EXHIBIT
10
EXECUTION
COPY
SECOND AMENDMENT AND WAIVER dated as
of December 7, 2007 (this “ Amendment ”),
to the FIVE-YEAR CREDIT AGREEMENT dated as of June 21, 2006 (as
amended, supplemented or otherwise modified from time to time the
“ Credit Agreement ”), among PALL CORPORATION
(the “ Company ”), the Subsidiaries of the
Company named on the signature pages thereto, the LENDERS from time
to time party thereto, JPMORGAN CHASE BANK, N.A., as facility agent
for the Lenders (the “ Facility Agent ”) and
J.P. MORGAN EUROPE LIMITED, as London agent for the Lenders (the
“ London Agent ” and, together with the Facility
Agent, the “ Agents ”).
WHEREAS
the Company has informed the Agents and the Lenders that
(a) it has understated its U.S. income tax payments and its
provision for income taxes, (b) the understatement relates to
the taxation of certain intercompany payable balances that mainly
resulted from sales of products by a foreign subsidiary of the
Company to a U.S. subsidiary of the Company, (c) as of the
date of this Amendment, the Company has paid $135,000,000
principally in respect of the foregoing, (d) the amount of
additional tax provisions required to be recorded by the Company
has not been determined as of the date of this Amendment and
(e) the Company expects that it will be required to restate
some or all of its financial statements for the fiscal years 1999
through 2006 and each of the fiscal quarters ended October 31,
2006, January 31, 2007 and April 30, 2007 and that, for
its fiscal year ended July 31, 2007, it may be required to
report one or more material weaknesses in its internal control over
financial reporting (the matters referred to in this paragraph
being called the “ Specified Matters ”).
WHEREAS
the Company has further informed the Agents and the Lenders that,
as a result of the Specified Matters, (a) certain
certifications, representations and warranties of the Company
contained in or made pursuant to the Credit Agreement or other Loan
Documents (or any document delivered in connection therewith) may
have been inaccurate when made or may not be accurate if required
to be made in the event of additional borrowings under the Credit
Agreement, (b) the covenants set forth in Sections 5.01,
5.02, 5.03, 5.04, 5.08 or 5.09 of the Credit Agreement may have
been violated, (c) certain defaults may have occurred under
other credit agreements, debt indentures or ISDA agreements of the
Company, (d) the Company expects that it may not be able to
deliver its Annual Report on Form 10-K for the fiscal year ended
July 31, 2007 (the “ Affected Annual Report
”) or its Quarterly Reports on Form 10-Q for its fiscal
quarters ending October 31, 2007 and January 31, 2008 (the
“ Affected Quarterly Reports ”), to the Facility
Agent as and when it is required to do so by Section 5.01 of
the Credit Agreement and (e) the foregoing inaccuracies,
violations and other matters may, if not waived by the Lenders,
have resulted in or will result in Events of Default pursuant to
Section 7.01 of the Credit Agreement.
WHEREAS
the Company has requested that the Lenders waive, and the Lenders
have agreed to waive, certain Defaults and failures of conditions
precedent arising from the Specified Matters and the Company has
requested that the Lenders amend, and the Lenders have agreed to
amend, Section 5.01 to extend the period of time
during
which the Company must deliver the Affected Annual Report and
Affected Quarterly Reports on the terms and subject to the
conditions set forth herein.
NOW,
THEREFORE, in consideration of the above premises and other good
and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto hereby agree as
follows:
SECTION
1. Defined Terms. Each capitalized term used and not defined
herein shall have the meaning assigned to it in the Credit
Agreement (as modified hereby).
SECTION
2. Waiver. Effective as of the Second Amendment and Waiver
Effective Date (as defined below), the Lenders hereby waive
(a) all breaches of representations and warranties under the
Credit Agreement, Defaults caused by violations of
Sections 5.01, 5.02, 5.03, 5.04, 5.08 and 5.09 of the Credit
Agreement and failures to satisfy conditions precedent set forth in
Section 4.02 of the Credit Agreement (including conditions
precedent to any further borrowing under the Credit Agreement)
resulting from the Specified Matters and (b) any Default that
may occur pursuant to Section 7.01(e)(i)(B) or 7.01(e)(ii)(A)
of the Credit Agreement as a result of violations of the Other Debt
Agreements (as defined below) due to (i) the Specified Matters
or (ii) the failure to file with the Securities and Exchange
Commission or to transmit to holders thereunder the Affected Annual
Report or the Affected Quarterly Reports as and when required by
the terms thereof (A) in the case of the Other Debt Agreements
(other than the Material Debt Agreements (as defined below)) until
March 31, 2008 and (B) in the case of the Material Debt
Agreements, until December 31, 2007.
SECTION
3. Amendment to Section 5.01. Effective as of the
Second Amendment and Waiver Effective Date, Section 5.01 of
the Credit Agreement is hereby amended by:
(a)
replacing paragraph (a) of such Section with the following
paragraph:
(a)
(i) with respect to each Fiscal Year of the Company (other
than the Fiscal Year ended July 31, 2007), as soon as available,
but in any event within 90 days after the end of each such
Fiscal Year or at such earlier time as the SEC may require the
Company to deliver its Form 10-K (commencing with the Fiscal Year
ended July 31, 2006) and (ii) with respect to the Fiscal
Year of the Company ended July 31, 2007, as soon as available,
but in any event by March 31, 2008, a consolidated balance
sheet of the Company and the Subsidiaries as at the end of such
Fiscal Year, and the related consolidated statements of earnings,
shareholders’ equity and cash flows for such Fiscal Year,
setting forth in each case in comparative form the figures for the
previous Fiscal Year, all in reasonable detail and prepared in
accordance with GAAP consistently applied throughout the periods
covered thereby, except as otherwise expressly noted therein,
audited and accompanied by a report and opinion of an independent
certified public accountant of nationally recognized standing
reasonably acceptable to the Required Lenders, which report and
opinion shall be prepared in accordance with generally
3
accepted
auditing standards and shall not be subject to any “going
concern” or like qualification or exception or any
qualification or exception as to the scope of such financial
statement audit; provided that (i) the requirements of
this paragraph shall be deemed satisfied by delivery within the
time period specified above of (A) a copy of the
Company’s Annual Report on Form 10-K for such Fiscal Year
(together with the Company’s annual report to shareholders,
if any, prepared pursuant to Rule 14a-3 under the Exchange
Act) (“ Form 10-K ”) prepared in accordance
with the requirements therefor and filed with the SEC or (B) a
notice setting forth a written reference to a website that contains
such Form 10-K (together with the Company’s annual report to
shareholders, if any, prepared pursuant to Rule 14a-3 under
the Exchange Act); and
(b)
replacing paragraph (b) of such Section with the following
paragraph:
(b)
(i) with respect to each of the first three fiscal quarters of
the Company in any Fiscal Year (other than the fiscal quarters
ending October 31, 2007 and January 31, 2008), as soon as
available, but in any event within 45 days after the end of
each such fiscal quarter or at such earlier time as the SEC may
require the Company to deliver its Form 10-Q (commencing with the
fiscal quarter ended October 31, 2006) and (ii) with
respect to the fiscal quarters of the Company ending
October 31, 2007 and January 31, 2008, as soon as
available, but in any event by March 31, 2008, (A) a
consolidated balance sheet of the Company and the Subsidiaries as
at the end of such quarter and (B) consolidated statements of
earnings of the Company and its Subsidiaries for such quarter and
(in the case of the second and third quarters) for the portion of
the Fiscal Year ending with such quarter, and a statement of cash
flows for the portion of the Fiscal Year ending with such quarter,
setting forth in each case in comparative form the figures for the
corresponding periods in the previous Fiscal Year, all in
reasonable detail, prepared in accordance with GAAP applicable to
quarterly financial statements generally consistently applied
throughout the periods covered thereby, except as otherwise
expressly noted therein, and certified by a Responsible Officer of
the Company as fairly presenting, in all material respects, the
financial position of the Company and its Subsidiaries being
reported on and their results of operations and cash flows, subject
to the changes resulting from year-end adjustments; provided
that (i) the requirements of this paragraph shall be deemed
satisfied by delivery within the time period specified above
of
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