NORDSON CORP (Form: 10-Q, Received: 09/04/2014 09:41:42)

Large accelerated filer

Accelerated filer

Non-accelerated filer

¨ (Do not check if smaller reporting company)

Smaller reporting company

FORM 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

(Mark One)

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

For the quarterly period ended July 31, 2014

¨	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

(Telephone Number)

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

Common Shares, without par value

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

None

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files). Yes x No ¨

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

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: Common Shares, without par value, as of August 26, 2014: 63,096,577

Table of Contents


PART I – FINANCIAL INFORMATION			3

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)			3
C ONDENSED C ONSOLIDATED S TATEMENTS OF I NCOME			3
C ONDENSED C ONSOLIDATED S TATEMENTS OF C OMPREHENSIVE I NCOME			4
C ONDENSED C ONSOLIDATED B ALANCE S HEETS			5
C ONDENSED C ONSOLIDATED S TATEMENT OF C ASH F LOWS			6
N OTES TO C ONDENSED C ONSOLIDATED F INANCIAL S TATEMENTS			7
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			20
*Overview*			20
*Critical Accounting Policies and Estimates*			20
*Results of Operations*			21
*Financial Condition*			24
*Outlook*			26
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK			26
ITEM 4. CONTROLS AND PROCEDURES			27

PART II – OTHER INFORMATION			27

ITEM 1. LEGAL PROCEEDINGS			27
ITEM 1A. RISK FACTORS			27
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS			28
ITEM 6. EXHIBITS			28

SIGNATURES			29

Page 2

Nordson Corporation

PART I – FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS (UNAUDITED)

Condensed Consolidated Statements of Income


	Three Months Ended						Nine Months Ended
	July 31, 2014			July 31, 2013			July 31, 2014			July 31, 2013
(In thousands, except for per share data)
Sales	$	458,550		$	402,960		$	1,235,431		$	1,132,103
Operating costs and expenses:
Cost of sales		201,039			177,877			547,586			492,853
Selling and administrative expenses		143,056			131,867			426,697			402,268

		344,095			309,744			974,283			895,121

Operating profit		114,455			93,216			261,148			236,982
Other income (expense):
Interest expense		(3,810	)		(3,353	)		(10,917	)		(11,045	)
Interest and investment income		137			112			466			304
Other—net		(236	)		2,699			(851	)		934

		(3,909	)		(542	)		(11,302	)		(9,807	)

Income before income taxes		110,546			92,674			249,846			227,175
Income taxes		32,667			27,250			75,153			65,135

Net income	$	77,879		$	65,424		$	174,693		$	162,040

Average common shares		63,482			64,137			63,888			64,242
Incremental common shares attributable to outstanding stock options, restricted stock, and deferred stock-based compensation		659			717			631			681

Average common shares and common share equivalents		64,141			64,854			64,519			64,923

Basic earnings per share	$	1.23		$	1.02		$	2.73		$	2.52

Diluted earnings per share	$	1.21		$	1.01		$	2.71		$	2.50

Dividends declared per share	$	0.18		$	0.15		$	0.54		$	0.45

See accompanying notes.

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Nordson Corporation

Condensed Consolidated Statements of Comprehensive Income


	Three Months Ended						Nine Months Ended
	July 31, 2014			July 31, 2013			July 31, 2014			July 31, 2013
(In thousands)
Net income	$	77,879		$	65,424		$	174,693		$	162,040
Components of other comprehensive income (loss), net of tax:
Foreign currency translation adjustments		(4,769	)		(5,133	)		(3,517	)		(9,716	)
Amortization of prior service cost and net actuarial losses		1,722			2,687			5,180			8,213

Total other comprehensive income (loss)		(3,047	)		(2,446	)		1,663			(1,503	)

Total comprehensive income	$	74,832		$	62,978		$	176,356		$	160,537

See accompanying notes.

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Nordson Corporation

Condensed Consolidated Balance Sheets


	July 31, 2014			October 31, 2013
(In thousands)
Assets
Current assets:
Cash and cash equivalents	$	53,223		$	42,375
Receivables - net		358,189			308,707
Inventories - net		210,352			198,401
Deferred income taxes		29,830			29,354
Prepaid expenses		28,197			21,733

Total current assets		679,791			600,570
Property, plant and equipment - net		209,285			200,979
Goodwill		937,139			939,211
Intangible assets - net		250,083			269,073
Other assets		33,147			32,456

	$	2,109,445		$	2,042,289

Liabilities and shareholders’ equity
Current liabilities:
Notes payable	$	9,405		$	3,604
Accounts payable		66,266			62,123
Income taxes payable		29,961			14,522
Accrued liabilities		112,205			110,528
Customer advanced payments		25,992			28,341
Current maturities of long-term debt		10,755			10,832
Current obligations under capital leases		5,473			5,521

Total current liabilities		260,057			235,471
Long-term debt		612,358			638,158
Deferred income taxes		82,344			79,977
Pension obligations		93,111			103,754
Postretirement obligations		61,494			59,794
Other long-term liabilities		41,306			37,272
Shareholders’ equity:
Common shares		12,253			12,253
Capital in excess of stated value		322,451			304,549
Retained earnings		1,502,752			1,362,584
Accumulated other comprehensive loss		(55,717	)		(57,380	)
Common shares in treasury, at cost		(822,964	)		(734,143	)

Total shareholders’ equity		958,775			887,863

	$	2,109,445		$	2,042,289

See accompanying notes.

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Nordson Corporation

Condensed Consolidated Statement of Cash Flows


Nine Months Ended	July 31, 2014			July 31, 2013
(In thousands)
Cash flows from operating activities:
Net income	$	174,693		$	162,040
Depreciation and amortization		43,839			39,555
Non-cash stock compensation		13,494			8,779
Deferred income taxes		(709	)		4,186
Other non-cash expense		328			1,626
Loss on sale of property, plant and equipment		194			(1,886	)
Tax benefit from the exercise of stock options		(4,127	)		(3,192	)
Changes in operating assets and liabilities		(44,754	)		(16,524	)

Net cash provided by operating activities		182,958			194,584
Cash flows from investing activities:
Additions to property, plant and equipment		(27,936	)		(34,569	)
Proceeds from sale of property, plant and equipment		278			3,760
Acquisition of business		—			(1,231	)
Investment in equity affiliate		(854	)		(1,116	)
Proceeds from sale of marketable securities		—			277

Net cash used in investing activities		(28,512	)		(32,879	)
Cash flows from financing activities:
Proceeds from short-term borrowings		8,673			5,033
Repayment of short-term borrowings		(2,778	)		(50,000	)
Proceeds from long-term debt		49,272			118,925
Repayment of long-term debt		(74,030	)		(148,734	)
Repayment of capital lease obligations		(4,629	)		(3,995	)
Issuance of common shares		5,870			5,124
Purchase of treasury shares		(94,410	)		(28,831	)
Tax benefit from the exercise of stock options		4,127			3,192
Dividends paid		(34,525	)		(28,930	)

Net cash used in financing activities		(142,430	)		(128,216	)
Effect of exchange rate changes on cash		(1,168	)		640

Increase in cash and cash equivalents		10,848			34,129
Cash and cash equivalents:
Beginning of year		42,375			41,239

End of quarter	$	53,223		$	75,368

See accompanying notes.

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Nordson Corporation

Notes to Condensed Consolidated Financial Statements

July 31, 2014

NOTE REGARDING AMOUNTS AND FISCAL YEAR REFERENCES

In this quarterly report, all amounts related to United States dollars 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. Unless the context otherwise indicates, all references to “we” or the “Company” mean Nordson Corporation.

Unless otherwise noted, all references to years relate to our fiscal year ending October 31.

Significant accounting policies

Basis of presentation . The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended July 31, 2014 are not necessarily indicative of the results that may be expected for the full year. For further information, refer to the consolidated financial statements and footnotes included in our annual report on Form 10-K for the year ended October 31, 2013.

Basis of consolidation . The consolidated financial statements include the accounts of Nordson Corporation and its majority-owned and controlled subsidiaries. Investments in affiliates and joint ventures in which our ownership is 50% or less or in which we do not have control but have the ability to exercise significant influence, are accounted for under the equity method. All significant intercompany accounts and transactions have been eliminated in consolidation.

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

Revenue recognition . Most of our 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.

A relative selling price hierarchy exists for determining the selling price of deliverables in multiple deliverable arrangements. Vendor specific objective evidence (VSOE) is used, if available. Third-party evidence (TPE) is used if VSOE is not available, and best estimated selling price is used if neither VSOE nor TPE is available. Our multiple deliverable arrangements include installation, installation supervision, training, and spare parts, which tend to be completed in a short period of time, at an insignificant cost, and utilizing skills not unique to us, and, therefore, are typically regarded as inconsequential or perfunctory. Revenue for undelivered items is deferred and included within accrued liabilities in the accompanying balance sheet. Revenues deferred in 2014 and 2013 were not material.

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 stock options computed using the treasury stock method, as well as restricted shares 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. For the nine months ended July 31, 2014, the number of options excluded from the calculation of diluted earnings per share was 92. For the three months ended July 31, 2014, and the three and nine months ended July 31, 2013, no options were excluded from the calculations of diluted earnings per share. Under the Long-Term Incentive Plan, executive officers and selected other key employees receive common share awards based on corporate performance measures over three-year performance periods. Awards for which performance measures have not been met were excluded from the calculation of diluted earnings per share.

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Nordson Corporation

Recently issued accounting standards

In July 2013, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Update (ASU) which requires the netting of unrecognized tax benefits against a deferred tax asset for a loss or other carry forward that would apply in settlement of uncertain tax positions. Under the new standard, unrecognized tax benefits will be netted against all available same-jurisdiction loss or other tax carry forwards that would be utilized, rather than only against carry forwards that are created by the unrecognized tax benefits. The new guidance is effective prospectively to all existing unrecognized tax benefits, but entities can choose to apply it retrospectively. The guidance will be effective for us in our first quarter of 2015, with early adoption permitted. We do not believe the adoption of this ASU will have a material effect on our consolidated financial statements.

In May 2014, the FASB issued a new standard regarding revenue recognition. Under this standard, a company recognizes revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The standard implements a five-step process for customer contract revenue recognition that focuses on transfer of control, as opposed to transfer of risk and rewards. It will be effective for us beginning in 2018, with early adoption not permitted. Entities can transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption. We are currently assessing the impact this standard will have on our consolidated financial statements.

Inventories

At July 31, 2014 and October 31, 2013, inventories consisted of the following:


	July 31, 2014			October 31, 2013
Raw materials and component parts	$	84,212		$	81,943
Work-in-process		33,987			34,756
Finished goods		129,029			115,078

		247,228			231,777
Obsolescence and other reserves		(29,452	)		(26,579	)
LIFO reserve		(7,424	)		(6,797	)

	$	210,352		$	198,401

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Nordson Corporation

Goodwill and other intangible assets

Changes in the carrying amount of goodwill for the nine months ended July 31, 2014 by operating segment are as follows:


	Adhesive Dispensing Systems			Advanced Technology Systems			Industrial Coating Systems		Total
Balance at October 31, 2013	$	407,269		$	507,884		$	24,058	$	939,211
Currency effect		(1,941	)		(131	)		—		(2,072	)

Balance at July 31, 2014	$	405,328		$	507,753		$	24,058	$	937,139

Accumulated impairment losses, which were recorded in 2009, were $232,789 at July 31, 2014 and October 31, 2013. Of these losses, $229,173 related to the Advanced Technology Systems segment, and $3,616 related to the Industrial Coating Systems segment.

Information regarding our intangible assets subject to amortization is as follows:


	July 31, 2014
	Carrying Amount		Accumulated Amortization		Net Book Value
Customer relationships	$	171,219	$	38,834	$	132,385
Patent/technology costs		85,920		26,055		59,865
Trade name		67,957		11,053		56,904
Non-compete agreements		8,371		7,616		755
Other		1,391		1,217		174

Total	$	334,858	$	84,775	$	250,083


	October 31, 2013
	Carrying Amount		Accumulated Amortization		Net Book Value
Customer relationships	$	171,489	$	28,872	$	142,617
Patent/technology costs		85,414		21,145		64,269
Trade name		67,865		7,856		60,009
Non-compete agreements		9,965		8,091		1,874
Other		1,400		1,096		304

Total	$	336,133	$	67,060	$	269,073

Amortization expense for the three months ended July 31, 2014 and 2013 was $6,150 and $5,550, respectively. Amortization expense for the nine months ended July 31, 2014 and 2013 was $18,790 and $17,034, respectively.

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Nordson Corporation

Pension and other postretirement plans

The components of net periodic pension cost for the three and nine months ended July 31, 2014 and July 31, 2013 were:


	U.S.						International
Three months ended	July 31, 2014			July 31, 2013			July 31, 2014			July 31, 2013
Service cost	$	2,018		$	2,070		$	691		$	516
Interest cost		3,480			3,057			783			709
Expected return on plan assets		(4,324	)		(3,737	)		(430	)		(373	)
Amortization of prior service cost (credit)		59			38			(20	)		(19	)
Amortization of net actuarial loss		1,985			3,431			384			347

Total benefit cost	$	3,218		$	4,859		$	1,408		$	1,180


	U.S.						International
Nine months ended	July 31, 2014			July 31, 2013			July 31, 2014			July 31, 2013
Service cost	$	6,053		$	6,692		$	2,102		$	1,586
Interest cost		10,441			9,235			2,392			2,147
Expected return on plan assets		(12,972	)		(11,401	)		(1,309	)		(1,133	)
Amortization of prior service cost (credit)		177			117			(59	)		(62	)
Amortization of net actuarial loss		5,955			10,496			1,170			1,049

Total benefit cost	$	9,654		$	15,139		$	4,296		$	3,587

The components of other postretirement benefit cost for the three and nine months ended July 31, 2014 and July 31, 2013 were:


	U.S.						International
Three months ended	July 31, 2014			July 31, 2013			July 31, 2014			July 31, 2013
Service cost	$	259		$	187		$	7		$	8
Interest cost		766			592			9			10
Amortization of prior service credit		(112	)		(118	)		—			—
Amortization of net actuarial (gain) loss		358			477			(3	)		(1	)

Total benefit cost	$	1,271		$	1,138		$	13		$	17


	U.S.						International
Nine months ended	July 31, 2014			July 31, 2013			July 31, 2014			July 31, 2013
Service cost	$	778		$	859		$	22		$	26
Interest cost		2,297			1,948			28			29
Amortization of prior service credit		(337	)		(355	)		—			—
Amortization of net actuarial (gain) loss		1,076			1,584			(10	)		(3	)

Total benefit cost	$	3,814		$	4,036		$	40		$	52

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Nordson Corporation

Income taxes

We record our interim provision for income taxes based on our estimated annual effective tax rate, as well as certain items discrete to the current period. The effective tax rates for the three and nine-month periods ended July 31, 2014 were 29.5% and 30.1%, respectively. The effective tax rates for the three and nine-month periods ended July 31, 2013 were 29.4% and 28.7%, respectively.

During the three months ending July 31, 2014, we recorded an adjustment related to our 2013 tax provision that reduced income taxes by $550. Additionally, we recorded a tax benefit of $500 related to an adjustment to deferred taxes resulting from a state income tax rate reduction.

During the three months ending July 31, 2013, we recorded an adjustment related to our 2012 tax provision that reduced income taxes by $430. Additionally, we recorded a tax benefit of $215 related to an adjustment to deferred taxes resulting from a tax rate reduction in the United Kingdom.

During the nine months ending July 31, 2013, we recorded a favorable adjustment to unrecognized tax benefits of $900 primarily related to expiration of certain foreign statutes of limitations. On January 2, 2013, the American Taxpayer Relief Act of 2012 was enacted which retroactively reinstated and extended the Federal R&D Tax Credit from January 1, 2012 to December 31, 2013 and extended certain other tax provisions. As a result, the Company’s income tax provision for the nine months ending July 31, 2013 includes a discrete tax benefit of $1,700 related to 2012.

Accumulated other comprehensive loss

Accumulated other comprehensive loss at July 31, 2014 and October 31, 2013 consisted of:


	Cumulative			Pension and			Accumulated
	translation			postretirement benefit			other comprehensive
	adjustments			plan adjustments			loss
Balance at October 31, 2013	$	26,699		$	(84,079	)	$	(57,380	)
Reclassification adjustments, net of tax of $(2,813)		—			5,180			5,180
Current period charge		(3,517	)		—			(3,517	)

Balance at July 31, 2014	$	23,182		$	(78,899	)	$	(55,717	)

For the three months ended July 31, 2014, reclassification adjustments out of accumulated other comprehensive loss affecting net income were $1,722 (net of tax of $936) and related to pension and postretirement adjustments.

Stock-based compensation

During the 2013 Annual Meeting of Shareholders on February 26, 2013, our shareholders approved the 2012 Stock Incentive and Award Plan (the “2012 Plan”). The 2012 Plan provides for the granting of stock options, stock appreciation rights, restricted shares, performance shares, stock purchase rights, stock equivalent units, cash awards and other stock or performance-based incentives. A maximum of 2,900 common shares is available for grant under the Plan.

Stock Options

Nonqualified or incentive stock options may be granted to our employees and directors. Generally, options granted to employees may be exercised beginning one year from the date of grant at a rate not exceeding 25% per year and expire 10 years from the date of grant. Vesting accelerates upon the occurrence of events that involve or may result in a change of control. For grants made prior to November 2012, vesting would cease upon retirement, death and disability, and unvested shares would be forfeited. For grants made in or after November 2012, in the event of termination of employment due to early retirement or normal retirement at age 65, options granted within 12 months prior to termination are forfeited, and vesting continues post retirement for all other unvested options granted. In the event of disability or death, all unvested stock options fully vest. Termination for any other reason results in forfeiture of unvested options and vested options in certain circumstances. The amortized cost of options is accelerated if the retirement eligibility date occurs before the normal vesting date. Option exercises are satisfied through the issuance of treasury shares on a first-in, first-out basis. We recognized compensation expense related to stock options of $2,358 and $1,244 in the three months ended July 31, 2014 and 2013, respectively. Corresponding amounts for the nine months ended July 31, 2014 and 2013 were $8,202 and $3,647, respectively. Most of the increases were related to accelerated amortization of the cost of options.

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Nordson Corporation

The following table summarizes activity related to stock options for the nine months ended July 31, 2014:


	Number of Options			Weighted-Average Exercise Price Per Share		Aggregate Intrinsic Value		Weighted Average Remaining Term
Outstanding at October 31, 2013		1,749		$	34.63
Granted		277		$	71.75
Exercised		(251	)	$	23.41
Forfeited or expired		(22	)	$	50.58

Outstanding at July 31, 2014		1,753		$	41.92	$	58,295		6.2 years

Vested or expected to vest at July 31, 2014		1,737		$	41.68	$	58,160		6.2 years
Exercisable at July 31, 2014		1,018		$	30.07	$	45,904		4.8 years

At July 31, 2014, there was $8,818 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 fair value of each option grant was estimated at the date of grant using the Black-Scholes option-pricing model with the following assumptions:


Nine months ended	July 31, 2014	July 31, 2013
Expected volatility	40.1%-44.7%	45.3%-46.9%
Expected dividend yield	0.98%-1.03%	0.97%-1.01%
Risk-free interest rate	1.51%-1.79%	0.75%-0.90%
Expected life of the option (in years)	5.4-6.1	5.4-6.1

The weighted-average expected volatility used to value the 2014 and 2013 options was 44.5% and 46.3%, 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 the nine months ended July 31, 2014 and 2013 was $27.92 and $24.12, respectively.

The total intrinsic value of options exercised during the three months ended July 31, 2014 and 2013 was $7,330 and $2,235, respectively. The total intrinsic value of options exercised during the nine months ended July 31, 2014 and 2013 was $13,291 and $10,590, respectively.

Cash received from the exercise of stock options for the nine months ended July 31, 2014 and 2013 was $5,870 and $5,124, respectively. The tax benefit realized from tax deductions from exercises for the nine months ended July 31, 2014 and 2013 was $4,127 and $3,192, respectively.

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Nordson Corporation

Restricted Shares and Restricted Share Units

We may grant restricted shares and/or restricted share units to our employees and directors. These shares or units may not be transferred for a designated period of time (generally one to three years) defined at the date of grant.

For employee recipients, in the event of termination of employment due to early retirement, restricted shares granted within 12 months prior to termination are forfeited, and other restricted shares vest on a pro-rata basis. In the event of termination of employment due to retirement at normal retirement age, restricted shares granted within 12 months prior to termination are forfeited, and, for other restricted shares, the restriction period will terminate and the shares will vest and be transferable. Restrictions lapse in the event of a recipient’s disability or death. Termination for any other reason prior to the lapse of any restrictions results in forfeiture of the shares.

For non-employee directors, all restrictions lapse in the event of disability or death of the non-employee director. Termination of service as a director for any other reason within one year of date of grant results in a pro-rata vesting of shares or units.

As shares or units are issued, deferred stock-based compensation equivalent to the fair market value on the date of grant is expensed over the vesting period. Tax benefits arising from the lapse of restrictions are recognized when realized and credited to capital in excess of stated value.

The following table summarizes activity related to restricted shares during the nine months ended July 31, 2014:


	Number of Shares			Weighted-Average Grant Date Fair Value
Restricted shares at October 31, 2013		82		$	52.67
Granted		23		$	71.89
Vested		(38	)	$	47.77

Restricted shares at July 31, 2014		67		$	62.10

As of July 31, 2014 there was $2,069 of unrecognized compensation cost related to restricted shares. The cost is expected to be amortized over a weighted average period of 1.8 years. The amount charged to expense related to restricted shares was $458 and $752 in the three months ended July 31, 2014 and 2013, respectively. These amounts included common share dividends for the three months ended July 31, 2014 and 2013 of $12 and $14, respectively. For the nine months ended July 31, 2014 and 2013, the amounts charged to expense related to restricted shares were $1,353 and $1,888, respectively. These amounts included common share dividends for the nine months ended July 31, 2014 and 2013 of $37 and $42, respectively.

The following table summarizes activity related to restricted share units during the nine months ended July 31, 2014:


	Number of Units			Weighted-Average Grant Date Fair Value
Restricted share units at October 31, 2013		12		$	51.79
Granted		12		$	71.82
Vested		(6	)	$	43.73

Restricted share units at July 31, 2014		18		$	68.71

As of July 31, 2014, there was $220 of remaining expense to be recognized related to outstanding restricted share units, which is expected to be recognized over a weighted average period of 0.3 years. The amount charged to expense related to restricted share units during the three months ended July 31, 2014 and 2013 was $222 and $262, respectively. For the nine months ended July 31, 2014 and 2013, the amounts were $667 and $480, respectively.

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Directors Deferred Compensation

Non-employee directors may defer all or part of their cash and equity-based compensation until retirement. Cash compensation may be deferred as cash or as share equivalent units. Deferred cash amounts are recorded as liabilities, and share equivalent units are recorded as equity. Additional share equivalent units are earned when common share dividends are declared.

The following table summarizes activity related to director deferred compensation share equivalent units during the nine months ended July 31, 2014:


	Number of Shares			Weighted-Average Grant Date Fair Value
Outstanding at October 31, 2013		148		$	23.22
Restricted stock units vested		6		$	43.73
Dividend equivalents		1		$	75.23
Distributions		(43	)	$	18.81

Outstanding at July 31, 2014		112		$	26.60

The amount charged to expense related to director deferred compensation for the three months ended July 31, 2014 and 2013 was $23 and $43, respectively. For the nine months ended July 31, 2014 and 2013, the corresponding amounts were $75 and $152, respectively.

Long-Term Incentives

Executive officers and selected other key employees participate in a common share-based long-term incentive compensation program. Payouts vary based on the degree to which corporate financial performance exceeds predetermined threshold, target and maximum performance levels over three-year performance periods. No payout will occur unless certain threshold performance objectives are exceeded.

The amount of compensation expense is based upon current performance projections for each three-year period and the percentage of the requisite service that has been rendered. The calculations are also based upon the grant date fair value determined using the closing market price of our common shares at the grant date, reduced by the implied value of dividends not to be paid. This value was $69.25 per share for 2014, $59.59 per share for 2013 and $42.12 per share for 2012. During the three months ended July 31, 2014 and 2013, $699 and $334, respectively, was charged to expense. For the nine months ended July 31, 2014 and 2013, the corresponding amounts were $3,144 and $2,601, respectively. The cumulative amount recorded in shareholders’ equity at July 31, 2014 was $6,410.

Our executive officers and other highly compensated employees may elect to defer up to 100% of their base pay and annual cash incentive compensation and for executive officers, up to 90% of their share-based long-term incentive compensation plan payout each year. Additional share units are credited for quarterly dividends paid on our common shares. Expense related to dividends paid under this plan for the three months ended July 31, 2014 and 2013 was $32 and $21, respectively. For the nine months ended July 31, 2014 and 2013, the amounts were $90 and $53, respectively.

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Warranties

We offer warranties to our customers depending on the specific product and terms of the customer purchase agreement. A typical warranty program requires that we repair or replace defective products within a specified time period (generally one year) from the date of delivery or first use. We record 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 our warranty provisions are adjusted as necessary. The liability for warranty costs is included in accrued liabilities in the Consolidated Balance Sheet.

Following is a reconciliation of the product warranty liability for the nine months ended July 31, 2014 and 2013:


	July 31, 2014			July 31, 2013
Beginning balance at October 31	$	9,409		$	8,929
Accruals for warranties		7,054			5,609
Warranty payments		(6,744	)		(5,964	)
Currency effect		(35	)		(44	)

Ending balance	$	9,684		$	8,530

10.

Operating segments

We conduct business across three primary business segments: Adhesive Dispensing Systems, Advanced Technology Systems, and Industrial Coating Systems. The composition of segments and measure of segment profitability is consistent with that used by our chief operating decision maker. The primary measure used by the chief operating decision maker for purposes of making decisions about allocating resources to the segments and assessing performance is operating profit, which equals sales less cost of sales and certain operating expenses. Items below the operating profit line of the Consolidated Statement of Income (interest and investment income, interest expense and other income/expense) are excluded from the measure of segment profitability reviewed by our chief operating decision maker and are not presented by operating segment. The accounting policies of the segments are generally the same as those described in Note 1, Significant Accounting Policies, of our annual report on Form 10-K for the year ended October 31, 2013.

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The following table presents sales and operating profits of our reportable segments:


	Adhesive Dispensing Systems			Advanced Technology Systems			Industrial Coating Systems		Corporate			Total
Three months ended July 31, 2014
Net external sales	$	226,762		$	174,636		$	57,152	$	—		$	458,550
Operating profit (loss)		60,806			56,444			7,471		(10,266	)		114,455
Three months ended July 31, 2013
Net external sales	$	195,992		$	150,280		$	56,688	$	—		$	402,960
Operating profit (loss)		50,998	(a)		42,465	(b)		7,585		(7,832	)		93,216
Nine months ended July 31, 2014
Net external sales	$	668,187		$	399,805		$	167,439	$	—		$	1,235,431
Operating profit (loss)		171,425	(c)		97,664	(d)		21,762		(29,703	)		261,148
Nine months ended July 31, 2013
Net external sales	$	575,750		$	388,990		$	167,363	$	—		$	1,132,103
Operating profit (loss)		146,011	(a)		96,310	(b)		22,896		(28,235	)		236,982

(a)	Includes $58 and $315 of severance and restructuring costs in the three and nine months ended July 31, 2013, respectively.

(b)	Includes $265 and $712 of severance and restructuring costs in the three and nine months ended July 31, 2013, respectively.

(c)	Includes $699 of severance and restructuring costs in the nine months ended July 31, 2014.

(d)	Includes $579 of severance and restructuring costs in the nine months ended July 31, 2014.

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


	Three Months Ended						Nine Months Ended
	July 31, 2014			July 31, 2013			July 31, 2014			July 31, 2013
Total profit for reportable segments	$	114,455		$	93,216		$	261,148		$	236,982
Interest expense		(3,810	)		(3,353	)		(10,917	)		(11,045	)
Interest and investment income		137			112			466			304
Other-net		(236	)		2,699			(851	)		934

Income before income taxes	$	110,546		$	92,674		$	249,846		$	227,175

We had significant sales in the following geographic regions:


	Three Months Ended				Nine Months Ended
	July 31, 2014		July 31, 2013		July 31, 2014		July 31, 2013
United States	$	119,705	$	115,809	$	360,904	$	341,926
Americas		31,296		28,017		89,705		91,851
Europe		126,639		103,877		365,172		297,708
Japan		34,593		26,704		89,727		93,914
Asia Pacific		146,317		128,553		329,923		306,704

Total net external sales	$	458,550	$	402,960	$	1,235,431	$	1,132,103

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11.

Fair value measurements

The inputs to the valuation techniques used to measure fair value are classified into the following categories:

Level 1: Quoted market prices in active markets for identical assets or liabilities.

Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data.

Level 3: Unobservable inputs that are not corroborated by market data.

The following table presents the classification of our assets and liabilities measured at fair value on a recurring basis at July 31, 2014:


	Total		Level 1		Level 2		Level 3
Assets:
Rabbi trust (a)	$	13,550	$	—	$	13,550	$	—
Foreign currency forward contracts (b)		3,688		—		3,688		—

Total assets at fair value	$	17,238	$	—	$	17,238	$	—

Liabilities:
Deferred compensation plans (c)	$	8,494	$	8,494	$	—	$	—
Foreign currency forward contracts (b)		3,966		—		3,966		—

Total liabilities at fair value	$	12,460	$	8,494	$	3,966	$	—

(a)	We maintain a rabbi trust that serves as an investment to shadow our deferred compensation plan liability. The investment assets of the trust consist of life insurance policies for which we recognize income or expense based upon changes in cash surrender value.

(b)

We enter into foreign currency forward contracts to reduce the risk of foreign currency exposures resulting from receivables, payables, intercompany receivables, intercompany payables and loans denominated in foreign currencies. Foreign currency forward contracts are valued using market exchange rates. These contracts are not designated as hedging instruments.

(c)

Executive officers and other highly compensated employees may defer up to 100% of their salary and annual cash incentive compensation and for executive officers, up to 90% of their share-based long-term incentive compensation, into various non-qualified deferred compensation plans. Deferrals can be allocated to various market performance measurement funds. Changes in the value of compensation deferred under these plans are recognized each period based on the fair value of the underlying measurement funds.

12.

Financial instruments

We operate internationally and enter into intercompany transactions denominated in foreign currencies. Consequently, we are subject to market risk arising from exchange rate movements between the dates foreign currencies are recorded and the dates they are settled. We regularly use foreign currency forward contracts to reduce our risks related to most of these transactions. These contracts usually have maturities of 90 days or less and generally require us to exchange foreign currencies for U.S. dollars at maturity, at rates stated in the contracts. These contracts are not designated as hedging instruments. We do not use financial instruments for trading or speculative purposes.

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Gains and losses on foreign currency forward contracts are recorded in “Other – net” on the Consolidated Statement of Income together with the transaction gain or loss from the hedged balance sheet position. For the three months ended July 31, 2014, we recognized losses of $285 on foreign currency forward contracts and gains of $267 from the change in fair value of balance sheet positions. For the three months ended July 31, 2013, we recognized losses of $1,313 on foreign currency forward contracts and gains of $1,402 from the change in fair value of balance sheet positions. For the nine months ended July 31, 2014, we recognized losses of $2,614 on foreign currency forward contracts and gains of $2,448 from the change in fair value of balance sheet positions. For the nine months ended July 31, 2013, we recognized losses of $1,887 on foreign currency forward contracts and losses of $571 from the change in fair value of balance sheet positions.

We had the following outstanding foreign currency forward contracts at July 31, 2014:


	Sell				Buy
	Notional Amounts		Fair Market Value		Notional Amounts		Fair Market Value
Euro	$	379,824	$	374,283	$	338,853	$	334,180
British pound		51,386		52,049		68,286		68,078
Japanese yen		15,667		15,477		9,161		9,068
Australian dollar		468		465		9,018		9,024
Hong Kong dollar		53,195		53,202		111,493		111,508
Singapore dollar		—		—		10,447		10,454
Others		4,330		4,263		26,626		26,162

Total	$	504,870	$	499,739	$	573,884	$	568,474

The carrying amounts and fair values of financial instruments at July 31, 2014, other than receivables and accounts payable, are shown in the table below. The carrying values of receivables and accounts payable approximate fair value due to the short-term nature of these instruments.


	Carrying Amount			Fair Value
Cash and cash equivalents	$	53,223		$	53,223
Notes payable		9,405			9,405
Long-term debt, including current maturities		623,113			624,973
Foreign currency forward contracts (net)		(278	)		(278	)

We 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.

•

Long-term debt is valued by discounting future cash flows at currently available rates for borrowing arrangements with similar terms and conditions, which are considered to be Level 2 inputs under the fair value hierarchy.

•

Foreign currency forward contracts are valued using observable market based inputs, which are considered to be Level 2 inputs under the fair value hierarchy.

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13.

Contingencies

We are 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 our opinion, after consultation with legal counsel, that resolutions of these matters are not expected to result in a material adverse effect on our financial condition, quarterly or annual operating results or cash flows.

We have voluntarily agreed with the City of New Richmond, Wisconsin and other Potentially Responsible Parties to share costs associated with the remediation of the City of New Richmond municipal landfill (the “Site”) and the construction of a potable water delivery system serving the impacted area down gradient of the Site. At July 31, 2014 and October 31, 2013, our accrual for the ongoing operation, maintenance and monitoring obligation at the Site was $615 and $668, respectively. 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 our estimate of environmental liability is affected by several uncertainties such as additional requirements that 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, our liability could be greater than our current estimate. However, we do not expect that the costs associated with remediation will have a material adverse effect on our financial condition or results of operations.

14.

Subsequent events

On August 6, 2014, we entered into a $100,000 unsecured credit facility with PNC Bank, National Association. This facility has a 364-day term and contains events of default and covenants related to limitations on indebtedness and the maintenance of certain financial ratios that are consistent with our existing revolving credit facility.

On August 8, 2014, we completed the acquisition of 100% of Avalon Laboratories Holding Corp (“Avalon”). Avalon, a leading designer and manufacturer of highly specialized catheters and medical tubing products for cardiology, pulminology and related applications, compliments our existing lines of highly engineered, single-use plastic components for fluid management in medical applications. Avalon will operate as part of our Advanced Technology Systems segment. We acquired Avalon on a cash-free and debt-free basis for an aggregate purchase price of $180,000, subject to certain adjustments. We financed the acquisition with borrowings under our credit facility with PNC Bank, National Association referred to above and with borrowings under our existing revolving credit facility.

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is Management’s discussion and analysis of certain significant factors affecting our financial condition and results of operations for the periods included in the accompanying condensed consolidated financial statements.

Overview

Founded in 1954, Nordson Corporation delivers precision technology solutions to help customers succeed worldwide. We engineer, manufacture and market differentiated products and systems used for precision dispensing of adhesives, coatings, sealants, biomaterials, fluids and other materials, plastic extrusion and injection molding, electronics testing and inspecting, and surface preparation. These products are supported with extensive application expertise and direct global sales and service. We serve a wide variety of consumer non-durable, durable and technology end-markets including packaging, nonwovens, electronics, medical, appliances, energy, transportation, construction, and general product assembly and finishing. We have approximately 5,800 employees and direct operations in more than 30 countries.

Critical Accounting Policies and Estimates

The preparation and fair presentation of the consolidated unaudited interim financial statements and accompanying notes included in this report are the responsibility of management. The financial statements and footnotes have been prepared in accordance with U.S. generally accepted accounting principles for interim financial statements and contain certain amounts that were based upon management’s best estimates, judgments and assumptions that were believed to be reasonable under the circumstances. On an ongoing basis, we evaluate the accounting policies and estimates used to prepare financial statements. Estimates are based on historical experience, judgments and assumptions believed to be reasonable under current facts and circumstances. Actual amounts and results could differ from these estimates used by management.

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A comprehensive discussion of the Company’s critical accounting policies and management estimates and significant accounting policies followed in the preparation of the financial statements is included in Item 7 of our annual report on Form 10-K for the year ended October 31, 2013. There have been no significant changes in critical accounting policies, management estimates or significant accounting policies since the year ended October 31, 2013.

Results of Operations

Sales

Worldwide sales for the three months ended July 31, 2014 were $458,550, an increase of $55,590, or 13.8%, from sales of $402,960 for the comparable period of 2013. Sales volume increased 12.8%, consisting of organic growth of 7.9% and 4.9% from acquisitions. Favorable currency effects increased sales by 1.0%.

Sales of the Adhesive Dispensing Systems segment for the three months ended July 31, 2014 were $226,762, an increase of 15.7% from the comparable period of 2013. Sales volume increased 14.7%, consisting of 4.6% organic volume and 10.1% from the first-year effect of the Kreyenborg acquisition. Favorable currency effects increased sales by 1.0%. Organic growth was driven by our disposable hygiene, rigid packaging, and polymer processing end markets. Sales volume, inclusive of acquisitions, increased in all geographic regions.

Sales of the Advanced Technology Systems segment for the three months ended July 31, 2014 were $174,636, a 16.2% increase compared to $150,280 for the three months ended July 31, 2013. Sales volume was higher by 15.0%, and favorable currency effects increased sales by 1.2%. Strong growth in all product lines was led by demand for our automated dispensing equipment related to electronic mobile device assembly end markets, along with higher demand for our electronic test and inspection equipment, semi-automated dispensing systems and single-use fluid management components related to medical and industrial end markets. Within this segment, sales volume increased in the Americas, Japan and Asia Pacific regions, and was offset by softness in the United States and Europe.

Sales of the Industrial Coating Systems segment for the three months ended July 31, 2014 were $57,152, an increase of 0.8% over the three months ended July 31, 2013. Sales volume increased 0.3% and favorable currency effects increased sales by 0.5%. Sales growth in our cold material dispensing equipment for automotive and industrial end markets was offset by softness in select consumer durable goods end markets. Sales volume increased in the United States and Europe, and was offset by softness in other regions.

Sales outside the United States accounted for 73.9% of sales in the three months ended July 31, 2014 and 71.3% of sales in the three months ended July 31, 2013. On a geographic basis, sales in the United States increased 3.4% for the three months ended July 31, 2014 compared to the same period of 2013. This increase in sales volume consisted of 2.4% organic growth and 1.0% from acquisitions. Sales in the Americas region were up 11.7%, with volume increasing 13.5% offset by unfavorable currency effects that reduced sales by 1.8%. The sales volume increase consisted of 13.2% organic volume and 0.3% from acquisitions. Sales in Europe increased 21.9%, consisting of a volume increase of 16.8% and favorable currency effects that increased sales by 5.1%. This increase in sales volume consisted of 0.9% organic growth and 15.9% from acquisitions. Sales in Japan for the three months ended July 31, 2014 were up 29.5% from the comparable period of the prior year, which consisted of volume increases of 32.2%, offset by unfavorable changes in the Japanese Yen that reduced sales by 2.7%. The sales volume increase consisted of higher organic volume of 29.4% and 2.8% growth from acquisitions. Sales in the Asia Pacific region were up 13.8%, consisting of a 13.9% volume increase partially offset by unfavorable currency effects of 0.1%. This increase in sales volume consisted of 13.0% organic volume growth and 0.9% growth from acquisitions.

Worldwide sales for the nine months ended July 31, 2014 were $1,235,431, an increase of $103,328, or 9.1%, over sales of $1,132,103 for the comparable period of 2013. Sales volume increased 9.1%, consisting of organic growth of 3.8% and 5.3% from acquisitions. Currency effects were neutral when compared to the comparable period of 2013.

Sales of the Adhesive Dispensing Systems segment for the nine months ended July 31, 2014 were $668,187, an increase of $92,437, or 16.1%, over the comparable period of 2013. Sales volume increased 16.4%, consisting of 5.9% organic growth and 10.5% from the first-year effect of acquisitions. Unfavorable currency effects reduced sales by 0.3%. Organic sales growth was driven by continued demand in the rigid packaging, disposable hygiene, general product assembly and polymer processing end markets. Sales volume, inclusive of acquisitions, increased in all geographic regions and was most pronounced in Europe and Asia Pacific.

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Sales of the Advanced Technology Systems segment for the nine months ended July 31, 2014 were $399,805 compared to $388,990 in the comparable period of 2013, an increase of $10,815, or 2.8%. Sales volume increased 2.2%, and favorable currency effects increased sales by 0.6%. Within the segment, sales volume increased in all regions, except the Americas. Higher demand for our test and inspection equipment, as well as in general fluid management end markets drove the sales volume increase.

Sales of the Industrial Coating Systems segment for the nine months ended July 31, 2014 were $167,439, compared to $167,363 for the same period of 2013. Sales volume increased 0.3%, and was offset by unfavorable currency effects of 0.3%. Sales volume increased in the United States and Europe regions, and was offset by softness in other regions. Sales growth in powder, container and liquid coating product lines for consumer and industrial durable goods end markets was offset by softness in our large dollar engineered systems supporting automotive OEMs.

Sales outside the United States accounted for 70.8% of sales in the nine months ended July 31, 2014 and 69.8% of sales for the nine months ended July 31, 2013. On a geographic basis, sales in the United States increased 5.6% for the nine months ended July 31, 2014 compared to the nine months ended July 31, 2013. This increase in sales volume consisted of 4.5% organic growth and 1.1% from acquisitions. Sales in the Americas region were down 2.3% for the nine months ended July 31, 2014. Sales volume increased 0.9%, and was offset by unfavorable currency effects which reduced sales by 3.2%. This increase in sales volume consisted of a 0.6% increase in organic volume, and a 0.3% increase from acquisitions. Sales in Europe increased 22.7%, consisting of a volume increase of 18.7% and favorable currency effects of 4.0%. This increase in sales volume consisted of 4.5% organic growth and 14.2% from acquisitions. Sales in Japan for the nine months ended July 31, 2014 decreased 4.5% from the comparable period of the prior year, consisting of higher volume of 3.7%, offset by unfavorable changes in the Japanese Yen of 8.2%. This sales volume increase consisted of a 1.3% increase in organic volume, and a 2.4% of increase from acquisitions. Sales in the Asia Pacific region increased 7.6%, consisting of 7.9% volume, offset by unfavorable currency effects of 0.3%. This increase in sales volume consisted of 4.1% from higher organic growth and 3.8% from acquisitions.

Operating Profit

Cost of sales for the three months ended July 31, 2014 were $201,039, up from $177,877 in 2013. Cost of sales for the nine months ended July 31, 2014 were $547,586, up from $492,853 in 2013.

The gross profit percentage was 56.2% for the three months ended July 31, 2014, as compared to 55.9% for the three months ended July 31, 2013. This increase is due to more profitable product line mix and favorable currency effects. For the nine months ended July 31, 2014, the gross profit percentage was 55.7%, as compared to 56.5% for the nine months ended July 31, 2013. This decrease was caused by the dilutive effect of our fourth quarter 2013 Kreyenborg acquisition and the short-term purchase price accounting valuation adjustment associated with acquired inventory, a portion of which was recognized in the first quarter of 2014.

Selling and administrative expenses, including severance and restructuring costs, for the three months ended July 31, 2014 were $143,056, an increase of 8.5% as compared to $131,867 for the comparable period of 2013. Selling and administrative expenses for the nine months ended July 31, 2014 were $426,697, an increase of 6.1% as compared to $402,268 for the comparable period of 2013. The increases were primarily a result of the first-year effect of the 2013 Kreyenborg acquisition, as well as higher compensation expenses related to increased employment levels worldwide.

Selling and administrative expenses, including severance and restructuring costs, for the three months ended July 31, 2014 as a percent of sales were reduced to 31.2%, as compared to 32.7% for the comparable period of 2013. For the nine months ended July 31, 2014, these expenses as a percent of sales were reduced to 34.5% from 35.5% for the same period of 2013.

During the nine months ended July 31, 2014, we recognized severance and restructuring costs of $699 in the Adhesive Dispensing Systems segment and $579 in the Advanced Technology Systems segment. These costs were associated with continuous improvement and global optimization efforts.

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During the three months ended July 31, 2013, we recognized severance and restructuring costs of $323 which consisted of $265 in the Advanced Technology Systems segment and $58 in the Adhesives Dispensing Systems segment. During the nine months ended July 31, 2013, we recognized severance and restructuring costs of $315 in the Adhesive Dispensing Systems segment and $712 in the Advanced Technology Systems segment. These costs were associated with implementing restructuring initiatives to optimize global operations.

Operating profit as a percentage of sales was 25.0% for the three months ended July 31, 2014, up from 23.1% for the comparable period of 2013. This increase was primarily due to the leverage of higher sales volume. Operating profit as a percentage of sales was 21.1% for the nine months ended July 31, 2014, up from 20.9% for the comparable period of 2013. This increase was primarily due to the leverage of higher sales volume, partially offset by a short-term purchase price accounting valuation adjustment associated with acquired inventory.

For the Adhesive Dispensing Systems segment, operating profit as a percent of sales increased to 26.8% for the three months ended July 31, 2014 from 26.0% in 2013 and to 25.7% for the nine months ended July 31, 2014 from 25.4% for the comparable period of 2013. The increases were primarily due to the leverage of higher sales volume and product mix, offset by the dilutive effect of our Kreyenborg acquisition in the fourth quarter of 2013.

For the Advanced Technology Systems segment, operating profit as a percent of sales for the three months ended July 31, 2014 increased to 32.3% from 28.3% for the three months ended July 31, 2013. This increase was primarily due to the leverage of higher sales volume. For the nine months ended July 31, 2014, operating profit as a percent of sales was 24.4%, down from 24.8% for the nine months ended July31, 2013. This decrease was primarily due to overall product mix during the year.

For the Industrial Coating Systems segment, operating profit as a percent of sales was 13.1% for the three months ended July 31, 2014, down from 13.4% for the three months ended July 31, 2013. For the nine months ended July 31, 2014, operating profit was 13.0% of sales, compared to 13.7% in the same period of 2013.

Interest and Other Income (Expense)

Interest expense for the three months ended July 31, 2014 was $3,810, up from $3,353 for the three months ended July 31, 2013. This increase is due primarily to higher average debt levels as compared to the same period a year ago. Interest expense for the nine months ended July 31, 2014 was $10,917, down from $11,045 for the nine months ended July 31, 2013. This reduction is due primarily to lower interest rates.

Other expense was $236 for the three months ended July 31, 2014, compared to other income of $2,699 in the comparable period of the prior year. Other expense for the nine months ended July 31, 2014 was $851, compared to other income of $934 for the nine months ended July 31, 2013. Included in the nine-month amounts were foreign exchange losses of $166 in 2014 and $2,458 in 2013. Included in the three- and nine-months ended July 31, 2013 was a gain on sale of real estate in China of $2,106.

Income Taxes

The effective tax rates for the three- and nine-month periods ending July 31, 2014 was 29.5% and 30.1%, respectively, compared to 29.4% and 28.7% for the three- and nine-month periods ending July 31, 2013, respectively. The increases in the effective tax rates compared to the prior year were due to the expiration of the Federal R&D Tax Credit on December 31, 2013 and certain discrete tax items recorded in both years.

During the three months ending July 31, 2014 we recorded an adjustment related to our 2013 tax provision that reduced income taxes by $550. Additionally, we recorded a tax benefit of $500 related an adjustment to deferred taxes resulting from a state income tax rate reduction.

During the three months ending July 31, 2013 we recorded an adjustment related to our 2012 tax provision that reduced income taxes by $430. Additionally, we recorded a tax benefit of $215 related to an adjustment to deferred taxes resulting from a tax rate reduction in the United Kingdom.

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During the nine months ending July 31, 2013 we recorded a favorable adjustment to unrecognized tax benefits of $900 primarily related to expiration of certain foreign statutes of limitations. On January 2, 2013, the American Taxpayer Relief Act of 2012 was enacted which retroactively reinstated and extended the Federal R&D Tax Credit from January 1, 2012 to December 31, 2013 and extended certain other tax provisions. As a result, the Company’s income tax provision for the nine months ending July 31, 2013 includes a discrete tax benefit of $1,700 related to 2012.

Net Income

Net income for the three months ended July 31, 2014 was $77,879 or $1.21 per share on a diluted basis, compared to $65,424 or $1.01 per share on a diluted basis in the same period of 2013. This represented a 19.0% increase in net income and a 19.8% increase in earnings per share. For the nine months ended July 31, 2014, net income was $174,693, or $2.71 per share on a diluted basis, compared to $162,040, or $2.50 per share for the nine months ended July 31, 2013. This represented a 7.8% increase in net income and a 8.4% increase in earnings per share. The percentage increase in earnings per share is more than the percentage increase in net income due to a lower number of shares outstanding in the current year as result of share repurchases.

Foreign Currency Effects

In the aggregate, average exchange rates for 2014 used to translate international sales and operating results into U.S. dollars compared favorably with average exchange rates existing during 2013. It is not possible to precisely measure the impact on operating results arising from foreign currency exchange rate changes because of changes in selling prices, sales volume, product mix and cost structure in each country in which we operate. However, if transactions for the three months ended July 31, 2014 were translated at exchange rates in effect during the same period of 2013, sales would have been approximately $3,939 lower while third-party costs and expenses would have been approximately $2,232 lower. If transactions for the nine months ended July 31, 2014 were translated at exchange rates in effect during the same period of 2013, sales would have been approximately $359 lower and third party costs would have been approximately $2,005 lower.

Financial Condition

Liquidity and Capital Resources

During the nine months ended July 31, 2014, cash and cash equivalents increased $10,848. Cash provided by operations during this period was $182,958, compared to $194,584 for the nine months ended July 31, 2013. Cash of $231,839 for the nine months ended July 31, 2014 was generated from net income adjusted for non-cash income and expenses (consisting of depreciation and amortization, non-cash stock compensation, deferred income taxes, other non-cash expense and loss on sale of property, plant and equipment) as compared to $214,300 in the same period of the prior year. Changes in operating assets and liabilities, including the tax benefit from the exercise of stock options, used $48,881 of cash in the first nine months of 2014, compared to $19,716 in the first nine months of 2013.

Cash used in investing activities was $28,512 for the nine months ended July 31, 2014, compared to $32,879 in the comparable period of the prior year. Current year capital expenditures were $27,936, down from $34,569 in 2013. Current year capital expenditures were focused on production machinery, continued investments in our information systems platform and on a new facility in Colorado supporting our fluid management product lines. For the nine months ended July 31, 2014, cash of $854 was used for an equity investment. For the nine months ended July 31, 2013, cash of $1,231 was used for the acquisition of certain assets of Kodama Chemical Industry Co. Ltd., a licensed distributor of our EDI business in Japan, and cash of $1,116 was used for an equity investment. Proceeds of $3,760 from the sale of property, plant and equipment in 2013 related primarily to real estate sold in China.

Cash used in financing activities was $142,430 for the nine months ended July 31, 2014, compared to $128,216 for the nine months ended July 31, 2013. In the current year, cash of $94,410 was used for the repurchase of common shares, cash of $34,525 was used for dividend payments, and cash of $18,863 was used for net short-term and long-term repayments. Cash of $5,870 was provided by the issuance of common stock related to stock option exercises,.

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Nordson Corporation

The following is a summary of significant changes in balance sheet captions from the end of fiscal 2013 to July 31, 2014:

Receivables increased $49,482 due to higher sales in the third quarter of 2014 as compared to the fourth quarter of 2013. Inventories increased $11,951 due to the higher level of business activity expected in the fourth quarter of 2014 as compared to the first quarter. Prepaid expenses increased $6,464 primarily due to the tax effect on higher intercompany profit in inventory. Property, plant and equipment – net increased $8,306 primarily due to capital expenditures and a capital lease for a new facility in Japan, and was partially offset by depreciation. The decrease of $18,990 in intangible assets – net was due to amortization and translation effects.

The increase of $5,801 in notes payable for the nine months ended July 31, 2014 was due to borrowings in China to fund expansion in China. The increase of $15,439 in income taxes payable was primarily due to the timing of required tax payments. The decrease of $10,643 in long-term pension obligations was primarily due to scheduled contributions to our domestic plans. The increase of $4,034 in other long-term liabilities was primarily due to a capital lease for the Japanese facility referred to above and increases in deferred compensation liabilities.

The board of directors approved a share repurchase program of up to $200,000 in August 2013. 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 being funded using cash from operations and proceeds from borrowings under our credit facilities. During the nine months ended July 31, 2014, 1,249 shares were repurchased under this program for a total amount of $91,611, or $73.35 per share.

Contractual Obligations

We have a $500,000 unsecured, multicurrency credit facility with a group of banks that expires in December 2016 and may be increased to $750,000 under certain conditions. At July 31, 2014, $265,684 was outstanding under this facility, compared to $254,000 outstanding at October 31, 2013. The weighted average interest rate for borrowings under this facility was 1.09% at July 31, 2014. This facility contains customary events of default and covenants related to limitations on indebtedness and the maintenance of certain financial ratios. We were in compliance with all debt covenants at July 31, 2014, and the amount we could borrow under the facility would not have been limited by any debt covenants.

We entered into a $150,000 three-year Private Shelf Note agreement with New York Life Investment Management LLC in 2011, and the amount of the facility was increased from $150,000 to $175,000 in 2013. Borrowings under the agreement may be up to 12 years, with an average life of up to 10 years, and are unsecured. The interest rate on each borrowing can be fixed or floating and is based upon the market rate at the borrowing date. At July 31, 2014 and October 31, 2013, $63,889 was outstanding under this facility at a fixed rate of 2.21% per annum. This agreement contains customary events of default and covenants related to limitations on indebtedness and the maintenance of certain financial ratios. We were in compliance with all covenants at July 31, 2014, and the amount we could borrow would not have been limited by any debt covenants.

In 2012, we entered into a Note Purchase Agreement with a group of insurance companies under which we sold $200,000 of Senior Notes. The notes mature between July 2017 and July 2025 and bear interest at fixed rates between 2.27% and 3.13%. We were in compliance with all covenants at July 31, 2014.

In 2013, we entered into a €100,000 agreement with The Bank of Tokyo-Mitsubishi UFJ, Ltd. The term of the agreement is three years and can be extended by one year at the end of the third and fourth anniversaries. The interest rate is variable based upon the EUR LIBOR rate. At July 31, 2014, there was €68,500 ($91,725) outstanding under this agreement, compared to € 95,000 ($129,058) outstanding at October 31, 2013. The weighted-average interest rate was 1.15% at July 31, 2014. We were in compliance with all covenants at July 31, 2014.

In addition, we have one note payable at our China subsidiary used for short-term financing needs.

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Nordson Corporation

Outlook

Our revenue growth in the previous quarter and expected for the near term is pacing strong in a slow-growing global macroeconomic environment. We move forward with cautious optimism regarding expectations beyond the near-term, given slower growth in emerging markets, economists’ expectations for global GDP indicating a low-growth macroeconomic environment and marketplace effects of political instability in certain areas of the world. Though the global macroeconomic outlook remains unclear, our growth potential has been demonstrated over time from our capacity to build and enhance our core businesses by entering emerging markets and pursuing market adjacencies. We drive value for our customers through our application expertise, differentiated technology, and direct sales and service support. Our priorities also are focused on operational efficiencies by employing continuous improvement methodologies in our business processes. We expect these efforts will continue to provide more than sufficient cash from operations for meeting our liquidity needs and paying dividends to common shareholders, as well as enabling us to invest in the development of new applications and markets for our technologies. Our cash and available borrowing capacity will enable us to make other strategic investments.

For the fourth quarter of 2014, sales are expected to increase in the range of 10% to 14% as compared to the fourth quarter a year ago. This outlook is inclusive of organic volume growth of 7% to 11% and 3% growth from the first year effect of acquisitions. Currency translation effects are not material based on the current exchange rate environment. Diluted earnings per share are expected to be in the range of $1.07 to $1.17. These projections include the effects of the recently announced acquisition as disclosed in Note 14 to our consolidated financial statements.

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

This Form 10-Q, 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 we operate and the U.S. and global economies. Statements in this 10-Q 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. We undertake 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.

Factors that could cause actual results to differ materially from the expected results are discussed in Item 1A, Risk Factors in our annual report on Form 10-K for the year ended October 31, 2013.

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Information regarding our financial instruments that are sensitive to changes in interest rates and foreign currency exchange rates was disclosed in our annual report on Form 10-K for the year ended October 31, 2013. The information disclosed has not changed materially in the interim period since then.

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Nordson Corporation

ITEM 4.

CONTROLS AND PROCEDURES

Our management with the participation of the principal executive officer (President and Chief Executive Officer) and principal financial officer (Senior Vice President, Chief Financial Officer) has reviewed and evaluated our disclosure controls and procedures (as defined in the Securities Exchange Act Rule 13a-15(e)) as of July 31, 2014. Based on that evaluation, our management, including the principal executive and financial officers, has concluded that our disclosure controls and procedures were effective as of July 31, 2014 in ensuring that information required to be disclosed in the reports that we file or submit 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 management, including the principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

There were no changes in our internal controls over financial reporting that occurred during the three months ended July 31, 2014 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Part II – OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS

We have voluntarily agreed with the City of New Richmond, Wisconsin and other Potentially Responsible Parties to share costs associated with the remediation of the City of New Richmond municipal landfill (the “Site”) and constructing a potable water delivery system serving the impacted area down gradient of the Site. Our accrual for the ongoing operation, maintenance and monitoring obligation at the Site was $615 and $668 at July 31, 2014 and October 31, 2013, respectively. 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 our estimate of environmental liability is affected by several uncertainties such as additional requirements that 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, our liability could be greater than our current estimate. However, we do not expect that the costs associated with remediation will have a material adverse effect on our financial condition or results of operations.

ITEM 1A.

RISK FACTORS

Information regarding our risk factors was disclosed in our annual report on Form 10-K filed for the year ended October 31, 2013. The information disclosed has not changed materially in 2014.

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Nordson Corporation

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table summarizes common stock repurchased by the Company during the three months ended July 31, 2014:


(In thousands, except for per share data)	Total Number of Shares Purchased (1)		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)		Maximum Value of Shares that May Yet Be Purchased Under the Plans or Programs
May 1, 2014 to May 31, 2014		178	$	74.58		177	$	127,430
June 1, 2014 to June 30, 2014		38	$	79.76		38	$	124,428
July 1, 2014 to July 31, 2014		255	$	78.50		255	$	104,419

Total		471				470

(1)	Includes shares purchased as part of a publicly announced program, as well as shares tendered for taxes related to stock option exercises and vesting of restricted shares.

(2)

In August 2013 the board of directors approved a repurchase program of up to $200,000. 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 being funded using cash from operations and proceeds from borrowings under our credit facilities.

ITEM 6.

EXHIBITS

Exhibit Number:



10.1		Agreement and Primary Release of Claims dated June 24, 2014 between Nordson Corporation and Peter G. Lambert.

10.2		Agreement and Plan of Merger by and among Avalon Laboratories Holding Corp., Nordson Medical Corporation, Arriba Merger Corp., American Capital Equity III, LP, as Securityholders’ Representative and, for the limited purposes set forth herein, Nordson Corporation, dated as of August 1, 2014.

10.3		Credit Agreement dated August 6, 2014 by and among Nordson Corporation, PNC Bank National Association and PNC Capital Markets LLC.

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 Chief Executive Officer 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 Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101		The following financial information from Nordson Corporation’s Quarterly Report on Form 10-Q for the three and nine months ended July 31, 2014, formatted in Extensible Business Reporting Language (XBRL): (i) the Condensed Consolidated Statements of Income for the three and nine months ended July 31, 2014 and July 31, 2013, (ii) the Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended July 31, 2014 and July 31, 2013, (iii) the Condensed Consolidated Balance Sheets at July 31, 2014 and October 31, 2013, (iv) the Condensed Consolidated Statements of Cash Flows for the nine months ended July 31, 2014 and July 31, 2013, and (v) the Notes to Condensed Consolidated Financial Statements.

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Nordson Corporation

SIGNATURES

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


Date: September 4, 2014						Nordson Corporation

						By: /s/ GREGORY A. THAXTON
						Gregory A. Thaxton
						Senior Vice President, Chief Financial Officer
						(Principal Financial Officer)

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Exhibit 10.1

NORDSON CORPORATION

28601 Clemens Road

Westlake, OH 44145-1119

June 4, 2014

(Amended June 24, 2014)

Personal and Confidential

Peter G. Lambert

9085 Waits Ferry Cr

Johns Creek GA. 30097

Dear Peter,

This letter sets forth the terms of your resignation as an executive officer of Nordson Corporation (Nordson) and the terms of a paid leave of absence through January 30, 2015, conditioned upon you signing: (i) this letter agreement (“Agreement”); (ii) the attached Primary Release of Claims (Exhibit 1) within twenty-one (21) days of the date of this letter; and (iii) the attached Secondary Release of Claims (Exhibit 2) during the period from January 30, 2015 through February 21, 2015, or within twenty-one (21) days following your voluntary termination of employment prior to expiration of the leave of absence period. All payments and benefits are also subject to your not revoking any of the Release of Claims during the applicable revocation periods.

1. Cessation of Status as an Officer . Effective June 6, 2014, your status as an executive officer of Nordson, and of any subsidiaries and other affiliates of Nordson of which you are an officer, and your status as a director of The Nordson Corporation Foundation will cease. Accordingly, you will not hold yourself out as being an officer or director, or as having any authority to bind, Nordson, any such subsidiary or affiliate, or The Nordson Corporation Foundation. You agree to execute any documents necessary to reflect the change in status.

Even though you will no longer be an officer of Nordson or of any subsidiary or other affiliate of Nordson, certain restrictions will apply to any purchase or sale of Nordson Common Shares by you. By signing this Agreement, you acknowledge that you have received the summary of those restrictions that is attached to this Agreement as Exhibit 3 hereto and agree that you will comply with those restrictions.

2. Paid Leave of Absence and Transitional Support. You will be placed on a paid leave of absence commencing June 6, 2014 through January 30, 2015 at which time you will be eligible to elect to retire from Nordson Corporation. During this paid leave of absence you agree to provide support for the transition of your managerial duties to other Nordson employees. The paid leave of absence expires the earlier of (i) the expiration of the leave period or (ii) the date you choose to voluntarily terminate your employment with Nordson.

3. Compensation During the Leave of Absence . As part of the consideration for you to execute the Primary Release of Claims (Exhibit 1), Nordson will continue to pay you your FY 2014 base salary on a biweekly basis through the leave of absence period.

4. FY 2014 Cash Incentive Award. As part of the consideration for you to execute the Primary Release of Claims (Exhibit 1), you will receive payment for the FY 2014 Cash Incentive Award on the settlement date of the Award, based on a full year of participation. You will not receive a FY 2015 Incentive Cash Award.

5. Performance Share Awards. As part of the consideration for you to execute the Primary Release of Claims (Exhibit 1), the FY 2012-2014, FY 2013-2015 and FY 2014-2016 Performance Share Awards will be paid on their respective settlement date as follows:

•

FY 2012-2014: Full payout at actual results, paid in shares on settlement date (Jan. 2015);

•

FY 2013-2015: 27/36ths of actual payout, paid in shares on settlement date (Jan. 2016; and

•

FY 2014-2016: 15/36ths of actual payout, paid in shares on settlement date (Jan 2017)

Should you voluntarily terminate your employment prior to the expiration of the leave of absence period, the prorata payouts for the FY 2013-2015 and FY 2014-2016 Performance Share Awards will be adjusted accordingly.

6. Stock Options and Restricted Stock . Unvested stock options and unvested restricted stock granted previously to you under the Amended and Restated Nordson Corporation 2008 Long-Term Performance Plan and Nordson Corporation 2012 Stock Incentive and Award Plan (collectively, the “Plans”) will vest according to the terms of grant for the respective grants and terms of the Plans. No additional stock options or restricted stock will be granted to you.

As part of the consideration for you to execute the Primary Release of Claims (Exhibit 1), should you voluntarily terminate your employment with Nordson prior to the expiration of the leave of absence, stock options and restricted stock then remaining unvested will vest as if you were age 55 on the date your employment with Nordson terminates. Further in such event, your ability to exercise vested stock options will be accordance with terms of grant and rules of the Plans governing the exercise of stock options for Nordson employees who elect to retire at age 55 (early retirement).

7. Health Care Coverage; Pension Plan; 401(k) Plan Through the paid leave of absence period you will continue to participate in the Nordson health care program; Nordson Salaried Employees’ Pension Plan and Nordson Employees Savings Trust Plan (401(k)),

and other welfare benefit plans extended to other full time employees, such as long term disability and life insurance coverage. For the period of the leave of absence, you will be reimbursed for tax planning assistance up to a $5,000 maximum.

8. Payment at the Conclusion of the Leave of Absence. As part of the consideration for you to execute the Secondary Release of Claims (Exhibit 2), you will receive a lump sum payment equal to 4 months of FY 2014 base pay - One Hundred Ten Thousand Dollars ($110,000) - following the expiration of the paid leave of absence period. This payment will be made within (14) fourteen days after you have executed the Secondary Release of Claims (Exhibit 2) and the Release becomes non-revocable.

Should you voluntarily terminate your employment with Nordson prior to the expiration of the leave of absence, and provided you abide by the restrictive covenants outlined below in Section 15 and sign the Secondary Release of Claims (Exhibit 2), the payment of this severance benefit will be accelerated. However, you will not receive the Cobra payment outlined in Section 12 below.

9. Retiree Benefits, Including Medical Insurance Coverage and Life Insurance . If you elect to retire under the Nordson Corporation Salaried Employees Pension Plan on or after the date you become eligible for early retirement, Nordson will provide you and your family with all benefits extended to retirees of the Company, including but not limited to medical insurance coverage and retiree life insurance, as and to the extent provided by Nordson’s programs for retirees, as those programs may be amended from time to time.

10. Excess Pension Benefit and Deferred Compensation . Distribution of your account balance in the 2005 Excess Defined Benefit Pension Plan and 2005 Officers’ Deferred Compensation Plan also will be determined by the current distribution election on file and terms of those plans, respectfully, subject to the payout deferral rules under Section 409A of the Internal Revenue Code.

11. Outplacement Services. You will receive outplacement services provided by Right Management Consultants or other firm retained by Nordson to provide such services.

12. Health Care Continuation . Loss of health care coverage is considered a “qualifying event” under federal law governing health care coverage (“Cobra”). Under Cobra, you are permitted to continue health care coverage at your expense for a period of up to 18 months following a loss of coverage.

Should you elect not to commence a pension benefit February 1, 2015 you may continue health care coverage for 18-months provided you make premium payments to Nordson’s Cobra administrator (currently United Health Care). As further consideration for executing the Secondary Release of Claims (Exhibit 2), Nordson will reimburse you for (4) four months of Cobra continuation coverage should you timely elect such coverage. Payment of premiums for the balance of the Cobra continuation period will be your responsibility. Specifics of the health care continuation program will be mailed to you separately.

Any health care continuation will cease if during the 18-month period you become covered under a health care program which offers coverage similar to that available to Nordson employees.

13. Nordson Equipment and Property . As soon as practicable, you will return to Nordson any equipment and property that belongs to Nordson, and all materials that contain any Nordson confidential or proprietary information (including any electronic storage devices), that you may have in your possession. You will be given access to your former office at Nordson to obtain your personal effects at a time agreed upon by you and Nordson.

14. Employment Retention Agreement. The Employment Retention Agreement between you and Nordson that is effective upon a change in control is also hereby terminated effective June 6, 2014.

15. Restrictive Covenants.

a. Prohibited Services to a Conflicting Business After Termination of Employment .

Upon the termination of your employment, whether voluntarily or involuntarily and regardless of the reason, you agree that, for a period of two (2) years, you will not accept employment with, assist or otherwise be engaged by, in, or associate with a competitive business which, in whole or in part, engages in or provides activities, products or services that are the same as or similar to the activities, products or services engaged in or provided by Nordson, and

(1) where your activities/duties for or on behalf of the competitive business are, in whole or in part, the same, similar or substantially related to the activities/duties you performed within the last two (2) years of your employment with Nordson, and

(2) where your activities/duties for or on behalf of the competitive business are performed and/or have the effect of benefitting the competitive business in any territory where you are working at the time of termination, and/or where your activities/duties for or on behalf of the competitive business are performed and/or have the effect of benefitting the competitive business within the geographic area that, at the time of termination, Nordson actively engaged in, marketed, produced and/or sold its activities, products and/or services.

For purposes of this Section 15, the activities, products, or services described herein are those related to the description of the Nordson businesses set forth in the Company’s Form 10-K Annual Report for FY 2014 and prospective FY 2105 and FY 2016 Form 10-K

Annual Report. A copy of the FY 2105 and FY 2016 Form 10-K will be provided to you and will be available on the Nordson website – www.nordson.com – once filed with the Securities and Exchange Commission.

b . Non-Solicitation.

During the term of your employment or association with Nordson and for a period of two (2) years after the termination thereof (whether voluntary or involuntary and regardless of the reason, you agree that you will not, in any manner whatsoever, directly or indirectly (i) induce, or assist others to induce, any employee, broker, agent, representative, independent contractor or other person or entity who performs work for, on behalf of, or in conjunction with Nordson to terminate or otherwise limit his/her/its relationship with Nordson or in any manner interfere with the relationship between Nordson and him/her/it, and/or (ii solicit or attempt to solicit, directly or by assisting others, any business in competition with Nordson from any of Nordson’s customers, including actively seeking prospective customers, with whom you had Material Contact during your employment or association with Nordson.

Material Contact means the contact between you and each customer or potential customer: (a) with whom/which you dealt on behalf of Nordson; (b) whose dealings with Nordson were supervised or coordinated by you; (c) about whom you obtained confidential information and/or trade secrets in the ordinary course of business as a result of your association with Nordson; or, (d) who receives products or services authorized by Nordson, the sale or provision of which results or resulted in compensation, commissions, or earnings for you within two (2) years prior to the date of the termination of your employment with Nordson.

16. Confidentiality; Nondisparagement; Cooperation . In consideration of payments and benefits to be provided to you by Nordson pursuant to this Agreement:

You will not reveal any information regarding the substance of this Agreement to any person or entity other than (i) your wife, (ii) your personal accountant or other person preparing your tax returns, and (iii) counsel retained by you in connection with this Agreement, and you will be responsible to see to it that none of these people reveals any information regarding the substance of this Agreement to any other person or organization.

You will not disparage, attempt to discredit, or otherwise call into disrepute Nordson, its affiliates, successors, assigns, officers, directors, employees, or agents (in their capacity as agents of Nordson), or any of their products or services, in any manner that might damage the business or reputation of Nordson or its affiliates, successors, assigns, officers, directors, employees, or agents. The preceding sentence applies to any statement that disparages, discredits, or calls into disrepute without regard to the truth or falsehood of the statement.

You will not assist any party other than Nordson in any litigation or investigation against Nordson or its affiliates, successors, assigns, officers, directors, employees, or agents with respect to any facts or circumstances existing at any time on or before the Termination Date, except as may be required by law. If you believe any such action is required by law, you will use your best efforts to afford Nordson the opportunity to raise any objection that Nordson may have to the purported requirement that such action be taken by you.

Your obligations under this paragraph 16 will remain in effect without any limitation as to time.

17. Certain Statements and Procedures .

a. Nordson will make the following statement regarding your termination of employment:

“Peter Lambert has resigned as an executive officer of Nordson to pursue other opportunities. During his tenure with Nordson, Peter Lambert made a significant contribution to the growth and profitability of the Company, and we wish him continued professional and personal success in his future endeavors.”

b. You may make the following statement regarding your termination of employment:

“I elected to resign from my employment with Nordson to pursue other opportunities. I wish Nordson continued success in the future.”

c. If you request Nordson or any of its officers, directors, employees, or agents to provide to any prospective employer a recommendation or evaluation of your services to Nordson, they will be permitted to provide the recommendation or evaluation to the employer. In that event, you hereby waive any claim that you may have against them by reason of the disclosure of the recommendation or evaluation, including any claim that the recommendation or evaluation is unfair in any respect.

d. Notwithstanding the foregoing, either party may communicate with its or his own counsel, with counsel for the other party, and with such other agents or representatives of the other party as may be authorized by the other party.

18. Injunctive Relief . In the event of a breach by you of your obligations under this Agreement, Nordson will be entitled to an injunction against any further breach, as well as money damages suffered by it or any of the beneficiaries of the Primary and Secondary Release of Claims as a result of the breach.

19. Legal Fees . If either party to this Agreement brings any suit or action to enforce or seek damages for breach of this Agreement, the parties agree that the court in which the suit or action is brought may, in its discretion, award to the prevailing party recovery of his or its reasonable legal fees and expenses incurred in the suit or action.

20. Governing Law; Venue . This Agreement will be governed by the laws of the State of Ohio applicable to contracts made and to be performed entirely within that state. Any suit, action, or other legal proceeding arising out of or relating to this Agreement may only be brought in the Court of Common Pleas of Cuyahoga County, Ohio. Nordson and you each (a) consents to the jurisdiction of that court in any such suit, action, or proceeding and (b) waives, to the fullest extent permitted by applicable law, any objection that it or he may have to the laying of venue of any such suit, action, or proceeding in that court and any claim that any such suit, action, or proceeding has been brought in an inconvenient forum.

21. Tax Withholding; IRS Code Section 409(A). All payments to be made by Nordson pursuant to this Agreement are subject to applicable federal, state, and local tax withholding and will be made in accordance with Section 409A of the Internal Revenue Code.

22. Entire Agreement, Binding Nature . This Agreement hereby sets forth the entire agreement between you and Nordson regarding the termination of your employment with Nordson and will be binding upon and inure to the benefit of you and your heirs, executors, administrators, personal representatives, successors, and assigns and Nordson and its successors and assigns.

Sincerely,


NORDSON CORPORATION

By

Shelly Peet,
Vice President

I hereby accept and agree to all of the terms of this Letter Agreement.

Peter G. Lambert

Date: June , 2014

EXHIBIT 1

Primary Release of Claims

In order to receive the benefits being offered to you and as described in the letter dated June 4, 2014 from Shelly Peet, Vice President, Human Resources, as amended June 23, 2014, you are required to sign the attached Primary Release of Claims (“Release”).

You have until 5:00 p.m. ET on June 27, 2014 to submit your signed Release to Shelly Peet. You may sign the Release any time before June 27, 2014. You may cancel a signed Release by giving Shelly Peet written notice within seven (7) days from the date you sign the Release. The Release will not be effective or enforceable until the seven (7) day cancellation period has expired.

The benefits being offered to you in exchange for the Release are in place of any other severance or separation pay or health care continuation benefits which you otherwise would have received as a result of your employment with Nordson Corporation.

Signing this Release does not affect your right to receive benefits for which you are qualified under any company-sponsored retirement plans or any company-sponsored welfare benefit plans.

Before you sign the Release, you have the right to have it reviewed by an attorney. We encourage you to do so to thoroughly understand the effect of signing the Release on your legal rights.

PRIMARY RELEASE OF CLAIMS

(“Release”)

A.	CONSIDERATION FOR THE RELEASE

In exchange for Nordson Corporation providing me the benefits outlined in a letter agreement (the “Agreement”) dated June 4, 2014 from Shelly Peet, as amended June 23, 2014, which benefits I acknowledge to be good and sufficient consideration I am not otherwise entitled to receive, I, on behalf of myself, my heirs, administrators, executors and assigns, release Nordson Corporation, its directors, officers, employees, successors and assigns (the “parties being released”), from any and all claims, demands or causes of action of any nature which have/may have arisen through the date of this Release and out of my employment with Nordson Corporation.

B.	SPECIFIC CLAIMS BEING RELEASED

By signing this Release, I expressly understand that I am giving up any opportunity to file a claim or lawsuit seeking compensation, damages or other forms of relief for me personally under, but not limited to, the following:

•

Title VII of the Civil Rights Act of 1964 and the Civil Rights Act of 1991 (gender/sex, race, color, national origin or religion discrimination);

•

Civil Rights Act of 1866 (race discrimination)

•

the Age Discrimination in Employment Act (age discrimination);

•

the Americans With Disabilities Act of 1993 (mental or physical disability discrimination);

•

Equal Pay Act of 1973 (gender discrimination);

•

Rehabilitation Act of 1973 (mental or physical disability discrimination);

•

Fair Labor Standards Act (minimum wage and overtime);

•

the Worker Adjustment and Retraining Notification Act of 1988 and any state law concerning facility closures (WARN Act)

•

Family and Medical Leave Act (unpaid leaves for serious health conditions);

•

Employee Retirement Income Security Act of 1974 (pension and employee welfare benefit plans);

•

any other applicable federal, state or local law or federal Executive Order addressing terms or conditions of employment, discrimination, civil rights, retaliation (including, but not limited to, claims under 42 U.S.C. § 1981) or unlawful employment practices; or

•

any state common law action in tort or in contract such as breach of expressed or implied contract of employment or wrongful discharge from employment; or

•

all claims for severance pay, other than as outlined or described in the Agreement.

I also understand that by signing this Release I am waiving my right to have the Equal Employment Opportunity Commission and/or state agency having jurisdiction seek compensation, damages or other relief for me personally based on an employment practice of Nordson Corporation.

C.	RIGHTS NOT BEING RELEASED

Though I have agreed not to seek compensation, damages or other relief on my own behalf, by signing this Release (and by signing the Agreement), I understand that I am not waiving my right to:

(i) file a charge of discrimination against Nordson Corporation with the Equal Employment Opportunity Commission and/or state agency having jurisdiction;

(ii) testify, assist or participate in any investigation or proceeding initiated by the Equal Employment Opportunity Commission and/or state agency having jurisdiction concerning an alleged discriminatory employment practice of Nordson Corporation;

(iii) bring a claim or lawsuit against Nordson Corporation that may arise after the date I sign this Release; or

(iv) file a claim or charges with any other governmental agency that is responsible for enforcing a law or from cooperating, participating, or assisting in any governmental agency or regulatory authority investigation or proceeding.

Notwithstanding the foregoing, I agree and understand that I will not accept or be entitled to any further personal relief, recovery, or monetary damages from any source whatsoever with respect to any claim that has been released in Section B of this Release, and that this Release shall control and is the exclusive remedy as to any of the claims released herein.

D.	ADDITIONAL INFORMATION

I understand that:

•

I have the opportunity to consult with an attorney before signing this Release;

•

I have until 5:00 p.m. ET on June 27, 2014 to submit the signed Release; and

•

I have the right to cancel a signed Release by notifying Nordson Corporation of this cancellation in writing within seven days after the date I sign this Release.

•

This Release will not become effective and enforceable until the seven (7) day cancellation period has expired.

I agree that in the event any provision of this Release is determined to be invalid, ineffective or otherwise unenforceable, the remaining provisions remain in effect and enforceable.

I promise to keep the terms of this Release strictly confidential; provided, however, that nothing herein shall prohibit me from discussing this Release with my spouse, my lawyer, or my accountant, other financial advisors, or from disclosing this Release to the extent required by law or as necessary to enforce it. I agree that any such persons or entities to whom I disclose this Release shall also be bound by the terms of this confidentiality provision; and, I agree to take appropriate steps to ensure that confidentiality is maintained by person or entity to whom authorized disclosure is made. Any breach by me or any of the persons or entities to whom authorized disclosure is made shall be deemed a material breach of this Release by me. I agree to promptly repay to Nordson the gross amount of the severance paid to me under this Release, should such a breach of this Confidentiality provision occur. I understand that the confidentiality restrictions of this paragraph extend to and expressly prohibit disclosure through social media, including but not limited to, blogs, virtual worlds, social or professional networking websites, and/or video sharing websites.

My signing this Release serves as my acknowledgment that I fully understand the contents of this Release and that my release of Nordson Corporation and the parties being released is knowing and voluntary.

Accepted and Agreed to:

EXHIBIT 2

Secondary Release of Claims

(“Release”)

A.	CONSIDERATION FOR THE RELEASE

In exchange for Nordson Corporation providing me the benefits following the expiration of a leave of absence and as outlined in a letter agreement (the “Agreement”) dated June 4, 2014 from Shelly Peet, as amended June 23, 2014, which benefits I acknowledge to be good and sufficient consideration I am not otherwise entitled to receive, I, on behalf of myself, my heirs, administrators, executors and assigns, release Nordson Corporation, its directors, officers, employees, successors and assigns (the “parties being released”), from any and all claims, demands or causes of action of any nature which have/may have arisen through the date of this Release and out of my employment with Nordson Corporation.

B.	SPECIFIC CLAIMS BEING RELEASED

•

Title VII of the Civil Rights Act of 1964 and the Civil Rights Act of 1991 (gender/sex, race, color, national origin or religion discrimination);

•

Civil Rights Act of 1866 (race discrimination)

•

the Age Discrimination in Employment Act (age discrimination);

•

the Americans With Disabilities Act of 1993 (mental or physical disability discrimination);

•

Equal Pay Act of 1973 (gender discrimination);

•

Rehabilitation Act of 1973 (mental or physical disability discrimination);

•

Fair Labor Standards Act (minimum wage and overtime);

•

the Worker Adjustment and Retraining Notification Act of 1988 and any state law concerning facility closures (WARN Act)

•

Family and Medical Leave Act (unpaid leaves for serious health conditions);

•

Employee Retirement Income Security Act of 1974 (pension and employee welfare benefit plans);

•

any state common law action in tort or in contract such as breach of expressed or implied contract of employment or wrongful discharge from employment; or

•

all claims for severance pay, other than as outlined or described in the Agreement.

C.	RIGHTS NOT BEING RELEASED

Though I have agreed not to seek compensation, damages or other relief on my own behalf, by signing this Release (and by signing the Agreement), I understand that I am not waiving my right to:

(i) file a charge of discrimination against Nordson Corporation with the Equal Employment Opportunity Commission and/or state agency having jurisdiction;

(iii) bring a claim or lawsuit against Nordson Corporation that may arise after the date I sign this Release; or

D.	ADDITIONAL INFORMATION

I understand that:

•

I have the opportunity to consult with an attorney before signing this Release;

•

I have until 5:00 p.m. ET on ( date to be inserted upon expiration of the leave of absence or earlier occurring voluntary termination of employment ) to submit the signed Release; and

•

I have the right to cancel a signed Release by notifying Nordson Corporation of this cancellation in writing within seven days after the date I sign this Release.

•

This Release will not become effective and enforceable until the seven (7) day cancellation period has expired.

I agree that in the event any provision of this Release is determined to be invalid, ineffective or otherwise unenforceable, the remaining provisions remain in effect and enforceable.

Accepted and Agreed to:

EXHIBIT 3

Stock Transfer Issues Arising Out of

Termination of Officer Status

Insider Trading Prohibition .

The prohibition on trading in Nordson Common Shares while you are in possession of non-public, material information about Nordson will continue to apply to you after you cease to be an officer of Nordson.

Transaction by Section 16 Officers .

You have been subject to Section 16 and the requirement that any profits on purchases and sales within six months be disgorged to Nordson.

After you cease to be an officer, you will no longer be subject to Section 16 except that any purchase or sale of Nordson shares by you after you cease to be an officer may be matched with any sale or purchase that was made during the preceding six months while you were an officer of Nordson .

Accordingly, since your last transaction in Nordson Common Shares was a sale of 2,000 shares on January 9, 2014, you are prohibited from purchasing Nordson Common Shares before July 9, 2014. There is no prohibition under Section 16 to your selling Nordson Common Shares

Please contact Bob Veillette if you have any questions.

Exhibit 10.2

P RIVILEGED AND C ONFIDENTIAL

AGREEMENT AND PLAN OF MERGER

BY AND AMONG

AVALON LABORATORIES HOLDING CORP.,

NORDSON MEDICAL CORPORATION,

ARRIBA MERGER CORP.,

AMERICAN CAPITAL EQUITY III, LP, AS SECURITYHOLDERS’ REPRESENTATIVE

and

FOR THE LIMITED PURPOSES SET FORTH HEREIN, NORDSON CORPORATION.

Dated as of August 1, 2014

TABLE OF CONTENTS


		Page
No table of contents entries found.

SCHEDULES


		Disclosure Schedule
Schedule A		Pro Rata Share
Schedule B		Net Working Capital Illustration
Schedule C		List of Securityholders
Schedule 2.1(f)		Officers of Surviving Entity
Schedule 5.2		Pre-Closing Period Conduct of Business
Schedule 7.1(c)		Board Resignations
Schedule 7.1(d)		Estimated Indebtedness Payment

EXHIBITS


Exhibit A		Form of Certificate of Merger
Exhibit B		Form of Certificate of Incorporation
Exhibit C		Form of Escrow Agreement
Exhibit D		Form of Letter of Transmittal
Exhibit E		Form of Written Consent
Exhibit F		Form of Non-Solicitation Agreement
Exhibit G		Form of SAR Recipient Acknowledgment

AGREEMENT AND PLAN OF MERGER

This AGREEMENT AND PLAN OF MERGER (hereinafter, and as may be amended from time to time, in accordance with the terms hereof, the “ Agreement ”), dated as of August 1, 2014, by and among Avalon Laboratories Holding Corp., a Delaware corporation (the “ Company ”), Nordson Medical Corporation, an Ohio corporation (“ Parent ”), Arriba Merger Corp., a Delaware corporation and a wholly-owned subsidiary of Parent (“ Merger Sub ”), American Capital Equity III, LP, solely in its capacity as the Securityholders’ Representative hereunder (the “ Securityholders’ Representative ”) (collectively, the “ Parties ”), and, for the limited purposes set forth in Section 10.14 , Nordson Corporation, an Ohio corporation (“ Guarantor ”). Capitalized terms used in this Agreement without definition shall have the meaning given to such terms in Section 1.1 hereof.

RECITALS

WHEREAS, Parent and Merger Sub desire to acquire 100% of the issued and outstanding equity interests of the Company on the terms and subject to the conditions set forth in this Agreement.

WHEREAS, in furtherance of such acquisition, the respective boards of directors of each of Parent and Merger Sub, and the board of the Company, have each approved this Agreement, and declared advisable the merger of Merger Sub with and into the Company (the “ Merger ”), upon the terms and subject to the conditions set forth in this Agreement and in accordance with the Delaware General Corporation Law (“ DGCL ”) .

WHEREAS, the board of directors of Merger Sub has recommended this Agreement for adoption and approval by its stockholder.

WHEREAS, following the execution of this Agreement, the Company shall obtain, in accordance with Section 228 of the DGCL, a unanimous written consent of its stockholders, in the form attached as Exhibit E hereto, approving this Agreement, the Merger and the other transactions contemplated hereby in accordance with Section 251 of the DGCL (the “ Written Consent ”).

WHEREAS, pursuant to the Written Consent, the stockholders of the Company shall appoint the Securityholders’ Representative to act in such capacity in connection with the Merger and the Transactions and the transactions contemplated by the Transaction Documents.

NOW, THEREFORE, in consideration of the above premises and the mutual representations, warranties, covenants and agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereto, intending to be legally bound, hereby agree as follows:

ARTICLE 1

DEFINITIONS

1.1 Certain Defined Terms . For purposes of this Agreement, the following terms shall have the following meanings:

“ Accounting Standards ” means the accounting methods, policies, principles, practices and procedures used by the Company in the preparation of the Interim Balance Sheet, and shall not include or give effect to any purchase accounting adjustments or other changes arising from or resulting as a consequence of the Transactions.

“ Actual Closing Cash ” means the Cash of the Company and its Subsidiaries as of the close of business on the Closing Date, as finally determined pursuant to Section 2.6 .

“ Actual Transaction Expenses ” means the actual Transaction Expenses unpaid as of the Closing (including the amount of the payments being made under Section 2.3(a)(v) ), as finally determined pursuant to Section 2.6 .

“ Affiliate ” means, with respect to any Person, any other Person controlling, controlled by, or under common control with such other Person. For purposes of this definition, “ control ,” when used with respect to any Person, means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise, and the terms “ controlling ” and “ controlled ” have correlative meanings. Notwithstanding the foregoing, for purposes of this Agreement, (i) neither the Company nor any of its Subsidiaries shall be considered an Affiliate of any current or former Securityholder (or any of their respective Affiliates) and (ii) neither the Company nor any of its Subsidiaries shall be considered an Affiliate of Parent or Merger Sub prior to the Closing.

“ Aggregate Option Exercise Amount ” means the aggregate amount of the per share exercise price payable for the vested portion of all Eligible Options.

“ American Capital ” means American Capital Equity III, LP.

“ Antitrust Authorities ” means the United States Federal Trade Commission and the Antitrust Division of the United States Department of Justice, the attorneys general of the several states of the United States and any other domestic or foreign Governmental Body having jurisdiction with respect to the Transactions pursuant to applicable Antitrust Laws.

“ Antitrust Laws ” means the Sherman Act, the Clayton Act, the HSR Act, the Federal Trade Commission Act, in each case as amended, and all other federal, state and foreign statutes, rules, regulations, orders, decrees, administrative and judicial doctrines, and other applicable competition, merger control, antitrust or similar Laws.

“ Business Day ” means a day other than a Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by Law to close.

“ Cash ” means cash and cash equivalents on hand, in transit, or in deposit accounts of the Company and its Subsidiaries, in each case, as of the close of business on the Closing Date.

“ Certificates ” means the stock certificates representing all of the outstanding shares of Company Capital Stock.

“ Charter ” means the Restated Articles of Incorporation of the Company dated December 14, 2007.

“ Class A Common Stock ” means Class A Voting Common Stock, par value $0.001 per share.

“ Class B Common Stock ” means Class B Non-Voting Common Stock, par value $0.001 per share.

“ Clayton Act ” means the Clayton Antitrust Act of 1914, as amended, codified at 15 U.S.C. § 12 et seq. and 29 U.S.C. §§ 52–53, and the rules and regulations promulgated thereunder.

“ Closing Date Working Capital ” means the actual Net Working Capital as of the close of business on the Closing Date.

“ Code ” means the Internal Revenue Code of 1986, as amended.

“ Common Stock ” means the Class A Common Stock and Class B Common Stock.

“ Company Capital Stock ” means the Class A Common Stock, Class B Common Stock, and Preferred Stock.

“ Confidentiality Agreement ” means that certain confidentiality agreement entered into by Parent and the Company on or prior to the date hereof, as amended.

“ Consent ” means any approval, consent, license, permit, notice or other authorization (including any Governmental Authorization).

“ Contract ” means any legally binding contract, lease or other property agreement, license, indenture, note, bond, agreement, permit, concession, franchise, commitment, mortgage, partnership or joint venture agreement, instrument or other legally binding agreement, whether written or oral.

“ Controlled Group ” means any trade or business (whether or not incorporated) (i) under common control within the meaning of Section 4001(b)(1) of ERISA with the Company or any of its Subsidiaries or (ii) which together with the Company or any of its Subsidiaries is treated as a single employer under Section 414(t) of the Code.

“ Current Assets ” means, on a consolidated basis, the current asset line item accounts set forth on Schedule B .

“ Current Liabilities ” means, on a consolidated basis, the current liability line item accounts set forth on Schedule B .

“ Damages ” means all assessments, levies, awards, judgments, losses, fines, penalties, damages, amounts paid in settlement, costs and expenses, including reasonable attorneys’, accountants’, investigators’ and experts’ fees and expenses incurred in investigating or defending any claim; provided that Damages shall exclude consequential and punitive damages (except to the extent such damages are payable to a third party).

“ Disclosure Schedule ” means the Disclosure Schedule of the Company attached to this Agreement.

“ Eligible Option ” means each Option that (a) has an exercise price per share less than the Estimated Price Per Share set forth in the Estimated Statement and (b) is fully or partially vested on or prior to the Closing Date in accordance with the terms thereof (after giving effect to any vesting which is triggered by the transactions contemplated herein).

“ Eligible Optionholder ” means any Person holding an Eligible Option.

“ EMA ” shall mean the European Medicines Agency.

“ Employee Benefit Plans ” means all “employee benefit plans,” as defined in Section 3(3) of ERISA and all other bonus, pension, profit sharing, deferred compensation, incentive compensation, equity ownership, equity purchase, equity option, phantom equity, retirement, vacation, severance, salary continuation, disability, death benefit, hospitalization, medical or other plan, program, contract or arrangement, and any trust, escrow or similar arrangement related thereto, whether or not funded, (i) that are sponsored or maintained by, or contributed to by, the Company or any of its Subsidiaries, (ii) with respect to which the Company or any of its Subsidiaries have made or are required to make payments, transfers or contributions and that provide benefits or compensation to any current or former employee, officer or director of the Company, its Subsidiaries or any member of the Controlled Group, or (iii) with respect to which the Company or any of its Subsidiaries have any Liability.

“ Encumbrance ” means any mortgage, deed of trust, hypothecation, pledge, lien (statutory or otherwise), security interest, charge, easement, tenancy or encumbrance of any kind, whether voluntary or involuntary (including any conditional sale or other title retention agreement, any lease in the nature thereof and any agreement to give any security interest) and, with respect to capital stock or other equity interest, any option or other right to purchase or any restriction on voting or other rights, but excluding any restrictions on transfer under federal or state securities Laws.

“ Engagement Letter ” means that certain engagement agreement between the Company and PJC.

“ Enterprise Value ” means $180,000,000.

“ Environment ” means soil, surface waters, groundwater, land, stream sediments, surface or subsurface strata, ambient air (including, indoor air or indoor air quality), including any material or substance used in the physical structure of any building or improvement.

“ Environmental Law ” means any applicable Law relating to pollution or the protection of the Environment, natural resources or human health and safety with respect to Hazardous Materials.

“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended.

“ Escrow Amount ” means an amount equal to $5,400,000.

“ Estimated Price Per Share ” means (a)(i) the Estimated Merger Consideration plus (ii) the Aggregate Option Exercise Amount minus (iii) 92.5% of the Escrow Amount minus (iv) 92.5% of the Securityholders’ Representative Amount divided by (b) the Fully Diluted Common Shares.

“ Federal Trade Commission Act ” means Federal Trade Commission Act of 1914, as amended, codified 15 U.S.C. § 41 et seq. , and the rules and regulations promulgated thereunder.

“ FDA ” shall mean the U.S. Food and Drug Administration.

“ FDCA ” shall mean the Federal Food, Drug and Cosmetic Act, 21 U.S.C. 321 et seq ., and all regulations promulgated thereunder.

“ Fully Diluted Common Shares ” means (a) all shares of the Class A Common Stock and Class B Common Stock issued and outstanding immediately prior to the Effective Time (excluding shares of Common Stock held in the treasury of the Company, if any) plus (b) all shares of the Preferred Stock issued and outstanding immediately prior to the Effective Time (with such number of shares of Preferred Stock calculated, for this purpose, by treating the shares of Preferred Stock as having been converted into outstanding shares of Class A Common Stock without the need for actual conversion (and without having been actually converted) pursuant to the Charter, but excluding shares of Preferred Stock held in the treasury of the Company, if any) plus (c) the aggregate number of Option Shares.

“ GAAP ” means United States generally accepted accounting principles as in effect at an applicable time, applied consistently by the Company and its Subsidiaries’ in accordance with past practices.

“ Governmental Authorization ” means any approval, consent, license, permit, franchise, registration, qualification, certificate or other authorization issued, granted, given or otherwise made available by or under the authority of any Governmental Body or pursuant to any Laws.

“ Governmental Body ” means any government or governmental or regulatory body thereof, or political subdivision thereof, or any agency, instrumentality or authority thereof, or any court or arbitrator (public or private), in each case, whether federal, state, local or foreign.

“ Hazardous Materials ” means any pollutant, toxic substance, waste, or material that is defined or otherwise regulated under any Environmental Law as “toxic” or “hazardous” or “contaminant”, and including without limitation asbestos and asbestos-containing materials, petroleum or petroleum-containing materials, radiation and radioactive materials, other harmful biological agents, and polychlorinated biphenyls.

“ HSR Act ” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, codified at 15 U.S.C. § 18a et seq , and the rules and regulations promulgated thereunder.

“ Indebtedness ” means with respect to any Person (i) all indebtedness for borrowed money, (ii) any accrued and unpaid interest on and any prepayment premiums, penalties or similar contractual charges in respect of any Indebtedness repaid at the Closing or that are triggered by the Closing, (iii) any liability evidenced by a bond, note, debenture or similar instrument (including a purchase money obligation), (iv) any liability for the payment of money relating to leases that are required to be classified as a capitalized lease obligation in accordance with GAAP, (v) any liability for all or any part of the deferred purchase price of property or services (other than trade payables), including any “earnout,” “holdback” or similar payments, (vi) any liability under interest rate swap, hedging or similar agreements, (vii) any liability for declared but unpaid dividends payable on preferred stock, and (viii) current management fees payable to American Capital; provided , that any of the foregoing shall not be considered Indebtedness to the extent accrued for in the calculation of the Closing Date Working Capital. Indebtedness will also include any liability of others described in clauses (i) through (viii) above that any Person has guaranteed, that is recourse to such Person or any of its assets or that is otherwise its legal liability or that is secured in whole or in part by the assets of such Person. For the avoidance of doubt, Indebtedness shall not include any payables or loans of any kind or nature between or among the Company and its wholly-owned Subsidiaries.

“ Indebtedness Amount ” means the amount of Indebtedness of the Company and its Subsidiaries as of the Closing (without giving effect to repayments of Indebtedness occurring in connection with the Closing, including payment of the Estimated Indebtedness Payment, or any Indebtedness incurred on behalf of Parent or Merger Sub or any of their respective Affiliates (as determined immediately prior to Closing)), as finally determined pursuant to Section 2.6 .

“ Independent Accounting Firm ” means KPMG LLP, and if such firm refuses or is unable to perform the requested services, Parent and the Securityholders’ Representative shall negotiate in good faith to agree upon a different independent accounting firm, which such other accounting firm the parties agree shall be one of the twenty largest accounting firms in the United States.

“ Information Systems ” means all computer hardware, databases and data storage systems, computer, data, database and communications networks (other than the Internet), architecture interfaces and firewalls (whether for data, voice, video or other media access, transmission or reception) and other apparatus used to create, store, transmit, exchange or receive information in any form.

“ Intellectual Property ” means all of the following: (i) patents; (ii) trademarks, service marks, trade dress, trade names, corporate names, together with all goodwill associated with the foregoing; (iii) Internet domain names; (iv) copyrights, including copyrights in computer software; (v) registrations and applications for any of the foregoing; (vi) trade secrets; (vii) all other intellectual property and proprietary rights; and (viii) all rights to enforce and to collect damages for past, present and future violations of the foregoing.

“ IRS ” means the Internal Revenue Service.

“ Judgment ” means any judgment, decision, order, decree, writ, injunction, ruling or award entered or issued by any Governmental Body.

“ Knowledge ” means the actual (and not imputed or constructive) knowledge of (i) with respect to the Company or any of its Subsidiaries, Michael Janish, John LeRosen, Dana Rodriguez and K. Paul Schmeling, and (ii) with respect to Parent and Merger Sub, their respective executive officers.

“ Law ” means any foreign, federal, state or local law (including common law), statute, code, rule, regulation or ordinance of any Governmental Body.

“ Letter of Transmittal ” means a Letter of Transmittal executed and delivered by a Securityholder in the form attached hereto as Exhibit D .

“ Liability ” means any direct or indirect liability, legally binding commitment or expense of any Person of any type, whether known, accrued, absolute, contingent, matured or unmatured.

“ Management Agreement ” means the Management Fee Agreement, dated January 9, 2008, among the Company, one or more of its Subsidiaries and American Capital (as transferee of American Capital, Ltd. (f/k/a American Capital Financial Services, Inc.)).

“ Material Adverse Effect ” means any change, event, development, state of facts, circumstances or effect that, individually or in the aggregate, has had, or would reasonably be expected to have, a material adverse effect on (i) the assets, business, results of operations or financial condition of the Company and its Subsidiaries, taken as a whole; provided , however , that none of the following shall be taken into account in determining whether there has occurred a “Material Adverse Effect”: any changes, events, developments, state of facts, circumstances or events that are (a) in interest or foreign exchange rates, (b) generally applicable to the industries and markets in which the Company or any of its Subsidiaries operate which does not have a disproportionate impact on the Company or its Subsidiaries, (c) generally applicable to the business or economic conditions in the United States or other localities in which the Company or its Subsidiaries operate, (d) generally applicable to financial, banking or securities markets, (e) relating to any change in Law, in GAAP or in any interpretation thereof which does not have a disproportionate impact on the Company or its Subsidiaries, (f) relating to or caused by Parent, Merger Sub or any of their respective Affiliates (determined immediately prior to the Closing), (g) arising from any action taken at the request of Parent, (h) resulting from earthquakes, hurricanes or other natural disasters or from the engagement in hostilities (or escalation thereof) whether or not pursuant to the declaration of a national emergency or war, or resulting from the occurrence of any military or terrorist attack, (i) relating to the failure of the Company or any of its Subsidiaries to meet any internal projections, or (j) resulting from the execution of this Agreement or any other Transaction Document, the public announcement of the Transactions or the transactions contemplated by the other Transaction Documents, or (ii) the ability of the Company to consummate the Transactions.

“ Merger Consideration ” means an amount equal to: (i) the sum of: (A) the Enterprise Value, (B) the Working Capital Adjustment Amount, and (C) Actual Closing Cash, minus

(ii) the sum of (X) the Indebtedness Amount and (Y) the Transaction Expenses. The Merger Consideration shall be estimated and finally determined pursuant to Section 2.6 . The Merger Consideration shall be paid as and when described in this Agreement.

“ Net Working Capital ” means the Current Assets less the Current Liabilities, determined in accordance with the Accounting Standards, as of the close of business on the applicable date. For illustrative purposes, the determination of Net Working Capital as of April 30, 2014 is set forth on Schedule B .

“ Option ” means each option to purchase Class B Common Stock issued pursuant to the Option Plan, whether or not vested, that has not expired (or has fully or partially expired and is listed in Section 7.1(g) of the Disclosure Schedule) and that has not been forfeited or exercised in full prior to the Effective Time.

“ Option Plan ” means the Avalon Laboratories Holding Corp. 2008 Long-Term Incentive Plan, as amended to date.

“ Option Share ” means a share of Class B Common Stock issuable upon exercise of the vested portion of an Eligible Option in accordance with its terms.

“ Optionholder ” means any Person holding an Option.

“ Parent Material Adverse Effect ” means a material adverse effect on the ability of Parent or Merger Sub to consummate the transactions contemplated by the Transaction Documents or satisfy all of its performance and payment obligations thereunder.

“ Permitted Encumbrances ” means (i) Encumbrances for Taxes and other governmental charges and assessments that are not yet due and payable as of the Closing Date, and Encumbrances for current Taxes and other charges and assessments of any Governmental Body that may thereafter be paid without penalty or that are being diligently contested in good faith by appropriate proceedings and for which adequate reserves have been established in the Company’s or a Subsidiary’s financial statements in accordance with GAAP, (ii) Encumbrances of carriers, warehousemen, mechanics and materialmen that, in any case, have arisen in the Company’s or a Subsidiary’s ordinary course of business, are not material to the business, operations or financial condition of the Company’s or Subsidiary’s property so encumbered and are not resulting from a breach, default or violation by the Company or Subsidiary of any Contract or Law, (iii) other Encumbrances or imperfections of title to or on real or personal property that are not material in amount or do not materially detract from the existing use of the property affected by such Encumbrance or imperfection, (iv) all Encumbrances and other similar restrictions of record identified in any title reports made available to Parent, (v) Encumbrances imposed by Law that relate to obligations that are not yet due and payable, have arisen in the Company’s or a Subsidiary’s ordinary course of business, are not material to the business, operations or financial condition of the Company’s or Subsidiary’s property so encumbered and are not resulting from a breach, default or violation by the Company or Subsidiary of any Contract or Law, (vi) Encumbrances that secure obligations reflected as liabilities in the Audited Financial Statements or the Unaudited Financial Statements (or the existence of which is referred to in the notes accompanying the Audited Financial Statements), (vii) any Encumbrances

permitted to be outstanding under any of the documents governing the Indebtedness to be repaid at Closing pursuant to the terms hereof, (viii) Encumbrances registered under the Uniform Commercial Code as adopted in any particular state or similar legislation in other jurisdictions by any lessor or licensor of personal property to the Company, (ix) Encumbrances to lenders incurred in deposits made in the ordinary course in connection with maintaining bank accounts, (x) deposits or pledges to secure the payment of workers’ compensation, unemployment insurance, social security benefits or obligations arising under similar Laws, or to secure the performance of public or statutory obligations, surety or appeal bonds, and other obligations of a like nature and (xi) Encumbrances created by any of the Transaction Documents, or by the actions of Parent.

“ Person ” means an individual, corporation (including any non-profit corporation), general or limited partnership, limited liability company, limited liability partnership, joint venture, estate, trust, unincorporated organization, association, organization or other entity or form of business enterprise or Governmental Body.

“ PJC ” means Piper Jaffray & Co.

“ Pre-Closing Tax Period ” means any taxable period ending on or before the Closing Date and the portion through the end of the Closing Date for any Straddle Period.

“ Preferred Stock ” means the Series A-1 Preferred Stock and Series A-2 Preferred Stock.

“ Proceeding ” means any judicial, administrative or arbitral claims (including counterclaims), actions, suits, mediation or proceedings brought or conducted by or before any Governmental Body.

“ Pro Rata Share ” means the percentages set forth on Schedule A , which Schedule A shall be delivered by the Securityholders’ Representative to Parent not later than two Business Days prior to the Closing.

“ Real Property ” means any and all real property and interests in real property of the Company or any Subsidiary (together will all buildings, structures, fixtures and improvements thereon), including the Leased Real Property, any real property leaseholds and subleaseholds, purchase options, easements, licenses, rights to access and rights of way and any other real property otherwise owned, occupied or used by the Company or any Subsidiary.

“ Release ” means any releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, migrating, disposing or dumping of a Hazardous Material into the Environment (including the abandonment or discarding of barrels, containers and other closed receptacles containing any Hazardous Materials) and any condition that results in the exposure of a Person to a Hazardous Material.

“ Representative ” or “ Representatives ” means, with respect to a particular Person, any director, member, limited or general partner, officer, manager, employee, agent, consultant, advisor or other representative of such Person, including outside legal counsel, accountants and financial advisors.

“ SAR Payments ” means those payments due upon the Closing to the SAR Recipients pursuant to the SAR Plan and any applicable grant agreements thereunder (including any amount that is a “Contingent Total Amount” under Section 8 of the SAR Plan).

“ SAR Plan ” means the Amended and Restated Avalon Laboratories Holding Corp. 2008 Executive Incentive Compensation Plan.

“ SAR Recipient ” means a Person who has received a grant of Units (as defined in the SAR Plan) pursuant to the SAR Plan that has not expired or been forfeited or exercised in full prior to the Effective Time.

“ Securityholders ” means all Persons identified on Schedule C as a “ Securityholder .”

“ Securityholders’ Representative Amount ” means an amount equal to $500,000, which amount shall be paid by Parent to the Securityholders’ Representative in accordance with Section 2.3(a)(iv) and shall be used to satisfy costs, expenses and/or liabilities of the Securityholders’ Representative and/or the Securityholders in connection with matters hereunder. For the avoidance of doubt, at no time shall any portion of the Securityholders’ Representative Amount be available for satisfaction of indemnification claims under Article 8 .

“ Series A-1 Preferred Stock ” means Series A-1 Preferred Stock, par value $0.001 per share.

“ Series A-2 Preferred Stock ” means Series A-2 Preferred Stock, par value $0.001 per share.

“ Sherman Act ” means the Sherman Antitrust Act of 1890, as amended, codified at 15 U.S.C. § 1 et seq , and the rules and regulations promulgated thereunder.

“ Straddle Period ” means any taxable period that includes (but does not end on) the Closing Date.

“ Subsidiary ” means, with respect to any Person, any corporation, partnership, limited liability company, association or other business entity of which (i) if a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof, or (ii) if a partnership, limited liability company, association or other business entity, a majority of the partnership or other similar ownership interest thereof is at the time owned or controlled, directly or indirectly, by any Person or one or more Subsidiaries of that Person or a combination thereof.

“ Target Working Capital Lower Threshold ” means $6,750,000.

“ Target Working Capital Upper Threshold ” means $7,250,000.

“ Tax ” or “ Taxes ” means all (i) all federal, state, local, provincial and foreign income, alternative or add-on minimum, gross receipts, sales, use, ad valorem, escheat, abandoned or

unclaimed property, value added, transfer, franchise, profits, license, withholding, payroll, employment, excise, severance, stamp, occupation, premium, property, environmental or windfall profit tax, custom, duty or other tax, governmental fee or other similar assessment or charge of any kind whatsoever, together with any interest, penalty, addition to tax or additional amount imposed by any Law or taxing authority, whether disputed or not, (ii) all liability for the payment of any amounts of any of the foregoing types as a result of being a member of an affiliated, consolidated, combined or unitary group, or being a party to any agreement or arrangement whereby liability for payment of such amounts was determined or taken into account with reference to the liability of any other Person, (iii) all liability for the payment of any amounts as a result of being a party to any tax sharing or allocation agreements or arrangements (whether or not written) or with respect to the payment of any amounts of any of the foregoing types as a result of any express or implied obligation to indemnify any other Person, and (iv) all liability for the payment of any of the foregoing types as a successor, transferee or otherwise.

“ Tax Return ” means all federal, state, local, provincial and foreign Tax returns, statements, reports, elections, schedules, claims for refund, and forms (including estimated Tax or information returns and reports), including any supplement or attachment thereto and any amendment thereof.

“ Third Party Claim ” means any action, suit, proceeding, investigation, or like matter (except a claim by an officer, or director to enforce its rights under Section 5.4 ), which is asserted or threatened by a party other than the parties hereto, their successors and permitted assigns against any Indemnified Party or to which any Indemnified Party is subject.

“Transaction Expenses ” means (i) the fees and expenses incurred by the Company or its Subsidiaries (on behalf of the Company, its Subsidiaries or otherwise) in connection with the drafting, negotiation, execution and delivery of this Agreement and the other Transaction Documents and the consummation of the Transactions and the transactions contemplated by the Transaction Documents, including amounts paid pursuant to the Engagement Letter (but, for the avoidance of doubt, not including any fees and expenses incurred by or on behalf of Parent, Merger Sub or any of their respective Affiliates (as determined immediately prior to the Closing)); provided that no amounts paid pursuant to the Engagement Letter shall be deemed incurred by or on behalf of Parent, Merger Sub or of any of their respective Affiliates, (ii) all bonus compensation payable to any of the directors, independent contractors, officers, managers or other employees of the Company or any of its Subsidiaries in connection with the consummation of the Transactions, including the SAR Payments, and including the employer portion of any payroll, Social Security or similar Taxes owed with respect to such bonus compensation, and (iii) any closing or other transaction fees paid to the Securityholders or any of their respective Affiliates in connection with the transactions contemplated by the Transaction Documents; provided , that any of the foregoing amounts in clauses (i), (ii) and (iii) shall not be considered Transaction Expenses to the extent included in the calculation of Indebtedness or the Closing Date Working Capital.

“ Underwater Option ” means each Option that has an exercise price per share equal to or greater than the Estimated Price Per Share set forth in the Estimated Statement.

“ WARN Act ” means the Worker Adjustment and Retraining Act of 1988, as amended, and any similar state, local or foreign law.

“ Working Capital Adjustment Amount ” means (i) in the event that the Closing Date Working Capital, as finally determined pursuant to Section 2.6 , is greater than the Target Working Capital Upper Threshold, the positive amount equal to such Closing Date Working Capital minus the Target Working Capital Upper Threshold, (ii) in the event that the Closing Date Working Capital, as finally determined pursuant to Section 2.6 , is less than the Target Working Capital Lower Threshold, the negative amount equal to such Closing Date Working Capital minus the Target Working Capital Lower Threshold or (iii) otherwise, zero dollars ($0).

“ Working Capital Initial Adjustment Amount ” means (i) in the event that the Estimated Closing Working Capital is greater than the Target Working Capital Upper Threshold, the positive amount equal to the Estimated Closing Working Capital minus the Target Working Capital Upper Threshold, (ii) in the event that the Estimated Closing Working Capital is less than the Target Working Capital Lower Threshold, the negative amount equal to the Estimated Closing Working Capital minus the Target Working Capital Lower Threshold or (iii) otherwise, zero dollars ($0).

1.2 Index of Certain Other Definitions . The following capitalized terms used in this Agreement have the meanings located in the corresponding section below.


Term		Section
280G Stockholder Vote		Section 5.16
AC Indemnitors		Section 5.4(g)
Accounting Firm Allocation		Section 2.6(c)
Adjustment Amount		Section 2.6(d)
Agreement		Introduction
Audited Financial Statements		Section 3.7(a)
Certificate of Merger		Section 2.1(c)
Claiming Party		Section 10.1
Closing		Section 2.1(b)
Closing Date		Section 2.1(b)
Collateral Source		Section 8.6(b)
Confidential Information		Section 5.6(b)
Consolidated Tax Return		Section 5.7(a)
Company		Introduction
Company Required Vote		Section 3.22
Company Transaction Documents		Section 3.2(a)
Continuing Employee		Section 5.11
D&O Indemnitees		Section 5.4(a)
Deductible		Section 8.3(b)
Defending Party		Section 10.1
Determination Date		Section 2.6(c)
DGCL		Recitals
Dispute Notice		Section 2.6(c)
Dissenting Shares		Section 2.5(a)


Term		Section
Draft Computation		Section 2.6(b)
Effective Time		Section 2.1(c)
Environmental Permits		Section 3.17(a)
Escrow Agent		Section 2.3(a)(iii)
Escrow Agreement		Section 2.3(a)(iii)
Escrow Fund		Section 2.3(a)(iii)
Estimated Closing Cash		Section 2.6(a)
Estimated Indebtedness Amount		Section 2.6(a)
Estimated Indebtedness Payment		Section 2.3(a)(vi)
Estimated Merger Consideration		Section 2.6(a)
Estimated Statement		Section 2.6(a)
Estimated Transaction Expenses		Section 2.6(a)
Estimated Closing Working Capital		Section 2.6(a)
Excluded Shares		Section 2.2(b)
Financial Statements		Section 3.7(a)
Fundamental Representations		Section 8.3(a)
Guaranteed Obligations		Section 10.14
Guarantor		Introduction
Indemnification Tax Benefit		Section 8.6(b)
Indemnified Party		Section 8.4
Indemnifying Party		Section 8.4
Initial SAR Payment Amount		Section 2.3(b)
Interim Balance Sheet		Section 3.7(a)
Jointly Privileged Information		Section 5.13
Leased Real Property		Section 3.9(b)
Litigation Conditions		Section 8.5(b)
Material Contracts		Section 3.10(a)
Material Customers		Section 3.23
Material Suppliers		Section 3.23
Medical Plan		Section 5.11
Merger		Recitals
Merger Sub		Introduction
Minor Claim		Section 8.3(a)
Option Cancellation Amount		Section 2.3(c)
Owned Intellectual Property		Section 3.14(a)
Parent		Introduction
Parent Adjustment Amount		Section 2.6(d)(ii)
Parent Indemnitee		Section 8.1
Parent Transaction Documents		Section 4.1
Parties		Introduction
Pre-Closing Period		Section 5.2
Privilege Period		Section 5.7(b)(iii)
Projections		Section 4.10
Real Property Leases		Section 3.9(b)
Securityholder Indemnitee		Section 8.2


Term		Section
Securityholders’ Representative		Introduction
Seller Group		Section 10.13
Survival Period		Section 8.3(c)
Surviving Entity		Section 2.1(a)
Tail Policy		Section 5.4(c)
Tax Claim		Section 5.7(d)
Tax Refunds		Section 5.7(f)
Tax Sharing Direction Letter		Section 5.7(f)
Transactions		Section 2.1(a)
Transaction Documents		Section 2.1(a)
Transition Period		Section 5.11
Unaudited Financial Statements		Section 3.7(a)
Updated Schedules		Section 5.8
Written Consent		Recitals

1.3 Other Definitional and Interpretive Matters .

(a) Except as otherwise provided or unless the context otherwise requires, whenever used in this Agreement, (i) any noun or pronoun shall be deemed to include the plural and the singular, (ii) the use of masculine pronouns shall include the feminine and neuter, (iii) the terms “include” and “including” shall be deemed to be followed by the phrase “without limitation,” (iv) the word “or” shall be inclusive and not exclusive, (v) all references to Articles and Sections refer to the Articles and Sections of this Agreement, all references to Schedules refer to the Schedules attached to or delivered with this Agreement, as appropriate, and all references to Exhibits refer to the Exhibits attached to this Agreement, each of which is made a part of this Agreement for all purposes, (vi) each reference to “herein” means a reference to “in this Agreement,” (vii) each reference to “$” or “dollars” shall be to United States dollars, (viii) each reference to “days” shall be to calendar days, (ix) each reference to any contract or agreement shall be to such contract or agreement as amended, supplemented, waived or otherwise modified from time to time prior to the date of this Agreement and (x) accounting terms which are not otherwise defined in this Agreement shall have the meanings given to them under GAAP; provided , however , that to the extent that a definition of a term set forth in this Agreement is inconsistent with the meaning of such term under GAAP, the definition set forth in this Agreement will control. Unless otherwise expressly provided herein, the measure of a period of one month or one year for purposes of this Agreement shall be that date of the following month or year corresponding to the starting date; provided , however , that if no corresponding date exists, the measure shall be that date of the following month or year corresponding to the next day following the starting date. For example, one month following February 18th is March 18th, and one month following March 31 is May 1.

(b) Any matter set forth in any section of the Disclosure Schedule shall be deemed set forth in all other sections of the Disclosure Schedule so long as the relevance of such matter to such other section of the Disclosure Schedule is reasonably apparent on its face. The inclusion of any information (including dollar amounts) in any section of the Disclosure Schedule shall not be deemed to be an admission or acknowledgment by any party that such

information is required to be listed in such section of the Disclosure Schedule or is material to or outside the ordinary course of the business of the Company, its Subsidiaries or Parent or Merger Sub, as the case may be. Matters reflected in the Disclosure Schedule are not necessarily limited to matters required by this Agreement to be reflected in the Disclosure Schedule; such additional matters are set forth for informational purposes only and do not necessarily include other matters of a similar nature. In addition, the Company may include in the Disclosure Schedule disclosure with respect to items that would not have a Material Adverse Effect within the meaning of such term, and any such inclusion shall not be deemed to be an acknowledgement by the Company that such items, or any of them, would have a Material Adverse Effect or further change, amend or define the meaning of the term “Material Adverse Effect” for purposes of this Agreement. The information contained in this Agreement, the Exhibits hereto and the Disclosure Schedule is disclosed solely for purposes of this Agreement, and no information contained herein or therein shall be deemed to be an admission by any party hereto to any third party of any matter whatsoever (including any violation of Law or breach of contract).

(c) The provisions of this Agreement shall be construed according to their fair meaning and neither for nor against any party hereto irrespective of which party caused such provisions to be drafted. Each of the parties hereto acknowledges that it has been represented by an attorney in connection with the preparation and execution of the Transaction Documents.

ARTICLE 2

THE MERGER; MERGER CONSIDERATION

2.1 The Merger; Closing .

(a) Upon the terms and subject to the conditions set forth in this Agreement, at the Effective Time, Merger Sub shall be merged with and into the Company. Following the Effective Time, the separate corporate existence of Merger Sub shall cease and the Company shall continue as the surviving entity in the Merger (sometimes hereinafter referred to as the “ Surviving Entity ”) and shall succeed to and assume all of the rights and obligations of Merger Sub and the Company in accordance with the DGCL. The Merger and the other transactions contemplated by this Agreement are collectively referred to herein as the “ Transactions ,” and this Agreement and each other agreement entered into in connection with the Transactions, including the Escrow Agreement, the Non-Solicitation Agreement, the Written Consent and the Letter of Transmittal are collectively referred to herein as the “ Transaction Documents .”

(b) The closing for the Merger (the “ Closing ”) shall take place at the offices of Arnold & Porter LLP, 555 12 ^th Street, NW, Washington, DC 20004, at 10:00 A.M. (Eastern Time) on the second Business Day (the “ Closing Date ”) following the satisfaction or waiver of all conditions of the parties to consummate the Transactions (other than the conditions with respect to actions the respective parties will take at the Closing itself, but subject to the satisfaction or waiver of such conditions) or at such other place or on such other date or time as is mutually agreed to by Parent and the Company; provided , however , that the Closing will not in any event occur prior to August 8, 2014 (and the Parties’ current intent is that the Closing will occur on August 8, 2014).

(c) On the Closing Date, the Company and Parent shall cause a Certificate of Merger in the form of Exhibit A attached hereto (the “ Certificate of Merger ”) to be executed and filed with the Secretary of State of the State of Delaware as provided in Section 251 of the DGCL. The Merger shall become effective at the time when the Certificate of Merger has been duly filed with the Secretary of State of the State of Delaware or at such later time as may be agreed by the Parties and specified in the Certificate of Merger (the “ Effective Time ”).

(d) The certificate of incorporation of the Company shall be amended at the Effective Time to read substantially in the form of Exhibit B attached hereto and, as so amended, such certificate shall be the certificate of incorporation of the Surviving Entity until thereafter changed or amended as provided therein or by applicable Law.

(e) The directors of Merger Sub immediately prior to the Effective Time shall be the directors of the Surviving Entity, effective as of the Effective Time, until the earlier of their resignation or removal or until their respective successors are duly elected and qualified, as the case may be.

(f) The individuals set forth on Schedule 2.1(f) shall be the officers of the Surviving Entity, effective as of the Effective Time, until the earlier of their resignation or removal or until their respective successors are duly elected or appointed and qualified, as the case may be.

(g) The bylaws of Merger Sub immediately prior to the Effective Time shall be the bylaws of the Surviving Entity, effective as of the Effective Time, until the change or amendment thereof as provided therein or under applicable Law.

2.2 Effect on Capital Stock of Merger Sub and Parent . Subject to the terms and conditions of this Agreement, by virtue of the Merger and without any action on the part of Parent, Merger Sub, the Company, the Securityholders or the holders of equity interests of Merger Sub:

(a) Capital Stock of Merger Sub . At the Effective Time, all of the issued and outstanding capital stock of Merger Sub shall be converted into and become one hundred percent (100%) of the issued and outstanding capital stock of the Company.

(b) Cancellation of Company Capital Stock . At the Effective Time, each share of Company Capital Stock issued by the Company and outstanding immediately prior to the Effective Time and (i) held in the treasury of the Company or (ii) owned by a Subsidiary of the Company (the shares referenced in clauses (i) and (ii), collectively, the “ Excluded Shares ”), shall cease to be outstanding, shall be cancelled and retired without any conversion thereof and without payment of any consideration therefor and shall cease to exist.

(c) Company Capital Stock . Subject to Section 2.4 and Section 2.5 , at the Effective Time, each share of Company Capital Stock issued by the Company and outstanding immediately prior to the Effective Time (other than any Excluded Shares and Dissenting Shares) shall be converted (with such number of shares of Preferred Stock calculated, for this purpose, by treating the shares of Preferred Stock as having been converted into outstanding shares of Class A Common Stock without the need for actual conversion (and without having been

actually converted) pursuant to the Charter) into the right to receive cash in an amount equal to (x) (i) the Merger Consideration plus (ii) the Aggregate Option Exercise Amount, divided by (y) the Fully Diluted Common Shares.

(d) No Further Rights . All Company Capital Stock issued by the Company, when cancelled and/or converted pursuant to this Section 2.2 , shall no longer be outstanding and shall automatically be cancelled and retired, and each Securityholder shall cease to have any rights with respect thereto, except the right to receive the amount of cash consideration with respect to such Company Capital Stock set forth in this Agreement.

(e) Dissenting Shares . The Dissenting Shares shall cease to exist and shall be automatically retired, and each holder of a certificate that, immediately prior to the Effective Time, represented Dissenting Shares shall cease to have any rights with respect to Company Capital Stock other than as described in Section 2.5 .

(f) No Further Transfers . At the Effective Time, the stock transfer books of the Company shall be closed and no transfer of Company Capital Stock shall thereafter be made.

2.3 Payments and Distributions on the Closing Date .

(a) Stockholder and Certain Other Payments . At the Closing, Parent shall pay by wire transfer in immediately available funds:

(i) to each holder of Common Stock, an amount equal to the Estimated Price Per Share multiplied by the number of shares of Common Stock (other than Dissenting Shares) owned by such holder;

(ii) to each holder of Preferred Stock, an amount equal to the Estimated Price Per Share multiplied by the number of shares of Common Stock (other than Dissenting Shares) into which the shares of Preferred Stock owned by such holder are convertible as of immediately prior to the Effective Time;

(iii) to PNC Bank, N.A. (the “ Escrow Agent ”), an amount equal to the Escrow Amount for deposit into an escrow account (the “ Escrow Fund ”), to be held for the Survival Period (subject to any then-pending claims made in accordance with this Agreement) and distributed as provided in an escrow agreement substantially in the form of Exhibit C attached hereto, to be entered into at Closing by Parent, the Escrow Agent and the Securityholders’ Representative (the “ Escrow Agreement ”);

(iv) to the Securityholders’ Representative, cash in an amount equal to the Securityholders’ Representative Amount to be applied in accordance with the terms of this Agreement;

(v) the Estimated Transaction Expenses other than the SAR Payments (which are payable pursuant to Section 2.3(b) ), to the extent not paid by the Company and/or its Affiliates prior to the Closing;

(vi) on behalf of the Company and its Subsidiaries, to the appropriate Persons in accordance with the wire instructions set forth on the applicable schedule indicated below and the payoff letter delivered at or prior to Closing, all Indebtedness and other obligations of the Company and its Subsidiaries set forth on Schedule 7.1(d) , which shall be delivered to Parent no later than three (3) Business Days prior to the Closing Date (the “ Estimated Indebtedness Payment ”); and

(vii) the payments set forth in Sections 2.3(b) and 2.3(c) .

(b) SAR Payments . At Closing, Parent will pay to the Company an amount (the “ Initial SAR Payment Amount ”) equal to (x) the aggregate amount of the SAR Payments minus (y) the sum of (A) the SAR Recipients’ Pro Rata Shares of the Securityholders’ Representative Amount plus (B) the SAR Recipients’ Pro Rata Share of the Escrow Amount, and following such payment, the Company will pay promptly (but in no event later than seven (7) Business Days) by wire transfer or direct deposit to each SAR Recipient his or her respective portion of the Initial SAR Payment Amount (subject to any applicable employee Taxes and withholdings), and the Company shall remit the portion of the Initial SAR Payment Amount that is withheld for Taxes to the appropriate Governmental Bodies. For the avoidance of doubt, the SAR Recipients will not be entitled to participate in the distribution (if any) of the “Adjustment Amount” to the Securityholders in accordance with Section 2.6(d) . The Company shall terminate the SAR Plan as of the Closing such that no new award may be made thereunder.

(c) Option Cancellation Payments . The Company shall cause each Eligible Option to be cancelled, as of the Closing, in exchange for the Eligible Optionholder being entitled to receive an amount in cash (subject to any applicable employee Taxes and withholdings) equal to the product of (i) the total number of Option Shares subject to such cancelled Eligible Option and (ii) the Estimated Price Per Share less the applicable exercise price per share of such Eligible Option (the aggregate of such amounts for all Eligible Options, the “ Option Cancellation Amount ”). The Company shall cause each Option that is not an Eligible Option, if any, to be cancelled without consideration as of the Closing, and shall terminate the Option Plan as of the Closing such that no new award may be made thereunder. At Closing, Parent will pay to the Company an amount equal to the Option Cancellation Amount, and following such payment the Company will pay promptly (but in no event later than seven (7) Business Days) by wire transfer or direct deposit to each Eligible Optionholder his or her respective portion of the Option Cancellation Amount (subject to any applicable employee Taxes and withholdings), and the Company shall remit the portion of the Option Cancellation Amount that is withheld for Taxes to the appropriate Governmental Bodies. From and after the Effective Time, no Option shall be exercisable, and each Option shall only entitle the holder thereof to receive the amount of cash consideration with respect to such Option set forth in this Agreement.

2.4 Mechanism of Payment and Delivery of Certificates .

(a) Upon delivery to Parent of a Certificate, together with a Letter of Transmittal covering such Certificate and duly executed and completed in accordance with the instructions thereto, the holder of such Certificate shall be entitled to receive at the Closing (or, such Certificate and Letter of Transmittal are delivered after the Closing, no later than three (3) Business Days after the delivery to Parent of such Certificate and Letter of Transmittal), in

exchange therefor, cash in the amount calculated pursuant to Section 2.3(a)(i) and/or (ii) for the Company Capital Stock evidenced by such Certificate, which amount shall be paid by wire transfer in accordance with the instructions provided by such holder. No interest or dividends will be paid or accrued on the consideration payable upon the delivery or transfer of any Certificate. If the consideration provided for herein is to be delivered in the name of a Person other than the Person in whose name the Certificate was delivered, it shall be a condition of such delivery that the Certificate so delivered shall be properly endorsed and otherwise in proper form for transfer. Until delivered in accordance with the provisions of this Section 2.4(a) , each Certificate (other than for Dissenting Shares and Excluded Shares) shall represent, for all purposes, only the right to receive cash in the amount set forth in this Agreement in respect of the Company Capital Stock formerly evidenced by such Certificate, without any interest thereon.

(b) In the event any Certificate shall have been lost, stolen or destroyed, upon the making and delivery to Parent of an affidavit of loss and indemnity (in form and substance reasonably acceptable to Parent) of that fact by the Person (who shall be the record owner of such Certificate) claiming such Certificate to be lost, stolen or destroyed and the making by such Person of a customary indemnity, Parent shall issue in exchange for such lost, stolen or destroyed Certificate the Securityholder’s amount payable for shares of Company Capital Stock represented by such Certificate pursuant to the terms of this Agreement.

2.5 Dissenting Shares .

(a) Notwithstanding any provision of this Agreement to the contrary, shares of Company Capital Stock that are outstanding immediately prior to the Effective Time and that are held by the holders of Company Capital Stock who shall have not voted in favor of the Merger and who shall have demanded properly in writing appraisal for such shares in accordance with Section 262 of the DGCL (collectively, the “ Dissenting Shares ”) shall not be converted into, or represent the right to receive, any portion of the amount payable for shares of Company Capital Stock pursuant to the terms of this Agreement. Such holders of Company Capital Stock shall be entitled to receive payment of the appraised value of such shares of Company Capital Stock held by them in accordance with the provisions of such Section 262, except that all Dissenting Shares held by the holders of Company Capital Stock who shall have failed to perfect or who effectively shall have withdrawn or lost their rights to appraisal of such shares under such Section 262 shall thereupon be deemed to have been converted into, and to have become exchangeable for, as of the Effective Time, the right to receive any portion of the amount payable for shares of Company Capital Stock pursuant to the terms of this Agreement, without any interest thereon, upon surrender, in the manner provided herein, of the Certificate or Certificates that formerly evidenced such shares, together with such Letter of Transmittal duly executed and completed in accordance with the instructions thereto.

(b) The Company shall (i) give Parent and the Securityholders’ Representative prompt written notice of any demands for appraisal received by the Company, withdrawals of such demands, and any other instruments served pursuant to the DGCL and received by the Company, and (ii) at the Closing, deliver to Parent a certificate listing the names and addresses of each holder of Company Capital Stock who has demanded appraisal rights, and any other instruments served pursuant to the DGCL and received by the Company. Parent shall have the opportunity to direct all negotiations and proceedings with respect to demands for

appraisal under the DGCL. Parent may, without the prior written consent of the Securityholders’ Representative, make any payment with respect to any demands for appraisal or offer to settle or settle any such demands. Prior to the Closing, except with the prior written consent of Parent, the Company will not make any payment with respect to, or settle or offer to settle, any such demands.

2.6 Post-Closing Adjustments .

(a) Estimated Statement . No later than three (3) Business Days prior to the Closing Date, the Company shall prepare and deliver to Parent (i) a statement (the “ Estimated Statement ”) setting forth in reasonable detail the Company’s good faith estimate of (A) Closing Date Working Capital (such estimate, “ Estimated Closing Working Capital ”) and resulting calculation of the Working Capital Initial Adjustment Amount, (B) the Actual Closing Cash (such estimate, “ Estimated Closing Cash ”), (C) the Indebtedness Amount (such estimate, the “ Estimated Indebtedness Amount ”), and (D) the Actual Transaction Expenses (such estimate, “ Estimated Transaction Expenses ”), which such Estimated Statement shall be prepared on a consolidated basis in accordance with the Accounting Standards, and (ii) the Company’s estimated calculation of the Merger Consideration as a result of the estimates described in the foregoing clause (i) (such estimate, “ Estimated Merger Consideration ”).

(b) Draft Computation; Merger Consideration Calculation . As soon as reasonably practicable following the Closing Date, and in any event within sixty (60) calendar days thereof, Parent shall cause to be prepared and delivered to the Securityholders’ Representative the following (collectively, the “ Draft Computation ”): (i) a statement of its calculation of the Working Capital Adjustment Amount, the Actual Closing Cash, the Indebtedness Amount, and the Actual Transaction Expenses and (ii) its calculation of the Merger Consideration as a result of the calculations described in the foregoing clauses. The Draft Computation shall be prepared on a consolidated basis in accordance with the Accounting Standards. The parties agree that the purposes of preparing the Draft Computation and determining the related purchase price adjustment contemplated by this Section 2.6 are to measure the amount of Actual Closing Cash, the Indebtedness Amount, the Actual Transaction Expenses and any changes in Net Working Capital, and such processes are not intended to permit the introduction of (and no party shall be permitted to introduce) different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies than those reflected in the Accounting Standards, but instead to require that each calculation be done in a manner consistent with the Accounting Standards. From and after the Closing Date until the Determination Date (as defined below), Parent will make available to the Securityholders’ Representative and its auditors, promptly upon the request of the Securityholders’ Representative, during normal business hours and upon reasonable notice, all employees and advisors relevant to the preparation of the calculations reflected in the Draft Computation and all records and work papers reflected in the Draft Computation.

(c) Determination Procedures . Within sixty (60) calendar days after its receipt of the Draft Computation, the Securityholders’ Representative shall provide Parent with a written notice of any disagreement with the Draft Computation setting forth in reasonable detail those items and amounts that the Securityholders’ Representative disputes (the “ Dispute Notice ”); provided , however , that any Dispute Notice may only include objections based on the

Securityholders’ Representative’s belief that (x) the Draft Computation included assumptions or applied principles that conflict with the Accounting Standards, this Section 2.6(c) and/or the applicable definitions in this Agreement or otherwise was not determined in accordance with the Accounting Standards, Section 2.6(c) and/or the applicable definitions in this Agreement and/or (y) the Draft Computation contained mathematical errors. If the Securityholders’ Representative delivers a Dispute Notice with respect to some, but not all, of the items or amounts included in the Draft Computation within such 60-day period, then the Securityholders’ Representative shall be deemed to have agreed with Parent’s calculations of all items and amounts set forth in the Draft Computation that were not disputed in such duly and timely delivered Dispute Notice. If no such Dispute Notice is received by Parent on or prior to the close of business on the last day of such sixty (60) calendar day period, the Draft Computation and the calculation of Working Capital Adjustment Amount, Actual Closing Cash, the Indebtedness Amount, the Actual Transaction Expenses and the Merger Consideration set forth therein shall be deemed accepted by the Securityholders’ Representative. If any such Dispute Notice is timely provided, Parent and the Securityholders’ Representative shall use their commercially reasonable efforts for a period of thirty (30) days (or such longer period as they may mutually agree in writing) to resolve any disagreements with respect to the Draft Computation or the calculation of the Working Capital Adjustment Amount, Actual Closing Cash, the Indebtedness Amount, the Actual Transaction Expenses or the Merger Consideration. If, at the end of such period, they are unable to resolve such disagreements, then the Independent Accounting Firm shall resolve any remaining disagreements. Parent and the Securityholders’ Representative shall use their commercially reasonable efforts to cause the Independent Accounting Firm to review those items or amounts remaining in dispute as promptly as practicable, but in any event within thirty (30) days of the date on which such Dispute Notice is referred to the Independent Accounting Firm. The Independent Accounting Firm will review only those items and amounts specifically set forth and objected to in the Dispute Notice and resolve the dispute with respect to each such specific item and amount in accordance with the Accounting Standards. The scope of the disputes to be arbitrated by the Independent Accounting Firm is limited to whether the Draft Computation or the calculation of Working Capital Adjustment Amount, Actual Closing Cash, the Indebtedness Amount, the Actual Transaction Expenses and the Merger Consideration were done in a manner consistent with the Accounting Standards, the principles set forth in this Section 2.6(c) and the applicable definitions in this Agreement, and whether there were mathematical errors in determining the Working Capital Adjustment Amount, Actual Closing Cash, the Indebtedness Amount, the Actual Transaction Expenses or the Merger Consideration, and the Independent Accounting Firm is not to make any other determination, including any determination as to whether the Target Working Capital is correct. The fees, costs and expenses of the Independent Accounting Firm shall be allocated to Parent based upon the percentage which the portion of the contested amount not awarded to each party bears to the amount actually contested by such party, as determined by the Independent Accounting Firm (the “ Accounting Firm Allocation ”). Solely by way of illustration, if Parent claims before the Independent Accounting Firm that the determination of Net Working Capital as of the Closing Date is $1,000,000, and the Securityholders’ Representative claims before the Independent Accounting Firm that the determination of Net Working Capital as of the Closing Date is $1,500,000, and if the Independent Accounting Firm ultimately resolves the dispute by awarding Parent $300,000 of the $500,000 difference, then the costs and expenses of the Independent Accounting Firm will be allocated 60% ( i.e ., 300,000 ÷ 500,000) to the Securityholders’ Representative (on behalf of

the Securityholders) and 40% ( i.e ., 200,000 ÷ 500,000) to Parent. Parent and the Securityholders’ Representative, on behalf of the Securityholders, will retain the Independent Accounting Firm and each pay 50% of any retainer. During the engagement, the Independent Accounting Firm will bill 50% of the total charges to Parent and 50% of the total charges to the Securityholders’ Representative (on behalf of the Securityholders), and Parent and the Securityholders’ Representative shall each timely pay or cause to be paid such amounts. The Accounting Firm Allocation will be settled by Parent and the Securityholders’ Representative in a manner consistent with such allocation within ten (10) days after the Determination Date. The determination of the Independent Accounting Firm shall be set forth in a written statement delivered to the Securityholders’ Representative and Parent and shall be final, conclusive and binding on the parties, absent fraud or manifest error. The date on which the Draft Computation and the Working Capital Adjustment Amount, Actual Closing Cash, the Indebtedness Amount, Actual Transaction Expenses and the Merger Consideration are finally determined in accordance with this Section 2.6(c) or Section 2.6(e) is hereinafter referred to as the “ Determination Date .”

(d) Adjustment Amount . The “ Adjustment Amount ” means the difference between (i) the Merger Consideration (taking into consideration the final agreements or determinations as to the Draft Computation, Working Capital Adjustment Amount, Actual Closing Cash, the Indebtedness Amount, and the Actual Transaction Expenses pursuant to this Section 2.6 ) and (ii) the Estimated Merger Consideration.

(i) If the Merger Consideration as finally determined under this Section 2.6 exceeds the Estimated Merger Consideration, then promptly, and in any event within five (5) Business Days following the Determination Date, Parent shall pay to the Securityholders’ Representative (or to the Securityholders, as directed by the Securityholders’ Representative), by wire transfer of immediately available funds to an account designated in writing by the Securityholders’ Representative, the amount equal to the Adjustment Amount (with amounts being distributed to each Securityholder, net of any withholding Taxes, in accordance with instructions from the Securityholders’ Representative).

(ii) If the Estimated Merger Consideration exceeds the Merger Consideration as finally determined under this Section 2.6 , then promptly, and in any event within five (5) Business Days following the Determination Date, Parent and the Securityholders’ Representative shall cause the Escrow Agent to pay to Parent, by wire transfer of immediately available funds to an account designated in writing by Parent, from the Escrow Fund an amount equal to the absolute value of the Adjustment Amount (such amount, the “ Parent Adjustment Amount ”).

(e) Non-Delivery of Draft Computation . If, for any reason, Parent fails to deliver the Draft Computation within the time period required by Section 2.6(b) , the amounts of the Estimated Working Capital Adjustment Amount, Estimated Indebtedness Amount, Estimated Transaction Expenses, Estimated Closing Cash and Estimated Merger Consideration delivered by the Company to Parent provided in the Estimated Statement shall be considered for all purposes of this Agreement as being Parent’s “Draft Computation” and the Securityholders’ Representative shall have all of its rights under this Section 2.6 with respect to such computation (including the rights to seek information relating to and/or to challenge such computation).

2.7 Securityholders’ Representative .

(a) Appointment . The Securityholders’ Representative has been (or will be pursuant to the Letter of Transmittal) appointed, authorized and empowered to act, on behalf of each of the Securityholders, as his, her or its agent and attorney in fact with full power of substitution to act from and after the date hereof and to do any and all things and execute any and all documents on behalf of such Securityholder which may be necessary, convenient or appropriate to facilitate the consummation of the Transactions, including but not limited to: (i) execution of the documents and certificates required pursuant to this Agreement; (ii) receipt of payments under or pursuant to this Agreement and disbursement thereof to the Securityholders and others, in accordance with this Agreement and subject to the terms hereof; (iii) receipt and forwarding of notices and communications pursuant to this Agreement; (iv) administration of the provisions of this Agreement; (v) giving or agreeing to, on behalf of the Securityholders, any and all consents, waivers, amendments or modifications deemed by the Securityholders’ Representative, in its sole and absolute discretion, to be necessary or appropriate under this Agreement and the execution or delivery of any documents that may be necessary or appropriate in connection therewith; (vi) amending this Agreement or any of the instruments to be delivered to Parent or Merger Sub pursuant to this Agreement; (vii) taking actions the Securityholders’ Representative is expressly authorized to take pursuant to the other provisions of this Agreement; (viii) (A) dispute or refrain from disputing any claim made by Parent or any other Parent Indemnitee under this Agreement or other agreements contemplated hereby, (B) negotiate and compromise, on behalf of the Securityholders, any dispute that may arise under, and exercise or refrain from exercising any remedies available under, this Agreement or any other agreement contemplated hereby, and (C) execute, on behalf of the Securityholders, any settlement agreement, release or other document with respect to such dispute or remedy; and (ix) engaging attorneys, accountants, agents or consultants on behalf of the Securityholders in connection with this Agreement or any other agreement contemplated hereby and paying any fees related thereto.

(b) Authorization . Notwithstanding Section 2.7(a) , in the event that the Securityholders’ Representative, with the advice of counsel, is of the opinion that it requires further authorization or advice from the Securityholders with respect to any matters concerning this Agreement, the Securityholders’ Representative shall be entitled to seek such further authorization from, and to confer with, the Securityholders prior to acting on their behalf. The Securityholders’ Representative may obtain such further authorization (i) at a meeting of the Securityholders, called by the Securityholders’ Representative with at least five days advance notice in writing, at which the holders of a majority of votes referred to in the next sentence are present and approve such authorization or (ii) in the form of a writing executed by a majority of the number of votes referred to in the next sentence, which writing shall thereafter be sent to each Securityholder that did not execute such writing promptly after its execution, provided that the failure to send such writing to such Securityholder shall not render invalid or void any such authorization. In such event, each Securityholder shall have a number of votes equal to his, her or its Pro Rata Share multiplied by 100, and the authorization of a majority of such number of votes shall be binding on the Securityholders and shall constitute the authorization of the Securityholders.

(c) Reliance . Parent shall be entitled to deal exclusively with the Securityholders’ Representative on all matters relating to this Agreement, the Escrow Agreement and any agreement with the Securityholders’ Representative deemed, pursuant to Section 2.7(a) to be necessary or appropriate herewith or therewith. Parent shall be fully protected in dealing with the Securityholders’ Representative under this Agreement and may rely upon the authority of the Securityholders’ Representative to act on behalf of the Securityholders. Any payment by Parent to the Securityholders’ Representative to the extent authorized under this Agreement shall be considered a payment by Parent to the Securityholders. The appointment of the Securityholders’ Representative is coupled with an interest and shall not be revocable by any Securityholder in any manner or for any reason. This power of attorney shall not be affected by the death, illness, dissolution, disability, incapacity or other inability to act of the principal pursuant to any applicable law.

(d) Acts of the Securityholders’ Representative . The Securityholders’ Representative may resign from its capacity as the Securityholders’ Representative at any time by written notice delivered to Parent and each Securityholder. If there is a vacancy at any time in the position of the Securityholders’ Representative for any reason, such vacancy shall be filled by the Securityholders’ vote in the manner contemplated by Section 2.7(b) .

(e) No Liability . The Securityholders’ Representative shall not be liable to Parent or any Securityholder in its capacity as the Securityholders’ Representative for any Liability of any Securityholder or for any error of judgment, or any act done or step taken or omitted by it that it believed to be in good faith or for any mistake in fact or law, or for anything which it may do or refrain from doing in connection with this Agreement or the Escrow Agreement except in the case of fraud or willful misconduct by it. The Securityholders’ Representative may seek the advice of reputable legal counsel in the event of any dispute or question as to the construction of any of the provisions of this Agreement or its duties hereunder, and it shall incur no Liability in its capacity as the Securityholders’ Representative to Parent or any Securityholder and shall be fully protected with respect to any action taken, omitted or suffered by it in good faith in accordance with the opinion of such counsel.

(f) Expenses and Liabilities . Any expenses or liabilities incurred by the Securityholders’ Representative in connection with the performance of its duties under this Agreement or the Escrow Agreement shall not be the personal obligation of the Securityholders’ Representative but shall be payable by the Securityholders based on each Securityholder’s Pro Rata Share. The Securityholders’ Representative may from time to time submit invoices to the Securityholders covering such expenses and/or liabilities and, upon the request of any Securityholder, the Securityholders’ Representative shall provide such Securityholder with an accounting of all expenses paid. In addition to any other rights or remedies, the Securityholders’ Representative may, upon notice, offset any amounts determined by it to be owed to the Securityholders’ Representative against the Securityholders’ Representative Amount and against any amounts to be paid to the Securityholders hereunder. Subject to the limitations set forth in the next succeeding proviso, upon any distribution to the Securityholders’ Representative of funds from Parent or the Surviving Entity following the Closing (but not at the Closing) pursuant to this Agreement or from the Escrow Fund pursuant to the Escrow Agreement, the Securityholders’ Representative may (x) set off any expenses or liabilities incurred by the Securityholders’ Representative in its capacity as the Securityholders’ Representative against

such funds otherwise distributable to the Securityholders or (y) retain a portion of such funds as additional funds to be used in the same manner as the Securityholders’ Representative Amount if the Securityholders’ Representative believes in good faith that such retention of funds may be necessary to satisfy the expenses or liabilities of the Securityholders’ Representative under this Agreement or the Escrow Agreement; provided that the Securityholders’ Representative may not retain funds from any such distribution to the extent that the amount retained from such distribution plus any remaining and unused portion of the Securityholders’ Representative Amount would exceed the original amount of the Securityholders’ Representative Amount; and provided further that, in the case of the foregoing clauses (x) and (y), any amount set off or retained in accordance with such clauses shall be set off against and/or retained from such funds otherwise distributable to the Securityholders on a pro rata basis in accordance with their respective Pro Rata Shares.

(g) Indemnification of the Securityholders’ Representative . The Securityholders shall severally, but not jointly, indemnify and hold harmless, pro rata based on the Pro Rata Shares, the Securityholders’ Representative from any and all losses, liabilities and expenses (including the reasonable fees and expenses of counsel) arising out of or in connection with the Securityholders’ Representative’s execution and performance (solely in its capacity as the Securityholders’ Representative and not in its capacity as a Securityholder) of this Agreement, except for fraud or willful misconduct by the Securityholders’ Representative.

(h) Distribution of the Securityholders’ Representative Amount . Except as otherwise agreed between the Securityholders’ Representative and the Securityholders, the Securityholders’ Representative shall distribute any portion of the Securityholders’ Representative Amount and any other amounts retained by the Securityholders’ Representative in accordance with Section 2.7(f) that has not been utilized by it to satisfy its liabilities or expenses as the Securityholders’ Representative or other obligations of the Securityholders hereunder to Securityholders pro rata based upon their respective Pro Rata Shares (net of any amounts owed by the Securityholders to the Securityholders’ Representative and net of any applicable withholding taxes) at such time or times as the Securityholders’ Representative may determine in its discretion following the later to occur of (x) the end of the Survival Period and (y) the final resolution of all claims against the Securityholders under this Agreement that arise prior to the end of the Survival Period; provided that in no event shall any distribution be made to any Optionholder with respect to his or her Eligible Option or any SAR Recipient with respect to his or her SAR Payment after the fifth anniversary of the Closing Date.

ARTICLE 3

REPRESENTATIONS AND WARRANTIES WITH RESPECT

TO THE COMPANY AND ITS SUBSIDIARIES

Except as otherwise set forth in the Disclosure Schedule, the Company hereby represents and warrants to Parent and Merger Sub as of the date hereof and as of the Closing Date:

3.1 Organization and Good Standing . The Company and each of its Subsidiaries is duly organized, validly existing and in good standing under the Laws of its jurisdiction of incorporation, formation or organization, as applicable, and has all necessary corporate, limited liability company or other power and authority, as the case may be, to carry on its business as

presently conducted, and to own and lease the assets and properties which it owns and leases. The Company and each of its Subsidiaries is duly qualified to do business as a foreign entity and is in good standing (if applicable) in each jurisdiction in which its ownership or leasing of assets or properties or the nature of its activities requires such qualification, except where the failure to be so qualified would not reasonably be expected to be materially adverse to the Company and its Subsidiaries, taken as a whole. The Company and each of its Subsidiaries has made available to Parent true and correct copies of the certificate of incorporation and bylaws (or other applicable organizational documents) of the Company and each of its Subsidiaries, as currently in effect.

3.2 Power and Authorization; Enforceability .

(a) Subject to receipt of the Written Consent, the Company has all requisite right, power, and authority to execute and deliver this Agreement and the other Transaction Documents to which it is, or is specified to be, a party (collectively, the “ Company Transaction Documents ”), to perform its obligations hereunder and thereunder, and to consummate the Transactions and the transactions contemplated by the other Transaction Documents. All necessary corporate action has been taken by the Company to authorize the execution, delivery and performance by the Company of this Agreement and each other Company Transaction Document and, other than the Company Required Vote, no other act or proceeding on the part of the Company or its stockholders is necessary to authorize the execution, delivery or performance by the Company of this Agreement or any other Company Transaction Document or the consummation of the Merger. The Company has duly executed and delivered this Agreement and, at or prior to the Closing, assuming receipt of the Required Company Vote, will have duly executed and delivered each other Company Transaction Document.

(b) This Agreement is, and each other Company Transaction Document, when duly executed and delivered at Closing by the Company, will be, the legal, valid and binding obligation of the Company, enforceable against it in accordance with its respective terms, except as enforceability of such obligations may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar Laws now or hereafter in effect relating to or limiting creditors’ rights generally and general principles of equity relating to the availability of specific performance and injunctive and other forms of equitable relief.

(c) On or prior to the date hereof, the Board of Directors of the Company has, at a meeting duly called and held in which all directors were present, unanimously determined that this Agreement and the transactions provided for herein, including the Merger, are fair to and in the best interest of the Company and its stockholders, and adopted resolutions by a unanimous vote (i) approving this Agreement and (ii) declaring this Agreement and the Merger are advisable and directed that this Agreement be submitted to the stockholders of the Company for their adoption, which resolutions have not been subsequently withdrawn or modified.

3.3 No Conflicts .

(a) Provided that the Consents set forth in Section 3.3(b) of the Disclosure Schedule are obtained (or made, in the case of any notice) prior to the Closing Date, and assuming execution and delivery of the Written Consent sufficient to obtain the Company

Required Vote, neither the execution, delivery and performance of this Agreement and the other Company Transaction Documents nor the consummation of the Transactions or the transactions contemplated by the other Transaction Documents (in each case with or without the passage of time or the giving of notice, or both): (i) contravene, conflict with or result in a violation or breach of the organizational documents of the Company or any of its Subsidiaries; (ii) require any Consent from (or to, in the case of any notice) any Person under any of the terms or conditions of any Material Contract, or result in any termination rights, loss of benefits under or any obligation to make any payment under any Material Contract; (iii) result in the creation or imposition of any Encumbrance upon any of the assets of the Company or any of its Subsidiaries, other than Permitted Encumbrances; (iv) cause a loss or impairment of any material Governmental Authorization held by the Company or any of its Subsidiaries or by which any of their respective properties or assets are bound; or (v) violate any Law or Judgment.

(b) Section 3.3(b) of the Disclosure Schedule contains a complete and accurate list of each Consent of or with any Governmental Body or other Person in connection with the execution, delivery and performance of this Agreement and the other Company Transaction Documents by the Company or any of its Subsidiaries or consummation of the Transactions.

3.4 Capitalization; Indebtedness .

(a) The authorized, issued and outstanding shares of Company Capital Stock issued by the Company are fully and accurately set forth in Section 3.4(a) of the Disclosure Schedule, including the name and number of shares of Company Capital Stock held by each stockholder of the Company. The Company has not granted any preemptive rights, rights of first refusal or other similar rights with respect to any of such Company Capital Stock and there are no offers, options, warrants, rights, agreements or commitments of any kind granted by the Company relating to the issuance, conversion, registration, voting, sale or transfer of shares of Company Capital Stock issued by the Company or obligating the Company to purchase or redeem any of such shares of Company Capital Stock. The Company Capital Stock set forth in Section 3.4(a) of the Disclosure Schedule constitute all of the outstanding equity interests issued by the Company, and such shares of Company Capital Stocks have been duly authorized and are validly issued and outstanding, fully paid and nonassessable.

(b) The authorized, issued and outstanding equity interests of each of the Company’s Subsidiaries and the name of each record holder of such equity interests are fully and accurately set forth in Section 3.4(b) of the Disclosure Schedule. Neither the Company nor any of its Subsidiaries has granted any preemptive rights, rights of first refusal or other similar rights with respect to any of such equity interests of any Subsidiary of the Company and there are no offers, options, warrants, rights, agreements or commitments of any kind granted by any Subsidiary of the Company relating to the issuance, conversion, registration, voting, sale or transfer of equity interests of such Subsidiary or obligating the Company or any of its Subsidiaries to purchase or redeem any of such equity interests. All of the issued and outstanding equity interests of the Company’s Subsidiaries have been duly authorized and are validly issued and outstanding, fully paid and nonassessable.

(c) Section 3.4(c) of the Disclosure Schedule sets forth a true and correct list, as of the date hereof, of all Options, including holder, exercise price, expiration date, vesting date, number of underlying shares and whether such Option is intended to qualify as an “incentive stock option” within the meaning of Section 422 of the Code. Each Option was granted with an exercise price per share at least equal to the fair market value of a share of Class B Common Stock on the date of grant of such Option.

(d) Section 3.4(d) of the Disclosure Schedule sets forth a list of all outstanding Indebtedness of the Company and its Subsidiaries.

3.5 Compliance with Laws . The Company and each of its Subsidiaries is in compliance in all material respects with all applicable Laws. Neither the Company nor any of its Subsidiaries has received any written notice from any Governmental Body of any violation of or failure to comply with any applicable Laws in any material respect which is pending or remains unresolved. Notwithstanding anything contained in this Section 3.5 , no representation or warranty shall be deemed to be made in this Section 3.5 in respect of any intellectual property matters (which are addressed exclusively in Section 3.14 ), employee benefits matters (which are addressed exclusively in Section 3.16 ), environmental matters (which are addressed exclusively in Sections 3.6 and 3.17 ), matters related to the regulation of the business by the FDA (which are addressed exclusively in Section 3.18 ) or tax matters (which are addressed exclusively in Section 3.19 ).

3.6 Litigation . Section 3.6 of the Disclosure Schedule sets forth a true and complete list, as of the date of this Agreement, and for three (3) years prior thereto, of each material Proceeding pending, resolved, threatened in writing or, to the Knowledge of the Company, otherwise threatened against the Company, any of its Subsidiaries, their businesses or assets. To the Knowledge of the Company, there are no pending investigations by any Governmental Body with respect to the Company or any of its Subsidiaries. There are not any pending or unsatisfied material Judgments against the Company or any of its Subsidiaries or any of their respective businesses, properties or assets. There is no Proceeding pending or, to the Knowledge of the Company, threatened against the Company seeking to prevent or delay the consummation of the transactions contemplated by this Agreement and the other Transaction Documents.

3.7 Financial Statements .

(a) Section 3.7(a) of the Disclosure Schedule includes: (i) the audited consolidated balance sheets of the Company and its Subsidiaries as of December 31, 2012 and December 31, 2013 (including the notes thereto, if any), and the related audited consolidated statements of income, equityholders’ capital and cash flows for the fiscal years then ended, together with the report thereon of Ernst & Young Global Limited (the “ Audited Financial Statements ”); and (ii) a consolidated unaudited balance sheet of the Company and its Subsidiaries as of June 30, 2014 (the “ Interim Balance Sheet ”) and the related consolidated unaudited statements of income, equityholders’ capital and cash flows for the six-month period then ended (the “ Unaudited Financial Statements ” and, together with the Audited Financial Statements, the “ Financial Statements ”). The Financial Statements (including the notes thereto, if any) fairly present in all material respects the consolidated financial condition, cash flows and results of operations of the Company and its Subsidiaries as at the date thereof and for the period

therein indicated, and the Financial Statements have been prepared in accordance with GAAP consistently applied by the Company without modification of the accounting principles used in the preparation thereof throughout the periods presented, subject in the case of Unaudited Financial Statements to the absence of footnotes and changes resulting from year-end adjustments.

(b) Neither the Company nor any of its Subsidiaries has any Liabilities that would be required to be reflected on a balance sheet prepared in accordance with GAAP, other than Liabilities (i) reflected or reserved against in the Financial Statements (including all notes thereto), (ii) Liabilities or obligations incurred in the ordinary course of business consistent with past practice since the date of the Interim Balance Sheet, (iii) Liabilities incurred in connection with the Transactions and (iv) Liabilities set forth on Schedule 3.7(b) .

3.8 Absence of Certain Changes and Events . Since December 31, 2013, the Company and its Subsidiaries have conducted their business in the ordinary course of business consistent with past practice and there has not occurred any change, event or condition that, individually or in the aggregate, has had, or would reasonably be expected to have, a Material Adverse Effect. Except as contemplated by this Agreement, the Company and each of its Subsidiaries have complied in all material respects with the covenants and restrictions set forth in Sections 5.2(a)-5.2(d) , 5.2(f)-(h) , and 5.2(k)-(m) (and (n) to the extent applicable to the foregoing) to the same extent as if this Agreement had been executed on, and had been in effect since, December 31, 2013.

3.9 Owned and Leased Real Property .

(a) Neither the Company nor any of its Subsidiaries own any Real Property.

(b) Section 3.9(b) of the Disclosure Schedule lists all Real Property that is leased, licensed or otherwise used or occupied (but not owned) by the Company or any of its Subsidiaries (the “ Leased Real Property ”), identifying the entity that leases such Leased Real Property and whether such entity subleases to any third parties the use of any portion of such Leased Real Property. Except as set forth on Section 3.9(b) of the Disclosure Schedule, the entity identified as having an interest in the Leased Real Property listed on Section 3.9(b) of the Disclosure Schedule has a valid and subsisting leasehold interest in such Leased Real Property free and clear of any Encumbrances other than Permitted Encumbrances. A true and correct copy of each lease, license or occupancy agreement, and all amendments thereto, with respect to the Leased Real Property (collectively, the “ Real Property Leases ”) has been delivered to Parent in the Data Room, and no changes have been made to any Real Property Leases since the date of such delivery. All of the Leased Real Property is used or occupied by the Company or the Subsidiary identified in Section 3.9(b) of the Disclosure Schedule pursuant to a Real Property Lease. With respect to each Real Property Lease: (i) all rents, deposits and additional rents due pursuant to such Real Property Lease have been paid in full and no security deposit or portion thereof has been applied in respect of a breach or default under such Real Property Lease that has not been redeposited in full and (ii) the operation of the business of the Company and any Subsidiary as it is currently conducted at such location does not violate such Real Property Lease. The Leased Real Property is (i) in good condition and repair (subject to normal wear and tear) and (ii) sufficient for the operation of the business of the Company and its Subsidiaries as it

is currently conducted. Neither the Company nor any Subsidiary has subleased, licensed or otherwise granted any Person the right to use or occupy any of the Leased Real Property. Neither the Company nor any Subsidiary has received any notice of any pending condemnation, expropriation, eminent domain or similar proceeding affecting all or any portion of the Real Property, and to the Knowledge of the Company and the Subsidiaries, no such proceeding is threatened or contemplated.

3.10 Material Contracts .

(a) Section 3.10(a) of the Disclosure Schedule lists, by reference to the applicable subsection of this Section 3.10(a) , the following Contracts to which the Company or one of its Subsidiaries is a party or pursuant to which any of its respective material properties or assets is bound (collectively, the “ Material Contracts ”):

(i) any Contract for the incurrence of Indebtedness for borrowed money by the Company or one of its Subsidiaries or any Contract under which the Company or one of its Subsidiaries guaranteed the Indebtedness for borrowed money of any other Person or any Contract relating to the issuance of letters of credit by or on behalf of the Company or any of its Subsidiaries;

(ii) any Contract providing for the sale, assignment, lease, license or other disposition of any asset of the Company or any of its Subsidiaries with a value in excess of $500,000 per annum, except for sales of inventory, sales of obsolete assets or sales of assets in the ordinary course of business;

(iii) (A) any partnership, limited liability company or joint venture agreement in which the Company or any of its Subsidiaries participates as a partner, member or joint venturer; and (B) Contracts relating to the acquisition (by merger, purchase of stock or assets or otherwise) by the Company or any of its Subsidiaries, during the past three (3) years, of any operating business or material assets or the capital stock of any other Person;

(iv) any Contract to license in Intellectual Property, other than licenses to off-the-shelf software;

(v) (A) any leases, licenses or other occupancy agreements for the Leased Real Property; and (B) any Contract pursuant to which the Company or any of its Subsidiaries is a lessor of or permits any third party to hold or operate any property, personal or real, or is a lessee of, or holds or operates any personal property owned by another Person for which the annual rental exceeds $500,000;

(vi) any sales agency, sales representation, distributorship, broker or franchise Contract that is (A) not terminable without penalty on 90 days’ notice or less; and (B) requires payment by the Company or any of its Subsidiaries in excess of $500,000 per annum;

(vii) any Contract with the Offshore Group or any of its Affiliates;

(viii) any Contract that requires payment by the Company or any of its Subsidiaries in excess of $500,000 per annum, or provides for the Company or one of its Subsidiaries to receive any payments in excess of, or any property with a fair market value in excess of, $500,000 per annum;

(ix) any Contract containing covenants of the Company or any of its Subsidiaries not to compete in any line of business or with any Person in any geographical area or not to solicit or hire any person with respect to employment;

(x) any written Contract wherein the Company or any of its Subsidiaries has agreed to indemnify, reimburse, hold harmless, guarantee or otherwise assume or incur any Liability of any Person other than the Company or its Subsidiaries, other than any of the foregoing that are contained in commercial Contracts entered into in the ordinary course of business consistent with the past practice of the Company or any of its Subsidiaries;

(xi) (A) employment, consulting and non-competition Contracts with any employee, officer or consultant whose base annual compensation is equal to or greater than $100,000; and (B) collective bargaining agreements or Contracts with any labor union or association representing any employee of the Company or any of its Subsidiaries; and

(xii) (xii) any Contract containing “most favored nation” pricing terms or contractual warranties (other than customary warranties consistent with those provided in the ordinary course of business).

(b) Each Material Contract is in full force and effect and is valid, binding and enforceable against the Company or one of its Subsidiaries party thereto, and, to the Knowledge of the Company, each other party thereto, except in each case as enforceability of such agreements may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar Laws now or hereafter in effect relating to or limiting creditors’ rights generally and general principles of equity relating to the availability of specific performance and injunctive and other forms of equitable relief. Neither the Company nor any of its Subsidiaries has received written notice that it is in violation in any respect of any of the terms or conditions of any Material Contract and no party has given written notice of any significant dispute with respect to any Material Contract. The Company has not received written notice that any party intends to terminate or amend any Material Contract. A true and complete copy of each Material Contract has been made available to Parent.

3.11 Insurance . Section 3.11 of the Disclosure Schedule contains a true and complete list of each material insurance policy owned by, or maintained for the benefit of, the Company or any of its Subsidiaries. Neither the Company nor any of its Subsidiaries is in material default under any such insurance policy. All such insurance policies are in full force and effect. All premiums due have been paid on such insurance policies, and neither the Company nor any of its Subsidiaries has received any written notice of cancellation of any such insurance policy or written notice with respect to any refusal of coverage thereunder.

3.12 Permits . Section 3.12 of the Disclosure Schedule contains a complete and correct list of all material Governmental Authorizations required for the operation of the business of the Company and each of its Subsidiaries as currently conducted; provided , however , that for purposes of this Section 3.12 , “material Governmental Authorizations” will be deemed to include all Governmental Authorizations issued by the FDA, EMA or any similar Governmental Body. Each such Governmental Authorization is in full force and effect without any default or violation thereunder in any material respect by the Company or any of its Subsidiaries. In the three years prior to the date hereof, neither the Company nor any of its Subsidiaries have been notified in writing that any such Governmental Authorization may not be renewed in the ordinary course upon its expiration or that, by virtue of the Transactions, any such Governmental Authorization would not reasonably be expected to be renewed. There are no Proceedings pending or, to the Knowledge of the Company, threatened, relating to the suspension, revocation or modification of any such Governmental Authorization.

3.13 Personal Property .

(a) The Company or its Subsidiaries has good and marketable title to, or a valid leasehold interest in, or valid rights under a Contract to use, all tangible personal property and assets used or held for use in the conduct of the Company’s and its Subsidiaries’ business, free and clear of all Encumbrances (except Permitted Encumbrances) and such properties and assets have been maintained in accordance with the ordinary course of business consistent with past practice. Nothing in this Section 3.13 shall apply to intellectual property matters, which matters are addressed in Section 3.14 below.

(b) The tangible properties and assets owned, leased or licensed by the Company and its Subsidiaries are in working order (subject to normal wear and tear) and constitute all of the tangible properties and assets necessary to conduct their business as currently conducted.

3.14 Intellectual Property .

(a) Section 3.14(a) of the Disclosure Schedule contains a complete and correct list (setting forth the owner, countries, registration and application numbers and dates, as applicable, and in the case of unregistered Trademarks, country of use and date of first use) of all issued patents, patent applications, registered trademarks and service marks, applications for trademark and service mark registration, material unregistered trademarks and service marks, registered copyrights, applications for copyright registration, and domain name registrations that are solely owned by the Company or its Subsidiaries (the “ Owned Intellectual Property ”). Unless specifically provided in Section 3.14(a) of the Disclosure Schedule, all Owned Intellectual Property is valid and in force, and all fees associated with maintaining any Owned Intellectual Property required to have been set forth in Section 3.14(a) of the Disclosure Schedule have been paid in full in a timely manner to the proper Governmental Body.

(b) To the Knowledge of the Company, the Owned Intellectual Property is not being infringed by any third party. Neither the Company nor any of its Subsidiaries has granted or assigned to any Person any license or other right to use any Owned Intellectual Property, nor has the Company or any of its Subsidiaries otherwise agreed not to assert any such Owned Intellectual Property against any Person.

(c) The Company and its Subsidiaries solely own or have valid licenses to use, free and clear of Encumbrances (except Permitted Encumbrances), all Intellectual Property used by them or necessary for the operation of their respective businesses as currently conducted. Neither the Company nor any of its Subsidiaries is in default (or with the giving of notice or lapse of time or both, would be in default) under any license it has to use Intellectual Property.

(d) To the Knowledge of the Company, the operation of the business of the Company and its Subsidiaries as currently conducted has not and does not infringe, misappropriate or violate any third-party rights in Intellectual Property. There is no pending Proceeding that challenges the Company’s or any of its Subsidiaries’ rights in, validity or scope of the Owned Intellectual Property, and neither the Company nor any of its Subsidiaries have received any written notice or written threat that the operation of their businesses does or may infringe or violate the rights of any Intellectual Property owned by a third party.

(e) The Company and its Subsidiaries have taken commercially reasonable steps to maintain the confidentiality of and otherwise protect and enforce their respective rights in all Owned Intellectual Property. The Company and its Subsidiaries have entered into confidentiality and non-disclosure agreements with all of their respective past and present directors, managers, officers, employees, consultants, contractors and agents and any other Person with access to the Owned Intellectual Property, or trade secrets, to protect the confidentiality and value of such Owned Intellectual Property, or trade secrets, and, to the Knowledge of the Company, there has not been any material breach by any of the foregoing of any such agreement.

(f) All Information Systems used by the Company and its Subsidiaries are sufficient for the conduct of their businesses as currently conducted. The Company and its Subsidiaries use commercially reasonable means to protect the security and integrity of all Information Systems used by the Company and its Subsidiaries.

(g) As of the Closing, the Surviving Entity will own, be licensed or otherwise have the valid right to exploit all Intellectual Property used by, or in the possession of, the Company and its Subsidiaries immediately prior to the Closing upon the same terms and subject to the same conditions as exploited by the Company and its Subsidiaries as of immediately prior to the Closing. The Owned Intellectual Property, together with the Intellectual Property that is licensed to the Company or any of its Subsidiaries, constitutes all of the Intellectual Property necessary to operate the Company’s and its Subsidiaries’ businesses as currently conducted.

3.15 Labor Matters . There are no collective bargaining or other labor union agreements currently in existence or being negotiated by the Company or any of its Subsidiaries to which the Company or any of its Subsidiaries is a party or by which any of them is bound. Neither the Company nor any of its Subsidiaries has in the three (3) years prior to the date hereof encountered any labor union organizing activity or had any employee strikes or lockouts. There is no labor strike, dispute, work stoppage or slowdowns due to labor disagreements pending or, to the Knowledge of the Company, threatened against the Company or its Subsidiaries. In the

three years prior to the date hereof, neither the Company nor any of its Subsidiaries has effectuated (i) a “plant closing” as defined in the WARN Act affecting any site of employment or one or more facilities or operating units within any site of employment or facility of the Company or its Subsidiaries or (ii) a “mass layoff” as defined in the WARN Act affecting any site of employment or facility of the Company or its Subsidiaries.

3.16 Employee Benefits .

(a) Section 3.16(a) of the Disclosure Schedule contains a list of all material Employee Benefit Plans. Each Employee Benefit Plan has been maintained and administered in all material respects in compliance with its terms and any related documents or agreements and in all material respects in compliance with all applicable Laws (including all Laws governing the qualified status of any Employee Benefit Plan intended to be qualified under Section 401(a) of the Code). There have been no prohibited transactions or breaches of any of the duties imposed on “fiduciaries” (within the meaning of Section 3(21) of ERISA) by ERISA with respect to the Employee Benefit Plans that would result in any material liability or excise tax under ERISA or the Code being imposed on the Company or any of its Subsidiaries. No Employee Benefit Plan is maintained outside of the United States.

(b) The Company has made available to Parent true, complete and correct copies of (i) the document, if any, constituting such Employee Benefit Plan and any other operative plan document for the three (3) year period prior to the date hereof, or, in the case of any material unwritten Employee Benefit Plan, a written description thereof, (ii) the three most recent annual reports on Form 5500 filed with the Internal Revenue Service (if any such report was required) and the three most recent summary annual reports with respect to each Employee Benefit Plan (if any such summary annual report was required), (iii) all currently applicable summary plan descriptions and summaries of material modification for each Employee Benefit Plan for which such summary plan descriptions and summaries of material modification are required by Law, (iv) all current trust agreements, insurance contracts and other documents relating to the funding or payment of benefits under any Employee Benefit Plan, (v) all current determination or opinion letters from the IRS with respect to any of the Employee Benefit Plans, and (vi) material correspondence between the Company, its Subsidiary, or their representatives and any Governmental Body relating to any Employee Benefit Plan during the three-year period ending on the date hereof.

(c) None of the Company, its Subsidiaries and the members of the Controlled Group currently has, and at no time in the past has had, an obligation to contribute to a “multiemployer plan” within the meaning of Section 3(37) of ERISA or Section 414(f) of the Code, a “multiple employer plan” within the meaning of Section 210(a) of ERISA or Section 413(c) of the Code, a “defined benefit plan” within the meaning of Section 3(35) of ERISA or a pension plan subject to the funding standards of Section 302 of ERISA or Section 412 of the Code, in each case, that will result in any liability to Parent, the Company or any of its Subsidiaries.

(d) With respect to any Employee Benefit Plan that is an employee welfare benefit plan, no such Employee Benefit Plan is funded through a “welfare benefit fund” (as such term is defined in Section 419(e) of the Code), and except as set forth on Section 3.16(d) of the

Disclosure Schedules, no benefits under any Employee Benefit Plan are or at any time have been provided through a voluntary employees’ beneficiary association (within the meaning of Section 501(c)(9) of the Code) or a supplemental unemployment benefit plan (within the meaning of Section 501(c)(17) of the Code). With respect to each “group health plan” benefiting any current or former employee of the Company, any of its Subsidiaries or any member of the Controlled Group that is subject to Section 4980B of the Code, there has been no breach by the Company, its Subsidiaries or any member of the Controlled Group with the applicable requirements of Section 4980B(f) of the Code and Part 6 of Subtitle B of Title I of ERISA that will result in any liability to Parent, the Company or any of its Subsidiaries. Neither the Company nor any of its Subsidiaries provides or has any obligation to provide post-employment medical, dental, vision or life benefits except as required under Section 4980B of the Code or similar state Law.

(e) The execution and delivery by the Company of this Agreement does not, the execution and delivery of any other Transaction Documents to which the Company is a party will not, and the consummation of the Transactions and compliance with the terms hereof and thereof will not either alone or in conjunction with any other event (other than any event that independently triggers the results in the following clauses (i) - (ii) of this Section 3.16(e) ), (i) entitle any current or former employee, officer, manager, director or consultant of the Company or its Subsidiaries to severance pay or (ii) accelerate the time of payment or vesting or trigger any payment or funding (through a grantor trust or otherwise) of compensation or benefits under, increase the amount payable or trigger any other material obligation pursuant to, any Employee Benefit Plan or any severance or termination agreements or arrangements between the Company or any of its Subsidiaries and any current executive officer, manager, director or consultant of the Company or any of its Subsidiaries.

(f) All material contributions, premiums, transfers or payments under or with respect to each Employee Benefit Plan which are due on or before the Closing Date have been paid.

(g) Each Employee Benefit Plan intended to be qualified under Section 401(a) of the Code has obtained a currently effective favorable determination, advisory and/or opinion letter, as applicable, as to its qualified status (or the qualified status of the master or prototype form on which the Employee Benefit Plan is established) from the IRS covering the amendments to the Code effected by the Tax Reform Act of 1986 and all subsequent legislation for which the IRS will currently issue such a letter, and no amendment to such Employee Benefit Plan has been adopted and no event has occurred since the date of such letter covering such Employee Benefit Plan that could reasonably be expected to adversely affect such favorable determination.

(h) There is no pending or, to the Knowledge of the Company, threatened assessment, complaint, proceeding or investigation of any kind in any court or government agency with respect to any Employee Benefit Plan (other than routine claims for benefits).

(i) Neither the Company nor any of its Subsidiaries has made any binding agreement or commitment to institute any plan, program, arrangement or agreement for the benefit of employees or former employees of the Company or any of its Subsidiaries other than the Employee Benefit Plans, or to make any amendments to any of the Employee Benefit Plans.

(j) The Company and its Subsidiaries have reserved all rights necessary to amend or terminate each of the Employee Benefit Plans without the consent of any other person.

(k) No Employee Benefit Plan provides benefits to any individual who is not a current or former employee of the Company or any of its Subsidiaries, or a dependent or other beneficiary of any such current or former employee.

(l) Except as set forth on Section 3.16(l) of the Disclosure Schedules, no amount that could be received (whether in cash or property or the vesting of property) as a result of the consummation of the Transactions (or the transactions contemplated by the other Transaction Documents) by any employee, officer or director of the Company or any of its affiliates who is a “disqualified individual” (as such term is defined in Treasury Regulation Section 1.280G-1) under any employment, severance or termination agreement, other compensation arrangement or Employee Benefit Plan currently in effect could be characterized as an “excess parachute payment” (as such term is defined in Section 280G(b)(1) of the Code).

(m) With respect to any Employee Benefit Plan or other payment or arrangement for which the Company or any of its Subsidiaries has liability that is subject to Section 409A of the Code, (i) the written terms thereof have at all times since January 1, 2009 been in compliance in all material respects with Section 409A of the Code and (ii) it has, at all times while subject to Section 409A of the Code, been operated in compliance in all material respects with Section 409A of the Code. No Person has a right to any gross up, reimbursement or indemnification from the Company or any of its Subsidiaries with respect to taxes incurred under Section 409A of the Code.

3.17 Environmental Matters . The representations and warranties contained in this Section 3.17 and Section 3.6 are the sole and exclusive representations and warranties of the Company pertaining or relating to any environmental, health or safety matters, including any matters arising under any Environmental Laws. Except as set forth in Section 3.6 or Section 3.17 of the Disclosure Schedule:

(a) the Company and each of its Subsidiaries are, and have been for the past five (5) years, in compliance in all material respects with all applicable Environmental Laws, which compliance includes obtaining and complying with all Governmental Authorizations required under all applicable Environmental Laws (“ Environmental Permits ”) necessary to operate the Company’s and it Subsidiaries’ business;

(b) in the past five (5) years, neither the Company nor any of its Subsidiaries has received any written claim or, to the Knowledge of the Company, any oral claim alleging that the Company or any of its Subsidiaries is in violation of any Environmental Law or any Environmental Permit or subject to liability for fines, penalties, damages or investigation, cleanup, remedial, response or other obligations pursuant to applicable Environmental Laws, in each case with respect to the operations, properties or facilities of the Company and its Subsidiaries, or any formerly owned, leased or operated real property or any off-site treatment, storage, disposal or recycling location;

(c) there has been no Release of any Hazardous Material at the Leased Real Property or any property formerly owned, leased or operated by the Company or any of its Subsidiaries in violation of Environmental Law or any contractual obligation owed to a third party (including any applicable lease agreements);

(d) neither the Company nor any of its Subsidiaries has assumed, undertaken or, to the Knowledge of the Company, otherwise become subject to any material liability of any other Person relating to or arising from any Environmental Law; and

(e) Copies of all material documents, records and information in the Company’s or its Subsidiaries’ possession or control concerning noncompliance with or potential liability under Environmental Laws, including previously conducted environmental compliance audits, environmental site assessments, asbestos surveys and material documents regarding any Release at, upon or from the Leased Real Property or any property formerly owned, leased or operated by the Company, any of its Subsidiaries or any of their predecessors, have been made available to Parent.

3.18 FDA Matters and Other Regulatory Matters . The representations and warranties contained in this Section 3.18 and Sections 3.6 and 3.12 are the sole and exclusive representations and warranties of the Company pertaining or relating to any regulatory matters overseen by the FDA and, as relevant, the EMA. Except as set forth in Section 3.6 or Section 3.18 of the Disclosure Schedule, and except in each case as would not be material to the Company and its Subsidiaries:

(a) the Company and its Subsidiaries are in compliance in all material respects with the FDCA, all applicable FDA Laws and regulations and foreign equivalents, which includes obtaining and complying with all Governmental Authorizations, including those of the FDA and EMA, required under applicable FDA and EMA Laws and regulations necessary to operate the Company’s and its Subsidiaries’ business;

(b) in the past three (3) years, neither the Company nor any of its Subsidiaries has received any written notice or any written claim alleging that the Company or any of its Subsidiaries is in violation of the FDCA or similar Law, from FDA or EMA; and

(c) to the Knowledge of the Company, neither the FDA or EMA has notified the Company that it is considering any action against the Company or any of its Subsidiaries that would reasonably be expected to result in material liability to the Company or its Subsidiaries.

3.19 Tax Matters .

(a) Each of the Company and its Subsidiaries has timely filed, or has caused to be timely filed on its behalf, taking into account any valid extensions of time properly secured, all Tax Returns with the appropriate taxing authority required to be filed by it in accordance with all applicable Laws, and all such Tax Returns are true, complete and accurate in all material respects. All Taxes due from the Company or its Subsidiaries whether or not shown as due on any Tax Returns have been timely paid to the appropriate taxing authority or are being contested in good faith and for which adequate reserves are reflected on the Interim Balance Sheet.

(b) The Company and its Subsidiaries have withheld and timely remitted to the appropriate taxing authority all Taxes required to have been withheld and remitted in connection with amounts paid or owing to any employees, independent contractors, creditors, stockholders and other Persons.

(c) Neither the Company nor any of its Subsidiaries is currently a beneficiary of any extension of time within which to file any Tax Return.

(d) All Forms W-2 and 1099 required to be filed or provided by the Company and its Subsidiaries have been properly completed and timely filed or provided.

(e) There are no material Encumbrances for Taxes on the assets or properties of the Company or any of its Subsidiaries other than Permitted Encumbrances.

(f) Neither the Company nor any of its Subsidiaries (i) has been a member of any affiliated group filing a consolidated Tax Return (other than a group the common parent of which was the Company) or of any affiliated, consolidated, combined, or unitary group, as defined under applicable state, local or foreign Law (other than a group the common parent of which was the Company) or (ii) has any Liability for the Taxes of any Person (other than the Company or its Subsidiaries) under Section 1.1502-6 of the Treasury Regulations (or any similar provision of state, local or foreign Law), as a transferee or successor, by contract or otherwise.

(g) No Tax Return of the Company or any of its Subsidiaries with respect to any Pre-Closing Tax Period has ever been audited by any taxing authority.

(h) There is no Proceeding pending or threatened against or with respect to the Company or any of its Subsidiaries in respect of any Tax.

(i) No written claim or deficiency for any Taxes has been asserted against the Company or any of its Subsidiaries which has not been resolved and/or paid in full.

(j) There are no pending Tax audits or examinations of any Tax Returns of the Company or any of its Subsidiaries. Neither the Company nor any of its Subsidiaries has waived any statute of limitations with respect to Taxes or agreed to any extension of time with respect to a Tax assessment or deficiency, which waiver is still outstanding.

(k) Neither the Company nor any of its Subsidiaries has received notice of any claim by a Governmental Body in a jurisdiction where the Company or its Subsidiaries do not file Tax Returns that it is or may be subject to taxation by that Governmental Body.

(l) Neither the Company nor any of its Subsidiaries will be required to include any item of income in, or exclude any item of deduction from, taxable income for any period or portion thereof ending after the Closing Date (i) under Section 481 of the Code (or any similar provision of state, local or foreign Law) as a result of change in method of accounting for a Pre-Closing Tax Period, (ii) pursuant to the provisions of any agreement entered into with any taxing authority or pursuant to a “closing agreement” as defined in Section 7121 of the Code (or any similar provision of state, local or foreign Law) executed on or prior to the Closing Date, (iii) as a result of any intercompany transactions or any excess loss account described in

Section 1.1502-19 of the Treasury Regulations (or any similar provision of state, local or foreign Law), (iv) as a result of the installment method of accounting, the completed contract method of accounting or the cash method of accounting with respect to a transaction that occurred prior to the Closing Date, (v) as a result of any prepaid amount received on or prior to the Closing Date or (vi) as a result of any election under Section 108(i) of the Code with respect to the discharge of any indebtedness on or prior to the Closing Date.

(m) Neither the Company nor any of its Subsidiaries is a party to any Tax sharing, allocation or indemnity agreement, arrangement or similar contract.

(n) Neither the Company nor any of its Subsidiaries has distributed the stock of another Person, or has had its stock distributed by another Person, in a transaction that was purported or intended to be governed in whole or in part by Sections 355 or 361 of the Code.

(o) The Company has not been a United States real property holding corporation within the meaning of Section 897(c)(2) of the Code during the applicable period specified in Section 897(c)(1)(A)(ii) of the Code.

(p) Neither the Company nor any of its Subsidiaries has participated in any “reportable transaction” as defined in Section 6707A of the Code or Treasury Regulation Section 1.6011-4 (or any predecessor provision).

(q) The Company has disclosed on its federal income Tax Returns all positions taken in such Tax Returns that could give rise to a substantial understatement of federal income Tax within the meaning of Section 6662 of the Code.

(r) As of the Closing Date, the Company and its Subsidiaries have a net operating loss, within the meaning of Section 172(c) of the Code (or any similar provision of state, local or foreign Law).

3.20 Affiliate Transactions . No officer, director, securityholder, Affiliate or, to the Knowledge of the Company, employee of the Company or any of its Subsidiaries (i) is a party to any Contract with the Company or its Subsidiaries (except relating to compensation paid to officers, directors and employees of the Company or its Subsidiaries in the ordinary course of business) or has any interest in any property or asset of the Company, or (ii) owns any property or right, tangible or intangible that is used by the Company or any of its Subsidiaries.

3.21 Brokers . Other than pursuant to the Engagement Letter, there is no investment banker, broker, finder or other intermediary entitled to any fee or commission in connection with the Transactions or any of the transactions contemplated by the other Transaction Documents based upon arrangements or agreements made by or on behalf the Company or any of its Subsidiaries.

3.22 Stockholder Approval . The only vote of Company Capital Stock necessary to approve and adopt this Agreement, the Merger and the transactions contemplated by this Agreement and the Transaction Documents is the approval and adoption of this Agreement by the stockholders holding a majority of the shares of the Common Stock and Preferred Stock entitled to vote thereon “ Company Required Vote ”).

3.23 Customers and Suppliers . Section 3.23 of the Disclosure Schedule contains a true and complete list of (a) the ten (10) largest customers of the Company and its Subsidiaries (on a consolidated basis) for the year ended December 31, 2013 (the “ Material Customers ”), showing the total sales to each Material Customer during the fiscal year ended December 31, 2013, and (b) the ten (10) largest suppliers of the Company and its Subsidiaries (on a consolidated basis) for the year ended December 31, 2013 (the “ Material Suppliers ”), showing the total purchases from each Material Supplier during the fiscal year ended December 31, 2013. Except as set forth on Section 3.23 of the Disclosure Schedule, as of the date hereof, none of the Material Customers or Material Suppliers has terminated or materially modified its Contract (including material reductions or changes to pricing terms) with the Company or any of its Subsidiaries and, to the Knowledge of the Company, no Material Customer or Material Supplier intends to terminate or materially modify its Contract (including material reductions or changes to pricing terms) with the Company or any of its Subsidiaries.

3.24 Inventory . All inventory of the Company and its Subsidiaries consists of a quality and quantity usable and salable in the ordinary course of business consistent with past practice, except for obsolete, damaged, defective or slow-moving items that have been written off or written down to fair market value or for which adequate reserves have been established. The inventories of the Company and its Subsidiaries constitute sufficient quantities for the normal operation of business in accordance with past practice, and are reasonable and not excessive with respect to the present condition and circumstances of the Company and its Subsidiaries.

3.25 Accounts Receivable . All of the accounts receivable of the Company and its Subsidiaries represent amounts receivable for merchandise actually delivered or services actually provided, have arisen from bona-fide transactions in the ordinary course of business consistent with past practice, have reserves which have been calculated in a manner consistent with past practice and are payable on ordinary terms (including terms substantially similar to those set forth in the Contracts therefor).

3.26 Books and Records . The minute books and stock record books of the Company and its Subsidiaries, true, complete and correct copies of which have been provided to Parent, have been maintained in accordance with sound business practices. At the Closing, all books and records of the Company and its Subsidiaries will be in the possession of the Company.

3.27 No Other Representations and Warranties . EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS ARTICLE 3 (AS QUALIFIED BY THE DISCLOSURE SCHEDULE), THE COMPANY MAKES NO EXPRESS OR IMPLIED REPRESENTATION OR WARRANTY WITH RESPECT TO THE COMPANY, AND THE COMPANY HEREBY DISCLAIMS ANY SUCH REPRESENTATION OR WARRANTY IN CONNECTION WITH THE EXECUTION AND DELIVERY OF THIS AGREEMENT AND THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.

ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB

Each of Parent and Merger Sub hereby jointly and severally represents and warrants to the Company and the Securityholders’ Representative as of the date hereof and the Closing Date:

4.1 Organization; Authorization . Each of Parent and Merger Sub is duly organized, validly existing and in good standing under the Laws of its jurisdiction of incorporation, formation or organization, as applicable, and has all necessary corporate, limited liability company or other power and authority, as the case may be, to carry on its business as presently conducted, and to own and lease the assets and properties which it owns and leases. Each of Parent and Merger Sub is duly qualified to do business as a foreign entity and is in good standing (if applicable) in each jurisdiction in which its ownership or leasing of assets or properties or the nature of its activities requires such qualification, except where the failure to be so qualified would not reasonably be expected to be materially adverse to Parent and Merger Sub, taken as a whole. Each of Parent and Merger Sub has all requisite right, power and authority to execute and deliver this Agreement and the other Transaction Documents to which it is, or is specified to be, a party (collectively, the “ Parent Transaction Documents ”), to perform its obligations hereunder and thereunder, and to consummate the Transactions and the transactions contemplated by the Transaction Documents. All necessary corporate and shareholder or stockholder action has been taken by each of Parent and Merger Sub to authorize the execution, delivery and performance by it of this Agreement and each other Parent Transaction Document. Each of Parent and Merger Sub has duly executed and delivered this Agreement and, at or prior to the Closing, will have duly executed and delivered each other Parent Transaction Document. This Agreement is, and each other Parent Transaction Document, when duly executed and delivered at or prior to the Closing by Parent and/or Merger Sub, as the case may be, will be, the legal, valid and binding obligation of Parent and/or Merger Sub, as the case may be, enforceable against Parent and/or Merger Sub, as the case may be, in accordance with its respective terms, except as enforceability of such obligations may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar Laws now or hereafter in effect relating to or limiting creditors’ rights generally and general principles of equity relating to the availability of specific performance and injunctive and other forms of equitable relief.

4.2 Merger Sub . Merger Sub was formed solely for the purpose of engaging in the transactions contemplated by this Agreement and, since the date of its incorporation, Merger Sub has not carried on any business or conducted any operations other than the execution of this Agreement and the other Transaction Documents to which it is a party, the performance of its obligations hereunder and thereunder and matters ancillary hereto and thereto.

4.3 Governmental Authorization . The execution, delivery and performance by Parent and Merger Sub of this Agreement and the other Parent Transaction Documents and the consummation of the Transactions by them require no Consent of or with any Governmental Body, other than compliance with any applicable requirements of federal and state securities laws.

4.4 No Conflicts . Neither the execution, delivery and performance by Parent or Merger Sub of this Agreement and the other Parent Transaction Documents nor the consummation of the Transactions or the transactions contemplated by the other Transaction Documents (in each case with or without the passage of time or the giving of notice, or both): (a) contravene, conflict with or result in a violation or breach of the organizational documents of

Parent or Merger Sub; (b) require any Consent from any Person under any of the terms or conditions of any material Contract to which Parent or Merger Sub is a party or by which it or any of its properties or assets are bound, or result in any termination rights, loss of benefits under or any obligation to make any payment under any such material Contract; (c) result in the creation or imposition of any Encumbrance upon any of the assets of Parent or Merger Sub, other than Permitted Encumbrances; (d) cause a loss or impairment of any material Governmental Authorization held by Parent or Merger Sub or by which any of their respective properties or assets are bound; or (v) violate any Law or Judgment.

4.5 Judgments and Proceedings . There are no (i) pending or unsatisfied material Judgments binding upon or applicable to Parent or Merger Sub or by which Parent or Merger Sub or any of their respective businesses, properties or assets that would reasonably be expected to have a Parent Material Adverse Effect or (ii) Proceedings pending or, to the Knowledge of Parent or Merger Sub, threatened against Parent or Merger Sub seeking to prevent or delay the consummation of the transactions contemplated by the Agreement and the other Transaction Documents.

4.6 No Brokers . There is no investment banker, broker, finder or other intermediary entitled to any fee or commission in connection with the consummation of the Transactions or any of the transactions contemplated by the other Transaction Documents based upon arrangements or agreements made by or on behalf of Parent, Merger Sub or any of their respective Affiliates or subsidiaries.

4.7 Investment . Parent is acquiring the Company Capital Stock for its own account, for investment only, and not with a view to any resale or public distribution thereof. Parent shall not offer to sell or otherwise dispose of such shares in violation of any Laws applicable to any such offer, sale or other disposition. Parent acknowledges that (a) such Company Capital Stock has not been registered under the Securities Act of 1933, as amended, or any state securities Laws, (b) there is no public market for such Company Capital Stock and there can be no assurance that a public market shall develop, and (c) it must bear the economic risk of its investment in such Company Capital Stock for an indefinite period of time. As of the Closing, Parent will be an “Accredited Investor” within the meaning of the Securities and Exchange Commission Rule 501 of Regulation D of the Securities Act of 1933, as presently in effect.

4.8 WARN Act . Parent has no present plans or intention to carry out, following the Closing, any “plant closing” or “mass layoff” (as defined in the WARN Act) at any facility of the Company or any of its Subsidiaries (assuming for purposes of this section that no notice would be given in connection with any such closing or layoff).

4.9 Solvency . Assuming the accuracy of the representations and warranties set forth in Article 3 , immediately after giving effect to the Transactions, (a) Parent and its Subsidiaries shall be able to pay their respective debts as they become due and shall own property which has a fair saleable value greater than the amounts required to pay their respective debts (including a reasonable estimate of the amount of all contingent liabilities), and (b) Parent and each of its Subsidiaries shall have adequate capital to carry on their respective businesses. No transfer of property is being made and no obligation is being incurred in connection with the Transactions with the intent to hinder, delay, or defraud either present or future creditors of Parent and its Subsidiaries.

4.10 Disclaimer Regarding Projections; No Reliance . In connection with Parent’s and Merger Sub’s investigation of the Company and its Subsidiaries, Parent, Merger Sub and their Representatives have received from the Company and its Subsidiaries (individually or through its Representatives) certain projections, estimates and other forecasts and certain business plan information (collectively, “ Projections ”). Each of Parent and Merger Sub acknowledges that there are uncertainties inherent in attempting to make such Projections, that it is familiar with such uncertainties, that it is making its own evaluation of the adequacy and accuracy of all Projections so furnished to it and any use of, or reliance by it on, such Projections shall be at its sole risk, and without limiting any other provisions herein, that it shall have no claim against anyone with respect thereto subject to the limitations herein. Each of Parent and Merger Sub acknowledges that none of the Company, the Securityholders, the Securityholders’ Representative or any other Person has made any representation or warranty, expressed or implied, as to the accuracy or completeness of any Projections, any written or oral information regarding the Company or any of its Subsidiaries furnished or made available to Parent, Merger Sub and their Representatives or otherwise with respect to the Securityholders or the Company, any of its Subsidiaries or their operations, business, financial condition, assets, liabilities or prospects, except as expressly set forth in Article 3 of this Agreement, and, none of the Company, the Securityholders’ Representative or any other Person shall have or be subject to any Liability to Parent, Merger Sub or any other Person resulting from the distribution to Parent, Merger Sub or their respective Representatives and Affiliates, or Parent’s, Merger Sub’s or any of their Representatives’ or Affiliates’ use of, any such Projections, written or oral information, and any information, documents or material made available to Parent, Merger Sub or their respective Representatives and Affiliates in any form. Parent and Merger Sub shall acquire the Company and its Subsidiaries without any representation or warranty as to merchantability or fitness for any particular purpose, in an “as is” condition and on a “where is” basis, except as otherwise expressly represented or warranted in this Agreement and the other Transaction Documents. For the avoidance of doubt, nothing in this Section 4.10 or this Agreement shall be interpreted to waive any rights that Parent and Merger Sub have with respect to recovery for breaches of representations and warranties made by the Company in Article 3 of this Agreement.

4.11 Sufficient Funds . Parent has (and will have and cause Merger Sub to have as of the Closing) the funds necessary to consummate the transactions contemplated by this Agreement, including payment of the Merger Consideration, the amounts referenced in Section 2.3 , and the fees and expenses associated with this Agreement and the transactions contemplated hereby. Parent shall promptly notify the Company and Securityholders’ Representative of any adverse change with respect to the availability of such funds.

4.12 No Other Representations and Warranties . Except for the representations and warranties contained in this Article 4 , Parent and Merger Sub make no express or implied representation or warranty, and Parent and Merger Sub hereby disclaim any such representation or warranty with respect to the execution and delivery of this Agreement and consummation of the Transactions.

ARTICLE 5

CERTAIN COVENANTS OF THE PARTIES

5.1 General . Subject to the terms and conditions of this Agreement, each of the Parties hereto shall use its commercially reasonable efforts to take all action and to do all things necessary, proper or advisable in order to consummate and make effective the Transactions as promptly as reasonably practicable, including (a) satisfaction, unless waived by the Party to whose benefit they would otherwise accrue, of the closing conditions set forth in Article 6 below, (b) the defending of any lawsuits or other Proceedings, whether judicial or administrative, challenging the Transactions or the performance of the obligations of any Party hereto in connection therewith, (c) obtaining, delivering or effecting any waivers, modifications, permits, consents, approvals, authorizations, qualifications, notices, registrations and filings as are required in connection with the consummation of the Transaction, and (d) the execution and delivery of such instruments and the taking of such other actions, including the furnishing to each other Party hereto of assistance or information, as the other Party hereto may reasonably require in order to carry out the intent of the Transaction (it being understood and agreed that all such information provided by or on behalf of the Company shall be subject to the Confidentiality Agreement).

5.2 Conduct of Business by the Company . From the date of this Agreement through the earlier of the termination pursuant to Article 9 of this Agreement or the Effective Time (the “ Pre-Closing Period ”), except as Parent may otherwise approve in writing (which approval shall not be unreasonably withheld or delayed) or as otherwise expressly contemplated or required by this Agreement, the Company shall, and shall cause each of its Subsidiaries to, conduct its business in the ordinary course of business consistent with past practice, and, to the extent consistent therewith, shall use commercially reasonable efforts to preserve its relationships with contractors, suppliers, customers, vendors, licensors, licensees, landlords and others with whom the Company or any of its Subsidiaries has contractual or other commercial relations in substantially the same manner as they have prior to the date of this Agreement. Without limiting the foregoing, except as set forth on Section 5.2 of the Disclosure Schedule or as otherwise expressly contemplated by the terms of the Transaction Documents and except as Parent may otherwise approve in writing (which approval shall not be unreasonably withheld or delayed), during the Pre-Closing Period, the Company shall not, and shall cause its Subsidiaries not to:

(a) amend or authorize the amendment of its certificate of incorporation or bylaws (or equivalent organizational documents);

(b) other than any cash dividends, declare, set aside, make, pay or effect any recapitalization, reclassification, stock dividend (or other distribution or payment), stock split, combination or like change in its capitalization or amend the terms of any outstanding securities of the Company or any of its Subsidiaries;

(c) issue, sell or deliver any of the Company’s or its Subsidiaries’ securities, securities convertible into equity securities or any options, warrants or other rights to purchase the Company’s or its Subsidiaries’ equity securities, other than the issuance of shares upon the exercise of Options or issuances of capital stock by a direct or indirect Subsidiary of the Company to such Subsidiary’s parent or another direct or indirect Subsidiary of the Company;

(d) enter into or agree to enter into any merger or consolidation with any Person, engage in any new business or invest in, make a loan, advance or capital contribution to, or otherwise acquire the securities or a substantial portion of the assets of, any other Person;

(e) make any change in any method of accounting or accounting policy other than as required by GAAP or applicable Law;

(f) (A) settle or compromise any Tax liability; (B) make, change or rescind any Tax election; (C) surrender any right in respect of Taxes; (D) consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; or (E) amend any Tax Return;

(g) increase the compensation or benefits payable or to become payable to or grant any bonuses or salary increase to any of its officers, directors, employees, agents or consultants, enter into or amend or terminate any employment, severance, consulting, termination or other agreement or employee benefit plan or make or amend any loans to any of its officers, directors, employees, affiliates, agents or consultants or make any change in its existing borrowing or lending arrangements for or on behalf of any of such Persons pursuant to an employee benefit plan or otherwise, in any case except (A) as required by the terms of an Employee Benefit Plan as in effect on the date hereof or applicable Law, (B) any annual salary increases made in the ordinary course of business consistent with past practice or (C) payments relating to the Transactions that are to be paid at or prior to the Closing (but not after the Closing) and that do not exceed $50,000 per recipient or $500,000 in the aggregate;

(h) hire or terminate (other than a termination for cause in the ordinary course of business consistent with past practice) any employee, officer, director, consultant or independent contractor of the Company or any of its Subsidiaries making more than $100,000 in base annual compensation;

(i) issue, create, incur, endorse, guarantee or assume any Indebtedness, mortgage, pledge or Encumbrance (other than (A) Permitted Encumbrances, (B) as required by applicable Law or (C) pursuant to Contracts entered into in the ordinary course of business consistent with past practice);

(j) make any loan or advance to any officer, director, employee or member of the Company or any of its Subsidiaries (except pursuant to an Employee Benefit Plan) or make any loan, advance, capital contribution to or investment in any firm or business in which any such Person has a direct or indirect material interest, other than (A) by the Company or a direct or indirect Subsidiary to or in the Company or any other direct or indirect Subsidiary or (B) pursuant to any Material Contract as in effect as of the date hereof;

(k) enter into, amend or terminate a Material Contract other than amendments in the ordinary course of business consistent with past practice;

(l) institute, settle or compromise any Proceeding (other than matters involving the payment of less than $100,000 by the Company or any of its Subsidiaries) or waive or release any right or claim against a third Person;

(m) take any action which would, or would reasonably be expected to, adversely affect the ability of the parties to consummate the transactions contemplated by this Agreement, including the Merger; or

(n) agree or commit to do any of the actions set forth in clauses (a) through (m) above.

5.3 Antitrust Filings .

(a) Within five (5) Business Days following the date hereof, the Company and Parent shall each make such premerger filings and any other filing or notification with the Antitrust Authorities, if any, as may be required under the Antitrust Laws, concerning the Transaction. From the date of such filing until the Closing Date, the Company and Parent shall file all reports or other documents required or requested by the Antitrust Authorities under the Antitrust Laws, or otherwise and will comply promptly with any requests by the Antitrust Authorities for additional information concerning the Transaction, so that the waiting period specified in the Antitrust Laws will expire or terminate as soon as reasonably possible after the execution and delivery of this Agreement. Parent shall pay all fees required in connection with any filing required under the Antitrust Laws, and Parent shall (and shall cause its Subsidiaries and Affiliates to) use best efforts to insure that any applicable waiting periods imposed under the Antitrust Laws terminate or expire as early as practicable. Parent’s obligations under this Section 5.3(a) to use best efforts shall include, if necessary, (i) proposing, negotiating, committing to and effecting, by consent decree, hold separate order, or otherwise, the sale transfer, license, divestiture or other disposition of any entities, assets, product lines, interests, or facilities of Parent or its Affiliates; (ii) terminating, amending or assigning existing relationships and contractual rights and obligations; or (iii) amending, assigning or terminating existing licenses or other agreements and entering into such new licenses or other agreements; provided , however , that any such action shall be conditioned upon the consummation of the Merger, and notwithstanding anything to the contrary set forth in this Agreement, Parent (and its Subsidiaries and Affiliates) shall not be required to take, or agree or commit to take, any such action or agree or commit to, or effect, any such other matter described in clauses (i), (ii) or (iii) above that, in the reasonable judgment of Parent, would reasonably be expected to be materially adverse to the business of Parent or the Company. Subject to the foregoing limitations, each party agrees to use (and cause its Subsidiaries and Affiliates to use) best efforts to cooperate and oppose any temporary restraining order, rescission order, preliminary injunction, or hold separate order sought by any Governmental Body to unwind, prevent, or delay the Transactions.

(b) The Company and Parent shall furnish, or cause their respective counsel to furnish, to each other such necessary information and reasonable assistance as the other may reasonably request in connection with both its determination of what filings are necessary under the Antitrust Laws and the preparation of necessary filings or submissions under the provisions of the Antitrust Laws. The Company and Parent will cause their respective counsel to supply to each other copies of all correspondence, filings or written communications by or to such party or

its Affiliates with or from any Governmental Body or staff members thereof, with respect to the Transactions and any related or contemplated transactions, except for information submitted in response to any request for additional information or documents pursuant to the Antitrust Laws which reveal the Company’s or Parent’s negotiating objectives or strategies or purchase price expectations.

5.4 Directors’ and Officers’ Exculpation; Indemnification .

(a) Parent and Merger Sub agree, for and on behalf of themselves and the Surviving Entity, that all rights of the individuals who, on or prior to the Closing Date, were directors, officers or managers (to the extent the entity is a limited liability company) of the Company or any of its Subsidiaries (collectively, the “ D&O Indemnitees ”) to indemnification and exculpation from liabilities for acts or omissions occurring at or prior to the Closing Date, as provided in the respective certificate of incorporation or bylaws or comparable organizational documents of the Company or any of the Subsidiaries as now in effect, and any indemnification agreements or arrangements of the Company or any of the Subsidiaries set forth on Section 5.4 of the Disclosure Schedule shall survive the Merger and shall continue in full force and effect in accordance with their terms for a period of six (6) years following the Effective Time. Such rights shall not be amended or otherwise modified for a period of six (6) years following the Effective Time in any manner that would adversely affect the rights of the D&O Indemnitees, unless such modification is required by Law.

(b) Parent and Merger Sub, for a period of six (6) years from and after the Effective Time, shall cause (i) the certificate of incorporation and bylaws of the Surviving Entity to contain provisions no less favorable to the applicable D&O Indemnitees with respect to limitation of liabilities of D&O Indemnitees and indemnification than are set forth as of the date of this Agreement in the certificate of incorporation and bylaws of the Company and (ii) the certificate of incorporation and bylaws or comparable organizational documents of each Subsidiary of the Surviving Entity to contain provisions no less favorable to the applicable D&O Indemnitees than the current provisions regarding indemnification of D&O Indemnitees, which provisions in each case shall not be amended, repealed or otherwise modified in a manner that would adversely affect the rights thereunder of the D&O Indemnitees.

(c) No later than thirty (30) days after the Closing Date, Parent shall purchase for any Person who is on the date of this Agreement or who becomes prior to the Closing Date a D&O Indemnitee a directors’ and officers’ liability insurance “tail” or “runoff” insurance program (a “ Tail Policy ”) to be in effect until the end of the six (6)-year period following the Closing Date (and for so long thereafter as any Claim is being adjudicated) with respect to acts or omissions occurring prior to the Closing Date (such coverage to be on terms and conditions and for an amount no less favorable to the Company’s directors, officers and managers currently covered by such insurance than those of such policy in effect on the date hereof). The cost of the Tail Policy shall be borne by the Parent (for the avoidance of doubt, such cost shall not constitute a Transaction Expense).

(d) The provisions of this Section 5.4 : (i) are intended to be for the benefit of, and shall be enforceable by, each D&O Indemnitee, his or her heirs and his or her representatives; and (ii) are in addition to, and not in substitution for, any other rights to indemnification or contribution that any such D&O Indemnitee may have by Contract or otherwise.

(e) In the event that Parent or Merger Sub or the Surviving Entity or any of their successors or assigns (i) consolidates with or merges into any other Person and is not the continuing or surviving corporation or entity of such consolidation or merger; or (ii) transfers or conveys all or substantially all of its properties and assets to any Person, then, and in each such case, proper provision shall be made so that the successors and assigns of Parent or Merger Sub or the Surviving Entity (as the case may be) shall assume all of the obligations thereof set forth in this Section 5.4 .

(f) After the Closing Date, the obligations of Parent and the Surviving Entity under this Section 5.4 shall not be terminated or modified in such a manner as to adversely affect any D&O Indemnitee to whom this Section 5.4 applies without the consent of the affected D&O Indemnitee (it being expressly agreed that the D&O Indemnitees to whom this Section 5.4 applies shall be third party beneficiaries of this Section 5.4 ).

(g) The Parties hereby acknowledge that the D&O Indemnitees may have certain rights to indemnification, advancement of expenses and/or insurance provided by American Capital or its Affiliates (other than the Company and its Subsidiaries) (collectively, the “ AC Indemnitors ”). Parent and Merger Sub hereby agree that from and after the Closing Date (i) the Company, its Subsidiaries and any of their successors or assigns are the indemnitors of first resort ( i.e ., its obligations to D&O Indemnitees are primary and any obligations of the AC Indemnitors to advance expenses or to provide indemnification for the same expenses or liabilities incurred by any D&O Indemnitee are secondary), (ii) the Company, its Subsidiaries and any of their successors or assigns shall be required to advance the full amount of expenses incurred by any D&O Indemnitee and shall be liable for the full amount of all expenses, judgments, penalties, fines and amounts paid in settlement to the extent permitted by applicable Law and by the terms of this Agreement and the certificate of incorporation or bylaws of the Company or any of its Subsidiaries (or any other agreement between the Company or any of its Subsidiaries, on the one hand, and any D&O Indemnitee, on the other hand), without regard to any rights a D&O Indemnitee may have against the AC Indemnitors and (iii) it irrevocably waives, relinquishes and releases the AC Indemnitors from any and all claims against the AC Indemnitors for contribution, subrogation or any other recovery of any kind in respect thereof. Parent and Merger Sub further agree that no advancement or payment by the AC Indemnitors on behalf of a D&O Indemnitee with respect to any claim for which a D&O Indemnitee seeks indemnification from the Company after the Effective Time shall affect the foregoing and the AC Indemnitors shall have a right of contribution and/or be subrogated to the extent of such advancement or payment to all of the rights of recovery of a D&O Indemnitee against the Company. Parent and Merger Sub agree that the AC Indemnitors are express third party beneficiaries of the terms of this Section 5.4(g) .

5.5 Further Assurances . Subject to the terms and conditions of this Agreement and the other Transaction Documents, following the Closing, each party hereto shall, from time to time, execute such further instruments and take such other actions as any other party hereto shall reasonably request in order to fulfill its obligations under any of the Transaction Documents, to effectuate the purposes of the Transaction Documents and to provide for the orderly and efficient

transition of the ownership of the Company to Parent; provided , however , that any actions not specifically required by other provisions of this Agreement and the Transaction Documents shall be at the expense of the party requesting.

5.6 Public Announcements; Confidentiality .

(a) Unless required by Law (in which case each of Parent, the Company and the Securityholders’ Representative shall consult with the other party prior to any such disclosure as to the form and content of such disclosure), the Company, Parent and Merger Sub agree that no public release or announcement concerning the consummation of the Transactions and the transactions contemplated by the other Transaction Documents shall be issued by any such Party without the prior consent of the other Parties hereto (which consent shall not be unreasonably withheld); provided , however , that notwithstanding the foregoing, each current or former holder of Company Capital Stock (or other Securityholder) and its Affiliates that has one or more classes of securities listed on a national stock exchange or NASDAQ may issue such press releases or public statements after the Closing as it issues in the ordinary course of business.

(b) For a period of three (3) years following the date hereof, the holders of Company Capital Stock shall not, directly or indirectly, disclose, reveal, divulge or communicate to any Person other than its authorized officers, directors, employees and attorneys or use or otherwise exploit for its own benefit or for the benefit of anyone other than such holder of Company Capital Stock, any Confidential Information (as defined below). Such holder of Company Capital Stock shall not have any obligation to keep confidential (or cause their officers, directors or Affiliates to keep confidential) any Confidential Information if and to the extent disclosure thereof is specifically required by applicable Law or in connection with a Proceeding; provided , however , that in the event disclosure is required by applicable Law or a Proceeding, such holder of Company Capital Stock shall, to the extent reasonably possible, provide Parent with prompt notice of such requirement prior to making any disclosure so that the Parent may seek an appropriate protective order. For purposes of this Section 5.6(b) , “ Confidential Information ” means any proprietary information with respect to the Company or any of the Subsidiaries, including methods of operation, customer lists, products, prices, fees, costs, technology, inventions, trade secrets, know how, software, marketing methods, plans, personnel, suppliers, competitors, markets or other specialized information or proprietary matters. “Confidential Information” does not include, and there shall be no obligation hereunder with respect to, information that (i) is generally available to the public on the date of this Agreement or (ii) becomes generally available to the public other than as a result of a disclosure not otherwise permissible hereunder. In addition, notwithstanding the foregoing or anything else to the contrary in this Agreement, each current or former holder of Company Capital Stock (or other Securityholder) and its Affiliates (i) is authorized to disclose confidential information with respect to the Company or its business to such Person’s representatives or advisors or to a Governmental Body, in each case, in connection with a Proceeding and/or (ii) if such holder is a private equity fund or similar investment firm, is authorized to disclose the following confidential financial information with respect to the Company or the Transactions to such Person’s current or prospective limited partners or similar investors, co-investors and/or lenders: (A) purchase price paid by parent for the Company; (B) the contemplated Merger Consideration; and (C) such other information regarding such fund’s internal rate of return and similar investment metrics with respect to its investment in the Company.

5.7 Tax Matters .

(a) Filing of Tax Returns . The Securityholders’ Representative shall prepare or cause to be prepared (i) all Tax Returns for the Surviving Entity and the Subsidiaries for all taxable periods ending on or prior to the Closing Date and (ii) the final U.S. federal consolidated income Tax Return which includes the Company and its Subsidiaries with respect to the taxable year ending at the end of the day on the Closing Date (such consolidated income Tax return the “ Consolidated Tax Return ”). All such Tax Returns shall be prepared and filed in a manner consistent with the past practice of the Company and its Subsidiaries unless otherwise required by applicable Law. At least thirty (30) days prior to the date on which each such Tax Return is filed, the Securityholders’ Representative shall submit such Tax Return to Parent for its review and comment. Parent shall provide any written comments to the Securityholders’ Representative not later than ten (10) days after receiving any such Tax Return or the Consolidated Tax Return and, if written comments are not provided within ten (10) days, Parent shall be deemed to have accepted such Tax Return or the Consolidated Tax Return. The parties shall attempt in good faith to resolve any dispute with respect to such Tax Return or the Consolidated Tax Return. If the parties are unable to resolve any such dispute at least ten (10) days prior to the date on which such Tax Return or the Consolidated Tax Return must be filed, the dispute shall be referred to the Independent Accounting Firm for resolution and the fees shall be shared one-half by the Securityholders’ Representative and one-half by Parent. If the Independent Accounting Firm is unable to resolve any such dispute prior to the date on which any such Tax Return or the Consolidated Tax Return must be filed, such Tax Return shall be filed as prepared by Parent (or, in the case of the Consolidated Tax Return, the Securityholders’ Representative) subject to amendment, if necessary, to reflect the resolution of the dispute by the Independent Accounting Firm. Parent shall prepare or cause to be prepared and file or cause to be filed all Tax Returns for the Surviving Entity and the Subsidiaries for any Straddle Period. At least thirty (30) days prior to the date on which each such Tax Return is filed, Parent shall submit such Tax Return to the Securityholders’ Representative for its review and comment. The Securityholders’ Representative shall provide any written comments to Parent not later than ten (10) days after receiving any such Tax Return and, if written comments are not provided within ten (10) days, the Securityholders’ Representative shall be deemed to have accepted such Tax Return. The parties shall attempt in good faith to resolve any dispute with respect to such Tax Return. If the parties are unable to resolve any such dispute at least ten (10) days prior to the date on which such Tax Return must be filed, the dispute shall be referred to the Independent Accounting Firm for resolution and the fees shall be shared one-half by the Securityholders’ Representative and one-half by Parent. If the Independent Accounting Firm is unable to resolve any such dispute prior to the date on which any such Tax Return must be filed, such Tax Return shall be filed as prepared by Parent subject to amendment, if necessary, to reflect the resolution of the dispute by the Independent Accounting Firm. No Party shall file any Tax Return for the Surviving Entity or the Subsidiaries for any period ending prior to or including the Closing Date (including the Consolidated Tax Return) except pursuant to the procedures set forth in this Section 5.7(a) . The Securityholders’ Representative (and, to the extent the Securityholders’ Representative Amount has been exhausted, the Securityholders) shall pay and shall be responsible for payment of all Taxes allocable to any Pre-Closing Tax Period shown as due on any Tax Returns prepared pursuant to this Section 5.7(a) to Parent no later than five (5) days prior to the date on which such Tax Return must be filed. The payments due under the preceding sentence shall be paid by the Securityholders’ Representative from the Securityholders’ Representative Amount; provided

that if the Securityholders’ Representative Amount has been exhausted and a balance remains for Tax payments due under the preceding sentence, the Securityholders will have a several, and not joint, liability for payment of such balance to the extent of its Pro Rata Share; provided , further , that (i) with respect to holders of Company Capital Stock, Parent may recover such amounts directly from the holders of Company Capital Stock or through the Escrow Fund at Parent’s sole discretion and (ii) with respect to any other Securityholders, Parent’s sole recovery will be through the Escrow Fund. For the avoidance of doubt, in no event will any Securityholder be liable under the preceding sentence for an amount in excess of its Pro Rata Share.

(b) Proration of Straddle Period Taxes . In the case of Taxes that are payable with respect to any Straddle Period, the portion of any such Taxes that is attributable to the portion of the period ending on the Closing Date shall be:

(i) in the case of Taxes that are either (A) based upon or related to income or receipts, or (B) imposed in connection with any sale or other transfer or assignment of property (real or personal, tangible or intangible), deemed equal to the amount that would be payable if the Tax period of the Company and its Subsidiaries (and each partnership in which the Company and its Subsidiaries is a partner) ended with (and included) the Closing Date; provided that exemptions, allowances or deductions that are calculated on an annual basis (including depreciation and amortization deductions) shall be allocated between the period ending on and including the Closing Date and the period beginning after the Closing Date in proportion to the number of days in each period;

(ii) in the case of Taxes that are imposed on a periodic basis with respect to the assets or capital of the Company or any Subsidiary, deemed to be the amount of such Taxes for the entire Straddle Period (or, in the case of such Taxes determined on an arrears basis, the amount of such Taxes for the immediately preceding period), multiplied by a fraction the numerator of which is the number of calendar days in the portion of the period ending on and including the Closing Date and the denominator of which is the number of calendar days in the entire period; and

(iii) in the case of a Tax that is (A) paid for the privilege of doing business during a period (a “ Privilege Period ”) and (B) computed based on business activity occurring during an accounting period ending prior to such Privilege Period, any reference to a “Tax period,” a “tax period,” or a “taxable period” shall mean such accounting period and not such Privilege Period.

(c) Amended Tax Returns . Without the prior written consent of the Securityholders’ Representative, which consent shall not be unreasonably conditioned, withheld or delayed, or unless otherwise required by Law, Parent will not (i) except for Tax Returns that are filed pursuant to Section 5.7(a) , file or amend or permit any of the Company or any of its Subsidiaries to file or amend any Tax Return relating to a Pre-Closing Tax Period, or (ii) with respect to Tax Returns filed pursuant to Section 5.7(a) , after the date such Tax Returns are filed pursuant to Section 5.7(a) , amend or permit any of the Company or any of its Subsidiaries to amend any such Tax Return.

(d) Cooperation of Tax Claims and Tax Returns . This Section 5.7(d) , and not Section 8.5 , shall control any Tax Claim. From and after the Closing, Parent shall cause the Surviving Entity to notify the Securityholders’ Representative in writing within five (5) Business Days of the receipt of any correspondence regarding a potential Tax Claim, demand or claim on the Surviving Entity with respect to Taxes for any Pre-Closing Tax Period or Straddle Period that, if determined adversely to the Surviving Entity would give rise to a Liability of any Securityholder to make a payment to Parent, the Surviving Entity or their respective successors or assigns pursuant to this Agreement or otherwise; provided , however , that the failure to give such notice shall not affect the indemnification provided in Section 8.1 or any other obligation of the Securityholders other than to the extent that the Securityholders have been materially and actually prejudiced as a result of such failure or the indemnification obligations or other obligations are materially increased as a result of such failure. The Securityholders’ Representative shall control any defense or settlement, compromise, admission, or acknowledgment of any Tax Claim that relates solely to any Pre-Closing Tax Period (including any that relates to the Consolidated Tax Return but does not relate to any taxable period or portion thereof that ends after the Closing Date); provided , however , that (i) Parent shall have the right (but not the duty) to participate in the defense of such Tax Claim and to employ counsel, at its own expense, separate from counsel employed by the Securityholders’ Representative, and (ii) the Securityholders’ Representative shall not enter into any settlement of or otherwise compromise any such Tax Claim without the prior written consent of Parent, which consent shall not be unreasonably conditioned, withheld or delayed. The Surviving Entity and Parent shall control any defense or settlement, compromise, admission, or acknowledgment of any Tax Claim that does not relate solely to any Pre-Closing Tax Period, provided , however , that (i) the Securityholders’ Representative shall have the right (but not the duty) to participate in the defense of such Tax Claim and to employ counsel, at its own expense, separate from counsel employed by the Surviving Entity and Parent, and (ii) the Surviving Entity and Parent shall not enter into any settlement of or otherwise compromise any such Tax Claim that could result in any Liability of any Securityholder to make a payment of Taxes pursuant to this Agreement without the prior written consent of the Securityholders’ Representative, which consent shall not be unreasonably conditioned, withheld or delayed. The Securityholders’ Representative, the Securityholders, the Surviving Entity, and Parent shall reasonably cooperate, and shall use commercially reasonable efforts to cause their respective Affiliates, directors, officers, employees, consultants, agents, auditors and other representatives to reasonably cooperate in preparing and filing all Tax Returns and in resolving all disputes and audits with respect to all taxable periods relating to Taxes (including by maintaining and making available to each other all records necessary in connection with Taxes and making employees available on a mutually convenient basis during normal business hours to provide additional information or explanation of any material provided hereunder or to testify at proceedings relating to such Tax Claim). For the purposes hereof, a “ Tax Claim ” is any audit, claim for refund or administrative or judicial proceeding involving any asserted Liability for Taxes of the Company or any of its Subsidiaries that could give rise to a Liability of any Securityholder to make a payment pursuant to this Agreement.

(e) Transfer Taxes . All transfer, documentary, sales, use, stamp, registration, value added and other such Taxes and fees (including any penalties and interest) incurred in connection with this Agreement shall be borne and paid by Parent when due, and Parent will, at its own expense, file all necessary Tax Returns and other documentation with respect to all such

Taxes and fees, and, if required by applicable Law or regulation, the Company and the Securityholders’ Representative, will execute and deliver, and will cause their respective Affiliates to join in the execution and delivery of, any such Tax Returns and other documentation.

(f) Tax Refunds . The amount of any refunds of Taxes of the Company and its Subsidiaries for any Pre-Closing Tax Period and any amount payable to the Company with respect to the Pre-Closing Tax Period under any tax sharing agreement (but excluding any refund resulting from any Tax attribute generated after the Closing Date, which refund shall be for the account of Parent) (collectively, “ Tax Refunds ”) shall be for the account of the holders of Company Capital Stock. The amount of any Tax Refund of the Company and its Subsidiaries for any Tax period beginning after the Closing Date shall be for the account of Parent. The amount of any Tax Refund of the Company and its Subsidiaries for any Straddle Period shall be equitably apportioned between Parent and the holders of Company Capital Stock in accordance with the principles set forth in Section 5.7(b) . Each party shall forward, and shall cause its Affiliates to forward, to the party entitled to receive a Tax refund pursuant to this Section 5.7(f) the amount of such Tax Refund within thirty (30) days after such Tax Refund is received, net any costs, Taxes or expenses incurred by such party and its Affiliates in procuring such refund. The counterparties to the tax sharing agreement will, as of the Closing pursuant to a direction letter to be sent by the Company to its counterparty in the tax sharing agreement and effective as of the Closing (the “ Tax Sharing Direction Letter ”), be irrevocably authorized and directed to pay any Tax Refund payable thereunder to the Securityholders’ Representative for further payment to the holders of Company Capital Stock or for inclusion in the Securityholders’ Representative Amount, as may be elected by the Securityholders’ Representative. For the avoidance of doubt, any payments of any refunds of Taxes of the Company and its Subsidiaries for any Pre-Closing Tax Period to be made by Parent will be net of any Taxes of the Company and its Subsidiaries due with respect to any Pre-Closing Tax Period.

(g) Tax Sharing Agreements . All Tax sharing or allocation agreements, arrangements or similar Contracts with respect to or involving the Company and its Subsidiaries shall be terminated as of the Closing Date and, after the Closing Date, the Company and its Subsidiaries will not be bound thereby or have any liability thereunder.

5.8 Disclosure Supplements . From time to time prior to the Closing, the Securityholders’ Representative, the Company and, with respect to disclosures given by them, any Securityholder, may disclose to Parent in writing promptly upon the discovery thereof any matter arising after the date hereof which, if existing on the date of this Agreement, would have been required to be set forth or described in the Disclosure Schedule. Such disclosures may take the form of amendments or supplements to the attached Disclosure Schedules in the form of “ Updated Schedules ” delivered to Parent; provided that if an Updated Schedule is delivered pursuant to this Section 5.8 , the Company’s representations and warranties shall be deemed modified, amended and supplemented by such Updated Schedule for purposes of the Company’s indemnification obligations set forth in Article 8 , but not for purposes of satisfying the closing conditions in Section 6.2 . For the avoidance of doubt, no Updated Schedule shall contain any matter that existed as of the date of this Agreement, whether or not known to the Company, the Securityholders’ Representative or the Securityholders, as applicable (unless the representation or warranty with respect to such matter is qualified by knowledge, such as “to the Knowledge of the Company”, and knowledge of such matter is acquired after the date of this Agreement).

5.9 WARN . For a period of one year following the Closing Date, Parent agrees to cause the Surviving Entity and its Subsidiaries to provide any required notice under the WARN Act, or any similar Law, and to otherwise comply with any such Law with respect to any “plant closing” or “mass layoff” (as defined in the WARN Act) or similar event affecting the Continuing Employees.

5.10 COBRA . On and after the Closing, Parent shall cause continuation coverage under the Section 4980B of the Code and Part 6 of Subtitle B of Title I of ERISA, and any similar applicable state or local Law, to be provided to each current and former employee of the Company and its Subsidiaries, and each eligible beneficiary thereof, who is or becomes an “M&A qualified beneficiary” (as defined in Section 54.4980B-9 of the Treasury Regulations) in connection with the occurrence of the Transactions to the extent elected by such individual.

5.11 Employee Matters . During the period that begins on the Closing Date and ends on the first anniversary of the Closing Date, Parent agrees to cause the Surviving Entity and its Subsidiaries to provide their respective employees who remain employed with such entities following the Closing (each, a “ Continuing Employee ”) with wages and bonus opportunities that are substantially comparable in the aggregate to the wages and bonus opportunities in effect for such Continuing Employees as a whole as of the date of this Agreement. As of and after the Closing Date, Parent shall cause the Surviving Entity and its Subsidiaries to provide each Continuing Employee with full credit for service with the Company and its Subsidiaries earned prior to the Closing Date (i) for eligibility purposes, except with respect to defined benefit pension plans, and (ii) for purposes of vacation accrual and severance benefit determinations under any plans, programs, policies and arrangements maintained for the benefit of such Continuing Employees, in each case to the extent recognized by the Company and its Subsidiaries immediately prior to the Closing Date and except as would result in a duplication of benefits. Nothing in this Section 5.11 is intended to (a) represent a guarantee of employment or otherwise restrict the authority of Parent, the Company, the Surviving Entity or any of their respective Subsidiaries to terminate the employment of any of their employees, subject to applicable Law, (b) create any third-party beneficiary or other rights in any employee or former employee (including any beneficiary or dependent thereof) of Parent, the Company, the Surviving Entity, or any of their respective Subsidiaries or any other Person other than the parties hereto and their respective successors and permitted assigns, or (c) constitute or be deemed to constitute an amendment to any employee benefit plan sponsored or maintained by Parent, the Company, the Surviving Entity or any of their respective Subsidiaries. The Securityholders’ Representative shall take such steps as are necessary to allow Continuing Employees to participate in the voluntary employees’ beneficiary association medical plan in which the Company is currently participating (the “ Medical Plan ”) through January 1, 2015 (the “ Transition Period ”). During the Transition Period, the Parent shall cause the Surviving Entity and its Subsidiaries to collect employee premium contributions for the Medical Plan from the Continuing Employees and transmit such employee premium contributions to the Medical Plan. Additionally, the Surviving Entity and its Subsidiaries shall reimburse the Medical Plan for the incremental difference between the total claims of the Continuing Employees and their dependents under the Medical Plan and the total employee premium contributions made by

Continuing Employees during the Transition Period. The Securityholders’ Representative shall calculate such amount as soon as reasonably practicable following the end of the run out period under the Medical Plan associated with the Transition Period and communicate such amount to the Parent in writing. Parent shall pay such amount or shall cause the Surviving Entity or its Subsidiaries to pay such amount to the Medical Plan within 60 days of receipt of the amount in writing from the Securityholders’ Representative.

5.12 Preservation of Books and Records . Parent agrees that it shall, and Parent agrees that it shall cause the Surviving Entity to, preserve and keep the records held by it, them or their Affiliates relating to the conduct of the respective businesses of the Company and its Subsidiaries prior to the Closing Date for a period of seven (7) years from the Closing Date and, upon reasonable prior notice, shall provide reasonable access during normal business hours to such records and personnel available to the Securityholders’ Representative as may be reasonably required by the Securityholders’ Representative in connection with, among other things, any insurance claims by, Proceedings or Tax audits against or governmental investigations of the Securityholders, Securityholders’ Representative or any of their Affiliates. In the event Parent wishes to destroy such records after such time, Parent shall first give ninety (90) days prior written notice to Securityholders’ Representative and Securityholders’ Representative shall have the right at its option and expense, upon prior written notice given to Parent within that ninety (90) day period, to take possession of the records within ninety (90) days after the date of such notice.

5.13 Jointly Privileged Information . Notwithstanding any other provision in this Agreement, prior to the Closing, American Capital shall be permitted to remove from the Company and any of its Subsidiaries any email, document and other records containing attorney-client privileged information where the attorney-client privilege is held jointly between one or more of the Company and any of its Subsidiaries on the one hand, and any of the Seller Group on the other to the extent relating to the Transactions (“ Jointly Privileged Information ”). From and after the Closing, Parent shall cause the Company and each of its Subsidiaries to provide American Capital all copies (including electronic, digital, or otherwise) of any Jointly Privileged Information that is inadvertently not removed prior to the Closing. Any email, document and other record temporarily removed for analysis to determine the presence of Jointly Privileged Information pursuant to the first sentence of this Section 5.13 shall be returned to the Company promptly following completion of such review if it is determined by American Capital that such email, document or other record does not contain Jointly Privileged Information.

5.14 Exclusivity . During the period from the date of this Agreement through the earlier to occur of the Closing Date or the termination of this Agreement pursuant to Article 9 , the Company will not, and will not permit any of its Affiliates, directors, officers, employees, representatives or agents to, directly or indirectly, (i) solicit, initiate, or encourage the submission of any proposal or offer from any Person relating to the acquisition of all or substantially all of the capital stock or assets of the Company taken as a whole (including any acquisition structured as a merger, consolidation, or share exchange) or (ii) enter into, maintain, or continue discussions or negotiations regarding, or furnish or disclose to any Person any information in connection with any acquisition of all or substantially all of the capital stock or assets of the Company taken as a whole (including any acquisition structured as a merger, consolidation, or share exchange), and the Company shall not enter into any letter of intent or purchase agreement, merger

agreement or other similar agreement with any Person other than Parent and Merger Sub with respect to acquisition of all or substantially all of the capital stock or assets of the Company taken as a whole (including any acquisition structured as a merger, consolidation, or share exchange).

5.15 Stockholder Approval . Immediately following the execution of this Agreement, the Company shall submit this Agreement to its stockholders for adoption and shall use reasonable best efforts to obtain, immediately following execution and delivery of this Agreement, the Company Required Vote pursuant to the Written Consent. Promptly following receipt of the Written Consent, and no later than one (1) Business Day after the date hereof, the Company shall deliver a copy of such Written Consent to Parent.

5.16 280G Stockholder Vote . Prior to the Closing Date, the Company shall submit to a vote of its stockholders, in a manner that satisfies the stockholder approval requirements under Section 280G(b)(5)(B) of the Code and regulations promulgated thereunder (a “ 280G Stockholder Vote ”), the right of any “disqualified individual” (as defined in Section 280G(c) of the Code) to receive any and all payments (or other benefits) contingent on the consummation of the transactions contemplated by this Agreement (within the meaning of Section 280G(b)(2)(A)(i) of the Code) to the extent necessary so that no payment or benefit received by such “disqualified individual” would be a “parachute payment” under Section 280G(b) of the Code if the stockholders approve the payment by a vote that complies with Section 280G(b)(5)(B) of the Code. The Company shall (a) at least two (2) Business Days prior to providing (i) the applicable disqualified individuals with any required waivers, consents or agreements and (ii) the applicable stockholders with any materials necessary to comply with the 280G Stockholder Vote, provide a draft of the applicable materials to Parent and incorporate into such materials any reasonable comments that are provided by Parent and (b) use commercially reasonable efforts to obtain any required waivers, consents or agreements from each disqualified individual at least one (1) Business Day prior to conducting the 280G Stockholder Vote. Prior to the Closing, the Company shall provide Parent and its counsel with copies of any and all documents executed by the stockholders and disqualified individuals in connection with the 280G Stockholder Vote.

ARTICLE 6

CLOSING CONDITIONS

6.1 Conditions to Obligations of the Company . The obligation of the Company to consummate and effect the Merger shall be subject to the satisfaction at or prior to the Closing Date of each of the following conditions, any of which may be waived, in writing, exclusively by the Company:

(a) Representations and Warranties . Each representation and warranty of Parent and Merger Sub contained in this Agreement that are qualified by materiality or “Material Adverse Effect” shall be true and correct in all respects and each representation and warranty of Parent and Merger Sub that are not so qualified shall be true and correct in all material respects (other than the representations and warranties contained in Sections 4.1 , 4.2 and 4.3 , which shall be true and correct in all respects), in each case, as of the date of this Agreement and on and as of the Closing Date, except for those representations and warranties which addressed matters only as of a particular date prior to the date hereof (which representations shall be true and correct as of such particular date).

(b) Agreements and Covenants . Parent and Merger Sub shall have performed and complied with all of its agreements and covenants hereunder in all material respects through the Closing; provided that Parent’s payment obligations under this Agreement shall have been fully complied with and performed in all respects.

(c) No Judgment . No Proceeding shall be threatened or pending before any Governmental Body or before any arbitrator wherein an unfavorable injunction, judgment, order, decree, ruling, or charge would (i) prevent or materially delay consummation of any of the Transactions, or (ii) cause any of the Transactions to be rescinded following consummation (and no such injunction, judgment, order, decree, ruling or charge shall be in effect), and no Law or Judgment of any kind will have been enacted, entered, promulgated or enforced by any Governmental Body that (A) would prevent or materially delay consummation of any of the Transactions, or (B) cause any of the Transactions to be rescinded following consummation.

(d) Antitrust Laws . All applicable waiting periods (and any extensions thereof) under any applicable Antitrust Laws shall have expired or otherwise been terminated.

(e) Deliveries . The closing deliveries set forth in Section 7.2 will have been delivered by Parent and/or Merger Sub, as applicable.

6.2 Conditions to Obligations of Parent and Merger Sub . The obligation of Parent and Merger Sub to consummate and effect the Merger shall be subject to the satisfaction at or prior to the Closing Date of each of the following conditions, any of which may be waived, in writing, exclusively by Parent:

(a) Representations and Warranties . Each of the representations and warranties of the Company contained in this Agreement (other than the representations and warranties contained in Sections 3.1 , 3.2 and 3.4 ), shall be (i) true and correct in all material respects as of the date hereof and (ii) true and correct on and as of the Closing Date except where the failure of such representations and warranties to be true and correct, individually or in the aggregate, has not had and would not reasonably be expected to have a Material Adverse Effect. The representations and warranties contained in Sections 3.1 , 3.2 and 3.4 shall be true and correct in all material respects on and as of the date hereof and the Closing Date (without regard to any qualifications therein as to materiality or Material Adverse Effect).

(b) Agreements and Covenants . The Company shall have performed and complied with all of its agreements and covenants hereunder in all material respects through the Closing.

(c) No Judgment . No Proceeding shall be threatened or pending before any Governmental Body or before any arbitrator wherein an unfavorable injunction, judgment, order, decree, ruling, or charge would (i) prevent or materially delay consummation of any of the Transactions, or (ii) cause any of the Transactions to be rescinded following consummation (and no such injunction, judgment, order, decree, ruling or charge shall be in effect), and no Law or Judgment of any kind will have been enacted, entered, promulgated or enforced by any Governmental Body that would (A) prevent or materially delay consummation of any of the Transactions, or (B) cause any of the Transactions to be rescinded following consummation.

(d) Antitrust Laws . All applicable waiting periods (and any extensions thereof) under any applicable Antitrust Laws shall have expired or otherwise been terminated.

(e) Deliveries . The closing deliveries set forth in Section 7.1 will have been delivered to Parent and Merger Sub.

ARTICLE 7

CLOSING DELIVERIES

7.1 Company Deliveries . Concurrently with the Closing, the Company shall deliver to Parent and Merger Sub:

(a) the Certificate of Merger, executed by the Company in accordance with the DGCL;

(b) the Escrow Agreement, executed by the Securityholders’ Representative and the Escrow Agent;

(c) written resignations of each board member of the Company and its Subsidiaries listed on Schedule 7.1(c) , effective as of the Closing;

(d) payoff letter(s), in customary form and reasonably acceptable to Parent, relating to the payment of all Indebtedness identified on Schedule 7.1(d) ;

(e) an affidavit issued to Parent by an officer of the Company as required by Treasury Regulation Section 1.1445-2(c)(3) certifying that the Company has not been a United States real property holding corporation (as the term is defined in the Code and the Treasury Regulations promulgated in connection therewith) at any time during the five (5) year period ending on the Closing Date in form and substance reasonably satisfactory to Parent;

(f) a non-solicitation agreement in the form set forth on Exhibit F duly executed by each holder of Company Capital Stock;

(g) a fully executed and effective release in substantially the form set forth on Exhibit G entered into with each SAR Recipient; and

(h) a certificate, dated as of the Closing Date and signed by an authorized officer of the Company, to the effect that each of the conditions specified in Sections 6.2(a) and 6.2(b) has been satisfied.

7.2 Parent and Merger Sub Deliveries . Concurrently with the Closing, Parent and Merger Sub shall deliver:

(a) to the Persons identified in Section 2.3 , the payments contemplated by Section 2.3 ;

(b) to the Securityholders’ Representative, the Escrow Agreement, executed by Parent and the Escrow Agent;

(c) to the Securityholders’ Representative, the non-solicitation agreement in the form set forth on Exhibit F duly executed by Parent; and

(d) to the Securityholders’ Representative, a certificate, dated as of the Closing Date and signed by an authorized officer of Parent and Merger Sub, to the effect that each of the conditions specified above in Sections 6.1(a) and 6.1(b) has been satisfied.

ARTICLE 8

INDEMNIFICATION

8.1 Securityholder Indemnification Obligation . Subject to the provisions of Section 8.3 , from and after the Closing, each Securityholder shall indemnify and hold harmless Parent and its Affiliates (including the Surviving Entity) and their respective directors, members, officers, equityholders, employees, agents, representatives, successors and assigns (each a “ Parent Indemnitee ” and, collectively, the “ Parent Indemnitees ”) against and from all Damages sustained or incurred by any Parent Indemnitee as a result of or arising from:

(a) any breach of any representation or warranty made by the Company in Article 3 ;

(b) any breach by the Securityholders’ Representative (or prior to the Closing, the Company) of, or failure to comply with, any covenant or obligation under this Agreement to be performed by the Securityholders’ Representative (or prior to the Closing, the Company);

(c) (i) all Taxes (or the nonpayment thereof) of the Company and its Subsidiaries for any Pre-Closing Tax Period; (ii) all Taxes of any member of an affiliated, combined or unitary group of which the Company or any of its Subsidiaries is or was a member prior to the Closing, including pursuant to Treasury Regulation Section 1.1502-6 or any analogous or similar state, local or foreign Law; (iii) any and all Taxes of any Person (other than the Company or any of its Subsidiaries) imposed on the Company or any of its Subsidiaries as a transferee or successor, by Contract or pursuant to any Law, which Taxes relate to an event or transaction occurring on or before the Effective Time; provided that the Securityholders shall have no obligation to indemnify the Parent Indemnitees against any Damages consisting of or relating to Taxes (A) resulting from any transactions outside the ordinary course of business occurring on the Closing Date after the Closing or (B) for any taxable periods the portions thereof beginning after the Closing Date other than with respect to breaches of the representations and warranties in Section 3.19(l) ; and

(d) any Indebtedness or Transaction Expense of the Company and its Subsidiaries as of the Closing that is not fully paid on the Closing Date;

provided , however , that each Securityholder shall only have a several (and not joint) obligation of indemnification under this Section 8.1 to the extent of his, her or its Pro Rata Share.

8.2 Parent’s Indemnification Obligations . From and after the Closing, the Parent shall indemnify and hold harmless each Securityholder and its Affiliates and their respective directors, members, officers, equityholders, employees, agents, representatives, successors and assigns (each a “ Securityholder Indemnitee ” and, collectively, the “ Securityholder Indemnitees ”) against and from all Damages sustained or incurred by any Securityholder Indemnitee as a result of or arising from:

(a) any breach of any representation or warranty made by Parent or Merger Sub in Article 4 ; and

(b) any breach by Parent or Merger Sub (or, following the Closing, the Company) of, or failure of Parent or Merger Sub to comply with, any covenant or obligation under this Agreement to be performed by Parent or Merger Sub (or, after the Closing, the Company).

8.3 Limitations on Securityholders’ Indemnification Obligations . Notwithstanding anything to the contrary set forth in this Agreement, the Securityholders’ indemnification obligations pursuant to the provisions of Section 8.1 are subject to the following limitations and conditions:

(a) The Parent Indemnitees shall not be entitled to indemnification under Section 8.1(a) if, with respect to any individual item of Damages, such item is less than $50,000 (“ Minor Claim ”); provided that the limitation set forth in this Section 8.3(a) shall not apply to any breach of the representations and warranties of the Company contained in Sections 3.1 (Organization and Good Standing), 3.2 (Power and Authorization; Enforceability), 3.4 (Capitalization), 3.21 (Brokers) and 3.22 (Stockholder Approval) (collectively, the “ Fundamental Representations ”).

(b) The Parent Indemnitees shall not be entitled to indemnification under Section 8.1(a) until the aggregate amount of all Damages (excluding Minor Claims) for which the Parent Indemnitees are entitled to indemnification thereof exceeds an amount equal to $1,800,000 (the “ Deductible ”), and then only for the excess over the Deductible; provided that the limitation set forth in this Section 8.3(b) shall not apply to any breach of a Fundamental Representation.

(c) The Parent Indemnitees shall not be entitled to recover under Section 8.1(a) or, with respect to pre-Closing covenants or obligations, Section 8.1(b) unless a claim has been asserted by written notice specifying in reasonable detail the nature of the claim and delivered to the Securityholders’ Representative on or prior to the first anniversary of the Closing Date (the “ Survival Period ”); provided that (i) the representations and warranties (i) set forth in Sections 3.1 (Organization and Good Standing), 3.2 (Power and Authorization; Enforceability), 3.4 (Capitalization) and 3.22 (Stockholder Approval) shall survive the Closing indefinitely, and (ii) set forth in Section 3.16 (Employee Benefits) and Section 3.19 (Tax Matters) shall survive until 90 days following the expiration of the applicable statute of limitations, as extended, with respect to the particular matter that is the subject matter thereof; provided further that if a Parent Indemnitee has validly delivered written notice of a claim for indemnification to the Securityholders’ Representative in accordance with the foregoing, such indemnification claim shall survive until such claim has been fully and finally resolved. The representations and warranties of Parent and Merger Sub shall survive the Closing.

(d) Notwithstanding anything to the contrary in this Agreement,

(i) the Parent Indemnitees shall not be entitled to recover under Section 8.1(a) to the extent the aggregate amount of Damages actually paid by or on behalf of Securityholders under Section 8.1(a) to the Parent Indemnitees would exceed the funds held in the Escrow Fund, and such funds shall be the sole and exclusive source of funds to satisfy claims under this Agreement (except as otherwise expressly set forth in this Section 8.3(d) ); and

(ii) the foregoing limitations in clause (i) above shall not apply to Damages relating to arising out of (A) a breach of the Fundamental Representations, (B) a breach of Section 3.19 (Tax Matters), (C) actual fraud or (D) Sections 8.1(b) , 8.1(c) or 8.1(d) ; provided that Parent Indemnitees must first seek recourse against the Escrow Fund if and to the extent it is available and, to the extent that it is not and the applicable claim is one for which a remedy beyond the Escrow Fund is available hereunder, each Securityholder shall only have a several, and not joint, obligation of indemnification to the extent of his, her or its Pro Rata Share and, in any event, shall not have any Liability in connection with this Agreement or the transactions contemplated hereby in an amount that exceeds the cash proceeds actually received by such Securityholder; provided , however , that, notwithstanding the foregoing, any recovery for the Damages described in Section 8.1(d) by a Parent Indemnitee may, at Parent’s option, be recovered first directly from the Securityholders.

(e) The Parent Indemnitees shall not be entitled to recover under Section 8.1 : to the extent the matter in question, taken together with all similar matters, (A) does not exceed the amount of any reserves with respect to such matters which are reflected in the Draft Computation as of the Determination Date or (B) is included in the calculation of the Indebtedness Amount or the Actual Transaction Expenses and, in either case, is paid pursuant to Section 2.3(a) .

(f) On the date which is twelve months following the Closing Date, the Escrow Agent shall release to the Securityholders’ Representative the then-remaining Escrow Fund less the aggregate amount of Damages specified in any then-unresolved good faith claims for indemnification, in accordance with the terms of the Escrow Agreement.

(g) For purposes of determining whether there has been a breach of any representation or warranty under this Agreement and for purposes of determining any Damages, in each case for purposes of indemnification under this Article VIII , such representations and warranties shall be interpreted without giving effect to any limitations or qualifications such as “materiality,” “material,” “in all material respects,” or “Material Adverse Effect” set forth in any such representation or warranty; provided that, this Section 8.3(g) shall not apply to the representations and warranties set forth in Sections 3.7 (Financial Statements) or 3.23 (Customers and Suppliers).

(h) For the avoidance of doubt, no Securityholder shall have any Liability for actions taken by Parent or the Company following the Effective Time.

8.4 Inter-Party Claims . In order for a Parent Indemnitee or a Securityholder Indemnitee (each, an “ Indemnified Party ”) to be entitled to indemnification pursuant to this Article 8 from another party to this Agreement, the Indemnified Party shall notify the other party or parties from whom such indemnification is sought (the “ Indemnifying Party ”) in writing promptly after the Indemnified Party becomes aware of the occurrence of an event giving rise to such Indemnified Party’s claim for indemnification, specifying in reasonable detail the basis of such claim; provided , however , that failure to give such notification shall not affect the indemnification provided hereunder except to the extent the Indemnifying Party shall have been materially and actually prejudiced as a result of such failure or the indemnification obligations are materially increased as a result of such failure. The Indemnified Party shall thereupon give the Indemnifying Party reasonable access during normal business hours to the books, records, personnel and assets of the Indemnified Party which evidence or support such claim or the act, omission or occurrence giving rise to such claim. If the Indemnifying Party disputes its liability with respect to any such claim, the Indemnifying Party and the Indemnified Party shall proceed to negotiate in good faith a resolution of such dispute and, if not resolved through negotiations within 30 days, such dispute shall, subject to the terms of this Agreement, be resolved by litigation in an appropriate court of competent jurisdiction.

8.5 Third Party Claims .

(a) Promptly following its receipt of written notice of a Third Party Claim, the Indemnified Party shall (i) notify the Indemnifying Party of its existence, setting forth with reasonable specificity the facts and circumstances of such Third Party Claim to the extent known, and (ii) specifying the basis hereunder upon which the Indemnified Party’s claim for indemnification is asserted; provided , however , that failure to give such notification shall not affect the indemnification provided hereunder except to the extent the Indemnifying Party shall have been materially and actually prejudiced as a result of such failure or the indemnification obligations are materially increased as a result of such failure.

(b) The Indemnified Party shall tender the defense of any Third Party Claim to the Indemnifying Party, and if the Indemnifying Party accepts such tender within thirty (30) days thereafter, then except as herein provided, the Indemnified Party shall not, and the Indemnifying Party shall, have the right to contest, defend, litigate or settle such Third Party Claim and shall have the right, in its discretion exercised in reasonable good faith and upon the advice of counsel, to settle any such matter, either before or after the initiation of litigation, at such time and upon such terms as it deems fair and reasonable; provided , however , that the Indemnified Party will only be required to tender the defense of any Third Party Claim to the extent that (i) the then-available Escrow Fund is sufficient, in the reasonable judgment of the Indemnified Party, to satisfy the amount of any adverse monetary judgment or settlement that is reasonably likely to result; (ii) the Third-Party Claim seeks (and continues to seek), as its primary remedy, monetary damages; and (iii) the Indemnifying Party expressly agrees in writing that as between the Indemnifying Party and the Indemnified Party, the Indemnifying Party shall be obligated to satisfy and discharge the Third Party Claim in accordance with the terms set forth in this Agreement (the conditions set forth in clauses (i) through (ii), the “ Litigation

Conditions ”); provided, further, that the Indemnifying Party, if it shall have assumed the defense of any Third Party Claim, shall not, without the written consent of the Indemnified Party (such consent not to be unreasonably withheld), consent to a settlement of, or the entry of judgment arising from, any such Third Party Claim which (A) does not include as an unconditional term thereof the giving by the claimant or plaintiff to the Indemnified Party of a complete release from all Damages in respect of such Third Party Claim, or (B) grants any injunctive or equitable relief. All expenses (including attorneys’ fees) incurred by the Indemnifying Party in connection with the foregoing shall be paid by the Indemnifying Party; provided that if the Securityholders’ Representative (on behalf of the Seller Group) is the Indemnifying Party and defends against, negotiates, settles or otherwise handles such Third Party Claim in accordance with this Article 8 , the fees and other Damages incurred and paid by the Indemnifying Party in connection therewith shall count toward the limitations or indemnifications set forth in this Article 8 . The Indemnified Party shall have the right to, at its own expense, be represented by counsel and participate in any such contest, defense, litigation or settlement conducted by the Indemnifying Party, and if the Indemnified Party exercises such right, the parties shall cooperate in the contest, defense, litigation and settlement of the Third Party Claim. If, in the reasonable opinion of counsel to the Indemnified Party, a conflict or potential conflict exists between the Indemnified Party and the Indemnifying Party that would make separate representation advisable, the Indemnified Party may retain separate counsel at the expense of the Indemnifying Party. The Indemnifying Party shall lose its right to contest, defend, litigate and settle any Third Party Claim, and shall be liable for all reasonable costs or expenses paid or incurred by the Indemnified Party in connection with assuming the right to contest, defend, litigate and settle such Third Party Claim, if (A) it shall fail to diligently contest the Third Party Claim or (B) any of the Litigation Conditions cease to be met. If an Indemnified Party is entitled to indemnification with respect to a Third Party Claim, and the Indemnifying Party fails to accept a tender of the defense of a Third Party Claim pursuant to this Section 8.5 , or if the Indemnifying Party does not have or loses its right to contest, defend, litigate and settle such a Third Party Claim, the Indemnified Party shall have the right, without prejudice to its right of indemnification hereunder, in its discretion exercised in reasonable good faith and upon the advice of counsel, to contest, defend and litigate such Third Party Claim; provided , that in no event will an Indemnified Party admit any Liability with respect to, compromise, consent to the entry of any judgment or enter into any settlement with respect to any Third Party Claim without the prior written consent of the Indemnifying Party, such consent not to be unreasonably withheld, conditioned or delayed. If, pursuant to the preceding sentence, the Indemnified Party so contests, defends, litigates or settles a Third Party Claim for which it is entitled to indemnification hereunder, Damages indemnifiable under this Agreement will include the reasonable attorneys’ fees and other expenses of contesting, defending, litigating and settling the Third Party Claim which are incurred from time to time, promptly following the presentation to the Indemnifying Party of itemized bills for such attorneys’ fees and other expenses.

8.6 Mitigation .

(a) Each Indemnified Party shall take commercially reasonable steps to mitigate all Damages after becoming aware of any event which would reasonably be expected to give rise to any Damages that are indemnifiable or recoverable hereunder or in connection herewith.

(b) The amount of any Damages subject to indemnification hereunder or of any claim therefor shall be calculated net of (i) any accruals or reserves on the Interim Balance Sheet that relate to the matter(s) for which indemnification is claimed, (ii) any amounts actually recovered by an Indemnified Party pursuant to any indemnification by or indemnification agreement with any non-affiliated third party (net of all direct collection expenses), (iii) any insurance proceeds or other cash receipts or sources of reimbursement actually received as an offset against such Damages (net of all direct collection expenses) received or receivable by Parent, Merger Sub or the Surviving Entity or any of their Affiliates on account of such Damages (each such source named in clauses (ii) and (iii), a “ Collateral Source ”), and (iv) any Indemnification Tax Benefit inuring to Parent, Merger Sub, the Company, any Subsidiary, or any of their Affiliates on account of such Damages. If Parent, Merger Sub, the Company, any Subsidiary or any of their Affiliates receives an Indemnification Tax Benefit after an indemnification payment is made, Parent shall promptly pay to the Securityholders’ Representative (on behalf of the Securityholders) the amount of such Indemnification Tax Benefit at such time or times as and to the extent that such Indemnification Tax Benefit is realized. For purposes hereof, “ Indemnification Tax Benefit ” means any refund of Taxes paid or reduction in the amount of Taxes which otherwise would have been paid, in each case computed at the effective tax rates. Parent, Merger Sub, the Surviving Entity and its Subsidiaries shall seek full recovery of any Damages from all Collateral Sources covering such Damages to the same extent as they would if such Damages were not subject to indemnification hereunder. Parent, Merger Sub, the Surviving Entity and its Subsidiaries shall not terminate or cancel any insurance policies in effect for periods prior to the Closing. In the event that a recovery from a Collateral Source is made by Parent, Merger Sub, the Surviving Entity, any Subsidiary or any of their Affiliates with respect to any Damages for which any such Person has been indemnified hereunder, then a refund equal to the aggregate amount of the recovery (net of all direct collection expenses) shall be made promptly to the Securityholders’ Representative (on behalf of the Securityholders).

(c) Each Person entitled to indemnification hereunder shall take all reasonable steps to mitigate all losses, costs, expenses and damages after becoming aware of any event which could reasonably be expected to give rise to any losses, costs, expenses and damages that are indemnifiable or recoverable hereunder or in connection herewith.

8.7 Adjustment of the Merger Consideration . Amounts paid for indemnification under this Article 8 shall be deemed to be an adjustment to the Merger Consideration for all Tax purposes, unless otherwise required by Law.

8.8 Exclusive Remedy . From and after the Closing, no party shall be liable or responsible in any manner whatsoever to the other parties (or the Indemnified Parties) with respect to any and all monetary claims (other than claims for actual fraud and claims under Section 2.6 ) in connection with any breach of this Agreement, except for indemnification provided in this Article 8 , which provides the exclusive remedies and causes of action of the parties hereto (or the Indemnified Parties) with respect to any and all monetary claims in connection with any breach of, arising out of, or in connection with this Agreement, any Disclosure Schedule or other Schedule or Exhibit hereto, the Transaction Documents or any document or certificate delivered in connection herewith (other than claims for actual fraud and claims under Section 2.6 ).

8.9 No Circular Recovery . Notwithstanding anything to the contrary contained in this Agreement, no Securityholder or Securityholder Indemnitees shall make any claim for indemnification pursuant to Section 5.4 hereof, or pursuant to the constituent documents of the Company, with respect to any claim brought by any Parent Indemnitee against any Securityholder or relating to the Transactions or the Transaction Documents.

ARTICLE 9

TERMINATION

9.1 Termination of Agreement . The Agreement may be terminated only as provided below:

(a) Parent and the Company may terminate this Agreement by mutual written consent at any time prior to the Closing;

(b) By either Parent or the Company, by written notice to the other, if consummation of any of the Transactions is enjoined, prohibited or otherwise restrained by the terms of a final, non-appealable order or judgment of a court of competent jurisdiction;

(c) By either Parent or the Company, by written notice to the other, if there shall have been any breach by the other Party (which in the case of the Company shall also include any breach by Merger Sub) of any representation, warranty or covenant set forth in this Agreement (or if any representation or warranty of the other Party shall have become untrue), which breach (i) would result in the failure of a condition to the Closing set forth in Sections 6.1(a) , 6.1(b) , 6.2(a) or 6.2(b) , as applicable, in favor of the terminating party and (ii) cannot be cured, or has not been cured within twenty (20) days following receipt by the breach party of written notice of such breach;

(d) By either Parent or the Company, by written notice to the other, if the Closing shall not have occurred at or before 11:59 p.m. Eastern Time on August 31, 2014; provided , however , that the right to terminate this Agreement under this Section 9.1(d) shall not be available to any party whose failure to fulfill any of its obligations under this Agreement has been the cause of or resulted in the failure of the Closing to occur on or prior to the aforesaid date or who has failed to satisfy any of the conditions set forth in Article 6 hereof that such party was required to satisfy; provided that no party shall be entitled to terminate this Agreement during the twenty (20) day cure period referenced in Section 9.1(c) ; or

(e) By Parent or the Company if the Company does not deliver the Written Consent within six (6) hours following the execution of this Agreement.

Notwithstanding the foregoing, the parties agree that neither Parent nor the Company shall have any right to terminate this Agreement pursuant to Section 9.1(d) during the pendency of a Proceeding by the other party for specific performance pursuant to Section 10.12 .

9.2 Effect of Termination . If this Agreement is terminated pursuant to Section 9.1 above, all rights and obligations of the parties hereunder shall terminate without any Liability of any party to any other party (except for any Liability for any willful breach occurring prior to such termination, including the failure of either Party to consummate the Transactions where the

conditions to such Party’s obligations to close hereunder have been satisfied (or are capable of being satisfied at Closing)); provided , however , that this Section 9.2 , Section 2.7 and Article 10 shall survive termination and Parent shall return or destroy all agreements, documents, contracts, instruments, books, records, materials and other information relating to the Company or any of its Subsidiaries in connection with this Agreement or the Transaction Documents or the transactions contemplated hereby or thereby.

ARTICLE 10

GENERAL PROVISIONS

10.1 Fees and Expenses . All fees and expenses incurred by Parent or its Affiliates in connection with the Merger and the other Transactions shall be paid by Parent or such Affiliate, whether or not the Merger is consummated. The Transaction Expenses shall be paid in the manner specified in this Agreement. Notwithstanding the foregoing, (i) all filing fees and similar expenses incurred in connection with the filings required to be made with any Governmental Body and the Governmental Authorizations to be received, in each case in connection with the Transactions shall be paid by Parent, (ii) the fees and expenses incurred in connection with the obligations to obtain director and officer insurance set forth in Section 5.4 shall be paid by Parent, and (iii) any and all transfer, sales, use, documentary and similar Taxes and recording and filing fees incurred in connection with the transactions contemplated by the Transaction Documents shall be paid by Parent. All amounts required to be paid hereunder shall be paid in United States currency and, except as otherwise expressly set forth in this Agreement, without discount, rebate or reduction and subject to no counterclaim or offset (other than, as specified in the Agreement, withholding tax obligations required to be withheld by law), on the dates specified herein (with time being of the essence). In addition, notwithstanding anything to the contrary in this Agreement, but subject to the provisions of Section 2.6 (which shall govern any dispute arising thereunder), in the event any Proceeding is commenced or threatened by any Person (the “ Claiming Party ”) to enforce its rights under this Agreement against any other Person (the “ Defending Party ”), if the Defending Party is the prevailing party in such Proceeding, all fees, costs and expenses, including reasonable attorneys fees and court costs, incurred by the Defending Party in such Proceeding shall be reimbursed by the Claiming Party; provided that , if the Defending Party prevails in part, and loses in part, in such Proceeding, the court, arbitrator or other adjudicator presiding over such Proceeding shall award a reimbursement of the fees, costs and expenses incurred by the Defending Party on an equitable basis.

10.2 Notices . All notices or other communications permitted or required under this Agreement or the other Transaction Documents shall be in writing and shall be sufficiently given if and when hand delivered to the Persons set forth below or if sent by documented overnight delivery service or registered or certified mail, postage prepaid, return receipt requested, or by facsimile, addressed as set forth below or to such other Person or Persons and/or at such other address or addresses as shall be furnished in writing by any party hereto to the other parties hereto. Any such notice or communication shall be deemed to have been given as of the date received, in the case of personal delivery, or on the date shown on the receipt or confirmation therefor in all other cases.

If to Guarantor, Parent or Merger Sub (or the Surviving Entity after the Closing) to:


Nordson Corporation
28601 Clemens Road
Westlake, Ohio 44145
Attention:		Robert E. Veillette, Vice President,
		General Counsel & Secretary
Facsimile No.: (440) 892-9253

With a copy (which shall not constitute notice) to:

Jones Day

North Point

901 Lakeside Ave.

Cleveland, Ohio 44114

Attention: James P. Dougherty

Facsimile No.: (216) 579-0212

If, to the Company (prior to Closing):

Avalon Laboratories Holding Corp.

2610 E. Homestead Place

Rancho Dominguez, CA 90220

Attention: Michael Janish

Facsimile No.: (310) 761-8665

With a copy (which shall not constitute notice) to:

American Capital Equity III, LP

2 Bethesda Metro Center

Bethesda, MD 20814

Attention: Eugene Krichevsky and Ryan Sacco

Facsimile No.: (301) 654-6714

With an additional copy (which shall not constitute notice) to:

Arnold & Porter LLP

555 12 ^th Street NW

Washington, DC 20004-1206

Attention: Andrew Varner

Facsimile No.: (202) 942-5999

If to the Securityholders’ Representative, to:

American Capital Equity III, LP

2 Bethesda Metro Center

Bethesda, MD 20814

Attention: Eugene Krichevsky and Ryan Sacco

Facsimile No.: (301) 654-6714

With a copy (which shall not constitute notice) to:

Arnold & Porter LLP

555 12 ^th Street NW

Washington, DC 20004-1206

Attention: Andrew Varner

Facsimile No.: (202) 942-5999

10.3 Assignment and Benefit . Neither this Agreement nor any of the rights, interests or obligations hereunder may be assigned, by operation of Law or otherwise, by any party hereto to any other Person without the prior written consent of Parent and the Securityholders’ Representative, and any such attempted assignment shall be null and void; provided , however , that (a) Parent may assign its rights and obligations under this Agreement in whole or in part to any of its Affiliates, (b) the Securityholders’ Representative may assign its rights and obligations under this Agreement to any of its Affiliates without the prior written consent of Parent, and (c) after the Closing, any Securityholder may assign this Agreement to any of its beneficial owners or successors by operation of Law; provided , that, no such assignment shall in any way affect such Securityholder’s obligations or liabilities hereunder. Subject to the foregoing, this Agreement and the rights and obligations set forth herein shall inure to the benefit of, and be binding upon, the parties hereto, and each of their respective permitted successors, heirs and assigns.

10.4 Amendment, Modification and Waiver . Any provision of this Agreement may be amended or waived if, but only if, such amendment or waiver is in writing and is signed by Parent, the Company and the Securityholders’ Representative or, after the Closing Date, by Parent and the Securityholders’ Representative. Any such amendment, modification, extension or waiver shall be in writing. The waiver by a party hereto of any breach of any provision of this Agreement shall not constitute or operate as a waiver of any other breach of such provision or of any other provision hereof, nor shall any failure to enforce any provision hereof operate as a waiver of such provision or of any other provision hereof.

10.5 Jurisdiction . This Agreement shall be governed and construed in accordance with the laws of the State of Delaware, without regard to any applicable conflicts of law provisions (except to the extent that mandatory provisions of federal Law apply). Each of the parties hereby irrevocably submits to the exclusive jurisdiction and venue of the Delaware Court of Chancery (and if the Delaware Court of Chancery shall be unavailable, any court of the State of Delaware or the United States District Court for the District of the State of Delaware) for the purpose of any Action arising out of this Agreement, or any of the Transaction Documents, brought by or against any other party hereto or thereto, and hereby irrevocably agrees (a) that all claims in respect of any such Action may be heard and determined in any such court and (b) not to commence any Action relating to this Agreement in any other court or before any other Governmental Body. Each party irrevocably and unconditionally waives and agrees not to assert in any such Action, in each case to the fullest extent permitted by applicable Law, (i) any objection to the laying of venue of any such Action brought in any such court, (ii) any claim that such party is not personally subject to the jurisdiction of any such court, or (iii) any claim that any such Action has been brought in an inconvenient forum (if brought in any such court). Each

party certifies and acknowledges that (A) no Representative of any other party has represented, expressly or otherwise, that such other party would not, in the event of litigation under this Section 10.5 , seek to enforce any of the foregoing waivers, (B) it understands and has considered the implications of such waivers and (C) it makes such waivers voluntarily. Each party agrees that service of any process, summons, notice or document in accordance with the provisions of Section 10.2 shall be effective service of process for any Action brought against such party in any such court. Notwithstanding the foregoing, each party agrees that a final judgment in any such Action brought in any such court shall be conclusive and binding upon such party and may be enforced in any other court to whose jurisdiction such party is or may be subject, by suit upon such judgment.

10.6 Waiver of Jury Trial . EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT TO ANY PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE OF ANY OTHER PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF ANY PROCEEDING, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.6 .

10.7 Performance Guaranty; Party Obligations . Parent hereby guarantees the due, prompt and faithful performance and discharge by, and compliance with, all of the obligations, covenants, terms, conditions and undertakings of Merger Sub at and prior to the Effective Time under this Agreement in accordance with the terms hereof. Whenever this Agreement or any Transaction Document requires Merger Sub to take any action, such requirement shall be deemed to include an undertaking on the part of Parent to cause Merger Sub to take such action.

10.8 Section Headings . The section headings contained herein are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement.

10.9 Severability . If any term or other provision of this Agreement (or portion thereof) or the application of any such term or other provision (or portion thereof) to any Person or circumstance is determined by a court of competent jurisdiction to be invalid, illegal or incapable of being enforced pursuant to any applicable Law or public policy, all other terms and provisions of this Agreement (or remaining portion of such term or other provision) will nevertheless remain in full force and effect. Upon such determination by a court of competent jurisdiction that any term or other provision (or portion thereof) of this Agreement is invalid, illegal or incapable of being enforced, the parties hereto will negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a legally acceptable manner to the end that Transactions are fulfilled to the greatest extent possible.

10.10 Counterparts; Third-Party Beneficiaries . This Agreement may be executed in two or more counterparts, including by facsimile transmission, each of which shall be deemed an

original, and any Person may become a party hereto by executing a counterpart hereof, but all of such counterparts together shall be deemed to be one and the same agreement. This Agreement will be binding upon and inure solely to the benefit of each party hereto, and, except as otherwise set forth in this Agreement, this Agreement is not intended to nor will confer upon any other Person any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement. Notwithstanding the foregoing, in the event that this Agreement is terminated by the Company pursuant to Sections 9.1(c) or 9.1(d) , then (a) the Securityholders, acting through the Securityholders’ Representative, shall be beneficiaries of this Agreement and, as provided in Section 9.2 and elsewhere in this Agreement, shall be entitled to pursue all available remedies and to seek recovery of all losses, liabilities, damages, costs and expenses of every kind and nature, including reasonable attorneys’ fees, (b) the Securityholders, acting through the Securityholders’ Representative, shall be beneficiaries of Section 10.12 and (c) from and after the Closing, Section 5.4 , Section 5.7(f) and the last sentence of Section 5.11 are made for the benefit of the persons referenced therein, as applicable, and Article 2 and Article 10 are made for the benefit of the Securityholders. All of the Persons identified in the immediately preceding sentence shall be entitled to enforce such provisions and to avail themselves of the benefits of any remedy for any breach of such provisions, all to the same extent as if such Persons were signatories to this Agreement.

10.11 Entire Agreement . This Agreement, together with the other Transaction Documents and the Confidentiality Agreement, constitute the entire agreement among the parties hereto with respect to the Transactions and supersede all prior and contemporaneous agreements and understandings, both written and oral, with respect to the subject matter hereof. The Parties have voluntarily agreed to define their rights, liabilities and obligations respecting the subject matter of this Agreement exclusively in contract pursuant to the terms and provisions of this Agreement and their sole and exclusive remedies regarding the subject matter of this Agreement shall be remedies available at law or in equity for breach of contract only (as such remedies may be limited by the express terms of this Agreement).

10.12 Specific Performance . The Parties hereto agree that if any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached, irreparable damage would occur, no adequate remedy at law would exist and Damages would be difficult to determine, and the Parties shall be entitled to an injunction, specific performance, or other equitable relief to prevent breaches or threatened breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement, in addition to any other remedy at law or in equity. The Parties further agree not to assert that a remedy of injunctive relief, specific performance or other equitable relief is unenforceable, invalid, contrary to law or inequitable for any reason (in each case, other than contesting the existence of a breach or threatened breach of this Agreement), nor to assert that a remedy of monetary damages would provide an adequate remedy. Each of the Parties hereby waives (a) any defenses in any action for specific performance, including the defense that a remedy at law would be adequate, and (b) any requirement under any Law to post a bond or other security as a prerequisite to obtaining equitable relief. The election of the Company to pursue an injunction or specific performance shall not restrict, impair or otherwise limit the Company from subsequently seeking to terminate this Agreement.

10.13 Representation of the Company . Each of the parties to this Agreement hereby acknowledges and agrees, on its own behalf and on behalf of each of its Affiliates and its and their directors, members, partners, officers, employees and Affiliates (and in the case of Parent on behalf of the Parent Indemnitees), that (i) Arnold & Porter LLP represents and/or has represented the Securityholders and their Affiliates (including American Capital) and/or the Company in other matters, (ii) Arnold & Porter LLP may serve as counsel to any and all of the current or former Securityholders, the Securityholders’ Representative and their respective Affiliates (individually and collectively, the “ Seller Group ”), in connection with any matters related to this Agreement and the Transactions (or the transactions contemplated by the other Transaction Documents), including the negotiation, preparation, execution and delivery of this Agreement and consummation of the Transactions (or the transactions contemplated by the other Transaction Documents) and any litigation, claim or obligation arising out of or relating to this Agreement or the Transactions (or the transactions contemplated by the other Transaction Documents), and each of the parties hereto, to the fullest extent permitted by law, consents to the foregoing and irrevocably waives any conflict of interest arising therefrom, on behalf of such party and each of its Affiliates and its and their directors, members, partners, officers, employees and Affiliates (and in the case of Parent on behalf of the Parent Indemnitees). Parent, Securityholders and the Company (on behalf of itself and its Subsidiaries) also further agree that, as to all communications among Arnold & Porter LLP, the Company, its Subsidiaries, and the Seller Group that relate in any way to the Transactions (or the transactions contemplated by the other Transaction Documents), the attorney-client privilege and the expectation of client confidence belongs to the Company and may be controlled by American Capital and shall not pass to or be claimed by Parent, the Surviving Entity or any of its Subsidiaries. Notwithstanding the foregoing, in the event that a dispute arises between Parent, the Surviving Entity or a Subsidiary and a third party other than a party to this Agreement after the Closing, the Surviving Entity and the Subsidiaries may assert the attorney-client privilege to prevent disclosure of confidential communications by Arnold & Porter LLP to such third party; provided , however , that neither the Surviving Entity nor any Subsidiary may waive such privilege without the prior written consent of American Capital. The Company, Parent and the Surviving Entity further agree that Arnold & Porter LLP and its partners and employees are third party beneficiaries of this Section 10.13 .

10.14 Guarantee . Guarantor hereby unconditionally and absolutely guarantees the prompt performance and observation of Parent and Merger Sub for each and every obligation, covenant and agreement of Parent or Merger Sub to be performed prior to, at or in connection with the Closing, including the full and timely payment by Parent of its payment obligations under Section 2.3 or upon delivery of a Letter of Transmittal following the Closing pursuant to Section 2.4 (the “ Guaranteed Obligations ”). The obligations of Guarantor under this Section 10.14 are continuing and will remain in full force and effect until the Guaranteed Obligations have been performed or paid in full. This is a guarantee of payment, and not of collection, and the Guarantor acknowledges that this guarantee is full and unconditional, and no release or extinguishment of Parent’s obligations or liabilities (other than in accordance with the terms of this Agreement), whether by decree in any bankruptcy proceeding or otherwise, shall affect the continuing validity and enforceability of this guarantee, as well as any provision requiring or contemplating performance by the Guarantor. The Guarantor waives, for the benefit of the Company and the Securityholders’ Representative, (a) any right to require the Company or Securityholders’ Representative, as a condition of payment by the Guarantor, to proceed against

Parent or Merger Sub or pursue any other remedy whatsoever, and (b) to the fullest extent permitted by Law, any defenses or benefits that may be derived from or afforded by Law which limit the liability of or exonerate guarantors or sureties, except to the extent that any such defense is available to Parent. Guarantor hereby makes the representations and warranties set forth in Sections 4.1 and 4.4, substituting Guarantor for Parent and Merger Sub, and such representations are hereby incorporated herein, mutatis mutandis .

[remainder of page intentionally blank]

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

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


*PARENT:*	NORDSON MEDICAL CORPORATION

	By:
		Name:
		Title:

*MERGER SUB:*	ARRIBA MERGER CORP.

	By:
		Name:
		Title:

*GUARANTOR:*	NORDSON CORPORATION

	By:
		Name:
		Title:

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


*SECURITYHOLDERS*
*REPRESENTATIVE:*	AMERICAN CAPITAL EQUITY III, LP
	By:	American Capital Equity GP III, LP
	Its:	General Partner
	By:	American Capital Equity Management, LLC
	Its:	General Partner

	By:
		Name:
		Title:

Disclosure Schedule

See attached.

Schedule A

Pro Rata Share

[Note: Final version to be delivered to Parent not later than two days prior to the Closing, pursuant to the Merger Agreement]


SECURITYHOLDER	PERCENTAGE
American Capital Equity III, LP		81.827	%
Excalibur Holdings, Inc.		9.570	%
Michael Janish		4.107	%
John LeRosen		1.484	%
Paul Schmeling		0.870	%
Pramil Kumar		0.690	%
Dana Rodriguez		0.593	%
Delfin Rojas		0.252	%
Cesar Lucero		0.092	%
Ken Jonkman		0.092	%
Rick Shorey		0.092	%
Igor Fuks		0.084	%
Brooke Basinger		0.077	%
Chris Knowlton		0.046	%
Dwight Buckholtz		0.046	%
Dennis Gonzalez		0.038	%
Donald Adams		0.038	%

Schedule A

Schedule B

Net Working Capital Illustration

Avalon Laboratories - Net Working Capital Illustration

Example of Net Working Capital Calculation as of April 30, 2014

(Using information as presented in the monthly management reporting package as of April 30, 2014)

As of April 30, 2014


	Unadjusted Working Capital			Cash			Income Tax Receivable - Related Party			Accrued Income Tax Liability ²		Adjusted Working Capital
Cash	$	9,284,876		($	9,284,876	)						$	0
Accounts Receivable		3,674,528											3,674,528
Income Tax Receivable - Related Party		1,241,675						(1,241,675	)				0
Inventory		4,665,854											4,665,854
Prepaid Expenses and Other		435,496											435,496

Total Current Assets	$	19,302,429		($	9,284,876	)	($	1,241,675	)	$	0	$	8,775,878

Accounts Payable ¹	($	1,028,834	)									($	1,028,834	)
Accounts Payable - Related Party		0											0
Accrued Compensation		(757,601	)										(757,601	)

Accrued Income Tax Liability ²		(603,487	)								603,487		0
Other Accrued Liabilities		(142,852	)										(142,852	)

Total Current Liabilities	($	2,532,774	)	$	0		$	0		$	603,487	($	1,929,287	)

Net Working Capital	$	16,769,654		($	9,284,876	)	($	1,241,675	)	$	603,487	$	6,846,591

¹	Excludes any debt related payables or payments of any kind to shareholders.

²	Working capital adjustment not intended to include any tax related items.

Schedule B

Schedule C

List of Securityholders

•

American Capital Equity III, LP

•

Excalibur Holdings, Inc.

•

Michael Janish

•

John LeRosen

•

Paul Schmeling

•

Pramil Kumar

•

Dana Rodriguez

•

Delfin Rojas

•

Cesar Lucero

•

Ken Jonkman

•

Rick Shorey

•

Igor Fuks

•

Brooke Basinger

•

Chris Knowlton

•

Dwight Buckholtz

•

Dennis Gonzalez

•

Donald Adams

Schedule C

Exhibit A

CERTIFICATE OF MERGER

See attached.

Exhibit A

Exhibit B

CERTIFICATE OF INCORPORATION

See attached.

Exhibit B

Exhibit C

ESCROW AGREEMENT

See attached.

Exhibit C

Exhibit D

LETTER OF TRANSMITTAL

See attached.

Exhibit D

Exhibit E

WRITTEN CONSENT

See attached.

Exhibit E

Exhibit F

FORM OF NON-SOLICITATION AGREEMENT

See attached.

Exhibit F

Exhibit G

FORM OF SAR RECIPIENT RELEASE

See attached.

Exhibit G

Exhibit 10.3

$100,000,000 TERM LOAN FACILITY

CREDIT AGREEMENT

by and among

NORDSON CORPORATION

and

THE BANKS PARTY HERETO

and

PNC BANK, NATIONAL ASSOCIATION

as Administrative Agent

and

PNC CAPITAL MARKETS LLC

as Lead Arranger and Bookrunner

Dated as of August 6, 2014

to be effective on the Effective Date

TABLE OF CONTENTS


		PAGE

Article I. DEFINITIONS			1
Section 1.01	Definitions		1
Section 1.02	Accounting and Legal Principles, Terms and Determinations		18
Section 1.03	Terms Generally		18

Article II. AMOUNT AND TERMS OF CREDIT			19
Section 2.01	Amount and Nature of Credit		19
Section 2.02	Conditions To Loans and Conversion/Continuation of Loans		19
Section 2.03	Payments, Etc.		21
Section 2.04	Prepayment		22
Section 2.05	Fees. Borrower shall pay to Agent the fees set forth in the Agent Fee Letter		23
Section 2.06	Computation of Interest and Fees; Default Rate		23

Article III. INCREASED CAPITAL; TAXES, ETC.			23
Section 3.01	Increased Costs		23
Section 3.02	Tax Law, Etc.		24
Section 3.03	Eurodollar Deposits Unavailable or Interest Rate Unascertainable		27
Section 3.04	Indemnity		28
Section 3.05	Changes in Law Rendering Eurodollar Loans Unlawful		28
Section 3.06	Funding		28
Section 3.07	Capital Adequacy		28
Section 3.08	Application of Provisions		29
Section 3.09	Replacement of Banks		29

Article IV. CONDITIONS PRECEDENT			30
Section 4.01	Loan Documents		30
Section 4.02	Officer’s Certificate, Resolutions, Organizational Documents		30
Section 4.03	Legal Opinion		30
Section 4.04	Good Standing Certificate		30
Section 4.05	Agent Fee Letter; Legal Fees		30
Section 4.06	Closing Certificate		30
Section 4.07	No Material Adverse Change		31
Section 4.08	Regulatory Approvals		31
Section 4.09	Avalon Purchase Agreement		31
Section 4.10	Consummation of Acquisition		31
Section 4.11	Miscellaneous		31

Article V. COVENANTS			31
Section 5.01	Money Obligations		31
Section 5.02	Financial Statements		31


Section 5.03	Records	33
Section 5.04	Franchises	33
Section 5.05	ERISA Compliance	33
Section 5.06	Financial Covenants	33
Section 5.07	Indebtedness	33
Section 5.08	Liens	34
Section 5.09	Merger and Sale of Assets	35
Section 5.10	Acquisitions	36
Section 5.11	Affiliate Transactions	36
Section 5.12	Regulations U and X	36
Section 5.13	Notice	36
Section 5.14	Environmental Compliance	36
Section 5.15	Restricted Payments	37
Section 5.16	Use of Proceeds	37
Section 5.17	Restrictive Agreements	37
Section 5.18	Guaranties of Payment; Guaranty Under Material Indebtedness Agreement	37
Section 5.19	Pari Passu Ranking	38
Section 5.20	Terrorism Sanctions Regulations	38
Section 5.21	Most Favored Lender	38
Section 5.22	Absence of Swaps	39

Article VI. REPRESENTATIONS AND WARRANTIES		39
Section 6.01	Organization; Subsidiary Preferred Equity	39
Section 6.02	Power and Authority	39
Section 6.03	Compliance with Laws	40
Section 6.04	Litigation and Administrative Proceedings	40
Section 6.05	Title to Assets	40
Section 6.06	Liens and Security Interests	40
Section 6.07	Tax Returns	41
Section 6.08	Environmental Laws	41
Section 6.09	Employee Benefit Plans	41
Section 6.10	Consents or Approvals	42
Section 6.11	Solvency	42
Section 6.12	Financial Statements	42
Section 6.13	Regulations	42
Section 6.14	Investment Company; Holding Company	42
Section 6.15	Accurate and Complete Statements	43
Section 6.16	Defaults	43
Section 6.17	Anti-Terrorism Law Compliance	43
Section 6.18	Anti-Money Laundering/International Trade Law Compliance	43

Article VII. EVENTS OF DEFAULT		43
Section 7.01	Payments	43
Section 7.02	Special Covenants and Representations	43
Section 7.03	Other Covenants	44
Section 7.04	Representations and Warranties	44


Section 7.05	Cross Default	44
Section 7.06	ERISA Default	44
Section 7.07	Change Of Control	44
Section 7.08	Money Judgment	44
Section 7.09	Validity of Loan Documents	44
Section 7.10	Insolvency	45

Article VIII. REMEDIES UPON DEFAULT		45
Section 8.01	Optional Defaults	45
Section 8.02	Automatic Defaults	45
Section 8.03	Offsets	46
Section 8.04	Equalization Provision	46

Article IX. THE AGENT		46
Section 9.01	Appointment and Authorization	46
Section 9.02	Note Holders	46
Section 9.03	Consultation With Counsel	47
Section 9.04	Documents	47
Section 9.05	Agent and Affiliates	47
Section 9.06	Knowledge of Default	47
Section 9.07	Action By Agent	47
Section 9.08	Notices, Default, Etc.	47
Section 9.09	Indemnification of Agent	47
Section 9.10	Successor Agent	48
Section 9.11	No Reliance on Agent’s Customer Identification Program	48
Section 9.12	USA Patriot Act	48

Article X. MISCELLANEOUS		48
Section 10.01	Banks’ Independent Investigation	48
Section 10.02	No Waiver; Cumulative Remedies	49
Section 10.03	Amendments; Consents	49
Section 10.04	Notices	50
Section 10.05	Costs, Expenses and Taxes	50
Section 10.06	Indemnification	50
Section 10.07	Obligations Several; No Fiduciary Obligations	50
Section 10.08	Execution In Counterparts	51
Section 10.09	Binding Effect; Borrower’ Assignment	51
Section 10.10	Assignments	51
Section 10.11	Participations	53
Section 10.12	Severability Of Provisions; Captions; Attachments	54
Section 10.13	Investment Purpose	54
Section 10.14	Entire Agreement	54
Section 10.15	Governing Law; Submission to Jurisdiction	54
Section 10.16	Legal Representation of Parties	55
Section 10.17	JURY TRIAL WAIVER	55

LIST OF SCHEDULES AND EXHIBITS


Schedules:

Schedule 1	-	Banks and Commitments
Schedule 6.04	-	Litigation


Exhibits

EXHIBIT A	-	FORM OF NOTE
EXHIBIT B	-	NOTICE OF LOAN
EXHIBIT C	-	COMPLIANCE CERTIFICATE
EXHIBIT D	-	FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT

CREDIT AGREEMENT

This CREDIT AGREEMENT (as the same may from time to time be amended, restated or otherwise modified, this “Agreement”) is dated as of August [6], 2014 to be effective on the Effective Date (as defined below), among the following:

(i) NORDSON CORPORATION, an Ohio corporation (“Borrower”);

(ii) the financial institutions from time to time a party hereto (including any such institution that becomes a party hereto pursuant to Section 10.10 hereof, collectively, “Banks”, and individually each a “Bank”);

(iii) PNC BANK, NATIONAL ASSOCIATION, as Administrative Agent for the Banks under this Agreement (in such capacity as Administrative Agent, “Agent”); and

(iv) PNC CAPITAL MARKETS LLC, as Lead Arranger and Bookrunner.

WITNESSETH:

WHEREAS, Borrower and the Banks desire to contract for the establishment of a One Hundred Million Dollar ($100,000,000) term loan facility, to be made available to Borrower upon the terms and subject to the conditions hereinafter set forth;

NOW, THEREFORE, it is mutually agreed as follows:

ARTICLE I.

DEFINITIONS

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

“2011 NYLIM Note Purchase Agreement” shall mean the Note Purchase and Private Shelf Agreement, dated as of June 30, 2011, as amended, pursuant to which Borrower issued and sold Seventy-Five Million Dollars ($75,000,000) in aggregate principal amount of its Senior Notes and may issue and sell up to an additional One Hundred Five Million Dollars ($105,000,000) of its Senior Notes.

“2012 Senior Note Purchase Agreement” shall mean the Master Note Purchase Agreement, dated as of July 26, 2012, pursuant to which Borrower issued and sold Two Hundred Million Dollars ($200,000,000) of its Senior Notes.

“Acquisition” shall mean any transaction or series of related transactions for the purpose of or resulting, directly or indirectly, in (a) the acquisition of all or substantially all of the assets of any Person, or any business or division of any Person, (b) the acquisition of in excess of fifty percent (50%) of the stock (or other equity interest) of any Person, or (c) the acquisition of another Person (other than Borrower or a Subsidiary) by a merger or consolidation or any other combination with such Person.

“Advantage” shall mean any payment (whether made voluntarily or involuntarily, by offset of any deposit or other indebtedness or otherwise) received by any Bank in respect of the Debt, if such payment results in that Bank having less than its pro rata share of the Debt then outstanding, than was the case immediately before such payment.

“Affiliate” shall mean with respect to any specified Person, any other Person that, directly or indirectly, controls, is controlled by, or is under common control with such specified Person, and “control” (including the correlative meanings, the terms “controlling”, “controlled by” and “under common control with”) shall mean the possession, directly or indirectly of, the power to direct or cause the direction of the management and policies of such specified Person, whether through the ownership of voting securities, by contract or otherwise.

“Agent Fee Letter” shall mean the Agent Fee Letter, dated as of August 4, 2014, among Borrower, Agent and PNC Capital Markets LLC.

“Agreement” shall have the meaning provided in the first paragraph hereof.

“Amendment” shall have the meaning provided in Section 5.21.

“Anti-Terrorism Law” shall mean any laws relating to terrorism or money laundering, including Executive Order No. 13224, the USA Patriot Act, the laws comprising or implementing the Bank Secrecy Act, and the laws administered by the United States Treasury Department’s Office of Foreign Asset Control (as any of the foregoing laws may from time to time be amended, renewed, extended, or replaced).

“Applicable Margin” shall mean:

(a) for the period from the Closing Date until the first adjustment date pursuant to clause (b) hereafter, 75 basis points for Eurodollar Loans and 0 basis points for Base Rate Loans; and

(b) commencing with the financial statements for FQE July 31, 2014, the number of basis points set forth in the applicable matrix below, based upon the result of the computation of the Leverage Ratio, shall be used to establish the number of basis points that will go into effect on October 1, 2014 and thereafter:


Leverage Ratio	Eurodollar Margin	Base Rate Margin
Greater than 3.25 to 1.00	150 basis points	50 basis points
Greater than 2.75 to 1.00, but less than or equal to 3.25 to 1.00	125 basis points	25 basis points
Greater than 2.00 to 1.00, but less than or equal to 2.75 to 1.00	100 basis points	0 basis points
Greater than 1.25 to 1.00, but less than or equal to 2.00 to 1.00	75 basis points	0 basis points
Greater than 0.50 to 1.00, but less than or equal to 1.25 to 1.00	62.5 basis points	0 basis points
Less than or equal to .50 to 1.00	50 basis points	0 basis points

Changes to the Applicable Margin shall be effective on the first day of the month following the date upon which Agent received, or, if earlier, Agent should have received, pursuant to Section 5.02(a) and (b) hereof, the financial statements of the Companies. The above matrix does not modify or waive, in any respect, the requirements of Section 5.06 hereof, the rights of Agent and the Banks to charge the Default Rate, or the rights and remedies of Agent and the Banks pursuant to Article VII and Article VIII hereof.

“Assignment Agreement” shall mean an Assignment and Assumption Agreement in the form of the attached Exhibit D .

“Authorized Officer” shall mean (i) in the case of Borrower, its chief executive officer, its chief financial officer, its treasurer, or any vice president of Borrower designated as an “Authorized Officer” of Borrower for the purpose of this Agreement in an Officer’s Certificate executed by Borrower’s chief executive officer or chief financial officer and delivered to the Agent and (ii) in the case of the Agent or any Bank, any vice president, senior vice president or person holding an equivalent or greater title of the Agent or any Bank. Any action taken under this Agreement on behalf of Borrower by any individual who on or after the date of this Agreement shall have been an Authorized Officer of Borrower and whom Agent or any Bank in good faith believes to be an Authorized Officer of Borrower at the time of such action shall be binding on Borrower even though such individual shall have ceased to be an Authorized Officer of Borrower, and any action taken under this Agreement on behalf of the Agent or any Bank by any individual who on or after the date of this Agreement shall have been an Authorized Officer of the Agent or such Bank and whom Borrower in good faith believes to be an Authorized Officer of the Agent or such Bank at the time of such action shall be binding on the Agent or such Bank even though such individual shall have ceased to be an Authorized Officer of the Agent or such Bank.

“Avalon” shall mean Avalon Laboratories Holding Corp., a Delaware corporation.

“Avalon Acquisition” shall mean the acquisition by the Borrower of all or substantially all of the ownership interests of Avalon in accordance with the terms of the Avalon Purchase Agreement.

“Avalon Purchase Agreement” shall mean the Agreement and Plan of Merger dated as of August 1, 2014, by and among Avalon Laboratories Holding Corp., Nordson Medical Corporation, Arriba Merger Corp., American Capital Equity III, LP and Nordson Corporation pursuant to which the Borrower will acquire Avalon pursuant to a merger effected between Avalon and Arriba Merger Corp.

“Bank” and “Banks” has the meaning set forth in the first paragraph of this Agreement.

“Base Rate” shall mean, for any day, a fluctuating per annum rate of interest equal to the highest of (a) the Federal Funds Open Rate, plus 0.5%, and (b) the Prime Rate, and (c) the Daily LIBOR Rate, plus 100 basis points (1.0%). Any change in the Base Rate (or any component thereof) shall take effect at the opening of business on the day such change occurs.

“Base Rate Loan” shall mean a Loan described in Section 2.01 hereof on which Borrower shall pay interest at a rate per annum equal to the sum of the Applicable Margin (from time to time in effect) plus the Base Rate.

“Borrower” shall have the meaning set forth in the first paragraph of this Agreement.

“Business Day” shall mean a day of the year on which banks are not required or authorized to close in Cleveland, Ohio, and, if the applicable Business Day relates to any Eurodollar Loan, on which dealings are carried on in the London interbank eurodollar market.

“Capital Distribution” shall mean a payment made, liability incurred or other consideration given for the purchase, acquisition, redemption or retirement of any capital stock or other equity interest of Borrower or any Subsidiary or as a dividend, return of capital or other distribution (other than any stock dividend, stock split or other equity distribution payable only in capital stock or other equity of Borrower or any Subsidiary of Borrower in respect of Borrower’s or any Subsidiary’s capital stock or other equity interest, including, but not limited to, any Share Repurchase.

“Cash Equivalent” shall mean any debt instrument that would be deemed a cash equivalent in accordance with GAAP.

“CEA” shall mean the Commodity Exchange Act (7 U.S.C.§1 et seq.), as amended from time to time, and any successor statute.

“CFTC” shall mean the Commodity Futures Trading Commission.

“Change in Law” shall mean the occurrence, after the date of this Agreement, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.

“Change of Control” shall mean (a) the acquisition of, or, if earlier, the shareholder or director approval of the acquisition of, ownership or voting control, directly or indirectly, beneficially or of record, on or after the Closing Date, by any Person or group (within the meaning of Rule 13d-3 of the Exchange Act) other than the Current Management Team, of

shares representing more than fifty percent (50%) of the aggregate ordinary Voting Power represented by the issued and outstanding capital stock of Borrower; (b) the occupation of a majority of the seats (other than vacant seats) on the board of directors of Borrower by persons who were neither (i) nominated by the board of directors of Borrower nor (ii) appointed by directors so nominated; or (c) the occurrence of a change of control, or other similar provision, as defined in any Material Indebtedness Agreement.

“CIP Regulations” shall have the meaning provided in Section 9.11 hereof.

“Closing Date” shall mean August [6], 2014.

“Code” shall mean the Internal Revenue Code of 1986, as amended, together with the rules and regulations promulgated thereunder.

“Commitment” shall mean the obligation hereunder, of each Bank to participate in the making of Loans on the Effective Date up to the aggregate amount set forth opposite such Bank’s name under the column headed “Commitment Amount” as set forth on Schedule 1 hereto.

“Commitment Percentage” shall mean, at any time for any Bank, a percentage obtained by dividing such Bank’s Commitment by the Total Commitment Amount. The Commitment Percentage for each Bank as of the Closing Date is set forth opposite such Bank’s name under the column headed “Commitment Percentage” as described in Schedule 1 hereto.

“Company” shall mean Borrower or a Subsidiary.

“Companies” shall mean Borrower and all its Subsidiaries.

“Compliance Authority” shall mean each and all of the (a) U.S. Treasury Department/Office of Foreign Assets Control, (b) U.S. Treasury Department/Financial Crimes Enforcement Network, (c) U.S. State Department/Directorate of Defense Trade Controls, (d) U.S. Commerce Department/Bureau of Industry and Security, (e) U.S. Internal Revenue Service, (f) U.S. Justice Department, and (g) SEC.

“Compliance Certificate” shall mean a certificate, substantially in the form of the attached Exhibit C .

“Connection Income Taxes” shall mean Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.

“Consolidated” shall mean the resultant consolidation of the financial statements of Borrower and its Subsidiaries in accordance with GAAP, including principles of consolidation consistent with those applied in preparation of the consolidated financial statements referred to in Section 5.02(a) and (b) hereof.

“Consolidated Depreciation and Amortization Charges” shall mean, for any period, the aggregate of all depreciation and amortization charges for fixed assets, leasehold improvements and general intangibles (specifically including goodwill) as well as impairments thereof and any

losses traced to the write-off of goodwill, fixed assets, leasehold improvements and general intangibles associated with the disposal or exiting of a business of Borrower or any of its Subsidiaries for such period, all as determined on a Consolidated basis and in accordance with GAAP.

“Consolidated EBIT” shall mean, for any period, on a Consolidated basis and in accordance with GAAP, Consolidated Net Earnings for such period plus the aggregate amounts deducted in determining such Consolidated Net Earnings in respect of (a) income taxes, (b) Consolidated Interest Expense, and (c) any non-cash charges.

“Consolidated EBITDA” shall mean, for any period, Consolidated EBIT plus Consolidated Depreciation and Amortization Charges.

“Consolidated Interest Expense” shall mean, for any period, the interest expense of Borrower for such period, as determined on a Consolidated basis and in accordance with GAAP, and shall include that portion of the expenses of a Permitted Receivables Facility that would be the equivalent to interest expense if Borrower obtained funding in a manner that would give rise to interest expense, in an amount approximately equal to the amount of the Permitted Receivables Facility.

“Consolidated Net Earnings” shall mean, for any period, the net income (loss) of Borrower for such period, as determined on a Consolidated basis and in accordance with GAAP.

“Consolidated Total Assets” shall mean the book value of all assets of Borrower and its Subsidiaries, as determined on a Consolidated basis and in accordance with GAAP, based upon the financial statements of Borrower for the most recently completed fiscal quarter.

“Consolidated Trailing EBITDA” shall mean the sum of (a) Consolidated EBITDA, plus (b)(i) without duplication, the EBITDA of Subsidiaries acquired by Borrower and its Subsidiaries during the most recently completed four (4) fiscal quarters to the extent that such EBITDA of Subsidiaries acquired is confirmed by audited financial or other information (which other information need not be audited or auditable) satisfactory to the Agent minus (ii) the EBITDA of Subsidiaries disposed of by Borrower and its Subsidiaries during the most recently completed four (4) fiscal quarters.

“Consolidated Trailing Interest Expense” shall mean the sum of (a) Consolidated Interest Expense, plus (b)(i) without duplication, the interest expense of Subsidiaries acquired by Borrower and its Subsidiaries during the most recently completed four (4) fiscal quarters to the extent that such interest expense of such Subsidiaries acquired is confirmed by audited financial or other information (which other information need not be audited or auditable) satisfactory to the Agent, minus (ii) the interest expense of Subsidiaries disposed of by Borrower and its Subsidiaries during the most recently completed four (4) fiscal quarters.

“Consolidated Trailing Net Earnings” shall mean the sum of (a) Consolidated Net Earnings, plus (b)(i) without duplication, the Net Earnings of Subsidiaries acquired by Borrower and its Subsidiaries during the most recently completed four (4) fiscal quarters to the extent that such Net Earnings of such Subsidiaries acquired is confirmed by audited financial or other information (which other information need not be audited or auditable) satisfactory to the Agent, minus (ii) the Net Earnings of Subsidiaries disposed of by Borrower and its Subsidiaries during the most recently completed four (4) fiscal quarters.

“Controlled Group” shall mean Borrower and each Person required to be aggregated with Borrower under Code Sections 414(b), (c), (m) or (o).

“Covered Entity” shall mean Borrower, its Affiliates and Subsidiaries, all Guarantors, any pledgors of collateral, all owners of the foregoing, and all brokers or other agents of Borrower acting in any capacity in connection with the Loans.

“Credit Related Fee” shall have the meaning provided in Section 5.21.

“Current Management Team” shall mean any group comprised of the chief executive officer, the chief operating officer, the chief financial officer and other senior management of Borrower (or any combination thereof) as in place on the Closing Date, and their respective spouses and children (and/or trusts of which the only beneficiaries are such members of senior management and their respective spouses and children) or any “group” (within the meaning of Rule 13d under the Exchange Act) that includes at least three (3) of such members of senior management, together with their “affiliates” and “associates” (within the meaning of Rule 12b-2 under the Exchange Act).

“Daily LIBOR Rate” shall mean, for any day, the rate per annum determined by the Agent by dividing (x) the Published Rate by (y) a number equal to 1.00 minus the LIBOR Reserve Percentage on such day.

“Debt” shall mean, collectively, all Indebtedness incurred by Borrower to Agent and the Banks pursuant to this Agreement and includes the principal amount of and interest (including any interest accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allocable in such proceeding) on all Loans and each extension, renewal or refinancing thereof in whole or in part, the facility fees, other fees and any prepayment fees and other amounts payable hereunder.

“Default” shall mean any of the events specified in Article VII, whether or not any requirement for such event to become an Event of Default has been satisfied.

“Default Rate” shall mean, with respect to any Loan, a rate per annum equal to two percent (2%) in excess of the rate otherwise applicable thereto, and, with respect to any other amount, if no rate is specified or available, then two percent (2%) in excess of the Base Rate.

“Defaulting Bank” shall mean any Bank that (a) has failed, within two Business Days of the date required to be funded or paid, to pay over to the Agent or any Bank any other amount required to be paid by it hereunder , (b) has become the subject of a Bankruptcy Event or (c) has failed at any time to comply with the provisions of Section 8.04.

As used in this definition, the term “Bankruptcy Event” means, with respect to any Person, such Person or such Person’s direct or indirect parent company becoming the subject of a bankruptcy or insolvency proceeding, or having had a receiver, conservator, trustee, administrator, custodian, assignee for the benefit of creditors or similar Person charged with the

reorganization or liquidation of its business appointed for it, or, in the good faith determination of the Agent, has taken any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any such proceeding or appointment, provided that a Bankruptcy Event shall not result solely by virtue of any ownership interest, or the acquisition of any ownership interest, in such Person or such Person’s direct or indirect parent company by a Governmental Authority or instrumentality thereof if, and only if, such ownership interest does not result in or provide such Person with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Person (or such Governmental Authority or instrumentality) to reject, repudiate, disavow or disaffirm any contracts or agreements made by such Person.

“Depreciation and Amortization Charges” shall mean, with respect to any Person for any period, in accordance with GAAP, the aggregate of all such charges for fixed assets, leasehold improvements and general intangibles (specifically including goodwill) of such Person as well as impairments thereof and any losses traced to the write-off of goodwill, fixed assets, leasehold improvements and general intangibles associated with the disposal or exiting of a business by such Person for such period.

“Derived Eurodollar Rate” shall mean with respect to a Eurodollar Loan, a rate per annum equal to the sum of the Applicable Margin (from time to time in effect) plus the LIBOR Rate.

“Dollar” and the sign “$” shall mean lawful money of the United States of America.

“Dollar Equivalent” shall mean, with respect to any amount of any currency, as of any date of computation, the equivalent amount of such currency expressed in Dollars.

“EBITDA” shall mean for any period, all Net Earnings in accordance with GAAP for such period, plus the aggregate amounts deducted in determining such Net Earnings in respect of (a) income taxes, (b) interest expense, and (c) Depreciation and Amortization Charges, in accordance with GAAP.

“Effective Date” shall mean the date after the Closing Date upon which all of the conditions set forth in Article IV of this Agreement have been met; provided, however that such date shall be a Business Day and if such date does not occur on or before September 8, 2014 this Agreement shall be deemed terminated and the Banks shall have no obligation to make any Loans hereunder.

“Eligible Assignee” shall have the meaning given to such term in Section 10.10(a).

“Environmental Laws” shall mean all provisions of law, statutes, ordinances, rules, regulations, permits, licenses, judgments, writs, injunctions, decrees, orders, awards and standards promulgated by the government of the United States of America or any other applicable country or sovereignty or by any state or municipality thereof or by any court, agency, instrumentality, regulatory authority or commission of any of the foregoing concerning health, safety and protection of, or regulation of the discharge of substances into, the environment.

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated pursuant thereto.

“ERISA Affiliate” shall mean any corporation which is a member of the same controlled group of corporations as Borrower within the meaning of section 414(b) of the Code, or any trade or business which is under common control with Borrower within the meaning of section 414(c) of the Code.

“ERISA Event” shall mean (a) the existence of a condition or event with respect to an ERISA Plan that presents a risk of the imposition of an excise tax or any other liability on Borrower or of the imposition of a Lien on the assets of Borrower or its Subsidiaries; (b) the engagement by a Controlled Group member in a non-exempt “prohibited transaction” (as defined under ERISA Section 406 or Code Section 4975) or a breach of a fiduciary duty under ERISA that could result in liability to Borrower; (c) the application by a Controlled Group member for a waiver from the minimum funding requirements of Code Section 412 or ERISA Section 302 or a Controlled Group member is required to provide security under Code Section 401(a)(29) or ERISA Section 307; (d) the occurrence of a Reportable Event with respect to any Pension Plan as to which notice is required to be provided to the PBGC; (e) the withdrawal by a Controlled Group member from a Multiemployer Plan in a “complete withdrawal” or a “partial withdrawal” (as such terms are defined in ERISA Sections 4203 and 4205, respectively); (f) the involvement of, or occurrence or existence of any event or condition that makes likely the involvement of, a Multiemployer Plan in any reorganization under ERISA Section 4241; (g) the failure of an ERISA Plan (and any related trust) that is intended to be qualified under Code Sections 401 and 501 to be so qualified or the failure of any “cash or deferred arrangement” under any such ERISA Plan to meet the requirements of Code Section 401(k); (h) the taking by the PBGC of any steps to terminate a Pension Plan or appoint a trustee to administer a Pension Plan, or the taking by a Controlled Group member of any steps to terminate a Pension Plan; (i) the failure by a Controlled Group member or an ERISA Plan to satisfy any requirements of law applicable to an ERISA Plan; (j) the commencement, existence or threatening of a claim, action, suit, audit or investigation with respect to an ERISA Plan, other than a routine claim for benefits; or (k) any incurrence by or any expectation of the incurrence by a Controlled Group member of any liability for post-retirement benefits under any Welfare Plan, other than as required by ERISA Section 601, et. seq. or Code Section 4980B, that, as to (a) through (k) above, would reasonably be likely to have or result in a Material Adverse Effect.

“ERISA Plan” shall mean an “employee benefit plan” (within the meaning of ERISA Section 3(3)) that a Controlled Group member at any time sponsors, maintains, contributes to, has liability with respect to or has an obligation to contribute to such plan.

“Eurodollar Loan” shall mean a Loan described in Section 2.01 hereof on which Borrower shall pay interest at a rate based upon the LIBOR Rate.

“Event of Default” shall mean any of the events specified in Article VII, provided that there has been satisfied any requirement in connection with such event for the giving of notice, or the lapse of time, or the happening of any further condition, event or act.

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

“Excluded Taxes” shall mean any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of any Bank, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Bank, U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Bank with respect to an applicable interest in a Loan or Commitment pursuant to a law in effect on the date on which (i) such Bank acquires such interest in the Loan or Commitment (other than pursuant to an assignment request by Borrower under Section 3.09) or (ii) such Bank changes its lending office, except in each case to the extent that, pursuant to Section 3.02 amounts with respect to such Taxes were payable either to such Bank’s assignor immediately before such Bank became a party hereto or to such Bank immediately before it changed its lending office, (c) Taxes attributable to such Recipient’s failure to comply with Section 3.02(f) and (d) any U.S. federal withholding Taxes imposed under FATCA.

“Existing Syndicated Credit Agreement” shall mean that certain Credit Agreement dated as of December 9, 2011 by and among Borrower and the financial institutions party thereto as the same may be amended, modified, restated, supplemented, replaced or refinanced from time to time.

“Exposure” shall mean, at any time, the sum of the aggregate principal Dollar amount of all Loans outstanding.

“FATCA” shall mean Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with) and any current or future regulations or official interpretations thereof.

“Federal Funds Effective Rate” for any day shall mean the rate per annum (based on a year of 360 days and actual days elapsed and rounded upward to the nearest 1/100 of 1%) announced by the Federal Reserve Bank of New York (or any successor) on such day as being the weighted average of the rates on overnight federal funds transactions arranged by federal funds brokers on the previous trading day, as computed and announced by such Federal Reserve Bank (or any successor) in substantially the same manner as such Federal Reserve Bank computes and announces the weighted average it refers to as the “Federal Funds Effective Rate” as of the date of this Agreement; provided , if such Federal Reserve Bank (or its successor) does not announce such rate on any day, the “Federal Funds Effective Rate” for such day shall be the Federal Funds Effective Rate for the last day on which such rate was announced.

“Federal Funds Open Rate” for any day shall mean the rate per annum (based on a year of 360 days and actual days elapsed) which is the daily federal funds open rate as quoted by ICAP North America, Inc. (or any successor) as set forth on the Bloomberg Screen BTMM for that day opposite the caption “OPEN” (or on such other substitute Bloomberg Screen that displays such rate), or as set forth on such other recognized electronic source used for the purpose of displaying such rate as selected by the Agent (for purposes of this definition, an “Alternate

Source”) (or if such rate for such day does not appear on the Bloomberg Screen BTMM (or any substitute screen) or on any Alternate Source, or if there shall at any time, for any reason, no longer exist a Bloomberg Screen BTMM (or any substitute screen) or any Alternate Source, a comparable replacement rate determined by the Agent at such time (which determination shall be conclusive absent manifest error); provided however, that if such day is not a Business Day, the Federal Funds Open Rate for such day shall be the “open” rate on the immediately preceding Business Day. If and when the Federal Funds Open Rate changes, the rate of interest applicable to Base Rate Loans will change automatically without notice to the Borrower, effective on the date of any such change.

“Financial Officer” shall mean any of the following officers: chief executive officer, president, vice president-finance, chief financial officer, controller or treasurer. Unless otherwise qualified, all references to a Financial Officer in this Agreement shall refer to a Financial Officer of Borrower.

“Foreign Bank” shall mean a Bank that is not a U.S. Person.

“FQE July 31” shall mean, for any fiscal year of Borrower, Borrower’s fiscal quarter of such year ending on or about July 31.

“GAAP” shall have the meaning given to such term in Section 1.02.

“Governmental Authority” shall mean the government of the United States of America or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).

“Guarantor” shall mean a Person that pledges its credit or property in any manner for the payment or other performance of the indebtedness, contract or other obligation of another and includes (without limitation) any guarantor (whether of payment or of collection), surety, co-maker or co-borrower, endorser or Person that agrees conditionally or otherwise to make any purchase, loan or investment in order thereby to enable another to prevent or correct a default of any kind.

“Guarantor of Payment” shall mean any Subsidiary that executes and delivers a guaranty of payment after the Closing Date in accordance with the provisions of Section 5.18.

“including” shall mean, unless the context clearly requires otherwise, “including without limitation”, whether or not so stated.

“Indebtedness” shall mean, for Borrower or any Subsidiary (excluding in all cases trade payables payable in the ordinary course of business by Borrower or such Subsidiary), without duplication, (a) all obligations to repay borrowed money, direct or indirect, incurred, assumed, or guaranteed, (b) all obligations for the deferred purchase price of capital assets, in each case, incurred outside of the ordinary course of business, (c) all obligations under conditional sales or other title retention agreements (other than a true consignment), in each case, incurred outside of

the ordinary course of business, (d) all obligations (contingent or otherwise) under any letter of credit, bank guarantee or banker’s acceptance (other than commercial, trade or other letters of credit and/or bank guarantees entered into in connection with customer or supplier relationships in the ordinary course business), (e) all synthetic leases, (f), all obligations of Borrower or such Subsidiary with respect to the repurchase of assets under asset securitization financing programs, including but not limited to, the Permitted Receivables Facility, and (g) all material obligations arising outside the ordinary course of business to advance funds to, or to purchase assets, property or services from, any other Person in order to maintain the financial condition of such Person.

“Indemnified Taxes” shall mean (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of any Loan Party under any Loan Document and (b) to the extent not otherwise described in (a), Other Taxes.

“Interest Adjustment Date” shall mean the last day of each Interest Period.

“Interest Coverage Ratio” shall mean, for the most recently completed four (4) fiscal quarters of Borrower, on a Consolidated basis and in accordance with GAAP, the ratio of (a) Consolidated Trailing EBITDA to (b) Consolidated Trailing Interest Expense, as determined as of the conclusion of most recently completed fiscal quarter in accordance with Borrower’s customary financial reporting practices.

“Interest Period” shall mean, with respect to a Eurodollar Loan, a period of one (1) week or one (1), two (2), three (3) or six (6) months, as selected by Borrower in accordance with Section 2.02 hereof, commencing on the applicable date of borrowing or conversion of such Eurodollar Loan and on each Interest Adjustment Date with respect thereto; provided, however, that if any such period would be affected by a prepayment or conversion rights or obligations as provided in Section 2.01 or Section 3.05 hereof, or maturity of Eurodollar Loans as provided in Section 2.01 hereof, Borrower shall not select a period that extends beyond the date of such prepayment, conversion or maturity; if Borrower fails to select a new Interest Period with respect to an outstanding Eurodollar Loan at least three (3) Business Days prior to the Interest Adjustment Date applicable to such Eurodollar Loan, Borrower shall be deemed to have converted such Eurodollar Loan to a Base Rate Loan at the end of the then current Interest Period.

“Leverage Ratio” shall mean, at any time, for the most recently completed four (4) fiscal quarters of Borrower, on a Consolidated basis and in accordance with GAAP, the ratio of (a)(i) Total Indebtedness minus (ii) the aggregate amount of cash, Cash Equivalents and other marketable securities of Borrower and its Subsidiaries that are not subject to a Lien (other than a Lien in favor of the Agent for the benefit of the Banks) as set forth on the financial statements of Borrower and its Subsidiaries for the most recently completed fiscal quarter to (b) Consolidated Trailing EBITDA, all as determined as of the conclusion of most recently completed fiscal quarter in accordance with Borrower’s customary financial reporting practices.

“LIBOR Rate” shall mean, with respect to a Eurodollar Loan for any Interest Period, the interest rate per annum determined by the Administrative Agent by dividing (the resulting quotient rounded upwards, if necessary, to the nearest 1/100th of 1% per annum) (i) the rate

which appears on the Bloomberg Page BBAM1 (or on such other substitute Bloomberg page that displays rates at which US dollar deposits are offered by leading banks in the London interbank deposit market), or the rate which is quoted by another source selected by the Administrative Agent as an authorized information vendor for the purpose of displaying rates at which US dollar deposits are offered by leading banks in the London interbank deposit market (for purposes of this definition, an “ Alternate Source ”), at approximately 11:00 a.m., London time, two (2) Business Days prior to the commencement of such Interest Period as the London interbank offered rate for U.S. Dollars for an amount comparable to such Eurodollar Loan and having a borrowing date and a maturity comparable to such Interest Period (or if there shall at any time, for any reason, no longer exist a Bloomberg Page BBAM1 (or any substitute page) or any Alternate Source, a comparable replacement rate determined by the Administrative Agent at such time (which determination shall be conclusive absent manifest error)), by (ii) a number equal to 1.00 minus the LIBOR Reserve Percentage.

The LIBOR Rate shall be adjusted with respect to any Eurodollar Loan that is outstanding on the effective date of any change in the LIBOR Reserve Percentage as of such effective date. The Agent shall give prompt notice to the Borrower of the LIBOR Rate as determined or adjusted in accordance herewith, which determination shall be conclusive absent manifest error.

“LIBOR Reserve Percentage” shall mean as of any day the maximum percentage in effect on such day, as prescribed by the Board of Governors of the Federal Reserve System (or any successor) for determining the net reserve requirements (including supplemental, marginal and emergency reserve requirements) with respect to eurocurrency funding (currently referred to as “Eurocurrency Liabilities”).

“Lien” shall mean any mortgage, security interest, lien (statutory or other), charge, encumbrance on, pledge or deposit of, or conditional sale, leasing, sale with a right of redemption or other title retention agreement and any capitalized lease with respect to any (real or personal) or asset.

“Loan” shall mean a loan made by the Banks to Borrower pursuant to Section 2.01 hereof.

“Loan Documents” shall mean, collectively, this Agreement, each Note, each guaranty agreement delivered pursuant to Section 5.18 (if any), the Agent Fee Letter and any other documents relating to any of the foregoing, as any of the foregoing may from time to time be amended, restated or otherwise modified or replaced.

“Loan Party” shall mean Borrower and each Guarantor.

“Material Adverse Effect” shall mean a material adverse effect on (a) the business, operations, property or condition (financial or otherwise) of Borrower and its Subsidiaries taken as a whole, or (b) the validity or enforceability of this Agreement or any of the other Loan Documents or the rights and remedies of the Agent of the Banks hereunder or thereunder.

“Material Indebtedness Agreement” shall mean any debt instrument, lease (capital, operating or otherwise), guaranty, contract, commitment, agreement or other arrangement

evidencing any Indebtedness of Borrower or any Subsidiary in an amount equal to or greater than the greater of (i) Fifty Million Dollars ($50,000,000) and (ii) an amount equal to five percent (5%) of Consolidated Total Assets.

“Maturity Date” shall mean the date that is 364 days after the Effective Date.

“MFL Provision” shall have the meaning provided in Section 5.21.

“Multiemployer Plan” shall mean a Pension Plan that is subject to the requirements of Subtitle E of Title IV of ERISA.

“Net Earnings” shall mean, for any period, the net income (loss) for such period, determined in accordance with GAAP.

“Non-Consenting Bank” shall mean any Bank that does not approve any consent, waiver or amendment that (i) requires the approval of all affected Banks in accordance with the terms of Section 10.03 and (ii) has been approved by the Required Banks.

“Nordson Holdings S.a.r.l.- BTMU Credit Agreement” shall mean that certain Credit Agreement dated as of August 23, 2013, by and among Nordson Holdings S.a.r.l. & Co. KG, as borrower, Nordson Corporation, as parent guarantor, the banks party thereto, and The Bank of Tokyo-Mitsubishi UFJ, LTD., as administrative agent.

“Note” shall mean any note delivered pursuant to Section 2.01 of this Agreement.

“Note Purchase Agreements” shall mean, collectively, the 2011 NYLIM Note Purchase Agreement and the 2012 Senior Note Purchase Agreement.

“Notice of Loan” shall mean a Notice of Loan in the form of the attached Exhibit B .

“Obligor” shall mean (a) a Person whose credit or any of whose property is pledged to the payment of the Debt and includes, without limitation, any Guarantor, and (b) any signatory to a Related Writing.

“Organizational Documents” shall mean, with respect to any Person (other than an individual), such Person’s Articles (Certificate) of Incorporation, or equivalent formation documents, and Regulations (Bylaws), or equivalent governing documents, and any amendments to any of the foregoing.

“Other Connection Taxes” shall mean, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document).

“Other Taxes” shall mean all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution,

delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 3.09).

“Participant” shall have the meaning provided to such term in Section 10.11(a).

“Participant Register” shall have the meaning specified in Section 10.11(c).

“PBGC” shall mean the Pension Benefit Guaranty Corporation, or any successor or replacement entity thereto under ERISA.

“Pension Plan” shall mean an ERISA Plan that is a “pension plan” (within the meaning of ERISA Section 3(2)).

“Permitted Receivables Facility” shall mean an accounts receivable facility whereby Borrower or its Subsidiaries sell or transfer the accounts receivables of Borrower or its Subsidiaries to the Receivables Subsidiary which in turn transfers to a buyer, purchaser or lender undivided fractional interests in such accounts receivable, so long as (a) no portion of the Indebtedness or any other obligation (contingent or otherwise) under such Permitted Receivables Facility is guaranteed by Borrower or any Subsidiary, (b) there is no recourse or obligation to Borrower or any Subsidiary (other than the Receivables Subsidiary) whatsoever other than pursuant to customary representations, warranties, covenants and indemnities entered into in the ordinary course of business in connection with such Permitted Receivables Subsidiary, and (c) neither Borrower nor any Subsidiary (other than the Receivables Subsidiary) provides, either directly or indirectly, any other credit support of any kind (excluding credit insurance or similar third party credit support obtained in the ordinary course of business) in connection with such Permitted Receivables Facility other than as set forth in subpart (b) of this definition.

“Person” shall mean any individual, sole proprietorship, partnership, joint venture, unincorporated organization, corporation, limited liability company, institution, trust, estate, government or other agency or political subdivision thereof or any other entity.

“Plan” shall mean any employee pension benefit plan (as such term is defined in section 3 of ERISA) which is or has been established or maintained, or to which contributions are or have been made, by Borrower or any ERISA Affiliate.

“Prime Rate” shall mean the interest rate established from time to time by Agent as Agent’s prime rate, whether or not such rate is publicly announced; the Prime Rate may not be the lowest interest rate charged by Agent for commercial or other extensions of credit. Each change in the Prime Rate shall be effective immediately from and after such change.

“Priority Indebtedness” shall mean, without duplication, the sum of (a) all Indebtedness of Subsidiaries permitted by Section 5.07(i) and (b) all Indebtedness of Borrower secured by any Liens permitted by Section 5.08(g).

“Published Rate” shall mean the rate of interest published each Business Day in The Wall Street Journal “ Money Rates ” listing under the caption “London Interbank Offered Rates” for a

one month period (or, if no such rate is published therein for any reason, then the Published Rate shall be the rate at which U.S. dollar deposits are offered by leading banks in the London interbank deposit market for a one month period as published in another publication selected by the Agent).

“Receivables Related Assets” shall mean accounts receivable, instruments, chattel paper, obligations, general intangibles and other similar assets, in each case relating to receivables subject to the Permitted Receivables Facility, including interests in merchandise or goods, the sale or lease of which gave rise to such receivables, related contractual rights, guaranties, insurance proceeds, collections and proceeds of all of the foregoing.

“Receivables Subsidiary” shall mean a Wholly-Owned Subsidiary of Borrower that is established as a “bankruptcy remote” Subsidiary for the sole purpose of acquiring and selling accounts receivable under the Permitted Receivables Facility and that shall not engage in any activities other than in connection with the Permitted Receivables Facility.

“Recipient” shall mean (a) the Agent and (b) any Bank, as applicable.

“Related Writing” shall mean each Loan Document and any other assignment, mortgage, security agreement, guaranty agreement, subordination agreement, financial statement, audit report or other writing furnished by Borrower, any Subsidiary or any Obligor, or any of their respective officers, to the Banks pursuant to or otherwise in connection with this Agreement.

“Reportable Compliance Event” shall mean that any Covered Entity becomes a Sanctioned Person, or is indicted, arraigned, investigated or custodially detained, or receives an inquiry from regulatory or law enforcement officials, in connection with any Anti-Terrorism Law or any predicate crime to any Anti-Terrorism Law, or self-discovers facts or circumstances implicating any aspect of its operations with the actual or possible violation of any Anti-Terrorism Law.

“Reportable Event” shall mean a reportable event as that term is defined in Title IV of ERISA, except actions of general applicability by the Secretary of Labor under Section 110 of such Act.

“Required Banks(s)” shall mean the holders of greater than fifty percent (50%) of the aggregate principal amount of those outstanding Loans. The Exposure of any Defaulting Bank shall be disregarded in determining Required Banks at any time.

“Restricted Payment” shall mean, with respect to Borrower or any Subsidiary, (a) any Capital Distribution, or (b) any amount paid by Borrower in repayment, redemption, retirement, repurchase, direct or indirect, of any Subordinated Indebtedness.

“Sanctioned Country” shall mean a country subject to a sanctions program maintained by any Compliance Authority.

“Sanctioned Person” shall mean any individual person, group, regime, entity or thing listed or otherwise recognized as a specially designated, prohibited, sanctioned or debarred person or entity, or subject to any limitations or prohibitions (including but not limited to the

blocking of property or rejection of transactions), under any order or directive of any Compliance Authority or otherwise subject to, or specially designated under, any sanctions program maintained by any Compliance Authority.

“SEC” shall mean the United States Securities Exchange Commission.

“Share Repurchase” shall mean the purchase, repurchase, redemption or other acquisition by Borrower from any Person of any capital stock or other equity interest of Borrower.

“Subordinated”, as applied to Indebtedness, shall mean that the Indebtedness has been subordinated (by written terms or written agreement being, in either case, in form and substance satisfactory to the Agent and the Required Banks) in favor of the prior payment in full of the Debt.

“Subordinated Indebtedness” shall mean, for Borrower or any Subsidiary any Indebtedness that is Subordinated.

“Subsidiary” of Borrower or any of its Subsidiaries shall mean (i) a corporation more than fifty percent (50%) of the Voting Power of which is owned, directly or indirectly, by Borrower or by one or more other Subsidiaries of Borrower or by Borrower and one or more Subsidiaries of Borrower, (ii) a partnership or limited liability company of which Borrower, one or more other Subsidiaries of Borrower or Borrower and one or more Subsidiaries of Borrower, directly or indirectly, is a general partner or managing member, as the case may be, that, or otherwise, has the power to direct the policies, management and affairs thereof, or (iii) any other Person (other than a corporation) in which Borrower, one or more other Subsidiaries of Borrower or Borrower and one or more Subsidiaries of Borrower, directly or indirectly, has at least a majority interest in the Voting Power or the power to direct the policies, management and affairs thereof.

“Swap” shall mean any “swap” as defined in Section 1a(47) of the CEA and regulations thereunder, other than (a) a swap entered into, or subject to the rules of, a board of trade designated as a contract market under Section 5 of the CEA, or (b) a commodity option entered into pursuant to CFTC Regulation 32.3(a).

“Taxes” shall mean all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

“Total Commitment Amount” shall mean the principal amount of One Hundred Million Dollars ($100,000,000).

“Total Indebtedness” shall mean, at any time, on a Consolidated basis, all Indebtedness of Borrower, including, but not limited to, current, long-term and Subordinated Indebtedness, if any, and all Indebtedness under the Permitted Receivables Facility.

“USA Patriot Act” shall mean the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT Act) Act of 2001.

“U.S. Person” shall mean any Person that is a “United States Person” as defined in Section 7701(a)(30) of the Code.

“U.S. Tax Compliance Certificate” has the meaning assigned to such term in paragraph Section 3.02(f).

“Voting Power” shall mean, with respect to any Person, the exclusive ability to control, through the ownership of shares of capital stock, partnership interests, membership interests or otherwise, the election of members of the board of directors or other similar governing body of such Person, and the holding of a designated percentage of Voting Power of a Person means the ownership of shares of capital stock, partnership interests, membership interests or other interests of such Person sufficient to control exclusively the election of that percentage of the members of the board of directors or similar governing body of such Person.

“Welfare Plan” shall mean an ERISA Plan that is a “welfare plan” within the meaning of ERISA Section 3(l).

“Wholly-Owned Subsidiary” shall mean, with respect to any Person, any corporation, limited liability company or other entity, except for director’s qualifying shares or shares required to be owned individually due to country specific regulations regarding ownership or control of the organization or operation of such entity, all of the securities or other ownership interest of which having ordinary voting power to elect a majority of the board of directors, or other persons performing similar functions, are at the time directly or indirectly owned by such Person.

Section 1.02 Accounting and Legal Principles, Terms and Determinations . All references in this Agreement to “generally accepted accounting principles” or “GAAP” shall be deemed to refer to generally accepted accounting principles in effect in the United States at the time of application thereof. Interim financial statements otherwise prepared in accordance with GAAP shall be deemed to comply with such principles subject to year-end adjustments and notwithstanding the absence of footnotes Unless otherwise specified herein, all accounting terms used herein shall be interpreted, all determinations with respect to accounting matters hereunder shall be made, and all unaudited consolidated financial statements and certificates and reports as to financial matters required to be furnished hereunder shall be prepared, in accordance with generally accepted accounting principles applied on a basis consistent with the most recent audited consolidated financial statements of Borrower and its Subsidiaries made available pursuant to Section 5.02(b) or, if no such statements have been so delivered, the most recent audited financial statements referred to in Section 5.02(a). Any reference herein to any specific citation, section or form of law, statute, rule or regulation shall refer to such new, replacement or analogous citation, section or form should such citation, section or form be modified, amended or replaced.

Section 1.03 Terms Generally . The foregoing definitions shall be applicable to the singular and plurals of the foregoing defined terms.

ARTICLE II.

AMOUNT AND TERMS OF CREDIT

Section 2.01 Amount and Nature of Credit . Subject to the terms and conditions of this Agreement, each Bank, for itself and not one for any other, agrees to participate in Loans made hereunder on the Effective Date.

Borrower shall have the option to choose any combination of (a) Base Rate Loans, or (b) Eurodollar Loans. No Loans may be borrowed until the Effective Date and no Loans may be borrowed after the Effective Date. Borrower shall be entitled to repay Loans in whole or in part, but once repaid a Loan may not be re-borrowed.

The obligation of each Bank to make Loans to the Borrower shall be in the proportion that such Bank’s Commitment bears to the Commitments of all Banks to the Borrower, but each Bank’s Loan to the Borrower shall never exceed its Commitment. The failure of any Bank to make a Loan shall not relieve any other Bank of its obligations to make a Loan nor shall it impose any additional liability on any other Bank hereunder. The Banks shall have no obligation to make Loans hereunder until the Effective Date. The Banks shall have no obligation to make Loans hereunder after the Effective Date. The Commitments are not revolving credit commitments, and the Borrower shall not have the right to borrow, repay and reborrow under this Section 2.01. The Loans shall be due and payable on the Maturity Date.

Borrower shall pay interest on the unpaid principal amount of Base Rate Loans made to it outstanding from time to time from the date thereof until paid at the Base Rate from time to time in effect. Interest on such Base Rate Loans shall be payable on the last day of each September, December, March and June of each year and at the maturity thereof.

Borrower shall pay interest on the unpaid principal amount of each Eurodollar Loan made to it outstanding from time to time, fixed in advance on the first day of the Interest Period applicable thereto through the last day of the Interest Period applicable thereto (but subject to changes in the Applicable Margin), at the Derived Eurodollar Rate. Interest on such Eurodollar Loans shall be payable on each Interest Adjustment Date (provided that if an Interest Period exceeds three (3) months, the interest must be paid every three (3) months, commencing three (3) months from the beginning of such Interest Period).

At the request of Borrower to Agent, subject to the notice and other provisions of Section 2.02 hereof, the Banks shall convert outstanding Base Rate Loans to Eurodollar Loans at any time and shall convert outstanding Eurodollar Loans to Base Rate Loans on any Interest Adjustment Date.

The obligation of Borrower to repay Loans made to it by each Bank pursuant to this Section 2.01 and to pay interest thereon shall be evidenced by a Note of Borrower in the form of Exhibit A hereto, payable to the order of such Bank in the principal amount of its Commitment.

Section 2.02 Conditions To Loans and Conversion/Continuation of Loans . The obligation of the Banks to make, continue or convert any Loan, is conditioned, in the case of the borrowing, conversion or continuation hereunder, upon:

(a) all conditions precedent as listed in Article IV hereof shall have been satisfied;

(b) with respect to Base Rate Loans, receipt by Agent of a Notice of Loan, such notice to be received by 11:00 A.M. (Cleveland, Ohio time) on the proposed date of borrowing or conversion, and, with respect to Eurodollar Loans, by 11:00 A.M. (Cleveland, Ohio time) three (3) Business Days prior to the proposed date of borrowing, conversion or continuation. Agent shall notify each Bank of the date, amount and initial Interest Period (if applicable) promptly upon the receipt of such notice, and, in any event, by 2:00 P.M. (Cleveland, Ohio time) on the date such notice is received. On the date such Loan is to be made, each Bank shall provide Agent, not later than 3:00 P.M. (Cleveland, Ohio time), with the amount in federal or other immediately available funds, required of it. If Agent elects to advance the proceeds of such Loan prior to receiving funds from such Bank, Agent shall have the right, upon prior notice to Borrower, to debit any account of the Borrower or otherwise receive from Borrower, on demand, such amount, in the event that such Bank fails to reimburse Agent in accordance with this subsection. Agent shall also have the right to receive interest from such Bank at the Federal Funds Effective Rate in the event that such Bank shall fail to provide its portion of the Loan on the date requested and Agent elects to provide such funds;

(c) Borrower’s request for (i) a Base Rate Loan shall be in an amount of not less than One Million Dollars ($1,000,000), increased by increments of Five Hundred Thousand Dollars ($500,000); or (ii) a Eurodollar Loan shall be in an amount of not less than Five Million Dollars ($5,000,000), increased by increments of One Million Dollars ($1,000,000);

(d) the fact that no Default or Event of Default shall then exist or immediately after the making, conversion or continuation of the Loan would exist;

(e) the fact that each of the representations and warranties contained in Article VI hereof shall be true and correct with the same force and effect as if made on and as of the date of the making, conversion, or continuation of such Loan, except to the extent that any thereof expressly relate to an earlier date; and

(f) the proceeds of such Loans will be used to (i) finance, in whole or in part, the Avalon Acquisition to the extent made in compliance with the provisions of this Agreement, and (ii) pay fees and expenses related to this Agreement and the Avalon Acquisition Documents to the extent the Borrower elects not to pay such fees and expenses from cash on hand or other liquid assets.

At no time shall Borrower request that Eurodollar Loans be outstanding for more than ten (10) different Interest Periods, at any time, and, if Base Rate Loans are outstanding, then Eurodollar Loans shall be limited to nine (9) different Interest Periods.

Each request by Borrower for the conversion or continuation of a Loan hereunder shall be deemed to be a representation and warranty by Borrower as of the date of such request as to the facts specified in (d), (e) and (f) above.

Each request for a Eurodollar Loan shall be irrevocable and binding on Borrower and Borrower shall indemnify Agent and the Banks against any loss or expense incurred by Agent or

the Banks as a result of any failure by Borrower to consummate such transaction including, without limitation, any loss (including loss of anticipated profits) or expense incurred by reason of liquidation or re-employment of deposits or other funds acquired by the Banks to fund such Eurodollar Loan. A certificate as to the amount of such loss or expense submitted by the Banks to Borrower shall be conclusive and binding for all purposes, absent manifest error.

Section 2.03 Payments, Etc .

(a) Payments Generally . Each payment made hereunder by Borrower shall be made without any offset, abatement, recoupment, counterclaim, withholding or reduction whatsoever.

(b) Payments in Dollars . With respect to (i) any Loan, or (ii) any other payment to Agent and the Banks that is not covered by subsection (a) hereof, all such payments (including prepayments) to Agent and the Banks of the principal of or interest on such Loan or other payment, including but not limited to principal, interest, fees or any other amount owed by Borrower under this Agreement, shall be made in Dollars. All payments described in this subsection (b) shall be remitted to Agent at its main office for the account of the Banks not later than 11:00 A.M. (Cleveland, Ohio time) on the due date thereof in immediately available funds. Any such payments received by Agent after 11:00 A.M. (Cleveland, Ohio time) shall be deemed to have been made and received on the next following Business Day.

(c) Payments Net of Taxes . All payments under this Agreement or any other Loan Document by Borrower or any other Obligor shall be made absolutely net of, without deduction or offset for, and altogether free and clear of, any and all present and future taxes, levies, deductions, charges and withholdings and all liabilities with respect thereto, under the laws of the United States of America or any foreign jurisdiction (or any state or political subdivision thereof), excluding income and franchise taxes imposed on any Bank (and withholding relating thereto) other than such income or franchise taxes arising solely from such Bank having executed, delivered or performed its obligations or received a payment under, or enforced the Loan Documents, under the laws of the United States of America or any foreign jurisdiction (or any state or political subdivision thereof). If Borrower or other Obligor is compelled by law to deduct any such taxes or levies (other than such excluded taxes) or to make any such other deductions, charges or withholdings, then Borrower or such Obligor, as the case may be, shall pay such additional amounts as may be necessary in order that the net payments after such deduction, and after giving effect to any United States or foreign jurisdiction (or any state or political subdivision thereof) income taxes required to be paid by the Banks in respect of such additional amounts, shall equal the amount of interest provided in Section 2.01 hereof for each Loan plus any principal then due. In each such case, Borrower shall provide to the applicable Bank evidence demonstrating that such taxes or levies have been paid.

(d) Payments to Banks . Upon Agent’s receipt of payments hereunder, Agent shall immediately distribute to each Bank its ratable share, if any, of the amount of principal, interest, and fees received by it for the account of such Bank. Each Bank shall record any principal, interest or other payment, the principal amounts of Base Rate Loans and Eurodollar Loans, all prepayments and the applicable dates, including Interest Periods, with respect to the Loans made, and payments received by such Bank, by such method as such Bank may generally

employ; provided, however, that failure to make any such entry shall in no way detract from the obligations of Borrower under the Notes. The aggregate unpaid amount of Loans, types of Loans, Interest Periods and similar information with respect to such Loans set forth on the records of Agent shall be rebuttably presumptive evidence with respect to such information, including the amounts of principal and interest owing and unpaid with respect to each Loan.

(e) Timing of Payments . Whenever any payment to be made hereunder, including, without limitation, any payment to be made on any Note, shall be stated to be due on a day that is not a Business Day, such payment shall be made on the next succeeding Business Day and such extension of time shall in each case be included in the computation of the interest payable on such Note; provided, however, that, with respect to any Eurodollar Loan, if the next succeeding Business Day falls in the succeeding calendar month, such payment shall be made on the preceding Business Day and the relevant Interest Period shall be adjusted accordingly.

Section 2.04 Prepayment .

(a) Right to Prepay . Borrower shall have the right, at any time or from time to time, to prepay, on a pro rata basis for all of the Banks, all or any part of the principal amount of the Loans then outstanding, as designated by Borrower, plus interest accrued on the amount so prepaid to the date of such prepayment; and

(b) Prepayment Fees .

(i) Prepayments of Base Rate Loans shall be without any premium or penalty;

(ii) In any case of prepayment (or, any assignment pursuant to Section 3.09(ii)) of a Eurodollar Loan, Borrower agrees that if the reinvestment rate with respect to the amount of such Eurodollar Loan, as quoted by the money desk of Agent (the “Reinvestment Rate”), shall be lower than the LIBOR Rate applicable to the Eurodollar Loan that is intended to be prepaid (hereinafter, “Last LIBOR”), then the Borrower shall, upon written notice from Agent, promptly pay to Agent, for the account of each Bank, in immediately available funds, a prepayment fee equal to the product of (A) a rate (the “Prepayment Rate”) which shall be equal to the difference between the Last LIBOR and the Reinvestment Rate, times (B) the prepayment principal amount of the Eurodollar Loan that is to be prepaid, times (C) (1) the number of days remaining in the Interest Period of the Eurodollar Loan that is to be prepaid divided by (2) three hundred sixty (360) but no additional premium or penalty shall apply. In addition, Borrower shall immediately pay directly to Agent, for the account of the Banks, the amount of any additional costs or expenses (including, without limitation, cost of telex, wires, or cables) incurred by Agent or the Banks in connection with the prepayment, upon Borrower’s receipt of a written statement from Agent.

(c) Notice of Prepayment . Borrower shall give Agent written notice of prepayment of any Base Rate Loan by not later than 11:00 A.M. (Cleveland, Ohio time) on the Business Day such prepayment is to be made and written notice of the prepayment of any Eurodollar Loan not later than 1:00 P.M. (Cleveland, Ohio time) three (3) Business Days prior to the Business Day on which such prepayment is to be made.

(d) Minimum Amount . Each prepayment of a Eurodollar Loan by Borrower shall be in the aggregate principal amount of not less than Five Million Dollars ($5,000,000), except in the case of a mandatory prepayment in connection with Article III hereof.

(e) Application of Prepayment . All prepayments required pursuant to this Section 2.04 shall first be applied among the Base Rate Loans, then to Eurodollar Loans.

Section 2.05 Fees . Borrower shall pay to Agent the fees set forth in the Agent Fee Letter.

Section 2.06 Computation of Interest and Fees; Default Rate . With the exception of Base Rate Loans, interest on Loans and fees and charges hereunder shall be computed on the basis of a year having three hundred sixty (360) days and calculated for the actual number of days elapsed. With respect to Base Rate Loans interest shall be computed on the basis of a year having three hundred sixty-five (365) days or three hundred sixty-six (366) days, as the case may be, and calculated for the actual number of days elapsed. Anything herein to the contrary notwithstanding, if an Event of Default shall occur and be continuing hereunder, at the option of Agent or the Required Banks, the principal of each Loan, the unpaid interest thereon and any other amounts owing hereunder shall bear interest, until paid, at the Default Rate. In no event shall the rate of interest hereunder exceed the maximum rate allowable by law.

ARTICLE III.

INCREASED CAPITAL; TAXES, ETC.

Section 3.01 Increased Costs .

(a) Increased Costs Generally . If any Change in Law shall:

(i) impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement (on a net basis) against assets of, deposits with or for the account of, or credit extended or participated in by, any Bank (except any reserve requirement reflected in the LIBOR Rate);

(ii) subject any Recipient to any Taxes (other than (A) Indemnified Taxes, (B) Taxes described in clauses (b) through (d) of the definition of Excluded Taxes and (C) Connection Income Taxes) on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto;

(iii) impose on any Bank or the London interbank market any other condition, cost or expense (other than Taxes) affecting this Agreement or Loans made by such Bank or participation therein;

and the result of any of the foregoing shall be to increase the cost to such Bank or such other Recipient of making, converting to, continuing or maintaining any Loan or of maintaining its obligation to make any such Loan, or to increase the cost to such Bank, or such other Recipient of participating in, or to reduce the amount of any sum received or receivable by such Bank or other Recipient hereunder (whether of principal, interest or any other amount) then, upon request of such Bank or other Recipient, Borrower will pay to such Bank or other Recipient, as the case may be, such additional amount or amounts as will compensate such Bank or other Recipient, as the case may be, for such additional costs incurred or reduction suffered.

(b) Certificates for Reimbursement . A certificate of a Bank setting forth the amount or amounts necessary to compensate such Bank or its holding company, as the case may be, as specified in paragraph (a) of this Section and delivered to Borrower, shall be conclusive absent manifest error. Borrower shall pay such Bank, the amount shown as due on any such certificate within 10 days after receipt thereof.

(c) Delay in Requests . Failure or delay on the part of any Bank to demand compensation pursuant to this Section shall not constitute a waiver of such Bank’s right to demand such compensation; provided that Borrower shall not be required to compensate a Bank pursuant to this Section for any increased costs incurred or reductions suffered more than nine months prior to the date that such Bank notifies Borrower of the Change in Law giving rise to such increased costs or reductions, and of such Bank’s intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the nine-month period referred to above shall be extended to include the period of retroactive effect thereof).

Section 3.02 Tax Law, Etc .

(a) Payments Free of Taxes . Any and all payments by or on account of any obligation of Borrower under any Loan Document shall be made without deduction or withholding for any Taxes, except as required by applicable law. If any applicable law (as determined in the good faith discretion of an applicable Withholding Agent) requires the deduction or withholding of any Tax from any such payment by a Withholding Agent, then the applicable Withholding Agent shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable law and, if such Tax is an Indemnified Tax, then the sum payable by Borrower shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this Section) the applicable Recipient receives an amount equal to the sum it would have received had no such deduction or withholding been made.

(b) Payment of Other Taxes by Borrower . Borrower shall timely pay to the relevant Governmental Authority in accordance with applicable law, or at the option of the Agent timely reimburse it for the payment of, any Other Taxes.

(c) Indemnification by Borrower . Borrower shall indemnify each Recipient, within 10 days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section) payable or paid by such Recipient or required to be withheld or deducted from a payment to such Recipient and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to Borrower by a Bank (with a copy to the Agent), or by the Agent on its own behalf or on behalf of a Bank, shall be conclusive absent manifest error.

(d) Indemnification by the Banks . Each Bank shall severally indemnify the Agent, within 10 days after demand therefor, for (i) any Indemnified Taxes attributable to such Bank (but only to the extent that Borrower have not already indemnified the Agent for such Indemnified Taxes and without limiting the obligation of Borrower to do so), (ii) any Taxes attributable to such Bank’s failure to comply with the provisions of Section 10.11 relating to the maintenance of a Participant Register and (iii) any Excluded Taxes attributable to such Bank, in each case, that are payable or paid by the Agent in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Bank by the Agent shall be conclusive absent manifest error. Each Bank hereby authorizes the Agent to set off and apply any and all amounts at any time owing to such Bank under any Loan Document or otherwise payable by the Agent to the Bank from any other source against any amount due to the Agent under this paragraph (d).

(e) Evidence of Payments . As soon as practicable after any payment of Taxes by Borrower to a Governmental Authority pursuant to this Section 3.02, Borrower shall deliver to the Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Agent.

(f) Status of Banks .

(i) Any Bank that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Loan Document shall deliver to Borrower and the Agent, at the time or times reasonably requested by Borrower or the Agent, such properly completed and executed documentation reasonably requested by Borrower or the Agent as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Bank, if reasonably requested by Borrower or the Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by Borrower or the Agent as will enable Borrower or the Agent to determine whether or not such Bank is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Section 3.02(f)(ii)(A), (ii)(B) and (ii)(D) below) shall not be required if in the Bank’s reasonable judgment such completion, execution or submission would subject such Bank to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Bank.

(ii) Without limiting the generality of the foregoing.

(A) any Bank that is a U.S. Person shall deliver to Borrower and the Agent on or prior to the date on which such Bank becomes a Bank under this Agreement (and from time to time thereafter upon the reasonable request of Borrower or the Agent), executed originals of IRS Form W-9 certifying that such Bank is exempt from U.S. federal backup withholding tax;

(B) any Foreign Bank shall, to the extent it is legally entitled to do so, deliver to Borrower and the Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Bank becomes a Bank under this Agreement (and from time to time thereafter upon the reasonable request of Borrower or the Agent), whichever of the following is applicable:

(i) in the case of a Foreign Bank claiming the benefits of an income tax treaty to which the United States is a party (x) with respect to payments of interest under any Loan Document, executed originals of IRS Form W-8BEN establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “interest” article of such tax treaty and (y) with respect to any other applicable payments under any Loan Document, IRS Form W-8BEN establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty;

(ii) executed originals of IRS Form W-8ECI;

(iii) in the case of a Foreign Bank claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate to the effect that such Foreign Bank is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of Borrower within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”) and (y) executed originals of IRS Form W-8BEN; or

(iv) to the extent a Foreign Bank is not the beneficial owner, executed originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN, a U.S. Tax Compliance Certificate acceptable to Borrower , IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided that if the Foreign Bank is a partnership and one or more direct or indirect partners of such Foreign Bank are claiming the portfolio interest exemption, such Foreign Bank may provide a U.S. Tax Compliance Certificate on behalf of each such direct and indirect partner;

(C) any Foreign Bank shall, to the extent it is legally entitled to do so, deliver to Borrower and the Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Bank becomes a Bank under this Agreement (and from time to time thereafter upon the reasonable request of Borrower or the Agent), executed originals of any other form prescribed by applicable law as a basis for claiming exemption from or a reduction in U.S. federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by applicable law to permit Borrower or the Agent to determine the withholding or deduction required to be made; and

(D) if a payment made to a Bank under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Bank were to fail to comply with the applicable reporting requirements of FATCA (including those contained in

Section 1471(b) or 1472(b) of the Code, as applicable), such Bank shall deliver to Borrower and the Agent at the time or times prescribed by law and at such time or times reasonably requested by Borrower or the Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by Borrower or the Agent as may be necessary for Borrower and the Agent to comply with their obligations under FATCA and to determine that such Bank has complied with such Bank’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (D), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

Each Bank agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify Borrower and the Agent in writing of its legal inability to do so.

(g) Treatment of Certain Refunds . If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section 3.02 (including by the payment of additional amounts pursuant to this Section 3.02), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this paragraph (g) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this paragraph (g), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this paragraph (g) the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party would have been in if the indemnification payments or additional amounts giving rise to such refund had never been paid. This paragraph shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.

(h) Survival . Each party’s obligations under this Section 3.02, Section 3.01, Section 3.04 and Section 3.07 shall survive the resignation or replacement of the Agent or any assignment of rights by, or the replacement of, a Bank, the termination of the Commitments and the repayment, satisfaction or discharge of all obligations under any Loan Document.

Section 3.03 Eurodollar Deposits Unavailable or Interest Rate Unascertainable . In respect of any Eurodollar Loan, in the event that Agent shall have determined that for Eurodollar Loans, that Dollar deposits in the relevant amount for the relevant Interest Period for such Eurodollar Loan are not available to Agent in the applicable Eurodollar market, or that, by reason of circumstances affecting such market, adequate and reasonable means do not exist for ascertaining the applicable LIBOR Rate applicable to such Interest Period, as the case may be, Agent shall promptly give notice of such determination to Borrower and (a) any notice of a conversion of an existing Base Rate Loan to a Eurodollar Loan shall be deemed a notice to

continue a Base Rate Loan, and (b) Borrower shall be obligated either to prepay, or with respect to a Eurodollar Loan, to convert to a Base Rate Loan, any outstanding Eurodollar Loan on the last day of the then current Interest Period with respect thereto.

Section 3.04 Indemnity . Without prejudice to any other provisions of this Article III, Borrower hereby agrees to indemnify each Bank against any loss or expense that such Bank may sustain or incur as a consequence of any default by Borrower in payment when due of any amount hereunder in respect of any Eurodollar Loan, including, but not limited to, any loss of profit, premium or penalty incurred by such Bank in respect of funds borrowed by it for the purpose of making or maintaining such Eurodollar Loan, as determined by such Bank in the exercise of its sole but reasonable discretion. A certificate as to any such loss or expense shall be promptly submitted by such Bank to the Borrower and shall, in the absence of manifest error, be conclusive and binding as to the amount thereof.

Section 3.05 Changes in Law Rendering Eurodollar Loans Unlawful . If at any time any Change in Law shall make it unlawful for any Bank to fund any Eurodollar Loan that it is committed to make hereunder, the commitment of such Bank to fund such Eurodollar Loan shall, upon the happening of such event, forthwith be suspended for the duration of such illegality, and such Bank shall by written notice to Borrower and Agent declare that its commitment with respect to such Eurodollar Loan has been so suspended and, if and when such illegality ceases to exist, such suspension shall cease and such Bank shall similarly notify Borrower and Agent. If any such change shall make it unlawful for any Bank to continue in effect the funding in the applicable Eurodollar market of any Eurodollar Loan previously made by it hereunder, such Bank shall, upon the happening of such event, notify Borrower, Agent and the other Banks thereof in writing stating the reasons therefor, and the Borrower shall, on the earlier of (a) the last day of the then current Interest Period or (b) if required by such law, regulation or interpretation, on such date as shall be specified in such notice, either convert such Eurodollar Loan (if a Eurodollar Loan) to a Base Rate Loan or prepay such Eurodollar Loan to the Banks in full. Any such prepayment or conversion shall be subject to the prepayment fees described in Section 2.04 hereof.

Section 3.06 Funding . Each Bank may, but shall not be required to, make Eurodollar Loans hereunder with funds obtained outside the United States or such Loans may be made through a branch or affiliate of any Bank.

Section 3.07 Capital Adequacy . If any Bank shall have determined, after the Closing Date, that a Change in Law affecting such Bank or any lending office of such Bank, if any, regarding capital adequacy (whether or not having the force of law), has or will have the effect of reducing the rate of return on such Bank’s capital as a consequence of its obligations hereunder to a level below that which such Bank could have achieved but for such Change in Law (taking into consideration such Bank’s policies or the policies of its holding company with respect to capital adequacy) by an amount deemed by such Bank to be material, then from time to time, within fifteen (15) days after demand by such Bank (made within one hundred eighty (180) days of such Bank becoming aware of the reason giving rise to such demand), with a copy to Agent, Borrower shall pay to such Bank such additional amount or amounts as shall compensate such Bank for such reduction. Each Bank shall designate a different lending office if such designation will avoid the need for, or reduce the amount of, such compensation and will not, in the

judgment of such Bank, be otherwise disadvantageous to such Bank. A certificate of any Bank claiming compensation under this Section and setting forth the additional amount or amounts to be paid to it hereunder shall be conclusive in the absence of manifest error. In determining such amount, such Bank may use any reasonable averaging and attribution methods. Failure on the part of any Bank to demand compensation for any reduction in return on capital with respect to any period shall not constitute a waiver of such Bank’s rights to demand compensation for any reduction in return on capital in such period or in any other period. The protection of this Section shall be available to each Bank regardless of any possible contention of the invalidity or inapplicability of the law, regulation or other condition that shall have been imposed.

Section 3.08 Application of Provisions . Notwithstanding anything in this Agreement to the contrary, no Bank shall demand compensation for any reduction referred to in Section 3.01, Section 3.02, Section 3.03 or Section 3.07 hereof if it shall not at the time be the general policy or practice of such Bank to demand such compensation, payment or reimbursement in similar circumstances under comparable provisions of other credit agreements.

Section 3.09 Replacement of Banks . If any Bank requests compensation under Section 3.01 or Section 3.07, or if Borrower is required to pay any Indemnified Taxes or additional amounts to any Bank or any Governmental Authority for the account of any Bank pursuant to Section 3.07 or if any Bank is a Non-Consenting Bank or if any Bank is a Defaulting Bank, then Borrower may, at its sole expense and effort, upon notice to such Bank and the Agent, require such Bank to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 10.10), all of its interests, rights (other than its existing rights to payments pursuant to Section 3.01, Section 3.07 or Section 3.02) and obligations under this Agreement and the related Loan Documents to an Eligible Assignee that shall assume such obligations (which assignee may be another Bank, if a Bank accepts such assignment); provided that:

(i) Borrower shall have paid to the Agent the assignment fee (if any) specified in Section 10.10;

(ii) such Bank shall have received payment of an amount equal to the outstanding principal of its Loans accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents (including any amounts under Section 3.04) from the assignee (to the extent of such outstanding principal and accrued interest and fees) or Borrower (in the case of all other amounts);

(iii) in the case of any such assignment resulting from a claim for compensation under Section 3.01, Section 3.07 or payments required to be made pursuant to Section 3.02, such assignment will result in a reduction in such compensation or payments thereafter;

(iv) such assignment does not conflict with applicable law; and

(v) in the case of any assignment resulting from a Bank becoming a Non-Consenting Bank or a Defaulting Bank, the applicable assignee shall have consented to the applicable amendment, waiver or consent.

A Bank shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Bank or otherwise, the circumstances entitling Borrower to require such assignment and delegation cease to apply.

ARTICLE IV.

CONDITIONS PRECEDENT

Notwithstanding the execution of this Agreement and the other Loan Documents on the Closing Date, the effectiveness of this Agreement and the obligation of the Banks to make the Loan is subject to Borrower satisfying each of the following conditions on the Closing Date or on before the Effective Date (as noted below), each in form and substance reasonably satisfactory to Agent:

Section 4.01 Loan Documents . On the Closing Date, Borrower shall have executed and delivered to (i) Agent, this Agreement, and each of the Loan Documents, and (ii) each Bank, its Note.

Section 4.02 Officer’s Certificate, Resolutions, Organizational Documents . On the Closing Date, Borrower shall have delivered to each Bank an officer’s certificate certifying the names of the officers of Borrower authorized to sign the Loan Documents, together with the true signatures of such officers and certified copies of (a) the resolutions of the board of directors of Borrower evidencing authorization of the transactions contemplated by the Loan Documents, and (b) the Organizational Documents of Borrower.

Section 4.03 Legal Opinion . On the Closing Date, Borrower shall have delivered to Agent an opinion of counsel for Borrower dated the Closing Date.

Section 4.04 Good Standing Certificate . On the Closing Date, Borrower shall have delivered to Agent a good standing certificate, issued on or about the Closing Date by the Secretary of State of Ohio.

Section 4.05 Agent Fee Letter; Legal Fees . Borrower shall have (a) paid to Agent the fees described in the Agent Fee Letter on the Closing Date and the Effective Date, as applicable, (b) paid all legal fees and expenses of Agent in connection with the preparation and negotiation of the Loan Documents incurred prior to the Closing Date on the Closing Date, and (c) paid all legal fees and expenses of Agent in connection with the preparation and negotiation of the Loan Documents incurred on and after the Closing Date through the Effective Date on the Effective Date.

Section 4.06 Closing Certificate . On the Effective Date, Borrower shall have delivered to Agent and the Banks an officer’s certificate certifying that, as of the Effective Date, (a) all conditions precedent set forth in this Article IV have been satisfied, (b) no Default or Event of Default exists nor immediately after the making of the Loan will exist, (c) each of the representations and warranties contained in Article VI hereof are true and correct as of the Effective Date, and (d) no material adverse change has occurred in the financial condition or operations of the Companies since October 31, 2013.

Section 4.07 No Material Adverse Change . As of the Effective Date, no material adverse change, in the opinion of Agent, shall have occurred in the financial condition or operations of the Companies since October 31, 2013.

Section 4.08 Regulatory Approvals . As of the Effective Date, all regulatory approvals and licenses necessary for the financing shall have been completed and there shall be an absence of any legal or regulatory prohibitions or restrictions.

Section 4.09 Avalon Purchase Agreement . On or prior to the Effective Date, Borrower shall have provided to Agent an executed copy of the Avalon Purchase Agreement (including all amendments, supplements, schedules and exhibits thereto).

Section 4.10 Consummation of Acquisition . On the Effective Date, Borrower shall have provided to Agent evidence of consummation of the Avalon Acquisition.

Section 4.11 Miscellaneous . On or prior to the Effective Date, Borrower shall have provided to Agent such other items and shall have satisfied such other conditions as may be reasonably agreed to by Agent and Borrower.

ARTICLE V.

COVENANTS

Borrower agrees that until all of the Debt shall have been paid in full, Borrower shall perform and observe, and shall cause each other Company to perform and observe, each of the following provisions:

Section 5.01 Money Obligations . Borrower covenants that it will, and shall cause each of its Subsidiaries to, pay in full (a) prior in each case to the date when penalties would attach, all taxes, assessments and governmental charges and levies (except only those so long as and to the extent that the same shall be contested in good faith by appropriate and timely proceedings and for which adequate reserves have been established in accordance with GAAP) for which it may be or become liable or to which any or all of its properties may be or become subject and the failure to pay would have a Material Adverse Effect; (b) all of its wage obligations to any employees required to be paid in compliance with the Fair Labor Standards Act (29 U.S.C. §§206-207) or any comparable provisions and the failure to pay would have a Material Adverse Effect; and (c) all of its other obligations calling for the payment of money (except only those so long as and to the extent that the same shall be contested in good faith and for which adequate reserves have been established in accordance with GAAP) before such payment becomes overdue and the failure to pay (i) would constitute a Default or Event of Default hereunder or (ii) have a Material Adverse Effect.

Section 5.02 Financial Statements . Borrower covenants that it will deliver to each Bank:

(a) within forty-five (45) days after the end of each of the first three (3) quarter-annual periods of each fiscal year of Borrower, balance sheets of Borrower as of the end of such period and statements of income (loss), stockholders’ equity and cash flow for the quarter and fiscal year to date periods, all prepared on a Consolidated basis, in accordance with GAAP and in form and detail satisfactory to the Required Banks and certified by a Financial Officer of Borrower;

(b) within ninety (90) days after the end of each fiscal year of Borrower, (i) an annual audit report of Borrower for that year prepared on a Consolidated and consolidating (but only as to Borrower and its Subsidiaries) basis, in accordance with GAAP, and in form and detail satisfactory to the Required Banks and certified by an independent public accountant satisfactory to the Required Banks, which report shall include balance sheets and statements of income (loss), stockholders’ equity and cash-flow for that period, provided that delivery of Borrower’s annual report for any fiscal year of Borrower on Form 10-K as filed with the SEC shall satisfy the requirements of this subpart (b)(i), and (ii) a certificate by such accountant setting forth the Defaults and Events of Default coming to its attention during the course of its audit or, if none, a statement to that effect;

(d) as soon as available, copies of all notices, reports, definitive proxy statements and other documents that are publicly available and sent by Borrower to its shareholders, to the holders of any of its debentures or bonds or the trustee of any indenture securing the same or pursuant to which they are issued, or sent by Borrower (in final form) to any securities exchange or over the counter authority or system, or to the SEC or any similar federal agency having regulatory jurisdiction over the issuance of Borrower’s securities; provided that publication of any of the foregoing items with the SEC shall satisfy the requirements of this subpart (d); and

(e) within ten (10) days of the written request of Agent or any Bank (with such request being made through Agent), such other information about the financial condition, properties and operations of any Company as Agent may from time to time reasonably request (but subject to any applicable law and, upon request of Borrower, subject to customary confidentiality provisions), which information shall be submitted in form and detail satisfactory to Agent and certified by a Financial Officer of the Company or Companies in question. Within twenty (20) days after the Effective Date, Borrower shall provide a Lien search with respect to the Avalon Acquisition in acceptable scope and with results consistent with the representations in the Avalon Acquisition Agreement.

Documents required to be delivered pursuant to Section 5.02(a) or (b) (to the extent that any such documents are included in materials otherwise filed with the SEC) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (i) on which Borrower posts such documents, or provides a link thereto on Borrower’s website on the Internet at the website address; or (ii) on which such documents are posted on Borrower’s behalf on an Internet website, if any, to which each Bank and the Agent have access (whether a commercial, third-party website or whether sponsored by the Agent); provided that: (i) Borrower shall deliver paper copies of such documents to the Agent or any Bank that requests Borrower to deliver such paper copies until a written request to cease delivering paper copies is given by the Agent or such Bank and (ii) Borrower shall notify the Agent and each Bank (by telecopier or electronic mail) of the posting of any such documents and provide to the Agent by electronic mail electronic versions (i.e., soft copies) of such documents.

Section 5.03 Records . Borrower covenants that it will, and will cause each material Subsidiary to, at all times maintain true and complete records and books of account, including, without limiting the generality of the foregoing, appropriate reserves for possible losses and liabilities, all in accordance with GAAP (solely to the extent such material Subsidiaries must comply with GAAP for purposes of the Consolidated financial statements).

Section 5.04 Franchises . Borrower will and shall cause each of its Subsidiaries to preserve and maintain at all times its existence, rights and franchises, except as otherwise permitted pursuant to Section 5.09 hereof; provided that Borrower shall not be required to preserve or maintain such rights or franchises where the failure to do so will not have a Material Adverse Effect.

Section 5.05 ERISA Compliance . None of Borrower or its Subsidiaries shall incur any material accumulated funding deficiency within the meaning of ERISA, or any material liability to the PBGC, established thereunder in connection with any ERISA Plan. Borrower shall promptly notify each Agent of any material taxes assessed, proposed to be assessed or that Borrower has reason to believe may be assessed against Borrower or any of its Subsidiaries by the Internal Revenue Service with respect to any ERISA Plan. As used in this Section “material” means the measure of a matter of significance that shall be determined as being an amount equal to five percent (5%) of the Consolidated Total Assets of Borrower.

Section 5.06 Financial Covenants .

(a) Leverage Ratio . Borrower covenants that it shall not suffer or permit the Leverage Ratio to exceed 3.50 to 1.00.

(b) Interest Coverage Ratio . Borrower covenants that it shall not suffer or permit the Interest Coverage Ratio to be less than 3.00 to 1.00.

Section 5.07 Indebtedness . Borrower covenants that it will not and shall not permit any of its Subsidiaries to create, incur or have outstanding any Indebtedness of any kind; provided, that this Section 5.07 shall not apply to:

(a) Loans or any Indebtedness under this Agreement;

(b) the unsecured Indebtedness under the Existing Syndicated Credit Agreement in an aggregate principal amount not to exceed Seven Hundred Fifty Million Dollars ($750,000,000);

(c) the unsecured Indebtedness of Borrower under the 2011 NYLIM Note Purchase Agreement in an aggregate principal amount not to exceed One Hundred Seventy Five Million Dollars ($175,000,000);

(d) the unsecured Indebtedness under the 2012 Senior Notes Purchase Agreement in an aggregate amount not to exceed Two Hundred Million Dollars ($200,000,000);

(e) the unsecured Indebtedness of Borrower owing to The Bank of Tokyo-Mitsubishi UFJ, Ltd. up to the Dollar Equivalent of One Billion Japanese Yen (¥1,000,000,000);

(f) the unsecured Indebtedness under the Nordson Holdings S.a.r.l.- BTMU Credit Agreement in an aggregate amount not to exceed of One Hundred Million Euros (€100,000,000);

(g) loans or capital leases to Borrower or any of its Subsidiaries for the purchase or lease of fixed assets, which loans or leases are secured by the assets being purchased or leased, so long as the aggregate then outstanding principal amount of all such loans and leases for Borrower and its Subsidiaries do not exceed the greater of (a) One Hundred Million Dollars ($100,000,000) and (b) an amount equal to five percent (5%) of Consolidated Total Assets at any time;

(h) Indebtedness owed by Borrower or a Subsidiary (other than the Receivables Subsidiary) to Borrower or another Subsidiary (other than the Receivables Subsidiary);

(i) Indebtedness of the Receivables Subsidiary under the Permitted Receivables Facility, so long as (a) the funded amount, together with any other Indebtedness thereunder, does not exceed the greater of (1) Two Hundred Million Dollars ($200,000,000) and (2) an amount equal to ten percent (10%) of Consolidated Total Assets at any time, and (b) Borrower provides a copy of the documents evidencing such transaction to the Agent; and

(j) additional Indebtedness of Borrower or any Subsidiary, to the extent not otherwise permitted pursuant to any of the foregoing clauses of this Section 5.07, so long as (i) Borrower will be in pro forma compliance as of the applicable measurement period with Section 5.06 hereof after giving effect to the incurrence of such Indebtedness and (ii) no Event of Default shall exist prior to or after giving effect to the incurrence of any such Indebtedness.

Section 5.08 Liens . Borrower covenants and warrants that it will not, and will not permit any Subsidiary to create, assume or suffer to exist any Lien upon any of its property or assets, whether now owned or hereafter acquired; provided that this Section 5.08 shall not apply to the following:

(a) Liens for taxes not yet due or that are being actively contested in good faith by appropriate proceedings and for which adequate reserves have been established in accordance with GAAP;

(b) other statutory Liens incidental to the conduct of its business or the ownership of its property and assets that (a) were not incurred in connection with the borrowing of money or the obtaining of advances or credit, and (b) do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business;

(c) easements or other minor defects or irregularities in title of real property not interfering in any material respect with the use of such property in the business of Borrower or any of its Subsidiaries;

(d) any Lien granted to Agent, for the benefit of the Banks;

(e) Liens on fixed assets securing the loans or capital leases pursuant to Section 5.07(g) hereof, provided that such Lien only attaches to the property being acquired or leased plus any such Liens existing on the date hereof;

(f) Liens on the Receivables Related Assets in connection with the Permitted Receivables Facility securing the obligations under the Permitted Receivables Facility; and

(g) any other Liens, to the extent not otherwise permitted pursuant to clauses (a) through (f) hereof, so long as the aggregate then outstanding amount of Priority Indebtedness does not exceed at any time, for Borrower and all Subsidiaries, an amount equal to fifteen percent (15%) of Consolidated Total Assets.

Borrower shall not, and shall not permit any Subsidiary (other than the Receivables Subsidiary) to, enter into any Material Indebtedness Agreement (other than any contract or agreement entered into in connection with the Indebtedness permitted to be incurred pursuant to paragraph 5.07(b), (c), (d), (e), (f), (g) (but only with respect to the assets the subject thereof), or (j) hereof) that would prohibit Agent or the Banks from acquiring a security interest, mortgage or other Lien on, or a collateral assignment of, any of the property or assets of Borrower or any of Subsidiaries.

Section 5.09 Merger and Sale of Assets . Borrower covenants that it will not, and will not permit any Subsidiary to, merge or consolidate with any other Person, or sell, lease or transfer or otherwise dispose of any assets to any Person other than in the ordinary course of business, except that, if no Default or Event of Default shall then exist or immediately thereafter shall begin to exist:

(a) any Subsidiary (other than the Receivables Subsidiary) may merge with (a) Borrower (provided that Borrower shall be the continuing or surviving Person), or (b) any other Subsidiary (other than the Receivables Subsidiary);

(b) Borrower may sell, lease, transfer or otherwise dispose of any of its assets to any Subsidiary (other than the Receivables Subsidiary) and any Subsidiary (other than the Receivables Subsidiary) may sell, lease, transfer or otherwise dispose of any of its assets to (a) Borrower, or (b) any Subsidiary (other than the Receivables Subsidiary);

(c) in addition to any sale, lease, transfer or other disposition permitted pursuant to clauses (a) and (b) above, Borrower and any Subsidiary may sell accounts receivables and related rights to the Receivables Subsidiary in connection with the Permitted Receivables Facility;

(d) Borrower may consummate the Avalon Acquisition and any merger or consolidation that constitutes an Acquisition permitted pursuant to Section 5.10 hereof; and

(e) in addition to any sale, lease, transfer or other disposition permitted pursuant to clauses (a) through (d) above, Borrower or any Subsidiary (other than the Receivables Subsidiary) may sell, lease, transfer or otherwise dispose of any of its assets to any

Person so long as the aggregate amount of all such assets sold, leased, transferred or otherwise disposed of by Borrower and all of its Subsidiaries does not exceed an amount equal to eleven percent (11.0%) of Consolidated Total Assets during any two consecutive fiscal years of Borrower.

Section 5.10 Acquisitions . Borrower covenants that it will not, and will not permit any Subsidiary to, effect an Acquisition, except that Borrower or any Subsidiary (other than the Receivables Subsidiary) may (a) effect the Avalon Acquisition and (b) effect any additional Acquisition provided that (i) if such Acquisition is a merger or consolidation with Borrower, Borrower shall be the surviving entity and if such Acquisition is a merger or consolidation with a Subsidiary, then the surviving entity shall be a Subsidiary on the consummation thereof; (ii) the Board of Directors (or equivalent governing body) of the Person acquired shall have approved such Acquisition; and (iii) no Default or Event of Default shall then exist or immediately thereafter shall begin to exist.

Section 5.11 Affiliate Transactions . Borrower covenants that it will not, and will not permit any Subsidiary to, directly or indirectly, enter into or permit to exist any transaction (including, without limitation, the purchase, sale, lease or exchange of any property or the rendering of any service) with any Affiliate of Borrower or its Subsidiaries on terms that are less favorable to Borrower or such Subsidiary, as the case may be, than those that might be obtained at the time in a transaction with a non-Affiliate; provided, however, that the foregoing shall not prohibit (i) the payment of customary and reasonable directors’ fees to directors who are not employees of Borrower or its Subsidiaries or any Affiliate thereof; or (ii) any transaction, including, but not limited to the transactions contemplated pursuant to the Permitted Receivables Facility, between Borrower and an Affiliate that Borrower reasonably determines in good faith is beneficial to Borrower and its Affiliates as a whole and that is not entered into for the purpose of hindering the exercise by the Agent or any Bank of its rights or remedies under this Agreement or any other Loan Document.

Section 5.12 Regulations U and X . No Company shall take any actions that would result in any non-compliance of the Loans with Regulations U and X, or any other applicable regulation, of the Board of Governors of the Federal Reserve System.

Section 5.13 Notice. Borrower covenants that it will promptly notify the Agent and the Banks whenever, to the knowledge of a Financial Officer (a) any Default or Event of Default is likely to occur hereunder, (b) any default, or event with which the passage of time or the giving of notice, or both, would cause a default, shall have occurred under any Material Indebtedness Agreement (including, without limitation, the Note Purchase Agreements so long as each is a Material Indebtedness Agreement), or (c) any Reportable Compliance Event.

Section 5.14 Environmental Compliance . Except where the failure to do so would not have or result in a Material Adverse Effect, Borrower covenants that it will, and shall cause each Subsidiary to, (i) comply in all respects with any and all Environmental Laws including, without limitation, all Environmental Laws in jurisdictions in which Borrower or any Subsidiary owns or operates a facility or site, arranges for disposal or treatment of hazardous substances, solid waste or other wastes, accepts for transport any hazardous substances, solid waste or other wastes or holds any interest in real property or otherwise and (ii) not allow the release or disposal of

hazardous waste, solid waste or other wastes on, under or to any real property in which Borrower or any of its Subsidiaries holds any interest or performs any of its operations, in violation of any Environmental Law. Borrower shall defend, indemnify and hold the Agent and the Banks harmless against all costs, expenses, claims, damages, penalties and liabilities of every kind or nature whatsoever (including attorneys’ fees) arising out of or resulting from the noncompliance of Borrower or any of its Subsidiaries with any Environmental Law. Such indemnification shall survive any termination of this Agreement.

Section 5.15 Restricted Payments. Borrower covenants that it will not make or commit itself to make any Restricted Payment if an Default or Event of Default shall then exist or immediately thereafter shall begin to exist.

Section 5.16 Use of Proceeds . Borrower’s use of the proceeds of the Loans shall be solely as required in Section 2.02(f) hereof.

Section 5.17 Restrictive Agreements . Except as set forth in this Agreement, Borrower covenants that it will not, and will not permit any Subsidiary (excluding the Receivable Subsidiary) to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any encumbrance or restriction on the ability of any Subsidiary (excluding the Receivables Subsidiary) to (a) make, directly or indirectly, any Capital Distribution to Borrower; (b) make, directly or indirectly, loans or advances or capital contributions to Borrower; or (c) transfer, directly or indirectly, any of the properties or assets of such Subsidiary (excluding the Receivables Subsidiary) to Borrower, except for such encumbrances or restrictions existing under or by reason of (1) applicable law, (2) customary non-assignment provisions in leases or other agreements entered in the ordinary course of business and consistent with past practices, (3) customary restrictions in security agreements or mortgages securing Indebtedness of Borrower or its Subsidiaries to the extent such restrictions only restrict the transfer of the property subject to such security agreement or mortgage or (4) customary and reasonable restrictions in agreements necessary to obtain loans and credit facilities so long as such restrictions do not materially encumber the ability of the Subsidiaries taken as a whole to make Capital Distributions.

Section 5.18 Guaranties of Payment; Guaranty Under Material Indebtedness Agreement . Borrower covenants that it will not permit any Subsidiary to become a Guarantor in respect of any Indebtedness under a Material Indebtedness Agreement (including, without limitation, the Existing Syndicated Credit Agreement or the Note Purchase Agreements, so long as each is a Material Indebtedness Agreement) unless, prior to or concurrently therewith (i) Borrower shall have caused each such Subsidiary to execute and deliver to the Agent and the Banks a guaranty of payment, in form and substance substantially similar to form of guaranty furnished under such Material Indebtedness Agreement and otherwise completed in a manner satisfactory to the Agent, accompanied by a certificate of the Secretary or Assistant Secretary of such Subsidiary certifying such Subsidiary’s charter and by-laws (or comparable governing documents), resolutions of the board of directors (or comparable governing body) of such Subsidiary authorizing the execution and delivery of such guaranty agreement and incumbency and specimen signatures of the officers of such Subsidiary executing such documents and (ii) if any holder of any Indebtedness under the Material Indebtedness Agreement shall be or become a party to an intercreditor agreement with any other holder of any Indebtedness under any other

Material Indebtedness Agreement, then all holders of Indebtedness under any other Material Indebtedness Agreement with respect to which any Subsidiary is a Guarantor shall have entered into an intercreditor agreement in form and substance customary and appropriate for such agreement and otherwise reasonably satisfactory to the Agent.

Section 5.19 Pari Passu Ranking . Borrower covenants that its obligations under this Agreement shall, and that it will, and will cause each Subsidiary to, take all necessary action to ensure that the obligations of Borrower under this Agreement shall, at all times rank at least pari passu in right of payment (to the fullest extent permitted by law) with all other senior unsecured Indebtedness of Borrower and its Subsidiaries.

Section 5.20 Terrorism Sanctions Regulations . Borrower covenants that it will not, and will not permit any Subsidiary to, (i) become a Person described or designated in the Specially Designated Nationals and Blocked Persons List of the Office of Foreign Assets Control or in Section 1 of the Anti-Terrorism Order or (ii) be in violation of any law, regulation, or list of any government agency (including, without limitation, the U.S. Office of Foreign Asset Control list, Executive Order No. 13224 or the USA Patriot Act) that prohibits or limits the conduct of business with or the receiving of funds, goods or services to or for the benefit of certain Persons specified therein or that prohibits or limits any Bank from making Loans hereunder to Borrower or from otherwise conducting business with Borrower or any Subsidiaries.

Section 5.21 Most Favored Lender . Borrower covenants that it will not amend, modify or waive (an “Amendment”) any term or provision of the Existing Syndicated Credit Agreement that is also contained in this Agreement or amend the Existing Syndicated Credit Agreement to add any additional term or provision thereto (any such modified, waived or added term or provision, an “MFL Provision”) unless, prior to the effectiveness of such Amendment, Borrower has notified Agent of such Amendment and, if requested by Agent, caused to be executed and delivered, reasonably simultaneously with the effectiveness of such Amendment to the Existing Syndicated Credit Agreement at Borrower’s expense (including the reasonable fees and expenses of counsel for Agent), an amendment to this Agreement, in form and substance satisfactory to Agent and the Required Bank(s), to similarly amend such term or provision in this Agreement or to add such term or provision to this Agreement, as the case may be. If, as a result of this Section 5.21, either (i) this Agreement is amended to change or add any MFL Provision or (ii) any MFL Provision in the Existing Syndicated Credit Agreement is amended to a less restrictive level (including eliminated) or (b) Borrower and its Subsidiaries are no longer bound by the amended or added covenant in the such Existing Syndicated Credit Agreement that caused such MFL Provision to be amended or added to this Agreement, as the case may be, and provided that (a) no Default or Event of Default then exists, and (b) if any Credit Related Fee has been given to any party to such Existing Syndicated Credit Agreement in connection with any Amendment, the Banks shall have received such Credit Related Fee in a proportionate amount based upon the relative Commitments and outstanding principal amount of the Loans under this Agreement and of the Indebtedness outstanding under the Existing Syndicated Credit Agreement, then this Agreement shall, without any further action on the part of Borrower or any Bank, be deemed to be amended automatically to amend or to delete such MFL Provisions. For purposes hereof, a “Credit Related Fee” with respect to any Amendment shall mean any fee paid in connection with such Amendment; provided that any amounts paid (1) for the reimbursement of out-of-pocket expenses relating to preparing such amendment, (2) for an extension and related modifications in

the ordinary course of the term of the Existing Syndicated Credit Agreement, or (3) to the extent paid to the agent(s) for the lenders under the Existing Syndicated Credit Agreement in such agent’s capacity as such or for out-of-pocket fees and expenses of the agent(s) on its behalf or on behalf of other lenders, shall not be “Credit Related Fees”.

Section 5.22 Absence of Swaps . Borrower covenants that it will not consummate, nor permit any of its Subsidiaries to consummate, any Swap which would constitute Debt under this Agreement.

ARTICLE VI.

REPRESENTATIONS AND WARRANTIES

Borrower solely as to itself and, to the extent set forth below, on behalf of each of its Subsidiaries represents and warrants that the statements set forth in this Article VI are true, correct and complete.

Section 6.01 Organization; Subsidiary Preferred Equity . Borrower is a corporation duly organized and existing in good standing under the laws of the State of Ohio, and each Subsidiary is duly organized and existing in good standing under the laws of the jurisdiction in which it is organized. Borrower and each of its Subsidiaries have duly qualified or been duly licensed, and are authorized to do business and are in good standing, in each jurisdiction in which the ownership of their respective properties or the nature of their respective businesses makes such qualification or licensing necessary and in which the failure to be so qualified or licensed could be reasonably likely to have a Material Adverse Effect. No Subsidiary has any outstanding shares of any class of capital stock or other equity interests which has priority over any other class of capital stock or other equity interests of such Subsidiary as to dividends or distributions or in liquidation except as may be owned beneficially and of record by Borrower or a Wholly-Owned Subsidiary. Each Subsidiary’s legal name and its state or jurisdiction of organization has been set forth in Borrower’s most recent annual report on Form 10-K (excluding for any Subsidiary organized or no longer in existence since the date thereof). As of the date of this Agreement, no Subsidiary is a Guarantor with respect to any Indebtedness under any Material Indebtedness Agreement.

Section 6.02 Power and Authority . Borrower and each Subsidiary has all requisite corporate, limited liability company or partnership, as the case may be, power to own or hold under lease and operate their respective properties which it purports to own or hold under lease and to conduct its business as currently conducted and as currently proposed to be conducted. Borrower has all requisite corporate power to execute, deliver and perform its obligations under this Agreement and other Loan Documents. The execution, delivery and performance of this Agreement and the other Loan Documents has been duly authorized by all requisite corporate action, and this Agreement and the other Loan Documents have been duly executed and delivered by authorized officers of Borrower and are valid obligations of Borrower, legally binding upon and enforceable against Borrower in accordance with their terms, except as such enforceability may be limited by (i) bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors’ rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). The execution, delivery and performance of the Loan Documents will not violate any applicable law,

conflict with or result in any breach in any of the provisions of, or constitute a default under, or result in the creation of any Lien (other than Liens permitted under Section 5.08 hereof) upon any assets or property of any Company under the provisions of such Company’s Organizational Documents or any agreement.

Section 6.03 Compliance with Laws . Each Company:

(a) holds permits, certificates, licenses, orders, registrations, franchises, authorizations, and other approvals from federal, state, local, and foreign governmental and regulatory bodies necessary for the conduct of its business and is in compliance with all applicable laws relating thereto except where the failure to do so would not have a Material Adverse Effect;

(b) is in compliance with all federal, state, local, or foreign applicable statutes, rules, regulations, and orders including, without limitation, those relating to environmental protection, occupational safety and health, and equal employment practices, except where the failure to do so would not have a Material Adverse Effect; and

(c) is not in violation of or in default under any agreement to which it is a party or by which its assets are subject or bound, except to the extent that any such violation or default would not have a Material Adverse Effect.

Section 6.04 Litigation and Administrative Proceedings . Except as disclosed on Schedule 6.04 hereto, as to any of which, individually or in the aggregate, if determined adversely, would not have a Material Adverse Effect, there are (a) no lawsuits, actions, investigations, or other proceedings pending or threatened against any Company, or in respect of which any Company may have any liability, in any court or before any governmental authority, arbitration board, or other tribunal, (b) no orders, writs, injunctions, judgments, or decrees of any court or government agency or instrumentality to which any Company is a party or by which the property or assets of any Company are bound, and (c) no grievances, disputes, or controversies outstanding with any union or other organization of the employees of any Company, or threats of work stoppage, strike, or pending demands for collective bargaining.

Section 6.05 Title to Assets . Each Company has good title to and ownership of all property it purports to own, which property is free and clear of all Liens, except those permitted under Section 5.08 hereof or which the failure to have good title would not have a Material Adverse Effect.

Section 6.06 Liens and Security Interests . On and after the Closing Date, except for Liens permitted pursuant to Section 5.08 hereof, (a) there is no financing statement outstanding covering any personal property of any Company, other than a financing statement in favor of Agent, for the benefit of the Banks, if any; (b) there is no mortgage outstanding covering any real property of any Company, other than a mortgage in favor of Agent, for the benefit of the Banks, if any; and (c) no real or personal property of any Company is subject to any security interest or Lien of any kind other than any security interest or Lien that may be granted to Agent, for the benefit of the Banks. No Company (other than the Receivables Subsidiary) has entered into any contract or agreement that exists on or after the Closing Date (other than any contract or

agreement entered into in connection with the Indebtedness permitted to be incurred pursuant to Section 5.07(b), (c), (d), (e), (f), (g) (but only with respect to the assets the subject thereof) or (j) hereof) that would prohibit Agent or the Banks from acquiring a security interest, mortgage or other Lien on, or a collateral assignment of, any of the property or assets of any Company.

Section 6.07 Tax Returns . All foreign, federal, state and local tax returns and other reports required by law to be filed in respect of the income, business, properties and employees of each Company have been filed and all taxes, assessments, fees and other governmental charges that are due and payable have been paid, except as otherwise permitted herein or the failure to do so does not and will not cause or result in a Material Adverse Effect. The provision for taxes on the books of each Company is adequate for all years not closed by applicable statutes and for the current fiscal year.

Section 6.08 Environmental Laws. Each Company is in compliance with any and all Environmental Laws, including, without limitation, all Environmental Laws in all jurisdictions in which any Company owns or operates, or has owned or operated, a facility or site, arranges or has arranged for disposal or treatment of hazardous substances, solid waste or other wastes, accepts or has accepted for transport any hazardous substances, solid waste or other wastes or holds or has held any interest in real property or otherwise, except where the failure to so comply would not have a Material Adverse Effect. No litigation or proceeding arising under, relating to or in connection with any Environmental Law is pending or, to the best knowledge of each Company, threatened, against any Company, any real property in which any Company holds or has held an interest or any past or present operation of any Company that, if determined adversely, would have a Material Adverse Effect. No release, threatened release or disposal of hazardous waste, solid waste or other wastes is occurring, or has occurred (other than those that are currently being cleaned up in accordance with Environmental Laws), on, under or to any real property in which any Company holds any interest or performs any of its operations, in violation of any Environmental Law and that would have a Material Adverse Effect. As used in this Section, “litigation or proceeding” means any demand, claim, notice, suit, suit in equity, action, administrative action, investigation or inquiry whether brought by any governmental authority, private Person or otherwise.

Section 6.09 Employee Benefit Plans . No ERISA Event has occurred or is expected to occur with respect to an ERISA Plan. Full payment has been made of all amounts which a Controlled Group member is required, under applicable law or under the governing documents, to have been paid as a contribution to or a benefit under each ERISA Plan. The liability of each Controlled Group member with respect to each ERISA Plan has been fully funded based upon reasonable and proper actuarial assumptions, has been fully insured, or has been fully reserved for on its financial statements. No changes have occurred or are expected to occur that would cause a material increase in the cost of providing benefits under the ERISA Plan. With respect to each ERISA Plan that is intended to be qualified under Code Section 401(a): (a) the ERISA Plan and any associated trust operationally comply with the applicable requirements of Code Section 401(a), (b) the ERISA Plan and any associated trust have been amended to comply with all such requirements as currently in effect, other than those requirements for which a retroactive amendment can be made within the “remedial amendment period” available under Code Section 401(b) (as extended under Treasury Regulations and other Treasury pronouncements upon which taxpayers may rely), (c) the ERISA Plan and any associated trust have received a favorable

determination letter from the Internal Revenue Service stating that the ERISA Plan qualifies under Code Section 401(a), that the associated trust qualifies under Code Section 501(a) and, if applicable, that any cash or deferred arrangement under the ERISA Plan qualifies under Code Section 401(k), unless the ERISA Plan was first adopted at a time for which the above-described “remedial amendment period” has not yet expired, (d) the ERISA Plan currently satisfies the requirements of Code Section 410(b), without regard to any retroactive amendment that may be made within the above-described “remedial amendment period”, and (e) no contribution made to the ERISA Plan is subject to an excise tax under Code Section 4972. With respect to any Pension Plan (except to the extent set forth in footnote 4 to Borrower’s Consolidated financial statements for the fiscal year ended October 31, 2006), the “accumulated benefit obligation” of Controlled Group members with respect to the Pension Plan (as determined in accordance with Statement of Accounting Standards No. 87, “Employers’ Accounting for Pensions”, as applicable to Borrower from time to time) does not exceed the fair market value of Pension Plan assets.

Section 6.10 Consents or Approvals. No consent, approval or authorization of, or filing, registration or qualification with, any governmental authority or any other Person is required to be obtained or completed by Borrower in connection with the execution, delivery or performance of any of the Loan Documents that has not already been obtained or completed.

Section 6.11 Solvency . Borrower has received consideration that is the reasonable equivalent value of the obligations and liabilities that Borrower has incurred to the Banks. The Borrower is not insolvent as defined in any applicable state or federal statute, nor will Borrower be rendered insolvent by the execution and delivery of the Loan Documents to Agent and the Banks. The Borrower is not engaged or about to engage in any business or transaction for which the assets retained by it are or will constitute unreasonably small capital, taking into consideration the obligations to Agent and the Banks incurred hereunder. The Borrower does not intend to, nor does it believe that it will, incur debts beyond its ability to pay such debts as they mature.

Section 6.12 Financial Statements. The Consolidated financial statements of Borrower for the fiscal year ended October 31, 2013 and the quarter ended on or about April 30, 2014 that are available to the Agent and the Banks, are true and complete, have been prepared in accordance with GAAP, and fairly present the financial condition of the Companies as of the dates of such financial statements and the results of their operations for the periods then ending.

Section 6.13 Regulations . The Borrower is not engaged principally or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying any “margin stock” (within the meaning of Regulation U of the Board of Governors of the Federal Reserve System of the United States of America). Neither the granting of any Loan (or any conversion thereof) nor the use of the proceeds of any Loan will violate, or be inconsistent with, the provisions of Regulation U or X or any other Regulation of such Board of Governors.

Section 6.14 Investment Company; Holding Company . No Company is (a) an “investment company” or a company “controlled” by an “investment company” within the meaning of the Investment Company Act of 1940, as amended, or (b) subject to regulation under the Public Utility Holding Company Act of 2005, the Federal Power Act, each as amended, or any foreign, federal, state or local statute or regulation limiting its ability to incur Indebtedness.

Section 6.15 Accurate and Complete Statements . Neither the Loan Documents nor any written statement made by any Company in connection with any of the Loan Documents contains any untrue statement of a material fact or omits a material fact necessary to make the statements contained therein or in the Loan Documents not misleading. After due inquiry by a Financial Officer of Borrower, as of the Closing Date and the Effective Date, there is no known fact that any Company has not disclosed to Agent and the Banks that has or would have a Material Adverse Effect.

Section 6.16 Defaults . No Default or Event of Default exists hereunder, nor will any begin to exist.

Section 6.17 Anti-Terrorism Law Compliance. No Company is subject to or in violation of any law, regulation, or list of any government agency (including, without limitation, the U.S. Office of Foreign Asset Control list, Executive Order No. 13224 or the USA Patriot Act) that prohibits or limits the conduct of business with or the receiving of funds, goods or services to or for the benefit of certain Persons specified therein or that prohibits or limits any Bank from making any advance or extension of credit to Borrower or from otherwise conducting business with Borrower.

Section 6.18 Anti-Money Laundering/International Trade Law Compliance . No Covered Entity (i) is a Sanctioned Person; (ii) has any of its assets in a Sanctioned Country in violation of any law, regulation, order or directive enforced by any Compliance Authority or has any assets in the possession, custody or control of a Sanctioned Person; or (iii) does business in or with, or derives any of its operating income from investments in or transactions with, any Sanctioned Country or Sanctioned Person in violation of any law, regulation, order or directive enforced by any Compliance Authority. In addition to the foregoing, Borrower represents and warrants that (i) the proceeds of the Loans will not be used to fund any operations in, finance any investments or activities in, or, make any payments to, a Sanctioned Country or Sanctioned Person in violation of any law, regulation, order or directive enforced by any Compliance Authority; (ii) the funds used to repay the Loans are not derived from any unlawful activity; and (iii) each Covered Entity is in compliance with, and no Covered Entity engages in any dealings or transactions prohibited by, any laws of the United States, including but not limited to any Anti-Terrorism Laws.

ARTICLE VII.

EVENTS OF DEFAULT

Each of the following shall constitute an Event of Default hereunder:

Section 7.01 Payments . If (a) the principal of any Loan shall not be paid in full punctually when due and payable, or (b) the interest on any Loan or any facility or other fee shall not be paid in full punctually when due and payable or within five (5) Business Days thereafter.

Section 7.02 Special Covenants and Representations . If any Company or Obligor shall fail or omit to perform and observe Section 5.06, Section 5.07, Section 5.08, Section 5.09, Section 5.10, Section 6.17 or Section 6.18 hereof.

Section 7.03 Other Covenants . If any Company or Obligor shall fail or omit to perform and observe any agreement or other provision (other than those referred to in Section 7.01 or Section 7.02 hereof) contained or referred to in this Agreement or any Related Writing that is on such Company’s or Obligor’s part, as the case may be, to be complied with, and that Default shall not have been fully corrected within thirty (30) days after the giving of written notice thereof to Borrower by Agent or any Bank that the specified Default is to be remedied.

Section 7.04 Representations and Warranties . If any representation, warranty or statement made in or pursuant to this Agreement (other than those referred to in Section 6.17 or Section 6.18 hereof) or any Related Writing or any other material information furnished by any Company or any Obligor to the Agent or the Banks shall be false or erroneous.

Section 7.05 Cross Default . If any Company or Obligor shall default in the payment in an amount in excess of Two Million Five Hundred Thousand Dollars ($2,500,000) of principal, interest or fees due and owing upon any other obligation for borrowed money (other than any of the Debt) in excess, for all such obligations for all such Companies and Obligors, of the greater of (i) Fifty Million Dollars ($50,000,000) and (ii) an amount equal to three percent (3%) of Consolidated Total Assets beyond any period of grace provided with respect thereto, or in the performance or observance of any other agreement, term or condition contained in any agreement under which such obligation is created beyond any period of grace provided with respect thereto, if the effect of such default is to allow the acceleration of the maturity of such Indebtedness or to permit the holder thereof to cause such Indebtedness to become due prior to its stated maturity.

Section 7.06 ERISA Default . The occurrence of one or more ERISA Events that (a) the Required Banks determine could have a Material Adverse Effect, or (b) results in a Lien on any of the assets of any Company in excess of the greater of (i) Fifty Million Dollars ($50,000,000) and (ii) an amount equal to three percent (3%) of Consolidated Total Assets.

Section 7.07 Change Of Control . If any Change of Control shall occur.

Section 7.08 Money Judgment . A final judgment or order for the payment of money shall be rendered against any Company or Obligor by a court of competent jurisdiction, that remains unpaid or unstayed and undischarged for a period (during which execution shall not be effectively stayed) of thirty (30) days after the date on which the right to appeal has expired, provided that the aggregate of all such judgments for all such Companies and Obligors shall exceed the greater of (i) Fifty Million Dollars ($50,000,000) and (ii) an amount equal to three percent (3%) of Consolidated Total Assets.

Section 7.09 Validity of Loan Documents . (a) Any material provision, in the reasonable opinion of Agent, of any Loan Document shall at any time for any reason cease to be valid and binding and enforceable against Borrower or any Company; (b) the validity, binding effect or enforceability of any material provision of any Loan Document against Borrower or any Company shall be contested by such Company or any other Obligor; (c) Borrower or any Guarantor of Payment shall deny that it has any or further liability or obligation thereunder; or (d) any material provision of any Loan Document shall be terminated, invalidated or set aside, or be declared ineffective or inoperative or in any way cease to give or provide to Agent and the Banks the benefits purported to be created thereby.

Section 7.10 Insolvency . If Borrower or any Subsidiary (other than any Subsidiary that individually, or in the aggregate when combined with all other Subsidiaries excluded from this Section 7.10 by operation of this parenthetical, has assets less than or equal to the greater of (i) Fifty Million Dollars ($50,000,000) and (ii) an amount equal to three percent (3%) of Consolidated Total Assets) shall (a) except as permitted pursuant to Section 5.09 hereof, discontinue business, (b) generally not pay its debts as such debts become due, (c) make a general assignment for the benefit of creditors, (d) apply for or consent to the appointment of a receiver, a custodian, a trustee, an interim trustee or liquidator of all or a substantial part of its assets, (e) be adjudicated a debtor or have entered against it an order for relief under Title 11 of the United States Code, as the same may be amended from time to time, (f) file a voluntary petition in bankruptcy, or have an involuntary proceeding filed against it and the same shall continue undismissed for a period of thirty (30) days from commencement of such proceeding or case, or file a petition or an answer seeking reorganization or an arrangement with creditors or seeking to take advantage of any other law (whether federal or state (or the foreign equivalent)) relating to relief of debtors, or admit (by answer, by default or otherwise) the material allegations of a petition filed against it in any bankruptcy, reorganization, insolvency or other proceeding (whether federal or state (or the foreign equivalent)) relating to relief of debtors, (g) suffer or permit to continue unstayed and in effect for thirty (30) consecutive days any judgment, decree or order entered by a court of competent jurisdiction, that approves a petition seeking its reorganization or appoints a receiver, custodian, trustee, interim trustee or liquidator of all or a substantial part of its assets, or (h) take, or omit to take, any action in order thereby to effect any of the foregoing.

ARTICLE VIII.

REMEDIES UPON DEFAULT

Notwithstanding any contrary provision or implication herein or elsewhere:

Section 8.01 Optional Defaults . If any Event of Default referred to in Section 7.01, Section 7.02, Section 7.03, Section 7.04, Section 7.05, Section 7.06, Section 7.07, Section 7.08 or Section 7.09 hereof shall occur, Agent may, with the consent of the Required Banks, and shall, at the request of the Required Banks, give written notice to Borrower, to accelerate the maturity of all of the Debt (if the Debt is not already due and payable), whereupon all of the Debt shall become and thereafter be immediately due and payable in full without any presentment or demand and without any further or other notice of any kind, all of which are hereby waived by Borrower.

Section 8.02 Automatic Defaults . If any Event of Default referred to in Section 7.10 hereof shall occur the principal, interest and any other amounts then outstanding on all of the Notes, and all of the other Debt, shall thereupon become and thereafter be immediately due and payable in full (if the Debt is not already due and payable), all without any presentment, demand or notice of any kind, which are hereby waived by Borrower.

Section 8.03 Offsets . If there shall occur or exist any Event of Default referred to in Section 7.10 hereof or if the Debt is accelerated pursuant to Section 8.01 or Section 8.02 hereof, each Bank shall have the right at any time to set off against, and to appropriate and apply toward the payment of, any and all Debt then owing by Borrower to that Bank (including, without limitation, any participation purchased or to be purchased pursuant to Section 2.01 or Section 8.04 hereof), whether or not the same shall then have matured, any and all deposit balances and all other indebtedness then held or owing by that Bank to or for the credit or account of Borrower or any Guarantor of Payment, all without notice to or demand upon Borrower or any other Person, all such notices and demands being hereby expressly waived by Borrower.

Section 8.04 Equalization Provision . Each Bank agrees with the other Banks that if it, at any time, shall obtain any Advantage over the other Banks or any thereof in respect of the Debt (except under Article III hereof), it shall purchase from the other Banks, for cash and at par, such additional participation in the Debt as shall be necessary to nullify the Advantage. If any such Advantage resulting in the purchase of an additional participation as aforesaid shall be recovered in whole or in part from the Bank receiving the Advantage, each such purchase shall be rescinded, and the purchase price restored (but without interest unless the Bank receiving the Advantage is required to pay interest on the Advantage to the Person recovering the Advantage from such Bank) ratably to the extent of the recovery. Each Bank further agrees with the other Banks that if it at any time shall receive any payment for or on behalf of Borrower on any indebtedness owing by Borrower to that Bank by reason of offset of any deposit or other indebtedness, it will apply such payment first to any and all Debt owing by Borrower to that Bank (including, without limitation, any participation purchased or to be purchased pursuant to this Section or any other Section of this Agreement). Borrower agrees that any Bank so purchasing a participation from the other Banks or any thereof pursuant to this Section may exercise all its rights of payment (including the right of set-off) with respect to such participation as fully as if such Bank was a direct creditor of Borrower in the amount of participation.

ARTICLE IX.

THE AGENT

The Banks authorize PNC Bank, National Association and PNC Bank, National Association hereby agrees to act as agent for the Banks in respect of this Agreement upon the terms and conditions set forth elsewhere in this Agreement, and upon the following terms and conditions:

Section 9.01 Appointment and Authorization . Each Bank hereby irrevocably appoints and authorizes Agent to take such action as agent on its behalf and to exercise such powers hereunder as are delegated to Agent by the terms hereof, together with such powers as are reasonably incidental thereto. Neither Agent nor any of its Affiliates, directors, officers, attorneys or employees shall be liable for any action taken or omitted to be taken by it or them hereunder or in connection herewith, except for its or their own gross negligence or willful misconduct.

Section 9.02 Note Holders . Agent may treat the payee of any Note as the holder thereof until written notice of transfer shall have been filed with it, signed by such payee and in form satisfactory to Agent.

Section 9.03 Consultation With Counsel . Agent may consult with legal counsel selected by it and shall not be liable for any action taken or suffered in good faith by it in accordance with the opinion of such counsel.

Section 9.04 Documents . Agent shall not be under any duty to examine into or pass upon the validity, effectiveness, genuineness or value of any Loan Documents or any other Related Writing furnished pursuant hereto or in connection herewith or the value of any collateral obtained hereunder, and Agent shall be entitled to assume that the same are valid, effective and genuine and what they purport to be.

Section 9.05 Agent and Affiliates . With respect to the Loans, Agent shall have the same rights and powers hereunder as any other Bank and may exercise the same as though it were not Agent, and Agent and its Affiliates may accept deposits from, lend money to and generally engage in any kind of business with any Company or any Affiliate thereof.

Section 9.06 Knowledge of Default . It is expressly understood and agreed that Agent shall be entitled to assume that no Default or Event of Default has occurred (other than an Event of Default under Section 7.01 hereof), unless Agent has been notified by a Bank in writing that such Bank believes that a Default or Event of Default has occurred and is continuing and specifying the nature thereof or has been notified by Borrower pursuant to Section 5.13 hereof.

Section 9.07 Action By Agent . Subject to the other terms and conditions hereof, so long as Agent shall be entitled, pursuant to Section 9.06 hereof, to assume that no Default or Event of Default shall have occurred and be continuing, Agent shall be entitled to use its discretion with respect to exercising or refraining from exercising any rights that may be vested in it by, or with respect to taking or refraining from taking any action or actions that it may be able to take under or in respect of, this Agreement. Agent shall incur no liability under or in respect of this Agreement by acting upon any notice, certificate, warranty or other paper or instrument believed by it to be genuine or authentic or to be signed by the proper party or parties, or with respect to anything that it may do or refrain from doing in the reasonable exercise of its judgment, or that may seem to it to be necessary or desirable in the premises.

Section 9.08 Notices, Default, Etc. In the event that Agent shall have acquired actual knowledge of any Default or Event of Default, Agent shall promptly notify the Banks and shall take such action and assert such rights under this Agreement as the Required Banks shall direct and Agent shall promptly inform the other Banks in writing of the action taken. Subject to the other terms and conditions hereof, Agent may take such action and assert such rights as it deems to be advisable, in its discretion, for the protection of the interests of the holders of the Notes.

Section 9.09 Indemnification of Agent . The Banks agree to indemnify Agent (to the extent not reimbursed by Borrower) ratably, according to their respective Commitment Percentages, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever that may be imposed on, incurred by or asserted against Agent in its agency capacity in any way relating to or arising out of this Agreement or any Loan Document or any action taken or omitted by it with respect to this Agreement or any Loan Document, provided that no Bank shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions,

judgments, suits, costs, expenses (including attorneys’ fees) or disbursements resulting from Agent’s gross negligence, willful misconduct or from any action taken or omitted by it in any capacity other than as agent under this Agreement.

Section 9.10 Successor Agent . Agent may resign as agent hereunder by giving not fewer than thirty (30) days prior written notice to Borrower and the Banks. If Agent shall resign under this Agreement, then either (a) the Required Banks shall appoint from among the Banks a successor agent for the Banks (with the consent of Borrower so long as a Default or an Event of Default has not occurred and which consent shall not be unreasonably withheld), or (b) if a successor agent shall not be so appointed and approved within the thirty (30) day period following Agent’s notice to the Banks of its resignation, then Agent shall appoint a successor agent that shall serve as agent until such time as the Required Banks appoint a successor agent. Upon its appointment, such successor agent shall succeed to the rights, powers and duties as agent, and the term “Agent” shall mean such successor effective upon its appointment, and the former agent’s rights, powers and duties as agent shall be terminated without any other or further act or deed on the part of such former agent or any of the parties to this Agreement.

Section 9.11 No Reliance on Agent’s Customer Identification Program . Each Bank acknowledges and agrees that neither such Bank, nor any of its Affiliates, participants or assignees, may rely on Agent to carry out such Bank’s, Affiliate’s, participant’s or assignee’s customer identification program, or other obligations required or imposed under or pursuant to the USA Patriot Act or the regulations thereunder, including the regulations contained in 31 CFR 103.121 (as hereafter amended or replaced, the “CIP Regulations”), or any other Anti-Terrorism Law, including any programs involving any of the following items relating to or in connection with Borrower, any other Company, their respective Affiliates or agents, the Loan Documents or the transactions hereunder: (a) any identity verification procedures, (b) any record keeping, (c) any comparisons with government lists, (d) any customer notices or (e) any other procedures required under the CIP Regulations or such other law.

Section 9.12 USA Patriot Act . Each Bank or assignee or participant of a Bank that is not organized under the laws of the United States of America or a state thereof (and is not excepted from the certification requirement contained in Section 313 of the USA Patriot Act and the applicable regulations because it is both (a) an Affiliate of a depository institution or foreign bank that maintains a physical presence in the United States or foreign country, and (b) subject to supervision by a banking authority regulating such Affiliated depository institution or foreign bank) shall deliver to Agent the certification, or, if applicable, recertification, certifying that such Bank is not a “shell” and certifying to other matters as required by Section 313 of the USA Patriot Act and the applicable regulations: (i) within 10 days after the Closing Date and (ii) at such other times as are required under the USA Patriot Act.

ARTICLE X.

MISCELLANEOUS

Section 10.01 Banks’ Independent Investigation . Each Bank, by its signature to this Agreement, acknowledges and agrees that Agent has made no representation or warranty, express or implied, with respect to the creditworthiness, financial condition, or any other condition of any Company or with respect to the statements contained in any information

memorandum furnished in connection herewith or in any other oral or written communication between Agent and such Bank. Each Bank represents that it has made and shall continue to make its own independent investigation of the creditworthiness, financial condition and affairs of the Companies in connection with the extension of credit hereunder, and agrees that Agent has no duty or responsibility, either initially or on a continuing basis, to provide any Bank with any credit or other information with respect thereto (other than such notices as may be expressly required to be given by Agent to the Banks hereunder), whether coming into its possession before the granting of the Loans hereunder or at any time or times thereafter.

Section 10.02 No Waiver; Cumulative Remedies . No omission or course of dealing on the part of Agent, any Bank or the holder of any Note in exercising any right, power or remedy hereunder or under any of the Loan Documents shall operate as a waiver thereof; nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy hereunder or under any of the Loan Documents. The remedies herein provided are cumulative and in addition to any other rights, powers or privileges held by operation of law, by contract or otherwise.

Section 10.03 Amendments; Consents . No amendment, modification, termination, or waiver of any provision of any Loan Document nor consent to any variance therefrom, shall be effective unless the same shall be in writing and signed by the Required Banks and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. Anything herein to the contrary notwithstanding, no such amendment, modification, termination, waiver or consent may be made with respect to (a) any increase in the Total Commitment Amount without the unanimous consent of all of the Banks, (b) the extension of the Maturity Date, the payment date of interest or principal with respect thereto, or the payment date of fees or amounts payable hereunder in each case without the consent of each Bank directly affected thereby, (c) any reduction in the rate of interest on the Loans, or in any amount of principal or interest due on any Loan, or any reduction in the amount of fees hereunder or any change in the manner of pro rata application of any payments made by Borrower to the Banks hereunder in each case without the unanimous consent of all of the Banks, (d) any change in any percentage voting requirement, voting rights, or the Required Banks definition in this Agreement in each case without the unanimous consent of all of the Banks, (e) the release of any Guarantor of Payment, if any, except in connection with a transaction permitted pursuant to Section 5.09 hereof, without the unanimous consent of all of the Banks or (f) any amendment to this Section 10.03 or Section 8.04 hereof without the unanimous consent of all of the Banks. In addition, the Commitment of any Bank may not be increased without the prior written consent of such Bank (even if such Bank is a Defaulting Bank). Notice of amendments or consents ratified by the Banks hereunder shall immediately be forwarded by Agent to all Banks. Each Bank or other holder of a Note shall be bound by any amendment, waiver or consent obtained as authorized by this Section, regardless of its failure to agree thereto. Notwithstanding anything to the contrary herein, no Defaulting Bank shall have any right to approve or disapprove any amendment, waiver or consent hereunder (and any amendment, waiver or consent which by its terms requires the consent of all Banks may be effected with the consent of the applicable Banks other than Defaulting Banks), except that any waiver, amendment or modification requiring the consent of all Banks that by its terms affects any Defaulting Bank disproportionately adversely relative to other affected Banks shall require the consent of such Defaulting Bank.

Section 10.04 Notices . All notices, requests, demands and other communications provided for hereunder shall be in writing and, if to Borrower, mailed or delivered to it, addressed to it at the address specified on the signature pages of this Agreement, if to a Bank, mailed or delivered to it, addressed to the address of such Bank specified on the signature pages of this Agreement, or, as to each party, at such other address as shall be designated by such party in a written notice to each of the other parties. All notices, statements, requests, demands and other communications provided for hereunder shall be given by overnight delivery or first class mail with postage prepaid by registered or certified mail, addressed as aforesaid, or sent by facsimile with telephonic confirmation of receipt, except that all notices hereunder shall not be effective until received.

Section 10.05 Costs, Expenses and Taxes . Borrower agrees to pay on demand all costs and expenses of Agent, including, but not limited to, (a) syndication, administration, travel and out-of-pocket expenses, including but not limited to attorneys’ fees and expenses, of Agent in connection with the preparation, negotiation and closing of the Loan Documents and the administration of the Loan Documents, the collection and disbursement of all funds hereunder and the other instruments and documents to be delivered hereunder, (b) extraordinary expenses of Agent in connection with the administration of the Loan Documents and the other instruments and documents to be delivered hereunder, and (c) the reasonable fees and out-of-pocket expenses of special counsel for Agent, with respect to the foregoing, and of local counsel, if any, who may be retained by said special counsel with respect thereto. Borrower also agrees to pay on demand all costs and expenses of Agent and the Banks, including reasonable attorneys’ fees, in connection with the restructuring or enforcement of the Debt owing by Borrower, this Agreement or any Related Writing. In addition, Borrower shall pay any and all stamp and other taxes and fees payable or determined to be payable in connection with the execution and delivery of the Loan Documents to which Borrower is a party, and the other instruments and documents to be delivered hereunder, and agrees to hold Agent and each Bank harmless from and against any and all liabilities with respect to or resulting from any delay in paying or omission to pay such taxes or fees. All obligations provided for in this Section 10.05 shall survive any termination of this Agreement.

Section 10.06 Indemnification . Borrower agrees to defend, indemnify and hold harmless Agent and the Banks (and their respective Affiliates, officers, directors, attorneys, agents and employees) from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses (including attorneys’ fees) or disbursements of any kind or nature whatsoever that may be imposed on, incurred by or asserted against Agent or any Bank in connection with any investigative, administrative or judicial proceeding (whether or not such Bank or Agent shall be designated a party thereto) or any other claim by any Person relating to or arising out of any Loan Document or any actual or proposed use of proceeds of the Loans or any of the Debt, or any activities of any Company or any Obligor or any of their respective Affiliates; provided that no Bank nor Agent shall have the right to be indemnified under this Section for its own gross negligence or willful misconduct as determined by a court of competent jurisdiction by final and nonappealable judgment. All obligations provided for in this Section 10.06 shall survive any termination of this Agreement.

Section 10.07 Obligations Several; No Fiduciary Obligations . The obligations of the Banks hereunder are several and not joint. Nothing contained in this Agreement and no action

taken by Agent or the Banks pursuant hereto shall be deemed to constitute the Banks a partnership, association, joint venture or other entity. No default by any Bank hereunder shall excuse the other Banks from any obligation under this Agreement; but no Bank shall have or acquire any additional obligation of any kind by reason of such default. The relationship among Borrower and the Banks with respect to the Loan Documents and the Related Writings is and shall be solely that of debtor and creditors, respectively, and neither Agent nor any Bank shall have any fiduciary obligation toward Borrower with respect to any such documents or the transactions contemplated thereby.

Section 10.08 Execution In Counterparts . This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts and by facsimile signature, each of which when so executed and delivered shall be deemed to be an original and all of which taken together shall constitute but one and the same agreement.

Section 10.09 Binding Effect; Borrower’ Assignment . This Agreement shall become effective when it shall have been executed by Borrower, Agent and by each Bank and thereafter shall be binding upon and inure to the benefit of Borrower, Agent and each of the Banks and their respective successors and assigns, except that Borrower shall not have the right to assign its rights hereunder or any interest herein without the prior written consent of Agent and all of the Banks.

Section 10.10 Assignments .

(a) Each Bank shall have the right, in accordance with the terms and conditions of this Section 10.10, at any time or times to assign to one or more commercial banks, finance companies, insurance companies or other financial institution or fund which, in each case, in the ordinary course of business extends credit of the type contemplated herein and whose becoming an assignee would not constitute a prohibited transaction under Section 4975 of ERISA (each an “Eligible Assignee”), without recourse, all or a percentage of all of such Bank’s Commitment, all Loans made by such Bank, such Bank’s Notes, and such Bank’s interest in any participation purchased pursuant to Section 2.01 or Section 8.04 hereof.

(b) No assignment may be consummated pursuant to this Section 10.10 without the prior written consent of Borrower and Agent (other than an assignment by any Bank to any Affiliate of such Bank which Affiliate is either wholly-owned by such Bank or is wholly-owned by a Person that wholly owns, either directly or indirectly, such Bank), which consent of Borrower and Agent shall not be unreasonably withheld; provided, however, that, Borrower’s consent shall not be required if, at the time of the proposed assignment, any Default or Event of Default shall then exist. Anything herein to the contrary notwithstanding, any Bank may at any time make a collateral assignment of all or any portion of its rights under the Loan Documents to a Federal Reserve Bank, and no such assignment shall release such assigning Bank from its obligations hereunder.

(c) Each assignment made pursuant to this Section 10.10 shall be in a minimum amount of the lesser of Five Million Dollars ($5,000,000) of the assignor’s Commitment and interest herein or the entire amount of the assignor’s Commitment and interest herein.

(d) Unless an assignment made pursuant to this Section 10.10 shall be to an Affiliate of the assignor or the assignment shall be due to merger of the assignor or for regulatory purposes, either the assignor or the assignee shall remit to Agent, for its own account, an administrative fee of Three Thousand Five Hundred Dollars ($3,500).

(e) Unless an assignment made pursuant to this Section 10.10 shall be due to merger of the assignor or a collateral assignment for regulatory purposes, the assignor shall (i) cause the assignee to execute and deliver to Borrower and Agent an Assignment Agreement and (ii) execute and deliver, or cause the assignee to execute and deliver, as the case may be, to Agent such additional amendments, assurances and other writings as Agent may reasonably require.

(f) If an assignment made pursuant to this 10.10 is to be made to an assignee that is organized under the laws of any jurisdiction other than the United States or any state thereof, the assignor Bank shall cause such assignee, at least five Business Days prior to the effective date of such assignment, (i) to represent to the assignor Bank (for the benefit of the assignor Bank, Agent and Borrower) that under applicable law and treaties no taxes will be required to be withheld by Agent, Borrower or the assignor with respect to any payments to be made to such assignee in respect of the Loans hereunder, (ii) to furnish to the assignor (and, in the case of any assignee registered in the Register (as defined below), Agent and Borrower) either (A) U.S. Internal Revenue Service Form W-8ECI or U.S. Internal Revenue Service Form W-8BEN or (B) United States Internal Revenue Service Forms W-8 or W-9, as applicable (wherein such assignee claims entitlement to complete exemption from U.S. federal withholding tax on all interest payments hereunder), and (iii) to agree (for the benefit of the assignor, Agent and Borrower) to provide the assignor Bank (and, in the case of any assignee registered in the Register, Agent and Borrower) a new Form W-8ECI or Form W-8BEN or Forms W-8 or W-9, as applicable, upon the expiration or obsolescence of any previously delivered form and comparable statements in accordance with applicable U.S. laws and regulations and amendments duly executed and completed by such assignee, and to comply from time to time with all applicable U.S. laws and regulations with regard to such withholding tax exemption.

(g) Upon satisfaction of all applicable requirements specified in subparts (a) though (f) above, Borrower shall execute and deliver (i) to Agent, the assignor and the assignee, any consent or release (of all or a portion of the obligations of the assignor) required to be delivered by Borrower in connection with the Assignment Agreement, and (ii) to the assignee or the assignor (if applicable), an appropriate Note or Notes. After delivery of the new Note or Notes, the assignor’s Note or Notes being replaced shall be returned to Borrower marked “replaced”.

(h) Upon satisfaction of all applicable requirements specified in subparts (a) though (f) above, and any other condition contained in this Section 10.10, (i) the assignee shall become and thereafter be deemed to be a “Bank” for the purposes of this Agreement, (ii) the Assignor shall be released from its obligations hereunder to the extent its interest has been assigned, (iii) in the event that the assignor’s entire interest has been assigned, the assignor shall cease to be and thereafter shall no longer be deemed to be a “Bank” and (iv) the signature pages hereto and Schedule 1 hereto shall be automatically amended, without further action, to reflect the result of any such assignment.

(i) Agent shall maintain at the address for notices referred to in Section 10.04 hereof a copy of each Assignment Agreement delivered to it and a register (the “Register”) for the recordation of the names and addresses of the Banks and the Commitment of, and principal amount (and stated interest) of the Loans owing to, each Bank from time to time. The entries in the Register shall be conclusive, in the absence of manifest error, and Borrower, Agent and the Banks may treat each financial institution whose name is recorded in the Register as the owner of the Loan recorded therein for all purposes of this Agreement. The Register shall be available for inspection by Borrower or any Bank at any reasonable time and from time to time upon reasonable prior notice.

Section 10.11 Participations .

(a) Each Bank shall have the right at any time or times, without the consent of Agent or Borrower, to sell one or more participations or sub-participations to a financial institution or other “accredited investor” (as defined in SEC Regulation D), as the case may be (each, a “Participant”), in all or any part of such Bank’s Commitment, such Bank’s Commitment Percentage, any Loan made by such Bank, any Note delivered to such Bank pursuant to this Agreement, and such Bank’s interest in any participation, if any, purchased pursuant to, Section 8.04 or this Section 10.11.

(b) The provisions of Article III and Section 10.06 shall inure to the benefit of each purchaser of participation or sub-participation and Agent shall continue to distribute payments pursuant to this Agreement as if no participation has been sold.

(c) Any agreement or instrument pursuant to which a Bank sells such a participation shall provide that such Bank shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Bank will not, without the consent of the Participant, agree to any amendment, modification or waiver described in Section 10.03 that affects such Participant. Borrower agrees that each Participant shall be entitled to the benefits of Section 3.01, Section 3.04 and Section 3.02 (subject to the requirements and limitations therein, including the requirements under Section 3.02(f) (it being understood that the documentation required under Section 3.02(f) shall be delivered to the participating Bank)) to the same extent as if it were a Bank and had acquired its interest by assignment pursuant to paragraph (b) of this Section; provided that such Participant (A) agrees to be subject to the provisions of Section 3.08 as if it were an assignee under paragraph (b) of this Section; and (B) shall not be entitled to receive any greater payment under Section 3.01 or Section 3.02, with respect to any participation, than its participating Bank would have been entitled to receive, except to the extent such entitlement to receive a greater payment results from a Change in Law that occurs after the Participant acquired the applicable participation. Each Bank that sells a participation agrees, at Borrower’ request and expense, to use reasonable efforts to cooperate with Borrower to effectuate the provisions of Section 3.08 with respect to any Participant. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 8.04 as though it were a Bank. Each Bank that sells a participation shall, acting solely for this purpose as an agent of Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under the Loan Documents (the “Participant Register”); provided

that no Bank shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant’s interest in any commitments, loans, letters of credit or its other obligations under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan, letter of credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Bank shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, the Agent (in its capacity as Agent) shall have no responsibility for maintaining a Participant Register.

(d) No participation or sub-participation shall operate as a delegation of any duty of the seller thereof.

(e) Under no circumstance shall any participation or sub-participation be deemed a novation in respect of all or any part of the seller’s obligations pursuant to this Agreement.

Section 10.12 Severability Of Provisions; Captions; Attachments . 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 or affecting the validity or enforceability of such provision in any other jurisdiction. The several captions to Sections and subsections herein are inserted for convenience only and shall be ignored in interpreting the provisions of this Agreement. Each schedule or exhibit attached to this Agreement shall be incorporated herein and shall be deemed to be a part hereof.

Section 10.13 Investment Purpose . Each of the Banks represents and warrants to Borrower that it is entering into this Agreement with the present intention of acquiring any Note issued pursuant hereto for investment purposes only and not for the purpose of distribution or resale, it being understood, however, that each Bank shall at all times retain full control over the disposition of its assets.

Section 10.14 Entire Agreement . This Agreement, any Note and any other Loan Document or other agreement, document or instrument attached hereto or executed on or as of the Closing Date integrate all the terms and conditions mentioned herein or incidental hereto and supersede all oral representations and negotiations and prior writings with respect to the subject matter hereof.

Section 10.15 Governing Law; Submission to Jurisdiction . This Agreement, each of the Notes and any Related Writing shall be governed by and construed in accordance with the laws of the State of Ohio and the respective rights and obligations of Borrower and the Banks shall be governed by Ohio law, without regard to principles of conflict of laws. Borrower hereby irrevocably submits to the non-exclusive jurisdiction of any Ohio state or federal court sitting in Cleveland, Ohio, over any action or proceeding arising out of or relating to this Agreement, the Debt or any Related Writing, and Borrower hereby irrevocably agrees that all claims in respect of such action or proceeding may be heard and determined in such Ohio state or federal court.

Borrower, on behalf of itself and its Subsidiaries, hereby irrevocably waives, to the fullest extent permitted by law, any objection it may now or hereafter have to the laying of venue in any action or proceeding in any such court as well as any right it may now or hereafter have to remove such action or proceeding, once commenced, to another court on the grounds of FORUM NON CONVENIENS or otherwise. Borrower agrees that a final, nonappealable judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

Section 10.16 Legal Representation of Parties . The Loan Documents were negotiated by the parties with the benefit of legal representation and any rule of construction or interpretation otherwise requiring this Agreement or any other Loan Document to be construed or interpreted against any party shall not apply to any construction or interpretation hereof or thereof.

Section 10.17 JURY TRIAL WAIVER . BORROWER, AGENT AND EACH OF THE BANKS WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG BORROWER, AGENT AND THE BANKS, OR ANY THEREOF, ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS AGREEMENT OR ANY NOTE OR OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS RELATED THERETO.

[Remainder of page intentionally left blank]

[SIGNATURE PAGE TO CREDIT AGREEMENT]


Address:	28601 Clemens Road	NORDSON CORPORATION
	Westlake, Ohio 44145
	Attention: Vice President, Chief
	Financial Officer

		By:
			Name:	Gregory A. Thaxton
			Title:	Senior Vice President, Chief
				Financial Officer

Address:	PNC Center	PNC BANK, NATIONAL ASSOCIATION,
	1900 East Ninth Street	as Administrative Agent and as a Bank
	Cleveland, Ohio 44114
	Attention: Joseph G. Moran

		By:

			Name:

			Title:

[Other Signature Pages to Follow]

Schedule 1

Banks and Commitments


Bank	Commitment Percentage			Commitment Amount
PNC Bank, National Association		100	%	$	100,000,000

Total Commitment Amount:		100.00	%	$	100,000,000

EXHIBIT 31.1

Nordson Corporation

CERTIFICATIONS

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, Michael F. Hilton, certify that:

I have reviewed this quarterly report on Form 10-Q of Nordson Corporation;

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;

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;

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:

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;

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;

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

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

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):

all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

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.

Date: September 4, 2014

/s/ Michael F. Hilton

Michael F. Hilton

President and Chief Executive Officer

EXHIBIT 31.2

Nordson Corporation

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, Gregory A. Thaxton, certify that:

I have reviewed this quarterly report on Form 10-Q of Nordson Corporation;

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.

Date: September 4, 2014

/s/ Gregory A. Thaxton

Gregory A. Thaxton

Senior Vice President, Chief Financial Officer

EXHIBIT 32.1

Nordson Corporation

Certification

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(Section 1350, Chapter 63 of Title 18, United States Code)

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Section 1350, Chapter 63 of Title 18, United States Code), I, Michael F. Hilton, President and Chief Executive Officer of Nordson Corporation, an Ohio corporation (the “ Company ”), do hereby certify that:

1. The Quarterly Report on Form 10-Q for the quarter ended July 31, 2014 of the Company (the “ Form 10-Q ”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. Information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.


Dated: September 4, 2014		/s/ Michael F. Hilton
		Michael F. Hilton
		President and Chief Executive Officer

EXHIBIT 32.2

Nordson Corporation

Certification

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(Section 1350, Chapter 63 of Title 18, United States Code)

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Section 1350, Chapter 63 of Title 18, United States Code), I, Gregory A. Thaxton, Senior Vice President, Chief Financial Officer of Nordson Corporation, an Ohio corporation (the “ Company ”), do hereby certify that:

2. Information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.


Dated: September 4, 2014		/s/ Gregory A. Thaxton
		Gregory A. Thaxton
		Senior Vice President, Chief Financial Officer