obligation is unconditional even though uncertainty exists about the timing and (or) method of settlement. The Company adopted Interpretation No. 47 at the beginning of fiscal 2006. The adoption did not impact the Company’s consolidated financial position or results of operations.

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In May 2005, the FASB issued Statement of Financial Accounting Standards No. 154, “Accounting Changes and Error Corrections.” No. 154 replaces Accounting Principles Board Opinion No. 20, “Accounting Changes,” and FASB Statement No. 3, “Reporting Accounting Changes in Interim Financial Statements,” and changes the accounting for and reporting of a change in accounting principle. The Statement applies to all voluntary changes in accounting principle and to changes required by an accounting pronouncement when specific transition provisions are not provided. The Statement requires retrospective application to prior periods’ financial statements for changes in accounting principle, unless it is impracticable to determine the period specific or cumulative effect of the change. The Company must adopt this Statement in fiscal 2007.

In June 2005, the FASB issued FSP FAS No. 143-1, “Accounting for Electronic Equipment Waste Obligations,” which addresses the accounting for obligations associated with Directive 2002/96/ EC, Waste Electrical and Electronic Equipment (the “Directive”), which was adopted by the European Union. FSP FAS No. 143-1 provides guidance on how to account for the effects of the Directive with respect to historical waste, which is defined as waste associated with products placed on the market on or before August 13, 2005. FSP FAS No. 143-1 is required to be applied to the later of the first reporting period ending after June 8, 2005, or the date of the adoption of the law by the applicable European Union Member State. The adoption of FSP FAS No. 143-1 did not have a material effect on the Company’s consolidated results of operations or financial condition.

In June 2006, the FASB issued FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes,” (“FIN 48”) an interpretation of FASB Statement No. 109, “Accounting for Income Taxes.” FIN 48 clarifies the accounting for uncertain income tax positions that are recognized in a company’s financial statements. FIN 48 also provides guidance on financial statement classification, accounting for interest and penalties, accounting for interim periods and new disclosure requirements. The Company must adopt FIN 48 in fiscal 2008 and has not yet determined the impact of adoption of FIN 48 on its financial position or results of operations.

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, “Fair Value Measurements.” This statement provides a common definition of fair value and establishes a framework to make the measurement of fair value in generally accepted accounting principles more consistent and comparable. It also requires expanded disclosures to provide information about the extent to which fair value is used to measure assets and liabilities, the methods and assumptions used to measure fair value, and the effect of fair value measures on earnings. The statement is effective for the Company’s 2008 fiscal year, although early adoption is permitted. The Company has not yet determined the impact of adoption on its consolidated financial position or results of operations.

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans,” an amendment of FASB Statements No. 87, 88, 106 and 132(R). This Statement requires an entity to recognize the overfunded or underfunded status of a defined benefit postretirement plan as an asset or liability in its statement of financial position and to recognize changes in that funded status in the year in which the changes occur in other comprehensive income. This Statement also requires an employer to measure the funded status of a plan as of the date of its year-end statement of financial position. The requirement to recognize the funded status of a defined benefit postretirement plan and the disclosure requirements are effective for the Company beginning in fiscal 2007. The requirement to measure plan assets and benefit obligations as of the date of the employer’s fiscal year-end statement of financial position is effective for fiscal years ending after December 15, 2008. The Company already complies with this requirement. As of October 31, 2006, the required adjustment to the Company’s balance sheet would increase the liability for pension and postretirement benefits and increase accumulated other comprehensive loss by approximately $27,000.

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In September 2006, the SEC staff issued Staff Accounting Bulletin No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements,” (SAB 108). SAB 108 was issued in order to eliminate the diversity in practice surrounding how public companies quantify financial statement misstatements. SAB 108 requires that registrants quantify errors using both a balance sheet and income statement approach and evaluate whether either approach results in a misstated amount that, when all relevant quantitative and qualitative factors are considered, is material. SAB 108 must be implemented by the end of the Company’s 2007 fiscal year.

Fiscal Years 2005 and 2004

Sales — Worldwide sales for 2005 were $832,179, an increase of 7.9 percent from 2004 sales of $771,450. Sales volume increased 5.8 percent, with favorable currency effects contributing an additional 2.1 percent to the overall sales gain.

Sales of the adhesive segment were $494,682 in 2005, an increase of $19,077, or 4.0 percent, from 2004. Currency effects added 2.6 percent to reported sales, with the remainder of the increase due to a sales volume increase of 1.4 percent. Within this segment, lower nonwoven system sales were partially offset by increases in the core packaging and product assembly businesses. Sales of the advanced technology segment were $199,807 in 2005, an increase of $34,906, or 21.2 percent from 2004. Substantially all of the increase was the result of volume gains. Within this segment, the Asymtek and March Plasma businesses were especially strong, with volume up more than 33 percent in the aggregate from 2004. EFD sales volume also increased. Finishing and coating segment sales in 2005 were $137,690, compared with $130,944 in the prior year. The 5.2 percent increase can be traced to a volume increase of 3.1 percent combined with currency effects of 2.1 percent. The volume increase was due to strong container system sales across all geographic regions, partially offset by a decrease in liquid system sales. It is estimated that the effect of pricing on total revenue was neutral relative to the prior year.

Nordson’s sales outside the United States accounted for 66.5 percent of total 2005 sales, up slightly from 65.7 percent in 2004. Sales volume was up 5.4 percent in the United States, 18.7 percent in Asia Pacific, 16.2 percent in the Americas and 6.6 percent in Japan. These increases can be traced largely to the advanced technology segment. European sales volume was flat compared to 2004.

Operating profit — Cost of sales in 2005 was $362,824, up 8.5 percent from 2004, due primarily to a volume increase of 7.2 percent and currency effects that added 1.3 percent. Gross margins, expressed as a percent of sales, decreased to 56.4 percent in 2005 from 56.7 percent in 2004. Selling and administrative expenses were $337,782 in 2005, an increase of $19,220, or 6.0 percent, from 2004. The increase is due to currency translation effects of 1.9 percent and to compensation increases and higher employee benefit costs. As a percent of sales, these costs decreased to 40.6 percent in 2005, from 41.3 percent in 2004.

Operating profit margins, expressed as a percent of sales, were 15.7 percent in 2005, compared to 15.4 percent in 2004. Segment operating profit margins in 2005 and 2004 were as follows:

Segment	2005			2004
Adhesive Dispensing Systems		22	%		22	%
Advanced Technology Systems		21	%		18	%
Finishing and Coating Systems		1	%		2	%

Operating capacity for each of our segments can support increases or decreases in order activity without significant changes in operating costs. Also, currency translation affects reported operating margins. Operating margins for each of our segments benefited from a weaker dollar during the year.

Sales volume of the advanced technology segment improved at a rate greater than operating costs, resulting in an increase in the operating profit percentage.

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The finishing and coating segment experienced improved sales volume, but also higher operating costs due in part to restructuring activity. During the fourth quarter of 2005, the Company announced a number of restructuring actions to improve performance and reduce costs in its finishing and coating segment. As a result of these actions, resources are more effectively aligned with shifting patterns of global demands, enabling the segment to operate both with lower costs and better capability to serve customers in the faster growing emerging markets. Costs of $875 were recorded in the fourth quarter of 2005.

Interest and other — Interest expense in 2005 was $13,825, a decrease of 10.4 percent from 2004, due to lower borrowing levels. Interest and investment income in 2005 was $1,826, up from $1,192 in the prior year, due to higher levels of cash and cash equivalents and marketable securities. Other income was $1,586 in 2005, as opposed to other expense of $2,685 in 2004. Included in these amounts were currency losses of $705 in 2005, and $326 in 2004. In 2004, other expenses included a loss of $3,288 on the disposition of a minority equity investment.

Net income — The Company’s effective income tax rate on continuing operations was 29.7 percent in 2005, down from 32.8 percent in 2004. The decrease was primarily due to the reversal of a valuation allowance on foreign tax credits of $7,367, offset somewhat by a lower extraterritorial income exclusion and a higher state income tax provision. Net income from continuing operations was $84,510, or $2.31 per diluted share, in 2005. This compares to net income from continuing operations of $68,307, or $1.87 per diluted share, in 2004. This represents a 24 percent increase in both income and earnings per share from continuing operations.

Liquidity, Capital Expenditures and Sources of Capital

Cash and cash equivalents at the end of 2006 were $48,859, an increase of $37,541 from the end of 2005. The 2005 year-end balance was impacted by the repurchase of approximately 10 percent of the Company’s outstanding Common Shares in a September 2005 transaction.

Cash generated by operations in 2006 was $120,024, up from $118,458 last year. The increase was due to higher net income offset by changes in operating assets and liabilities. The increase in year-end receivables is traced to higher sales in the fourth quarter of 2006 compared to 2005. The 2006 year-end receivable balance also included approximately $4,000 related to an income tax refund and related interest. An increase in accrued liabilities accounted for $6,801 of cash provided by operations and was largely due to higher incentive compensation and donation accruals. The reduction in current deferred taxes in 2006 related primarily to employee benefit accruals, and the increase in long-term deferred tax assets related primarily to employee benefit accruals and to accruals not currently deductible, offset by amortization of goodwill. Other noncurrent assets increased due to the funding of a deferred compensation obligation. Within long-term liabilities, pension and retirement obligations decreased as a result of plan funding, and other liabilities increased primarily due to higher deferred compensation. In addition, there was a $9,074 use of cash from operations traced to a change in the presentation of tax benefits from the exercise of stock options, whereby prior to the adoption of FAS 123(R), the Company presented the tax benefit of deductions resulting from the exercise of stock options as operating cash flows in the Statement of Cash Flows. FAS 123(R) requires the reclassification of the benefit associated with capital in excess of stated value as financing cash flows.

Cash used by investing activities was $7,195 in 2006, compared to cash provided by investing activities of $33,565 in 2005. The change was due to the sale of auction rate and variable rate demand obligation securities in 2005. Capital expenditures, which were concentrated on information systems and production equipment, were $13,610. Cash of $5,411 was generated from the sale of the Fiber Systems Group.

Cash used for financing activities in 2006 was $77,968. Principal uses of cash were $54,004 for scheduled repayments of long-term debt, $22,521 for the repurchase of the Company’s Common Shares and $22,372 for dividend payments to shareholders. Total dividend payments decreased $1,006 from 2005 due to a lower number of shares outstanding. The per-share amount increased 3.9 percent from 2005. Issuance of Common Shares related to the exercise of stock options generated $21,535 of cash.

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Discontinued operations — Cash flows from discontinued operations are presented separately on a single line in each section of the Consolidated Statement of Cash Flows. The absence of future cash flows from discontinued operations is not expected to materially affect future liquidity and capital resources.

The following table summarizes the Company’s obligations as of October 31, 2006:

	Payments Due by Period
			Less than						After
Obligations	Total		1 Year		1-3 Years		4-5 Years		5 Years
Long-term debt	$	101,420	$	54,290	$	28,580	$	18,550
Capital lease obligations		12,043		5,878		5,935		229		1
Operating leases		23,356		7,658		9,097		5,687		914
Notes payable		15,898		15,898
Interest payments		12,938		6,403		4,140		2,395
Contributions related to pension and postretirement benefits		16,000		16,000
Purchase obligations		30,623		28,865		1,758
Total obligations	$	212,278	$	134,992	$	49,510	$	26,861	$	915

Pension and postretirement plan funding amounts after 2007 will be determined based on the future funded status of the plans and therefore cannot be estimated at this time.

Nordson has various lines of credit with both domestic and foreign banks. At October 31, 2006, these lines totaled $268,157, of which $252,259 was unused. Included in the total amount of $268,157 was a $200,000 facility with a group of banks that expires in 2009. This facility was increased from $200,000 to $300,000 on December 8, 2006, and may be increased to $400,000 under certain conditions. This facility was unused at the end of 2006. There are two covenants that the Company must meet under this facility. The first covenant limits the amount of additional debt the Company can incur. At the end of 2006, this covenant would not have limited the amount the Company could borrow under this facility. The other covenant requires EBIT (as defined in the credit agreement) to be at least three times interest expense. The actual interest coverage was 11.2 for 2006. The Company was in compliance with all debt covenants at October 31, 2006.

On December 14, 2006, the Company announced that it had acquired Dage Holdings Limited, a leading manufacturer of testing and inspection equipment used in the semiconductor and printed circuit board industries. Dage, headquartered in the United Kingdom, employs more than 200 people and had revenues of approximately $59,000 during the 12-month period ending October 31, 2006. The purchase price was approximately Great Britain Pounds 117,006 (approximately $230,000), subject to certain post-closing adjustments. Cash and existing lines of credit were used for the purchase.

The Company believes that the combination of present capital resources, internally generated funds and unused financing sources are more than adequate to meet cash requirements for 2007. There are no significant restrictions limiting the transfer of funds from international subsidiaries to the parent Company.

In October 2003, the board of directors authorized the Company to repurchase up to 2,000 of the Company’s Common Shares on the open market. Uses for repurchased shares include the funding of benefit programs, including stock options, restricted stock and 401(k) matching. Shares purchased are treated as treasury shares until used for such purposes. The repurchase program is funded using the Company’s working capital. During 2006, the Company repurchased 423 of the shares authorized to be repurchased under this program. In October 2006, the board of directors authorized the Company to repurchase up to 1,000 of the Company’s Common Shares on the open market or in privately negotiated transactions over a three-year period.

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Outlook

The Company has recently taken two strategic actions that will add value in 2007 and beyond. The first was the sale of the Fiber Systems Group in the fourth quarter of 2006. The absence of the operating losses from this business will improve ongoing earnings per share. The second strategic action was the December 14, 2006 acquisition of Dage Holdings Limited. Dage operates two principle product lines used to analyze the integrity of electronic connections in semiconductor packages and printed circuit board assemblies. Revenues for the 12 months ended October 31, 2006, were approximately $59,000. This acquisition is expected to be moderately accretive to the Company’s 2007 earnings per share.

Effects of Foreign Currency

The impact of changes in foreign currency exchange rates on sales and operating results cannot be precisely measured because of fluctuating selling prices, sales volume, product mix and cost structures in each country where Nordson operates. As a rule, a weakening of the U.S. dollar relative to foreign currencies has a favorable effect on sales and net income, while a strengthening of the U.S. dollar has a detrimental effect.

In 2006 compared with 2005, the U.S. dollar was generally stronger against foreign currencies. If 2005 exchange rates had been in effect during 2006, sales would have been approximately $11,161 higher and third-party costs would have been approximately $6,535 higher. In 2005 compared with 2004, the U.S. dollar was generally weaker against foreign currencies. If 2004 exchange rates had been in effect during 2005, sales would have been approximately $16,510 lower and third-party costs would have been approximately $10,618 lower. These effects on reported sales do not include the impact of local price adjustments made in response to changes in currency exchange rates.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

The Company operates internationally and enters into transactions denominated in foreign currencies. Consequently, the Company is subject to market risk arising from exchange rate movements between the dates foreign currencies are recorded and the dates they are settled. Nordson regularly uses foreign exchange contracts to reduce its risks related to most of these transactions. These contracts, primarily Euro and Yen, usually have maturities of 90 days or less, and generally require the Company to exchange foreign currencies for U.S. dollars at maturity, at rates stated in the contracts. Gains and losses from changes in the market value of these contracts offset foreign exchange losses and gains, respectively, on the underlying transactions. The balance of transactions denominated in foreign currencies are designated as hedges of the Company’s net investments in foreign subsidiaries or are intercompany transactions of a long-term investment nature. As a result of the Company’s use of foreign exchange contracts on a routine basis to reduce the risks related to nearly all of the Company’s transactions denominated in foreign currencies as of October 31, 2006, the Company did not have a material foreign currency risk related to its derivatives or other financial instruments.

Note 11 to the financial statements contains additional information about the Company’s foreign currency transactions and the methods and assumptions used by the Company to record these transactions.

The Company finances a portion of its operations with short-term and long-term borrowings and is subject to market risk arising from changes in interest rates for its long-term debt.

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The tables that follow present principal repayments and related weighted-average interest rates by expected maturity dates of fixed-rate, long-term debt.

At October 31, 2006

											There-		Total		Fair
	2007		2008		2009		2010		2011		after		Value		Value
Long-term debt, including current portion	$	54,290	$	24,290	$	4,290	$	4,290	$	14,260		—	$	101,420	$	104,113
Average interest rate		6.99%		7.20%		7.29%		7.33%		7.39%		—		6.99%

At October 30, 2005

											There-		Total		Fair
	2006		2007		2008		2009		2010		after		Value		Value
Long-term debt, including current portion	$	12,290	$	54,290	$	24,290	$	4,290	$	4,290	$	14,260	$	113,710	$	118,575
Average interest rate		7.01%		6.99%		7.20%		7.29%		7.33%		7.39%		7.01%

The company also has variable-rate notes payable. The weighted average interest rate of this debt was 3.1 percent at the end of 2006 and 2.7 percent at the end of 2005. A 1 percent increase in interest rates would have resulted in additional interest expense of approximately $171 on the notes payable in fiscal 2006.

Inflation

Inflation affects profit margins because the ability to pass cost increases on to customers is restricted by the need for competitive pricing. Although inflation has been modest in recent years and has had no material effect on the years covered by these financial statements, Nordson continues to seek ways to minimize the impact of inflation. It does so through focused efforts to raise its productivity.

Trends

The Five-Year Summary in Item 6 documents Nordson’s historical financial trends. Over this period, the world’s economic conditions fluctuated significantly. Nordson’s solid performance is attributed to the Company’s participation in diverse geographic and industrial markets and its long-term commitment to develop and provide quality products and worldwide service to meet customers’ changing needs.

Safe Harbor Statements Under the Private Securities Litigation Reform Act of 1995

This Form 10-K, particularly “Management’s Discussion and Analysis,” contains forward-looking statements within the meaning of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Such statements relate to, among other things, income, earnings, cash flows, changes in operations, operating improvements, businesses in which Nordson Corporation operates and the U.S. and global economies. Statements in this 10-K that are not historical are hereby identified as “forward-looking statements” and may be indicated by words or phrases such as “anticipates,” “supports,” “plans,” “projects,” “expects,” “believes,” “should,” “would,” “could,” “hope,” “forecast,” “management is of the opinion,” as well as the use of the future tense and similar words or phrases. These forward-looking statements are based on current expectations and involve risks and uncertainties. Consequently, the Company’s actual results could differ materially from the expectations expressed in the forward-looking statements. Factors that could cause the Company’s actual results to differ materially from the expected results are discussed in Item 1A, Risk Factors.

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Item 8. Financial Statements and Supplementary Data

Consolidated Statements of Income

Years ended October 31, 2006, October 30, 2005 and October 31, 2004

		2006			2005			2004
(In thousands except for per-share amounts)
Sales		$	892,221		$	832,179		$	771,450
Operating costs and expenses:
	Cost of sales		379,800			362,824			334,302
	Selling and administrative expenses		362,179			337,782			318,562
	Severance and restructuring costs		2,627			875			—
			744,606			701,481			652,864
Operating profit			147,615			130,698			118,586
Other income (expense):
	Interest expense		(12,017	)		(13,825	)		(15,432	)
	Interest and investment income		1,867			1,826			1,192
	Other — net		(1,031	)		1,586			(2,685	)
			(11,181	)		(10,413	)		(16,925	)
Income before income taxes and discontinued operations			136,434			120,285			101,661
Income tax provision:
	Current		39,719			27,671			23,967
	Deferred		(952	)		8,104			9,387
			38,767			35,775			33,354
Income from continuing operations			97,667			84,510			68,307
Loss from discontinued operations, net of income tax benefits of $6,418, $2,837 and $2,860 for the years ended October 31, 2006, October 30, 2005 and October 31, 2004			(7,069	)		(6,172	)		(4,973	)
Net income		$	90,598		$	78,338		$	63,334
Average common shares			33,365			35,718			35,489
Incremental common shares attributable to outstanding stock options, nonvested stock and deferred stock-based compensation			815			809			1,057
Average common shares and common share equivalents			34,180			36,527			36,546
Basic earnings per share from continuing operations		$	2.93		$	2.37		$	1.92
Basic loss per share from discontinued operations			(0.21	)		(0.18	)		(0.14	)
Total		$	2.72		$	2.19		$	1.78
Diluted earnings per share from continuing operations		$	2.86		$	2.31		$	1.87
Diluted loss per share from discontinued operations			(0.21	)		(0.17	)		(0.14	)
Total		$	2.65		$	2.14		$	1.73

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

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Consolidated Balance Sheets

October 31, 2006 and October 30, 2005

		2006			2005
(In thousands)
Assets
Current assets:
	Cash and cash equivalents	$	48,859		$	11,318
	Marketable securities		9			215
	Receivables — net		190,459			179,231
	Inventories — net		83,688			80,588
	Deferred income taxes		19,287			30,954
	Prepaid expenses		5,002			5,399
	Current assets of discontinued operations		—			5,902
Total current assets			347,304			313,607
Property, plant and equipment — net			105,415			108,306
Goodwill — net			331,915			331,356
Intangible assets — net			8,806			10,438
Deferred income taxes			9,961			1,282
Other assets			19,489			16,702
Long-term assets of discontinued operations			—			8,726
		$	822,890		$	790,417
Liabilities and shareholders’ equity
Current liabilities:
	Notes payable	$	15,898		$	18,393
	Accounts payable		38,680			51,500
	Income taxes payable		10,951			10,290
	Accrued liabilities		106,842			99,001
	Customer advance payments		10,015			9,740
	Current maturities of long-term debt		54,290			53,686
	Current obligations under capital leases		4,649			4,469
	Current liabilities of discontinued operations		—			4,886
Total current liabilities			241,325			251,965
Long-term debt			47,130			101,420
Obligations under capital leases			5,071			4,931
Pension and retirement obligations			43,022			56,693
Other liabilities			55,814			44,496
Shareholders’ equity:
	Preferred shares, no par value; 10,000 shares authorized; none issued		—			—
	Common shares, no par value; 80,000 shares authorized; 49,011 shares issued		12,253			12,253
	Capital in excess of stated value		210,690			188,132
	Retained earnings		681,018			613,580
	Accumulated other comprehensive loss		(12,518	)		(25,883	)
	Common shares in treasury, at cost		(460,915	)		(454,365	)
	Deferred stock-based compensation		—			(2,805	)
Total shareholders’ equity			430,528			330,912
		$	822,890		$	790,417

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

31

Consolidated Statements of Shareholders’ Equity

Years ended October 31, 2006, October 30, 2005 and October 31, 2004

		2006			2005			2004
(In thousands)
Number of common shares in treasury
	Balance at beginning of year		16,100			12,733			14,976
	Shares issued under company stock and employee benefit plans		(1,171	)		(662	)		(2,625	)
	Purchase of treasury shares		671			4,029			382
	Balance at end of year		15,600			16,100			12,733
Common shares
	Balance at beginning and ending of year	$	12,253		$	12,253		$	12,253
Capital in excess of stated value
	Balance at beginning of year	$	188,132		$	174,440		$	131,573
	Shares issued under company stock and employee benefit plans		5,565			10,359			39,262
	Tax benefit from stock option and restricted stock transactions		9,074			3,333			3,605
	Stock-based compensation		7,121			—			—
	Adoption of FAS 123(R)		798			—			—
	Balance at end of year	$	210,690		$	188,132		$	174,440
Retained earnings
	Balance at beginning of year	$	613,580		$	558,620		$	517,414
	Elimination of reporting lag for certain international subsidiaries		(788	)		—			—
	Net income		90,598			78,338			63,334
	Dividends paid ($.67 per share in 2006, $.645 per share in 2005 and $.625 per share in 2004)		(22,372	)		(23,378	)		(22,128	)
	Balance at end of year	$	681,018		$	613,580		$	558,620
Accumulated other comprehensive loss
	Balance at beginning of year	$	(25,883	)	$	(16,471	)	$	(20,296	)
	Translation adjustments		8,693			(2,902	)		6,476
	Minimum pension liability adjustment (net of tax of $(2,671) in 2006, $3,949 in 2005 and $1,773 in 2004)		4,672			(6,510	)		(2,651	)
	Balance at end of year	$	(12,518	)	$	(25,883	)	$	(16,471	)
Common shares in treasury, at cost
	Balance at beginning of year	$	(454,365	)	$	(323,531	)	$	(339,815	)
	Shares issued under company stock and employee benefit plans		22,248			6,797			30,481
	Purchase of treasury shares		(28,798	)		(137,631	)		(14,197	)
	Balance at end of year	$	(460,915	)	$	(454,365	)	$	(323,531	)
Deferred stock based compensation
	Balance at beginning of year	$	(2,805	)	$	(1,978	)	$	(1,020	)
	Shares issued under company stock and employee benefit plans		—			(2,246	)		(1,904	)
	Amortization of deferred stock based compensation		—			1,419			946
	Adoption of FAS 123(R)		2,805			—			—
	Balance at end of year	$	—		$	(2,805	)	$	(1,978	)
Total shareholders’ equity		$	430,528		$	330,912		$	403,333
Comprehensive income
	Net income	$	90,598		$	78,338		$	63,334
	Translation adjustments		8,693			(2,902	)		6,476
	Minimum pension liability adjustment (net of tax of $(2,671) in 2006, $3,949 in 2005 and $1,773 in 2004)		4,672			(6,510	)		(2,651	)
	Total comprehensive income	$	103,963		$	68,926		$	67,159

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

32

Consolidated Statements of Cash Flows

Years ended October 31, 2006, October 30, 2005 and October 31, 2004

					2006			2005			2004
(In thousands)
Cash flows from operating activities:
	Net income				$	90,598		$	78,338		$	63,334
	Less: Loss from discontinued operations					(7,069	)		(6,172	)		(4,973	)
		Income from continuing operations				97,667			84,510			68,307
		Adjustments to reconcile net income to net cash provided by operating activities:
			Depreciation			22,284			21,049			22,502
			Amortization			1,026			2,410			2,152
			Provision for losses on receivables			277			1,596			1,282
			Deferred income taxes			61			8,362			10,344
			Tax benefit from the exercise of stock options			(9,074	)		3,333			3,605
			Non-cash stock compensation			7,121			—			—
			Other			8,271			(3,291	)		7,088
			Changes in operating assets and liabilities:
				Receivables		(25,069	)		(16,047	)		(17,271	)
				Inventories		(1,769	)		4,511			(3,222	)
				Other current assets		771			641			(1,039	)
				Other noncurrent assets		(2,502	)		(3,599	)		135
				Accounts payable		(1,190	)		(9,241	)		9,125
				Income taxes payable		17,737			8,591			4,986
				Accrued liabilities		6,801			7,227			6,727
				Customer advance payments		(347	)		877			2,733
				Other noncurrent liabilities		6,536			8,621			(79	)
		Net cash used by discontinued operations				(8,577	)		(1,092	)		(4,262	)
			Net cash provided by operating activities			120,024			118,458			113,113
Cash flows from investing activities:
	Additions to property, plant and equipment					(13,610	)		(15,379	)		(11,243	)
	Proceeds from sale of property, plant and equipment					913			322			128
	Consolidation of joint venture					—			—			295
	Acquisition of businesses, net of cash acquired					—			(557	)		(4,013	)
	Proceeds from sale of business					5,411			—			—
	Proceeds from sale of marketable securities					206			154,265			24,750
	Purchases of marketable securities					—			(105,076	)		(74,126	)
	Net cash used by discontinued operations					(115	)		(10	)		(194	)
			Net cash provided by (used in) investing activities			(7,195	)		33,565			(64,403	)
Cash flows from financing activities:
	Net proceeds from short-term borrowings					16,190			33,429			6,743
	Net repayment of short-term borrowings					(20,299	)		(29,746	)		(56,845	)
	Repayment of long-term debt					(54,004	)		(4,290	)		(21,922	)
	Repayment of capital lease obligations					(5,571	)		(5,471	)		(4,698	)
	Issuance of common shares					21,535			9,575			56,758
	Purchase of treasury shares					(22,521	)		(132,159	)		(3,115	)
	Tax benefit from the exercise of stock options					9,074			—			—
	Dividends paid					(22,372	)		(23,378	)		(22,128	)
			Net cash used in financing activities			(77,968	)		(152,040	)		(45,207	)
Effect of exchange rate changes on cash						1,428			(263	)		918
Effect of change in fiscal year-end for certain international subsidiaries						1,252			—			—
Increase in cash and cash equivalents						37,541			(280	)		4,421
	Cash and cash equivalents at beginning of year					11,318			11,598			7,177
	Cash and cash equivalents at end of year				$	48,859		$	11,318		$	11,598

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

33

Notes to Consolidated Financial Statements

In this annual report, all amounts related to U.S. and foreign currency and to the number of Nordson Corporation’s Common Shares, except for per share earnings and dividend amounts, are expressed in thousands.

Note 1 — Significant accounting policies

Consolidation — The consolidated financial statements include the accounts of the Company and its majority-owned and controlled subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Other investments are recorded at cost.

As discussed in Note 3, the Company sold its Fiber Systems Group on October 13, 2006, and its results of operations have been included in discontinued operations for all periods presented. Unless noted otherwise, disclosures reported in these financial statement and notes pertain to the Company’s continuing operations.

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

Fiscal year — Effective in 2006, the Company’s fiscal year end is October 31. Previously, the fiscal year for the Company’s domestic operations ended on the Sunday closest to October 31 and contained 52 weeks in 2005 and 2004.

Prior to 2006, the majority of the Company’s international operations reported their results on a one-month lag, in order to facilitate reporting of consolidated accounts. Effective in 2006, the reporting lag was eliminated. As a result, the October 2005 results of operations for these subsidiaries, which amounted to a net loss of $788 were recorded directly to retained earnings at the beginning of fiscal 2006. Accordingly, certain tables showing balance sheet activity presented in these Notes to Consolidated Financial Statements contain 13 months of change when reconciling beginning balances to ending balances.

Revenue recognition — Most of the Company’s revenues are recognized upon shipment, provided that persuasive evidence of an arrangement exists, the sales price is fixed or determinable, collectibility is reasonably assured, and title and risk of loss have passed to the customer. Revenues from contracts with multiple element arrangements, such as those including installation or other services, are recognized as each element is earned based on objective evidence of the relative fair value of each element. If the installation or other services are inconsequential to the functionality of the delivered product, the entire amount of revenue is recognized upon transfer of ownership. Inconsequential installation or other services are those that can generally be completed in a short period of time, at insignificant cost, and the skills required to complete these installations are not unique to the Company. If installation or other services are essential to the functionality of the delivered product, revenues attributable to these obligations are deferred until completed. Amounts received in excess of revenue recognized are included as deferred revenue in the accompanying balance sheets. Revenues deferred in 2006, 2005 and 2004 were not material. A limited number of the Company’s large engineered systems sales contracts were accounted for using the percentage-of-completion method. The amount of revenue recognized in any accounting period was based on the ratio of actual costs incurred through the end of the period to total estimated costs at completion. Cost estimates were updated on a quarterly basis. During 2006, no revenues were recognized under the percentage-of-completion method. During 2005 and 2004, the Company recognized revenue of approximately $5,000 and $7,000, respectively, under this method. These revenues have been reclassified to discontinued operations.

Shipping and handling costs — The Company records amounts billed to customers for shipping and handling as revenue. Shipping and handling expenses are included in cost of sales.

Advertising costs — Advertising costs are expensed as incurred and were $7,044, $8,137 and $8,105 in 2006, 2005 and 2004, respectively.

34

Notes to Consolidated Financial Statements — Continued

Research and development — Research and development costs are expensed as incurred and were $24,467, $20,946 and $22,016 in 2006, 2005 and 2004, respectively.

Earnings per share — Basic earnings per share are computed based on the weighted-average number of common shares outstanding during each year, while diluted earnings per share are based on the weighted-average number of common shares and common share equivalents outstanding. Common share equivalents consist of shares issuable upon exercise of the Company’s stock options, computed using the treasury stock method, as well as nonvested stock and deferred stock-based compensation. Options whose exercise price is higher than the average market price are excluded from the calculation of diluted earnings per share because the effect would be anti-dilutive.

Cash and cash equivalents — Highly liquid instruments with maturities of 90 days or less at date of purchase are considered to be cash equivalents. Cash and cash equivalents are carried at cost.

Marketable securities — Marketable securities consist primarily of certificates of deposit and other short-term notes with maturities greater than 90 days at date of purchase, and all contractual maturities were within one year or could be callable within one year.

The Company’s marketable securities are classified as available for sale and are recorded at quoted market prices that approximate cost.

Allowance for doubtful accounts — The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. The amount of the allowance is determined principally on the basis of past collection experience and known factors regarding specific customers. Accounts are written off against the allowance when it becomes evident that collection will not occur.

Inventories — Inventories are valued at the lower of cost or market. Cost has been determined using the last-in, first-out (LIFO) method for 37 percent of consolidated inventories at October 31, 2006, and 35 percent at October 30, 2005. The first-in, first-out (FIFO) method is used for all other inventories. Liquidations decreased cost of goods sold by $7 in 2005. Consolidated inventories would have been $8,866 and $8,484 higher than reported at October 31, 2006 and October 30, 2005, respectively, had the Company used the FIFO method, which approximates current cost, for valuation of all inventories.

Property, plant and equipment and depreciation — Property, plant and equipment are carried at cost. Additions and improvements that extend the lives of assets are capitalized, while expenditures for repairs and maintenance are expensed as incurred. Plant and equipment are depreciated for financial reporting purposes using the straight-line method over the estimated useful lives of the assets or, in the case of property under capital leases, over the terms of the leases. Leasehold improvements are depreciated over shorter of the lease term or their useful lives. Useful lives are as follows:

Land Improvements	15-25 years
Buildings	20-40 years
Machinery and Equipment	3-12 years
Enterprise Management Systems	5-10 years

The Company capitalizes costs associated with the development and installation of internal use software in accordance with Statement of Position 98-1, “Accounting for the Costs of Computer Software Developed or Obtained for Internal Use.” Accordingly, internal use software costs are expensed or capitalized depending on whether they are incurred in the preliminary project stage, application development stage or the post-implementation stage. Amounts capitalized are amortized over the estimated useful lives of the software beginning with the project’s completion. All re-engineering costs are expensed as incurred. The Company capitalizes interest costs on significant capital projects. No interest was capitalized in 2006 or 2005.

35

Notes to Consolidated Financial Statements — Continued

Goodwill and intangible assets — Goodwill assets are subject to impairment testing. Other intangible assets, which consist primarily of core/developed technology, noncompete agreements and patent costs, are amortized over their useful lives. At present, these lives range from five to 21 years.

Environmental remediation costs — The Company accrues for losses associated with environmental remediation obligations when such losses are probable and reasonably estimable. Accruals for estimated losses from environmental remediation obligations generally are recognized no later than completion of the remedial feasibility study. Such accruals are adjusted as further information develops or circumstances change. Costs for future expenditures for environmental remediation obligations are not discounted to their present value. Recoveries of environmental remediation costs from other parties are recognized as assets when their receipt is deemed probable.

Foreign currency translation — The financial statements of the Company’s subsidiaries outside the United States, except for those subsidiaries located in highly inflationary economies, are generally measured using the local currency as the functional currency. Assets and liabilities of these subsidiaries are translated at the rates of exchange at the balance sheet dates. Income and expense items are translated at average monthly rates of exchange. The resulting translation adjustments are included in accumulated other comprehensive income (loss), a separate component of shareholders’ equity. Generally, gains and losses from foreign currency transactions, including forward contracts, of these subsidiaries and the United States parent are included in net income. Premiums and discounts on forward contracts are amortized over the lives of the contracts. Gains and losses from foreign currency transactions, which hedge a net investment in a foreign subsidiary and from intercompany foreign currency transactions of a long-term investment nature, are included in accumulated other comprehensive income (loss). For subsidiaries operating in highly inflationary economies, gains and losses from foreign currency transactions and translation adjustments are included in net income.

Comprehensive income — Accumulated other comprehensive loss at October 31, 2006 and October 30, 2005, consisted of:

	2006			2005
Net foreign currency translation adjustments	$	14,774		$	6,081
Minimum pension liability adjustments		(27,292	)		(31,964	)
	$	(12,518	)	$	(25,883	)

Warranties — The Company offers warranties to its customers depending on the specific product and terms of the customer purchase agreement. Most of the Company’s product warranties are customer specific. A typical warranty program requires that the Company repair or replace defective products within a specified time period (generally one year) from the date of delivery or first use. The Company records an estimate for future warranty-related costs based on actual historical return rates. Based on analysis of return rates and other factors, the adequacy of the Company’s warranty provisions are adjusted as necessary. The liability for warranty costs is included in other accrued liabilities in the Consolidated Balance Sheet.

Following is a reconciliation of the product warranty liability for 2006 and 2005:

	2006			2005
Balance at beginning of year	$	3,989		$	3,601
Accruals for warranties		6,226			4,090
Warranty payments		(5,480	)		(3,575	)
Currency adjustments		182			(127	)
Balance at end of year	$	4,917		$	3,989

Presentation — Certain 2005 and 2004 amounts have been reclassified to conform to 2006 presentation.

36

Notes to Consolidated Financial Statements — Continued

Note 2 — Accounting changes

In November 2004, the FASB issued Statement of Financial Accounting Standard No. 151, “Inventory Costs.” No. 151 amends Accounting Research Bulletin No. 43, Chapter 4, “Inventory Pricing,” to clarify the accounting for abnormal amounts of idle facility expense, freight, handling costs and wasted material. This Statement requires that those items be recognized as current-period charges and requires that allocation of fixed production overheads to the costs of conversion be based on the normal capacity of the production facilities. The Company adopted No. 151 at the beginning of fiscal 2006. The adoption did not impact the Company’s consolidated financial position or results of operations.

In December 2004, the FASB issued Statement of Financial Accounting Standard No. 123(R) (revised 2004), “Share-Based Payment.” This Statement replaced FASB Statement No. 123 and superseded APB Opinion No. 25. No. 123(R) eliminates the ability to account for share-based compensation transactions using the intrinsic method currently used by the Company. No. 123(R) requires such transactions be accounted for using a fair-value-based method that results in expense being recognized in the Company’s financial statements. As discussed in Note 13, the Company adopted No. 123(R) at the beginning of fiscal 2006.

In March 2005, the FASB issued Interpretation No. 47, “Accounting for Conditional Asset Retirement Obligations.” This interpretation states that the term “conditional asset retirement obligation,” as used in paragraph A23 of SFAS No. 143 refers to a legal obligation to perform an asset retirement in which the timing and (or) method of settlement are conditional on a future event that may or may not be within the control of the entity. The obligation to perform the asset retirement obligation is unconditional even though uncertainty exists about the timing and (or) method of settlement. The Company adopted Interpretation No. 47 at the beginning of fiscal 2006. The adoption did not impact the Company’s consolidated financial position or results of operations.

In May 2005, the FASB issued Statement of Financial Accounting Standards No. 154, “Accounting Changes and Error Corrections.” No. 154 replaces Accounting Principles Board Opinion No. 20, “Accounting Changes,” and FASB Statement No. 3, “Reporting Accounting Changes in Interim Financial Statements,” and changes the accounting for and reporting of a change in accounting principle. The Statement applies to all voluntary changes in accounting principle and to changes required by an accounting pronouncement when specific transition provisions are not provided. The Statement requires retrospective application to prior periods’ financial statements for changes in accounting principle, unless it is impracticable to determine the period specific or cumulative effect of the change. The Company must adopt this Statement in fiscal 2007.

In June 2005, the FASB issued FSP FAS No. 143-1, “Accounting for Electronic Equipment Waste Obligations,” which addresses the accounting for obligations associated with Directive 2002/96/ EC, Waste Electrical and Electronic Equipment (the “Directive”), which was adopted by the European Union. FSP FAS No. 143-1 provides guidance on how to account for the effects of the Directive with respect to historical waste, which is defined as waste associated with products placed on the market on or before August 13, 2005. FSP FAS No. 143-1 is required to be applied to the later of the first reporting period ending after June 8, 2005, or the date of the adoption of the law by the applicable European Union Member State. The adoption of FSP FAS No. 143-1 did not have a material effect on the Company’s consolidated results of operations or financial condition.

In June 2006, the FASB issued FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes,” (“FIN 48”) an interpretation of FASB Statement No. 109, “Accounting for Income Taxes.” FIN 48 clarifies the accounting for uncertain income tax positions that are recognized in a company’s financial statements. FIN 48 also provides guidance on financial statement classification, accounting for interest and penalties, accounting for interim periods and new disclosure requirements. The Company must adopt FIN 48 in fiscal 2008 and has not yet determined the impact of adoption of FIN 48 on its financial position or results of operations.

37

Notes to Consolidated Financial Statements — Continued

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, “Fair Value Measurements.” This statement provides a common definition of fair value and establishes a framework to make the measurement of fair value in generally accepted accounting principles more consistent and comparable. It also requires expanded disclosures to provide information about the extent to which fair value is used to measure assets and liabilities, the methods and assumptions used to measure fair value, and the effect of fair value measures on earnings. The statement is effective for the Company’s 2008 fiscal year, although early adoption is permitted. The Company has not yet determined the impact of adoption on its consolidated financial position or results of operations.

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans,” an amendment of FASB Statements No. 87, 88, 106 and 132(R). This Statement requires an entity to recognize the overfunded or underfunded status of a defined benefit postretirement plan as an asset or liability in its statement of financial position and to recognize changes in that funded status in the year in which the changes occur in other comprehensive income. This Statement also requires an employer to measure the funded status of a plan as of the date of its year-end statement of financial position. The requirement to recognize the funded status of a defined benefit postretirement plan and the disclosure requirements are effective for the Company beginning in fiscal 2007. The requirement to measure plan assets and benefit obligations as of the date of the employer’s fiscal year-end statement of financial position is effective for fiscal years ending after December 15, 2008. The Company already complies with this requirement. As of October 31, 2006, the required adjustment to the Company’s balance sheet would increase the liability for pension and postretirement benefits and increase accumulated other comprehensive loss by approximately $27,000.

In September 2006, the SEC staff issued Staff Accounting Bulletin No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements” (SAB 108). SAB 108 was issued in order to eliminate the diversity in practice surrounding how public companies quantify financial statement misstatements. SAB 108 requires that registrants quantify errors using both a balance sheet and income statement approach and evaluate whether either approach results in a misstated amount that, when all relevant quantitative and qualitative factors are considered, is material. SAB 108 must be implemented by the end of the Company’s 2007 fiscal year.

Note 3 — Discontinued Operations

On October 13, 2006, the Company entered into an agreement to sell its Fiber Systems Group to Saurer Inc. for $5,966. The Fiber Systems Group was acquired in 1998 as part of the acquisition of J&M Laboratories as a means of expanding the Adhesive Dispensing Systems segment. However, due to the changing competitive environment, the Fiber Systems Group did not meet the Company’s financial performance objectives. The sale will enable the Company to concentrate its activities on better performing or faster growing businesses. Proceeds of $5,411 were received on the closing date, with the remaining $555 to be paid over an 18-month period following the closing date. In accordance with FASB Statement of Accounting Standards No. 144, the results of this business have been classified as discontinued operations. Accordingly, the revenues, costs and expenses, assets and liabilities, and cash flows of this business have been segregated in the Consolidated Statement of Income, Consolidated Balance Sheet and Consolidated Statement of Cash Flows.

38

Notes to Consolidated Financial Statements — Continued

The terms of the agreement require the Company to indemnify Saurer Inc. for losses incurred in excess of $100 for breach of representations and warranties made by the Company in the Asset Purchase Agreement. The maximum amount the Company would be required to pay is $1,500, except with respect to the Company’s pre-sale violation of environmental laws and regulations. No amount has been recorded by the Company related to this indemnification. Operating results of the Fiber Systems Group are as follows:

	2006			2005			2004
Sales	$	5,919		$	6,983		$	22,094
Loss from discontinued operations before income taxes	$	(14,428	)	$	(9,009	)	$	(7,833	)
Income tax benefit		(4,546	)		(2,837	)		(2,860	)
Net loss from discontinued operations before gain on disposal		(9,882	)		(6,172	)		(4,973	)
Gain on disposal of discontinued operations, including tax benefit of $1,872		2,813			—			—
	$	(7,069	)	$	(6,172	)	$	(4,973	)

Included in the 2006 loss from discontinued operations is severance expense of $699 related to 27 employees of the Fiber Systems Group that were not hired by Saurer Inc. Cash disbursements will be made over the first half of 2007. Also, included in the 2006 loss from discontinued operations is the recognition of an impairment of an intangible asset of $2,630.

Included in the gain on disposal of discontinued operations above is a $107 write-off of goodwill, which was based on the relative fair value of the disposed group. There was no goodwill impairment impact resulting from the sale of the Fiber Systems Group. The net tax benefit of $1,872 on disposal is the result of $2,867 tax expense on one-time gains resulting from the disposal, offset by $4,739 tax benefit resulting from an excess of tax basis over book basis in Fiber Systems Group assets.

The major classes of assets and liabilities of discontinued operations in the Consolidated Balance Sheet as of October 30, 2005, are as follows:

Assets:
	Cash and cash equivalents	$	(49	)
	Receivables — net		4,320
	Inventories — net		1,280
	Prepaid expenses		351
	Property, plant and equipment — net		2,225
	Intangible assets — net		5,019
	Other assets		1,482
Total assets		$	14,628
Liabilities:
	Accrued liabilities	$	3,776
	Customer advance payments		1,110
Total liabilities		$	4,886

39

Notes to Consolidated Financial Statements — Continued

Note 4 — Retirement, pension and other postretirement plans

Retirement plans — The parent company and certain subsidiaries have funded contributory retirement plans covering certain employees. The Company’s contributions are primarily determined by the terms of the plans, subject to the limitation that they shall not exceed the amounts deductible for income tax purposes. The Company also sponsors unfunded contributory supplemental retirement plans for certain employees. Generally, benefits under these plans vest gradually over a period of approximately five years from date of employment, and are based on the employee’s contribution. The expense applicable to retirement plans for 2006, 2005 and 2004 was approximately $5,857, $5,477 and $4,552, respectively.

Pension plans — The Company has various pension plans covering a portion of the Company’s U.S. and international employees. Pension plan benefits are generally based on years of employment and, for salaried employees, the level of compensation. The Company contributes actuarially determined amounts to U.S. plans to provide sufficient assets to meet future benefit payment requirements. The Company also sponsors an unfunded supplemental pension plan for certain employees. The Company’s international subsidiaries fund their pension plans according to local requirements.

The Company uses a measurement date of October 31 for all pension plans.

40

Notes to Consolidated Financial Statements — Continued

A reconciliation of the benefit obligations, plan assets, accrued benefit cost and the amount recognized in financial statements for these plans is as follows:

		U.S.						International
		2006			2005			2006			2005
Change in benefit obligation:
Benefit obligation at beginning of year		$	159,206		$	135,478		$	38,781		$	33,161
	Service cost		5,543			4,120			1,890			1,686
	Interest cost		9,294			8,102			1,902			1,594
	Participant contributions		—			—			163			144
	Addition of plan		—			—			2,445			—
	Foreign currency exchange rate change		—			—			2,294			(1,355	)
	Actuarial (gain) loss		(2,609	)		15,963			(1,489	)		4,752
	Benefits paid		(5,507	)		(4,457	)		(1,175	)		(1,201	)
Benefit obligation at end of year		$	165,927		$	159,206		$	44,811		$	38,781
Change in plan assets:
Beginning fair value of plan assets		$	97,954		$	93,251		$	14,885		$	13,918
	Actual return on plan assets		9,405			7,515			1,203			1,000
	Company contributions		16,780			1,645			1,636			1,494
	Participant contributions		—			—			163			144
	Foreign currency exchange rate change		—			—			1,087			(470	)
	Benefits paid		(5,507	)		(4,457	)		(1,175	)		(1,201	)
Ending fair value of plan assets		$	118,632		$	97,954		$	17,799		$	14,885
Reconciliation of accrued cost:
Funded status of the plan		$	(47,295	)	$	(61,252	)	$	(27,012	)	$	(23,896	)
Unrecognized actuarial loss			51,806			58,620			10,678			10,937
Unamortized prior service cost			3,581			4,090			210			242
Prepaid (accrued) benefit cost		$	8,092		$	1,458		$	(16,124	)	$	(12,717	)
Reconciliation of amount recognized in financial statements:
Accrued benefit liability		$	(38,092	)	$	(50,594	)	$	(18,866	)	$	(17,583	)
Intangible asset			3,727			4,343			210			242
Accumulated other comprehensive income			42,457			47,709			2,532			4,624
Total amount recognized in financial statements		$	8,092		$	1,458		$	(16,124	)	$	(12,717	)

The accumulated benefit obligation for the U.S. pension plans was $156,724 and $148,548 at October 31, 2006 and October 30, 2005, respectively. The accumulated benefit obligation for the international pension plans was $35,203 and $32,164 at October 31, 2006 and October 30, 2005, respectively. Benefit obligations exceeded plan assets for all pension plans at the end of both years.

During 2006 and 2005, the Company recorded an additional minimum pension liability so that the recorded pension liability was at least equal to the accumulated benefit obligation. Amounts recorded in other comprehensive income (loss) related to the minimum pension liability, net of tax, were $4,672 in 2006, and ($6,510) in 2005.

41

Notes to Consolidated Financial Statements — Continued

Net pension benefit costs include the following components:

	U.S.									International
	2006			2005			2004			2006			2005			2004
Service cost	$	5,543		$	4,120		$	3,492		$	1,890		$	1,686		$	1,564
Interest cost		9,294			8,102			7,491			1,902			1,594			1,434
Expected return on plan assets		(8,941	)		(8,403	)		(7,593	)		(960	)		(868	)		(760	)
Amortization of prior service cost		508			535			362			46			48			33
Amortization of transition obligation		—			—			—			—			—			50
Recognized net actuarial loss		3,742			2,046			1,249			556			248			264
Total benefit cost	$	10,146		$	6,400		$	5,001		$	3,434		$	2,708		$	2,585

The weighted average assumptions in the following table represent the rates used to develop the actuarial present value of projected benefit obligation for the year listed and also the net periodic benefit cost for the following year.

	U.S.									International
	2006			2005			2004			2006			2005			2004
Discount rate		6.0	%		5.8	%		6.0	%		4.3	%		4.2	%		4.8	%
Expected return on plan assets		8.5			8.5			8.5			5.4			5.7			6.0
Rate of compensation increase		3.3			3.3			3.3			3.1			3.1			3.7

The amortization of prior service cost is determined using a straight-line amortization of the cost over the average remaining service period of employees expected to receive benefits under the plans.

In determining the expected return on plan assets, the Company considers both historical performance and an estimate of future long-term rates of return on assets similar to those in the Company’s plans. The Company consults with and considers the opinions of financial and other professionals in developing appropriate return assumptions.

The allocation of pension plan assets as of October 31, 2006, and October 30, 2005, is as follows:

			U.S.						International
			2006			2005			2006			2005
Asset Category
	Equity securities			70	%		63	%		17	%		32	%
	Debt securities			29			36			46			20
	Real estate			—			—			5			11
	Insurance contracts			—			—			31			34
	Other			1			1			1			3
		Total		100	%		100	%		100	%		100	%

The Company’s investment objective for defined benefit plan assets is to meet the plans’ benefit obligations, while minimizing the potential for future required Company plan contributions.

42

Notes to Consolidated Financial Statements — Continued

U.S. plans comprise 87 percent of the worldwide pension assets. The investment strategies focus on asset class diversification, liquidity to meet benefit payments and an appropriate balance of long-term investment return and risk. Target ranges for asset allocations are determined by matching the actuarial projections of the plans’ future liabilities and benefit payments with expected long-term rates of return on the assets, taking into account investment return volatility and correlations across asset classes. The target allocation is 50 to 70 percent equity securities and 30 to 50 percent debt securities. Plan assets are diversified across several investment managers and are generally invested in liquid funds that are selected to track broad market equity and bond indices. Investment risk is carefully controlled with plan assets rebalanced to target allocations on a periodic basis and continual monitoring of investment managers’ performance relative to the investment guidelines established with each investment manager.

International plans comprise 13 percent of the worldwide pension assets. Asset allocations are developed on a country-specific basis. The Company’s investment strategy is to cover pension obligations with insurance contracts or to employ independent managers to invest the assets.

At October 31, 2006 and October 30, 2005, the pension plans did not have any investment in the Company’s Common Shares.

The Company’s contributions to the pension plans in 2007 are estimated to be approximately $14,000.

Retiree pension benefit payments, which reflect expected future service, are anticipated to be paid as follows:

Fiscal Year		U.S.		International
2007		$	9,672	$	946
2008			5,283		1,518
2009			5,592		1,336
2010			6,605		1,905
2011			6,789		1,279
2012-2016			47,498		8,698
	Total	$	81,439	$	15,682

Other postretirement plans — The Company has an unfunded postretirement benefit plan covering most of its U.S. employees. Employees hired after January 1, 2002, are not eligible to participate in this plan. The plan provides medical and life insurance benefits. The plan is contributory, with retiree contributions in the form of premiums adjusted annually, and contains other cost-sharing features, such as deductibles and coinsurance. The Company also sponsors an unfunded, non-contributory postretirement benefit plan that provides medical and life insurance benefits for certain international employees. The Company uses a measurement date of October 31 for all postretirement plans.

In May 2004, the Financial Accounting Standards Board (“FASB”) issued Staff Position No. FSP 106-2, “Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003,” in response to a new law that provides prescription drug benefits under Medicare (“Medicare Part D”) as well as a federal subsidy to sponsors of retiree health care benefit plans that provide a benefit that is at least actuarially equivalent to Medicare Part D. Currently, Statement of Financial Accounting Standard No. 106, “Employers’ Accounting for Postretirement Benefits Other Than Pensions,” (FAS 106) requires that changes in relevant law be considered in current measurement of postretirement benefit costs. In the third quarter of 2005, the Company’s actuary determined that the prescription drug benefit provided by the Company’s postretirement plan is considered to be actuarially equivalent to the benefit provided under the Medicare Prescription Drug, Improvement and Modernization Act of 2003. The Company accounted for this benefit under the provisions of FAS 106. As a result, the Company’s accumulated postretirement benefit obligation was reduced by $10,456, with an expense reduction of approximately $1,651 in 2005.

43

Notes to Consolidated Financial Statements — Continued

A reconciliation of the benefit obligations, accrued benefit cost and the amount recognized in financial statements for these plans is as follows:

		U.S.						International
		2006			2005			2006
Change in benefit obligation:
Benefit obligation at beginning of year		$	39,564		$	37,032		$	—
	Service cost		1,039			1,011			40
	Interest cost		2,216			1,963			35
	Participant contributions		774			762			—
	Amendments		—			(1,112	)		—
	Addition of plan		—			—			583
	Foreign currency exchange rate change		—			—			32
	Actuarial loss		3,982			2,111			46
	Benefits paid		(2,366	)		(2,203	)		(4	)
Benefit obligation at end of year		$	45,209		$	39,564		$	732
Change in plan assets:
Beginning fair value of plan assets		$	—		$	—		$	—
	Company contributions		1,592			1,441			4
	Participant contributions		774			762			—
	Benefits paid		(2,366	)		(2,203	)		(4	)
Ending fair value of plan assets		$	—		$	—		$	—
Reconciliation of accrued cost:
Funded status of the plan		$	(45,209	)	$	(39,564	)	$	(732	)
Unrecognized actuarial loss			23,969			21,274			228
Unamortized prior service cost			(3,809	)		(4,534	)		—
Accrued benefit cost		$	(25,049	)	$	(22,824	)	$	(504	)
Reconciliation of amount recognized in financial statements:
Accrued benefit liability		$	(25,049	)	$	(22,824	)	$	(504	)
Total amount recognized in financial statements		$	(25,049	)	$	(22,824	)	$	(504	)

Net postretirement benefit costs include the following components:

	U.S.									International
	2006			2005			2004			2006
Service cost	$	1,039		$	1,011		$	1,147		$	40
Interest cost		2,216			1,963			2,030			35
Amortization of prior service cost		(725	)		(725	)		(589	)		—
Recognized net actuarial loss		1,288			1,036			1,079			7
Total benefit cost	$	3,818		$	3,285		$	3,667		$	82

44

Notes to Consolidated Financial Statements — Continued

The weighted average assumptions in the following table represent the rates used to develop the actuarial present value of projected benefit obligation for the year listed and also the net periodic benefit cost for the following year.

	U.S.									International
	2006			2005			2004			2006
Discount rate		6.0	%		5.8	%		6.0	%		5.3	%
Health care cost trend rate		10.0			10.0			8.0			6.4
Rate to which health care cost trend rate is assumed to decline (ultimate trend rate)		5.0			5.0			5.0			4.5
Year the rate reaches the ultimate trend rate		2011			2011			2009			2015

The health care cost trend rate assumption has a significant effect on the amounts reported. For example, a one-percentage point change in the assumed health care cost trend rate would have the following effects:

	U.S.					International
	1% Point		1% Point			1% Point		1% Point
	Increase		Decrease			Increase		Decrease
Effect on total service and interest cost components in 2006	$	589	$	(471	)	$	23	$	(17	)
Effect on postretirement obligation as of October 31, 2006	$	7,062	$	(5,745	)	$	213	$	(158	)

The Company’s contributions to the postretirement plans in 2007 are estimated to be approximately $2,000.

Retiree postretirement benefit payments are anticipated to be paid as follows:

		U.S.
		With Medicare		Without Medicare
Fiscal Year		Part D Subsidy		Part D Subsidy		International
2007		$	1,753	$	1,986	$	3
2008			1,863		2,130		3
2009			2,002		2,304		3
2010			2,009		2,438		3
2011			2,287		2,673		3
2012-2016			13,906		16,643		73
	Total	$	23,820	$	28,174	$	88

45

Notes to Consolidated Financial Statements — Continued

Note 5 — Income taxes

Income tax expense from continuing operations includes the following:

			2006			2005			2004
Current:
	U.S. federal		$	22,112		$	12,129		$	8,145
	State and local			991			815			(41	)
	Foreign			16,616			14,727			15,863
		Total current		39,719			27,671			23,967
Deferred:
	U.S. federal			(793	)		5,418			7,287
	State and local			566			3,209			2,109
	Foreign			(725	)		(523	)		(9	)
		Total deferred		(952	)		8,104			9,387
			$	38,767		$	35,775		$	33,354

Foreign income tax expense includes a benefit related to the utilization of loss carryforwards of $1,126, $578 and $395 in 2006, 2005 and 2004, respectively.

The reconciliation of the U.S. statutory federal income tax rate to the worldwide-consolidated effective tax rate follows:

		2006			2005			2004
Statutory federal income tax rate			35.00	%		35.00	%		35.00	%
	Extraterritorial income exclusion		(2.46	)		(2.65	)		(3.44	)
	Domestic Production Deduction		(0.51	)		—			—
	Foreign tax rate variances, net of foreign tax credits		(1.70	)		(4.50	)		(0.48	)
	State and local taxes, net of federal income tax benefit		0.72			2.17			2.06
	Amounts related to prior years		(2.99	)		(0.02	)		(0.47	)
	Other — net		0.35			(0.26	)		0.14
Effective tax rate			28.41	%		29.74	%		32.81	%

Included in foreign tax rate variances, net of foreign tax credits for 2006 and 2005, are benefits of $1,010 and $7,367, respectively, related to foreign tax credit carryforwards that were utilized. These carryforwards were previously offset with a valuation allowance because the Company was uncertain they would be utilized before expiration. The extraterritorial income exclusion allows a portion of certain income from export sales of goods manufactured in the United States to be excluded from taxable income. The Domestic Production Deduction, enacted by the American Jobs Creation Act of 2004, is effective for the Company in 2006 and allows a deduction with respect to income from certain U.S. manufacturing activities.

The Joint Committee on Taxation approved an income tax refund of approximately $3,100 during 2006. This item was treated as a discrete event in the third quarter of 2006 and is included in amounts related to prior years in the table above.

46

Notes to Consolidated Financial Statements — Continued

Earnings before income taxes of international operations, which are calculated before intercompany profit elimination entries, were $45,211, $37,009 and $40,739 in 2006, 2005 and 2004, respectively. Deferred income taxes are not provided on undistributed earnings of international subsidiaries that are intended to be permanently invested in those operations. These undistributed earnings aggregated approximately $100,763 and $103,951 at October 31, 2006 and October 30, 2005, respectively. Should these earnings be distributed, applicable foreign tax credits would substantially offset U.S. taxes due upon the distribution.

In December 2006, Congress passed and the President signed the Tax Relief and Health Care Act, which provided retroactive reinstatement of a research credit. The 2006 impact on the Company from this Act will be an additional tax benefit of approximately $400, which will be recorded in the first quarter of 2007, in accordance with FAS No. 109.

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

			2006			2005
Deferred tax assets:
	Sales to international subsidiaries and related consolidation adjustments		$	5,508		$	6,751
	Employee benefits			43,469			34,249
	Other accruals not currently deductible for taxes			11,648			13,514
	Tax credit and loss carryforwards			4,136			7,511
	Inventory adjustments			3,725			4,135
	Translation of foreign currency accounts			—			614
	Other — net			133			31
		Total deferred tax assets		68,619			66,805
		Valuation allowance		(4,136	)		(6,421	)
		Total deferred tax assets		64,483			60,384
Deferred tax liabilities:
	Depreciation			34,728			27,914
	Translation of foreign currency accounts			299			—
	Other — net			208			234
		Total deferred tax liabilities		35,235			28,148
	Net deferred tax assets		$	29,248		$	32,236

At October 31, 2006, the Company had $488 of tax credit carryforwards that will expire in years 2009 through 2016. At October 31, 2006, the Company had $37,553 state and $3,680 foreign operating loss carryforwards, of which $38,130 will expire in years 2007 through 2026, and $3,103 of which has an indefinite carryforward period. The net reduction in the valuation allowance was $2,285 in 2006, and $7,707 in 2005. The valuation allowance of $4,136 at October 31, 2006, relates to tax credits and loss carryforwards that may expire before being realized.

47

Notes to Consolidated Financial Statements — Continued

Note 6 — Incentive compensation plans

The Company has two incentive compensation plans for executive officers. The Compensation Committee of the board of directors, composed of independent directors, approves participants in the plans and payments under the plans.

The annual awards under the management incentive compensation plan are based upon corporate and individual performance and are calculated as a percentage of base salary for each executive officer. In making awards under this plan for any particular year, the Committee may, however, choose to modify measures, change payment levels or otherwise exercise discretion to reflect the external economic environment and individual or Company performance. Compensation expense attributable to this plan was $4,711, $4,432 and $3,965 in 2006, 2005 and 2004, respectively.

Under the long-term incentive compensation plan, executive officers receive cash or stock awards based solely on corporate performance measures over three-year performance periods. Awards vary based on the degree to which corporate performance equals or exceeds predetermined threshold, target and maximum performance levels at the end of a performance period. No payout will occur unless the Company achieves certain pre-determined performance objectives. The Committee may, however, choose to modify measures, change payment levels or otherwise exercise discretion to reflect the external economic environment and individual or Company performance. Compensation expense attributable to this plan was $5,238, $4,237 and $7,004 in 2006, 2005 and 2004, respectively.

48

Notes to Consolidated Financial Statements — Continued

Note 7 — Details of balance sheet

		2006			2005
Receivables:
	Accounts	$	176,422		$	168,794
	Notes		8,511			11,087
	Other		9,191			4,394
			194,124			184,275
	Allowance for doubtful accounts		(3,665	)		(5,044	)
		$	190,459		$	179,231
Inventories:
	Finished goods	$	41,757		$	44,671
	Work-in-process		10,904			11,613
	Raw materials and finished parts		47,392			39,914
			100,053			96,198
	Obsolescence and other reserves		(7,499	)		(7,126	)
	LIFO reserve		(8,866	)		(8,484	)
		$	83,688		$	80,588
Property, plant and equipment:
	Land	$	6,879		$	6,977
	Land improvements		2,925			2,906
	Buildings		100,106			97,482
	Machinery and equipment		166,097			159,865
	Enterprise management system		31,162			30,002
	Construction-in-progress		4,859			5,103
	Leased property under capitalized leases		17,868			16,909
			329,896			319,244
	Accumulated depreciation and amortization		(224,481	)		(210,938	)
		$	105,415		$	108,306
Accrued liabilities:
	Salaries and other compensation	$	44,462		$	44,417
	Pension and retirement		15,601			12,884
	Taxes other than income taxes		6,132			6,657
	Other		40,647			35,043
		$	106,842		$	99,001

Note 8 — Leases

The Company has lease commitments expiring at various dates, principally for manufacturing, warehouse and office space, automobiles and office equipment. Many leases contain renewal options and some contain purchase options and residual guarantees.

Rent expense for all operating leases was approximately $9,299, $10,121 and $10,340 in 2006, 2005 and 2004, respectively.

Amortization of assets recorded under capital leases is recorded in depreciation expense.

49

Notes to Consolidated Financial Statements — Continued

Assets held under capitalized leases and included in property, plant and equipment are as follows:

		2006			2005
Transportation equipment		$	16,127		$	16,175
Other			1,741			734
Total capitalized leases			17,868			16,909
Accumulated amortization			(8,148	)		(7,509	)
	Net capitalized leases	$	9,720		$	9,400

At October 31, 2006, future minimum lease payments under noncancelable capitalized and operating leases are as follows:

		Capitalized		Operating
		Leases		Leases
Fiscal year ending:
	2007	$	5,878	$	7,658
	2008		4,274		5,360
	2009		1,661		3,737
	2010		214		3,281
	2011		15		2,406
	Later years		1		914
Total minimum lease payments			12,043	$	23,356
Less amount representing executory costs			1,182
Net minimum lease payments			10,861
Less amount representing interest			1,141
Present value of net minimum lease payments			9,720
Less current portion			4,649
Long-term obligations at October 31, 2006		$	5,071

Note 9 — Notes payable

Bank lines of credit and notes payable are summarized as follows:

			2006			2005
Available bank lines of credit:
	Domestic banks		$	215,000		$	210,000
	Foreign banks			53,157			55,425
		Total	$	268,157		$	265,425
Outstanding notes payable:
	Domestic bank debt		$	—		$	4,800
	Foreign bank debt			15,898			13,593
		Total	$	15,898		$	18,393
Weighted-average interest rate on notes payable				3.1	%		2.7	%
Unused bank lines of credit			$	252,259		$	247,032

50

Notes to Consolidated Financial Statements — Continued

Included in the domestic available amount above is a $200,000 revolving credit agreement with a group of banks that expires in 2009. This facility was increased to $300,000 on December 8, 2006, and may be increased to $400,000 under certain conditions. Payment of quarterly commitment fees is required. Other lines of credit obtained by the Company can generally be withdrawn at the option of the banks and do not require material compensating balances or commitment fees.

Note 10 — Long-term debt

The long-term debt of the Company is as follows:

	2006		2005
Senior note, due 2007	$	50,000	$	50,000
Senior notes, due 2005-2011		51,420		95,285
Five-year term loan		—		8,000
Leasehold improvements financing note, due 2006		—		1,821
		101,420		155,106
Less current maturities		54,290		53,686
Long-term maturities	$	47,130	$	101,420

Senior note, due 2007 — This note is payable in one installment and bears interest at a fixed rate of 6.78 percent.

Senior notes, due 2005-2011 — These notes, with a group of insurance companies, have a weighted-average, fixed-interest rate of 7.19 percent and had an original weighted-average life of 6.5 years at the time of issuance in 2001.

Annual maturities — The annual maturities of long-term debt for the five fiscal years subsequent to October 31, 2006, are as follows: $54,290 in 2007; $24,290 in 2008; $4,290 in 2009; $4,290 in 2010; and $14,260 in 2011.

Note 11 — Financial instruments

The Company enters into foreign currency forward contracts, which are derivative financial instruments, to reduce the risk of foreign currency exposures resulting from receivables, payables, intercompany receivables, intercompany payables and loans denominated in foreign currencies. The maturities of these contracts are usually less than 90 days. Forward contracts are marked to market each accounting period, and the resulting gains or losses are included in other income (expense) in the Consolidated Statement of Income. A gain of $2,534 was recognized from changes in fair value of these contracts for the year ended October 31, 2006. A loss of $2,573 and a gain of $807 were recognized from changes in fair value of these contracts for the years ended October 30, 2005 and October 31, 2004, respectively.

51

Notes to Consolidated Financial Statements — Continued

At October 31, 2006, the Company had outstanding forward exchange contracts that mature at various dates through January 2007. The following table summarizes, by currency, the Company’s forward exchange contracts:

		Sell				Buy
		Notional		Fair Market		Notional		Fair Market
		Amounts		Value		Amounts		Value
October 31, 2006 contract amounts:
	Euro	$	7,835	$	7,877	$	77,824	$	78,500
	British pound		755		763		9,987		10,132
	Japanese yen		2,573		2,565		18,204		18,313
	Others		3,419		3,429		12,285		12,444
	Total	$	14,582	$	14,634	$	118,300	$	119,389
October 30, 2005 contract amounts:
	Euro	$	6,259	$	6,095	$	68,505	$	67,486
	British pound		1,087		1,058		8,553		8,388
	Japanese yen		2,513		2,422		17,526		17,049
	Others		2,803		2,771		12,343		12,194
	Total	$	12,662	$	12,346	$	106,927	$	105,117

The Company also uses foreign denominated fixed-rate debt and intercompany foreign currency transactions of a long-term investment nature to hedge the value of its investment in its wholly owned subsidiaries. For hedges of the net investment in foreign operations, realized and unrealized gains and losses are shown in the cumulative translation adjustment account included in total comprehensive income. For the years ended October 31, 2006, and October 30, 2005, a net gain of $1,489 and a net loss of $723, respectively, were included in the cumulative translation adjustment account related to foreign denominated fixed-rate debt designated as a hedge of net investment in foreign operations.

The Company entered into two interest rate swaps that convert fixed rate debt to variable rate debt. A swap related to a Japanese Yen 200,000 leasehold improvement note was entered into in 1996, and a swap related to a $40,000 senior note was entered into in 2004. The swaps were designated as fair-value hedges, and the derivatives qualified for the short-cut method. The swaps expired in fiscal 2006 when the debt became payable. The swaps were recorded with a fair market value of ($366) in the October 30, 2005 Consolidated Balance Sheet.

The Company is exposed to credit-related losses in the event of nonperformance by counterparties to financial instruments. The Company uses major banks throughout the world for cash deposits, forward exchange contracts and interest rate swaps. The Company’s customers represent a wide variety of industries and geographic regions. As of October 31, 2006, there were no significant concentrations of credit risk. The Company does not use financial instruments for trading or speculative purposes.

52

Notes to Consolidated Financial Statements — Continued

The carrying amounts and fair values of the Company’s financial instruments, other than receivables and accounts payable, are as follows:

	2006
	Carrying
	Amount			Fair Value
Cash and cash equivalents	$	48,859		$	48,859
Marketable securities		9			9
Notes payable		(15,898	)		(15,898	)
Long-term debt		(101,420	)		(104,113	)
Forward exchange contracts		1,037			1,037
Interest rate swaps		—			—

	2005
	Carrying
	Amount			Fair Value
Cash and cash equivalents	$	11,318		$	11,318
Marketable securities		215			215
Notes payable		(18,393	)		(18,393	)
Long-term debt		(155,106	)		(160,431	)
Forward exchange contracts		(1,487	)		(1,487	)
Interest rate swaps		(366	)		(366	)

The Company used the following methods and assumptions in estimating the fair value of financial instruments:

•  Cash, cash equivalents and notes payable are valued at their carrying amounts due to the relatively short period to maturity of the instruments.

•  Marketable securities are valued at quoted market prices.

•  Long-term debt is valued by discounting future cash flows at currently available rates for borrowing arrangements with similar terms and conditions.

•  Forward exchange contracts are estimated using quoted exchange rates of comparable contracts.

•  Interest rate swaps are estimated using valuation techniques based on discounted future cash flows.

Note 12 — Capital shares

Preferred — The Company has authorized 10,000 Series A convertible preferred shares without par value. No preferred shares were outstanding in 2006, 2005 or 2004.

Common — The Company has 80,000 authorized Common Shares without par value. In March 1992, the shareholders adopted an amendment to the Company’s articles of incorporation, which, when filed with the Secretary of State for the State of Ohio, would increase the number of authorized Common Shares to 160,000. At October 31, 2006 and October 30, 2005, there were 49,011 Common Shares issued. At October 31, 2006 and October 30, 2005, the number of outstanding Common Shares, net of treasury shares, was 33,411 and 32,911, respectively.

53

Notes to Consolidated Financial Statements — Continued

Note 13 — Stock-based compensation

The Company’s long-term performance plan, approved by the Company’s shareholders in 2004, provides for the granting of stock options, stock appreciation rights, restricted stock, stock purchase rights, stock equivalent units, restricted stock units, cash awards and other stock- or performance-based incentives. The number of Common Shares available for grant of awards is 3 percent of the number of Common Shares outstanding as of the first day of each fiscal year, plus up to an additional 0.5 percent, consisting of shares available, but not granted, in prior years. At the end of fiscal 2006, there were 1,169 shares available for grant in 2007.

Stock options — Nonqualified or incentive stock options may be granted to employees and directors of the Company. Generally, the options may be exercised beginning one year from the date of grant at a rate not exceeding 25 percent per year and expire 10 years from the date of grant. Options granted to non-employee directors vest in six months. Vesting accelerates upon the occurrence of events that involve or may result in a change of control of the Company. Option exercises are satisfied through the issuance of treasury shares on a first-in first-out basis.

Prior to 2006, the Company accounted for its stock options under the recognition and measurement principles of APB Opinion No. 25, “Accounting for Stock Issued to Employees.” No stock option expense was reflected in net income, as all options granted under these plans had an exercise price equal to the fair market value of the underlying Common Shares on the date of grant. Effective at the beginning of 2006, the Company adopted the fair value recognition provisions of FAS 123 (R) using the modified prospective transition method. Under this method compensation cost in 2006 includes cost for options granted prior to but not vested as of October 31, 2005, and options granted in 2006. Compensation expense is being recognized on a straight-line basis over the total requisite service period of each option grant. Results for prior periods have not been restated.

The following table shows pro forma information regarding net income and earnings per share for 2005 and 2004 as if the Company had accounted for stock options granted since 1996 under the fair value method.

		2005			2004
Net income, as reported			$78,338			$63,334
Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of tax			(3,777	)		(2,920	)
Pro forma net income			$74,561			$60,414
Earnings per share:
	Basic — as reported		$2.19			$1.78
	Basic — pro forma		$2.09			$1.70
	Diluted — as reported		$2.14			$1.73
	Diluted — pro forma		$2.04			$1.65
Weighted-average fair value of options granted during the year			$12.08			$8.57
Risk-free interest rate			3.87- 3.88	%		3.88	%
Expected life of option, in years			7			7
Expected dividend yield			1.71	%		2.19	%
Expected volatility			0.30			0.30

As a result of adopting FAS 123 (R), the Company recognized compensation expense of $3,675 ($2,389 on an after-tax basis, or $.07 per both basic and diluted share) for the year ended October 31, 2006.

54

Notes to Consolidated Financial Statements — Continued

Prior to the adoption of FAS 123 (R), the Company presented the tax benefit of deductions resulting from the exercise of stock options as operating cash flows in the Statement of Cash Flows. FAS 123 (R) requires these benefits to be classified as financing cash flows. The excess tax benefit of $9,074 for the year ended October 31, 2006 was classified as a financing cash inflow and would have been classified as an operating cash flow prior to adoption of FAS 123 (R).

Following is a summary of the Company’s stock options for the three years ended October 31, 2006:

					Weighted-Average		Aggregate
		Number of			Exercise Price		Intrinsic		Weighted-Average
		Options			Per Share		Value		Remaining Term
Outstanding at November 2, 2003			5,955		$	25.65
	Granted		441		$	27.71
	Exercised		(2,547	)	$	26.50
	Forfeited or expired		(26	)	$	26.56
Outstanding at October 31, 2004			3,823		$	25.33
	Granted		343		$	37.04
	Exercised		(592	)	$	24.86
	Forfeited or expired		(85	)	$	28.73
Outstanding at October 30, 2005			3,489		$	26.48
	Granted		331		$	38.81
	Exercised		(1,136	)	$	24.49
	Forfeited or expired		(61	)	$	30.66
Outstanding at October 31, 2006			2,623		$	28.80	$	45,249		5.7 years
Vested or expected to vest at October 31, 2006			2,544		$	28.63	$	44,319		5.7 years
Exercisable at October 31, 2006			1,749		$	26.42	$	34,344		4.7 years

Summarized information on currently outstanding options follows:

	Range of Exercise Price
	$20 — $25		$26 — $30		$31 — $39
Number outstanding		821		1,146		656
Weighted-average remaining contractual life, in years		4.0		5.5		8.2
Weighted-average exercise price	$	22.87	$	27.94	$	37.73
Number exercisable		773		842		134
Weighted-average exercise price	$	22.82	$	28.13	$	36.42

As of October 31, 2006, there was $5,553 of total unrecognized compensation cost related to nonvested stock options. That cost is expected to be amortized over a weighted average period of approximately 1.4 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. The fair value of each option grant during 2006 was estimated at the date of grant using the Black-Scholes option-pricing model with the following assumptions:

Expected volatility	.276-.282
Expected dividend yield	1.88- 2.00	%
Risk-free interest rate	4.44- 4.59	%
Expected life of the option (in years)	5.6-8.8

55

Notes to Consolidated Financial Statements — Continued

The weighted-average expected volatility and weighted-average expected dividend yield used to value the 2006 options were .278 and 1.92 percent, respectively.

Historical information was the primary basis for the selection of the expected volatility, expected dividend yield and the expected lives of the options. The risk-free interest rate was selected based upon yields of U.S. Treasury issues with a term equal to the expected life of the option being valued.

The weighted average grant date fair value of stock options granted during 2006 and 2005 was $11.81 and $12.08, respectively. The total intrinsic value of options exercised during 2006 and 2005 was $22,930 and $7,661, respectively.

Cash received from the exercise of stock options was $21,535 for 2006 and $9,575 for 2005. The tax benefit realized from tax deductions from exercises was $9,074 for 2006 and $3,333 for 2005.

Stock appreciation rights — The Company may grant stock appreciation rights to employees. A stock appreciation right provides for a payment equal to the excess of the fair market value of a common share when the right is exercised over its value when the right was granted. There were no stock appreciation rights outstanding during 2006, 2005 and 2004.

Limited stock appreciation rights that become exercisable upon the occurrence of events that involve or may result in a change of control of the Company have been granted with respect to 2,623 shares.

Restricted stock — The Company may grant restricted stock to employees and directors of the Company. These shares may not be disposed of for a designated period of time (currently six months to five years) defined at the date of grant. For employee recipients, shares are forfeited on a pro-rata basis in the event employment is terminated as a consequence of the employee recipient’s retirement, disability or death. Termination for any other reason results in forfeiture of the shares. For non-employee directors, restrictions lapse upon the retirement, disability or death of the non-employee director. Termination of service as a director for any other reason results in a pro-rata forfeiture of shares.

As shares are issued, deferred stock-based compensation equivalent to the fair market value on the date of grant is charged to shareholders’ equity and subsequently amortized over the restriction period. Tax benefits arising from the lapse of restrictions on the stock are recognized when realized and credited to capital in excess of stated value. Upon adoption of FAS 123 (R) at the beginning of 2006, the unamortized balance of the deferred stock-based compensation was reclassified to capital in excess of stated value.

56

Notes to Consolidated Financial Statements — Continued

The following table summarizes activity related to restricted stock:

					Weighted-Average
		Number of			Grant Date
		Shares			Fair Value Per Share
Nonvested at November 2, 2003			71		$	23.51
	Granted		66		$	29.00
	Vested		(17	)	$	26.02
	Forfeited		(1	)	$	31.70
Nonvested at October 31, 2004			119		$	26.13
	Granted		66		$	36.82
	Vested		(13	)	$	27.73
	Forfeited		(11	)	$	29.25
Nonvested at October 30, 2005			161		$	30.17
	Granted		20		$	43.67
	Vested		(54	)	$	25.45
	Forfeited		(3	)	$	32.58
Nonvested at October 31, 2006			124		$	34.38

As of October 31, 2006, there was approximately $2,063 of unrecognized compensation cost related to restricted stock. The cost is expected to be amortized over a weighted average period of 1.7 years. The amount charged to expense related to restricted stock was $1,525, $1,419 and $946 in 2006, 2005 and 2004, respectively.

Employee stock purchase rights — The Company may grant stock purchase rights to employees. These rights permit eligible employees to purchase a limited number of Common Shares at a discount from fair market value. No stock purchase rights were outstanding during 2006, 2005 and 2004.

Directors deferred compensation — Non-employee directors may defer all or part of their fees until retirement. The fees may be deferred as cash or as stock equivalent units. Deferred cash amounts are recorded as liabilities. Upon adoption of FAS 123 (R) at the beginning of 2006, deferred amounts of $3,471 in stock equivalent units were reclassified from liabilities to capital in excess of stated value. Additional stock equivalent units are earned when common stock dividends are declared.

The following is a summary of the activity during 2006:

					Weighted-Average
		Number of			Grant Date Fair
		Shares			Value Per Share
Outstanding at October 30, 2005			151		$	22.74
	Deferrals		6		$	44.88
	Dividend equivalents		2		$	43.65
	Distributions		(18	)	$	19.95
Outstanding at October 31, 2006			141		$	24.35

The amount charged to expense related to this plan was $328 in 2006.

Long-Term Incentive Compensation Plan (LTIP) — Under the long-term incentive compensation plan, executive officers and selected other employees receive cash or stock awards based solely on corporate performance measures over three-year performance periods. Awards vary based on the degree to which corporate performance exceeds predetermined threshold, target and maximum performance levels at the end of a performance period. No payout will occur unless the Company exceeds certain threshold performance objectives.

57

Notes to Consolidated Financial Statements — Continued

Under the performance periods originating in 2004 and 2005, awards will be paid in cash based upon the share price of the Company’s Common Shares at a predetermined date subsequent to the end of each three-year performance period. Over each three-year performance period, costs are accrued based upon current performance projections for the three-year period and the percentage of the requisite service that has been rendered, along with changes in value of the Company’s Common Shares. The method of estimating accrual amounts was revised upon adoption of FAS 123 (R), however the cumulative effect of the change was not material. The accruals for these performance periods continue to be classified as liabilities.

Under the performance period originating in 2006, awards will be settled in Common Shares. The amount of compensation expense is based upon current performance projections for the three-year period and the percentage of the requisite service that has been rendered. The calculation is also based upon the value of the Company’s Common Shares at the dates of grant ($37.05 per share for the executive officer group and $36.56 per share for the group of selected other employees). These awards are recorded in shareholders’ equity, and the amount recorded at October 31, 2006, was $1,590.

Shares reserved for future issuance — At October 31, 2006, there were 77,660 of the Company’s Common Shares reserved for future issuance through the exercise of outstanding options or rights.

Note 14 — Nonrecurring charges

During the second quarter of 2006, the Company realigned the management of its adhesive dispensing segment, which resulted in the elimination of nine positions. These actions better positioned the segment to achieve its growth objectives. Total costs attributable to the position eliminations were $429, of which $398 was paid in 2006. The remaining $31 will be paid in 2007.

As a result of a slowdown in customer demand in the UV Curing business within the advanced technology segment, the Company eliminated 13 positions in the second half of 2006. Total severance costs of $380 were paid in 2006.

During the fourth quarter of 2005, the Company announced a number of restructuring actions to improve performance and reduce costs in its finishing and coating segment. These actions, which included operational consolidations and approximately 60 personnel reductions, were completed in the fourth quarter of fiscal 2006. As a result of these actions, resources are more effectively aligned with shifting patterns of global demands, enabling the segment to operate both with lower costs and better capability to serve customers in the faster growing emerging markets. Total restructuring costs were $2,693, of which $875 was recorded in the fourth quarter of 2005, and the remainder was recorded in 2006. Substantially all of the $2,693 of expense was associated with cash expenditures for severance payments to terminated employees. Cash of $4 was paid during the fourth quarter of 2005, and $2,640 was paid in 2006. The remaining $49 will be paid in 2007.

The following table summarizes activity in the severance and restructuring accruals during the twelve months ended October 31, 2006:

	Adhesive			Advanced			Finishing and
	Dispensing			Technology			Coating			Total
Accrual balance at October 30, 2005	$	—		$	—		$	871		$	871
Additions to accrual		429			380			1,818			2,627
Payments		(398	)		(380	)		(2,640	)		(3,418	)
Accrual balance at October 31, 2006	$	31		$	—		$	49		$	80

During the fourth quarter of 2004, the Company disposed of a minority equity investment that resulted in a pretax loss of $3,288 ($2,257 after tax), which was recorded in other expense.

58

Notes to Consolidated Financial Statements — Continued

Note 15 — Acquisitions

Business acquisitions have been accounted for as purchases, with the acquired assets and liabilities recorded at their estimated fair value at the dates of acquisition. The cost in excess of the net assets of the business acquired is included in goodwill. Operating results of acquisitions are included in the Consolidated Statement of Income from the respective dates of acquisition.

In March 2005, the Company acquired full ownership of H.P. Solutions Inc., d/b/a H.F. Johnson Manufacturing Co., a California machining company that performed services for the Company’s Asymtek business. The cost of the acquisition was $567, which was allocated to net tangible assets.

In April 2004, the Company acquired full ownership of W. Puffe Technologie, a German manufacturer of hot melt adhesive dispensing systems for the textile, aerospace, life science, automotive, construction and baby diaper industries, with annual sales of approximately $6,000. The cost of the acquisition was $4,473, which was allocated to net tangible assets of $1,498, intangible assets of $570 and tax-deductible goodwill of $2,405. The intangible assets consist of patents, which are being amortized over an average of 14 years, and a noncompete agreement, which will be amortized over two years.

Assuming these acquisitions had taken place at the beginning of 2004, proforma results would not have been materially different.

Note 16 — Supplemental information for the statement of cash flows

		2006		2005			2004
Cash operating activities:
	Interest paid	$	13,556	$	13,683		$	15,654
	Income taxes paid		25,060		15,175			15,555
Non-cash investing and financing activities:
	Capitalized lease obligations incurred	$	6,549	$	6,958		$	5,614
	Capitalized lease obligations terminated		986		854			424
	Shares acquired and issued through exercise of stock options		6,270		5,472			11,081
Non-cash assets and liabilities of businesses acquired:
	Working capital	$	—	$	(27	)	$	145
	Property, plant and equipment		—		743			1,615
	Intangibles and other		—		—			2,975
	Long-term debt and other liabilities		—		(159	)		(722	)
		$	—	$	557		$	4,013

Note 17 — Operating segments and geographic area data

The Company conducts business across three primary business segments: Adhesive Dispensing Systems, Advanced Technology Systems and Finishing and Coating Systems. The composition of segments and measure of segment profitability is consistent with that used by the Company’s chief operating decision maker. The primary focus is operating profit, which equals sales less operating costs and expenses. Operating profit excludes interest income (expense), investment income (net) and other income (expense). Items below the operating income line of the Condensed Consolidated Statement of Income are not presented by segment, since they are excluded from the measure of segment profitability reviewed by the Company’s chief operating decision maker. The accounting policies of the segments are generally the same as those described in Note 1, Significant Accounting Policies.

59

Notes to Consolidated Financial Statements — Continued

Nordson products are used around the world in the appliance, automotive, bookbinding, container, converting, electronics, food and beverage, furniture, medical, life sciences, metal finishing, nonwovens, packaging, semiconductor and other diverse industries. Nordson sells its products primarily through a direct, geographically dispersed sales force.

No single customer accounted for more than 5 percent of the Company’s sales in 2006, 2005 or 2004.

The following table presents information about Nordson’s reportable segments:

								Finishing
		Adhesive			Advanced			and
		Dispensing			Technology			Coating			Corporate			Total
Year ended October 31, 2006
	Net external sales	$	507,959		$	239,258		$	145,004		$	—		$	892,221
	Depreciation		10,040			4,039			3,514			4,691			22,284
	Operating profit		110,604	(a)		56,976	(b)		8,765	(c)		(28,730	)		147,615
	Identifiable assets(d)		203,067			86,266			52,578			536,583	(e)		878,494
	Expenditures for long-lived assets(f)		4,255			4,991			1,977			2,387			13,610
Year ended October 30, 2005
	Net external sales	$	494,682		$	199,807		$	137,690		$	—		$	832,179
	Depreciation		9,819			3,427			3,666			4,137			21,049
	Operating profit		106,584			41,523			1,407	(c)		(18,816	)		130,698
	Identifiable assets(d)		205,079			69,926			53,256			490,218	(e)		818,479
	Expenditures for long-lived assets(f)		7,701			2,453			2,317			2,908			15,379
Year ended October 31, 2004
	Net external sales	$	475,605		$	164,901		$	130,944		$	—		$	771,450
	Depreciation		9,927			3,851			3,871			4,853			22,502
	Operating profit		106,020			30,229			2,466			(20,129	)		118,586
	Identifiable assets(d)		207,047			53,920			58,161			530,154	(e)		849,282
	Expenditures for long-lived assets(f)		5,098			1,808			1,587			2,750			11,243

(a)  Includes $429 of severance and restructuring charges.

(b)  Includes $380 of severance and restructuring charges.

(c)  Includes $1,818 of severance and restructuring charges in 2006 and $875 in 2005.

(d)  Includes notes and accounts receivable net of customer advance payments and allowance for doubtful accounts, inventories net of reserves and property, plant and equipment net of accumulated depreciation.

(e)  Corporate assets are principally cash and cash equivalents, domestic deferred income taxes, investments, capital leases, headquarter facilities, the major portion of the Company’s domestic enterprise management system and intangible assets.

(f)  Long-lived assets consist of property, plant and equipment and capital lease assets.

60

Notes to Consolidated Financial Statements — Continued

The Company has significant sales and long-lived assets in the following geographic areas:

		2006		2005		2004
Net external sales
	United States	$	291,242	$	279,074	$	264,722
	Americas		64,928		59,400		49,560
	Europe		314,287		298,692		286,935
	Japan		86,982		89,757		83,243
	Asia Pacific		134,782		105,256		86,990
Total net external sales		$	892,221	$	832,179	$	771,450
Long-lived assets
	United States	$	78,368	$	82,208	$	83,171
	Americas		1,627		1,615		1,329
	Europe		15,699		15,398		15,979
	Japan		2,635		3,079		3,559
	Asia Pacific		7,086		6,006		3,908
Total long-lived assets		$	105,415	$	108,306	$	107,946

A reconciliation of total segment operating income to total consolidated income before income taxes and discontinued operations is as follows:

	2006			2005			2004
Total profit for reportable segments	$	147,615		$	130,698		$	118,586
Interest expense		(12,017	)		(13,825	)		(15,432	)
Interest and investment income		1,867			1,826			1,192
Other-net		(1,031	)		1,586			(2,685	)
Consolidated income before income taxes and discontinued operations	$	136,434		$	120,285		$	101,661

A reconciliation of total assets for reportable segments to total consolidated assets is as follows:

	2006			2005			2004
Total assets for reportable segments	$	878,494		$	818,479		$	849,282
Customer advance payments		10,015			9,740			8,859
Net assets of discontinued operations		—			14,628			22,112
Eliminations		(65,619	)		(52,430	)		(39,705	)
Total consolidated assets	$	822,890		$	790,417		$	840,548

61

Notes to Consolidated Financial Statements — Continued

Note 18 — Goodwill and other intangible assets

Goodwill is tested for impairment on an annual basis and more often if indications of impairment exist. Estimates of future cash flows, discount rates and terminal value amounts are used to determine the estimated fair value of the reporting units. The results of the Company’s analyses indicated that no reduction of goodwill is required.

Changes in the carrying amount of goodwill for 2006 by operating segment are as follows:

	Adhesive			Advanced		Finishing
	Dispensing			Technology		and Coating		Total
Balance at October 30, 2005	$	30,546		$	297,414	$	3,396	$	331,356
Adjustment		(107	)		—		—		(107	)
Currency effect		332			284		50		666
Balance at October 31, 2006	$	30,771		$	297,698	$	3,446	$	331,915

The adjustment in the table above relates to write-off of goodwill associated with the sale of the Fiber Systems Group that is described in Note 3. The amount is based on the relative fair value of the disposed group.

Information regarding the Company’s intangible assets subject to amortization is as follows:

		October 31, 2006
		Carrying		Accumulated
		Amount		Amortization		Net Book Value
Core/developed technology		$	2,788	$	1,217	$	1,571
Noncompete agreements			4,086		1,908		2,178
Patent costs			2,579		1,857		722
Other			5,039		4,640		399
	Total	$	14,492	$	9,622	$	4,870

		October 30, 2005
		Carrying		Accumulated
		Amount		Amortization		Net Book Value
Core/developed technology		$	2,788	$	950	$	1,838
Noncompete agreements			4,070		1,649		2,421
Patent costs			2,955		1,956		999
Other			6,422		5,827		595
	Total	$	16,235	$	10,382	$	5,853

At October 31, 2006, $3,936 of intangible assets related to a minimum pension liability for the Company’s pension plans were not subject to amortization. The amount at October 30, 2005, was $4,585.

Amortization expense for 2006 and 2005 was $1,026 and $1,128, respectively. Estimated amortization expense for each of the five succeeding fiscal years is as follows:

Fiscal Year	Amounts
2007	$	1,146
2008	$	1,068
2009	$	749
2010	$	639
2011	$	446

62

Notes to Consolidated Financial Statements — Continued

Note 19 — Quarterly financial data (unaudited)

		First			Second			Third			Fourth
2006:
Sales		$	197,351		$	227,840		$	225,518		$	241,512
Cost of sales			83,336			97,150			97,226			102,088
Net income (loss):
	From continuing operations		17,553			24,046			26,590			29,478
	From discontinued operations		(1,486	)		(2,115	)		(1,776	)		(1,692	)
Total net income			16,067			21,931			24,814			27,786
Net income per share — Basic:
	Income from continuing operations		.53			.72			.79			.88
	Loss from discontinued operations		(.04	)		(.06	)		(.05	)		(.05	)
	Total net income per share		.49			.66			.74			.83
Net income per share — Diluted:
	Income from continuing operations		.52			.70			.77			.87
	Loss from discontinued operations		(.05	)		(.06	)		(.05	)		(.05	)
	Total		.47			.64			.72			.82
2005:
Sales		$	187,678		$	204,912		$	200,722		$	238,867
Cost of sales			81,212			88,884			86,082			106,646
Net income (loss):
	From continuing operations		15,599			19,056			20,561			29,294
	From discontinued operations		(1,233	)		(1,578	)		(1,970	)		(1,391	)
Total net income			14,366			17,478			18,591			27,903
Net income per share — Basic:
	Income from continuing operations		.43			.52			.57			.86
	Loss from discontinued operations		(.03	)		(.04	)		(.06	)		(.04	)
	Total net income per share		.40			.48			.51			.82
Net income per share — Diluted:
	Income from continuing operations		.42			.51			.56			.84
	Loss from discontinued operations		(.03	)		(.04	)		(.06	)		(.04	)
	Total		.39			.47			.50			.80

In 2006, the Company’s quarters ended on the last calendar day of January, April, July and October. In 2005, the Company’s domestic operations reported results using four, 13-week quarters. International subsidiaries reported results using calendar quarters. The sum of the per-share amounts for the four quarters of 2006 and 2005 do not equal the annual per-share amounts because of the timing of stock repurchases.

Amounts for 2005 and the first three quarters of 2006 have been restated to reflect the discontinued operations of the Fiber Systems Group (see Note 3).

The Company recognized pretax severance and restructuring costs of $1,233, $942, $556 and ($104) in the first, second, third and fourth quarters, respectively, of 2006.

63

Notes to Consolidated Financial Statements — Continued

During the third quarter of 2006, the Company recorded $2,835 of expense for estimated remediation costs associated with an environmental claim at a New Richmond, Wisconsin, municipal landfill. Also, during the third quarter, $800 of interest income was recorded, which was associated with a tax refund of $3,100 that was also recognized in the quarter.

In the third quarter of 2005, the Company’s actuary determined that the prescription drug benefit provided by the Company’s postretirement plan is considered to be actuarially equivalent to the benefit provided under the Medicare Prescription Drug, Improvement and Modernization Act of 2003. As a result, the Company’s postretirement benefit expense was reduced by $1,238 in the third quarter. This gain was partially offset by actuarial losses from demographic and from claim and underwriting sources.

Also, in the third quarter of 2005, the Company determined that it would be able to reverse a valuation allowance on foreign tax credit carryovers, resulting in a $3,900 reduction in a deferred tax valuation allowance. The Company also determined that an increase in the provision for foreign and U.S. state income taxes was necessary, which resulted in additional income tax expense of $1,500. As a result of a change in the Ohio Tax Law, the Company also wrote down a deferred state income tax benefit of $500.

During the fourth quarter of 2005, the Company recognized pretax severance and restructuring costs of $875.

Note 20 — Guarantees

The Company has issued guarantees to two banks to support the short-term borrowing facilities of a 49 percent-owned South Korean joint venture/distributor of the Company’s products. One guarantee is for Korean Won 3,000,000 (approximately $3,184) secured by land and a building and expires on January 31, 2007. The other is a continuing guarantee for $3,300.

In 2004, the Company issued a guarantee to a U.S. bank related to a five-year trade financing agreement for a sale to a customer in Turkey. The loan is secured by collateral with a current value well in excess of the amount due. The guarantee would be triggered upon a payment default by the customer to the bank. The amount of the guarantee at October 31, 2006, was Euro 1,450 (approximately $1,850) and is declining ratably as semiannual principal payments are made by the customer. The Company has recorded $917 in accrued liabilities related to this guarantee. The recorded amount is being reduced as the customer makes payments.

Note 21 — Subsequent event

On December 14, 2006, the Company announced that it had acquired Dage Holdings Limited, a leading manufacturer of testing and inspection equipment used in the semiconductor and printed circuit board industries. Dage, headquartered in the United Kingdom, employs more than 200 people and had revenues of approximately $59,000 during the 12-month period ending October 31, 2006. The purchase price was approximately Great Britain Pounds 117,006 (approximately $230,000), subject to certain post-closing adjustments. Cash and existing lines of credit were used for the purchase.

Note 22 — Contingencies

The Company is involved in pending or potential litigation regarding environmental, product liability, patent, contract, employee and other matters arising from the normal course of business. Including the environmental matter discussed below, it is the Company’s opinion, after consultation with legal counsel, that resolutions of these matters are not expected to result in a material effect on its financial condition, quarterly or annual operating results or cash flows.

64

Notes to Consolidated Financial Statements — Continued

Environmental — The Company has voluntarily agreed with the City of New Richmond, Wisconsin, and other Potentially Responsible Parties (“PRP”) to share costs associated with (1) a feasibility study and remedial investigation (“FS/ RI”) for remediation of the City of New Richmond municipal landfill (the “Site”) and (2) providing clean drinking water to the affected residential properties down gradient of the Site. The PRP group has agreed to an allocation that sets the Company’s share of the cost of remediation at 56.35 percent. The Company has committed and paid $943 towards completing the FS/ RI phase of the project.

The FS/ RI was completed and submitted to the Wisconsin Department of Natural Resources (“WDNR”) in July 2006. The total cost of the Company’s share for remediation efforts (Site and clean drinking water) will not be ascertainable until a remediation plan is approved by the WDNR. Approval is not anticipated to occur before the second quarter of fiscal 2007. However, based upon the range of viable alternatives for Site remediation and providing clean drinking water to residences down gradient of the Site submitted as part of the Feasibility Study, the Company accrued $2,835 of expense in the third quarter of 2006, its best estimate of its obligation with respect to remediation of the Site and providing clean drinking water to residences down gradient of the Site. This amount is recorded in selling and administrative expenses.

The third quarter accrual brought the total liability balance to $2,970. Approximately $2,150 of the liability is classified as long-term, and is expected to be disbursed over the next 10 years. The remaining portion is included in accrued liabilities. If the Site remediation takes longer than expected and clean drinking water must be provided to more residences than expected, the Company has estimated that it could incur additional obligations of up to $2,600.

The liability for environmental remediation represents management’s best estimate of the probable and reasonably estimable undiscounted costs related to known remediation obligations. The accuracy of the Company’s estimate of environmental liability is affected by several uncertainties such as additional requirements, which may be identified in connection with remedial activities, the complexity and evolution of environmental laws and regulations, and the identification of presently unknown remediation requirements. Consequently, the Company’s liability could be greater than its current estimate. However, the Company does not expect that the costs associated with remediation will have a material adverse effect on its financial condition or results of operations.

The European Union (“EU”) has adopted two Directives to facilitate the recycling of electrical and electronic equipment sold in the EU. The first of these is the Waste Electrical and Electronic Equipment (“WEEE”) Directive which directs EU Member States to enact laws, regulations, and administrative provisions to ensure that producers of electrical and electronic equipment provide for the financing of the collection, treatment, recovery and environmentally sound disposal of WEEE from products placed on the market after August 13, 2005, and from products in use prior to that date that are being replaced. In accordance with the WEEE directive, the Company has identified and labeled its products that are affected by the regulations adopted by Member States. The Company also has developed a strategy to support recycling of the electrical and electronic equipment and has created a section on its Website to provide customers with information on how to return WEEE-labeled products for proper recycling.

The second of these Directives is the Restriction on the Use of Certain Hazardous Substances in Electrical and Electronic Equipment (“RoHS”). The RoHS Directive addresses the restriction on use of certain hazardous substances, such as mercury, lead, cadmium, and hexavalent cadmium in electrical and electronic equipment placed on the market after July 1, 2006. The Company has committed to design its future products to meet the standards established by the RoHS Directive.

Costs incurred in 2006 related to these Directives were not material.

65

Management’s Report on Internal Control Over Financial Reporting

The management of Nordson Corporation is responsible for establishing and maintaining adequate internal control over financial reporting.

Using criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework, Nordson’s management assessed the effectiveness of the Company’s internal control over financial reporting as of October 31, 2006.

Based on our assessment, management concluded that the Company’s internal control over financial reporting was effective as of October 31, 2006.

The Company’s independent auditors, Ernst & Young LLP, have issued an audit report on management’s assessment of the effectiveness of the Company’s internal control over financial reporting and on the effectiveness of internal control over financial reporting of the Company as of October 31, 2006. This report is included herein.

/s/ Edward P. Campbell	/s/ Peter. S. Hellman
Chairman of the Board and Chief Executive Officer January 10, 2007	President, Chief Financial and Administrative Officer January 10, 2007

66

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of Nordson Corporation

We have audited management’s assessment, included in the accompanying Management’s Report on Internal Control Over Financial Report, that Nordson Corporation maintained effective internal control over financial reporting as of October 31, 2006, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). Nordson Corporation’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express an opinion on management’s assessment and an opinion on the effectiveness of the company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, management’s assessment that Nordson Corporation maintained effective internal control over financial reporting as of October 31, 2006, is fairly stated, in all material respects, based on the COSO criteria. Also, in our opinion, Nordson Corporation maintained, in all material respects, effective internal control over financial reporting as of October 31 2006, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Nordson Corporation as of October 31, 2006 and October 30, 2005, and the related consolidated statements of income, shareholders’ equity and cash flows for each of the three years in the period ended October 31, 2006 of Nordson Corporation and our report dated January 10, 2007 expressed an unqualified opinion thereon.

Cleveland, Ohio

January 10, 2007

67

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of Nordson Corporation

We have audited the accompanying consolidated balance sheets of Nordson Corporation as of October 31, 2006 and October 30, 2005, and the related consolidated statements of income, shareholders’ equity and cash flows for each of the three years in the period ended October 31, 2006. Our audits also included the financial statement schedule listed in the Index at Item 15(a)(2) and (c). These financial statements and schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (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 Nordson Corporation at October 31, 2006 and October 30, 2005, and the consolidated results of their operations and their cash flows for each of the three years in the period ended October 31, 2006, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

As discussed in Note 13 to the consolidated financial statements, the Company adopted SFAS No. 123(R), “Shared-Based Payment” applying the modified prospective transition method at the beginning of fiscal year 2006.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of Nordson Corporation’s internal control over financial reporting as of October 31, 2006, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated January 10, 2007 expressed an unqualified opinion thereon.

Cleveland, Ohio

January 10, 2007

68

Item 9.  Changes In and Disagreements With Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

(a) Evaluation of disclosure controls and procedures. The Company’s management, with the participation of its principal executive officer (chairman and chief executive officer) and principal financial officer (president, chief financial and administrative officer), has reviewed and evaluated the Company’s disclosure controls and procedures (as defined in the Securities Exchange Act Rule 13a-15e) as of October 31, 2006. Based on that evaluation, the Company’s management, including its principal executive and financial officers, has concluded that the Company’s disclosure controls and procedures were effective as of October 31, 2006 in ensuring that information required to be disclosed in the reports that the Company files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and is accumulated and communicated to the Company’s management, including its principal executive officer and its principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

(b) Management’s report on internal control over financial reporting. The Report of Management on Internal Control over Financial Reporting and the Report of Independent Registered Public Accounting Firm thereon are set forth in Part II, Item 8 of this Annual Report on Form 10-K.

(c) Changes in internal control over reporting. There were no changes in the Company’s internal controls over financial reporting that occurred during the fourth quarter of the fiscal year ended October 31, 2006 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Item 9B. Other Information

None.

PART III

Item 10. Directors and Executive Officers of the Company

The Company incorporates herein by reference the information appearing under the captions “Election of Directors” and “Section 16(a) Beneficial Ownership Reporting Compliance” of the Company’s definitive Proxy Statement for the 2007 Annual Meeting of Shareholders. Information regarding the Company’s Audit Committee financial experts is incorporated by reference to the caption “Election of Directors” of the definitive Proxy Statement for the 2007 Annual Meeting of Shareholders.

Executive officers of the Company serve for a term of one year from date of election to the next organizational meeting of the board of directors and until their respective successors are elected and qualified, except in the case of death, resignation or removal. Information concerning executive officers of the Company is contained in Part I of this report under the caption “Executive Officers of the Company.”

69

The Company has adopted a code of ethics for all employees and directors, including the principal executive officer, other executive officers, principal finance officer and other finance personnel. A copy of the code of ethics is available free of charge on the Company’s Web site at http://www.nordson.com/ Corporate/ Governance/. The Company intends to satisfy its disclosure requirement under Item 5.05 of Form 8-K regarding any amendment to or waiver of a provision of the Company’s code of ethics that applies to the Company’s principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions and that relates to any element of the code of ethics definition enumerated in Item 406(b) of Regulation S-K by posting such information on its Web site.

Item 11. Executive Compensation

The Company incorporates herein by reference the information appearing under the caption “Compensation of Directors,” and information pertaining to compensation of executive officers appearing under the captions “Summary Compensation Table,” “Option/ SAR Grants in Last Fiscal Year,” “Long-Term Incentive Compensation,” “Aggregated Option/ SAR Exercises in Last Fiscal Year and Fiscal Year-End Option/ SAR Values,” “Salaried Employees’ Pension Plan,” and “Excess Defined Benefit Pension Plan, Excess Defined Contribution Retirement Plan, and Deferred Compensation Plan” in the Company’s definitive Proxy Statement for the 2007 Annual Meeting of Shareholders.

Item 12.  Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The Company incorporates herein by reference the information appearing under the caption “Ownership of Nordson Common Shares” in the Company’s definitive Proxy Statement for the 2007 Annual Meeting of Shareholders.

Equity Compensation Table

The following table sets forth information regarding the Company’s equity compensation plans in effect as of October 31, 2006.

					Number of securities
					remaining available for
					future issuance under
	Number of securities to be		Weighted-average		equity compensation plans
	issued upon exercise of		exercise price of		(excluding securities
	outstanding options,		outstanding options,		reflected in first reporting
Plan category	warrants and rights		warrants and rights		column)
Equity compensation plans approved by security holders		2,623	$	28.80		1,169
Equity compensation plans not approved by security holders		—		—		—
Total		2,623	$	28.80		1,169

The number of Common Shares available for grant of awards is 3 percent of the number of Common Shares outstanding as of the first day of each fiscal year, plus up to an additional 0.5 percent, consisting of shares available, but not granted, in prior years.

70

Item 13. Certain Relationships and Related Transactions

The Company incorporates herein by reference the information appearing under the caption “Agreements with Officers and Directors” in the Company’s definitive Proxy Statement for the 2007 Annual Meeting of Shareholders. There are no other transactions that require disclosure pursuant to Item 404 of Regulation S-K.

William D. Ginn, a director of the Company, is a retired partner with the law firm of Thompson Hine LLP. Thompson Hine LLP has in the past provided and continues to provide legal services to the Company.

Item 14. Principal Accounting Fees and Services

The Company incorporates herein by reference the information appearing under the caption “Independent Auditors” in the Company’s definitive Proxy Statement for the 2007 Annual Meeting of Shareholders.

PART IV

Item 15. Exhibits and Financial Statement Schedules

(a)(1). Financial Statements

The financial statements listed in the accompanying index to financial statements are included in Part II, Item 8.

(a)(2) and (c). Financial Statement Schedules

Schedule II Valuation and Qualifying Accounts and Reserves for each of the three years in the period ending October 31, 2006.

No other consolidated financial statement schedules are presented because the schedules are not required, because the required information is not present or not present in amounts sufficient to require submission of the schedule, or because the information required is included in the financial statements, including the notes thereto.

(a)(3) and (b). Exhibits

The exhibits listed on the accompanying index to exhibits are filed as part of this Annual Report on Form 10-K.

71

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.

NORDSON CORPORATION

Date: January 12, 2007

By: /s/ Peter S. Hellman

Peter S. Hellman

President, Chief Financial and

Administrative Officer

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.

/s/ Edward P. Campbell Edward P. Campbell Chairman of the Board and Chief Executive Officer (Principal Executive Officer)	January 12, 2007
/s/ Peter S. Hellman Peter S. Hellman Director, President, Chief Financial and Administrative Officer (Principal Financial Officer) (Principal Accounting Officer)	January 12, 2007
/s/ William W. Colville William W. Colville Director	January 12, 2007
/s/ William D. Ginn William D. Ginn Director	January 12, 2007
/s/ Stephen R. Hardis Stephen R. Hardis Director	January 12, 2007
/s/ Dr. David W. Ignat Dr. David W. Ignat Director	January 12, 2007
/s/ Joseph P. Keithley Joseph P. Keithley Director	January 12, 2007
/s/ William P. Madar William P. Madar Director	January 12, 2007

72

Signatures — Continued

/s/ MARY G. PUMA Mary G. Puma Director	January 12, 2007
/s/ WILLIAM L. ROBINSON William L. Robinson Director	January 12, 2007
/s/ BENEDICT P. ROSEN Benedict P. Rosen Director	January 12, 2007

73

Schedule II — Valuation and Qualifying Accounts and Reserves

	Balance at									Balance
	Beginning		Charged to				Currency			at End
	of Year		Expense		Deductions		Effects			of Year
Allowance for Doubtful Accounts
Fiscal 2004	$	4,225		1,282		1,538		187		$	4,156
Fiscal 2005	$	4,156		1,596		658		(50	)	$	5,044
Fiscal 2006	$	5,044		219		1,775		177		$	3,665
Inventory Obsolescence and Other Reserves
Fiscal 2004	$	7,022		4,421		4,688		384		$	7,139
Fiscal 2005	$	7,139		2,896		2,770		(139	)	$	7,126
Fiscal 2006	$	7,126		2,392		2,342		323		$	7,499
Warranty Accrual
Fiscal 2004	$	2,600		3,732		2,802		71		$	3,601
Fiscal 2005	$	3,601		4,090		3,575		(127	)	$	3,989
Fiscal 2006	$	3,989		6,226		5,480		182		$	4,917

74

NORDSON CORPORATION

Index to Exhibits

(Item 15(a) (3))

Exhibit
Number	Description
(3)	Articles of Incorporation and By-Laws
3-a	1989 Amended Articles of Incorporation (incorporated herein by reference to Exhibit 3-a to Registrant’s Annual Report on Form 10-K for the year ended October 30, 2005)
3-b	1998 Amended Regulations (incorporated herein by reference to Exhibit 3-b to Registrant’s Annual Report on Form 10-K for the year ended October 31, 2004)
(4)	Instruments Defining the Rights of Security Holders, including indentures
4-a	$200 million Credit Agreement between Nordson Corporation and various financial institutions (incorporated herein by reference to Exhibit 10.1 to Registrant’s Form 8-K dated October 19, 2004)
4-b	Second Restated Rights Agreement between Nordson Corporation and National City Bank, Rights Agent (incorporated herein by reference to Exhibit 4-b to Registrant’s Annual Report on Form 10-K for the year ended November 2, 2003)
4-c	$100 million Senior Note Purchase Agreement between Nordson Corporation and various insurance companies
(10)	Material Contracts
10-a	Nordson Corporation 2004 Management Incentive Compensation Plan (incorporated herein by reference to Exhibit 10.2 to Registrant’s Form 8-K dated November 8, 2004)*
10-b	Nordson Corporation Deferred Compensation Plan*
10-b-1	Nordson Corporation 2005 Deferred Compensation Plan (incorporated herein by reference to Exhibit 10-1 to Registrant’s Form 10-Q for the quarter ended January 30, 2005)*
10-c	Indemnity Agreement (incorporated herein by reference to Exhibit 10-c to Registrant’s Annual Report on Form 10-K for the year ended October 28, 2001)*
10-d	Restated Nordson Corporation Excess Defined Contribution Retirement Plan (incorporated herein by reference to Exhibit 10-d to Registrant’s Annual Report on Form 10-K for the year ended November 2, 2003)*
10-d-1	First Amendment to Nordson Corporation Excess Defined Contribution Retirement Plan*
10-d-2	Nordson Corporation 2005 Excess Defined Contribution Benefit Plan (incorporated herein by reference to Exhibit 10-d-2 to Registrant’s Annual Report on Form 10-K for the year ended October 30, 2005) *
10-e	Nordson Corporation Excess Defined Benefit Pension Plan (incorporated herein by reference to Exhibit 10-e to Registrant’s Annual Report on Form 10-K for the year ended November 2, 2003)*
10-e-1	Second Amendment to Nordson Corporation Excess Defined Benefit Retirement Plan*
10-e-2	Nordson Corporation 2005 Excess Defined Benefit Pension Plan (incorporated herein by reference to Exhibit 10-2 to Registrant’s Form 10-Q for the quarter ended January 30, 2005)*
10-f	Employment Agreement between the Registrant and Edward P. Campbell (incorporated herein by reference to Exhibit 10-f to Registrant’s Annual Report on Form 10-K for the year ended October 31, 2004) *
10-g	Nordson Corporation 1993 Long-Term Performance Plan, as amended March 12, 1998*
10-g-1	Nordson Corporation 2004 Long-Term Performance Plan (incorporated herein by reference to Exhibit 10.1 to Registrant’s Form 8-K dated November 8, 2004)*

75

Index to Exhibits — Continued

Exhibit
Number	Description
10-h	Nordson Corporation Assurance Trust Agreement (incorporated herein by reference to Exhibit 10-h to Registrant’s Annual Report on Form 10-K for the year ended October 31, 2004)*
10-h-1	Employment Agreement (Change in Control) between the Registrant and Edward P. Campbell (incorporated herein by reference to Exhibit 10-h-1 to Registrant’s Annual Report on Form 10-K for the year ended October 31, 2004)*
10-h-2	Form of Employment Agreement (Change in Control) between the Registrant and Officers — excluding Edward P. Campbell (incorporated herein by reference to Exhibit 10-h-2 to Registrant’s Annual Report on Form 10-K for the year ended October 31, 2004)*
10-i	Stock Redemption Agreement between the Registrant and Russell L. Bauknight dated August 26, 2005 (incorporated herein by reference to Exhibit 10-i to Registrant’s Annual Report on Form 10-K for the year ended October 30, 2005)
10-j	Release of Claims Agreement between the Registrant and Mark G. Gacka (incorporated herein by reference to Exhibit 99 to Registrant’s Form 8-K dated September 13, 2005)
10-k	Compensation Committee Rules of the Nordson Corporation 2004 Long Term Performance Plan governing directors’ deferred compensation (incorporated herein by reference to Exhibit 10-3 to Registrant’s Form 10-Q for the quarter ended January 30, 2005)*
10-l	Stock Purchase Agreement between Geraint Rees and Others and Nordson Corporation (incorporated herein by reference to Exhibit 99.3(a) to Registrant’s Form 8-K dated December 19, 2006)
10-m	Stock Purchase Agreement between John Greasley, Nordson Corporation and Dage Holdings Limited (incorporated herein by reference to Exhibit 99.3(b) to Registrant’s Form 8-K dated December 19, 2006)
(21)	Subsidiaries of the Registrant
(23)	Consent of Independent Registered Public Accounting Firm
31.1	Certification pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934 by the Chief Executive Officer, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934 by the Chief Financial Officer, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of CEO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(99)	Additional Exhibits
99-a	Form S-8 Undertakings (Nos. 33-18309 and 33-33481)
99-b	Form S-8 Undertakings (No. 2-66776)

*  Indicates management contract or compensatory plan, contract or arrangement in which one or more directors and/or executive officers of Nordson Corporation may be participants.

76 EX-4.C 2 l22480aexv4wc.htm EX-(4)(C)

Exhibit 4c

Nordson Corporation

$40,000,000 6.79% Senior Notes, Series A, Due May 15, 2006
$20,000,000 7.11% Senior Notes, Series B, Due May 15, 2008
$30,000,000 7.11% Senior Notes, Series C, Due May 15, 2011
$10,000,000 7.51% Senior Notes, Series D, Due May 15, 2011

Note Purchase Agreement

Dated as of May 15, 2001

Table of Contents

(Not a part of the Agreement)

Section	Heading	Page
Section 1.	Authorization of Notes	1
Section 2.	Sale and Purchase of Notes	2
Section 3.	Closing	2
Section 4.	Conditions to Closing	2
Section 4.1.	Representations and Warranties	2
Section 4.2.	Performance; No Default	2
Section 4.3.	Compliance Certificates	3
Section 4.4.	Opinions of Counsel	3
Section 4.5.	Purchase Permitted By Applicable Law, Etc.	3
Section 4.6.	Sale of Other Notes	3
Section 4.7.	Payment of Special Counsel Fees	3
Section 4.8.	Private Placement Numbers	4
Section 4.9.	Changes in Corporate Structure	4
Section 4.10.	Funding Instructions	4
Section 4.11.	Proceedings and Documents	4
Section 5.	Representations and Warranties of the Company	4
Section 5.1.	Organization; Power and Authority	4
Section 5.2.	Authorization, Etc.	5
Section 5.3.	Disclosure	5
Section 5.4.	Organization and Ownership of Shares of Subsidiaries; Affiliates	5
Section 5.5.	Financial Statements	6
Section 5.6.	Compliance with Laws, Other Instruments, Etc.	6
Section 5.7.	Governmental Authorizations, Etc.	6
Section 5.8.	Litigation; Observance of Agreements, Statutes and Orders	6
Section 5.9.	Taxes	7
Section 5.10.	Title to Property; Leases	7
Section 5.11.	Licenses, Permits, Etc.	7
Section 5.12.	Compliance with ERISA	8
Section 5.13.	Private Offering by the Company	9
Section 5.14.	Use of Proceeds; Margin Regulations	9
Section 5.15.	Existing Debt; Future Liens	9
Section 5.16.	Foreign Assets Control Regulations, Etc.	9
Section 5.17.	Status under Certain Statutes	9

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Section	Heading	Page
Section 5.18.	Notes Rank Pari Passu	10
Section 5.19.	Environmental Matters	10
Section 6.	Representations of the Purchaser	10
Section 6.1.	Purchase for Investment	10
Section 6.2.	Source of Funds	11
Section 7.	Information as to the Company	12
Section 7.1.	Financial and Business Information	12
Section 7.2.	Officer’s Certificate	15
Section 7.3.	Inspection	16
Section 8.	Prepayment of the Notes	16
Section 8.1.	Required Prepayments	16
Section 8.2.	Optional Prepayments with Make-Whole Amount	17
Section 8.3.	Prepayment Upon Change of Control	17
Section 8.4.	Allocation of Partial Prepayments	18
Section 8.5.	Maturity; Surrender, Etc.	18
Section 8.6.	Purchase of Notes	18
Section 8.7.	Make-Whole Amount	18
Section 9.	Affirmative Covenants	20
Section 9.1.	Compliance with Law	20
Section 9.2.	Insurance	20
Section 9.3.	Maintenance of Properties	20
Section 9.4.	Payment of Taxes and Claims	20
Section 9.5.	Corporate Existence, Etc.	21
Section 9.6.	Nature of Business	21
Section 9.7.	Notes to Rank Pari Passu	21
Section 9.8.	Guaranty by Subsidiaries	21
Section 10.	Negative Covenants	22
Section 10.1.	Consolidated Total Debt	22
Section 10.2.	Consolidated Priority Debt	22
Section 10.3.	Interest Coverage Ratio	22
Section 10.4.	Consolidated Net Worth	22
Section 10.5.	Limitation on Liens	22
Section 10.6.	Restricted Payments and Restricted Investments	24
Section 10.7.	Mergers, Consolidations and Sales of Assets	25
Section 10.8.	Transactions with Affiliates	27
Section 10.9.	Restrictive Agreements	28
Section 10.10.	Significant Subsidiaries	28
Section 11.	Events of Default	29

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Section	Heading	Page
Section 12.	Remedies on Default, Etc.	31
Section 12.1.	Acceleration	31
Section 12.2.	Other Remedies	31
Section 12.3.	Rescission	31
Section 12.4.	No Waivers or Election of Remedies, Expenses, Etc.	32
Section 13.	Registration; Exchange; Substitution of Notes	32
Section 13.1.	Registration of Notes	32
Section 13.2.	Transfer and Exchange of Notes	32
Section 13.3.	Replacement of Notes	33
Section 14.	Payments on Notes	33
Section 14.1.	Place of Payment	33
Section 14.2.	Home Office Payment	33
Section 15.	Expenses, Etc.	34
Section 15.1.	Transaction Expenses	34
Section 15.2.	Survival	34
Section 16.	Survival of Representations and Warranties; Entire Agreement	34
Section 17.	Amendment and Waiver	35
Section 17.1.	Requirements	35
Section 17.2.	Solicitation of Holders of Notes	35
Section 17.3.	Binding Effect, Etc.	35
Section 17.4.	Notes Held by Company, Etc.	36
Section 18.	Notices	36
Section 19.	Reproduction of Documents	36
Section 20.	Confidential Information	37
Section 21.	Substitution of Purchaser	37
Section 22.	Miscellaneous	38
Section 22.1.	Successors and Assigns	38
Section 22.2.	Payments Due on Non-Business Days	38
Section 22.3.	Severability	38
Section 22.4.	Construction	38

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Section	Heading	Page
Section 22.5.	Counterparts		38
Section 22.6.	Governing Law		39
Signature			40

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Schedule A	—	Information Relating To Purchasers
Schedule B	—	Defined Terms
Schedule 4.9	—	Changes in Corporate Structure
Schedule 5.3	—	Disclosure Materials
Schedule 5.4	—	Subsidiaries of the Company and Ownership of Subsidiary Stock
Schedule 5.5	—	Financial Statements
Schedule 5.8	—	Certain Litigation
Schedule 5.11	—	Patents, etc.
Schedule 5.14	—	Use of Proceeds
Schedule 5.15	—	Existing Debt
Schedule 10.6	—	Existing Investments
Exhibit 1-A	—	Form of 6.79% Senior Note, Series A, due May 15, 2006
Exhibit 1-B	—	Form of 7.11% Senior Note, Series B, due May 15, 2008
Exhibit 1-C	—	Form of 7.11% Senior Note, Series C, due May 15, 2011
Exhibit 1-D	—	Form of 7.51% Senior Note, Series D, due May 15, 2011
Exhibit 4.4(a)	—	Form of Opinion of Special Counsel for the Company
Exhibit 4.4(b)	—	Form of Opinion of Special Counsel for the Purchasers

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Nordson Corporation
28601 Clemens Road
Westlake, Ohio 44145

$40,000,000 6.79% Senior Notes, Series A, Due May 15, 2006
$20,000,000 7.11% Senior Notes, Series B, Due May 15, 2008
$30,000,000 7.11% Senior Notes, Series C, Due May 15, 2011
$10,000,000 7.51% Senior Notes, Series D, Due May 15, 2011

Dated as of May 15, 2001

To the Purchaser listed in the attached
Schedule A who is a signatory hereto:

Ladies and Gentlemen:

     Nordson Corporation, an Ohio corporation (the “Company”), agrees with you as follows:

Section 1. Authorization of Notes.

     The Company will authorize the issue and sale of:

     (a) $40,000,000 aggregate principal amount of its 6.79% Senior Notes, Series A, due May 15, 2006 (the “Series A Notes”);

     (b) $20,000,000 aggregate principal amount of its 7.11% Senior Notes, Series B, due May 15, 2008 (the “Series B Notes”);

     (c) $30,000,000 aggregate principal amount of its 7.11% Senior Notes, Series C, due May 15, 2011 (the “Series C Notes”); and

     (d) $10,000,000 aggregate principal amount of its 7.51% Senior Notes, Series D, due May 15, 2011 (the “Series D Notes”).

     The term “Notes” as used in this Agreement shall include the Series A Notes, the Series B Notes, the Series C Notes and the Series D Notes, such term to include any such notes issued in substitution therefor pursuant to Section 13 of this Agreement or the Other Agreements (as hereinafter defined). The Notes shall be substantially in the form set out in Exhibit 1-A, Exhibit 1-B, Exhibit 1-C, and Exhibit 1-D, respectively, with such changes therefrom, if any, as may be approved by you and the Company. Certain capitalized terms used in this Agreement are defined in Schedule B; references to a “Schedule” or an “Exhibit” are, unless otherwise specified, to a Schedule or an Exhibit attached to this Agreement.

Section 2. Sale and Purchase of Notes.

     Subject to the terms and conditions of this Agreement, the Company will issue and sell to you and you will purchase from the Company, at the Closing provided for in Section 3, Notes in the principal amount and of the Series specified opposite your name in Schedule A at the purchase price of 100% of the principal amount thereof. Contemporaneously with entering into this Agreement, the Company is entering into separate Note Purchase Agreements (the “Other Agreements") identical with this Agreement with each of the other purchasers named in Schedule A (the “Other Purchasers"), providing for the sale at such Closing to each of the Other Purchasers of Notes in the principal amount and of the Series specified opposite its name in Schedule A. Your obligation hereunder, and the obligations of the Other Purchasers under the Other Agreements, are several and not joint obligations, and you shall have no obligation under any Other Agreement and no liability to any Person for the performance or nonperformance by any Other Purchaser thereunder.

Section 3. Closing.

     The sale and purchase of the Notes to be purchased by you and the Other Purchasers shall occur at the offices of Chapman and Cutler, 111 West Monroe Street, Chicago, Illinois, at 10:00 A.M. Chicago time, at a closing (the “Closing") on May 17, 2001 or on such other Business Day thereafter on or prior to May 31, 2001 as may be agreed upon by the Company and you and the Other Purchasers. At the Closing the Company will deliver to you the Notes to be purchased by you in the form of a single Note (or such greater number of Notes in denominations of at least $100,000 as you may request) dated the date of the Closing and registered in your name (or in the name of your nominee), against delivery by you to the Company or its order of immediately available funds in the amount of the purchase price therefor by wire transfer of immediately available funds for the account of the Company to the account specified in the instructions delivered pursuant to Section 4.10 hereof. If at the Closing the Company shall fail to tender such Notes to you as provided above in this Section 3, or any of the conditions specified in Section 4 shall not have been fulfilled to your satisfaction, you shall, at your election, be relieved of all further obligations under this Agreement, without thereby waiving any rights you may have by reason of such failure or such nonfulfillment.

Section 4. Conditions to Closing.

     Your obligation to purchase and pay for the Notes to be sold to you at the Closing is subject to the fulfillment to your satisfaction, prior to or at the Closing, of the following conditions:

     Section 4.1. Representations and Warranties. The representations and warranties of the Company in this Agreement shall be correct when made and at the time of the Closing.

     Section 4.2. Performance; No Default. The Company shall have performed and complied with all agreements and conditions contained in this Agreement required to be performed or complied with by it prior to or at the Closing, and after giving effect to the issue

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and sale of the Notes (and the application of the proceeds thereof as contemplated by Schedule 5.14), no Default or Event of Default shall have occurred and be continuing. Neither the Company nor any Subsidiary shall have entered into any transaction since the date of the Memorandum that would have been prohibited by Sections 10.5, 10.7 or 10.8 hereof had such Sections applied since such date.

     Section 4.3. Compliance Certificates.

     (a) Officer’s Certificate. The Company shall have delivered to you an Officer’s Certificate, dated the date of the Closing, certifying that the conditions specified in Sections 4.1, 4.2 and 4.9 have been fulfilled.

     (b) Secretary’s Certificate. The Company shall have delivered to you a certificate of its Secretary, dated the date of the Closing, certifying as to the resolutions attached thereto and other corporate proceedings relating to the authorization, execution and delivery of the Notes and the Agreements.

     Section 4.4. Opinions of Counsel. You shall have received opinions in form and substance satisfactory to you, dated the date of the Closing (a) from Robert Veillette, Assistant General Counsel of the Company, and from Thompson Hine LLP, counsel for the Company, covering the matters set forth in Exhibit 4.4(a) and covering such other matters incident to the transactions contemplated hereby as you or your counsel may reasonably request (and the Company hereby instructs its counsel to deliver such opinion to you) and (b) from Chapman and Cutler, your special counsel in connection with such transactions, substantially in the form set forth in Exhibit 4.4(b) and covering such other matters incident to such transactions as you may reasonably request.

     Section 4.5. Purchase Permitted By Applicable Law, Etc. On the date of the Closing your purchase of Notes shall (a) be permitted by the laws and regulations of each jurisdiction to which you are subject, without recourse to provisions (such as Section 1405(a)(8) of the New York Insurance Law) permitting limited investments by insurance companies without restriction as to the character of the particular investment, (b) not violate any applicable law or regulation (including, without limitation, Regulation T, U or X of the Board of Governors of the Federal Reserve System) and (c) not subject you to any tax, penalty or liability under or pursuant to any applicable law or regulation, which law or regulation was not in effect on the date hereof. If requested by you, you shall have received an Officer’s Certificate certifying as to such matters of fact as you may reasonably specify to enable you to determine whether such purchase is so permitted.

     Section 4.6. Sale of Other Notes. Contemporaneously with the Closing, the Company shall sell to the Other Purchasers, and the Other Purchasers shall purchase, the Notes to be purchased by them at the Closing as specified in Schedule A.

     Section 4.7. Payment of Special Counsel Fees. Without limiting the provisions of Section 15.1, the Company shall have paid on or before the Closing the fees, charges and disbursements of your special counsel referred to in Section 4.4 to the extent reflected in a

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statement of such counsel rendered to the Company at least one Business Day prior to the Closing.

     Section 4.8. Private Placement Numbers. Private Placement Numbers issued by Standard & Poor’s CUSIP Service Bureau (in cooperation with the Securities Valuation Office of the National Association of Insurance Commissioners) shall have been obtained for each Series of the Notes.

     Section 4.9. Changes in Corporate Structure. Except as specified in Schedule 4.9, the Company shall not have changed its jurisdiction of incorporation or been a party to any merger or consolidation and shall not have succeeded to all or any substantial part of the liabilities of any other entity, at any time following the date of the most recent financial statements referred to in Schedule 5.5.

     Section 4.10. Funding Instructions. At least three Business Days prior to the date of the Closing, you shall have received written instructions executed by a Responsible Officer of the Company directing the manner of the payment of funds and setting forth (i) the name and address of the transferee bank, (ii) such transferee bank’s ABA number, (iii) the account name and number into which the purchase price for the Notes is to be deposited, and (iv) the name and telephone number of the account representative responsible for verifying receipt of such funds.

     Section 4.11. Proceedings and Documents. All corporate and other proceedings in connection with the transactions contemplated by this Agreement and all documents and instruments incident to such transactions shall be satisfactory to you and your special counsel, and you and your special counsel shall have received all such counterpart originals or certified or other copies of such documents as you or they may reasonably request.

         The obligation of the Company to deliver the Notes hereunder is subject to the condition that the entire principal amount of the Notes scheduled to be sold on the date of the Closing pursuant to this Agreement and the Other Agreements shall have been tendered by the Purchasers.

Section 5. Representations and Warranties of the Company.

         The Company represents and warrants to you that:

     Section 5.1. Organization; Power and Authority. The Company is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation, and is duly qualified as a foreign corporation and is in good standing in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the failure to be so qualified or in good standing could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The Company has the corporate power and authority to own or hold under lease the properties it purports to own or hold under lease, to transact the business it transacts and proposes to transact, to execute and deliver this Agreement and the Other Agreements and the Notes and to perform the provisions hereof and thereof.

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     Section 5.2. Authorization, Etc. This Agreement, the Other Agreements and the Notes have been duly authorized by all necessary corporate action on the part of the Company, and this Agreement constitutes, and upon execution and delivery thereof each Note will constitute, a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by (a) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and (b) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

     Section 5.3. Disclosure. The Company, through its agent, Wachovia Securities, Inc., has delivered to you and each Other Purchaser a copy of a Private Placement Memorandum, dated April, 2001 (the “Memorandum"), relating to the transactions contemplated hereby. The Memorandum fairly describes, in all material respects, the general nature of the business and principal properties of the Company and its Subsidiaries. Except as disclosed in Schedule 5.3, this Agreement, the Memorandum, and the documents, certificates or other writings delivered to you by or on behalf of the Company in connection with the transactions contemplated hereby and the financial statements listed in Schedule 5.5, taken as a whole, do not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein not misleading in light of the circumstances under which they were made. Except as disclosed in the Memorandum or as expressly described in Schedule 5.3, or in one of the documents, certificates or other writings identified therein, or in the financial statements listed in Schedule 5.5, since October 29, 2000, there has been no change in the financial condition, operations, business, properties or prospects of the Company or any Subsidiary except changes that individually or in the aggregate could not reasonably be expected to have a Material Adverse Effect. There is no fact known to the Company (separate from general economic conditions applicable to U.S. business enterprises on the whole) that could reasonably be expected to have a Material Adverse Effect that has not been set forth herein or in the Memorandum or in the other documents, certificates and other writings delivered to you by or on behalf of the Company specifically for use in connection with the transactions contemplated hereby.

     Section 5.4. Organization and Ownership of Shares of Subsidiaries; Affiliates. (a) Schedule 5.4 contains (except as noted therein) complete and correct lists of (i) the Company’s Subsidiaries, showing, as to each Subsidiary, the correct name thereof, the jurisdiction of its organization, the percentage of shares of each class of its capital stock or similar equity interests outstanding owned by the Company and each other Subsidiary and whether such Subsidiary is a Significant Subsidiary under this Agreement, (ii) the Company’s Affiliates, other than Subsidiaries, and (iii) the Company’s directors and senior officers.

     (b) All of the outstanding shares of capital stock or similar equity interests of each Subsidiary shown in Schedule 5.4 as being owned by the Company and its Subsidiaries have been validly issued, are fully paid and nonassessable and are owned by the Company or another Subsidiary free and clear of any Lien (except as otherwise disclosed in Schedule 5.4).

     (c) Each Subsidiary identified in Schedule 5.4 is a corporation or other legal entity duly organized, validly existing and in good standing under the laws of its jurisdiction of organization, and is duly qualified as a foreign corporation or other legal entity and is in good standing in each

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jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the failure to be so qualified or in good standing could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Each such Subsidiary has the corporate or other power and authority to own or hold under lease the properties it purports to own or hold under lease and to transact the business it transacts and proposes to transact.

     (d) No Subsidiary is a party to, or otherwise subject to, any legal restriction or any agreement (other than this Agreement, the agreements listed on Schedule 5.4 and customary limitations imposed by corporate law statutes) restricting the ability of such Subsidiary to pay dividends out of profits or make any other similar distributions of profits to the Company or any of its Subsidiaries that owns outstanding shares of capital stock or similar equity interests of such Subsidiary.

     Section 5.5. Financial Statements. The Company has delivered to each Purchaser copies of the financial statements of the Company and its Subsidiaries listed on Schedule 5.5. All of said financial statements (including in each case the related schedules and notes) fairly present in all material respects the consolidated financial position of the Company and its Subsidiaries as of the respective dates specified in such financial statements and the consolidated results of their operations and cash flows for the respective periods so specified and have been prepared in accordance with GAAP consistently applied throughout the periods involved except as set forth in the notes thereto (subject, in the case of any interim financial statements, to normal year-end adjustments).

     Section 5.6. Compliance with Laws, Other Instruments, Etc. The execution, delivery and performance by the Company of this Agreement and the Notes will not (a) contravene, result in any breach of, or constitute a default under, or result in the creation of any Lien in respect of any property of the Company or any Subsidiary under, any indenture, mortgage, deed of trust, loan, purchase or credit agreement, lease, corporate charter or by-laws, or any other agreement or instrument to which the Company or any Subsidiary is bound or by which the Company or any Subsidiary or any of their respective properties may be bound or affected, (b) conflict with or result in a breach of any of the terms, conditions or provisions of any order, judgment, decree, or ruling of any court, arbitrator or Governmental Authority applicable to the Company or any Subsidiary or (c) violate any provision of any statute or other rule or regulation of any Governmental Authority applicable to the Company or any Subsidiary.

     Section 5.7. Governmental Authorizations, Etc. No consent, approval or authorization of, or registration, filing or declaration with, any Governmental Authority is required in connection with the execution, delivery or performance by the Company of this Agreement or the Notes.

     Section 5.8. Litigation; Observance of Agreements, Statutes and Orders. (a) Except as disclosed in Schedule 5.8, there are no actions, suits or proceedings pending or, to the knowledge of the Company, threatened against or affecting the Company or any Subsidiary or any property of the Company or any Subsidiary in any court or before any arbitrator of any kind or before or by any Governmental Authority that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

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     (b) Neither the Company nor any Subsidiary is in default under any term of any agreement or instrument to which it is a party or by which it is bound, or any order, judgment, decree or ruling of any court, arbitrator or Governmental Authority or is in violation of any applicable law, ordinance, rule or regulation (including without limitation Environmental Laws) of any Governmental Authority, which default or violation, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

     Section 5.9. Taxes. The Company and its Subsidiaries have filed all tax returns that are required to have been filed in any jurisdiction, and have paid all taxes shown to be due and payable on such returns and all other taxes and assessments levied upon them or their properties, assets, income or franchises, to the extent such taxes and assessments have become due and payable and before they have become delinquent, except for any taxes and assessments (a) the amount of which is not individually or in the aggregate Material or (b) the amount, applicability or validity of which is currently being contested in good faith by appropriate proceedings and with respect to which the Company or a Subsidiary, as the case may be, has established adequate reserves in accordance with GAAP. The Company knows of no basis for any other tax or assessment that relates to periods ending on or before the date of this Agreement that could reasonably be expected to have a Material Adverse Effect and knows of no proposed tax or assessment for subsequent periods that could reasonably be expected to result in a Material increase in the tax liability of the Company and its Subsidiaries. The charges, accruals and reserves on the books of the Company and its Subsidiaries in respect of Federal, state or other taxes for all fiscal periods are in all Material respects adequate. The Federal income tax liabilities of the Company and its Subsidiaries have been determined by the Internal Revenue Service and paid for all fiscal years up to and including the fiscal year ended November 2, 1997.

     Section 5.10. Title to Property; Leases. The Company and its Subsidiaries have good and sufficient title to their respective properties that individually or in the aggregate are Material, including all such properties reflected in the most recent audited balance sheet referred to in Section 5.5 or purported to have been acquired by the Company or any Subsidiary after said date (except as sold or otherwise disposed of in the ordinary course of business), in each case free and clear of Liens prohibited by this Agreement. All leases that individually or in the aggregate are Material are valid and subsisting and are in full force and effect in all material respects.

     Section 5.11. Licenses, Permits, Etc. Except as disclosed in Schedule 5.11,

     (a) the Company and its Subsidiaries own or possess all licenses, permits, franchises, authorizations, patents, copyrights, service marks, trademarks and trade names, or rights thereto, that individually or in the aggregate are Material to the conduct of its business as normally conducted, without known conflict with the rights of others;

     (b) to the best knowledge of the Company, no product of the Company infringes in any Material respect any license, permit, franchise, authorization, patent, copyright, service mark, trademark, trade name or other right owned by any other Person; and

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     (c) to the best knowledge of the Company, there is no Material violation by any Person of any right of the Company or any of its Subsidiaries with respect to any patent, copyright, service mark, trademark, trade name or other right owned or used by the Company or any of its Subsidiaries.

     Section 5.12. Compliance with ERISA. (a) The Company and each ERISA Affiliate have operated and administered each Plan in compliance with all applicable laws except for such instances of noncompliance as have not resulted in and could not reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any ERISA Affiliate has incurred any liability pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans (as defined in Section 3 of ERISA), and no event, transaction or condition has occurred or exists that could reasonably be expected to result in the incurrence of any such liability by the Company or any ERISA Affiliate, or in the imposition of any Lien on any of the rights, properties or assets of the Company or any ERISA Affiliate, in either case pursuant to Title I or IV of ERISA or to such penalty or excise tax provisions or to Section 401(a)(29) or 412 of the Code, other than such liabilities or Liens as would not be individually or in the aggregate Material.

     (b) The present value of the aggregate benefit liabilities under the Plans (other than Multiemployer Plans), determined as of the end of the most recently ended plan year of such Plans on the basis of the actuarial assumptions specified for funding purposes in the most recent actuarial valuation report for such Plans, did not exceed the aggregate current value of the assets of such Plans allocable to such benefit liabilities, except to the extent set forth in Footnote 3 to the Company’s consolidated financial statements for the fiscal year ended October 29, 2000. The term “benefit liabilities” has the meaning specified in Section 4001 of ERISA and the terms “current value” and “present value” have the meaning specified in Section 3 of ERISA.

     (c) The Company and its ERISA Affiliates have not incurred withdrawal liabilities (and are not subject to contingent withdrawal liabilities) under Section 4201 or 4204 of ERISA in respect of Multiemployer Plans that individually or in the aggregate are Material.

     (d) Except as disclosed in Footnote 3 to the Company’s consolidated financial statements for the fiscal year ending October 29, 2000, the expected post-retirement benefit obligation (determined as of the last day of the Company’s most recently ended fiscal year in accordance with Financial Accounting Standards Board Statement No. 106, without regard to liabilities attributable to continuation coverage mandated by Section 4980B of the Code) of the Company and its Subsidiaries is not Material.

     (e) The execution and delivery of this Agreement and the issuance and sale of the Notes hereunder will not involve any transaction that is subject to the prohibitions of Section 406 of ERISA or in connection with which a tax could be imposed pursuant to Section 4975(c)(1)(A)-(D) of the Code. The representation by the Company in the first sentence of this Section 5.12(e) is made in reliance upon and subject to the accuracy of your representation in Section 6.2 as to the sources of the funds used to pay the purchase price of the Notes to be purchased by you.

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     Section 5.13. Private Offering by the Company. Neither the Company nor anyone acting on its behalf has offered the Notes or any similar securities for sale to, or solicited any offer to buy any of the same from, or otherwise approached or negotiated in respect thereof with, any Person other than you, the Other Purchasers and not more than 75 other Institutional Investors, each of which has been offered the Notes at a private sale for investment. Neither the Company nor anyone acting on its behalf has taken, or will take, any action that would subject the issuance or sale of the Notes to the registration requirements of Section 5 of the Securities Act.

     Section 5.14. Use of Proceeds; Margin Regulations. The Company will apply the proceeds of the sale of the Notes as set forth in Schedule 5.14. No part of the proceeds from the sale of the Notes hereunder will be used, directly or indirectly, for the purpose of buying or carrying any margin stock within the meaning of Regulation U of the Board of Governors of the Federal Reserve System (12 CFR 221), or for the purpose of buying or carrying or trading in any securities under such circumstances as to involve the Company in a violation of Regulation X of said Board (12 CFR 224) or to involve any broker or dealer in a violation of Regulation T of said Board (12 CFR 220). Margin stock does not constitute more than 1% of the value of the consolidated assets of the Company and its Subsidiaries and the Company does not have any present intention that margin stock will constitute more than 1% of the value of such assets. As used in this Section, the terms “margin stock” and “purpose of buying or carrying” shall have the meanings assigned to them in said Regulation U.

     Section 5.15. Existing Debt; Future Liens. (a) Schedule 5.15 sets forth a complete and correct list of all Capital Leases as of February 28, 2001 and all other outstanding Debt of the Company as of May 17, 2001 and of its Subsidiaries as of the date of April 30, 2001, since which dates, respectively, there has been no Material change in the amounts, interest rates, sinking funds, installment payments or maturities of the Debt of the Company or its Subsidiaries. Neither the Company nor any Subsidiary is in default and no waiver of default is currently in effect, in the payment of any principal or interest on any Debt of the Company or such Subsidiary and no event or condition exists with respect to any Debt of the Company or any Subsidiary that would permit (or that with notice or the lapse of time, or both, would permit) one or more Persons to cause such Debt to become due and payable before its stated maturity or before its regularly scheduled dates of payment.

     (b) Except as disclosed in Schedule 5.15, neither the Company nor any Subsidiary has agreed or consented to cause or permit in the future (upon the happening of a contingency or otherwise) any of its property, whether now owned or hereafter acquired, to be subject to a Lien not permitted by Section 10.5.

     Section 5.16. Foreign Assets Control Regulations, Etc. Neither the sale of the Notes by the Company hereunder nor its use of the proceeds thereof will violate the Trading with the Enemy Act, as amended, or any of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling legislation or executive order relating thereto.

     Section 5.17. Status under Certain Statutes. Neither the Company nor any Subsidiary is an “investment company” registered or required to be registered subject to regulation under the

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Investment Company Act of 1940, as amended, or is subject to regulation under the Public Utility Holding Company Act of 1935, as amended, the ICC Termination Act of 1995, as amended, or the Federal Power Act, as amended.

     Section 5.18. Notes Rank Pari Passu. The obligations of the Company under this Agreement and the Notes rank at least pari passu in right of payment with all other senior unsecured Debt (actual or contingent) of the Company, including, without limitation, all senior unsecured Debt of the Company described in Schedule 5.15 hereto.

     Section 5.19. Environmental Matters. Neither the Company nor any Subsidiary has knowledge of any claim or has received any notice of any claim, and no proceeding has been instituted raising any claim against the Company or any of its Subsidiaries or any of their respective real properties now or formerly owned, leased or operated by any of them or other assets, alleging any damage to the environment or violation of any Environmental Laws, except, in each case, such as could not reasonably be expected to result in a Material Adverse Effect. Except as otherwise disclosed to you in writing:

     (a) neither the Company nor any Subsidiary has knowledge of any facts which would give rise to any claim, public or private, of violation of Environmental Laws or damage to the environment emanating from, occurring on or in any way related to real properties now or formerly owned, leased or operated by any of them or to other assets or their use, except, in each case, such as could not reasonably be expected to result in a Material Adverse Effect;

     (b) neither the Company nor any of its Subsidiaries has stored any Hazardous Materials on real properties now or formerly owned, leased or operated by any of them or has disposed of any Hazardous Materials in a manner contrary to any Environmental Laws in each case in any manner that could reasonably be expected to result in a Material Adverse Effect; and

     (c) all buildings on all real properties now owned, leased or operated by the Company or any of its Subsidiaries are in compliance with applicable Environmental Laws, except where failure to comply could not reasonably be expected to result in a Material Adverse Effect.

Section 6. Representations of the Purchaser.

     Section 6.1. Purchase for Investment. You represent that you are purchasing the Notes for your own account or for one or more separate accounts maintained by you or for the account of one or more pension or trust funds and not with a view to the distribution thereof; provided that the disposition of your or their property shall at all times be within your or their control. You understand that the Notes have not been registered under the Securities Act and may be resold only if registered pursuant to the provisions of the Securities Act or if an exemption from registration is available, except under circumstances where neither such registration nor such an exemption is required by law, and that the Company is not required to register the Notes. You

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represent that you are, or any such pension or trust fund is, an “accredited investor,” as defined in Rule 501 under the Securities Act.

     Section 6.2. Source of Funds. You represent that at least one of the following statements is an accurate representation as to each source of funds (a “Source") to be used by you to pay the purchase price of the Notes to be purchased by you hereunder:

     (a) the Source is an “insurance company general account” within the meaning of Department of Labor Prohibited Transaction Exemption (“PTE”) 95-60 (issued July 12, 1995) and there is no employee benefit plan, treating as a single plan all plans maintained by the same employer or employee organization, with respect to which the amount of the general account reserves and liabilities for all contracts held by or on behalf of such plan, exceed ten percent (10%) of the total reserves and liabilities of such general account (exclusive of separate account liabilities) plus surplus, as set forth in the NAIC Annual Statement filed with your state of domicile; or

     (b) the Source is either (i) an insurance company pooled separate account, within the meaning of PTE 90-1 (issued January 29, 1990), or (ii) a bank collective investment fund, within the meaning of the PTE 91-38 (issued July 12, 1991) and, except as you have disclosed to the Company in writing pursuant to this paragraph (b), no employee benefit plan or group of plans maintained by the same employer or employee organization beneficially owns more than 10% of all assets allocated to such pooled separate account or collective investment fund; or

     (c) the Source constitutes assets of an “investment fund” (within the meaning of Part V of the QPAM Exemption) managed by a “qualified professional asset manager” or “QPAM” (within the meaning of Part V of the QPAM Exemption), no employee benefit plan’s assets that are included in such investment fund, when combined with the assets of all other employee benefit plans established or maintained by the same employer or by an affiliate (within the meaning of Section V(c)(1) of the QPAM Exemption) of such employer or by the same employee organization and managed by such QPAM, exceed 20% of the total client assets managed by such QPAM, the conditions of Part l(c) and (g) of the QPAM Exemption are satisfied, neither the QPAM nor a Person controlling or controlled by the QPAM (applying the definition of “control” in Section V(e) of the QPAM Exemption) owns a 5% or more interest in the Company and (i) the identity of such QPAM and (ii) the names of all employee benefit plans whose assets are included in such investment fund have been disclosed to the Company in writing pursuant to this paragraph (c); or

     (d) the Source is a governmental plan; or

     (e) the Source is one or more employee benefit plans, or a separate account or trust fund comprised of one or more employee benefit plans, each of which has been identified to the Company in writing pursuant to this paragraph (e); or

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     (f) the Source does not include assets of any employee benefit plan, other than a plan exempt from the coverage of ERISA.

     If you or any subsequent transferee of the Notes indicates that you or such transferee are relying on any representation contained in paragraph (b), (c) or (e) above, you or such transferee shall provide written notice to the company of such fact, identifying the information required by paragraphs (b), (c) or (e) above, as applicable. The Company shall deliver on the date of Closing and on the date of any applicable transfer a certificate, which shall either state that (i) it is neither a party in interest nor a “disqualified person” (as defined in section 4975(e)(2) of the Internal Revenue Code of 1986, as amended), with respect to any plan identified pursuant to paragraphs (b) or (e) above, or (ii) with respect to any plan, identified pursuant to paragraph (c) above, neither it nor any “affiliate” (as defined in Section V(c) of the QPAM Exemption) has at such time, and during the immediately preceding one year, exercised the authority to appoint or terminate said QPAM as manager of any plan identified in writing pursuant to paragraph (c) above or to negotiate the terms of said QPAM’s management agreement on behalf of any such identified plan; provided, however, that if the Company is, in fact, such a party in interest or “disqualified person”, or if it has exercised such authority, then, in lieu of such certificate, the Company shall promptly notify you or such transferee of such fact prior to the date of Closing or the applicable transfer date so that you or such transferee may identify an alternative Source. As used in this Section 6.2, the terms “employee benefit plan”, “governmental plan”, “party in interest” and “separate account” shall have the respective meanings assigned to such terms in Section 3 of ERISA.

Section 7. Information as to the Company.

     Section 7.1. Financial and Business Information. The Company shall deliver to each holder of Notes that is an Institutional Investor:

     (a) Quarterly Statements — within 60 days after the end of each quarterly fiscal period in each fiscal year of the Company, other than the last quarterly fiscal period of each such fiscal year (and, in any event, concurrently with the delivery to the lenders under the Credit Agreement), duplicate copies of:

     (i) a consolidated balance sheet of the Company and its Subsidiaries as at the end of such quarter, and

     (ii) consolidated statements of income, changes in shareholders’ equity and cash flows of the Company and its Subsidiaries for such quarter and (in the case of the second and third quarters) for the portion of the fiscal year ending with such quarter,

setting forth in each case in comparative form the figures for the corresponding periods in the previous fiscal year, all in reasonable detail, prepared in accordance with GAAP applicable to quarterly financial statements generally, and certified by a Senior Financial Officer as fairly presenting, in all material respects, the consolidated financial position of the companies being reported on and their consolidated results of operations and cash flows, subject to changes

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resulting from year-end adjustments; provided that delivery within the time period specified above of copies of the Company’s Quarterly Report on Form 10-Q prepared in compliance with the requirements therefor and filed with the Securities and Exchange Commission shall be deemed to satisfy the requirements of this Section 7.1(a);

          (b) Annual Statements — within 105 days after the end of each fiscal year of the Company (and, in any event, concurrently with the delivery to the lenders under the Credit Agreement), duplicate copies of,

     (i) a consolidated balance sheet of the Company and its Subsidiaries, as at the end of such year, and

     (ii) consolidated statements of income, changes in shareholders’ equity and cash flows of the Company and its Subsidiaries, for such year,

setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail, prepared in accordance with GAAP, and accompanied by:

     (1) an opinion thereon of independent certified public accountants of recognized national standing, which opinion shall state that such financial statements present fairly, in all material respects, the consolidated financial position of the companies being reported upon and their consolidated results of operations and cash flows and have been prepared in conformity with GAAP, and that the examination of such accountants in connection with such financial statements has been made in accordance with auditing standards generally accepted in the United States of America, and that such audit provides a reasonable basis for such opinion in the circumstances, and

     (2) a certificate of such accountants stating that they have reviewed this Agreement and stating further whether, in making their audit, they have become aware of any condition or event that then constitutes a Default or an Event of Default, and, if they are aware that any such condition or event then exists, specifying the nature and period of the existence thereof (it being understood that such accountants shall not be liable, directly or indirectly, for any failure to obtain knowledge of any Default or Event of Default unless such accountants should have obtained knowledge thereof in making an audit in accordance with auditing standards generally accepted in the United States of America or did not make such an audit),

provided that the delivery within the time period specified above of the Company’s Annual Report on Form 10-K for such fiscal year (together with the Company’s annual report to shareholders, if any, prepared pursuant to Rule 14a-3 under the Exchange Act) prepared in accordance with the requirements therefor and filed with the Securities and

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Exchange Commission, together with the accountant’s certificate described in clause (2) above, shall be deemed to satisfy the requirements of this Section 7.1(b);

     (c) SEC and Other Reports — promptly upon their becoming available, one copy of (i) each financial statement, report, notice or proxy statement sent by the Company or any Subsidiary to public securities holders generally, and (ii) each regular or periodic report, each registration statement that shall have become effective (without exhibits except as expressly requested by such holder), and each final prospectus and all amendments thereto filed by the Company or any Subsidiary with the Securities and Exchange Commission (other than filings with respect to offerings of securities under employee benefit plans, registration statements with respect to sales of securities of the Company by Persons other than the Company, and filings with respect to dividend reinvestment plans) and of all press releases and other statements made available generally by the Company or any Subsidiary to the public concerning developments that are Material;

     (d) Notice of Default or Event of Default — promptly, and in any event within five days after a Responsible Officer becoming aware of the existence of any Default or Event of Default or that any Person has given any notice or taken any action with respect to a claimed default hereunder or that any Person has given any notice or taken any action with respect to a claimed default of the type referred to in Section 11(f), a written notice specifying the nature and period of existence thereof and what action the Company is taking or proposes to take with respect thereto;

     (e) ERISA Matters — promptly, and in any event within five days after a Responsible Officer becoming aware of any of the following, a written notice setting forth the nature thereof and the action, if any, that the Company or an ERISA Affiliate proposes to take with respect thereto:

     (i) with respect to any Plan, any reportable event, as defined in Section 4043(b) of ERISA and the regulations thereunder, for which notice thereof has not been waived pursuant to such regulations as in effect on the date hereof; or

     (ii) the taking by the PBGC of steps to institute, or the threatening by the PBGC of the institution of, proceedings under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan, or the receipt by the Company or any ERISA Affiliate of a notice from a Multiemployer Plan that such action has been taken by the PBGC with respect to such Multiemployer Plan; or

     (iii) any event, transaction or condition that could result in the incurrence of any liability by the Company or any ERISA Affiliate pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans, or in the imposition of any Lien on any of the rights, properties or assets of the Company or any ERISA Affiliate pursuant to Title I or

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IV of ERISA or such penalty or excise tax provisions, if such liability or Lien, taken together with any other such liabilities or Liens then existing, could reasonably be expected to have a Material Adverse Effect;

     (f) Notices from Governmental Authority — promptly, and in any event within 30 days of receipt thereof, copies of any notice to the Company or any Subsidiary from any Federal or state Governmental Authority relating to any order, ruling, statute or other law or regulation that could reasonably be expected to have a Material Adverse Effect; and

     (g) Requested Information — with reasonable promptness, such other data and information relating to the business, operations, affairs, financial condition, assets or properties of the Company or any of its Subsidiaries or relating to the ability of the Company to perform its obligations hereunder and under the Notes as from time to time may be reasonably requested by any such holder of Notes, including without limitation (i) such information as is required by SEC Rule 144A under the Securities Act to be delivered to the prospective transferee of the Notes and (ii) copies of annual pro forma projections of the Company and its Subsidiaries, if prepared for the Banks under the Credit Agreement.

     Section 7.2. Officer’s Certificate. Each set of financial statements delivered to a holder of Notes pursuant to Section 7.1(a) or Section 7.1(b) hereof shall be accompanied by a certificate of a Senior Financial Officer setting forth:

     (a) Covenant Compliance — the information (including detailed calculations) required in order to establish whether the Company was in compliance with the requirements of Section 10.1 through Section 10.7 hereof, inclusive, during the quarterly or annual period covered by the statements then being furnished (including with respect to each such Section, where applicable, the calculations of the maximum or minimum amount, ratio or percentage, as the case may be, permissible under the terms of such Sections, and the calculation of the amount, ratio or percentage then in existence);

     (b) Significant Subsidiaries — a list of the Company’s Significant Subsidiaries and the information (including detailed calculations) required in order to establish whether the Company was in compliance with the requirements of Section 10.10 during the quarterly or annual period covered by the statements then being furnished; and

     (c) Event of Default — a statement that such officer has reviewed the relevant terms hereof and has made, or caused to be made, under his or her supervision, a review of the transactions and conditions of the Company and its Subsidiaries from the beginning of the quarterly or annual period covered by the statements then being furnished to the date of the certificate and that such review shall not have disclosed the existence during such period of any condition or event that constitutes a Default or an Event of Default or, if any such condition or event existed or exists (including, without limitation, any such event or condition resulting from the failure of the Company or any

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Subsidiary to comply with any Environmental Law), specifying the nature and period of existence thereof and what action the Company shall have taken or proposes to take with respect thereto.

     Section 7.3. Inspection. The Company shall permit the representatives of each holder of Notes that is an Institutional Investor:

     (a) No Default — if no Default or Event of Default then exists, at the expense of such holder and upon reasonable prior notice to the Company, to visit the principal executive office of the Company, to discuss the affairs, finances and accounts of the Company and its Subsidiaries with the Company’s officers, and (with the consent of the Company, which consent will not be unreasonably withheld) its independent public accountants, and (with the consent of the Company, which consent will not be unreasonably withheld) to visit the other offices and properties of the Company and each Subsidiary, all at such reasonable times and as often as may be reasonably requested in writing; and

     (b) Default — if a Default or Event of Default then exists, at the expense of the Company, to visit and inspect any of the offices or properties of the Company or any Subsidiary, to examine all their respective books of account, records, reports and other papers, to make copies and extracts therefrom, and to discuss their respective affairs, finances and accounts with their respective officers and independent public accountants (and by this provision the Company authorizes said accountants to discuss the affairs, finances and accounts of the Company and its Subsidiaries), all at such times and as often as may be requested.

Section 8. Prepayment of the Notes.

     Section 8.1. Required Prepayments.

     (a) Series A Notes. On May 15, 2006, the entire principal amount of the Series A Notes, together with accrued and unpaid interest thereon, shall become due and payable.

     (b) Series B Notes. On May 15, 2008, the entire principal amount of the Series B Notes, together with accrued and unpaid interest thereon, shall become due and payable.

     (c) Series C Notes. The Company agrees that on each May 15, beginning May 15, 2005, it will prepay and apply and there shall become due and payable on the principal Debt evidenced by the Series C Notes an amount equal to the lesser of (a) $4,290,000 or (b) the principal amount of the Series C Notes then outstanding. On May 15, 2011, the entire principal amount of the Series C Notes, together with accrued and unpaid interest thereon, shall become due and payable.

     In the event that the Company shall prepay less than all of the Notes pursuant to Section 8.2 or Section 8.3, or shall purchase less than all of the Series C Notes pursuant to Section 8.6, the amounts of the prepayments in respect of the Series C Notes required by this

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Section 8.1(c) shall be reduced by an amount which is the same percentage of such required prepayment as the percentage that the principal amount of Series C Notes prepaid pursuant to Section 8.2 or Section 8.3, or purchased pursuant to Section 8.6, is of the aggregate principal amount of outstanding Series C Notes immediately prior to such prepayment or purchase.

     (d) Series D Notes. On May 15, 2011, the entire principal amount of the Series D Notes, together with accrued and unpaid interest thereon, shall become due and payable.

     Section 8.2. Optional Prepayments with Make-Whole Amount. The Company may, at its option, upon notice as provided below, prepay at any time all, or from time to time any part of, the Notes, in an amount not less than 10% of the aggregate principal amount of the Notes then outstanding in the case of a partial prepayment, at 100% of the principal amount so prepaid, together with interest accrued thereon to the date of such prepayment, plus the Make-Whole Amount determined for the prepayment date with respect to such principal amount. The Company will give each holder of Notes written notice of each optional prepayment under this Section 8.2 not less than 30 days and not more than 60 days prior to the date fixed for such prepayment. Each such notice shall specify such date, the aggregate principal amount of the Notes to be prepaid on such date, the principal amount of each Note held by such holder to be prepaid (determined in accordance with Section 8.4), and the interest to be paid on the prepayment date with respect to such principal amount being prepaid, and shall be accompanied by a certificate of a Senior Financial Officer as to the estimated Make-Whole Amount due in connection with such prepayment (calculated as if the date of such notice were the date of the prepayment), setting forth the details of such computation. Two Business Days prior to such prepayment, the Company shall deliver to each holder of Notes a certificate of a Senior Financial Officer specifying the calculation of such Make-Whole Amount as of the specified prepayment date.

     Section 8.3. Prepayment Upon Change of Control. In the event that any Change of Control shall occur or the Company shall have knowledge of any proposed Change of Control that is likely to occur, the Company will give written notice (the “Company Notice") of such fact in the manner provided in Section 18 hereof to the holders of the Notes. The Company Notice shall be delivered promptly upon receipt of such knowledge by the Company. The Company Notice shall (1) describe the facts and circumstances of such Change of Control in reasonable detail, (2) make reference to this Section 8.3 and the right of the holders of the Notes to require prepayment of the Notes on the terms and conditions provided for in this Section 8.3, (3) offer in writing to prepay all, but not less than all, of the outstanding Notes, together with accrued interest to the date of prepayment, and (4) specify a date for such prepayment (the “Change of Control Prepayment Date"), which Change of Control Prepayment Date shall be not more than 60 days nor less than 30 days following the date of such Company Notice. Each holder of the then outstanding Notes shall have the right to accept such offer and require prepayment of the Notes held by such holder in full by written notice to the Company (a “Noteholder Notice") given not later than 15 days after receipt of the Company Notice. The Company shall on the Change of Control Prepayment Date prepay in full all of the Notes held by holders which have so accepted such offer of prepayment. The prepayment price of the Notes payable upon the occurrence of any Change of Control shall be an amount equal to 100% of the outstanding principal amount of the Notes so to be prepaid and accrued interest thereon to the date of such prepayment.

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For purposes of this Section 8.3:

     “Change of Control” means the replacement (other than solely by reason of retirement, death or disability) of more than 50% of the members of the Board of Directors of the Company over any period of 12 consecutive months from the directors who constituted such Board of Directors at the beginning of such period.

     Section 8.4. Allocation of Partial Prepayments. In the case of each partial prepayment of the Notes pursuant to Section 8.2, the principal amount of the Notes to be prepaid shall be (a) allocated among each Series of Notes in proportion to the aggregate unpaid principal amount of each such Series of Notes, and (b) allocated pro rata among all of the holders of each Series of Notes at the time outstanding in accordance with the unpaid principal amount thereof. All partial prepayments made pursuant to Section 8.3 shall be applied only to the Notes of the holders who have elected to participate in such prepayment.

     Section 8.5. Maturity; Surrender, Etc. In the case of each prepayment of Notes pursuant to this Section 8, the principal amount of each Note to be prepaid shall mature and become due and payable on the date fixed for such prepayment, together with interest on such principal amount accrued to such date and the applicable Make-Whole Amount, if any. From and after such date, unless the Company shall fail to pay such principal amount when so due and payable, together with the interest and Make-Whole Amount, if any, as aforesaid, interest on such principal amount shall cease to accrue. Any Note paid or prepaid in full shall be surrendered to the Company and cancelled and shall not be reissued, and no Note shall be issued in lieu of any prepaid principal amount of any Note.

     Section 8.6. Purchase of Notes. The Company will not and will not permit any Affiliate to purchase, redeem, prepay or otherwise acquire, directly or indirectly, any Series of the outstanding Notes or any part or portion of any Series thereof, except upon the payment, prepayment or purchase of all Series of the Notes in accordance with the terms of this Agreement and the Notes. The Company will promptly cancel all Notes acquired by it or any Affiliate pursuant to any payment, prepayment or purchase of Notes pursuant to any provision of this Agreement and no Notes may be issued in substitution or exchange for any such Notes.

     Section 8.7. Make-Whole Amount. The term “Make-Whole Amount” means, with respect to any Note, an amount equal to the excess, if any, of the Discounted Value of the Remaining Scheduled Payments with respect to the Called Principal of such Note over the amount of such Called Principal; provided that the Make-Whole Amount may in no event be less than zero. For the purposes of determining the Make-Whole Amount, the following terms have the following meanings:

     “Called Principal” means, with respect to any Note, the principal of such Note that is to be prepaid pursuant to Section 8.2 or has become or is declared to be immediately due and payable pursuant to Section 12.1, as the context requires.

     “Discounted Value” means, with respect to the Called Principal of any Note, the amount obtained by discounting all Remaining Scheduled Payments with respect to such

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Called Principal from their respective scheduled due dates to the Settlement Date with respect to such Called Principal, in accordance with accepted financial practice and at a discount factor (applied on the same periodic basis as that on which interest on the Notes is payable) equal to the Reinvestment Yield with respect to such Called Principal.

     “Reinvestment Yield” means, with respect to the Called Principal of any Note, 0.50% over the yield to maturity implied by (a) the yields reported, as of 10:00 A.M. (New York City time) on the second Business Day preceding the Settlement Date with respect to such Called Principal, on the display designated as “Page USD” of the Bloomberg Financial Markets Services Screen (or, if not available, any other national recognized trading screen reporting on-line intraday trading in the U.S. Treasury securities) for actively traded U.S. Treasury securities having a maturity equal to the Remaining Average Life of such Called Principal as of such Settlement Date, or (b) if such yields are not reported as of such time or the yields reported as of such time are not ascertainable, the Treasury Constant Maturity Series Yields reported, for the latest day for which such yields have been so reported as of the second Business Day preceding the Settlement Date with respect to such Called Principal, in Federal Reserve Statistical Release H.15 (519) (or any comparable successor publication) for actively traded U.S. Treasury securities having a constant maturity equal to the Remaining Average Life of such Called Principal as of such Settlement Date. Such implied yield will be determined, if necessary, by (i) converting U.S. Treasury bill quotations to bond-equivalent yields in accordance with accepted financial practice and (ii) interpolating linearly between (1) the actively traded U.S. Treasury security with the duration closest to and greater than the Remaining Average Life and (2) the actively traded U.S. Treasury security with the duration closest to and less than the Remaining Average Life.

     “Remaining Average Life” means, with respect to any Called Principal, the number of years (calculated to the nearest one-twelfth year) obtained by dividing (a) such Called Principal into (b) the sum of the products obtained by multiplying (i) the principal component of each Remaining Scheduled Payment with respect to such Called Principal by (ii) the number of years (calculated to the nearest one-twelfth year) that will elapse between the Settlement Date with respect to such Called Principal and the scheduled due date of such Remaining Scheduled Payment.

     “Remaining Scheduled Payments” means, with respect to the Called Principal of any Note, all payments of such Called Principal and interest thereon that would be due after the Settlement Date with respect to such Called Principal if no payment of such Called Principal were made prior to its scheduled due date; provided that if such Settlement Date is not a date on which interest payments are due to be made under the terms of the Notes, then the amount of the next succeeding scheduled interest payment will be reduced by the amount of interest accrued to such Settlement Date and required to be paid on such Settlement Date pursuant to Section 8.2 or 12.1.

     “Settlement Date” means, with respect to the Called Principal of any Note, the date on which such Called Principal is to be prepaid pursuant to Section 8.2 or has

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become or is declared to be immediately due and payable pursuant to Section 12.1, as the context requires.

Section 9. Affirmative Covenants.

     The Company covenants that so long as any of the Notes are outstanding:

     Section 9.1. Compliance with Law. The Company will, and will cause each of its Significant Subsidiaries and Special Purpose Subsidiaries to, comply with all laws, ordinances or governmental rules or regulations to which each of them is subject, including, without limitation, ERISA and applicable laws in respect of Non-U.S. Pension Plans and all Environmental Laws, and will obtain and maintain in effect all licenses, certificates, permits, franchises and other governmental authorizations necessary to the ownership of their respective properties or to the conduct of their respective businesses, in each case to the extent necessary to ensure that non-compliance with such laws, ordinances or governmental rules or regulations or failures to obtain or maintain in effect such licenses, certificates, permits, franchises and other governmental authorizations could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

     Section 9.2. Insurance. The Company will, and will cause each of its Significant Subsidiaries to, maintain, with financially sound and reputable insurers, insurance with respect to their respective properties and businesses against such casualties and contingencies, of such types, on such terms and in such amounts (including deductibles, co-insurance and self-insurance, if adequate reserves are maintained with respect thereto) as is customary in the case of entities of established reputations engaged in the same or a similar business and similarly situated.

     Section 9.3. Maintenance of Properties. The Company will, and will cause each of its Significant Subsidiaries to, maintain and keep, or cause to be maintained and kept, their respective Material properties in good repair, working order and condition (other than ordinary wear and tear), so that the business carried on in connection therewith may be properly conducted at all times; provided that this Section shall not prevent the Company or any Significant Subsidiary from discontinuing the operation and the maintenance of any of its properties if such discontinuance is desirable in the conduct of its business and the Company has concluded that such discontinuance could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

     Section 9.4. Payment of Taxes and Claims. The Company will, and will cause each of its Significant Subsidiaries and Special Purpose Subsidiaries to, file all tax returns required to be filed in any jurisdiction and to pay and discharge all taxes shown to be due and payable on such returns and all other taxes, assessments, governmental charges, or levies imposed on them or any of their properties, assets, income or franchises, to the extent such taxes and assessments have become due and payable and before they have become delinquent and all claims for which sums have become due and payable that have or might become a Lien on properties or assets of the Company or any Significant Subsidiary or Special Purpose Subsidiary; provided that neither the Company nor any Significant Subsidiary or Special Purpose Subsidiary need pay any such tax or

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assessment or claims if (a) the amount, applicability or validity thereof is contested by the Company or such Significant Subsidiary or Special Purpose Subsidiary on a timely basis in good faith and in appropriate proceedings, and the Company or a Significant Subsidiary has established adequate reserves therefor in accordance with GAAP on the books of the Company or such Subsidiary or (b) the nonpayment of all such taxes and assessments and claims in the aggregate could not reasonably be expected to have a Material Adverse Effect.

     Section 9.5. Corporate Existence, Etc. The Company will at all times preserve and keep in full force and effect its corporate existence. Subject to Section 10.7, the Company will at all times preserve and keep in full force and effect the corporate existence of each of its Significant Subsidiaries (unless merged into the Company or a Significant Subsidiary) and all rights and franchises of the Company and its Significant Subsidiaries unless, in the good faith judgment of the Company, the termination of or failure to preserve and keep in full force and effect such corporate existence, right or franchise could not, individually or in the aggregate, have a Material Adverse Effect.

     Section 9.6. Nature of Business. Neither the Company nor any Significant Subsidiary will engage in any business if, as a result, the general nature of the business, taken on a consolidated basis, which would then be engaged in by the Company and its Significant Subsidiaries would be substantially changed from the general nature of the business engaged in by the Company and its Significant Subsidiaries on the date of this Agreement.

     Section 9.7. Notes to Rank Pari Passu. The Notes and all other obligations under this Agreement of the Company are and at all times shall remain direct and unsecured obligations of the Company ranking pari passu as against the assets of the Company with all other Notes from time to time issued and outstanding hereunder without any preference among themselves and pari passu with all other present and future unsecured Debt (actual or contingent) of the Company which is not expressed to be subordinate or junior in rank to any other unsecured Debt of the Company.

     Section 9.8. Guaranty by Subsidiaries. The Company will cause each Subsidiary which delivers a Guaranty to any holder of Debt for borrowed money of the Company to concurrently enter into a Guaranty (a “Subsidiary Guaranty"), and within three Business Days thereafter shall deliver to each of the holders of the Notes the following items:

     (a) an executed counterpart of such Subsidiary Guaranty or joinder agreement in respect of an existing Subsidiary Guaranty, as appropriate;

     (b) a certificate signed by the President, a Vice President or another authorized Responsible Officer of such Subsidiary making representations and warranties to the effect of those contained in Sections 5.1, 5.2, 5.6 and 5.7, but with respect to such Subsidiary and such Subsidiary Guaranty, as applicable;

     (c) such documents and evidence with respect to such Subsidiary as any holder of the Notes may reasonably request in order to establish the existence and good

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standing of such Subsidiary and the authorization of the transactions contemplated by such Subsidiary Guaranty;

     (d) an opinion of counsel satisfactory to the Required Holders to the effect that such Subsidiary Guaranty has been duly authorized, executed and delivered and constitutes the legal, valid and binding contract and agreement of such Subsidiary enforceable in accordance with its terms, except as an enforcement of such terms may be limited by bankruptcy, insolvency, reorganization, moratorium and similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles; and

     (e) an executed counterpart of an intercreditor agreement among the holders of the Notes and each such Person to which a Subsidiary is then delivering a Guaranty giving rise the requirements of this Section 9.8, which agreement shall provide that the proceeds from the enforcement of any such Guaranty shall be shared on an equal and ratable basis with the holders of the Notes.

Section 10. Negative Covenants.

     The Company covenants that so long as any of the Notes are outstanding:

     Section 10.1. Consolidated Total Debt. The Company will not at any time permit the ratio of (a) Consolidated Total Debt to (b) Consolidated Cash Flow for the period of four consecutive fiscal quarters of the Company then most recently ended to exceed 3.50 to 1.00.

     Section 10.2. Consolidated Priority Debt. The Company will not, as of the last day of any fiscal quarter, permit Consolidated Priority Debt outstanding on such date to exceed an amount equal to 15% of Consolidated Tangible Assets as of such date.

     Section 10.3. Interest Coverage Ratio. The Company will not at any time permit the ratio of (a) Consolidated Cash Flow for the period of four consecutive fiscal quarters of the Company then most recently ended to (b) Consolidated Interest Expense for such four consecutive fiscal quarter period to be less than 2.75 to 1.00.

     Section 10.4. Consolidated Net Worth. The Company will not at any time permit Consolidated Net Worth to be less than $200,000,000.

     Section 10.5. Limitation on Liens. The Company will not, and will not permit any Subsidiary to, create or incur, or suffer to be incurred or to exist, any Lien on its or their property or assets, whether now owned or hereafter acquired, or upon any income or profits therefrom, or transfer any property for the purpose of subjecting the same to the payment of obligations in priority to the payment of its or their general creditors, or acquire or agree to acquire, or permit any Subsidiary to acquire, any property or assets upon conditional sales agreements or other title retention devices, except:

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     (a) Liens for property taxes and assessments or governmental charges or levies and Liens securing claims or demands of mechanics and materialmen; provided that payment thereof is not at the time required by Section 9.4;

     (b) Liens of or resulting from any judgment or award, the time for the appeal or petition for rehearing of which shall not have expired, or in respect of which the Company or a Subsidiary shall at any time in good faith be prosecuting an appeal or proceeding for a review and in respect of which a stay of execution pending such appeal or proceeding for review shall have been secured;

     (c) Liens incidental to the conduct of business or the ownership of properties and assets (including Liens in connection with worker’s compensation, unemployment insurance and other like laws, warehousemen’s and attorneys’ liens and statutory landlords’ liens) and Liens to secure the performance of bids, tenders or trade contracts, or to secure statutory obligations, surety or appeal bonds or other Liens of like general nature, in any such case incurred in the ordinary course of business and not in connection with the borrowing of money; provided in each case, the obligation secured is not overdue or, if overdue, is being contested in good faith by appropriate actions or proceedings;

     (d) survey exceptions, encumbrances, easements or reservations, or rights of others for rights-of-way, utilities and other similar purposes, or zoning or other restrictions as to the use of real properties, in each case, which are necessary for the conduct of the activities of the Company and its Subsidiaries or which customarily exist on properties of corporations engaged in similar activities and similarly situated and which do not in any event materially impair their use in the operation of the business of the Company and its Subsidiaries;

     (e) Liens securing Debt of a Subsidiary to the Company or to another Wholly-owned Subsidiary;

     (f) Liens existing as of the date of the Closing and securing Debt of the Company and its Subsidiaries described on Schedule 5.15 hereto;

     (g) Liens created or incurred after the date of the Closing given to secure the payment of the purchase price incurred in connection with the acquisition or purchase or the cost of construction of property or of assets useful and intended to be used in carrying on the business of the Company or a Subsidiary, including Liens existing on such property or assets at the time of acquisition thereof or at the time of completion of construction, as the case may be, whether or not such existing Liens were given to secure the payment of the acquisition or purchase price or cost of construction, as the case may be, of the property or assets to which they attach; provided that (i) the Lien shall attach solely to the property or assets acquired, purchased or constructed, (ii) such Lien shall have been created or incurred within 180 days of the date of acquisition or purchase or completion of construction, as the case may be (with the exception that in the case of the construction or acquisition of improvements to real estate, such Liens shall be created or

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incurred within 180 days of the date of construction or acquisition of such improvements and not the acquisition of the land on which such improvements are located), (iii) at the time of acquisition or purchase or of completion of construction of such property or assets, the aggregate amount remaining unpaid on all Debt secured by Liens on such property or assets, whether or not assumed by the Company or a Subsidiary, shall not exceed an amount equal to 100% of the lesser of the total purchase price or Fair Market Value at the time of acquisition or purchase (as determined in good faith by a Senior Financial Officer of the Company) or the cost of construction on the date of completion thereof, (iv) Debt secured by any such Lien shall have been created or incurred within the applicable limitations provided in Sections 10.1 and 10.2, and (v) at the time of creation, issuance, assumption, guarantee or incurrence of the Debt secured by such Lien and after giving effect thereto and to the application of the proceeds thereof, no Default or Event of Default would exist;

     (h) Liens securing operating leases pursuant to which the Company or a Subsidiary is lessee (excluding financing leases, synthetic leases and similar arrangements), including precautionary Uniform Commercial Code financing statements filed in connection with such operating leases; provided that the Lien shall attach solely to the property or assets leased;

     (i) any extension, renewal or refunding of any Lien permitted by the preceding clause (f) of this Section 10.5 in respect of the same property theretofore subject to such Lien in connection with the extension, renewal or refunding of the Debt secured thereby; provided that (i) such extension, renewal or refunding of Debt shall be without increase in the principal amount remaining unpaid as of the date of such extension, renewal or refunding, (ii) such Lien shall attach solely to the same such property, (iii) the principal amount remaining unpaid as of the date of such extension, renewal or refunding of Debt is less than or equal to the Fair Market Value of the property (determined in good faith by the Board or Directors of the Company) to which such Lien is attached, and (iv) at the time of such extension, renewal or refunding and after giving effect thereto, no Default or Event of Default would exist;

     (j) Liens created or incurred after the date of the Closing given to secure Debt of the Company or any Subsidiary in addition to the Liens permitted by the preceding clauses (a) through (i) hereof; provided that (i) all Debt secured by such Liens shall have been incurred within the applicable limitations provided in Sections 10.1 and 10.2 and (ii) at the time of creation, issuance, assumption, guarantee or incurrence of the Debt secured by such Lien and after giving effect thereto and to the application of the proceeds thereof, no Default or Event of Default would exist.

     Section 10.6. Restricted Payments and Restricted Investments. (a) The Company will not, and will not permit any of its Subsidiaries to, directly or indirectly, or through any Affiliate, declare or make, or incur any liability to declare or make, any Restricted Payment or Restricted Investment unless immediately prior to and after giving effect to the proposed Restricted Payment or Restricted Investment, no Default or Event of Default would exist.

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     (b) The Company will not declare any dividend which constitutes a Restricted Payment payable more than 60 days after the date of declaration thereof.

     Section 10.7. Mergers, Consolidations and Sales of Assets. (a) The Company will not, and will not permit any Subsidiary to, consolidate with or be a party to a merger with any other Person, or sell, lease or otherwise dispose of all or substantially all of its assets; provided that:

     (i) any Subsidiary may merge or consolidate with or into, or transfer all or substantially all of its assets to, the Company or any Wholly-owned Subsidiary so long as in (1) any merger or consolidation involving the Company, the Company shall be the surviving or continuing corporation and (2) in any merger or consolidation involving one or more Wholly-owned Subsidiaries (and not the Company), a Wholly-owned Subsidiary shall be the surviving or continuing corporation;

     (ii) the Company may consolidate or merge with or into any other corporation if (1) the corporation which results from such consolidation or merger is the Company or another corporation (the “surviving corporation") organized under the laws of any state of the United States or the District of Columbia or Canada, (2) if the Company is not the surviving corporation, the due and punctual payment of the principal of and premium, if any, and interest on all of the Notes, according to their tenor, and the due and punctual performance and observation of all of the covenants in the Notes and this Agreement to be performed or observed by the Company are expressly assumed in writing by the surviving corporation and the surviving corporation shall furnish to the holders of the Notes an opinion of counsel satisfactory to such holders to the effect that the instrument of assumption has been duly authorized, executed and delivered and constitutes the legal, valid and binding contract and agreement of the surviving corporation enforceable in accordance with its terms, except as enforcement of such terms may be limited by bankruptcy, insolvency, reorganization, moratorium and similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles, and (3) at the time of such consolidation or merger and immediately after giving effect thereto, no Default or Event of Default would exist;

     (iii) the Company may sell or otherwise dispose of all or substantially all of its assets to any Person for consideration which represents the Fair Market Value of such assets (as determined in good faith by the Board of Directors of the Company) at the time of such sale or other disposition if (1) the acquiring Person is a corporation organized under the laws of any state of the United States or the District of Columbia or Canada, (2) the due and punctual payment of the principal of and premium, if any, and interest on all the Notes, according to their tenor, and the due and punctual performance and observance of all of the covenants in the Notes and in this Agreement to be performed or observed by the Company are expressly assumed in writing by the acquiring corporation and the acquiring corporation shall furnish to the holders of the Notes an opinion of counsel satisfactory to such holders to the effect that the instrument of assumption has been duly authorized, executed and delivered and constitutes the legal, valid and binding contract and agreement of such acquiring corporation enforceable in accordance with its terms, except as enforcement of such terms may be limited by bankruptcy, insolvency,

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reorganization, moratorium and similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles, and (3) at the time of such sale or disposition and immediately after giving effect thereto, no Default or Event of Default would exist.

     (b) The Company will not, and will not permit any Subsidiary to, sell, lease, transfer, abandon or otherwise dispose of assets (except assets sold in the ordinary course of business for Fair Market Value and except as provided in Section 10.7(a)(iii) and Section 10.7(c)); provided that the foregoing restrictions do not apply to:

     (i) the sale, lease, transfer or other disposition of assets of a Subsidiary to the Company or a Wholly-owned Subsidiary; or

     (ii) the sale by the Company or any Subsidiary of receivables (whether with or without recourse to the Company or any Subsidiary) pursuant to one or more bona fide securitization transactions effected under terms and conditions customary in transactions of a similar nature, which sales are not accounted for under GAAP as secured loans and are, in the good faith opinion of a Senior Financial Officer of the Company, for fair value and in the best interests of the Company and its Subsidiaries, provided that (A) recourse to the Company or any Subsidiary in connection with any such sale of receivables shall be limited to (x) Securitization Recourse Obligations in an amount not in excess of 5% of the cash consideration received by the Company or any Subsidiary for such receivables and (y) repurchase, substitution or indemnification obligations customarily provided for in asset securitization transactions and arising from breaches of representations or warranties made by the Company or a Subsidiary in connection with such sale, (B) after giving effect to such sale of receivables, the aggregate amount of receivables sold by the Company and its Subsidiaries in securitization transactions and which shall then be outstanding shall not exceed $150,000,000 and (C) at the time of such sale of receivables and after giving effect thereto, no Default or Event of Default shall have occurred and be continuing.

     (iii) the sale of assets (including Subsidiary Stock disposed of pursuant to Section 10.7(c)) for cash or other property to a Person or Persons other than an Affiliate if all of the following conditions are met:

     (1) such assets (valued at net book value) do not, together with all other assets of the Company and its Subsidiaries previously disposed of during the most recently ended period of twelve consecutive months (other than in the ordinary course of business and other than pursuant to Sections 10.7(b)(i) and (ii)), exceed 15% of Consolidated Tangible Assets determined as of the end of the immediately preceding fiscal year;

     (2) in the opinion of the Company’s Board of Directors, the sale is adequate and satisfactory and is in the best interests of the Company; and

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     (3) immediately after the consummation of the transaction and after giving effect thereto, no Default or Event of Default would exist;

provided, however, that if an amount equal to the Net Proceeds of any sale, lease or other disposition of assets are applied to (x) a Debt Prepayment Application within 360 days after such sale, lease or other disposition, or (y) a Property Reinvestment Application within 180 days before or 360 days after such sale, lease or other disposition (but in any event, within the same fiscal year of such sale, lease or other disposition), then such sale, lease or other disposition shall not be included in any computations under Section 10.7(b)(iii) as of a date on or after the Net Proceeds are so applied; provided, that in the good faith opinion of the Board of Directors of the Company, such sale, lease or other disposition is in exchange for consideration having a Fair Market Value at least equal to that of the property and assets exchanged and is in the best interest of the Company or such Subsidiary.

     (c) The Company will not sell, transfer or otherwise dispose of any Subsidiary Stock of a Subsidiary (except to qualify directors or in connection with a merger or consolidation permitted under Section 10.7(a)(i)) or any Debt of any Subsidiary, and will not permit any Subsidiary to sell, transfer or otherwise dispose of any Subsidiary Stock or Debt of any Subsidiary (other than to the Company or a Wholly-owned Subsidiary), unless:

     (i) simultaneously with such sale, transfer or disposition, all shares of Subsidiary Stock and all Debt of such Subsidiary at the time owned by the Company and by every other Subsidiary shall be sold, transferred or disposed of as an entirety;

     (ii) the Board of Directors of the Company shall have determined, as evidenced by a resolution thereof, that the proposed sale, transfer or disposition of said shares of Subsidiary Stock and Debt is in the best interest of the Company;

     (iii) said shares of Subsidiary Stock and Debt are sold, transferred or otherwise disposed of to a Person on terms and for consideration reasonably deemed by the Board of Directors of the Company to be adequate and satisfactory;

     (iv) the Subsidiary being disposed of shall not have any continuing investment in the Company or any other Subsidiary not being simultaneously disposed of; and

     (v) such sale, transfer or other disposition shall be treated as a disposition under and shall satisfy the requirements of Section 10.7(b)(iii) hereof.

     (d) The Company will not permit any Subsidiary to issue any Subsidiary Stock of such Subsidiary to any Person other than the Company or a Wholly-owned Subsidiary except (i) to qualify directors or (ii) in connection with an issuance of Subsidiary Stock pursuant to which the Minority Interests in such Subsidiary, after giving effect to such issuance, do not exceed 10%.

     Section 10.8. Transactions with Affiliates. The Company will not, and will not permit any Subsidiary to, enter into or be a party to any transaction or arrangement (including, without

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limitation, the purchase, sale or exchange of property or the rendering of any service) with any Affiliate (other than the Company or a Wholly-owned Subsidiary), except in the ordinary course of and pursuant to the reasonable requirements of the Company’s or such Subsidiary’s business and upon fair and reasonable terms no less favorable to the Company or such Subsidiary than would obtain in a comparable arm’s-length transaction with a Person other than an Affiliate.

     Section 10.9. Restrictive Agreements. The Company will not, and will not permit any Subsidiary to, enter into or suffer to exist, any agreement with any Person which prohibits or limits the ability of any Subsidiary to (a) pay dividends or make other distributions to the Company or prepay any Debt owed to the Company or (b) transfer any of its properties or assets to the Company (other than with respect to Liens permitted by Section 10.5).

     Section 10.10. Significant Subsidiaries. (a) The Company will not at any time, on the basis of the then most recently available financial statements delivered by the Company pursuant to Section 7.1(a) or Section 7.1(b), permit all of the then existing Significant Subsidiaries, together with the Company, to account for less than 85% of Consolidated Total Assets as at the end of the immediately preceding fiscal quarter of the Company (for these purposes the respective total assets of the Company and each Significant Subsidiary shall include its own current assets, long term receivables and investments, and fixed assets, all as reported within the Company’s consolidated internal accounting systems after excluding intercompany receivables).

     (b) If at any time, the Company and all of the then existing Significant Subsidiaries do not together account for 85% or more of Consolidated Total Assets, the Company shall promptly designate, by written notice to the holders of the Notes, such other Subsidiaries of the Company (which would not otherwise be Significant Subsidiaries) to be deemed Significant Subsidiaries hereunder so that such 85% threshold is satisfied.

     (c) The Company may designate any Subsidiary as a Significant Subsidiary and may de-designate any Significant Subsidiary identified in Schedule 5.4 or in an officer’s certificate pursuant to Section 7.2(b) or previously designated as a Significant Subsidiary pursuant to the requirements of this Section 10.10; provided that:

     (i) the Company shall have given not less than 10 days’ prior written notice to the holders of the Notes of such designation or de-designation;

     (ii) at the time of such designation or de-designation and immediately after giving effect thereto no Default or Event of Default shall exist;

     (iii) in the case of the designation of a Subsidiary as a Significant Subsidiary, such Subsidiary shall not at any time after the date of this Agreement have previously been designated as a Significant Subsidiary more than once; and

     (iv) in the case of the de-designation of a Significant Subsidiary, such Significant Subsidiary shall not at any time after the date of this Agreement have previously been de-designated more than once.

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Section 11. Events of Default.

     An “Event of Default” shall exist if any of the following conditions or events shall occur and be continuing:

     (a) the Company defaults in the payment of any principal or Make-Whole Amount, if any, on any Note when the same becomes due and payable, whether at maturity or at a date fixed for prepayment or by declaration or otherwise; or

     (b) the Company defaults in the payment of any interest on any Note for more than five Business Days after the same becomes due and payable; or

     (c) the Company defaults in the performance of or compliance with any term contained in Sections 10.1 through 10.8; or

     (d) the Company defaults in the performance of or compliance with any term contained herein (other than those referred to in paragraphs (a), (b) and (c) of this Section 11) and such default is not remedied within 30 days after the earlier of (i) a Responsible Officer obtaining actual knowledge of such default and (ii) the Company receiving written notice of such default from any holder of a Note (any such written notice to be identified as a “notice of default” and to refer specifically to this paragraph (d) of Section 11); or

     (e) any representation or warranty made in writing by or on behalf of the Company or by any officer of the Company in this Agreement or in any writing furnished pursuant to this Agreement proves to have been false or incorrect in any Material respect on the date as of which made; or

     (f) (i) the Company or any Significant Subsidiary is in default (as principal or as guarantor or other surety) in the payment of any principal of or premium or make-whole amount or interest on any Debt that is outstanding in an aggregate principal amount of at least $10,000,000 beyond any period of grace provided with respect thereto, or (ii) the Company or any Significant Subsidiary is in default in the performance of or compliance with any term of any evidence of any Debt in an aggregate outstanding principal amount of at least $10,000,000 or of any mortgage, indenture or other agreement relating thereto or any other condition exists, and as a consequence of such default or condition such Debt has become, or has been declared, due and payable before its stated maturity or before its regularly scheduled dates of payment, or (iii) as a consequence of the occurrence or continuation of any event or condition (other than the passage of time or the right of the holder of Debt to convert such Debt into equity interests), (1) the Company or any Significant Subsidiary has become obligated to purchase or repay Debt before its regular maturity or before its regularly scheduled dates of payment in an aggregate outstanding principal amount of at least $10,000,000 or (2) one or more Persons have the right to require the Company or any Significant Subsidiary to purchase or repay such Debt and have exercised such right; or

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     (g) the Company or any Significant Subsidiary (i) is generally not paying, or admits in writing its inability to pay, its debts as they become due, (ii) files, or consents by answer or otherwise to the filing against it of, a petition for relief or reorganization or arrangement or any other petition in bankruptcy, for liquidation or to take advantage of any bankruptcy, insolvency, reorganization, moratorium or other similar law of any jurisdiction, (iii) makes an assignment for the benefit of its creditors, (iv) consents to the appointment of a custodian, receiver, trustee or other officer with similar powers with respect to it or with respect to any substantial part of its property, (v) is adjudicated as insolvent or to be liquidated, or (vi) takes corporate action for the purpose of any of the foregoing; or

     (h) a court or Governmental Authority of competent jurisdiction enters an order appointing, without consent by the Company or any of its Significant Subsidiaries, a custodian, receiver, trustee or other officer with similar powers with respect to it or with respect to any substantial part of its property, or constituting an order for relief or approving a petition for relief or reorganization or any other petition in bankruptcy or for liquidation or to take advantage of any bankruptcy or insolvency law of any jurisdiction, or ordering the dissolution, winding-up or liquidation of the Company or any of its Significant Subsidiaries, or any such petition shall be filed against the Company or any of its Significant Subsidiaries and such petition shall not be dismissed within 60 days; or

     (i) a final judgment or judgments for the payment of money aggregating in excess of $5,000,000 are rendered against one or more of the Company and its Significant Subsidiaries and which judgments are not, within 60 days after entry thereof, bonded, discharged or stayed pending appeal, or are not discharged within 60 days after the expiration of such stay; or

     (j) if (i) any Plan shall fail to satisfy the minimum funding standards of ERISA or the Code for any plan year or part thereof or a waiver of such standards or extension of any amortization period is sought or granted under section 412 of the Code, (ii) a notice of intent to terminate any Plan shall have been or is reasonably expected to be filed with the PBGC or the PBGC shall have instituted proceedings under ERISA Section 4042 to terminate or appoint a trustee to administer any Plan or the PBGC shall have notified the Company or any ERISA Affiliate that a Plan may become a subject of any such proceedings, (iii) the aggregate “amount of unfunded benefit liabilities” (within the meaning of Section 4001(a)(18) of ERISA) under all Plans, determined in accordance with Title IV of ERISA, shall exceed $25,000,000, (iv) the Company or any ERISA Affiliate shall have incurred or is reasonably expected to incur any liability pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans, (v) the Company or any ERISA Affiliate withdraws from any Multiemployer Plan, or (vi) the Company or any Subsidiary establishes or amends any employee welfare benefit plan that provides post-employment welfare benefits in a manner that would increase the liability of the Company or any Subsidiary thereunder; and any such event or events described in clauses (i) through (vi) above, either individually or together with any other such event or events, could reasonably be expected to have a Material Adverse Effect.

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As used in Section 11(j), the terms “employee benefit plan” and “employee welfare benefit plan” shall have the respective meanings assigned to such terms in Section 3 of ERISA.

Section 12. Remedies on Default, Etc.

     Section 12.1. Acceleration. (a) If an Event of Default with respect to the Company described in paragraph (g) or (h) of Section 11 (other than an Event of Default described in clause (i) of paragraph (g) or described in clause (vi) of paragraph (g) by virtue of the fact that such clause encompasses clause (i) of paragraph (g)) has occurred, all the Notes then outstanding shall automatically become immediately due and payable.

          (b) If any other Event of Default has occurred and is continuing, any holder or holders of more than 50% in principal amount of the Notes at the time outstanding may at any time at its or their option, by notice or notices to the Company, declare all the Notes then outstanding to be immediately due and payable.

          (c) If any Event of Default described in paragraph (a) or (b) of Section 11 has occurred and is continuing, any holder or holders of Notes at the time outstanding affected by such Event of Default may at any time, at its or their option, by notice or notices to the Company, declare all the Notes held by it or them to be immediately due and payable.

          Upon any Note’s becoming due and payable under this Section 12.1, whether automatically or by declaration, such Note will forthwith mature and the entire unpaid principal amount of such Note, plus (i) all accrued and unpaid interest thereon and (ii) the Make-Whole Amount determined in respect of such principal amount (to the full extent permitted by applicable law), shall all be immediately due and payable, in each and every case without presentment, demand, protest or further notice, all of which are hereby waived. The Company acknowledges, and the parties hereto agree, that each holder of a Note has the right to maintain its investment in the Notes free from repayment by the Company (except as herein specifically provided for), and that the provision for payment of a Make-Whole Amount by the Company in the event that the Notes are prepaid or are accelerated as a result of an Event of Default, is intended to provide compensation for the deprivation of such right under such circumstances.

     Section 12.2. Other Remedies. If any Default or Event of Default has occurred and is continuing, and irrespective of whether any Notes have become or have been declared immediately due and payable under Section 12.1, the holder of any Note at the time outstanding may proceed to protect and enforce the rights of such holder by an action at law, suit in equity or other appropriate proceeding, whether for the specific performance of any agreement contained herein or in any Note, or for an injunction against a violation of any of the terms hereof or thereof, or in aid of the exercise of any power granted hereby or thereby or by law or otherwise.

     Section 12.3. Rescission. At any time after any Notes have been declared due and payable pursuant to clause (b) or (c) of Section 12.1, the holders of more than 50% in principal amount of the Notes then outstanding, by written notice to the Company, may rescind and annul any such declaration and its consequences if (a) the Company has paid all overdue interest on the Notes, all principal of and Make-Whole Amount, if any, on any Notes that are due and payable and are

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unpaid other than by reason of such declaration, and all interest on such overdue principal and Make-Whole Amount, if any, and (to the extent permitted by applicable law) any overdue interest in respect of the Notes, at the Default Rate, (b) all Events of Default and Defaults, other than non-payment of amounts that have become due solely by reason of such declaration, have been cured or have been waived pursuant to Section 17, and (c) no judgment or decree has been entered for the payment of any monies due pursuant hereto or to the Notes. No rescission and annulment under this Section 12.3 will extend to or affect any subsequent Event of Default or Default or impair any right consequent thereon.

     Section 12.4. No Waivers or Election of Remedies, Expenses, Etc. No course of dealing and no delay on the part of any holder of any Note in exercising any right, power or remedy shall operate as a waiver thereof or otherwise prejudice such holder’s rights, powers or remedies. No right, power or remedy conferred by this Agreement or by any Note upon any holder thereof shall be exclusive of any other right, power or remedy referred to herein or therein or now or hereafter available at law, in equity, by statute or otherwise. Without limiting the obligations of the Company under Section 15, the Company will pay to the holder of each Note on demand such further amount as shall be sufficient to cover all costs and expenses of such holder incurred in any enforcement or collection under this Section 12, including, without limitation, reasonable attorneys’ fees, expenses and disbursements.

Section 13. Registration; Exchange; Substitution of Notes.

     Section 13.1. Registration of Notes. The Company shall keep at its principal executive office a register for the registration and registration of transfers of Notes. The name and address of each holder of one or more Notes, each transfer thereof and the name and address of each transferee of one or more Notes shall be registered in such register. Prior to due presentment for registration of transfer, the Person in whose name any Note shall be registered shall be deemed and treated as the owner and holder thereof for all purposes hereof, and the Company shall not be affected by any notice or knowledge to the contrary. The Company shall give to any holder of a Note that is an Institutional Investor promptly upon request therefor, a complete and correct copy of the names and addresses of all registered holders of Notes.

     Section 13.2. Transfer and Exchange of Notes. Upon surrender of any Note at the principal executive office of the Company for registration of transfer or exchange (and in the case of a surrender for registration of transfer, duly endorsed or accompanied by a written instrument of transfer duly executed by the registered holder of such Note or its attorney duly authorized in writing and accompanied by the address for notices of each transferee of such Note or part thereof), the Company shall execute and deliver, at the Company’s expense (except as provided below), one or more new Notes (as requested by the holder thereof) in exchange therefor, in an aggregate principal amount equal to the unpaid principal amount of the surrendered Note. Each such new Note shall be payable to such Person as such holder may request and shall be substantially in the form of Exhibit 1-A, Exhibit 1-B, Exhibit 1-C or Exhibit 1-D, as applicable. Each such new Note shall be dated and bear interest from the date to which interest shall have been paid on the surrendered Note or dated the date of the surrendered Note if no interest shall have been paid thereon. The Company may require payment of a sum sufficient to cover any stamp tax or governmental charge imposed in respect of any such transfer of Notes.

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Notes shall not be transferred in denominations of less than $1,000,000; provided that if necessary to enable the registration of transfer by a holder of its entire holding of Notes, one Note may be in a denomination of less than $1,000,000. Any transferee, by its acceptance of a Note registered in its name (or the name of its nominee), shall be deemed to have made the representation set forth in Section 6.2.

     Section 13.3. Replacement of Notes. Upon receipt by the Company of evidence reasonably satisfactory to it of the ownership of and the loss, theft, destruction or mutilation of any Note (which evidence shall be, in the case of an Institutional Investor, notice from such Institutional Investor of such ownership and such loss, theft, destruction or mutilation), and

     (a) in the case of loss, theft or destruction, of indemnity reasonably satisfactory to it (provided that if the holder of such Note is, or is a nominee for, an original Purchaser or another holder of a Note with a minimum net worth of at least $10,000,000, such Person’s own unsecured agreement of indemnity shall be deemed to be satisfactory), or

     (b) in the case of mutilation, upon surrender and cancellation thereof,

the Company at its own expense shall execute and deliver, in lieu thereof, a new Note, dated and bearing interest from the date to which interest shall have been paid on such lost, stolen, destroyed or mutilated Note or dated the date of such lost, stolen, destroyed or mutilated Note if no interest shall have been paid thereon.

Section 14. Payments on Notes.

     Section 14.1. Place of Payment. Subject to Section 14.2, payments of principal, Make-Whole Amount, if any, and interest becoming due and payable on the Notes shall be made in Cuyahoga County, Ohio, at the principal office of the Company in such jurisdiction or at the principal office of a bank or trust company in such jurisdiction or in Cleveland, Ohio, which the Company agrees to designate at any time when there is any holder of any Note not entitled to the benefits of Section 14.2. The Company may at any time, by notice to each holder of a Note, change the place of payment of the Notes so long as such place of payment shall be either the principal office of the Company in the United States of America or the principal office of a bank or trust company in the United States of America.

     Section 14.2. Home Office Payment. So long as you or your nominee shall be the holder of any Note, and notwithstanding anything contained in Section 14.1 or in such Note to the contrary, the Company will pay all sums becoming due on such Note for principal, Make-Whole Amount, if any, and interest by the method and at the address specified for such purpose below your name in Schedule A, or by such other method or at such other address as you shall have from time to time specified to the Company in writing for such purpose, without the presentation or surrender of such Note or the making of any notation thereon, except that upon written request of the Company made concurrently with or reasonably promptly after payment or prepayment in full of any Note, you shall surrender such Note for cancellation, reasonably promptly after any such request, to the Company at its principal executive office or at the place of payment most

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recently designated by the Company pursuant to Section 14.1. Prior to any sale or other disposition of any Note held by you or your nominee you will, at your election, either endorse thereon the amount of principal paid thereon and the last date to which interest has been paid thereon or surrender such Note to the Company in exchange for a new Note or Notes pursuant to Section 13.2. The Company will afford the benefits of this Section 14.2 to any Institutional Investor that is the direct or indirect transferee of any Note purchased by you under this Agreement and that has made the same agreement relating to such Note as you have made in this Section 14.2.

Section 15. Expenses, Etc.

     Section 15.1. Transaction Expenses. Whether or not the transactions contemplated hereby are consummated, the Company will pay all costs and expenses (including reasonable attorneys’ fees of a special counsel and, if reasonably required, local or other counsel) incurred by you and each Other Purchaser or holder of a Note in connection with such transactions and in connection with any amendments, waivers or consents under or in respect of this Agreement or the Notes (whether or not such amendment, waiver or consent becomes effective), including, without limitation: (a) the costs and expenses incurred in enforcing or defending (or determining whether or how to enforce or defend) any rights under this Agreement or the Notes or in responding to any subpoena or other legal process or informal investigative demand issued in connection with this Agreement or the Notes, or by reason of being a holder of any Note, and (b) the costs and expenses, including financial advisors’ fees, incurred in connection with the insolvency or bankruptcy of the Company or any Subsidiary or in connection with any work-out or restructuring of the transactions contemplated hereby and by the Notes. The Company will pay, and will save you and each other holder of a Note harmless from, all claims in respect of any fees, costs or expenses, if any, of brokers and finders (other than those retained by you).

     Section 15.2. Survival. The obligations of the Company under this Section 15 will survive the payment or transfer of any Note, the enforcement, amendment or waiver of any provision of this Agreement or the Notes, and the termination of this Agreement.

Section 16. Survival of Representations and Warranties; Entire Agreement.

          All representations and warranties contained herein shall survive the execution and delivery of this Agreement and the Notes, the purchase or transfer by you of any Note or portion thereof or interest therein and the payment of any Note, and may be relied upon by any subsequent holder of a Note, regardless of any investigation made at any time by or on behalf of you or any other holder of a Note. All statements contained in any certificate or other instrument delivered by or on behalf of the Company pursuant to this Agreement shall be deemed representations and warranties of the Company under this Agreement. Subject to the preceding sentence, this Agreement and the Notes embody the entire agreement and understanding between you and the Company and supersede all prior agreements and understandings relating to the subject matter hereof.

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Section 17. Amendment and Waiver.

     Section 17.1. Requirements. This Agreement and the Notes may be amended, and the observance of any term hereof or of the Notes may be waived (either retroactively or prospectively), with (and only with) the written consent of the Company and the Required Holders, except that (a) no amendment or waiver of any of the provisions of Section 1, 2, 3, 4, 5, 6 or 21 hereof, or any defined term (as it is used therein), will be effective as to you unless consented to by you in writing, and (b) no such amendment or waiver may, without the written consent of the holders of all Notes of each Series at the time outstanding affected thereby, (i) subject to the provisions of Section 12 relating to acceleration or rescission, change the amount or time of any prepayment or payment of principal of, or reduce the rate or change the time of payment or method of computation of interest or of the Make-Whole Amount on, the Notes, (ii) change the percentage of the principal amount of the Notes the holders of which are required to consent to any such amendment or waiver, or (iii) amend any of Sections 8, 11(a), 11(b), 12, 17 or 20.

     Section 17.2. Solicitation of Holders of Notes.

          (a) Solicitation. The Company will provide each holder of the Notes (irrespective of the amount of Notes then owned by it) with sufficient information, sufficiently far in advance of the date a decision is required, to enable such holder to make an informed and considered decision with respect to any proposed amendment, waiver or consent in respect of any of the provisions hereof or of the Notes. The Company will deliver executed or true and correct copies of each amendment, waiver or consent effected pursuant to the provisions of this Section 17 to each holder of outstanding Notes promptly following the date on which it is executed and delivered by, or receives the consent or approval of, the requisite holders of Notes.

          (b) Payment. The Company will not directly or indirectly pay or cause to be paid any remuneration, whether by way of supplemental or additional interest, fee or otherwise, or grant any security, to any holder of Notes as consideration for or as an inducement to the entering into by any holder of Notes of any waiver or amendment of any of the terms and provisions hereof unless such remuneration is concurrently paid, or security is concurrently granted, on the same terms, ratably to each holder of Notes then outstanding even if such holder did not consent to such waiver or amendment.

     Section 17.3. Binding Effect, Etc. Any amendment or waiver consented to as provided in this Section 17 applies equally to all holders of Notes and is binding upon them and upon each future holder of any Note and upon the Company without regard to whether such Note has been marked to indicate such amendment or waiver. No such amendment or waiver will extend to or affect any obligation, covenant, agreement, Default or Event of Default not expressly amended or waived or impair any right consequent thereon. No course of dealing between the Company and the holder of any Note nor any delay in exercising any rights hereunder or under any Note shall operate as a waiver of any rights of any holder of such Note. As used herein, the term “this Agreement” and references thereto shall mean this Agreement as it may from time to time be amended or supplemented.

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     Section 17.4. Notes Held by Company, Etc. Solely for the purpose of determining whether the holders of the requisite percentage of the aggregate principal amount of Notes then outstanding approved or consented to any amendment, waiver or consent to be given under this Agreement or the Notes, or have directed the taking of any action provided herein or in the Notes to be taken upon the direction of the holders of a specified percentage of the aggregate principal amount of Notes then outstanding, Notes directly or indirectly owned by the Company or any of its Affiliates shall be deemed not to be outstanding.

Section 18. Notices.

          All notices and communications provided for hereunder shall be in writing and sent (a) by telefacsimile if the sender on the same day sends a confirming copy of such notice by a recognized overnight delivery service (charges prepaid), or (b) by registered or certified mail with return receipt requested (postage prepaid), or (c) by a recognized overnight delivery service (with charges prepaid). Any such notice must be sent:

     (i) if to you or your nominee, to you or it at the address specified for such communications in Schedule A, or at such other address as you or it shall have specified to the Company in writing,

     (ii) if to any other holder of any Note, to such holder at such address as such other holder shall have specified to the Company in writing, or

     (iii) if to the Company, to the Company at its address set forth at the beginning hereof to the attention of Chief Financial Officer, or at such other address as the Company shall have specified to the holder of each Note in writing.

Notices under this Section 18 will be deemed given only when actually received.

Section 19. Reproduction of Documents.

          This Agreement and all documents relating thereto, including, without limitation, (a) consents, waivers and modifications that may hereafter be executed, (b) documents received by you at the Closing (except the Notes themselves), and (c) financial statements, certificates and other information previously or hereafter furnished to you, may be reproduced by you by any photographic, photostatic, microfilm, microcard, miniature photographic or other similar process and you may destroy any original document so reproduced. The Company agrees and stipulates that, to the extent permitted by applicable law, any such reproduction shall be admissible in evidence as the original itself in any judicial or administrative proceeding (whether or not the original is in existence and whether or not such reproduction was made by you in the regular course of business) and any enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in evidence. This Section 19 shall not prohibit the Company or any other holder of Notes from contesting any such reproduction to the same extent that it could contest the original, or from introducing evidence to demonstrate the inaccuracy of any such reproduction.

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Section 20. Confidential Information.

          For the purposes of this Section 20, “Confidential Information” means all material information delivered to you by or on behalf of the Company or any Subsidiary pursuant to this Agreement; provided that such term does not include information that (a) was publicly known or otherwise known to you prior to the time of such disclosure, (b) subsequently becomes publicly known through no act or omission by you or any Person acting on your behalf, (c) otherwise becomes known to you other than through disclosure by the Company or any Subsidiary or (d) constitutes financial statements delivered to you under Section 7.1 that are otherwise publicly available. You will maintain the confidentiality of such Confidential Information in accordance with procedures adopted by you in good faith to protect confidential information of third parties delivered to you; provided that you may deliver or disclose Confidential Information to (i) your directors, trustees, officers, employees, agents, attorneys and affiliates (to the extent such disclosure reasonably relates to the administration of the investment represented by your Notes), (ii) your financial advisors and other professional advisors who agree to hold confidential the Confidential Information substantially in accordance with the terms of this Section 20, (iii) any other holder of any Note, (iv) any Institutional Investor to which you sell or offer to sell such Note or any part thereof or any participation therein (if such Person has agreed in writing prior to its receipt of such Confidential Information to be bound by the provisions of this Section 20), (v) any Person from which you offer to purchase any security of the Company (if such Person has agreed in writing prior to its receipt of such Confidential Information to be bound by the provisions of this Section 20), (vi) any federal or state regulatory authority having jurisdiction over you, (vii) the National Association of Insurance Commissioners or any similar organization, or any nationally recognized rating agency that requires access to information about your investment portfolio or (viii) any other Person to which such delivery or disclosure may be necessary or appropriate (w) to effect compliance with any law, rule, regulation or order applicable to you, (x) in response to any subpoena or other legal process, (y) in connection with any litigation to which you are a party or (z) if an Event of Default has occurred and is continuing, to the extent you may reasonably determine such delivery and disclosure to be necessary or appropriate in the enforcement or for the protection of the rights and remedies under your Notes and this Agreement. In addition to the foregoing, you acknowledge that you are prohibited from any use of non-public Confidential Information you receive pursuant to Section 7 other than in connection with the administration of your investment in the Notes. Each holder of a Note, by its acceptance of a Note, will be deemed to have agreed to be bound by and to be entitled to the benefits of this Section 20 as though it were a party to this Agreement. On reasonable request by the Company in connection with the delivery to any holder of a Note of information required to be delivered to such holder under this Agreement or requested by such holder (other than a holder that is a party to this Agreement or its nominee), such holder will enter into an agreement with the Company embodying the provisions of this Section 20.

Section 21. Substitution of Purchaser.

          You shall have the right to substitute any one of your Affiliates as the purchaser of the Notes that you have agreed to purchase hereunder, by written notice to the Company, which notice shall be signed by both you and such Affiliate, shall contain such Affiliate’s agreement to be bound by this Agreement and shall contain a confirmation by such Affiliate of the accuracy

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with respect to it of the representations set forth in Section 6. Upon receipt of such notice, wherever the word “you” is used in this Agreement (other than in this Section 21), such word shall be deemed to refer to such Affiliate in lieu of you. In the event that such Affiliate is so substituted as a purchaser hereunder and such Affiliate thereafter transfers to you all of the Notes then held by such Affiliate, upon receipt by the Company of notice of such transfer, wherever the word “you” is used in this Agreement (other than in this Section 21), such word shall no longer be deemed to refer to such Affiliate, but shall refer to you, and you shall have all the rights of an original holder of the Notes under this Agreement.

Section 22. Miscellaneous.

     Section 22.1. Successors and Assigns. All covenants and other agreements contained in this Agreement by or on behalf of any of the parties hereto bind and inure to the benefit of their respective successors and assigns (including, without limitation, any subsequent holder of a Note) whether so expressed or not.

     Section 22.2. Payments Due on Non-Business Days. Anything in this Agreement or the Notes to the contrary notwithstanding, any payment of principal of or Make-Whole Amount or interest on any Note that is due on a date other than a Business Day shall be made on the next succeeding Business Day without including the additional days elapsed in the computation of the interest payable on such next succeeding Business Day.

     Section 22.3. Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall (to the full extent permitted by law) not invalidate or render unenforceable such provision in any other jurisdiction.

     Section 22.4. Construction. Each covenant contained herein shall be construed (absent express provision to the contrary) as being independent of each other covenant contained herein, so that compliance with any one covenant shall not (absent such an express contrary provision) be deemed to excuse compliance with any other covenant. Where any provision herein refers to action to be taken by any Person, or which such Person is prohibited from taking, such provision shall be applicable whether such action is taken directly or indirectly by such Person.

          Where the character or amount of any asset or liability or item of income or expense is required to be determined or any consolidation or other accounting computation is required to be made by the Company for the purposes of this Agreement, the same shall be done by the Company in accordance with GAAP, to the extent applicable, except where such principles are inconsistent with the requirements of this Agreement.

     Section 22.5. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original but all of which together shall constitute one instrument. Each counterpart may consist of a number of copies hereof, each signed by less than all, but together signed by all, of the parties hereto.

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     Section 22.6. Governing Law. This Agreement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the law of the State of New York, excluding choice-of-law principles of the law of such State that would require the application of the laws of a jurisdiction other than such State.

* * * * *

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     If you are in agreement with the foregoing, please sign the form of agreement on the accompanying counterpart of this Agreement and return it to the Company, whereupon the foregoing shall become a binding agreement between you and the Company.

	Very truly yours,
	Nordson Corporation
	By
		Name:
		Title
Accepted as of
	[Variation]
	By
		Name:
		Title:

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Information Relating to Purchasers

	Principal Amount
Name and Address	of Series A Notes
of Purchaser	to Be Purchased

Metropolitan Life Insurance Company	$20,000,000
Private Placement Unit
334 Madison Avenue
Convent Station, New Jersey 07961-0633
Attention: Director
Fax Number: (973) 254-3032

Payments

All payments on or in respect of the Notes to be by bank wire transfer of Federal or other immediately available funds (identifying each payment as “Nordson Corporation, 6.79% Senior Notes, Series A, due May 15, 2006, PPN 655663 A@ 1, principal, premium or interest”) to:

The Chase Manhattan Bank
New York, New York
ABA #021-000-021
Account Number 002-2-410591
For credit to: Metropolitan Life Insurance Company
Reference: PPN Number

Notices

All notices and communications, including notices with respect to payments and written confirmation of each such payment, to be addressed as first provided above with a copy to:

Metropolitan Life Insurance Company
One Madison Avenue
New York, New York 10010
Attention: Lisa Korsten, Esq. (Area 6-H)
Fax Number: (212) 251-1640

Name of Nominee in which Notes are to be issued: None

Taxpayer I.D. Number: 13-5581829

Schedule A
(to Note Purchase Agreement)

	Principal Amount
Name and Address	of Series A Notes
of Purchaser	to Be Purchased

The Canada Life Assurance Company	$14,000,000
330 University Avenue, SP-11
Toronto, Ontario, Canada M5G 1R8
Attention: Paul English, U.S. Investments Division

Payments

All payments on or in respect of the Notes to be by bank wire transfer of Federal or other immediately available funds (identifying each payment as “Nordson Corporation, 6.79% Senior Notes, Series A, due May 15, 2006, principal or interest”) to:

Regular Principal and Interest:
Chase Manhattan Bank
ABA #021-000-021
Account No. 900-9-000200
Trust Account No. G52708, The Canada Life Assurance Company
Reference: PPN number, name of issuer, rate, maturity date, type of security, whether principal and/or interest and due date

For Call or Maturity:
Chase Manhattan Bank
ABA #021-000-021
Account No. 900-9-000192
Trust Account No. G52708, The Canada Life Assurance Company
Reference: PPN number, name of issuer, rate, maturity date, type of security, whether principal and/or interest and effective date of call or maturity

A-2

Notices

Notices with respect to payments and written confirmation of each such payment to be addressed:

Chase Manhattan Bank
North American Insurance
3 Chase MetroTech Centre-6^th Floor
Brooklyn, New York 11245
Attention: Doll Balbadar

With a copy to:
The Canada Life Assurance Company
330 University Ave., SP-12
Securities Accounting
Toronto, Ontario Canada M5G 1R8

All other notices and communications (including financial statements) to be addressed as first provided above.

Name of Nominee in which Notes are to be issued: J. Romeo & Co.

Taxpayer I.D.: 38-0397420

A-3

	Principal Amount
Name and Address	of Series A Notes
of Purchaser	to Be Purchased

The Canada Life Assurance Company	$300,000
330 University Avenue, SP-11
Toronto, Ontario, Canada M5G 1R8
Attention: Paul English, U.S. Investments Division

Payments

All payments on or in respect of the Notes to be by bank wire transfer of Federal or other immediately available funds (identifying each payment as “Nordson Corporation, 6.79% Senior Notes, Series A, due May 15, 2006, principal or interest”) to:

Regular Principal and Interest:
Chase Manhattan Bank
ABA #021-000-021
Account No. 900-9-000200
Trust Account No. G52724, The Canada Life Assurance Company
Reference: PPN number, name of issuer, rate, maturity date, type of security, whether principal and/or interest and due date

For Call or Maturity:
Chase Manhattan Bank
ABA #021-000-021
Account No. 900-9-000192
Trust Account No. G52724, The Canada Life Assurance Company
Reference: PPN number, name of issuer, rate, maturity date, type of security, whether principal and/or interest and effective date of call or maturity

A-4

Notices

Notices with respect to payments and written confirmation of each such payment to be addressed:

Chase Manhattan Bank
North American Insurance
3 Chase MetroTech Centre-6^th Floor
Brooklyn, New York 11245
Attention: Doll Balbadar

With a copy to:
The Canada Life Assurance Company
330 University Ave., SP-12
Securities Accounting
Toronto, Ontario Canada M5G 1R8

All other notices and communications (including financial statements) to be addressed as first provided above.

Name of Nominee in which Notes are to be issued: J. Romeo & Co.

Taxpayer I.D.: 38-0397420

A-5

	Principal Amount
Name and Address	of Series A Notes
of Purchaser	to Be Purchased

The Canada Life Assurance Company	$375,000
330 University Avenue, SP-11
Toronto, Ontario, Canada M5G 1R8
Attention: Paul English, U.S. Investments Division

Payments

All payments on or in respect of the Notes to be by bank wire transfer of Federal or other immediately available funds (identifying each payment as “Nordson Corporation, 6.79% Senior Notes, Series A, due May 15, 2006, principal or interest”) to:

Regular Principal and Interest:
Chase Manhattan Bank
ABA #021-000-021
Account No. 900-9-000200
Trust Account No. G08798, The Canada Life Assurance Company
Reference: PPN number, name of issuer, rate, maturity date, type of security, whether principal and/or interest and due date

For Call or Maturity:
Chase Manhattan Bank
ABA #021-000-021
Account No. 900-9-000192
Trust Account No. G08798, The Canada Life Assurance Company
Reference: PPN number, name of issuer, rate, maturity date, type of security, whether principal and/or interest and effective date of call or maturity

A-6

Notices

Notices with respect to payments and written confirmation of each such payment to be addressed:

Chase Manhattan Bank
North American Insurance
3 Chase MetroTech Centre-6^th Floor
Brooklyn, New York 11245
Attention: Doll Balbadar

With a copy to:
The Canada Life Assurance Company
330 University Ave., SP-12
Securities Accounting
Toronto, Ontario Canada M5G 1R8

All other notices and communications (including financial statements) to be addressed as first provided above.

Name of Nominee in which Notes are to be issued: J. Romeo & Co.

Taxpayer I.D.: 38-0397420

A-7

	Principal Amount
Name and Address	of Series A Notes
of Purchaser	to Be Purchased

Canada Life Insurance Company of New York	$325,000
330 University Avenue, SP-11
Toronto, Ontario, Canada M5G 1R8
Attention: Paul English, U.S. Investments Division

Payments

All payments on or in respect of the Notes to be by bank wire transfer of Federal or other immediately available funds (identifying each payment as “Nordson Corporation, 6.79% Senior Notes, Series A, due May 15, 2006, principal or interest”) to:

Regular Principal and Interest:
Chase Manhattan Bank
ABA #021-000-021
Account No. 900-9-000200
Trust Account No. G52685, Canada Life Insurance Company of New York
Reference: PPN number, name of issuer, rate, maturity date, type of security, whether principal and/or interest and due date

For Call or Maturity:
Chase Manhattan Bank
ABA #021-000-021
Account No. 900-9-000192
Trust Account No. G52685, Canada Life Insurance Company of New York
Reference: PPN number, name of issuer, rate, maturity date, type of security, whether principal and/or interest and effective date of call or maturity

A-8

Notices

Notices with respect to payments and written confirmation of each such payment to be addressed:

Chase Manhattan Bank
North American Insurance
3 Chase MetroTech Centre-6^th Floor
Brooklyn, New York 11245
Attention: Doll Balbadar

With a copy to:
The Canada Life Assurance Company
330 University Ave., SP-12
Securities Accounting
Toronto, Ontario Canada M5G 1R8

All other notices and communications (including financial statements) to be addressed as first provided above.

Name of Nominee in which Notes are to be issued: J. Romeo & Co.

Taxpayer I.D.: 13-2690792

A-9

	Principal Amount
Name and Address	of Series A Notes
of Purchaser	to Be Purchased

Nationwide Life Insurance Company	$5,000,000
One Nationwide Plaza (1-33-07)
Columbus, Ohio 43215-2220
Attention: Corporate Fixed-Income Securities
Facsimile: (614) 249-4553

Payments

All notices of payment on or in respect of the Notes and written confirmation of each such payment to:

The Bank of New York
ABA #021-000-018
BNF: IOC566
F/A/O Nationwide Life Insurance Company
Attention: P&I Department
PPN 655663 A@ 1
Security Description: Nordson Corporation, 6.79% Senior Notes, Series A, due May 15, 2006

Notices

All notices of payment on or in respect of the Notes and written confirmation of each such payment to:

Nationwide Life Insurance Company
c/o The Bank of New York
P. O. Box 19266
Newark, New Jersey 07195
Attention: P&I Department

With a copy to:

Nationwide Life Insurance Company
One Nationwide Plaza (1-32-05)
Columbus, Ohio 43215-2220
Attention: Investment Accounting

All notices and communications other than those in respect to payments to be addressed as first provided above.

A-10

Name of Nominee in which Notes are to be issued: None

Taxpayer I.D. Number: 31-4156830

A-11

	Principal Amount
Name and Address	of Series B Notes
of Purchaser	to Be Purchased

Teachers Insurance and Annuity	$15,000,000
Association of America
730 Third Avenue
New York, New York 10017-3206

Payments

All payments on or in respect of the Notes shall be made in immediately available funds at the opening of business on the due date by electronic funds transfer through the Automated Clearing House System to:

Chase Manhattan Bank
ABA #021-000-021
Account of: Teachers Insurance and Annuity Association of America
Account Number 900-9-000200
For further credit to the TIAA Account Number: G07040
Reference: PPN#/Issuer/Mat. Date/Coupon Rate/P&I Breakdown

Notices

Contemporaneous with the above electronic funds transfer, advice setting forth (1) the full name, private placement number and interest rate of the Note; (2) allocation of payment between principal, interest, premium and any special payment; and (3) name and address of Bank (or Trustee) from which wire transfer was sent, shall be delivered, mailed or faxed to:

Teachers Insurance and Annuity Association of America
730 Third Avenue
New York, New York 10017-3206
Attention: Securities Accounting Division
Telephone: (212) 916-6004
Fax: (212) 916-6955

A-12

All other notices and communications shall be delivered or mailed to:

Teachers Insurance and Annuity Association of America
730 Third Avenue
New York, New York 10017-3206
Attention: Securities Division
Telephone:	(212) 916-4119 (Greg Spilberg)
	(212) 490-9000 (General Number)
Fax:	(212) 916-6582 (Team Fax Number)

Name of Nominee in which Notes are to be issued: None

Taxpayer I.D. Number: 13-1624203

A-13

	Principal Amount
Name and Address	of Series B Notes
of Purchaser	to Be Purchased

Nationwide Life Insurance Company	$3,000,000
One Nationwide Plaza (1-33-07)
Columbus, Ohio 43215-2220
Attention: Corporate Fixed-Income Securities
Facsimile: (614) 249-4553

Payments

All notices of payment on or in respect of the Notes and written confirmation of each such payment to:

The Bank of New York
ABA #021-000-018
BNF: IOC566
F/A/O Nationwide Life Insurance Company
Attention: P&I Department
PPN 655663 A# 9
Security Description: Nordson Corporation, 7.11% Senior Notes, Series B, due May 15, 2008

Notices

All notices of payment on or in respect of the Notes and written confirmation of each such payment to:

Nationwide Life Insurance Company
c/o The Bank of New York
P. O. Box 19266
Newark, New Jersey 07195
Attention: P&I Department

With a copy to:

Nationwide Life Insurance Company
One Nationwide Plaza (1-32-05)
Columbus, Ohio 43215-2220
Attention: Investment Accounting

All notices and communications other than those in respect to payments to be addressed as first provided above.

A-14

Name of Nominee in which Notes are to be issued: None

Taxpayer I.D. Number: 31-4156830

A-15

	Principal Amount
Name and Address	of Series B Notes
of Purchaser	to Be Purchased

Nationwide Life and Annuity Insurance Company	$2,000,000
One Nationwide Plaza (1-33-07)
Columbus, Ohio 43215-2220
Attention: Corporate Fixed-Income Securities
Facsimile: (614) 249-4553

Payments

All notices of payment on or in respect of the Notes and written confirmation of each such payment to:

Wiring Instructions:
The Bank of New York
ABA #021-000-018
BNF: IOC566
F/A/O Nationwide Life and Annuity Insurance Company
Attention: P&I Department
PPN 655663 A# 9
Security Description: Nordson Corporation, 7.11% Senior Notes, Series B, due May 15, 2008

Notices

All notices of payment on or in respect of the Notes and written confirmation of each such payment to:

Nationwide Life and Annuity Insurance Company
c/o The Bank of New York
P. O. Box 19266
Newark, New Jersey 07195
Attention: P&I Department

With a copy to:

Nationwide Life and Annuity Insurance Company
One Nationwide Plaza (1-32-05)
Columbus, Ohio 43215-2220
Attention: Investment Accounting

All notices and communications other than those in respect to payments to be addressed as first provided above.

A-16

Name of Nominee in which Notes are to be issued: None

Taxpayer I.D. Number: 31-1000740

A-17

	Principal Amount
Name and Address	of Series C Notes
of Purchaser	to Be Purchased

State Farm Life Insurance Company	$10,000,000
One State Farm Plaza
Bloomington, Illinois 61710
Attention: Investment Department E-10

Payments

All payments on or in respect of the Notes to be by bank wire transfer of Federal or other immediately available funds (identifying each payment as “Nordson Corporation, 7.11% Senior Notes, Series C, due May 15, 2011, PPN 655663 B* 2, principal, premium or interest”) to:

The Chase Manhattan Bank
ABA #021-000-021
SSG Private Income Processing
A/C #900-9-000200
For Credit to: Account Number G 06893
Ref. PPN 655663 B* 2
Rate: 7.11% (Series C)
Maturity Date: May 15, 2011

Notices

All notices and communications to be addressed as first provided above with a copy to be addressed Attention: Investment Accounting Department D-3.

Name of Nominee in which Notes are to be issued: None

Taxpayer I.D. Number: 37-0533090

A-18

	Principal Amount
Name and Address	of Series C Notes
of Purchaser	to Be Purchased

C.M. Life Insurance Company	$2,000,000
c/o Massachusetts Mutual Life Insurance Company
c/o David L. Babson & Company Inc.
1295 State Street
Springfield, Massachusetts 01111
Attention: Securities Investment Division

Payments

All payments on or in respect of the Notes shall be made by crediting in the form of bank wire transfer of Federal or other immediately available funds (identifying each payment as Nordson Corporation, 7.11% Senior Notes, Series C, due May 15, 2011, PPN 655663 B* 2, principal, premium or interest) to:

Citibank, N.A
111 Wall Street
New York, New York 10043
ABA #021-000-089
For Segment 43 – Universal Life
Account No. 4068-6561
Re: Description of security, principal and interest split

With telephone advice of payment to the Securities Custody and Collection Department of David L. Babson & Company Inc. at (413) 744-5104 or (413) 744-5718.

Notices

All notices and communications to be addressed as first provided above, except notices with respect to payments to be addressed Attention: Securities Custody and Collection Department, F 381.

Name of Nominee in which Notes are to be issued: None

Taxpayer I.D. Number: 06-1041383

A-19

	Principal Amount
Name and Address	of Series C Notes
of Purchaser	to Be Purchased

Massachusetts Mutual Life Insurance Company	$4,000,000
c/o David L. Babson & Company Inc.
1295 State Street
Springfield, Massachusetts 01111
Attention: Securities Investment Division

Payments

All payments on or in respect of the Notes shall be made by crediting in the form of bank wire transfer of Federal or other immediately available funds (identifying each payment as “Nordson Corporation, 7.11% Senior Notes, Series C, due May 15, 2011, PPN 655663 B* 2, principal, premium or interest”) to:

Citibank, N.A
111 Wall Street
New York, New York 10043
ABA #021-000-089
For MassMutual Spot Priced Contract
Account No. 3890-4953
Re: Description of security, principal and interest split

With telephone advice of payment to the Securities Custody and Collection Department of David L. Babson & Company Inc. at (413) 744-5104 or (413) 744-5718.

Notices

All notices and communications to be addressed as first provided above, except notices with respect to payments to be addressed Attention: Securities Custody and Collection Department, F 381.

Name of Nominee in which Notes are to be issued: None

Taxpayer I.D. Number: 04-1590850

A-20

	Principal Amount
Name and Address	of Series C Notes
of Purchaser	to Be Purchased

Massachusetts Mutual Life Insurance Company	$2,000,000
c/o David L. Babson & Company Inc.
1295 State Street
Springfield, Massachusetts 01111
Attention: Securities Investment Division

Payments

All payments on or in respect of the Notes shall be made by crediting in the form of bank wire transfer of Federal or other immediately available funds (identifying each payment as “Nordson Corporation, 7.11% Senior Notes, Series C, due May 15, 2011, PPN 655663 B* 2, principal, premium or interest”) to:

Chase Manhattan Bank, N.A.
4 Chase MetroTech Center
New York, New York 10081
ABA #021-000-021
For MassMutual IFM Non-Traditional
Account No. 910-2509073
Re: Description of security, principal and interest split

With telephone advice of payment to the Securities Custody and Collection Department of David L. Babson & Company Inc. at (413) 744-5104 or (413) 744-5718.

Notices

All notices and communications to be addressed as first provided above, except notices with respect to payments to be addressed Attention: Securities Custody and Collection Department, F 381.

Name of Nominee in which Notes are to be issued: None

Taxpayer I.D. Number: 04-1590850

A-21

	Principal Amount
Name and Address	of Series C Notes
of Purchaser	to Be Purchased

Massachusetts Mutual Life Insurance Company	$500,000
c/o David L. Babson & Company Inc.
1295 State Street
Springfield, Massachusetts 01111
Attention: Securities Investment Division

Payments

All payments on or in respect of the Notes shall be made by crediting in the form of bank wire transfer of Federal or other immediately available funds (identifying each payment as “Nordson Corporation, 7.11% Senior Notes, Series C, due May 15, 2011, PPN 655663 B* 2, principal, premium or interest”) to:

Chase Manhattan Bank, N.A.
4 Chase MetroTech Center
New York, New York 10081
ABA #021-000-021
For MassMutual Long Term Care
Account No. 323133053
Re: Description of security, principal and interest split

With telephone advice of payment to the Securities Custody and Collection Department of David L. Babson & Company Inc. at (413) 744-5104 or (413) 744-5718.

Notices

All notices and communications to be addressed as first provided above, except notices with respect to payments to be addressed Attention: Securities Custody and Collection Department, F 381.

Name of Nominee in which Notes are to be issued: None

Taxpayer I.D. Number: 04-1590850

A-22

	Principal Amount
Name and Address	of Series C Notes
of Purchaser	to Be Purchased

Massachusetts Mutual Life Insurance Company	$6,850,000
c/o David L. Babson & Company Inc.
1295 State Street
Springfield, Massachusetts 01111
Attention: Securities Investment Division

Payments

All payments on or in respect of the Notes shall be made by crediting in the form of bank wire transfer of Federal or other immediately available funds (identifying each payment as “Nordson Corporation, 7.11% Senior Notes, Series C, due May 15, 2011, PPN 655663 B* 2, principal, premium or interest”) to:

Citibank, N.A
111 Wall Street
New York, New York 10043
ABA #021-000-089
For MassMutual Long-Term Pool
Account No. 4067-3488
Re: Description of security, principal and interest split

With telephone advice of payment to the Securities Custody and Collection Department of David L. Babson & Company Inc. at (413) 744-5104 or (413) 744-5718.

Notices

All notices and communications to be addressed as first provided above, except notices with respect to payments to be addressed Attention: Securities Custody and Collection Department, F 381.

Name of Nominee in which Notes are to be issued: None

Taxpayer I.D. Number: 04-1590850

A-23

	Principal Amount
Name and Address	of Series C Notes
of Purchaser	to Be Purchased

MassMutual Asia Limited	$250,000
c/o David L. Babson & Company Inc.
1295 State Street
Springfield, Massachusetts 01111
Attention: Securities Investment Division

Payments

All payments on or in respect of the Notes shall be made by crediting in the form of bank wire transfer of Federal or other immediately available funds (identifying each payment as “Nordson Corporation, 7.11% Senior Notes, Series C, due May 15, 2011, PPN 655663 B* 2, principal, premium or interest”) to:

Citibank, N.A
111 Wall Street
New York, New York 10043
ABA #021-000-089
For MassMutual Spot Priced Contract
Account No. 30413797
Re: Description of security, principal and interest split

With telephone advice of payment to the Securities Custody and Collection Department of David L. Babson & Company Inc. at (413) 744-5104 or (413) 744-5718.

Notices

All notices and communications to be addressed as first provided above, except notices with respect to payments to be addressed Attention: Securities Custody and Collection Department, F 381.

Name of Nominee in which Notes are to be issued: Gerlach & Co.

Taxpayer I.D. Number: 04-1590850

A-24

	Principal Amount
Name and Address	of Series C Notes
of Purchaser	to Be Purchased

Massachusetts Mutual Life Insurance Company	$4,400,000
c/o David L. Babson & Company Inc.
1295 State Street
Springfield, Massachusetts 01111
Attention: Securities Investment Division

Payments

All payments on or in respect of the Notes shall be made by crediting in the form of bank wire transfer of Federal or other immediately available funds (identifying each payment as “Nordson Corporation, 7.11% Senior Notes, Series C, due May 15, 2011, PPN 655663 B* 2, principal, premium or interest”) to:

Chase Manhattan Bank, N.A.
4 Chase MetroTech Center
New York, New York 10081
ABA #021-000-021
For MassMutual Pension Management
Account No. 910-2594018
Re: Description of security, principal and interest split

With telephone advice of payment to the Securities Custody and Collection Department of David L. Babson & Company Inc. at (413) 744-5104 or (413) 744-5718.

Notices

All notices and communications to be addressed as first provided above, except notices with respect to payments to be addressed Attention: Securities Custody and Collection Department, F 381.

Name of Nominee in which Notes are to be issued: None

Taxpayer I.D. Number: 04-1590850

A-25

	Principal Amount
Name and Address	of Series D Notes
of Purchaser	to Be Purchased

Teachers Insurance and Annuity	$10,000,000
Association of America
730 Third Avenue
New York, New York 10017-3206

Payments

All payments on or in respect of the Notes shall be made in immediately available funds at the opening of business on the due date by electronic funds transfer through the Automated Clearing House System to:

Chase Manhattan Bank
ABA #021-000-021
Account of: Teachers Insurance and Annuity Association of America
Account Number 900-9-000200
For further credit to the TIAA Account Number: G07040
Reference: PPN#/Issuer/Mat. Date/Coupon Rate/P&I Breakdown

Notices

Contemporaneous with the above electronic funds transfer, advice setting forth (1) the full name, private placement number and interest rate of the Note; (2) allocation of payment between principal, interest, premium and any special payment; and (3) name and address of Bank (or Trustee) from which wire transfer was sent, shall be delivered, mailed or faxed to:

Teachers Insurance and Annuity Association of America
730 Third Avenue
New York, New York 10017-3206
Attention: Securities Accounting Division
Telephone: (212) 916-6004
Fax: (212) 916-6955

A-26

All other notices and communications shall be delivered or mailed to:

Teachers Insurance and Annuity Association of America
730 Third Avenue
New York, New York 10017-3206
Attention: Securities Division
Telephone:	(212) 916-4119 (Greg Spilberg)
	(212) 490-9000 (General Number)
Fax:	(212) 916-6582 (Team Fax Number)

Name of Nominee in which Notes are to be issued: None

Taxpayer I.D. Number: 13-1624203

A-27

Defined Terms

     As used herein, the following terms have the respective meanings set forth below or set forth in the Section hereof following such term:

     “Affiliate” means, at any time, and with respect to any Person, (a) any other Person that at such time directly or indirectly through one or more intermediaries Controls, or is Controlled by, or is under common Control with, such first Person, and (b) any Person beneficially owning or holding, directly or indirectly, 10% or more of any class of voting or equity interests of the Company or any Subsidiary or any corporation of which the Company and its Subsidiaries beneficially own or hold, in the aggregate, directly or indirectly, 10% or more of any class of voting or equity interests. As used in this definition, “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise. Unless the context otherwise clearly requires, any reference to an “Affiliate” is a reference to an Affiliate of the Company.

     “Business Day” means (a) for the purposes of Section 8.6 only, any day other than a Saturday, a Sunday or a day on which commercial banks in New York City are required or authorized to be closed, and (b) for the purposes of any other provision of this Agreement, any day other than a Saturday, a Sunday or a day on which commercial banks in Cleveland, Ohio or New York, New York, are required or authorized to be closed.

     “Capital Lease” means any lease the obligation for Rentals with respect to which is required to be capitalized on a consolidated balance sheet of the lessee and its subsidiaries in accordance with GAAP.

     “Change of Control” is defined in Section 8.3.

     “Change of Control Prepayment Date” is defined in Section 8.3.

     “Closing” is defined in Section 3.

     “Code” means the Internal Revenue Code of 1986, as amended from time to time, and the rules and regulations promulgated thereunder from time to time.

     “Company” means Nordson Corporation, an Ohio corporation, and any successor thereto pursuant to the terms hereof.

     “Company Notice” is defined in Section 8.3.

     “Confidential Information” is defined in Section 20.

     “Consolidated Cash Flow” for any period means the sum of (a) Consolidated EBITDA plus (without duplication), (b) the Consolidated EBITDA for such period of Persons acquired by the Company and its Subsidiaries during the most recently completed four fiscal quarters to the

Schedule B
(to Note Purchase Agreement)

extent that such Consolidated EBITDA of Persons acquired is confirmed by audited financial or other credible information relied on by the Company in good faith (which other information need not be audited or auditable), minus (ii) the Consolidated EBITDA for such period of Persons disposed of by the Company and its Subsidiaries during the most recently completed four fiscal quarters.

     “Consolidated EBITDA” for any period means the sum of (a) Consolidated Net Income during such period plus (to the extent deducted in determining Consolidated Net Income) (b) (i) all provisions for any Federal, state or local income taxes (U.S. or foreign) made by the Company and its Subsidiaries during such period, (ii) all provisions for depreciation and amortization (other than amortization of debt discount) made by the Company and its Subsidiaries during such period, and (iii) Consolidated Interest Expense during such period and (iv) all EBITDA Adjustments (defined below) during such period (less non-recurring gains).

     For purposes of calculating Consolidated EBITDA, the term “EBITDA Adjustments” shall mean (a) for calculations including any fiscal quarters in the fiscal years of the Company ending October 29, 2000 and October 28, 2001, non-cash charges taken by the Company during such fiscal quarters in connection with the Company’s “Action 2000 Plan” up to an aggregate amount, for all such changes, not to exceed $11,000,000, and (b) in addition to the amounts set forth in clause (a), other non-cash charges taken by the Company during any fiscal quarter of the Company in accordance with GAAP, up to an aggregate amount for all such charges during any period of four consecutive fiscal quarters of the Company, not to exceed $8,000,000.

     “Consolidated Interest Expense” of the Company and its Subsidiaries for any period means, on a consolidated basis, eliminating inter-company items in accordance with GAAP the sum of (a) (i) all interest in respect of Debt of the Company and its Subsidiaries (including the interest component on Rentals on Capital Leases) accrued or capitalized during such period (whether or not actually paid during such period), (ii) all amortization of debt discount and expense on all Debt (including, without limitation, payment-in-kind, zero coupon and other like Securities) for which such calculations are being made and (iii) all program expenses under any receivables securitization program, plus (b)(i) without duplication, the interest expense for such period of Persons acquired by the Company and its Subsidiaries during the most recently completed four fiscal quarters to the extent that such interest expense of Persons acquired is confirmed by audited financial or other credible information relied upon by the Company in good faith (which other information need not be audited or auditable), minus (ii) the interest expense for such period of Persons disposed of by the Company and its Subsidiaries during the most recently completed four fiscal quarters. Computations of Consolidated Interest Expense on a pro forma basis for Debt having a variable interest rate shall be calculated at the rate in effect on the date of any determination.

     “Consolidated Net Income” for any period means the net income (or loss) of the Company and its Subsidiaries for such period, as determined in accordance with GAAP, after eliminating offsetting debits and credits between the Company and its Subsidiaries and all other items required to be eliminated in the course of the preparation of consolidated financial

B-2

statements of the Company and its Subsidiaries in accordance with GAAP, and after eliminating earnings or losses attributable to outstanding Minority Interests, and excluding in any event:

     (a) net earnings of any business entity (other than a Subsidiary) in which the Company or any Subsidiary has an ownership interest unless such net earnings shall have actually been received by the Company or such Subsidiary in the form of cash distributions; and

     (b) any other non-recurring, extraordinary gain or loss during such period.

     “Consolidated Net Worth” means, as of the date of any determination, the sum of (a) stockholders’ equity plus (b) Minority Interest accounts, each as would be shown on a consolidated balance sheet of the Company and its Subsidiaries prepared in accordance with GAAP as of such date.

     “Consolidated Priority Debt” means all Priority Debt of the Company and its Subsidiaries determined on a consolidated basis eliminating inter-company items.

     “Consolidated Tangible Assets” means the book value of all assets of the Company and its Subsidiaries minus goodwill and other general intangibles, as determined on a consolidated basis and in accordance with GAAP.

     “Consolidated Total Assets” means as of the date of any determination thereof, total assets of the Company and its Subsidiaries determined on a consolidated basis in accordance with GAAP.

     “Consolidated Total Debt” means all Debt of the Company and its Subsidiaries, determined on a consolidated basis eliminating inter-company items.

     “Credit Agreement” means that certain Credit Agreement dated as of May 17, 2001 among the Company, as borrower, and the KeyBank National Association, as Administrative Agent, Wachovia Bank, N.A., as Syndication Agent, Credit Lyonnais Chicago Branch, as Co-Documentation Agent, The Bank of Nova Scotia, as Co-Documentation Agent and the other financial institutions named therein, as amended, supplemented, modified, refinanced or replaced from time to time.

     “Debt” with respect to any Person means, at any time, without duplication,

     (a) its liabilities for borrowed money and its redemption obligations in respect of mandatorily redeemable Preferred Stock;

     (b) its liabilities for the deferred purchase price of property acquired by such Person (excluding accounts payable arising in the ordinary course of business but including all liabilities created or arising under any conditional sale or other title retention agreement with respect to any such property);

B-3

     (c) all liabilities appearing on its balance sheet in accordance with GAAP in respect of Capital Leases;

     (d) all liabilities for borrowed money secured by any Lien with respect to any property owned by such Person (whether or not it has assumed or otherwise become liable for such liabilities);

     (e) all its liabilities in respect of letters of credit or instruments serving a similar function issued or accepted for its account by banks and other financial institutions (whether or not representing obligations for borrowed money);

     (f) all obligations of such Person arising in connection with transactions and other arrangements which are treated by such Person for any purpose (including, without limitation, tax, state real estate, commercial law or bankruptcy) as financing arrangements or loans, or which give rise to the creation of indebtedness of such Person;

     (g) Swaps of such Person;

     (h) Securitization Recourse Obligations; and

     (i) any Guaranty of such Person with respect to liabilities of a type described in any of clauses (a) through (h) hereof.

Debt of any Person shall include all obligations of such Person of the character described in clauses (a) through (i) to the extent such Person remains legally liable in respect thereof notwithstanding that any such obligation is deemed to be extinguished under GAAP.

     “Debt Prepayment Application” means, with respect to any sale, lease or other disposition of property or assets, the application by the Company or its Subsidiaries of cash in an amount equal to the Net Proceeds with respect to such sale, lease or other disposition to pay Senior Funded Debt of the Company (other than Senior Funded Debt owing to the Company, any of its Subsidiaries or any Affiliate and Senior Funded Debt in respect of any revolving credit or similar credit facility providing the Company or any of its Subsidiaries with the right to obtain loans or other extensions of credit from time to time, except to the extent that in connection with such payment of Senior Funded Debt the availability of credit under such credit facility is permanently reduced by an amount not less than the amount of such proceeds applied to the payment of such Senior Funded Debt), provided that in the course of making such application the Company shall offer to prepay at par each outstanding Note in accordance with Section 8.2 (except that such prepayment shall be at par) in a principal amount which equals the Ratable Portion for such Note. If any holder of a Note fails to accept such offer of prepayment, then, for purposes of the preceding sentence only, the Company nevertheless will be deemed to have paid Senior Funded Debt in an amount equal to the Ratable Portion for such Note. “Ratable Portion” for any Note means an amount equal to the product of (x) the Net Proceeds being so applied to the payment of Senior Funded Debt multiplied by (y) a fraction the numerator of which is the outstanding principal amount of such Note and the denominator of which is the aggregate principal amount of Senior Funded Debt of the Company. If all holders of the Notes decline the

B-4

prepayment offer made by the Company, then the Company shall not be required to permanently reduce any revolving credit or similar credit facility to which Net Proceeds were concurrently offered and applied in connection with such sale, lease or other disposition of property or assets.

     “Default” means an event or condition the occurrence or existence of which would, with the lapse of time or the giving of notice or both, become an Event of Default.

     “Default Rate” means that rate of interest that is the greater of (i) 2% per annum above the rate of interest stated in clause (a) of the first paragraph of the relevant Note or (ii) 2% over the rate of interest publicly announced by CitiBank N.A., New York, New York, or any successor thereto, as its “base” or “prime” rate.

     “Distribution” means, in respect of any corporation, association or other business entity:

     (a) dividends or other distributions or payments on capital stock or other equity interest of such corporation, partnership, association or other business entity (except distributions in such stock, other equity interest or other securities); and

     (b) the redemption or acquisition of such stock or other equity interests or of warrants, rights or other options to purchase such stock or other equity interests (except when solely in exchange for such stock or other equity interests) unless made, contemporaneously, from the net proceeds of a sale of such stock or other equity interests.

     “Environmental Laws” means any and all Federal, state, local, and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or governmental restrictions relating to pollution and the protection of the environment or the release of any materials into the environment, including but not limited to those related to hazardous substances or wastes, air emissions and discharges to waste or public systems.

     “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the rules and regulations promulgated thereunder from time to time in effect.

     “ERISA Affiliate” means any trade or business (whether or not incorporated) that is treated as a single employer together with the Company under Section 414 of the Code.

     “Event of Default” is defined in Section 11.

     “Exchange Act” means the Securities Exchange Act of 1934, as amended.

     “Fair Market Value” means, at any time and with respect to any property, the sale value of such property that would be realized in an arm’s-length sale at such time between an informed and willing buyer and an informed and willing seller (neither being under a compulsion to buy or sell).

B-5

     “GAAP” means generally accepted accounting principles as in effect from time to time in the United States of America.

     “Governmental Authority” means

     (a) the government of

     (i) the United States of America or any State or other political subdivision thereof, or

     (ii) any jurisdiction in which the Company or any Subsidiary conducts all or any part of its business, or which asserts jurisdiction over any properties of the Company or any Subsidiary, or

     (b) any entity exercising executive, legislative, judicial, regulatory or administrative functions of, or pertaining to, any such government.

     “Guaranty” means, with respect to any Person, any obligation (except the endorsement in the ordinary course of business of negotiable instruments for deposit or collection) of such Person guaranteeing or in effect guaranteeing any Debt, dividend or other obligation of any other Person in any manner, whether directly or indirectly, including (without limitation) obligations incurred through an agreement, contingent or otherwise, by such Person:

     (a) to purchase such Debt or obligation or any property constituting security therefor;

     (b) to advance or supply funds (i) for the purchase or payment of such Debt or obligation, or (ii) to maintain any working capital or other balance sheet condition or any income statement condition of any other Person or otherwise to advance or make available funds for the purchase or payment of such Debt or obligation;

     (c) to lease properties or to purchase properties or services primarily for the purpose of assuring the owner of such Debt or obligation of the ability of any other Person to make payment of the Debt or obligation; or

     (d) otherwise to assure the owner of such Debt or obligation against loss in respect thereof.

In any computation of the Debt or other liabilities of the obligor under any Guaranty, the Debt or other obligations that are the subject of such Guaranty shall be assumed to be direct obligations of such obligor.

     “Hazardous Material” means any and all pollutants, toxic or hazardous wastes or any other substances, including all substances listed in or regulated in any Environmental law that might pose a hazard to health or safety, the removal of which may be required or the generation, manufacture, refining, production, processing, treatment, storage, handling, transportation,

B-6

transfer, use, disposal, release, discharge, spillage, seepage, or filtration of which is or shall be restricted, regulated, prohibited or penalized by any applicable law (including, without limitation, asbestos, urea formaldehyde foam insulation and polychlorinated biphenyls).

     “holder” means, with respect to any Note, the Person in whose name such Note is registered in the register maintained by the Company pursuant to Section 13.1.

     “Institutional Investor” means (a) any original purchaser of a Note, (b) any holder of a Note holding more than 5% of the aggregate principal amount of the Notes then outstanding, and (c) any bank, trust company, savings and loan association or other financial institution, any pension plan, any investment company, any insurance company, any broker or dealer, or any other similar financial institution or entity, regardless of legal form.

     “Investments” means all investments, in cash or by delivery of property, made directly or indirectly in any property or assets or in any Person, whether by acquisition of shares of capital stock, Debt or other obligations or Securities or by loan, advance, capital contribution or otherwise; provided that “Investments” shall not mean or include routine investments in property to be used or consumed in the ordinary course of business.

     “Lien” means any interest in property securing an obligation owed to, or a claim by, a Person other than the owner of the property, whether such interest is based on the common law, statute or contract, and including but not limited to the security interest lien arising from a mortgage, encumbrance, pledge, conditional sale or trust receipt or a lease, consignment or bailment for security purposes. The term “Lien” shall include reservations, exceptions, encroachments, easements, rights-of-way, covenants, conditions, restrictions, leases and other title exceptions and encumbrances (including, with respect to stock, stockholder agreements, voting trust agreements, buy-back agreements and all similar arrangements) affecting property. For the purposes of this Agreement, the Company or a Subsidiary shall be deemed to be the owner of any property which it has acquired or holds subject to a conditional sale agreement, Capital Lease or other arrangement pursuant to which title to the property has been retained by or vested in some other Person for security purposes and such retention or vesting shall constitute a Lien.

     “Make-Whole Amount” is defined in Section 8.7.

     “Material” means material in relation to the business, operations, affairs, financial condition, assets, properties, or prospects of the Company and its Subsidiaries taken as a whole.

     “Material Adverse Effect” means a material adverse effect on (a) the business, operations, affairs, financial condition, assets, properties or prospects of the Company and its Subsidiaries taken as a whole, or (b) the ability of the Company to perform its obligations under this Agreement and the Notes, or (c) the validity or enforceability of this Agreement or the Notes.

     “Memorandum” is defined in Section 5.3.

B-7

     “Minority Interests” means any shares of stock of any class of a Subsidiary (other than directors’ qualifying shares as required by law) that are not owned by the Company and/or one or more of its Subsidiaries. Minority Interests shall be valued by valuing Minority Interests constituting preferred stock at the voluntary or involuntary liquidating value of such preferred stock, whichever is greater, and by valuing Minority Interests constituting common stock at the book value of capital and surplus applicable thereto adjusted, if necessary, to reflect any changes from the book value of such common stock required by the foregoing method of valuing Minority Interests in preferred stock.

     “Multiemployer Plan” means any Plan that is a “multiemployer plan” (as such term is defined in Section 4001(a)(3) of ERISA).

     “Net Proceeds” means, with respect to any sale, lease or other disposition of property or assets by any Person, an amount equal to the difference of:

     (a) the aggregate amount of the consideration (valued at the Fair Market Value of such consideration at the time of the consummation of such sale, lease or other disposition) received by such Person in respect of such sale, lease or other disposition, minus

     (b) (i) the amount necessary for payment of any Debt of such Person secured by the property and assets involved in such sale, lease or other disposition that is required to be repaid prior to or at the closing of such sale, lease or other disposition and (ii) all ordinary and reasonable out-of-pocket costs and expenses (including any taxes payable as a direct result of such sale, lease or other disposition) actually incurred by such Person in connection with such sale, lease or other disposition.

     “Non-U.S. Pension Plan” means any plan, fund, or other similar program established or maintained outside the United States of America by the Company or any one or more of its Subsidiaries primarily for the benefit of employees of the Company or such Subsidiary residing outside the United States of America, which plan, fund or other similar program provides for retirement income for such employees or a deferral of income for such employees in contemplation of retirement and is not subject to ERISA or the Code.

     “Noteholder Notice” is defined in Section 8.3.

     “Notes” is defined in Section 1.

     “Officer’s Certificate” means a certificate of a Senior Financial Officer or of any other officer of the Company whose responsibilities extend to the subject matter of such certificate.

     “Other Agreements” is defined in Section 2.

     “Other Purchasers” is defined in Section 2.

B-8

     “PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA or any successor thereto.

     “Person” means an individual, partnership, corporation, limited liability company, association, trust, unincorporated organization, or a government or agency or political subdivision thereof.

     “Plan” means an “employee benefit plan” (as defined in Section 3(3) of ERISA) that is or, within the preceding five years, has been established or maintained, or to which contributions are or, within the preceding five years, have been made or required to be made, by the Company or any ERISA Affiliate or with respect to which the Company or any ERISA Affiliate may have any liability.

     “Preferred Stock” means any class of capital stock of a corporation that is preferred over any other class of capital stock of such corporation as to the payment of dividends or the payment of any amount upon liquidation or dissolution of such corporation.

     “Priority Debt” means (a) all Debt of the Company secured by a Lien created or incurred pursuant to Section 10.5(g) or Section 10.5(j) and (b) all Debt and mandatorily redeemable Preferred Stock of the Subsidiaries except for Debt and mandatorily redeemable Preferred Stock of Subsidiaries owed to the Company or Wholly-owned Subsidiaries.

     “property” or “properties” means, unless otherwise specifically limited, real or personal property of any kind, tangible or intangible, choate or inchoate.

     “Property Reinvestment Application” means, with respect to any sale, lease or other disposition of property or assets, the satisfaction of each of the following conditions:

     (a) an amount equal to the Net Proceeds with respect to such sale, lease or other disposition shall have been applied to the acquisition by the Company or any of its Subsidiaries, of fixed or capital assets, or stock of an entity which becomes a Subsidiary, which assets and stock are unencumbered by any Lien created in connection with or in contemplation of such acquisition; provided (i) any such assets are property classifiable under GAAP as non-current, (ii) any such assets or Subsidiary are to be used in the principal business of the Company and its Subsidiaries, and (iii) immediately after the acquisition, the Company is in compliance with Section 10.2 (on a pro forma basis) and Section 10.5; and

     (b) the Company shall have delivered a certificate of a Responsible Officer of the Company to each holder of a Note referring to Section 10.7(b) and identifying the property and assets that were the subject of such sale, lease or other disposition, and the nature, terms, amount and application of the Net Proceeds from the sale, lease or other disposition.

     “QPAM Exemption” means Prohibited Transaction Class Exemption 84-14 issued by the United States Department of Labor.

B-9

     “Rentals” means and include as of the date of any determination thereof all fixed payments (including as such all payments which the lessee is obligated to make to the lessor on termination of the lease or surrender of the property) payable by the Company or a Subsidiary, as lessee or sublessee under a lease of real or personal property, but shall be exclusive of any amounts required to be paid by the Company or a Subsidiary (whether or not designated as rents or additional rents) on account of maintenance, repairs, insurance, taxes and similar charges. Fixed rents under any so-called “percentage leases” shall be computed solely on the basis of the minimum rents, if any, required to be paid by the lessee regardless of sales volume or gross revenues.

     “Required Holders” means, at any time, the holders of at least 66-2/3% in principal amount of the Notes at the time outstanding (exclusive of Notes then owned by the Company or any of its Affiliates).

     “Responsible Officer” means any Senior Financial Officer and any other officer of the Company with responsibility for the administration of the relevant portion of this Agreement.

     “Restricted Investments” means all Investments, other than:

     (a) Investments by the Company and its Subsidiaries in and to Subsidiaries, including any Investment in a corporation which, after giving effect to such Investment, will become a Subsidiary;

     (b) Investments representing loans or advances in the usual and ordinary course of business to officers, directors and employees for expenses (including moving expenses related to a transfer) incidental to carrying on the business of the Company or any Subsidiary;

     (c) Investments in property or assets to be used in the ordinary course of the business of the Company and its Subsidiaries as described in Section 9.6 of this Agreement;

     (d) Investments representing travel advances in the usual and ordinary course of business to officers and employees of the Company and its Subsidiaries incidental to carrying-on the business of the Company or any Subsidiaries;

     (e) Investments in Securities resulting from the settlement of obligations of other Persons created in the usual and ordinary course of business and owing to the Company or a Subsidiary;

     (f) Investments of the Company existing as of the date of the Closing and described on Schedule 10.6 hereto;

     (g) receivables arising from the sale of goods and services in the ordinary course of business of the Company and its Subsidiaries;

B-10

     (h) Investments in commercial paper of corporations organized under the laws of the United States or any state thereof maturing in 270 days or less from the date of issuance which, at the time of acquisition by the Company or any Subsidiary, is accorded a rating of “A-1” or better by Standard & Poor’s Ratings Group or “P-1” by Moody’s Investors Service, Inc.;

     (i) Investments in direct obligations of the United States of America or any agency or instrumentality of the United States of America, the payment or guarantee of which constitutes a full faith and credit obligation of the United States of America, in either case, maturing within twelve months from the date of acquisition thereof;

     (j) Investments in certificates of deposit and time deposits maturing within one year from the date of issuance thereof, either issued by a bank or trust company organized under the laws of the United States or any State thereof having capital, surplus and undivided profits aggregating at least $200,000,000; provided that at the time of acquisition thereof by the Company or a Subsidiary (1) the senior unsecured long-term debt of such bank or trust company or of the holding company of such bank or trust company is rated “A-” or better by Standard & Poor’s Ratings Group or “A3” or better by Moody’s Investors Service, Inc. or (2) such certificate of deposit or time deposit is issued by any bank or trust company organized under the laws of the United States or any state thereof to the extent that such Investments are fully insured by the Federal Depository Insurance Corporation;

     (k) Investments in repurchase agreements with respect to any Security described in clause (i) of this definition entered into with a depository institution or trust company acting as principal described in clause (j) of this definition if such repurchase agreements are by their terms to be performed by the repurchase obligor and such repurchase agreements are deposited with a bank or trust company of the type described in clause (j) of this definition;

     (l) Investments in any money market fund which is classified as a current asset in accordance with GAAP, the aggregate asset value of which “marked to market” is at least $100,000,000,000 and which is managed by a fund manager of recognized national standing, and which invests substantially all of its assets in obligations described in clauses (h) through (j) above; and

     (m) Investments of the Company not described in the foregoing clauses (a) through (l); provided that the aggregate amount of all such Investments shall not at any time exceed 15% of Consolidated Net Worth.

     “Restricted Payment” means

     (a) any Distribution in respect of the Company or any Subsidiary thereof (other than on account of capital stock, partnership, equity or other similar interests of a Subsidiary owned legally and beneficially by the Company or another Subsidiary thereof),

B-11

including, without limitation, any Distribution resulting in the acquisition by the Company of Securities which would constitute treasury stock, and

     (b) any payment, repayment, redemption, retirement, repurchase or other acquisition, direct or indirect, by the Company or any Subsidiary of, on account of, or in respect of, the principal of any Subordinated Debt (or any installment thereof) prior to the regularly scheduled maturity date thereof (as in effect on the date such Subordinated Debt was originally incurred).

     “Securities Act” means the Securities Act of 1933, as amended from time to time.

     “Securitization Recourse Obligations” means, with respect to any Person, obligations of such Person, undertaken in connection with a sale of receivables in a securitization transaction, to repurchase, provide substitute receivables or other property or indemnify the purchaser of such receivables in the event of defaults on such receivables, provided, however, that Securitization Recourse Obligations shall not include obligations customarily provided for in asset securitization transactions and arising from breaches of representations or warranties. For the purposes of all computations made under this Agreement, Securitization Recourse Obligations in respect of any receivables at any time shall be deemed to be equal to the maximum recourse portion of the then-outstanding amount of such receivables.

     “Security” shall have the same meaning as in Section 2(1) of the Securities Act.

     “Senior Financial Officer” means the chief financial officer, principal accounting officer, treasurer or comptroller of the Company.

     “Senior Funded Debt” means all Debt of the Company for borrowed money having a maturity of more than one year from the date of origin and which is not expressed to be subordinate to or junior in rank to any other Debt of the Company.

     “Significant Subsidiary” means at any time any Subsidiary of the Company that would at such time constitute a “significant subsidiary” (as such term is defined in Regulation S-X of the Securities and Exchange Commission as in effect on the date of the Closing) and identified as a Significant Subsidiary in Schedule 5.4 hereof, together with each other Subsidiary identified in any officer’s certificate delivered pursuant to Section 7.2(b) or designated as a Significant Subsidiary pursuant to Section 10.10.

     “Special Purpose Subsidiary” means any Subsidiary created as a special purpose entity in connection with one or more securitization transactions entered into in connection with a sale of receivables permitted under Section 10.7(b)(ii), provided, however, that such Subsidiary shall not own any property or conduct any activities other than those properties and activities which are reasonably required to be owned and conducted in connection with the involvement of such Subsidiary in such securitization transactions.

     “Subordinated Debt” means any Debt that is in any manner subordinated in right of payment or security in any respect to Debt evidenced by the Notes.

B-12

     “Subsidiary” means, as to any Person, any corporation, association or other business entity in which such Person or one or more of its Subsidiaries or such Person and one or more of its Subsidiaries owns sufficient equity or voting interests to enable it or them (as a group) ordinarily, in the absence of contingencies, to elect a majority of the directors (or Persons performing similar functions) of such entity, and any partnership or joint venture if more than a 50% interest in the profits or capital thereof is owned by such Person or one or more of its Subsidiaries or such Person and one or more of its Subsidiaries (unless such partnership can and does ordinarily take major business actions without the prior approval of such Person or one or more of its Subsidiaries). Unless the context otherwise clearly requires, any reference to a “Subsidiary” is a reference to a Subsidiary of the Company.

     “Subsidiary Guaranty” is defined in Section 9.8.

     “Subsidiary Stock” means, with respect to any Person, the stock or other equity interests (or any options or warrants to purchase stock or other equity interests or other Securities exchangeable for or convertible into stock or other equity interests) of any subsidiary of such Person.

     “Swaps” means, with respect to any Person, payment obligations with respect to interest rate swaps, currency swaps and similar obligations obligating such Person to make payments, whether periodically or upon the happening of a contingency. For the purposes of this Agreement, the amount of the obligation under any Swap shall be the amount determined in respect thereof as of the end of the then most recently ended fiscal quarter of such Person, based on the assumption that such Swap had terminated at the end of such fiscal quarter, and in making such determination, if any agreement relating to such Swap provides for the netting of amounts payable by and to such Person thereunder or if any such agreement provides for the simultaneous payment of amounts by and to such Person, then in each such case, the amount of such obligation shall be the net amount so determined.

     “Voting Equity Capital” means Securities or partnership interests of any class or classes, the holders of which are ordinarily, in the absence of contingencies, entitled to elect a majority of the corporate directors (or Persons performing similar functions).

     “Wholly-owned Subsidiary” means, at any time, any Subsidiary one hundred percent (100%) of all of the equity interests (except directors’ qualifying shares) and voting interests of which are owned by any one or more of the Company and the Company’s other Wholly-owned Subsidiaries at such time.

B-13

[Form of Series A Note]

Nordson Corporation

6.79% Senior Note, Series A, due May 15, 2006

No. [                              ]	[Date]
$[                                   ]	PPN 655663 A@1

     For Value Received, the undersigned, Nordson Corporation (herein called the “Company”), a corporation organized and existing under the laws of the State of Ohio, hereby promises to pay to [                                        ], or registered assigns, the principal sum of [                                        ] Dollars on May 15, 2006, with interest (computed on the basis of a 360-day year of twelve 30-day months) (a) on the unpaid balance thereof at the rate of 6.79% per annum from the date hereof, payable semiannually, on the fifteenth day of May and November in each year, commencing with the May 15 or November 15 next succeeding the date hereof, until the principal hereof shall have become due and payable, and (b) to the extent permitted by law on any overdue payment (including any overdue prepayment) of principal, any overdue payment of interest and any overdue payment of any Make-Whole Amount (as defined in the Note Purchase Agreements referred to below), payable semiannually as aforesaid (or, at the option of the registered holder hereof, on demand), at a rate per annum from time to time equal to the greater of (i) 8.79% or (ii) 2% over the rate of interest publicly announced by CitiBank N.A., from time to time in New York, New York as its “base” or “prime” rate.

     Payments of principal of, interest on and any Make-Whole Amount with respect to this Note are to be made in lawful money of the United States of America at Westlake, Ohio or at such other place as the Company shall have designated by written notice to the holder of this Note as provided in the Note Purchase Agreements referred to below.

     This Note is one of the 6.79% Senior Notes, Series A, due May 15, 2006 (the “Series A Notes”) of the Company in the aggregate principal amount of $40,000,000 which, together with the Company’s $20,000,000 aggregate principal amount of 7.11% Senior Notes, Series B, due May 15, 2008 (the “Series B Notes”), the Company’s $30,000,000 aggregate principal amount of 7.11% Senior Notes, Series C, due May 15, 2011 (the “Series C Notes”), and the Company’s $10,000,000 aggregate principal amount of 7.51% Senior Notes, Series D, due May 15, 2011 (the “Series D Notes” and, together with the Series A Notes, the Series B Notes and the Series C Notes, collectively, the “Notes”), was issued pursuant to separate Note Purchase Agreements, dated as of May 15, 2001 (as from time to time amended, the “Note Purchase Agreements”), between the Company and the respective Purchasers named therein and is entitled to the benefits thereof. Each holder of this Note will be deemed, by its acceptance hereof, (i) to have agreed to the confidentiality provisions set forth in Section 20 of the Note Purchase Agreements and (ii) to have made the representation set forth in Section 6.2 of the Note Purchase Agreements.

     This Note is a registered Note and, as provided in the Note Purchase Agreements, upon surrender of this Note for registration of transfer, duly endorsed, or accompanied by a written

Exhibit 1-A
(to Note Purchase Agreement)

instrument of transfer duly executed, by the registered holder hereof or such holder’s attorney duly authorized in writing, a new Note for a like principal amount will be issued to, and registered in the name of, the transferee. Prior to due presentment for registration of transfer, the Company may treat the person in whose name this Note is registered as the owner hereof for the purpose of receiving payment and for all other purposes, and the Company will not be affected by any notice to the contrary.

     This Note is subject to prepayment, in whole or from time to time in part, at the times and on the terms specified in the Note Purchase Agreements, but not otherwise.

     If an Event of Default, as defined in the Note Purchase Agreements, occurs and is continuing, the principal of this Note may be declared or otherwise become due and payable in the manner, at the price (including any applicable Make-Whole Amount) and with the effect provided in the Note Purchase Agreements.

     This Note shall be construed and enforced in accordance with, and the rights and parties shall be governed by, the law of the State of New York, excluding choice-of-law principles of the law of such State which would require application of the laws of the jurisdiction other than such State.

Nordson Corporation


By
      Name:
      Title:
 

E-1A-2

[Form of Series B Note]

Nordson Corporation

7.11% Senior Note, Series B, due May 15, 2008

No. [                              ]	[Date]
$[                                   ]	PPN 655663 A#9

     For Value Received, the undersigned, Nordson Corporation (herein called the “Company”), a corporation organized and existing under the laws of the State of Ohio, hereby promises to pay to [                                        ], or registered assigns, the principal sum of [                                        ] Dollars on May 15, 2008, with interest (computed on the basis of a 360-day year of twelve 30-day months) (a) on the unpaid balance thereof at the rate of 7.11% per annum from the date hereof, payable semiannually, on the fifteenth day of May and November in each year, commencing with the May 15 or November 15 next succeeding the date hereof, until the principal hereof shall have become due and payable, and (b) to the extent permitted by law on any overdue payment (including any overdue prepayment) of principal, any overdue payment of interest and any overdue payment of any Make-Whole Amount (as defined in the Note Purchase Agreements referred to below), payable semiannually as aforesaid (or, at the option of the registered holder hereof, on demand), at a rate per annum from time to time equal to the greater of (i) 9.11% or (ii) 2% over the rate of interest publicly announced by CitiBank N.A., from time to time in New York, New York as its “base” or “prime” rate.

     Payments of principal of, interest on and any Make-Whole Amount with respect to this Note are to be made in lawful money of the United States of America at Westlake, Ohio or at such other place as the Company shall have designated by written notice to the holder of this Note as provided in the Note Purchase Agreements referred to below.

     This Note is one of the 7.11% Senior Notes, Series B, due May 15, 2008 (the “Series B Notes”) of the Company in the aggregate principal amount of $20,000,000 which, together with the Company’s $40,000,000 aggregate principal amount of 6.79% Senior Notes, Series A, due May 15, 2006 (the “Series A Notes”), the Company’s $30,000,000 aggregate principal amount of 7.11% Senior Notes, Series C, due May 15, 2011 (the “Series C Notes”), and the Company’s $10,000,000 aggregate principal amount of 7.51% Senior Notes, Series D, due May 15, 2011 (the “Series D Notes” and, together with the Series A Notes, the Series B Notes and the Series C Notes, collectively, the “Notes”), was issued pursuant to separate Note Purchase Agreements, dated as of May 15, 2001 (as from time to time amended, the “Note Purchase Agreements”), between the Company and the respective Purchasers named therein and is entitled to the benefits thereof. Each holder of this Note will be deemed, by its acceptance hereof, (i) to have agreed to the confidentiality provisions set forth in Section 20 of the Note Purchase Agreements and (ii) to have made the representation set forth in Section 6.2 of the Note Purchase Agreements.

     This Note is a registered Note and, as provided in the Note Purchase Agreements, upon surrender of this Note for registration of transfer, duly endorsed, or accompanied by a written

Exhibit 1-B
(to Note Purchase Agreement)

instrument of transfer duly executed, by the registered holder hereof or such holder’s attorney duly authorized in writing, a new Note for a like principal amount will be issued to, and registered in the name of, the transferee. Prior to due presentment for registration of transfer, the Company may treat the person in whose name this Note is registered as the owner hereof for the purpose of receiving payment and for all other purposes, and the Company will not be affected by any notice to the contrary.

     This Note is subject to prepayment, in whole or from time to time in part, at the times and on the terms specified in the Note Purchase Agreements, but not otherwise.

     If an Event of Default, as defined in the Note Purchase Agreements, occurs and is continuing, the principal of this Note may be declared or otherwise become due and payable in the manner, at the price (including any applicable Make-Whole Amount) and with the effect provided in the Note Purchase Agreements.

     This Note shall be construed and enforced in accordance with, and the rights and parties shall be governed by, the law of the State of New York, excluding choice-of-law principles of the law of such State which would require application of the laws of the jurisdiction other than such State.

Nordson Corporation


By
     Name:
     Title:
 

E-1B-2

[Form of Series C Note]

Nordson Corporation

7.11% Senior Note, Series C, due May 15, 2011

No. [                              ]	[Date]
$[                                   ]	PPN 655663 B*2

     For Value Received, the undersigned, Nordson Corporation (herein called the “Company”), a corporation organized and existing under the laws of the State of Ohio, hereby promises to pay to [                                        ], or registered assigns, the principal sum of [                                        ] Dollars on May 15, 2011, with interest (computed on the basis of a 360-day year of twelve 30-day months) (a) on the unpaid balance thereof at the rate of 7.11% per annum from the date hereof, payable semiannually, on the fifteenth day of May and November in each year, commencing with the May 15 or November 15 next succeeding the date hereof, until the principal hereof shall have become due and payable, and (b) to the extent permitted by law on any overdue payment (including any overdue prepayment) of principal, any overdue payment of interest and any overdue payment of any Make-Whole Amount (as defined in the Note Purchase Agreements referred to below), payable semiannually as aforesaid (or, at the option of the registered holder hereof, on demand), at a rate per annum from time to time equal to the greater of (i) 9.11% or (ii) 2% over the rate of interest publicly announced by CitiBank N.A., from time to time in New York, New York as its “base” or “prime” rate.

     Payments of principal of, interest on and any Make-Whole Amount with respect to this Note are to be made in lawful money of the United States of America at Westlake, Ohio or at such other place as the Company shall have designated by written notice to the holder of this Note as provided in the Note Purchase Agreements referred to below.

     This Note is one of the 7.11% Senior Notes, Series C, due May 15, 2011 (the “Series C Notes”) of the Company in the aggregate principal amount of $30,000,000 which, together with the Company’s $40,000,000 aggregate principal amount of 6.79% Senior Notes, Series A, due May 15, 2006 (the “Series A Notes”), the Company’s $20,000,000 aggregate principal amount of 7.11% Senior Notes, Series B, due May 15, 2008 (the “Series B Notes”), and the Company’s $10,000,000 aggregate principal amount of 7.51% Senior Notes, Series D, due May 15, 2011 (the “Series D Notes” and, together with the Series A Notes, the Series B Notes and the Series C Notes, collectively, the “Notes”), was issued pursuant to separate Note Purchase Agreements, dated as of May 15, 2001 (as from time to time amended, the “Note Purchase Agreements”), between the Company and the respective Purchasers named therein and is entitled to the benefits thereof. Each holder of this Note will be deemed, by its acceptance hereof, (i) to have agreed to the confidentiality provisions set forth in Section 20 of the Note Purchase Agreements and (ii) to have made the representation set forth in Section 6.2 of the Note Purchase Agreements.

     This Note is a registered Note and, as provided in the Note Purchase Agreements, upon surrender of this Note for registration of transfer, duly endorsed, or accompanied by a written

Exhibit 1-C
(to Note Purchase Agreement)

instrument of transfer duly executed, by the registered holder hereof or such holder’s attorney duly authorized in writing, a new Note for a like principal amount will be issued to, and registered in the name of, the transferee. Prior to due presentment for registration of transfer, the Company may treat the person in whose name this Note is registered as the owner hereof for the purpose of receiving payment and for all other purposes, and the Company will not be affected by any notice to the contrary.

     The Company will make required prepayments of principal on the dates and in the amounts specified in the Note Purchase Agreements. This Note is also subject to optional prepayment, in whole or from time to time in part, at the times and on the terms specified in the Note Purchase Agreements, but not otherwise.

     If an Event of Default, as defined in the Note Purchase Agreements, occurs and is continuing, the principal of this Note may be declared or otherwise become due and payable in the manner, at the price (including any applicable Make-Whole Amount) and with the effect provided in the Note Purchase Agreements.

     This Note shall be construed and enforced in accordance with, and the rights and parties shall be governed by, the law of the State of New York, excluding choice-of-law principles of the law of such State which would require application of the laws of the jurisdiction other than such State.

Nordson Corporation


By
     Name:
     Title:
 

E-1C-2

[Form of Series D Note]

Nordson Corporation

7.51% Senior Note, Series D, due May 15, 2011

No. [                              ]	[Date]
$ [                                   ]	PPN 655663 B@0

     For Value Received, the undersigned, Nordson Corporation (herein called the “Company”), a corporation organized and existing under the laws of the State of Ohio, hereby promises to pay to [                                        ], or registered assigns, the principal sum of [                                        ] Dollars on May 15, 2011, with interest (computed on the basis of a 360-day year of twelve 30-day months) (a) on the unpaid balance thereof at the rate of 7.51% per annum from the date hereof, payable semiannually, on the fifteenth day of May and November in each year, commencing with the May 15 or November 15 next succeeding the date hereof, until the principal hereof shall have become due and payable, and (b) to the extent permitted by law on any overdue payment (including any overdue prepayment) of principal, any overdue payment of interest and any overdue payment of any Make-Whole Amount (as defined in the Note Purchase Agreements referred to below), payable semiannually as aforesaid (or, at the option of the registered holder hereof, on demand), at a rate per annum from time to time equal to the greater of (i) 9.51% or (ii) 2% over the rate of interest publicly announced by CitiBank N.A., from time to time in New York, New York as its “base” or “prime” rate.

     Payments of principal of, interest on and any Make-Whole Amount with respect to this Note are to be made in lawful money of the United States of America at Westlake, Ohio or at such other place as the Company shall have designated by written notice to the holder of this Note as provided in the Note Purchase Agreements referred to below.

     This Note is one of the 7.51% Senior Notes, Series D, due May 15, 2011 (the “Series D Notes”) of the Company in the aggregate principal amount of $10,000,000 which, together with the Company’s $40,000,000 aggregate principal amount of 6.79% Senior Notes, Series A, due May 15, 2006 (the “Series A Notes”), the Company’s $20,000,000 aggregate principal amount of 7.11% Senior Notes, Series B, due May 15, 2008 (the “Series B Notes”) and the Company’s $30,000,000 aggregate principal amount of 7.11% Senior Notes, Series C, due May 15, 2011 (the “Series C Notes” and, together with the Series A Notes, the Series B Notes and the Series D Notes, collectively, the “Notes”), was issued pursuant to separate Note Purchase Agreements, dated as of May 15, 2001 (as from time to time amended, the “Note Purchase Agreements”), between the Company and the respective Purchasers named therein and is entitled to the benefits thereof. Each holder of this Note will be deemed, by its acceptance hereof, (i) to have agreed to the confidentiality provisions set forth in Section 20 of the Note Purchase Agreements and (ii) to have made the representation set forth in Section 6.2 of the Note Purchase Agreements.

     This Note is a registered Note and, as provided in the Note Purchase Agreements, upon surrender of this Note for registration of transfer, duly endorsed, or accompanied by a written

Exhibit 1-D
(to Note Purchase Agreement)

instrument of transfer duly executed, by the registered holder hereof or such holder’s attorney duly authorized in writing, a new Note for a like principal amount will be issued to, and registered in the name of, the transferee. Prior to due presentment for registration of transfer, the Company may treat the person in whose name this Note is registered as the owner hereof for the purpose of receiving payment and for all other purposes, and the Company will not be affected by any notice to the contrary.

     This Note is subject to prepayment, in whole or from time to time in part, at the times and on the terms specified in the Note Purchase Agreements, but not otherwise.

     If an Event of Default, as defined in the Note Purchase Agreements, occurs and is continuing, the principal of this Note may be declared or otherwise become due and payable in the manner, at the price (including any applicable Make-Whole Amount) and with the effect provided in the Note Purchase Agreements.

     This Note shall be construed and enforced in accordance with, and the rights and parties shall be governed by, the law of the State of New York, excluding choice-of-law principles of the law of such State which would require application of the laws of the jurisdiction other than such State.

Nordson Corporation


By
     Name:
     Title:
 

E-1D-2

Form of Opinion of Counsel
to the Company

     The closing opinions of Robert Veillette, Esq. and of Thompson Hine LLP, special counsel for the Company, which are called for by Section 4.4(a) of the Agreement, shall be dated the date of the Closing and addressed to you and the Other Purchasers, shall be satisfactory in scope and form to you and the Other Purchasers and, taken together, shall be to the effect that:

     1. The Company is a corporation, duly incorporated, validly existing and in good standing under the laws of the State of Ohio, has the corporate power and the corporate authority to execute and perform the Agreement and the Other Agreements and to issue the Notes and has the full corporate power and the corporate authority to conduct the activities in which it is now engaged and is duly licensed or qualified and is in good standing as a foreign corporation in each jurisdiction in which the character of the properties owned or leased by it or the nature of the business transacted by it makes such licensing or qualification necessary, except where the failure to be licensed or qualified could not reasonably be expected to have a Material Adverse Effect.

     2. Each Significant Subsidiary is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation and is duly licensed or qualified and is in good standing in each jurisdiction in which the character of the properties owned or leased by it or the nature of the business transacted by it makes such licensing or qualification necessary, except where the failure to be licensed or qualified could not reasonably be expected to have a Material Adverse Effect. All of the issued and outstanding shares of capital stock of each such Subsidiary have been duly issued, are fully paid and non-assessable and are owned by the Company, by one or more Subsidiaries, or by the Company and one or more Subsidiaries.

     3. The Agreement and the Other Agreements have been duly authorized by all necessary corporate action on the part of the Company, have been duly executed and delivered by the Company and constitute the legal, valid and binding contracts of the Company enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent conveyance or similar laws affecting creditors’ rights generally, and general principles of equity (regardless of whether the application of such principles is considered in a proceeding in equity or at law).

     4. The Notes have been duly authorized by all necessary corporate action on the part of the Company, have been duly executed and delivered by the Company and constitute the legal, valid and binding obligations of the Company enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent conveyance or similar laws affecting creditors’ rights generally, and general principles of equity (regardless of whether the application of such principles is considered in a proceeding in equity or at law).

     5. No approval, consent or withholding of objection on the part of, or filing, registration or qualification with, any governmental body, Federal, state or local, is

Exhibit 4.4(a)
(to Note Purchase Agreement)

necessary in connection with the execution, delivery and performance of the Agreement, the Other Agreements or the Notes.

     6. The issuance and sale of the Notes and the execution, delivery and performance by the Company of the Agreement and the Other Agreements do not conflict with or result in any breach of any of the provisions of or constitute a default under or result in the creation or imposition of any Lien upon any of the property of the Company pursuant to the provisions of the Certificate of Incorporation or By-laws of the Company or any agreement or other instrument known to such counsel to which the Company is a party or by which the Company may be bound or any Federal, state or local law.

     7. The issuance, sale and delivery of the Notes under the circumstances contemplated by the Agreement and the Other Agreements does not, under existing law, require the registration of the Notes under the Securities Act of 1933, as amended, or the qualification of an indenture under the Trust Indenture Act of 1939, as amended.

     8. The issuance of the Notes and the use of the proceeds of the sale of the Notes in accordance with the provisions of and contemplated by the Agreement and the Other Agreements do not violate or conflict with Regulation T, U or X of the Board of Governors of the Federal Reserve System.

     9. The Company is not an “investment company” or a company “controlled” by an “investment company” under the Investment Company Act of 1940, as amended.

     10. There is no litigation pending or, to the best knowledge of such counsel, threatened which in such counsel’s opinion could reasonably be expected to have a materially adverse effect on the Company’s business or assets or which would impair the ability of the Company to issue and deliver the Notes or to comply with the provisions of the Agreement and the Other Agreements.

     The opinions of Robert Veillette, Esq. and of Thompson Hine LLP shall cover such other matters relating to the sale of the Notes as you and the Other Purchasers may reasonably request. With respect to matters of fact on which such opinions are based, such counsel shall be entitled to rely on appropriate certificates of public officials and officers of the Company.

     You and the Other Purchasers, together with subsequent holders of the Notes, may rely on the opinions of Robert Veillette, Esq. and of Thompson Hine LLP.

E-4.4(a)-2

Form of Opinion of Special Counsel
to the Purchasers

     The closing opinion of Chapman and Cutler, special counsel to you and the Other Purchasers, called for by Section 4.4(b) of the Agreement, shall be dated the date of the Closing and addressed to you and the Other Purchasers, shall be satisfactory in form and substance to you and the Other Purchasers and shall be to the effect that:

     1. The Company is a corporation, validly existing and in good standing under the laws of the State of State of Ohio and has the corporate power and the corporate authority to execute and deliver the Agreement and the Other Agreements and to issue the Notes.

     2. The Agreement and the Other Agreements have been duly authorized by all necessary corporate action on the part of the Company, have been duly executed and delivered by the Company and constitute the legal, valid and binding contracts of the Company enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent conveyance or similar laws affecting creditors’ rights generally, and general principles of equity (regardless of whether the application of such principles is considered in a proceeding in equity or at law).

     3. The Notes have been duly authorized by all necessary corporate action on the part of the Company, have been duly executed and delivered by the Company and constitute the legal, valid and binding obligations of the Company enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent conveyance or similar laws affecting creditors’ rights generally, and general principles of equity (regardless of whether the application of such principles is considered in a proceeding in equity or at law).

     4. The issuance, sale and delivery of the Notes under the circumstances contemplated by the Agreement and the Other Agreements does not, under existing law, require the registration of the Notes under the Securities Act of 1933, as amended, or the qualification of an indenture under the Trust Indenture Act of 1939, as amended.

     The opinion of Chapman and Cutler shall also state that the opinions of Robert Veillette, Esq. and of Thompson Hine LLP are satisfactory in scope and form to Chapman and Cutler and that, in their opinion, you and the Other Purchasers are justified in relying thereon.

     In rendering the opinion set forth in paragraph 1 above, Chapman and Cutler may rely solely upon an examination of the Articles of Incorporation certified by, and a certificate of good standing of the Company from, the Secretary of State of State of Ohio, the By-laws of the Company and the general business corporation law of the State of Ohio. The opinion of Chapman and Cutler is limited to the laws of the State of New York, the general business corporation law of the State of Ohio and the Federal laws of the United States.

     With respect to matters of fact upon which such opinion is based, Chapman and Cutler may rely on appropriate certificates of public officials and officers of the Company.

Exhibit 4.4(b)
(to Note Purchase Agreement)

EX-4.C

EX-(4)(C)

EX-10.B

Exhibit 10b

NORDSON CORPORATION

DEFERRED COMPENSATION PLAN

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TABLE OF CONTENTS

		Page
Purpose			3
ARTICLE 1	Definitions		3
ARTICLE 2	Selection, Enrollment, Eligibility		8
ARTICLE 3	Deferral Commitments/Company Matching/Crediting/Taxes		9
ARTICLE 4	Short-Term Payout; Unforeseeable Financial Emergencies; Withdrawal Election		15
ARTICLE 5	Retirement Benefit		16
ARTICLE 6	Pre-Retirement Survivor Benefit		17
ARTICLE 7	Termination Benefit		17
ARTICLE 8	Disability Waiver and Benefit		18
ARTICLE 9	Beneficiary Designation		18
ARTICLE 10	Leave of Absence		20
ARTICLE 11	Termination, Amendment or Modification		20
ARTICLE 12	Administration		21
ARTICLE 13	Other Benefits and Agreements		22
ARTICLE 14	Claims Procedures		23
ARTICLE 15	Trust		24
ARTICLE 16	Miscellaneous		24

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DEFERRED COMPENSATION PLAN

Effective November 3, 2000

Purpose

     The purpose of this Plan is to provide specified benefits to a select group of management and highly compensated Employees who contribute materially to the continued growth, development and future business success of Nordson Corporation, and its subsidiaries, if any, that sponsor this Plan. This Plan shall be unfunded for tax purposes and for purposes of Title I of ERISA.

ARTICLE 1
Definitions

     For purposes of this Plan, unless otherwise clearly apparent from the context, the following phrases or terms shall have the following indicated meanings:

1.1	“Account Balance” shall mean, with respect to a Participant, a credit on the records of the Company equal to the sum of (i) the Deferral Account balance, (ii) the vested Company Contribution Account balance, (iii) the Restricted Stock Account balance, and (iv) the Rollover Account balance. The Account Balance, and each other specified account balance, shall be a bookkeeping entry only and shall be utilized solely as a device for the measurement and determination of the amounts to be paid to a Participant, or his or her designated Beneficiary, pursuant to this Plan.
1.2	“Annual Company Contribution Amount” shall mean, for any one Plan Year, the amount determined in accordance with Section 3.5.
1.3	“Annual Installment Method” shall be an annual installment payment over the number of years selected by the Participant in accordance with this Plan, calculated as follows: The Account Balance of the Participant shall be calculated as of the close of business on the last business day of the year. The annual installment shall be calculated by multiplying this balance by a fraction, the numerator of which is one, and the denominator of which is the remaining number of annual payments due the Participant. By way of example, if the Participant elects a 10 year Annual Installment Method, the first payment shall be 1/10 of the Account Balance, calculated as described in this definition. The following year, the payment shall be 1/9 of the Account Balance, calculated as described in this definition. Each annual installment shall be paid on or as soon as practicable after the last business day of the applicable year.
1.4	“Base Salary” shall mean the annual cash compensation relating to services performed during any calendar year, whether or not paid in such calendar year or included on the Federal Income Tax Form W-2 for such calendar year, excluding bonuses, commissions, overtime, fringe benefits, stock options, relocation expenses, incentive payments, non-monetary awards, fees, automobile and other allowances paid to a Participant for

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	employment services rendered (whether or not such allowances are included in the Employee’s gross income). Base Salary shall be calculated before reduction for compensation voluntarily deferred or contributed by the Participant pursuant to all qualified or non-qualified plans of any Employer and shall be calculated to include amounts not otherwise included in the Participant’s gross income under Code Sections 125, 402(e)(3), 402(h), or 403(b) pursuant to plans established by any Employer; provided, however, that all such amounts will be included in compensation only to the extent that, had there been no such plan, the amount would have been payable in cash to the Employee.
1.5	“Beneficiary” shall mean one or more persons, trusts, estates or other entities, designated in accordance with Article 9, that are entitled to receive benefits under this Plan upon the death of a Participant.
1.6	“Beneficiary Designation Form” shall mean the form established from time to time by the Committee that a Participant completes, signs and returns to the Committee to designate one or more Beneficiaries.
1.7	“Board” shall mean the board of directors of the Company.
1.8	“Bonus” shall mean any compensation relating to services performed during any calendar year(s), whether or not paid in a calendar year or included on the Federal Income Tax Form W-2 for a calendar year, payable to a Participant as an Employee under any Employer’s bonus or cash compensation incentive plans, excluding stock options and restricted stock.
1.9	“Change in Control” shall mean an event described below occurring at any time after the date of the adoption of this Plan:

     (i) any person (other than the Company, any of its subsidiaries, any employee benefit plan or employee stock ownership plan of the Company, or any Person organized, appointed, or established by the Company for or pursuant to the terms of any such plan), alone or together with any of its Affiliates or Associates, becomes the Beneficial Owner of 20% or more of the Common Shares then outstanding, or any such Person commences or publicly announces an intent to commence a tender offer or exchange offer the consummation of which would result in the Person becoming the Beneficial Owner of 20% or more of the Common Shares then outstanding (provided, however, that, for purposes of determining whether Eric T. Nord or Evan W. Nord, together with each of their Affiliates or Associates, is the Beneficial Owner of 20% or more of the Common Shares then outstanding, the Common Shares then held by the Walter G. Nord trust, by the Nord Family Foundation (or any successor to the Nord Family Foundation), and by the Eric and Jane Nord Foundation shall be excluded; for purposes of determining whether the Walter G. Nord Trust, the Nord Family Foundation (or any successor), or the Eric and Jane Nord Foundation, together with each of their Affiliates and Associates, is the Beneficial Owner of 20% or more of the Common Shares then outstanding, the Common Shares then held by Eric T. Nord and by Evan W. Nord shall be excluded; for purposes of determining whether the Nord Family Foundation (or any successor), together with its Affiliates and Associates,

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is the Beneficial Owner of 20% or more of the Common Shares then outstanding, the Common Shares then held by the Eric and Jane Nord Foundation will be excluded; and, for purposes of determining whether the Eric and Jane Nord Foundation, together with its Affiliates and Associates, is the Beneficial Owner of 20% or more of the Common Shares then outstanding, the Common Shares then held by the Nord Family Foundation (or any successor) will be excluded. For purposes of this Section 1.11, the terms “Affiliates,” “Associates,” “Beneficial Owner,” and “Person” will have the meanings given to them in the Restated Rights Agreement, dated as of November 7, 1997, between the Company and National City Bank, as Rights Agent, as amended from time to time.

     (ii) At any time during a period of 24 consecutive months, individuals who were directors of the Company at the beginning of the period no longer constitute a majority of the members of the Board, unless the election, or the nomination for election by the Company’s shareholders, of each director who was not a director at the beginning of the period is approved by at least a majority of the directors who were members of the Board at the time of the election or nomination and were directors at the beginning of the period.

     (iii) A record date is established for determining shareholders entitled to vote upon (A) a merge or consolidation of the Company with another corporation in which the Company is not the surviving or continuing corporation or in which all or part of the outstanding Common Shares are to be converted into or exchanged for cash, securities, or other property, (B) a sale or other disposition of all or substantially all of the assets of the Company, or (C) the dissolution of the Company.

     (iv) Any person who proposes to make a “control share acquisition” of the Company, within the meaning of the applicable Section of the Ohio General Corporation Law, submits or is required to submit an acquiring person statement to the Company.

1.10	“Claimant” shall have the meaning set forth in Section 14.1.
1.11	“Code” shall mean the Internal Revenue Code of 1986, as it may be amended from time to time.
1.12	“Committee” shall mean the Compensation Committee of the Board of Directors of the Company.
1.13	“Company” shall mean Nordson Corporation, an Ohio corporation, and any successor to all or substantially all of the Company’s assets or business.
1.14	“Company Contribution Account” shall mean (i) the sum of the Participant’s Annual Company Contribution Amounts, plus (ii) amounts credited in accordance with all the applicable crediting provisions of this Plan that relate to the Participant’s Company Contribution Account, less (iii) all distributions made to the Participant or his or her

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	Beneficiary pursuant to this Plan that relate to the Participant’s Company Contribution Account.
1.15	“Deduction Limitation” shall mean the following described limitation on a benefit that may otherwise be distributable pursuant to the provisions of this Plan. Except as otherwise provided, this limitation shall be applied to all distributions that are “subject to the Deduction Limitation” under this Plan. If an Employer determines in good faith prior to a Change in Control that there is a reasonable likelihood that any compensation paid to a Participant for a taxable year of the Employer would not be deductible by the Employer solely by reason of the limitation under Code Section 162(m), then to the extent deemed necessary by the Employer to ensure that the entire amount of any distribution to the Participant pursuant to this Plan prior to the Change in Control is deductible, the Employer may defer all or any portion of a distribution under this Plan. Any amounts deferred pursuant to this limitation shall continue to be credited/debited with additional amounts in accordance with Section 3.10 below, even if such amount is being paid out in installments. The amounts so deferred and amounts credited thereon shall be distributed to the Participant or his or her Beneficiary (in the event of the Participant’s death) at the earliest possible date, as determined by the Employer in good faith, on which the deductibility of compensation paid or payable to the Participant for the taxable year of the Employer during which the distribution is made will not be limited by Section 162(m), or if earlier, the effective date of a Change in Control. Notwithstanding anything to the contrary in this Plan, the Deduction Limitation shall not apply to any distributions made after a Change in Control.
1.16	“Deferral Account” shall mean (i) the sum of all of a Participant’s Deferral Amounts, plus (ii) amounts credited in accordance with all the applicable crediting provisions of this Plan that relate to the Participant’s Deferral Account, less (iii) all distributions made to the Participant or his or her Beneficiary pursuant to this Plan that relate to his or her Deferral Account
1.17	“Deferral Amount” shall mean that portion of a Participant’s Base Salary and Bonus that a Participant elects to have, and is deferred, in accordance with Article 3, for any one Plan Year. In the event of a Participant’s Retirement, Disability (if deferrals cease in accordance with Section 8.1), death or a Termination of Employment prior to the end of a Plan Year, such year’s Deferral Amount shall be the actual amount withheld prior to such event.
1.18	“Disability” shall mean a period of disability during which a Participant qualifies for permanent disability benefits under the Participant’s Employer’s long-term disability plan, or, if a Participant does not participate in such a plan, a period of disability during which the Participant would have qualified for permanent disability benefits under such a plan had the Participant been a participant in such a plan, as determined in the sole discretion of the Committee. If the Participant’s Employer does not sponsor such a plan, or discontinues to sponsor such a plan, Disability shall be determined by the Committee in its sole discretion.

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1.19	“Disability Benefit” shall mean the benefit set forth in Article 8.
1.20	“Election Form” shall mean the form established from time to time by the Committee that a Participant completes, signs and returns to the Committee to make an election under the Plan.
1.21	“Employee” shall mean a person who is an employee of any Employer.
1.22	“Employer(s)” shall mean the Company and any of its subsidiaries (now in existence or hereafter formed or acquired) that have been selected by the Committee to participate in the Plan and have adopted the Plan as a sponsor.
1.23	“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as it may be amended from time to time.
1.24	“NEST” shall mean the Nordson Corporation Employees Savings Trust Plan.
1.25	“Participant” shall mean any Employee (i) who is selected to participate in the Plan, (ii) who elects to participate in the Plan, (iii) who signs a Plan Agreement, an Election Form and a Beneficiary Designation Form, (iv) whose signed Plan Agreement, Election Form and Beneficiary Designation Form are accepted by the Committee, (v) who commences participation in the Plan, and (vi) whose Plan Agreement has not terminated. A spouse or former spouse of a Participant shall not be treated as a Participant in the Plan or have an account balance under the Plan, even if he or she has an interest in the Participant’s benefits under the Plan as a result of applicable law or property settlements resulting from legal separation or divorce.
1.26	“Plan” shall mean the Nordson Corporation Deferred Compensation Plan, as amended from time to time.
1.27	“Plan Agreement” shall mean a written agreement, as may be amended by the Committee from time to time, which is entered into by and between an Employer and a Participant. Should there be more than one Plan Agreement, the Plan Agreement bearing the latest date of acceptance by the Employer shall supersede all previous Plan Agreements in their entirety and shall govern such entitlement.
1.28	“Plan Year” shall, except for the First Plan Year, mean a period beginning on January 1 of each calendar year and continuing through December 31 of such calendar year.
1.29	“Pre-Retirement Survivor Benefit” shall mean the benefit set forth in Article 6.
1.30	“Restricted Stock” shall mean shares of restricted stock granted to the Participant under the Company’s 1993 Long-Term Performance Plan.
1.31	“Restricted Stock Account” shall mean (i) the sum of the Participant’s Restricted Stock Amounts, plus (ii) amounts credited/debited in accordance with all the applicable

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	crediting/debiting provisions of this Plan that relate to the Participant’s Restricted Stock Account, less (iii) all distributions made to the Participant or his or her Beneficiary pursuant to this Plan that relate to the Participant’s Restricted Stock Account.
1.32	“Restricted Stock Amount” shall mean, for any grant of Restricted Stock, the amount of such Restricted Stock deferred in accordance with Section 3.6 of this Plan.
1.33	“Retirement”, “Retire(s)” or “Retired” shall mean, with respect to an Employee, severance from employment pursuant to the Nordson Corporation Salaried Employees Pension Plan.
1.34	“Retirement Benefit” shall mean the benefit set forth in Article 5.
1.35	“Rollover Account” shall mean the vested account balance that a Participant accrued while participating in the Nordson Corporation Excess Defined Contribution Retirement Plan (SERP) and which has been transferred or rolled over into this Plan.
1.36	“Short-Term Payout” shall mean the payout set forth in Section 4.1.
1.37	“Stock” shall mean the common shares of the Company or any other equity securities of the Company designated by the Committee.
1.38	“Termination Benefit” shall mean the benefit set forth in Article 7.
1.39	“Termination of Employment” shall mean the severing of employment with the Company or an Employer, voluntarily or involuntarily, for any reason other than Retirement, Disability, or death.
1.40	“Trust” shall mean one or more rabbi trusts established by the Company or an Employer in accordance with Article 15 of this Plan as amended from time to time.
1.41	“Unforeseeable Financial Emergency” shall mean an unanticipated emergency that is caused by an event beyond the control of the Participant that would result in severe financial hardship to the Participant resulting from (i) a sudden and unexpected illness or accident of the Participant or a dependent of the Participant, (ii) a loss of the Participant’s property due to casualty, or (iii) such other extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant, all as determined in the sole discretion of the Committee.
1.42	“Years of Vested Service” shall have the meaning as that term is defined in the NEST.

ARTICLE 2
Selection, Enrollment, Eligibility

2.1 Selection by Committee. Participation in the Plan shall be limited to those employees of an Employer who (i) are officers or key employees of an Employer, (ii) received, or would have received but for an election to defer compensation under this Plan and any other plan

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	of the Company, from the Employer aggregate cash compensation for the prior Plan Year (or calendar year for purposes of the initial Plan Year) of not less than $100,000, or such higher amount as the Committee may decide from time to time, and (iii) are, upon recommendation of the President and Chief Executive Officer of the Company, approved for such participation by the Committee, in its sole discretion,
2.2	Enrollment Requirements. As a condition to participation, each selected Employee shall complete, execute and return to the Committee a Plan Agreement, an Election Form and a Beneficiary Designation Form, all within 30 days (or such other time as the Committee may determine) after he or she is selected to participate in the Plan. In addition, the Committee shall establish from time to time such other enrollment requirements as it determines in its sole discretion are necessary.
2.3	Eligibility; Commencement of Participation. Provided an Employee selected to participate in the Plan has met all enrollment requirements set forth in this Plan and required by the Committee, including returning all required documents to the Committee within thirty (30) days (or such other time as the Committee may determine) after he or she is selected to participate in the Plan, that Employee shall commence participation in the Plan on the first day of the month following the month in which the Employee completes all enrollment requirements. If an Employee fails to meet all such requirements within the period required, that Employee shall not be eligible to participate in the Plan until the first day of the Plan Year following the delivery to and acceptance by the Committee of the required documents.
2.4	Termination of Participation and/or Deferrals. If the Committee determines in good faith that a Participant no longer qualifies as a member of a select group of management or highly compensated employees, as membership in such group is determined in accordance with Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA, the Committee shall have the right, in its sole discretion, to (i) terminate any deferral election the Participant has made for the remainder of the Plan Year in which the Participant’s membership status changes, (ii) prevent the Participant from making future deferral elections and/or (iii) immediately distribute the Participant’s then Account Balance as a Termination Benefit and terminate the Participant’s participation in the Plan.

ARTICLE 3
Deferral Commitments/Company Matching/Crediting/Taxes

3.1 Minimum Deferrals.

Base Salary and Bonus. For each Plan Year, a Participant may elect to defer, as his or her Deferral Amount, a minimum of at least Five Thousand dollars ($5,000) between his Base Salary and Bonus. If an election is made for less than stated minimum amounts, or if no election is made, the amount deferred shall be zero.

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(b)

Short Plan Year. Notwithstanding the foregoing, if a Participant first becomes a Participant after the first day of a Plan Year, or in the case of the first Plan Year of the Plan itself, the minimum Base Salary deferral shall be an amount equal to the minimum set forth above, multiplied by a fraction, the numerator of which is the number of complete months remaining in the Plan Year and the denominator of which is 12.

Restricted Stock Amount. For Restricted Stock, a Participant may elect to defer, as his or her Restricted Stock Amount, the following minimum percentage of the Participant’s Restricted Stock:

Deferral	Minimum Percentage
Restricted Stock	10%

provided, however, that the Restricted Stock Amount shall be no less than the lesser of $20,000 or 100% of the Participant’s Restricted Stock.

3.2 Maximum Deferral.

(a) Base Salary and Bonus. For each Plan Year, a Participant may elect to defer, as his or her Deferral Amount, Base Salary and/or Bonus up to the following maximum percentages for each deferral elected:

Deferral	Maximum Percentage
Base Salary	100%
Bonus	100%

(b)

Notwithstanding the foregoing, if a Participant first becomes a Participant after the first day of a Plan Year, or in the case of the first Plan Year of the Plan itself, the maximum Deferral Amount, with respect to Base Salary and/or Bonus shall be limited to the amount of compensation not yet earned by the Participant as of the date the Participant submits a Plan Agreement and Election Form to the Committee for acceptance.

(c)

A Participant may elect to defer up to 100% of his or her Restricted Stock.

3.3 Election to Defer; Effect of Election Form.

(a) First Plan Year. In connection with a Participant’s commencement of participation in the Plan, the Participant shall make an irrevocable deferral election for the Plan Year in which the Participant commences participation in the Plan, along with such

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	other elections as the Committee deems necessary or desirable under the Plan. For these elections to be valid, the Election Form must be completed and signed by the Participant, timely delivered to the Committee (in accordance with Section 2.2 above) and accepted by the Committee.
(b)	Subsequent Plan Years. For each succeeding Plan Year, an irrevocable deferral election for that Plan Year, and such other elections as the Committee deems necessary or desirable under the Plan, shall be made by timely delivering to the Committee, in accordance with its rules and procedures, before the end of the Plan Year preceding the Plan Year for which the election is made, or at such other time as the Committee may determine from time to time, a new Election Form. If no such Election Form is timely delivered for a Plan Year, the Deferral Amount shall be zero for that Plan Year.
(c)	Restricted Stock. For an election to defer Restricted Stock Amounts to be valid: (i) a separate irrevocable Election Form must be completed and signed by the Participant, with respect to such Restricted Stock; and (ii) such Election Form must be timely delivered to the Committee and accepted by the Committee at least six (6) months prior to the date the restrictions applicable to such Restricted Stock lapse.

3.4	Withholding of Annual Deferral Amounts. For each Plan Year, the Base Salary portion of the Deferral Amount shall be withheld from each regularly scheduled Base Salary payroll in equal amounts, as adjusted from time to time for increases and decreases in Base Salary. The Bonus portion of the Deferral Amount shall be withheld at the time the Bonus is or otherwise would be paid to the Participant, whether or not this occurs during the Plan Year itself.
3.5	Annual Company Contribution Amount. For each Plan Year, the Company, in its sole discretion, may, but is not required to, credit any amount it desires to any Participant’s Company Contribution Account under this Plan, which amount shall be for that Participant the Annual Company Contribution Amount for that Plan Year. The amount so credited to a Participant may be smaller or larger than the amount credited to any other Participant, and the amount credited to any Participant for a Plan Year may be zero, even though one or more other Participants receive an Annual Company Contribution Amount for that Plan Year. The Annual Company Contribution Amount, if any, shall be credited as of the last day of the Plan Year. If a Participant is not employed by an Employer as of the last day of a Plan Year other than by reason of his or her Retirement or death while employed, the Annual Company Contribution Amount for that Plan Year shall be zero.
3.6	Restricted Stock Amount. Subject to any terms and conditions imposed by the Committee, Participants may elect to defer, under the Plan, Restricted Stock Amounts. Restricted Stock Amounts shall be credited/debited to the Participant on the books of the Employer in connection with such an election at the time the restrictions applicable to the Restricted Stock lapse under the terms of the Company’s 1993 Long Term Performance Plan.

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3.7	Investment of Trust Assets. The Trustee of the Trust shall be authorized, upon written instructions received from the Committee or investment manager appointed by the Committee, to invest and reinvest the assets of the Trust in accordance with the applicable Trust Agreement, including the disposition of Stock and reinvestment of the proceeds in one or more investment vehicles designated by the Committee.
3.8	Sources of Stock. If Stock is credited under the Plan in the Trust in connection with a deferral of Restricted Stock, the shares so credited shall be deemed to have originated, and shall be counted against the number of shares reserved, under such other plan, program or arrangement.
3.9	Vesting.

(a)	A Participant shall at all times be 100% vested in his or her Deferral Account, Restricted Stock Account and Rollover Account. A Participant shall vest in his or her Company Contribution Account in accordance with the same vesting schedule as set forth in the NEST.
(b)	Notwithstanding anything to the contrary contained in this Section 3.9, in the event of a Change in Control, a Participant’s Company Contribution Account shall immediately become 100% vested (if it is not already vested in accordance with the above vesting schedules).
(c)	Notwithstanding subsection (a), the vesting schedule for a Participant’s Company Contribution Account shall not be accelerated to the extent that the Committee determines that such acceleration would cause the deduction limitations of Section 280G of the Code to become effective. In the event that all of a Participant’s Company Contribution Account is not vested pursuant to such a determination, the Participant may request independent verification of the Committee’s calculations with respect to the application of Section 280G. In such case, the Committee must provide to the Participant within 15 business days of such a request an opinion from a nationally recognized accounting firm selected by the Participant (the “Accounting Firm”). If the Accounting Firm’s opinion is in agreement with the Committee’s determination, the opinion shall state that any limitation in the vested percentage hereunder is necessary to avoid the limits of Section 280G and contain supporting calculations. The cost of such opinion shall be paid for by the Company.

3.10 Crediting/Debiting of Account Balances. In accordance with, and subject to, the rules and procedures that are established from time to time by the Committee, in its sole discretion, amounts shall be credited or debited to a Participant’s Account Balance in accordance with the following rules:

(a) Election of Measurement Funds. A Participant, in connection with his or her initial deferral election in accordance with Section 3.3(a) above, shall elect, on the

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	Election Form, one or more Measurement Fund(s) (as described in Section 3.10(c) below) to be used to determine the additional amounts to be credited to his or her Account Balance for each business day thereof in which the Participant commences participation in the Plan and continuing thereafter for each subsequent business day in which the Participant participates in the Plan. Thereafter, the Participant may (but is not required to) elect, either by submitting an Election Form to the Committee that is accepted by the Committee or through any other manner approved by the Committee, to add or delete one or more Measurement Fund(s) to be used to determine the additional amounts to be credited to his or her Account Balance, or to change the portion of his or her Account Balance allocated to each previously or newly elected Measurement Fund, all in a manner permitted by the Committee.
(b)	Proportionate Allocation. In making any election described in Section 3.10(a) above, the Participant shall specify on the Election Form, in increments of five percentage points (5%), the percentage of his or her Account Balance to be allocated to a Measurement Fund (as if the Participant was making an investment in that Measurement Fund with that portion of his or her Account Balance).
(c)	Measurement Funds. In the First Plan Year, the following measurement fund, (the “Measurement Fund”), will be used for the purpose of crediting additional amounts to Participant’s Account Balance:

• Nordson Corporation Investment Contract Fund

As necessary, the Committee may, in its sole discretion, discontinue, substitute or add a Measurement Fund(s). Each such action will take effect as of the first day of the calendar quarter that follows by thirty (30) days the day on which the Committee gives Participants advance written notice of such change.

(d)

Crediting or Debiting Method. The performance of each elected Measurement Fund (either positive or negative) will be determined by the Committee, in its reasonable discretion, based on the performance of the Measurement Funds themselves. A Participant’s Account Balance shall be credited or debited on a schedule as determined by the Committee in its sole discretion, as though (i) a Participant’s Account Balance were invested in the Measurement Fund(s) selected by the Participant, in the percentages applicable to such business day, as of the close of business on that business day, at the closing price on such date; (ii) the portion of the Deferral Amount that was actually deferred during any business day were invested in the Measurement Fund(s) selected by the Participant, in the percentages applicable to such business day, no later than the close of business on that business day after the day on which such amounts are actually deferred from the Participant’s Base Salary through reductions in his or her payroll, at the closing price on such date; and (iii) any distribution made to a Participant that decreases such Participant’s Account Balance ceased being invested in the Measurement

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	Fund(s), in the percentages applicable to such business day, no earlier than one business day prior to the distribution, at the closing price on such date. The Participant’s Company Contributions Amount shall be credited to his or her Company Contribution Account for purposes of this Section 3.10(d) as of the date determined by the Committee.
(e)	No Actual Investment. Notwithstanding any other provision of this Plan that may be interpreted to the contrary, the Measurement Funds are to be used for measurement purposes only, and a Participant’s election of any such Measurement Fund, the allocation to his or her Account Balance thereto, the calculation of additional amounts and the crediting or debiting of such amounts to a Participant’s Account Balance shall not be considered or construed in any manner as an actual investment of his or her Account Balance in any such Measurement Fund. In the event that the Company or the Trustee (as that term is defined in the Trust), in its own discretion, decides to invest funds in any or all of the Measurement Funds, no Participant shall have any rights in or to such investments themselves. Without limiting the foregoing, a Participant’s Account Balance shall at all times be a bookkeeping entry only and shall not represent any investment made on his or her behalf by the Company or the Trust; the Participant shall at all times remain an unsecured creditor of the Company.
(f)	Special Rule for Restricted Stock Account. Notwithstanding any provision of this Plan that may be construed to the contrary, any amounts allocated to the Restricted Stock Account can never be reallocated to any other Measurement Fund(s) in this Plan. In addition, all distributions from the Restricted Stock Account must be distributed in Stock.

3.11 FICA and Other Taxes.

(a)

Annual Deferral Amounts. For each Plan Year in which an Deferral Amount is being withheld from a Participant, the Participant’s Employer(s) shall withhold from that portion of the Participant’s Base Salary and Bonus that is not being deferred, in a manner determined by the Employer(s), the Participant’s share of FICA and other employment taxes on such Deferral Amount. If necessary, the Committee may reduce the Deferral Amount in order to comply with this Section 3.11.

(b)

Company Contribution Amounts. When a Participant becomes vested in a portion of his or her Company Contribution Account, the Participant’s Employer(s) shall withhold from the Participant’s Base Salary and/or Bonus that is not deferred, in a manner determined by the Employer(s), the Participant’s share of FICA and other employment taxes. If necessary, the Committee may reduce the vested portion of the Participant’s Company Contribution Account in order to comply with this Section 3.11.

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(c) Restricted Stock Amounts. For each Plan Year in which a Restricted Stock Amount is being first withheld from a Participant, the Participant’s Employer(s) shall withhold from that portion of the Participant’s Base Salary, Bonus, and Restricted Stock that is not being deferred, in a manner determined by the Employer, the Participant’s share of FICA and other employment taxes on such Restricted Stock Amount. If necessary, the Committee may reduce the Restricted Stock Amount in order to comply with this Section 3.11.

3.12 Distributions. The Participant’s Employer, or the trustee of the Trust, shall withhold from any payments made to a Participant under this Plan all federal, state and local income, employment and other taxes required to be withheld by the Employer, or the trustee of the Trust, in connection with such payments, in amounts and in a manner to be determined in the sole discretion of the Employer and the trustee of the Trust.

ARTICLE 4
Short-Term Payout; Unforeseeable Financial Emergencies;
Withdrawal Election

4.1	Short-Term Payout. In connection with each election to defer an Annual Deferral Amount, a Participant may irrevocably elect to receive a future Short-Term Payout from the Plan with respect to such Deferral Amount. Subject to the Deduction Limitation, the Short-Term Payout shall be a lump sum payment in an amount that is equal to the Annual Deferral Amount plus amounts credited or debited in the manner provided in Section 3.10 above on that amount, determined at the time that the Short-Term Payout becomes payable (rather than the date of a Termination of Employment). Subject to the Deduction Limitation and the other terms and conditions of this Plan, each Short-Term Payout elected shall be paid out within a 60 day period commencing immediately after the last day of any Plan Year designated by the Participant that is at least five Plan Years after the Plan Year in which the Deferral Amount is actually deferred. By way of example, if a five year Short-Term Payout is elected for Deferral Amounts that are deferred in the Plan Year commencing January 1, 2001, the five year Short-Term Payout would become payable within a 60 day period commencing January 1, 2006.
4.2	Other Benefits Take Precedence Over Short-Term. Should an event occur that triggers a benefit under Article 5, 6, 7 or 8, any Annual Deferral Amount, plus amounts credited or debited thereon, that is subject to a Short-Term Payout election under Section 4.1 shall not be paid in accordance with Section 4.1 but shall be paid in accordance with the other applicable Article. Moreover, any Short-Term Payout shall be adjusted to take into account any contribution under Section 3.5 above.
4.3	Payout/Suspensions for Unforeseeable Financial Emergencies. If the Participant experiences an Unforeseeable Financial Emergency, the Participant may petition the Committee to (i) suspend any deferrals required to be made by a Participant and/or (ii) receive a partial or full payout from the Plan. The payout shall not exceed the lesser of the Participant’s Account Balance, calculated as if such Participant were receiving a

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Termination Benefit, or the amount reasonably needed to satisfy the Unforeseeable Financial Emergency. If, subject to the sole discretion of the Committee, the petition for a suspension and/or payout is approved, suspension shall take effect upon the date of approval and any payout shall be made within 60 days of the date of approval. The payment of any amount under this Section 4.3 shall not be subject to the Deduction Limitation or withdrawal penalty of Section 4.4 below.

4.4

Withdrawal Election. A Participant (or, after a Participant’s death, his or her Beneficiary) may elect, at any time, to withdraw all of his or her Account Balance, calculated as if there had occurred a Termination of Employment as of the day of the election, less a withdrawal penalty equal to 10% of such amount (the net amount shall be referred to as the “Withdrawal Amount”). This election can be made at any time, before or after Retirement, Disability, death or Termination of Employment, and whether or not the Participant (or Beneficiary) is in the process of being paid pursuant to an installment payment schedule. If made before Retirement, Disability or death, a Participant’s Withdrawal Amount shall be his or her Account Balance calculated as if there had occurred a Termination of Employment as of the day of the election. No partial withdrawals of the Withdrawal Amount shall be allowed. The Participant (or his or her Beneficiary) shall make this election by giving the Committee advance written notice of the election in a form determined from time to time by the Committee. The Participant (or his or her Beneficiary) shall be paid the Withdrawal Amount within 60 days of his or her election. Once the Withdrawal Amount is paid, the Participant’s participation in the Plan shall terminate and the Participant shall not be eligible to participate in the Plan for two full years following and from the date of receiving the Withdrawal Amount. The payment of this Withdrawal Amount shall not be subject to the Deduction Limitation.

ARTICLE 5
Retirement Benefit

5.1

Retirement Benefit. Subject to the Deduction Limitation, a Participant who Retires shall receive, as a Retirement Benefit, his or her Account Balance.

5.2

Payment of Retirement Benefit. A Participant, in connection with his or her commencement of participation in the Plan, shall elect on an Election Form to receive the Retirement Benefit in a lump sum or pursuant to an Annual Installment Method of 5, 10 or 15 years. Notwithstanding the preceding sentence, if the Participant’s Account Balance at the time of his or her Retirement is less than $35,000, payment of his or her Retirement Benefit shall be paid in a lump sum. The Participant may annually change his or her election to an allowable alternative payout period by submitting a new Election Form to the Committee, provided that any such Election Form is submitted at least 12 months prior to the Participant’s Retirement and is accepted by the Committee in its sole discretion. The Election Form most recently accepted by the Committee shall govern the payout of the Retirement Benefit. If a Participant does not make any election with respect to the payment of the Retirement Benefit, then such benefit shall be payable in a lump sum. The lump sum payment shall be made, or installment payments shall commence, no later than

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60 days after the last day of the Plan Year which the Participant Retires. Any payment made shall be subject to the Deduction Limitation.

5.3

Death Prior to Completion of Retirement Benefit. If a Participant dies after Retirement but before the Retirement Benefit is paid in full, the Participant’s unpaid Retirement Benefit payments shall continue and shall be paid to the Participant’s Beneficiary (a) over the remaining number of years and in the same amounts as that benefit would have been paid to the Participant had the Participant survived, or (b) in a lump sum, if requested by the Beneficiary and allowed in the sole discretion of the Committee, that is equal to the Participant’s unpaid remaining Account Balance.

ARTICLE 6
Pre-Retirement Survivor Benefit

6.1

Pre-Retirement Survivor Benefit. Subject to the Deduction Limitation, the Participant’s Beneficiary shall receive a Pre-Retirement Survivor Benefit equal to the Participant’s Account Balance if the Participant dies before he or she Retires, experiences a Termination of Employment or suffers a Disability.

6.2

Payment of Pre-Retirement Survivor Benefit. A Participant’s Beneficiary shall receive the Pre-Retirement Survivor Benefit in a lump sum. The lump sum payment shall be made no later than 60 days after the last day of the Plan Year in which the Committee is provided with proof that is satisfactory to the Committee of the Participant’s death. Any payment made shall be subject to the Deduction Limitation.

ARTICLE 7
Termination Benefit

7.1

Termination Benefit. Subject to the Deduction Limitation, the Participant shall receive a Termination Benefit, which shall be equal to the Participant’s Account Balance if a Participant experiences a Termination of Employment prior to his or her Retirement, death or Disability.

7.2

Payment of Termination Benefit. If the Participant’s Account Balance at the time of his or her Termination of Employment is less than $35,000, payment of his or her Termination Benefit shall be paid in a lump sum. If his or her Account Balance at such time is equal to or greater than that amount, the Committee, in its sole discretion, may cause the Termination Benefit to be paid in a lump sum or pursuant to an Annual Installment Method of 5, 10 or 15 years. The lump sum payment shall be made, or installment payments shall commence, no later than 60 days after the Participant experiences the Termination of Employment. Any payment made shall be subject to the Deduction Limitation.

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ARTICLE 8
Disability Waiver and Benefit

8.1 Disability Waiver.

(a)

Waiver of Deferral. A Participant who is determined by the Committee to be suffering from a Disability shall be (i) excused from fulfilling that portion of the Annual Deferral Amount commitment that would otherwise have been withheld from a Participant’s Base Salary and/or Bonus for the Plan Year during which the Participant first suffers a Disability and (ii) excused from fulfilling any existing Restricted Stock Amount. During the period of Disability, the Participant shall not be allowed to make any additional deferral elections, but will continue to be considered a Participant for all other purposes of this Plan.

(b)

Return to Work. If a Participant returns to active employment with an Employer, after a Disability ceases, the Participant may elect to defer Deferral Amount and Restricted Stock Amount for the Plan Year following his or her return to active employment or service and for every Plan Year thereafter while a Participant in the Plan; provided such deferral elections are otherwise allowed and an Election Form is delivered to and accepted by the Committee for each such election in accordance with Section 3.3 above.

8.2 Continued Eligibility; Disability Benefit. A Participant suffering a Disability shall, for benefit purposes under this Plan, continue to be considered to be employed by an Employer, and shall be eligible for the benefits provided for in Articles 4, 5, 6 or 7 in accordance with the provisions of those Articles. Notwithstanding the above, the Committee shall have the right to, in its sole and absolute discretion and for purposes of this Plan only, and must in the case of a Participant who is otherwise eligible to Retire, deem the Participant to have experienced a Termination of Employment, or in the case of a Participant who is eligible to Retire, to have Retired, at any time (or in the case of a Participant who is eligible to Retire, as soon as practicable) after such Participant is determined to be suffering a Disability, in which case the Participant shall receive a Disability Benefit equal to his or her Account Balance at the time of the Committee’s determination; provided, however, that should the Participant otherwise have been eligible to Retire, he or she shall be paid in accordance with Article 5. The Disability Benefit shall be paid in a lump sum within sixty (60) days of the Committee’s exercise of such right. Any payment made shall be subject to the Deduction Limitation.

ARTICLE 9
Beneficiary Designation

9.1 Beneficiary. Each Participant shall have the right, at any time, to designate his or her Beneficiary(ies) (both primary as well as contingent) to receive any benefits payable under the Plan to a beneficiary upon the death of a Participant. The Beneficiary designated under

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	this Plan may be the same as or different from the Beneficiary designation under any other plan of an Employer in which the Participant participates.
9.2	Beneficiary Designation; Change; Spousal Consent. A Participant shall designate his or her Beneficiary by completing and signing the Beneficiary Designation Form, and returning it to the Committee or its designated agent. A Participant shall have the right to change a Beneficiary by completing, signing and otherwise complying with the terms of the Beneficiary Designation Form and the Committee’s rules and procedures, as in effect from time to time. If the Participant names someone other than his or her spouse as a Beneficiary, a spousal consent, in the form designated by the Committee, must be signed by that Participant’s spouse and returned to the Committee. Upon the acceptance by the Committee of a new Beneficiary Designation Form, all Beneficiary designations previously filed shall be canceled. The Committee shall be entitled to rely on the last Beneficiary Designation Form filed by the Participant and accepted by the Committee prior to his or her death.
9.3	Acknowledgment. No designation or change in designation of a Beneficiary shall be effective until received and acknowledged in writing by the Committee or its designated agent.
9.4	No Beneficiary Designation. If a Participant fails to designate a Beneficiary as provided in Sections 9.1, 9.2 and 9.3 above or, if all designated Beneficiaries predecease the Participant or die prior to complete distribution of the Participant’s benefits, then the Participant’s designated Beneficiary shall be deemed to be his or her surviving spouse. If the Participant has no surviving spouse, the benefits remaining under the Plan to be paid to a Beneficiary shall be payable to the Participant’s estate.
9.5	Doubt as to Beneficiary. If the Committee has any doubt as to the proper Beneficiary to receive payments pursuant to this Plan, the Committee shall have the right, exercisable in its discretion, to cause the Participant’s Employer to withhold such payments until this matter is resolved to the Committee’s satisfaction.
9.6	Discharge of Obligations. The payment of benefits under the Plan to a Beneficiary shall fully and completely discharge all Employers and the Committee from all further obligations under this Plan with respect to the Participant, and that Participant’s Plan Agreement shall terminate upon such full payment of benefits.

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ARTICLE 10
Leave of Absence

10.1

Paid Leave of Absence. If a Participant is authorized by the Participant’s Employer for any reason to take a paid leave of absence from the employment of the Employer, the Participant shall continue to be considered employed by the Employer and the Deferral Amount shall continue to be withheld during such paid leave of absence in accordance with Section 3.3.

10.2

Unpaid Leave of Absence. If a Participant is authorized by the Participant’s Employer for any reason to take an unpaid leave of absence from the employment of the Employer, the Participant shall continue to be considered employed by the Employer and the Participant shall be excused from making deferrals until the Participant returns to a paid employment status. Upon such return, deferrals shall resume for the remaining portion of the Plan Year in which the return occurs, based on the deferral election, if any, made for that Plan Year. If no election was made for that Plan Year, no deferral shall be withheld.

ARTICLE 11
Termination, Amendment or Modification

11.1

Termination. Although the Company anticipates that it will continue the Plan for an indefinite period of time, there is no guarantee that the Company will continue the Plan or will not terminate the Plan at any time in the future. Accordingly, the Company reserves the right to terminate the Plan at any time with respect to any or all of its participating Employees, by action of the Committee. Upon the termination of the Plan with respect to any Employer, the Plan Agreements of the affected Participants who are employed by that Employer shall terminate and their Account Balances, determined as if they had experienced a Termination of Employment on the date of Plan termination or, if Plan termination occurs after the date upon which a Participant was eligible to Retire, then with respect to that Participant as if he or she had Retired on the date of Plan termination, shall be paid to the Participants as follows: Prior to a Change in Control, if the Plan is terminated, the Company shall have the right, in its sole discretion, and notwithstanding any elections made by the Participant, to pay such benefits in a lump sum or pursuant to an Annual Installment Method of up to 15 years, with amounts credited and debited during the installment period as provided herein. After a Change in Control, the Company shall be required to pay such benefits in a lump sum within sixty (60) days of a Change in Control. The termination of the Plan shall not adversely affect any Participant or Beneficiary who has become entitled to the payment of any benefits under the Plan as of the date of termination; provided however, that the Company shall have the right to accelerate installment payments without a premium or prepayment penalty by paying the Account Balance in a lump sum or pursuant to an Annual Installment Method using fewer years.

11.2

Amendment. The Company may, at any time, amend or modify the Plan in whole or in part by the action of the Committee; provided, however, that: (i) no amendment or modification shall be effective to decrease or restrict the value of a Participant’s Account

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Balance in existence at the time the amendment or modification is made, calculated as if the Participant had experienced a Termination of Employment as of the effective date of the amendment or modification or, if the amendment or modification occurs after the date upon which the Participant was eligible to Retire, the Participant had Retired as of the effective date of the amendment or modification, and (ii) no amendment or modification of this Section 11.2 or Section 12.2 of the Plan shall be effective. The amendment or modification of the Plan shall not affect any Participant or Beneficiary who has become entitled to the payment of benefits under the Plan as of the date of the amendment or modification; provided, however, that the Company shall have the right to accelerate installment payments by paying the Account Balance in a lump sum or pursuant to an Annual Installment Method using fewer years.

11.3

Effect of Payment. The full payment of the applicable benefit under Articles 4, 5, 6, 7 or 8 of the Plan shall completely discharge all obligations to a Participant and his or her designated Beneficiaries under this Plan and the Participant’s Plan Agreement shall terminate.

ARTICLE 12
Administration

12.1

Committee Duties. This Plan will be administered by the Committee. The Committee will, subject to the terms of this Plan, have the authority to: (i) approve for participation employees who are recommended for participation by the president and Chief Executive Officer of the Company, (ii) adopt, alter, and repeal administrative rules and practices governing this Plan, (iii) interpret the terms and provisions of this Plan, and (iv) otherwise supervise the administration of this Plan. All decisions by the Committee will be made with the approval of not less than a majority of its members. The Committee may delegate any of its authority to any other person or persons that it deems appropriate, provided the delegation does not cause this Plan or any awards granted under this Plan to fail to qualify for the exemption provided by Rule 16b-3, or, if applicable, to meet the requirements of the regulations under Section 162(m) of the Code.

12.2

Administration Upon Change In Control. For purposes of this Plan, the Company shall be the “Administrator” at all times prior to the occurrence of a Change in Control. Upon and after the occurrence of a Change in Control, the “Administrator” shall be an independent third party selected by the Trustee and approved by the individual who, immediately prior to such event, was the Company’s President and Chief Executive Officer or, if not so identified, the Company’s then highest ranking officer (the “Ex-President and Chief Executive Officer”). The Administrator shall have the discretionary power to determine all questions arising in connection with the administration of the Plan and the interpretation of the Plan and Trust including, but not limited to benefit entitlement determinations; provided, however, upon and after the occurrence of a Change in Control, the Administrator shall have no power to direct the investment of Plan or Trust assets or select any investment manager or custodial firm for the Plan or Trust. Upon and after the occurrence of a Change in Control, the Company must: (1) pay all reasonable

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	administrative expenses and fees of the Administrator; (2) indemnify the Administrator against any costs, expenses and liabilities including, without limitation, attorney’s fees and expenses arising in connection with the performance of the Administrator hereunder, except with respect to matters resulting from the gross negligence or willful misconduct of the Administrator or its employees or agents; and (3) supply full and timely information to the Administrator or all matters relating to the Plan, the Trust, the Participants and their Beneficiaries, the Account Balances of the Participants, the date of circumstances of the Retirement, Disability, death or Termination of Employment of the Participants, and such other pertinent information as the Administrator may reasonably require. Upon and after a Change in Control, the Administrator may be terminated (and a replacement appointed) by the Trustee only with the approval of the Ex-President and Chief Executive Officer. Upon and after a Change in Control, the Administrator may not be terminated by the Company.
12.3	Agents. In the administration of this Plan, the Committee may, from time to time, employ agents and delegate to them such administrative duties as it sees fit (including acting through a duly appointed representative) and may from time to time consult with counsel who may be counsel to any Employer.
12.4	Binding Effect of Decisions. All decisions by the Committee, and by any other person or persons to whom the Committee has delegated authority, shall be final and conclusive and binding upon all persons having any interest in the Plan.
12.5	Indemnity of Committee. The Company shall indemnify and hold harmless the members of the Committee, and any Employee to whom the duties of the Committee may be delegated, and the Administrator against any and all claims, losses, damages, expenses or liabilities arising from any action or failure to act with respect to this Plan, except in the case of willful misconduct by the Committee, any of its members, any such Employee or the Administrator.
12.6	Employer Information. To enable the Committee and/or Administrator to perform its functions, the Company and each Employer shall supply full and timely information to the Committee and/or Administrator, as the case may be, on all matters relating to the compensation of its Participants, the date and circumstances of the Retirement, Disability, death or Termination of Employment of its Participants, and such other pertinent information as the Committee or Administrator may reasonably require.

ARTICLE 13
Other Benefits and Agreements

13.1 Coordination with Other Benefits. The benefits provided for a Participant and Participant’s Beneficiary under the Plan are in addition to any other benefits available to such Participant under any other plan or program for employees of the Participant’s Employer. The Plan shall supplement and shall not supersede, modify or amend any other such plan or program except as may otherwise be expressly provided.

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ARTICLE 14
Claims Procedures

14.1

Presentation of Claim. Any Participant or Beneficiary of a deceased Participant (such Participant or Beneficiary being referred to below as a “Claimant”) may deliver to the Committee a written claim for a determination with respect to the amounts distributable to such Claimant from the Plan. If such a claim relates to the contents of a notice received by the Claimant, the claim must be made within 60 days after such notice was received by the Claimant. All other claims must be made within 180 days of the date on which the event that caused the claim to arise occurred. The claim must state with particularity the determination desired by the Claimant.

14.2

Notification of Decision. The Committee shall consider a Claimant’s claim within a reasonable time, and shall notify the Claimant in writing:

(a)	that the Claimant’s requested determination has been made, and that the claim has been allowed in full; or
(b)	that the Committee has reached a conclusion contrary, in whole or in part, to the Claimant’s requested determination, and such notice must set forth in a manner calculated to be understood by the Claimant:

(i)	the specific reason(s) for the denial of the claim, or any part of it;
(ii)	specific reference(s) to pertinent provisions of the Plan upon which such denial was based;
(iii)	a description of any additional material or information necessary for the Claimant to perfect the claim, and an explanation of why such material or information is necessary; and
(iv)	an explanation of the claim review procedure set forth in Section 14.3 below.

14.3 Review of a Denied Claim. Within 60 days after receiving a notice from the Committee that a claim has been denied, in whole or in part, a Claimant (or the Claimant’s duly authorized representative) may file with the Committee a written request for a review of the denial of the claim. Thereafter, but not later than 30 days after the review procedure began, the Claimant (or the Claimant’s duly authorized representative):

(a)	may review pertinent documents;
(b)	may submit written comments or other documents; and/or
(c)	may request a hearing, which the Committee, in its sole discretion, may grant.

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14.4 Decision on Review. The Committee shall render its decision on review promptly, and not later than 60 days after the filing of a written request for review of the denial, unless a hearing is held or other special circumstances require additional time, in which case the Committee’s decision must be rendered within 120 days after such date. Such decision must be written in a manner calculated to be understood by the Claimant, and it must contain:

(a)	specific reasons for the decision;
(b)	specific reference(s) to the pertinent Plan provisions upon which the decision was based; and
(c)	such other matters as the Committee deems relevant.

14.5 Legal Action. A Claimant’s compliance with the foregoing provisions of this Article 14 is a mandatory prerequisite to a Claimant’s right to commence any legal action with respect to any claim for benefits under this Plan.

ARTICLE 15
Trust

15.1	Establishment of the Trust. The Company may establish one or more Trusts to which the Company may transfer such assets as the Company determines in its sole discretion to assist in meeting its obligations under the Plan.
15.2	Interrelationship of the Plan and the Trust. The provisions of the Plan and the Plan Agreement shall govern the rights of a Participant to receive distributions pursuant to the Plan. The provisions of the Trust shall govern the rights of the Company, Participants and the creditors of the Employers to the assets transferred to the Trust.
15.3	Distributions From the Trust. Each Employers obligations under the Plan may be satisfied with Trust assets distributed pursuant to the terms of the Trust, and any such distribution shall reduce the Company’s obligations under this Plan.
15.4	Stock Transferred to the Trust. Notwithstanding any other provision of this Plan or the Trust: (i) if Trust assets are distributed to a Participant in a distribution which reduces the Participant’s Restricted Stock Account balance under this Plan, such distribution must be made in the form of Stock and (ii) any Stock transferred to the Trust in accordance with Section 3.6 may not be otherwise distributed or disposed of by the Trustee until at least 6 months after the date such Stock is transferred to the Trust.

ARTICLE 16
Miscellaneous

16.1 Status of Plan. The Plan is intended to be a plan that is not qualified within the meaning of Code Section 401(a) and that “is unfunded and is maintained by an employer primarily

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	for the purpose of providing deferred compensation for a select group of management or highly compensated employee” within the meaning of ERISA Sections 201(2), 301(a)(3) and 401(a)(1). The Plan shall be administered and interpreted to the extent possible in a manner consistent with that intent.
16.2	Unsecured General Creditor. Participants and their Beneficiaries, heirs, successors and assigns shall have no legal or equitable rights, interests or claims in any property or assets of the Company or an Employer. For purposes of the payment of benefits under this Plan, any and all of the Company’s or an Employer’s assets shall be, and remain, the general, unpledged unrestricted assets of the Company or an Employer, respectively. The Company’s or an Employer’s obligation under the Plan shall be merely that of an unfunded and unsecured promise to pay money in the future.
16.3	Employer’s Liability. An Employer’s liability for the payment of benefits shall be defined only by the Plan and the Plan Agreement, as entered into between the Employer and a Participant. An Employer shall have no obligation to a Participant under the Plan except as expressly provided in the Plan and his or her Plan Agreement.
16.4	Nonassignability. Neither a Participant nor any other person shall have any right to commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber, transfer, hypothecate, alienate or convey in advance of actual receipt, the amounts, if any, payable hereunder, or any part thereof, which are, and all rights to which are expressly declared to be, unassignable and non-transferable. No part of the amounts payable shall, prior to actual payment, be subject to seizure, attachment, garnishment or sequestration for the payment of any debts, judgments, alimony or separate maintenance owed by a Participant or any other person, be transferable by operation of law in the event of a Participant’s or any other person’s bankruptcy or insolvency or be transferable to a spouse as a result of a property settlement or otherwise.
16.5	Not a Contract of Employment. The terms and conditions of this Plan shall not be deemed to constitute a contract of employment between any Employer and the Participant, either expressed or implied. Such employment is hereby acknowledged to be an “at will” employment relationship that can be terminated at any time for any reason, or no reason, with or without cause, and with or without notice, unless expressly provided in a written employment agreement. Nothing in this Plan shall be deemed to give a Participant the right to be retained in the service of any Employer, or to interfere with the right of any Employer to discipline or discharge the Participant at any time.
16.6	Furnishing Information. A Participant or his or her Beneficiary will cooperate with the Committee by furnishing any and all information requested by the Committee and take such other actions as may be requested in order to facilitate the administration of the Plan and the payments of benefits hereunder, including but not limited to taking such physical examinations as the Committee may deem necessary.

-25-

16.7	Terms. Whenever any words are used herein in the masculine, they shall be construed as though they were in the feminine in all cases where they would so apply; and whenever any words are used herein in the singular or in the plural, they shall be construed as though they were used in the plural or the singular, as the case may be, in all cases where they would so apply.
16.8	Captions. The captions of the articles, sections and paragraphs of this Plan are for convenience only and shall not control or affect the meaning or construction of any of its provisions.
16.9	Governing Law. Subject to ERISA, the provisions of this Plan shall be construed and interpreted according to the internal laws of the State of Ohio without regard to its conflicts of laws principles.

-26-

Notice. Any notice or filing required or permitted to be given to the Committee under this Plan shall be sufficient if in writing and hand-delivered, or sent by registered or certified mail, to the address below:

Robert E. Veillette
Assistant General Counsel
Nordson Corporation
28601 Clemens Road
Westlake, Ohio 44145

	Such notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark on the receipt for registration or certification.
	Any notice or filing required or permitted to be given to a Participant under this Plan shall be sufficient if in writing and hand-delivered, or sent by mail, to the last known address of the Participant.
16.10	Successors. The provisions of this Plan shall bind and inure to the benefit of the Company Employer and its successors and assigns and the Participant and the Participant’s designated Beneficiaries.
16.11	Spouse’s Interest. The interest in the benefits hereunder of a spouse of a Participant who has predeceased the Participant shall automatically pass to the Participant and shall not be transferable by such spouse in any manner, including but not limited to such spouse’s will, nor shall such interest pass under the laws of intestate succession.
16.12	Validity. In case any provision of this Plan shall be illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts hereof, but this Plan shall be construed and enforced as if such illegal or invalid provision had never been inserted herein.
16.13	Incompetent. If the Committee determines in its discretion that a benefit under this Plan is to be paid to a minor, a person declared incompetent or to a person incapable of handling the disposition of that person’s property, the Committee may direct payment of such benefit to the guardian, legal representative or person having the care and custody of such minor, incompetent or incapable person. The Committee may require proof of minority, incompetence, incapacity or guardianship, as it may deem appropriate prior to distribution of the benefit. Any payment of a benefit shall be a payment for the account of the Participant and the Participant’s Beneficiary, as the case may be, and shall be a complete discharge of any liability under the Plan for such payment amount.
16.14	Court Order. The Committee is authorized to make any payments directed by court order in any action in which the Plan or the Committee has been named as a party. In addition, if

-27-

a court determines that a spouse or former spouse of a Participant has an interest in the Participant’s benefits under the Plan in connection with a property settlement or otherwise, the Committee, in its sole discretion, shall have the right, notwithstanding any election made by a Participant, to immediately distribute the spouse’s or former spouse’s interest in the Participant’s benefits under the Plan to that spouse or former spouse.

16.15

Distribution in the Event of Taxation.

(a)

In General. If, for any reason, all or any portion of a Participant’s benefits under this Plan becomes taxable to the Participant prior to receipt, a Participant may petition the Committee before a Change in Control, or the trustee of the Trust after a Change in Control, for a distribution of that portion of his or her benefit that has become taxable. Upon the grant of such a petition, which grant shall not be unreasonably withheld (and, after a Change in Control, shall be granted), a Participant’s Employer shall distribute to the Participant immediately available funds in an amount equal to the taxable portion of his or her benefit (which amount shall not exceed a Participant’s unpaid Account Balance under the Plan). If the petition is granted, the tax liability distribution shall be made within 90 days of the date when the Participant’s petition is granted. Such a distribution shall affect and reduce the benefits to be paid under this Plan.

(b)

Trust. If the Trust terminates in accordance with Section 3.6(e) of the Trust and benefits are distributed from the Trust to a Participant in accordance with that Section, the Participant’s benefits under this Plan shall be reduced to the extent of such distributions.

16.17

Insurance. The Company, on its own behalf or on behalf of the trustee of the Trust, and, in its sole discretion, may apply for and procure insurance on the life of the Participant, in such amounts and in such forms as the Trust may choose. The Company or the trustee of the Trust, as the case may be, shall be the sole owner and beneficiary of any such insurance. The Participant shall have no interest whatsoever in any such policy or policies, and at the request of the Company shall submit to medical examinations and supply such information and execute such documents as may be required by the insurance company or companies to whom the Company has applied for insurance.

16.18

Legal Fees To Enforce Rights After Change in Control. The Company is aware that upon the occurrence of a Change in Control, the Board or a shareholder of the Company, or of any successor corporation might then cause or attempt to cause the Company, or such successor to refuse to comply with its obligations under the Plan and might cause or attempt to cause the Company to institute, or may institute, litigation seeking to deny Participants the benefits intended under the Plan. In these circumstances, the purpose of the Plan could be frustrated. Accordingly, if, following a Change in Control, it should appear to any Participant that the Company or any successor corporation has failed to comply with any of its obligations under the Plan or any agreement thereunder or, if the Company or any other person takes any action to declare the Plan void or unenforceable or

-28-

institutes any litigation or other legal action designed to deny, diminish or to recover from any Participant the benefits intended to be provided, then the Company hereby irrevocably authorizes such Participant to retain counsel of his or her choice at the expense of the Company to represent such Participant in connection with the initiation or defense of any litigation or other legal action, whether by or against the Company or any director, officer, shareholder or other person affiliated with the Company or any successor thereto in any jurisdiction.

     IN WITNESS WHEREOF, the Company has signed this Plan document as of November 3, 2000.

NORDSON CORPORATION

By:

Title:

-29-

EX-10.D.1

Exhibit 10-d-1

FIRST AMENDMENT
TO
NORDSON CORPORATION
EXCESS DEFINED CONTRIBUTION RETIREMENT PLAN
(November 1, 1987 Restatement)

               The Nordson Corporation Excess Defined Contribution Retirement Plan (hereinafter referred to as the “Plan”), as originally established for the benefit of certain designated salaried employees effective as of November 1, 1985, and amended and restated in its entirety effective as of November 1, 1987, is hereby amended further, effective as January 1, 1988, to provide as follows:

     1. Section 1.1 of the Plan is amended by the addition of a new paragraph (f) at the end thereof to provide as follows:

          (f) The term “Non-Union ESOP” shall mean the Nordson Corporation Non-Union Employees Stock Ownership Plan and Trust in effect on the date of an Employee’s retirement, death, or other termination of employment.

     2. Sections 2.1 and 2.2 of the Plan are amended to provide as follows:

          2.1 Eligibility. An Employee who is a Participant in the Employees’ Savings Trust Plan or the Non-Union ESOP and whose benefits under either Plan have been limited by Section 401(a)(17), Section 402(g)(1), or Section 415 of the Code, including limitations on tax-deferred and employer-matching contributions, shall be eligible for an excess retirement benefit determined by Section 2.2. In addition, in the event that the Tax Deferred Contributions of an eligible Employee under the Employees’ Savings Trust Plan are limited by the provisions of Section 401(a)(17), Section 415, or Section 402(g)(1) of the Code, such eligible Employee may elect to defer payment of that portion of his compensation that otherwise could have been made as Tax Deferred Contributions but for these limitations. The deferred payment election shall be made in writing by the eligible Employee and delivered to the Company prior to the beginning of a Plan Year. The election shall be irrevocable until the first day of the next Plan Year. Notwithstanding any of the foregoing, any reference in Section 2.1 and 2.2 hereunder to the limitation imposed by Section 402(g)(1) of the Code shall automatically include any amendments to such limitation to reflect cost of living increases.

          2.2 Amount. The excess retirement benefit payable to an eligible Employee or his beneficiary shall be an amount equal to the sum of:

(i) the amount, if any, of the limited contributions an eligible Employee elected to defer in Section 2.1, except that if such limited contributions would be further restricted under the Employees’ Savings Trust Plan for a Plan Year to comply with Section 401(k) of the Code with respect to the deferral of compensation by highly compensated employees, the amount determined hereunder shall be similarly limited; plus

(ii) an amount that, when added to the vested interest of such Employee in Employer Matching Contributions under the Employees’ Savings Trust Plan, equals the value his vested interest in Employer Matching Contributions would have

been on the date distribution commences under the Employees’ Savings Trust Plan if the limitations of Section 401(a)(17), Section 415, or Section 402(g)(1) of the Code had not been in effect; plus

(iii) an amount, if any, equal to the value of the vested interest an eligible Employee would have been entitled to receive under the Non-Union ESOP if the limitations of Section 401(a)(17) or Section 415 of the Code had not been in effect.

In determining the value that an eligible Employee’s interest under the Employees’ Savings Trust Plan and under the Non-Union ESOP would have been if the limitations of Section 401(a)(17), Section 415, or Section 402(g)(1) of the Code had not been in effect as described in (i), (ii), and (iii) above, it shall be assumed that:

(a) his Tax Deferred Contributions and his Employer Matching Contributions under the Employees’ Savings Trust Plan and any Employer contributions under the Non-Union ESOP were deposited on the dates such contributions would have otherwise been made to the Employees’ Savings Trust Plan or Non-Union ESOP, as applicable, and held in the guaranteed income contract maintained as part of the Guaranteed Fund that holds the largest amount of assets from the Employees’ Savings Trust Plan for such year; and

(b) the interest rate actually paid with respect to such guaranteed income contract under the Guaranteed Fund for the Employee’s Savings Trust Plan was paid with respect to the contributions that would otherwise have been made under either Plan; and

(c) such interest was reinvested in the Guaranteed Fund for the Employee’s Savings Trust on the date and in the same manner as actual interest under the Guaranteed Fund.

*      *      *

EXECUTED at Westlake, Ohio, this 29th day of May, 1989.

NORDSON CORPORATION
By
	Title:

EX-10.E.1

Exhibit 10-e-1

SECOND AMENDMENT
TO
NORDSON CORPORATION
EXCESS DEFINED BENEFIT RETIREMENT PLAN

     The Nordson Corporation Excess Defined Benefit Retirement Plan (hereinafter referred to as the “Plan”), as originally established for the benefit of certain designated salaried employees effective as of November 1, 1985, and as amended on one subsequent occasion, is hereby further amended, effective upon execution hereof, to add new Section 2.4 as follows:

          2.4 VESTING OF BENEFITS. Notwithstanding any provision of the Plan other than Section 6.6 to the contrary, the excess pension benefit of each eligible Employee determined as if he were to terminate employment on December 31, 1993, shall be fully vested and nonforfeitable on December 31, 1993.

          EXECUTED at Westlake, Ohio this ___day of ___, 1993.

NORDSON CORPORATION

By

Title

EX-21

Exhibit 21

NORDSON CORPORATION

Subsidiaries of the Registrant

The following table sets forth the subsidiaries of the Registrant (each of which is included in the Registrant’s consolidated financial statements), and the jurisdiction under the laws of which each subsidiary was organized.

Jurisdiction
of Incorporation	Name
INTERNATIONAL:
Australia	Nordson Australia Pty. Limited
Austria	Nordson GmbH
Belgium	Nordson Benelux S.A./N.V.
Brazil	Nordson do Brasil Industria e Comercio Ltda.
Canada	Nordson Canada Limited
China	Nordson (China) Co., Ltd.
Colombia	Nordson Andina Limitada
Czech Republic	Nordson CS, spol.s.r.o.
Denmark	Nordson Danmark A/S
Finland	Nordson Finland Oy
France	Nordson France S.A.S.
France	Dosage 2000(1)
Germany	Nordson Deutschland GmbH(2)
Germany	Nordson Engineering GmbH(3)
Germany	Wolfgang Puffe Hotmelt-Technologie
Hong Kong	Nordson Application Equipment, Inc.
India	Nordson India Private Limited
Italy	Nordson Italia S.p.A.
Japan	Nordson K.K.
Japan	Nordson Asymtek K.K.
Malaysia	Nordson (Malaysia) Sdn. Bhd.
Mexico	Nordson de Mexico, S.A. de C.V.
The Netherlands	Nordson Benelux B.V.
The Netherlands	Nordson B.V.
New Zealand	Nordson New Zealand
Norway	Nordson Norge A/S
Poland	Nordson Polska Sp.z.o.o.
Portugal	Nordson Portugal Equipamento Industrial, Lda.
Russia	Nordson Deutschland GmbH — Representative Office
Singapore	Nordson S.E. Asia (Pte.) Ltd.
South Korea	Nordson Sang San Limited
Spain	Nordson Iberica, S.A.
Sweden	Nordson AB
Switzerland	Nordson (Schweiz) A.G.(4)
United Kingdom	Nordson (U.K.) Limited
United Kingdom	Nordson U.V. Limited.

77

Subsidiaries of the Registrant — Continued

Jurisdiction
of Incorporation	Name
DOMESTIC:
California	Asymptotic Technologies, Inc.(5)
California	March Plasma Systems, Inc.
California	H.P. Solutions, Inc.(6)
Connecticut	Electrostatic Technology, Inc.
Georgia	J and M Laboratories, Inc.(7)
New Jersey	Horizon Lamps, Inc.
Ohio	Nordson U.S. Trading Company
Rhode Island	Electron Fusion Devices, Inc.
Rhode Island	EFD, International, Inc.(8)

Ownership Legend

(1)	Owned by Electron Fusion Devices, Inc.
(2)	Owned by Nordson Engineering GmbH, Nordson Corporation and Nordson Holdings GmbH
(3)	Owned by Nordson Corporation and Nordson Holdings GmbH
(4)	Owned by Nordson Benelux S.A./ N.V.
(5)	Doing business as Asymtek
(6)	Doing business as H.F. Johnston Manufacturing, Inc.
(7)	Doing business as Nordson Dawsonville
(8)	Owned by Electron Fusion Devices, Inc.

78 EX-23 7 l22480aexv23.htm EX-23

Exhibit 23

NORDSON CORPORATION

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the Registration Statements (Forms S-8) listed below of Nordson Corporation of our reports dated January 10, 2007, with respect to the consolidated financial statements and schedule of Nordson Corporation, Nordson Corporation management’s assessment of the effectiveness of internal control over financial reporting, and the effectiveness of internal control over financial reporting of Nordson Corporation included in the Annual Report (Form 10-K) for the year ended October 31, 2006:

•  Nordson Corporation 1982 Amended and Restated Stock Appreciation Rights Plan (now entitled 1988 Amended and Restated Stock Appreciation Rights Plan) (No. 2-66776)

•  Nordson Employees’ Savings Trust Plan (No. 33-18309)

•  Nordson Hourly-Rated Employees’ Savings Trust Plan (No. 33-33481)

•  Nordson Corporation 1993 Long-Term Performance Plan (No. 33-67780)

•  Nordson Corporation 2004 Long-Term Performance Plan (No. 333-119399)

Cleveland, Ohio

January 12, 2007

79 EX-31.1 8 l22480aexv31w1.htm EX-31.1

EXHIBIT 31.1

CERTIFICATION PURSUANT TO RULE 13a-14(a)/15d-14(a) OF THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Edward P. Campbell, certify that:

      1. I have reviewed this Annual Report on Form 10-K of Nordson Corporation;

      2. Based on my knowledge, this 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 report;

      3. Based on my knowledge, the financial statements, and other financial information included in this 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 report;

      4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

      a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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 report is being prepared;

      b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

      c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

      d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

      5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

      a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting that are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

      b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ EDWARD P. CAMPBELL

Edward P. Campbell

Chairman of the Board of Directors and

Chief Executive Officer

Date: January 12, 2007

80 EX-31.2 9 l22480aexv31w2.htm EX-31.2

EXHIBIT 31.2

CERTIFICATION PURSUANT TO RULE 13a-14(a)/15d-14(a) OF THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Peter S. Hellman, certify that:

      1. I have reviewed this Annual Report on Form 10-K of Nordson Corporation;

      2. Based on my knowledge, this 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 report;

      3. Based on my knowledge, the financial statements, and other financial information included in this 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 report;

      4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

      a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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 report is being prepared;

      b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

      c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

      d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

      5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

      a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting that are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

      b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ PETER S. HELLMAN

Peter S. Hellman

President, Chief Financial and

Administrative Officer

Date: January 12, 2007

81 EX-32.1 10 l22480aexv32w1.htm EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Nordson Corporation (the “Company”) on Form 10-K for the year ended October 31, 2006, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Edward P. Campbell, chairman of the board of directors and chief executive officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

      (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

      (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ EDWARD P. CAMPBELL

Edward P. Campbell

Chairman of the Board of Directors

and Chief Executive Officer

January 12, 2007

82 EX-32.2 11 l22480aexv32w2.htm EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Nordson Corporation (the “Company”) on Form 10-K for the year ended October 31, 2006, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Peter S. Hellman, president, chief financial and administrative officer and director of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

      (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

      (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ PETER S. HELLMAN

Peter S. Hellman

President, Chief Financial and

Administrative Officer and Director

January 12, 2007

83 EX-99.A 12 l22480aexv99wa.htm EX-99(A)

Exhibit 99-a

For the purposes of complying with the amendments to the rules governing Form S-8 (effective July 13, 1990) under the Securities Act of 1933, the undersigned Registrant hereby undertakes as follows, which undertaking shall be incorporated by reference into Registrant’s Registration Statements on Form S-8 Nos; 33-18309 (Employees Savings Trust Plan); and 33-33481 (Hourly-Rated Employees Savings Trust Plan):

Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the “Act”) may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

EX-23

EX-23

EX-31.1

EX-31.1

EX-31.2

EX-31.2

EX-32.1

EX-32.1

EX-32.2

EX-32.2

EX-99.A

EX-99(A)

EX-99.B

Exhibit 99-b

For the purpose of complying with the amendments to the rules governing Form S-8 under the Securities Act of 1933, the undersigned Registrant hereby undertakes as follows, which undertaking shall be incorporated by reference into Registrant’s Registration Statement on Form S-8 No. 2-66776 (1979 Stock Option Plan and 1982 Amended and Restated Stock Appreciation Rights Plan (now entitled 1988 Amended and Restated Stock Appreciation Rights Plan)):

(a)	That, for purposes of determining any liability under the Securities Act of 1933 (the “Act”), each post-effective amendment to this Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and that the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(b)	To remove from registration by means of a post-effective amendment of any of the securities being registered which remain unsold at the termination of the offering.
(c)	Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the “Act”) may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceedings) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.