As filed with the Securities and Exchange Commission on January
30, 1995
Registration No. 33-__________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
PALL CORPORATION
(Exact name of registrant as specified in its charter)
New York 11-1541330
(State or other (I.R.S. Employer
jurisdiction of Identification No.)
incorporation or
organization)
2200 Northern Boulevard
East Hills, New York 11548
(516) 484-5400
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
Peter Schwartzman
Secretary
Pall Corporation
2200 Northern Boulevard
East Hills, New York 11548
(516) 484-5400
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
__________________
Copy to:
Heywood Shelley, Esq.
Carter, Ledyard & Milburn
2 Wall Street
New York, New York 10005
(212) 732-3200
_________________
Approximate date of commencement of proposed sale to the
public: From time to time after this registration statement
becomes effective, as determined by market conditions and other
factors.
If the only securities being registered on this Form are
being offered pursuant to dividend or interest reinvestment
plans, please check the following box. __ __
If any of the securities being registered on this Form are
to be offered on a delayed or continuous basis pursuant to Rule
415 under the Securities Act of 1933, other than securities
offered only in connection with dividend or interest reinvestment
plans, check the following box. __X__
<PAGE>
<TABLE>
CALCULATION OF REGISTRATION FEE
<CAPTION>
Proposed Proposed
Title of each maximum maximum Amount of
class of offering aggregate registration
securities to Amount to be price offering fee
be registered registered per unit price
<S> <C> <C> <C> <C>
Common Stock,
par value $.10
per share 1,280,325 shs. $18.8125(1) $24,086,115(1) $8,305.56
Common Share
Purchase 1,280,325 rights -- (2) -- (2) None
Rights
<FN>
_______________________________
(1) Calculated pursuant to Rule 457(c) under the Securities Act
of 1933, on the basis of the average of the high and the low
prices ($19.125 and $18.50) of a share of Common Stock as
reported for New York Stock Exchange composite transactions
on January 24, 1995.
(2) The Rights are presently attached to and transferable only
with the common shares of the registrant. The value, if
any, attributable to the Rights to be offered is reflected
in the proposed offering price of the Common Stock.
____________________________
The registrant hereby amends this registration statement on
such date or dates as may be necessary to delay its effective
date until the registrant shall file a further amendment which
specifically states that this registration statement shall
thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement
shall become effective on such date as the Securities and
Exchange Commission, acting pursuant to said Section 8(a), may
determine.
</FN>
</TABLE>
<PAGE>
PROSPECTUS
PALL CORPORATION
1,280,325 Shares of Common Stock,
Par Value $.10 per Share
This Prospectus relates to an offering by certain persons
(the "Selling Shareholders") of up to 1,280,325 shares (the
"Shares") of the Common Stock, par value $.10 per share (the
"Common Stock"), of Pall Corporation, a New York corporation (the
"Company"). The Shares were issued to the Selling Shareholders
in connection with the Company's acquisition of Filtron
Technology Corporation, a Massachusetts corporation ("Filtron").
The Company will receive no part of the proceeds from the sale of
the Shares by the Selling Shareholders. This Prospectus also
relates to up to 1,280,325 Common Share Purchase Rights of the
Company (the "Rights") which are attached to and transferable
only with the Shares. See "Description of the Common Stock."
On February___, 1995, the closing price of a share of the
Common Stock as reported by and for New York Stock Exchange
composite transactions was $________.
The Selling Shareholders may sell the Shares from time to
time in ordinary brokers' transactions at then current market
prices or in other transactions at negotiated prices. Such
transactions may be effected through or with brokers or dealers
who may receive compensation in the form of commissions or
discounts. Any such broker or dealer may be deemed to be an
"underwriter" within the meaning of Section 2(11) of the
Securities Act of 1933, as amended, and any commissions received
by any such broker or dealer in connection with such sales and
any profits received by any such broker or dealer on the resale
of any Shares acquired as principal may be deemed to be
underwriting compensation. See "The Offering."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED
BY THE SECURITIES AND EXCHANGE COMMISSION NOR HAS
THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is February___, 1995.
<PAGE>
TABLE OF CONTENTS
Page
AVAILABLE INFORMATION . . . . . . . . . . . . . . . . . 2
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE . . . . . 2
THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . 3
THE OFFERING . . . . . . . . . . . . . . . . . . . . . . 3
DESCRIPTION OF THE COMMON STOCK . . . . . . . . . . . . . 8
LEGAL MATTERS . . . . . . . . . . . . . . . . . . . . . . 12
EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . 12
AVAILABLE INFORMATION
A Registration Statement on Form S-3 relating to this
offering of the Shares (the "Registration Statement") has been
filed with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the
"Securities Act"). As permitted by the rules and regulations of
the Commission, this Prospectus omits certain information
contained in the Registration Statement. For further information
pertaining to this offering, reference is made to the
Registration Statement, including the exhibits filed as a part
thereof.
The Company is subject to the informational
requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and in accordance therewith files reports,
proxy statements and other information with the Commission. The
Registration Statement, as well as such reports, proxy statements
and other information, can be inspected and copied at the public
reference facilities of the Commission, at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. and at the regional offices of the
Commission located at 7 World Trade Center, Suite 1300, New York,
New York 10048, and at Northwestern Atrium Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of
such material can also be inspected at the offices of the New
York Stock Exchange, 20 Broad Street, New York, New York 10005,
and can be obtained at prescribed rates from the public reference
section of the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents are incorporated by reference
in this Prospectus:
(a) The Company's Annual Report on Form 10-K for the
fiscal year ended July 30, 1994;
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<PAGE>
(b) The Company's Quarterly Report on Form 10-Q for
the quarterly period ended October 29, 1994; and
(c) The descriptions of the Common Stock and the
Rights contained in the Company's Registration Statements on
Form 8-A, both dated September 10, 1992, for the regis-
tration of the Common Stock and the Rights pursuant to
Section 12(b) of the Exchange Act, and any updates of such
descriptions contained in any registration statement, report
or amendment thereto of the Company hereafter filed under
the Exchange Act.
In addition, all reports and documents subsequently
filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act, prior to the filing of a post-
effective amendment to the Registration Statement which indicates
that all securities offered hereby have been sold or which
deregisters all securities then remaining unsold, shall be deemed
to be incorporated by reference in this Prospectus and to be a
part hereof from the date of filing of such documents.
Any statement contained herein or in a document all or
a portion of which is incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in
any other subsequently filed document that also is incorporated
by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this
Prospectus.
The Company will provide without charge to each person
to whom this Prospectus is delivered, upon written or oral
request of such person, a copy of any or all of the documents
incorporated by reference herein (not including exhibits to such
information unless such exhibits are specifically incorporated by
reference into such information). Written or telephone requests
should be directed to the Corporate Secretary, Pall Corporation,
2200 Northern Boulevard, East Hills, New York 11548, telephone
number (516) 484-5400.
THE COMPANY
The Company is a leading supplier of fine filters,
mainly made by the Company using its proprietary filter media,
and of other fluid clarification equipment for the removal of
solid, liquid and gaseous contaminants from a wide variety of
liquids and gases. The Company's principal markets are the
health care, aeropower and fluid processing industries. The
Company's principal executive offices are located at 2200
Northern Boulevard, East Hills, New York 11548 (telephone 516-
484-5400).
THE OFFERING
Pursuant to the terms of an Agreement and Plan of
Merger dated as of December 22, 1994, among the Company, a
wholly-owned subsidiary of the Company, Filtron and certain
stockholders and employees of Filtron, such wholly-owned
subsidiary of the Company was merged into Filtron effective on
January 30, 1995 (the "Merger"). As a result of the Merger,
Filtron became a wholly-owned subsidiary of the Company with the
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<PAGE>
name Pall Filtron Corporation, and the Selling Shareholders, who
at the time of the Merger were the beneficial and record owners
of all of the issued and outstanding shares of capital stock of
Filtron, received the Shares in exchange for such capital stock.
Attached to and transferable only with each of the Shares is one
Common Share Purchase Right (a "Right"). See "Description of the
Common Stock - Common Share Purchase Rights."
The following table is a list of the Selling
Shareholders which sets forth the position or other material
relationship, if any, which each of them has had during the past
three years with the Company, Filtron or their respective
affiliates (other than as a stockholder of Filtron), and the
number of Shares and attached Rights received by each in the
Merger, all of which Shares and Rights are offered hereby.
Except for the Shares as shown below, to the Company's best
knowledge, no Selling Shareholder other than Martin H. Hirsch is
currently the beneficial owner of any shares of Common Stock.
Mr. Hirsch owns an additional 1,596 shares of Common Stock and
has no current plans to sell such shares.
-4-
<PAGE>
Number of Position or other
Name Shares material
(and attached relationship
Rights) (if any)
Martin H. Hirsch and
Jo-Ellen L. Hirsch 189,181 Mr. Hirsch was
President and Chief
Executive Officer of
Filtron prior to the
Merger; thereafter, he
has been President of
Filtron (1).
Denis R. Friedman and
Linda P. Friedman 189,181 Mr. Friedman was
Treasurer and Vice
President of Product
Development of Filtron
prior to the Merger;
thereafter, he has
been an employee of
Filtron (1).
Richard C. Goulston and
Jane E. Goulston 189,181 Mr. Goulston was Vice
President of Process
Development of Filtron
prior to the Merger;
thereafter, he has
been an employee of
Filtron (1).
John J. Rozembersky and
Rozsa H. Rozembersky 189,181 Mr. Rozembersky was
Vice President of
Technical Service of
Filtron prior to the
Merger; thereafter, he
has been an employee
of Filtron (1).
Nicholas J. Mozzicato 9,032 Vice President of
Operations and Chief
Financial Officer of
Filtron prior to the
Merger; thereafter, he
has been an employee
of Filtron (1).
Nicholas J. Mozzicato and
Deborah S. Mozzicato 11,200 See above.
___________________
(1) Also a director of Filtron prior to and after the Merger.
-5-
<PAGE>
Number of Position or other
Name Shares material
(and attached relationship
Rights) (if any)
Attila E. Herczeg 7,854 Director and Vice
President of Membrane
Technology of Filtron
prior to the Merger;
thereafter, he has
been an employee of
Filtron.
WICOR, Inc. 262,227 Owner of 20.48% of the
common stock of
Filtron prior to the
Merger. An employee
of WICOR, Inc. was a
director of Filtron
prior to the Merger.
Robert M. Bailey and
Judith E. Bailey 2,244
Francis X. Barry 1,009
Karyn A. Barry 448
Mark E. Barry 2,019
Mark E. Barry and
Sheila T. Barry 16,831
Matthew H. Barry 2,019
Peter Bauman 22,441 (2)
Carl Bender and
Barbara Bender 3,366
John Callahan 673
Susan Coleman and
Kevin Coleman 2,805
Frank L. Cooley 2,805
Rex D'Agostino 6,732
Patrick J. Glynn and
Anne T. Glynn 47,688
Richard Hatton 2,692
Eugenio Kim 42,638
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<PAGE>
Number of Position or other
Name Shares material
(and attached relationship
Rights) (if any)
Alfred J. LaGreca 22,441
Richard L. McBrine 7,854
Eileen Jan Messing 964
Lynn Sharon Messing 964
Robin Steven Messing 964
Susan S. Messing 1,147
Carlo Petruzziello 8,303
Feliciano Petruzziello 3,815
Feliciano Petruzziello and
Gloria Petruzziello 13,464
Gina L. Petruzziello 8,303
Gloria Petruzziello 3,815
Thomas Plattner 4,488 (2)
Margaret Travers 336
_________
1,280,325
_________________
(2) Messrs. Bauman and Plattner are each 32%
shareholders, directors and officers of Skan AG, a
Switzerland-based corporation which has acted as a European
distributor of Filtron's products since 1990. Sales of
Filtron products through Skan AG amounted to approximately
$200,000 in 1994.
Pursuant to the Merger Agreement, each of Messrs.
Hirsch, Friedman, Goulston, Rozembersky, Mozzicato and Herczeg
(the "Filtron Insiders") agreed to sell not more than one-quarter
of the Shares received by him prior to January 26, 1996, the
first anniversary of the closing date of the Merger. On and
after each of the first three anniversary dates of the Merger, an
additional one-quarter of the Shares received by each Filtron
Insider may be sold (on a cumulative basis) without restriction.
Thus, all the 784,830 Shares held by the Filtron Insiders may be
sold without restriction on and after January 26, 1998. In
addition, in order to secure the obligation of the Filtron
Insiders to indemnify the Company for losses arising out of any
breach of a representation, warranty, covenant or agreement made
by Filtron or the Filtron Insiders in the Merger Agreement, each
of Messrs. Hirsch, Friedman, Goulston and Rozembersky has pledged
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<PAGE>
38,635 of his Shares to the Company until January 26, 1997, or
such later date as all claims for indemnity made by the Company
on or prior to January 26, 1997, are finally satisfied, settled
or resolved.
The Company will not realize any proceeds from the sale
of the Shares by the Selling Shareholders.
The Selling Shareholders have not advised the Company
of any specific plans for the distribution of the Shares, but it
is anticipated that the Shares will be sold from time to time by
the Selling Shareholders, or by pledgees, donees, transferees or
other successors in interest. Such sales may be made on the New
York Stock Exchange or otherwise, at prices and at terms then
prevailing or at prices related to the then current market price,
or in negotiated transactions. The Shares may be sold (a) in
block trades, in which the broker or dealer so engaged would
attempt to sell the Shares as agent but may position and resell a
portion of the block as principal to facilitate the transaction,
(b) in purchases by a broker or dealer as principal and resale by
such broker or dealer for its account pursuant to this
Prospectus, (c) in an exchange distribution in accordance with
the rules of such exchange, and (d) in ordinary brokerage
transactions and transactions in which the broker solicits
purchases. In effecting sales, brokers or dealers engaged by the
Selling Shareholders may arrange for other brokers or dealers to
participate. Brokers or dealers will receive commissions or
discounts from Selling Shareholders in amounts to be negotiated
immediately prior to the sale. Such brokers or dealers and any
other participating brokers or dealers may be deemed to be
"underwriters" within the meaning of the Securities Act in
connection with such sales.
Upon the Company's being notified by a Selling
Shareholder that any material arrangement has been entered into
with a broker-dealer for the sale of Shares through a block
trade, special offering, exchange distribution, secondary
distribution or a purchase by a broker or dealer, a prospectus
supplement will be delivered with this Prospectus, if required,
disclosing (i) the name of such Selling Shareholder and of the
participating broker-dealer(s), (ii) the number of Shares
involved, (iii) the price at which such Shares were sold,
(iv) the commissions paid or discounts or concessions allowed to
such broker-dealer(s), where applicable, (v) that such broker-
dealer(s) did not conduct any investigation to verify the
information set out or incorporated by reference in this
Prospectus, and (vi) other facts material to the transaction.
DESCRIPTION OF THE COMMON STOCK
The authorized capital stock of the Company consists of
500,000,000 shares of Common Stock, par value $0.10 per share
(the "Common Stock"). The rights of the holders of Common Stock
are governed by the Business Corporation Law of the State of New
York (the "BCL") and the Company's certificate of incorporation
and by-laws.
Holders of Common Stock are entitled to receive divi-
dends when and as declared by the Company's Board of Directors
out of funds legally available therefor. In the event of the
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<PAGE>
liquidation, dissolution or winding up of the Company, holders of
Common Stock would be entitled to share ratably in all corporate
assets available for distribution to shareholders. The holders
of Common Stock are not subject to further calls or assessments
by the Company and have no pre-emptive, subscription or
conversion rights. The Common Stock is not redeemable.
Voting Rights
The holders of Common Stock are entitled to one vote
per share on all matters submitted to shareholders, and the
holders of a majority of the outstanding shares constitute a
quorum at any meeting of shareholders.
Directors of the Company are elected by a plurality of
the votes cast at a meeting of shareholders. The Common Stock
does not have cumulative voting rights; therefore, the holders of
a majority of the outstanding shares of Common Stock can elect
all directors of the Company.
In general, shareholder action other than the election
of directors must be authorized by a majority of the votes cast
at a meeting of shareholders. However, the BCL provides that
certain extraordinary matters, such as a merger or consolidation
in which the Company is a constituent corporation, a sale or
other disposition of all or substantially all of the Company's
assets, and the dissolution of the Company, would require the
vote of the holders of two-thirds of all outstanding shares.
Most amendments to the Company's certificate of incorporation
require the vote of the holders of a majority of all outstanding
shares. See also "Fair Price Provisions" below.
Classification of the Board
The by-laws of the Company provide that the Board of
Directors (currently comprised of twelve persons) shall be
divided into three classes of directors serving staggered three-
year terms, such classes being as nearly equal in number as
possible. As a result, one-third of the Company's Board of
Directors is elected each year.
Fair Price Provisions
The Company's certificate of incorporation contains
provisions designed to assure fair treatment for all shareholders
of the Company in certain "Business Combinations" involving a
"Related Party," defined as either the beneficial owner of 20% or
more of the securities entitled to vote in the election of the
Company's directors, or an affiliate of the Company who was the
beneficial owner of 20% or more of such securities at any time
within the preceding five years. "Business Combination" is
defined broadly to include (i) any merger or consolidation of the
Company or any of its subsidiaries into or with a Related Person
or its affiliates, (ii) any sale or other disposition of more
than 5% in value of the consolidated assets of the Company and
its subsidiaries to a Related Person or its affiliates, or more
than 5% of the assets of a Related Person to the Company or its
subsidiaries, (iii) certain issuances and transfers by the
Company or its subsidiaries of their respective securities to a
Related Person, and (iv) any reclassification of securities,
recapitalization, reorganization or similar transaction which has
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<PAGE>
the effect, directly or indirectly, of increasing the proportion-
ate share of the outstanding shares of any class of equity
security of the Company or its subsidiaries which is directly or
indirectly owned by a Related Person.
Any Business Combination is subject to the prior
approval of the holders of not less than 85% of all outstanding
shares of Common Stock unless certain fair price and procedural
requirements are met. Approval by the holders of not less than
85% of the outstanding Common Stock is also required to amend or
repeal the provisions in the Company's certificate of incorpo-
ration relating to Business Combinations, unless at least 75% of
certain "continuing" directors of the Company shall recommend
such amendment or repeal, in which case the approval of only the
holders of a majority of the outstanding shares of Common Stock
would be required under the BCL to amend or repeal such provi-
sions.
In addition, under Section 912 of the BCL, the Company
may not engage in a "business combination" (the statutory defini-
tion of which is similar to that in the Company's certificate of
incorporation) with an "interested shareholder" (the statutory
definition of which is similar to the definition of "Related
Party" in the Company's certificate of incorporation) for a
period of five years after the interested shareholder becomes
such, unless the business combination or the purchase of stock by
means of which the interested shareholder becomes such is ap-
proved by the Company's Board of Directors in advance of such
stock purchase. After the five-year period, an interested
shareholder may engage in a business combination with the Company
only if (i) the business combination is approved after the five-
year period by the affirmative vote of the holders of a majority
of the outstanding shares of Common Stock not beneficially owned
by the interested shareholder and its affiliates and associates,
or (ii) the value of the aggregate consideration to be paid by
the interested shareholder in connection with the business
combination satisfies certain formulas specified in the statute,
and the interested shareholder, after becoming such, has not
acquired any additional shares of Common Stock, except as
provided in the statute.
Common Share Purchase Rights
On November 17, 1989, the Company's Board of Directors,
pursuant to a favorable advisory vote of the Company's
shareholders, adopted a Shareholders Rights Plan and pursuant
thereto declared a dividend of one Common Share Purchase Right (a
"Right") for each outstanding share of Common Stock. The divi-
dend distribution was made to the holders of record of Common
Stock outstanding on December 1, 1989, and is being made with
respect to all shares of Common Stock issued thereafter
(including the Common Stock issued in the Merger) until the
earliest to occur of the Distribution Date (as defined below),
the date on which the Rights are redeemed, and the expiration
date of the Rights (December 1, 1999, unless the expiration date
is extended).
The "Distribution Date" is defined as the earlier to
occur of (i) 10 days following a public announcement that a per-
son or group of affiliated or associated persons (other than the
Company, any subsidiary of the Company, any employee benefit plan
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<PAGE>
of the Company or of any subsidiary of the Company, or any entity
holding the Company Stock for or pursuant to the terms of such
plan) has acquired beneficial ownership of 20% or more of the
outstanding Common Stock (such person or group being defined as
an "Acquiring Person"), or (ii) 10 business days (or such later
date as may be determined by action of the Company's Board prior
to such time as any person or group becomes an Acquiring Person)
following the commencement of, or announcement of an intention to
make, a tender offer or exchange offer the consummation of which
would result in the beneficial ownership by a person or group
(other than the Company, any subsidiary of the Company, any
employee benefit plan of the Company or of any subsidiary of the
Company, or any entity holding Common Stock for or pursuant to
the terms of such plan) of 20% or more of such outstanding Common
Stock.
Until the Distribution Date, the Rights (i) will not be
exercisable, (ii) will be evidenced by the certificates for the
Common Stock registered in the names of the holders thereof and
not by separate Right certificates, and (iii) will be transfer-
able with and only with the Common Stock, and one Right will be
associated with each share of Common Stock, subject to adjustment
in certain events. Each Right, when it becomes exercisable, will
entitle the registered holder to purchase from the Company one
share of Common Stock at a price of $60, which price reflects
stock splits declared from November 17, 1989, through the date of
this Prospectus, and is subject to further adjustment in certain
events as described below (the "Purchase Price"). As soon as
practicable following the Distribution Date, separate certifi-
cates evidencing the Rights ("Right Certificates") will be mailed
to holders of record of the Common Stock as of the close of
business on the Distribution Date and such separate Right Certif-
icates alone will evidence the Rights.
In the event that the Company is acquired by any person
in a merger or other business combination transaction, or 50% or
more of its consolidated assets or earning power are sold, proper
provision will be made so that each holder of a Right will
thereafter have the right to receive, upon the exercise thereof
at the then current exercise price of the Right, that number of
shares of common stock of the acquiring company which at the time
of such transaction will have a market value of two times the
exercise price of the Right. In the event that (i) any person
becomes an Acquiring Person, or (ii) during such time as there is
an Acquiring Person, there shall be a reclassification of securi-
ties or a recapitalization or a reorganization of the Company or
other transaction or series of transactions involving the Company
which has the effect of increasing by more than 1% the
proportionate share of the outstanding shares of any class of
equity securities of the Company or any of its subsidiaries
beneficially owned by the Acquiring Person, proper provision
shall be made so that each holder of a Right, other than Rights
beneficially owned by the Acquiring Person (which will thereafter
be void), will thereafter have the right to receive upon exercise
that number of shares of Common Stock (or other securities, cash
or property) having a market value of two times the exercise
price of the Right.
At any time after any person becomes an Acquiring Per-
son and prior to the acquisition by a person or group (other than
the Company, any employee benefit plan of the Company or of any
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<PAGE>
subsidiary of the Company, or any entity holding Common Stock for
or pursuant to the terms of such plan) of beneficial ownership of
50% or more of the outstanding Common Stock (other than Common
Stock into which nonvoting securities of the Company beneficially
owned by such person or group can be converted), the Board of
Directors of the Company may exchange the Rights (other than
Rights owned by such person or group which will have become
void), in whole or in part, at an exchange ratio of one share of
Common Stock per Right (subject to adjustment).
At any time prior to such time as any person or group
becomes an Acquiring Person,the Board of Directors ofthe Company-
may redeem the Rights in whole, but not in part, at a price of
.33 of a cent per Right, which price reflects stock splits
declared from November 17, 1989, through the date of this
Prospectus, and is subject to further adjustment in certain
events (the "Redemption Price"). The redemption of the Rights
may be made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may
establish. Immediately upon any redemption of the Rights, the
right to exercise the Rights will terminate and the only right of
the holders of Rights will be to receive the Redemption Price.
The terms of the Rights may be amended by the Board of
Directors of the Company without the consent of the holders of
the Rights, except that from and after such time as any person
becomes an Acquiring Person, no such amendment may adversely
affect the interests of the holders of the Rights.
Until a Right is exercised, the holder thereof, as
such, will have no rights as a shareholder of the Company,
including, without limitation, the right to vote or to receive
dividends.
LEGAL MATTERS
The validity of the Shares and Rights offered hereby
has been passed upon for the Company by Carter, Ledyard &
Milburn, New York, New York. Heywood Shelley, a member of
Carter, Ledyard & Milburn, is a director of the Company and the
beneficial owner of 36,500 shares of Common Stock, including
35,000 shares issuable upon exercise of stock options.
EXPERTS
The consolidated financial statements and schedules of
the Company and its subsidiaries as of July 30, 1994, and July
31, 1993, and for each of the years in the three-year period
ended July 30, 1994, incorporated by reference in this
Prospectus, have been incorporated by reference herein in
reliance upon the reports of KPMG Peat Marwick LLP, independent
certified public accountants, which reports have been
incorporated by reference herein, and upon the authority of said
firm as experts in accounting and auditing. Such reports refer
to a change, in 1992, in the Company's method of accounting for
income taxes to adopt the provisions of the Financial Accounting
Standards Board Statement of Financial Accounting Standards No.
109, "Accounting for Income Taxes."
-12-
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
Estimated expenses in connection with the sale of the
securities being registered hereby, other than underwriting
discounts and commissions, if any, are as follows:
Registration fee $ 8,306
Legal fees and expenses 13,000
Accounting fees and expenses 7,500
Miscellaneous 1,194
Total $30,000
All of such expenses will be paid by the registrant.
Item 15. Indemnification of Directors and Officers.
Reference is made to Sections 721 through 725 of the
Business Corporation Law of the State of New York, the
registrant's jurisdiction of incorporation, which provides for
indemnification of directors and officers under certain circum-
stances.
Section 7.02 of the registrant's by-laws provides as
follows:
"Indemnification. The Corporation shall indemnify any
person made or threatened to be made a party to any action
or proceeding, whether civil or criminal (and whether or not
by or in the right of the corporation or of any other corpo-
ration of any type or kind, domestic or foreign, or any
partnership, joint venture, trust, employee benefit plan or
other enterprise), by reason of the fact that such person,
his testator or intestate, is or was a director or officer
of the corporation or served any other corporation of any
type or kind, domestic or foreign, or any partnership, joint
venture, trust, employee benefit plan or other enterprise in
any capacity at the request of the corporation, against
judgments, fines, amounts paid in settlement and reasonable
expenses, including attorneys' fees, actually and necessari-
ly incurred as a result of such action or proceeding, or any
appeal therein, provided that (i) no indemnification may be
made to or on behalf of any person if a judgment or other
final adjudication adverse to such person establishes that
his acts were committed in bad faith or were the result of
active and deliberate dishonesty and were material to the
cause of action so adjudicated, or that he personally gained
in fact a financial profit or other advantage to which he
was not legally entitled; (ii) no indemnification shall be
required in connection with the settlement of any pending or
threatened action or proceeding, or any other disposition
thereof except a final adjudication, unless the corporation
has consented to such settlement or other disposition, and
(iii) the corporation shall not be obligated to indemnify
any person by reason of the adoption of this Section 7.02 if
II-1
<PAGE>
and to the extent such person is entitled to be indemnified
under a policy of insurance as such policy would apply in
the absence of the adoption of this Section 7.02.
"Reasonable expenses, including attorneys' fees, in-
curred in defending any action or proceeding, whether
threatened or pending, shall be paid or reimbursed by the
corporation in advance of the final disposition thereof upon
receipt of an undertaking by or on behalf of the person
seeking indemnification to repay such amount to the corpora-
tion to the extent, if any, such person is ultimately found
not to be entitled to indemnification.
"Notwithstanding any other provision hereof, no amend-
ment or repeal of this Section 7.02, or any other corporate
action or agreement which prohibits or otherwise limits the
right of any person to indemnification or advancement or
reimbursement of expenses hereunder, shall be effective as
to any person until the 60th day following notice to such
person of such action, and no such amendment or repeal or
other corporate action or agreement shall deprive any person
of any right hereunder arising out of any alleged or actual
act or omission occurring prior to such 60th day.
"The corporation is hereby authorized, but shall not be
required, to enter into agreements with any of its direc-
tors, officers or employees providing for rights to indemni-
fication and advancement and reimbursement of reasonable
expenses, including attorneys' fees, to the extent permitted
by law, but the corporation's failure to do so shall not in
any manner affect or limit the rights provided for by this
Section 7.02 or otherwise.
"For purposes of this Section 7.02, the term 'the
corporation' shall include any legal successor to the corpo-
ration, including any corporation which acquires all or sub-
stantially all of the assets of the corporation in one or
more transactions. For purposes of this Section 7.02, the
corporation shall be deemed to have requested a person to
serve an employee benefit plan where the performance by such
person of his duties to the corporation or any subsidiary
thereof also imposes duties on, or otherwise involves ser-
vices by, such person to the plan or participants or benefi-
ciaries of the plan, and excise taxes assessed on a person
with respect to an employee benefit plan pursuant to appli-
cable law shall be considered fines.
"The rights granted pursuant to or provided by the
foregoing provisions of this Section 7.02 shall be in addi-
tion to and shall not be exclusive of any other rights to
indemnification and expenses to which any such person may
otherwise be entitled by law, contract or otherwise."
The registrant has policies insuring its officers and
directors against certain civil liabilities, including liabili-
ties under the Securities Act of 1933.
II-2<PAGE>
Item 16. Exhibits.
Exhibit No.
(2) Agreement and Plan of Merger dated as of
December 22, 1994, among Pall Corporation,
Pall Acquisition Corporation, Filtron
Technology Corporation and certain
stockholders and employees of Filtron
Technology Corporation. The copy being filed
does not include the schedules to the
Agreement and Plan of Merger as listed in the
table of contents thereto. The registrant
undertakes to furnish any such schedules to
the Commission upon its request.
(4)* Rights Agreement dated as of November 17,
1989, between the registrant and United
States Trust Company of New York, as Rights
Agent, filed as Exhibit I to the registrant's
Registration Statement on Form 8-A
(Commission File No. 1-4311) dated September
10, 1992, for the registration of the Common
Share Purchase Rights pursuant to Section
12(b) of the Securities Exchange Act of 1934
(the "Exchange Act").
(5) Opinion of Carter, Ledyard & Milburn
(23)(a) Consent of Carter, Ledyard & Milburn
(included in Exhibit 5)
(23)(b) Consent of KPMG Peat Marwick LLP
(24) Powers of Attorney (included in the signature
page of this Registration Statement)
___________
* Incorporated herein by reference.
Item 17. Undertakings.
(1) The undersigned registrant hereby undertakes:
(a) To file, during any period in which offers or
sales are being made, a post-effective amendment to this Regis-
tration Statement:
(i) to include any prospectus required by section
10(a)(3) of the Securities Act of 1933, unless the informa-
tion required to be included in such post effective amend-
ment is contained in a periodic report filed by the regis-
trant pursuant to Section 13 or 15(d) of the Exchange Act
and incorporated herein by reference;
(ii) to reflect in the prospectus any facts or
events arising after the effective date of this Registration
Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent
II-4
<PAGE>
a fundamental change in the information set forth in this
Registration Statement, unless the information required to
be included in such post-effective amendment is contained in
a periodic report filed by the registrant pursuant to Sec-
tion 13 or 15(d) of the Securities Exchange Act and
incorporated herein by reference;
(iii) to include any material information with
respect to the plan of distribution not previously disclosed
in this Registration Statement or any material change to
such information in this Registration Statement.
(b) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective amend-
ment shall be deemed to be a new registration statement relating
to the securities offered herein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) To remove from registration by means of a post-
effective amendment any of the securities being registered which
remain unsold at the termination of the offering.
(d) That, for the purposes of determining any liabili-
ty under the Securities Act of 1933, each filing of the registra-
nt's annual report pursuant to Section 13(a) or Section 15(d) of
the Exchange Act that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration
statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(2) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the registrant pursuant to
the provisions described in Item 15 above, or otherwise, the
registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of
the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnifica-
tion by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of
1933, the registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form
S-3 and has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in
the Village of East Hills, State of New York, on January 30,
1995.
PALL CORPORATION
By:/s/Jeremy Hayward-Surry
_______________________
Jeremy Hayward-Surry
President and Treasurer
POWER OF ATTORNEY
Each person whose signature appears below hereby
constitutes Eric Krasnoff, Jeremy Hayward-Surry and Peter
Schwartzman, and each of them singly, his true and lawful
attorneys-in-fact with full power to execute in the name of such
person, in the capacities stated below, and to file, such one or
more amendments to this Registration Statement as the registrant
deems appropriate, and generally to do all such things in the
name and on behalf of such person, in the capacities stated
below, to enable the registrant to comply with the provisions of
the Securities Act of 1933, as amended, and all requirements of
the Securities and Exchange Commission thereunder, hereby
ratifying and confirming the signature of such person as may be
signed by said attorneys-in-fact, or any one of them, to any and
all amendments to this Registration Statement.
Pursuant to the requirements of the Act of 1933, this
Registration Statement has been signed on January 30, 1995, by
the following persons in the capacities indicated:
Signature Title
/s/Eric Krasnoff Chairman and Chief Executive Officer
__________________________ (Principal Executive Officer)
Eric Krasnoff and Director
/s/Jeremy Hayward-Surry President and Treasurer
__________________________ (Principal Financial Officer)
Jeremy Hayward-Surry and Director
/s/Peter Schwartzman Chief Accountant (Principal
__________________________ Accounting Officer)
Peter Schwartzman
II-6
<PAGE>
Director
__________________________
Abraham Appel
/s/Ulric Haynes, Jr. Director
__________________________
Ulric Haynes, Jr.
/s/Abraham Krasnoff Director
__________________________
Abraham Krasnoff
Director
__________________________
Edwin W. Martin, Jr.
/s/David B. Pall Director
__________________________
David B. Pall
Director
__________________________
Chesterfield F. Seibert
/s/Heywood Shelley Director
__________________________
Heywood Shelley
Director
__________________________
Alan B. Slifka
/s/James D. Watson Director
__________________________
James D. Watson
/s/Derek T.D. Williams Director
__________________________
Derek T.D. Williams
II-7
<PAGE>
EXHIBIT INDEX
Exhibit No.
(2) Agreement and Plan of Merger dated as of
December 22, 1994, among Pall Corporation,
Pall Acquisition Corporation, Filtron
Technology Corporation and certain
stockholders and employees of Filtron
Technology Corporation. The copy being filed
does not include the schedules to the
Agreement and Plan of Merger as listed in the
table of contents thereto. The registrant
undertakes to furnish any such schedules to
the Commission upon its request.
(4)* Rights Agreement dated as of November 17,
1989, between the registrant and United
States Trust Company of New York, as Rights
Agent, filed as Exhibit I to the registrant's
Registration Statement on Form 8-A
(Commission File No. 1-4311) dated September
10, 1992, for the registration of the Common
Share Purchase Rights pursuant to Section
12(b) of the Securities Exchange Act of 1934.
(5) Opinion of Carter, Ledyard & Milburn
(23)(a) Consent of Carter, Ledyard & Milburn
(included in Exhibit 5)
(23)(b) Consent of KPMG Peat Marwick LLP
(24) Powers of Attorney (included in the signature
page of this Registration Statement)
_________
* Incorporated herein by reference.
II-8
<PAGE>
EXHIBIT 2<PAGE>
Execution Copy
AGREEMENT AND PLAN OF MERGER
Dated as of December 22, 1994
Among
PALL CORPORATION
PALL ACQUISITION CORPORATION
FILTRON TECHNOLOGY CORPORATION
and
CERTAIN STOCKHOLDERS
AND EMPLOYEES OF
FILTRON TECHNOLOGY CORPORATION
<PAGE>
TABLE OF CONTENTS
ARTICLE I . . . . . . . . . . . . . . . . . . . . . . . . . . 1
PRINCIPAL TERMS OF MERGER . . . . . . . . . . . . . . . . . . 1
1.1 Surviving Corporation . . . . . . . . . . . . . . . 1
1.2 Closing . . . . . . . . . . . . . . . . . . . . . . 2
1.3 Effective Time . . . . . . . . . . . . . . . . . . 2
1.4 Articles of Organization . . . . . . . . . . . . . 2
1.5 By-Laws . . . . . . . . . . . . . . . . . . . . . . 2
1.6 Officers and Directors . . . . . . . . . . . . . . 3
1.7 Meeting of Company Stockholders . . . . . . . . . . 3
ARTICLE II . . . . . . . . . . . . . . . . . . . . . . . . . 3
STATUS AND CONVERSION OF SECURITIES . . . . . . . . . . . . . 3
2.1 Status and Conversion of Company Shares . . . . . . 3
2.2 Company Stock Options . . . . . . . . . . . . . . . 4
2.3 Noncompetition Covenants . . . . . . . . . . . . . 5
2.4 Pall and Acquisition to Make Pall Stock and Cash
Available . . . . . . . . . . . . . . . . . . . . . 5
2.5 Status and Conversion of Acquisition Shares . . . . 6
ARTICLE III . . . . . . . . . . . . . . . . . . . . . . . . . 6
CERTAIN EFFECTS OF MERGER . . . . . . . . . . . . . . . . . . 6
3.1 Effect of Merger . . . . . . . . . . . . . . . . . 6
3.2 Further Assurances . . . . . . . . . . . . . . . . 7
ARTICLE IV . . . . . . . . . . . . . . . . . . . . . . . . . 7
REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . 7
4.1 Representations and Warranties by the Company and
the Company Insiders . . . . . . . . . . . . . . . 7
(a) Organization of the Company . . . . . . . . . 7
(b) Authority of the Company . . . . . . . . . . . 8
(c) Capitalization . . . . . . . . . . . . . . . . 9
(d) Consents, etc . . . . . . . . . . . . . . . . 9
(e) Financial Statements . . . . . . . . . . . . . 9
(f) Absence of Certain Changes or Events . . . . . 10
(g) Governmental Authorization and Compliance
with Laws . . . . . . . . . . . . . . . . . . 10
(h) Tax Matters . . . . . . . . . . . . . . . . . 10
(i) Title to Properties; Absence of Liens and
Encumbrances, etc . . . . . . . . . . . . . . 13
(j) Contracts, etc . . . . . . . . . . . . . . . . 14
(k) Litigation . . . . . . . . . . . . . . . . . . 14
(l) Patents, Copyrights, Trademarks, etc . . . . . 14
(m) Employee Benefit Plans . . . . . . . . . . . . 15
(n) Finder's Fee . . . . . . . . . . . . . . . . . 17
(o) No Failure to Disclose . . . . . . . . . . . . 17
<PAGE>
(p) Proxy Statement . . . . . . . . . . . . . . . 18
(q) Insider Interests . . . . . . . . . . . . . . 18
(r) Labor Controversies . . . . . . . . . . . . . 18
(s) Use of Real Property . . . . . . . . . . . . . 18
(t) Accounts Receivable . . . . . . . . . . . . . 19
(u) Compliance with Environmental Laws . . . . . . 19
4.2. Representations and Warranties by the Company
Insiders. . . . . . . . . . . . . . . . . . . . . 22
4.3 Representations and Warranties by Pall and
Acquisition . . . . . . . . . . . . . . . . . . . 24
(a) Organization of Pall and Acquisition . . . . . 24
(b) Authority of Acquisition . . . . . . . . . . . 25
(c) Consents, etc . . . . . . . . . . . . . . . . 26
(d) Availability of Funds . . . . . . . . . . . . 26
(e) Litigation . . . . . . . . . . . . . . . . . . 26
(f) Pall Stock . . . . . . . . . . . . . . . . . . 26
(g) Finder's Fee . . . . . . . . . . . . . . . . . 26
(h) Proxy Statement . . . . . . . . . . . . . . . 26
(i) Reorganization . . . . . . . . . . . . . . . . 26
ARTICLE V . . . . . . . . . . . . . . . . . . . . . . . . . . 28
COVENANTS AND AGREEMENTS . . . . . . . . . . . . . . . . . . 28
5.1 Covenants and Agreements of the Company . . . . . . 28
(a) Submission to Stockholders . . . . . . . . . . 28
(b) Conduct of Business . . . . . . . . . . . . . 28
(c) Stock Options . . . . . . . . . . . . . . . . 30
(d) No Other Negotiations . . . . . . . . . . . . 30
(e) Financial Statements . . . . . . . . . . . . . 31
(f) Certification of Stockholder Vote . . . . . . 31
5.2 Other Covenants and Agreements . . . . . . . . . . 31
(a) Cooperation of Pall and the Company . . . . . 31
(b) Efforts to Consummate Transactions . . . . . . 31
(c) Vote by the Company Insiders, etc . . . . . . 31
(d) Employment Agreements . . . . . . . . . . . . 32
(e) Indemnification . . . . . . . . . . . . . . . 32
(i) Indemnification by Company Insiders . . . 32
(ii) Indemnification by Pall . . . . . . . . 32
(iii) (A) Claims for Indemnification . . . . 32
(B) Defense by Indemnifying Party . . . 32
(C) Set-Off Right of Pall and
Surviving Corporation . . . . . . . 33
(D) Arbitration . . . . . . . . . . . . 34
(f) Set-Off and Pall Stock Pledge . . . . . . . . 35
(g) Registered Resales of Pall Stock . . . . . . . 35
(h) Agreement Not to Sell . . . . . . . . . . . . 36
(i) Purchaser Representative . . . . . . . . . . . 36
ii<PAGE>
ARTICLE VI . . . . . . . . . . . . . . . . . . . . . . . . . 37
CONDITIONS . . . . . . . . . . . . . . . . . . . . . . . . . 37
6.1 Mutual Conditions . . . . . . . . . . . . . . . . . 37
(a) Stockholder Approval . . . . . . . . . . . . . 37
(b) Absence of Restraint . . . . . . . . . . . . . 37
(c) Blue Sky Compliance . . . . . . . . . . . . . 37
(d) Cutoff Date . . . . . . . . . . . . . . . . . 37
(e) Filings and Approvals . . . . . . . . . . . . 37
(f) Dissenting Stockholders . . . . . . . . . . . 37
6.2 Conditions to Obligations of Pall and Acquisition . 37
(a) Compliance with Representations, Warranties,
Covenants and Agreements . . . . . . . . . . . 38
(b) Opinion of Counsel . . . . . . . . . . . . . . 38
(c) Options . . . . . . . . . . . . . . . . . . . 40
(d) No Material Adverse Change . . . . . . . . . . 40
(e) Other Agreements . . . . . . . . . . . . . . . 40
(f) FIRPTA Certification . . . . . . . . . . . . . 40
(g) Good Standing Certificates . . . . . . . . . . 40
(h) Purchaser Questionnaires . . . . . . . . . . . 40
6.3 Conditions to Obligations of the Company . . . . . 40
(a) Compliance with Representations, Warranties,
Covenants and Agreements . . . . . . . . . . . 41
(b) Opinion of Counsel . . . . . . . . . . . . . . 41
(c) Adequacy of Pall Stock and Funds . . . . . . . 42
ARTICLE VII . . . . . . . . . . . . . . . . . . . . . . . . . 42
TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . 42
7.1 Termination . . . . . . . . . . . . . . . . . . . . 42
7.2 Effect of Termination . . . . . . . . . . . . . . . 43
ARTICLE VIII . . . . . . . . . . . . . . . . . . . . . . . . 43
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . 43
8.1 Extension of Time; Waivers . . . . . . . . . . . . 43
(a) By Pall . . . . . . . . . . . . . . . . . . . 43
(b) By the Company . . . . . . . . . . . . . . . . 43
8.2 Costs and Expenses . . . . . . . . . . . . . . . . 44
8.3 Amendments . . . . . . . . . . . . . . . . . . . . 44
8.4 Assignability . . . . . . . . . . . . . . . . . . . 44
8.5 Reliance by Counsel . . . . . . . . . . . . . . . . 44
8.6 Notices . . . . . . . . . . . . . . . . . . . . . . 45
8.7 Entire Agreement; Law Governing . . . . . . . . . . 45
8.8 Publicity and Disclosures . . . . . . . . . . . . . 46
8.9 Headings . . . . . . . . . . . . . . . . . . . . . 47
8.10 Survival . . . . . . . . . . . . . . . . . . . . . 47
8.11 Actions by Company Insiders . . . . . . . . . . . . 47
iii <PAGE>
Agreement
Page and Section
Exhibit Description Reference
A List of Company Insiders 1 [preamble]
B Option Surrender Compensation 4 [Section 2.2]
C Form of Noncompetition Agreement 5 [Section 2.3]
D Form of Irrevocable Proxy 31 [Section 5.2(c)]
E Form of Employment Agreement 32 [Section 5.2(d)]
F Form of Pledge Agreement 35 [Section 5.2(f)]
G Registration Procedures 35 [Section 5.2(g)]
H Form of Pall Employee Agreement 40 [Section 6.2(f)]
Agreement
Page and Section
Schedule Description Reference
Part A Organization of Company 7 [Section 4.1(a)]
Part B Authority of the Company 8 [Section 4.1(b)]
Part E Financial Statements 9 [Section 4.1(e)]
Part F Absence of Certain Changes
or Events 10 [Section 4.1(f)]
Part G Governmental Authorizations and
Compliance with Laws 10 [Section 4.1(g)]
Part H Tax Matters 10 [Section 4.1(h)]
Part I Title Exceptions 13 [Section 4.1(i)]
Part J Contracts 14 [Section 4.1(j)]
Part K Pending Litigation 14 [Section 4.1(k)]
Part L Proprietary Rights 14 [Section 4.1(1)]
Part M Employee Benefit Plans 15 [Section 4.1(m)]
Part Q Insider Interests 18 [Section 4.1(q)]
Part R Labor Controversies 18 [Section 4.1(r)]
Part T Accounts Receivable 19 [Section 4.1(t)]
Part U Environmental Compliance 19 [Section 4.1(u)]
iv <PAGE>
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (herein, including the
Exhibits and Schedules hereto "this Agreement") dated as of
December 22, 1994 among Filtron Technology Corporation, a
Massachusetts corporation (the "Company"), certain stockholders
and employees of the Company listed on Exhibit A hereto
(collectively the "Company Insiders"), Pall Corporation, a New
York corporation ("Pall"), and Pall Acquisition Corporation, a
Massachusetts corporation ("Acquisition").
W I T N E S E T H :
WHEREAS: Acquisition is a wholly-owned subsidiary of
Pall. The Company Insiders are the principal stockholders and
key managers of the Company. The Company, the Company Insiders,
Pall and Acquisition desire that Acquisition merge with and into
the Company, upon the terms and conditions set forth herein and
in accordance with the Business Corporation Law of the
Commonwealth of Massachusetts (the "MBCL"), and that the
outstanding shares of Common Stock, par value $.01 per share, of
the Company (referred to collectively as the "Company Shares" and
individually as a "Company Share") be converted upon such merger
(the "Merger") into the right to receive shares of Pall Common
Stock, par value $.10 per share ("Pall Stock") in the amounts set
forth in Section 2.1 hereof (Acquisition and the Company
sometimes being hereinafter referred to as the "Constituent
Corporations" and the Company, following the effectiveness of the
Merger, as the "Surviving Corporation"); and
WHEREAS: the respective Boards of Directors of Pall,
Acquisition and the Company have approved this Agreement and the
Merger;
NOW, THEREFORE, in consideration of the mutual repre-
sentations, warranties, covenants, agreements and conditions
contained herein, and in order to set forth the terms and condi-
tions of the Merger and the mode of carrying the same into
effect, the parties hereto agree as follows:
ARTICLE I
PRINCIPAL TERMS OF MERGER
1.1 Surviving Corporation. At the Effective Time (as
defined in Section 1.3 hereof), Acquisition shall be merged with
and into the Company upon the terms and subject to the conditions
hereinafter set forth as permitted by and in accordance with the
MBCL. At the Effective Time, the identity and separate existence
of Acquisition shall cease, and the Company shall succeed to all
1 <PAGE>
rights, privileges, powers, franchises, properties, assets,
debts, liabilities and obligations of Acquisition in accordance
with the MBCL.
1.2 Closing. (a) Subject to the provisions of Article
VI hereof, the closing of the transactions provided for in this
Agreement (the "Closing") shall take place in the offices of
Carter, Ledyard & Milburn, 2 Wall Street, New York, New York
10005, as soon as practicable (and in any event not later than
three business days) following the meeting of the stockholders of
the Company referred to in Section 1.7 hereof, subject to
adjournment in the event any condition set forth in Article VI
hereof shall not have been fulfilled at such time notwithstanding
the best efforts of the parties hereto, and shall not have been
waived, in which event the Closing shall take place as soon as
practicable (and in any event not later than three business days)
following the date on which the satisfaction or waiver of all of
such conditions has occurred, or at such other time and place or
on such other date as the Company and Acquisition may mutually
agree upon (the date and time of such Closing being herein
referred to as the "Closing Date").
(b) Subject to the provisions of Article VI hereof,
the Company and Acquisition shall execute articles of merger
setting forth the due adoption of this Agreement (the "Articles
of Merger") and cause such Articles of Merger to be submitted to
the Massachusetts State Secretary (the "Secretary") in accordance
with the applicable provisions of the MBCL.
1.3 Effective Time. The Merger shall become effective
when the Articles of Merger are filed with the Secretary in
accordance with Sections 6 and 78 of the MBCL (or at such time,
not later than 30 days after such filing, specified as the
effective time in the Articles of Merger), which Articles of
Merger shall be submitted for filing on the Closing Date,
provided that this Agreement has not been previously terminated
pursuant to Section 7.1 hereof. The date and time when the
Merger shall become effective are herein referred to as the
"Effective Time."
1.4 Articles of Organization. Upon effectiveness of
the Merger, the Articles of Organization of the Company, as
amended by the Articles of Merger, shall be the Articles of
Organization of the Surviving Corporation, until thereafter
further amended as provided by law.
1.5 By-Laws. Upon effectiveness of the Merger, the
By-Laws of Acquisition shall be the By-Laws of the Surviving
Corporation, until thereafter further amended as therein
provided.
2 <PAGE>
1.6 Officers and Directors. At the Effective Time,
the directors and officers of the Surviving Corporation shall be
as designated by Acquisition in writing prior to the Effective
Time; and such officers and directors shall hold office until the
next annual meeting of the Surviving Corporation and until their
successors have been duly elected and qualified.
1.7 Meeting of Company Stockholders. The Company
shall take all action necessary in accordance with the MBCL and
the Company's Articles of Organization and By-Laws to hold a
meeting of its stockholders as soon as reasonably possible after
the execution and delivery of this Agreement to consider and vote
upon the adoption of this Agreement and the authorization of the
Merger. In no event shall such meeting be held earlier than the
longer of (i) twenty days following the date on which a proxy
information statement (the "Proxy Statement") and notice of
meeting is sent to the stockholders of the Company, or (ii) such
longer period of notice as may be required by the Company's
Articles of Organization.
ARTICLE II
STATUS AND CONVERSION OF SECURITIES
2.1 Status and Conversion of Company Shares. At the
Effective Time, by virtue of the Merger and without any action on
the part of the holders thereof:
(a) Any Company Shares held by the Company as treasury
shares shall be cancelled and retired.
(b) Each then outstanding Company Share (other than
Company Shares to be cancelled in accordance with Section 2.1(a)
hereof and other than Company Shares held by stockholders of the
Company who properly exercise dissenters' rights available under
the MBCL ("Dissenting Shares")) shall be automatically converted
into the right to receive a fraction of a share of Pall Stock
having a value of $4.35644 (the "Merger Consideration"). For
such purpose, Pall Stock shall be valued at the average of the
closing prices of Pall Stock as reported by and for New York
Stock Exchange composite transactions on each of the last ten
trading days ending two business days prior to the Closing Date
(the "Pall Stock Value"). Attached to each currently issued
share of Pall Stock is, and attached to each share of Pall Stock
issuable hereafter (including the shares issuable as Merger
Consideration) will be, one Common Share Purchase Right (a
"Right") pursuant to the Rights Agreement dated as of November
17, 1989 between Pall and United States Trust Company of New
York, as Rights Agent. As used throughout this Agreement,
references to "Pall Stock" shall be deemed to include the Rights.
3 <PAGE>
(c) If, between the date of this Agreement and the
Effective Time, the outstanding Company Shares shall have been
changed into a different number of shares or a different class by
reason of any reclassification, recapitalization, split-up,
combination, exchange of shares or readjustment, exercise of
stock options, or a stock dividend thereon shall be declared with
a record date within said period, the merger price per share set
forth in Section 2.1(b) hereof shall be correspondingly adjusted
such that the aggregate Merger Consideration for all outstanding
Company Shares will be Pall Stock with a Pall Stock Value of
$24,854,579 plus, in the event that any outstanding stock options
are exercised between the date hereof and the Closing Date, an
amount equal to the aggregate of the cash consideration listed
next to the name of each exercising optionholder on Exhibit B
hereto (or the appropriate portion of such consideration if such
optionholder's options are exercised in part). The Company
covenants and agrees not to take any action referred to in the
preceding sentence without the prior written consent of Pall.
(d) Each Dissenting Share (i) as to which a written
objection to the Merger is filed in accordance with Section 86 of
the MBCL before the taking of the vote of the Company's
stockholders on the Merger at the meeting of such stockholders
referred to in Section 1.7 hereof and not withdrawn at or prior
to the time of such vote and (ii) which is not voted in favor of
the Merger shall not be converted into a right to receive Pall
Stock hereunder unless and until the holder shall have effective-
ly withdrawn or lost his right to payment for his Company Shares
under Sections 88-98 of the MBCL, at which time his Company
Shares shall be converted into a right to receive Pall Stock in
accordance with Section 2.1(b).
(e) No fraction of a share of Pall Stock will be
issued in the Merger, but, in lieu thereof, each holder of
Company Shares who would otherwise be entitled to a fraction of a
share of Pall Stock (after aggregating all fractional shares of
Pall Stock to be received by the holder) will be entitled to re-
ceive an amount of cash (rounded to the nearest whole cent) equal
to the product of (i) the fraction multiplied by (ii) the Pall
Stock Value.
2.2 Company Stock Options. Promptly after the
execution of this Agreement, the Company agrees to use its best
efforts to enter into written agreements ("Option Surrender
Agreements") with every holder of Options (each an
"Optionholder") in form and substance reasonably satisfactory to
Pall whereby the Optionholders agree to surrender their Options
for cancellation for the cash consideration listed next to each
Optionholders name on Exhibit B hereto to be paid by the Company.
Immediately prior to the Closing the Company shall complete the
Option Surrender Agreements by paying the cash compensation
4 <PAGE>
contemplated thereby to the Optionholders and cancelling their
Options. The Company agrees to use its best efforts to obtain
the cancellation of all Options prior to the Effective Time
consistent with the foregoing.
2.3 Noncompetition Covenants. Pall and each of the
Company Insiders hereby agree at the Closing to execute and
deliver a Noncompetition Agreement in the form of Exhibit C
hereto (the "Noncompetition Agreements"). Subject to a separate
vote of the stockholders of the Company in accordance with
Section 280G(b)(5)(B) of the Internal Revenue Code of 1986, as
amended (the "Code"), the Noncompetition Agreements with Mr.
Nicholas J. Mozzicato and Mr. Attila E. Herczeg will provide for
Pall to pay them $1,022,055 and $1,248,749, respectively, as
consideration for the covenants contained therein, such payments
to be made in four equal installments, with the first installment
payable promptly after their delivery to Pall at the Closing of
properly executed Noncompetition Agreements and the other three
installments to be payable on the first, second and third
anniversaries of the Closing Date.
2.4 Pall and Acquisition to Make Pall Stock and Cash
Available. At or before the Effective Time, Pall and Acquisition
shall make available to Wachovia Bank of North Carolina, N.A. or
such other entity as Pall shall designate to act as paying agent
(the "Paying Agent"), such number of shares of Pall Stock and
such cash (the "Payment Fund") as are required for the conversion
of Company Shares into the right to receive Pall Stock pursuant
to Section 2.1(b) hereof and cash in lieu of fractional shares
pursuant to Section 2.1(e) hereof. The cash portion of the
Payment Fund may be invested from time to time by the Paying
Agent, as directed by the Surviving Corporation, in (i)
obligations of or guaranteed by the United States of America or
any State, (ii) commercial paper rated A-1 or A-2, and/or (iii)
time deposits with, including certificates of deposit issued by,
any office located in the United States of any bank or trust
company that has capital, surplus and undivided profits of at
least $50,000,000, and any net earnings with respect thereto
shall be paid to the Surviving Corporation as and when requested
by the Surviving Corporation.
Promptly after the Effective Time, the Paying Agent
shall mail to each record holder of Company Shares a form of
letter of transmittal and instructions for use in surrendering
certificates representing such shares and receiving payment
therefor.
Each holder of Company Shares to be converted into the
right to receive Pall Stock pursuant to Section 2.1(b) hereof
shall be entitled to receive, upon surrender to the Paying Agent
of one or more certificates for such Company Shares for
5 <PAGE>
cancellation, a Pall Stock certificate registered in the name of
such holder for the number of shares of Pall Stock into which the
Company Shares previously represented by such certificates are
convertible in the Merger and a bank check for the amount of any
payment in lieu of fractional shares contemplated by Section
2.1(e) hereof. Until so presented and surrendered in exchange,
each certificate representing Company Shares held by Company
stockholders (other than Dissenting Shares) shall be deemed for
all purposes to evidence only the right to receive the Pall Stock
and cash in lieu of fractional shares to which such Company
Shares are entitled in accordance with Section 2.1(b) and (e)
hereof.
Any portion of the Payment Fund not paid to holders of
Company Shares pursuant to this Agreement within six months after
the Effective Time shall be paid over by the Paying Agent to the
Surviving Corporation together with a list of holders of Company
Shares who have not yet surrendered certificates for Company
Shares to the Paying Agent and such holders of Company Shares
shall thereafter look only to the Surviving Corporation for
payment, but shall have no greater rights against the Surviving
Corporation than may be accorded to general creditors under
applicable law. Notwithstanding the foregoing, neither the
Paying Agent, the Surviving Corporation nor any party hereto
shall be liable to a holder of Company Shares for any Pall Stock
or cash delivered to a public official pursuant to any applicable
abandoned property, escheat or similar law.
2.5 Status and Conversion of Acquisition Shares. At
the Effective Time, each share of Common Stock, $.01 par value,
of Acquisition issued and outstanding immediately prior to the
Effective Time shall, by virtue of the Merger, be converted into
one validly issued, fully paid and nonassessable share of Common
Stock, $.01 par value, of the Surviving Corporation.
ARTICLE III
CERTAIN EFFECTS OF MERGER
3.1 Effect of Merger. At and after the Effective
Time, the separate existence of Acquisition shall cease, the
Company Shares shall cease to exist (except as evidence of the
right of the holder thereof to receive Pall Stock or cash and
Pall Stock therefor in accordance with the terms hereof) subject
to the rights of holders of Dissenting Shares, and all the
estate, property rights, privileges, powers and franchises, and
all property, real, personal and mixed, of Acquisition shall
transfer to, vest in and devolve on the Company as the Surviving
Corporation without further act or deed. Confirmatory deeds,
assignments, or similar instruments to evidence such transfer may
be executed and delivered at any time in the name of Acquisition
or the Company by Acquisition's last acting officers or by the
6 <PAGE>
appropriate officers of the Surviving Corporation. The Surviving
Corporation shall be liable for all of the debts and obligations
of Acquisition and the Company. Any existing claim, action or
proceeding pending by or against Acquisition or the Company may
be prosecuted to judgment as if the Merger had not taken place
or, on motion of the Surviving Corporation, the Surviving
Corporation may be substituted as a party, and any judgment
against Acquisition or the Company shall constitute a claim on
the property of the Surviving Corporation. The Merger shall not
impair the rights of creditors or any liens on the property of
either of the Constituent Corporations.
3.2 Further Assurances. If at any time after the
Effective Time the Surviving Corporation shall consider or be ad-
vised that any further deeds, assignments or assurances in law or
any other acts are necessary, desirable or proper (a) to vest,
perfect or confirm, of record or otherwise, in the Surviving
Corporation, the title to any property or right of the Constitu-
ent Corporations acquired or to be acquired by reason of, or as a
result of, the Merger, or (b) otherwise to carry out the purposes
of this Agreement, the Constituent Corporations agree that the
Surviving Corporation and its proper officers and directors shall
and will execute and deliver all such property, deeds, assign-
ments and assurances in law and do all acts necessary, desirable
or proper to vest, perfect or confirm title to such property or
right in the Surviving Corporation and otherwise to carry out the
purposes of this Agreement, and that the proper officers and
directors of the Constituent Corporations and the proper officers
and directors of the Surviving Corporation are fully authorized
in the name of the Constituent Corporations or otherwise to take
any and all such action.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1 Representations and Warranties by the Company and
the Company Insiders. Each of the Company and the Company In-
siders jointly and severally represents and warrants to, and
agrees with, Pall and Acquisition, subject to the exceptions set
forth in the disclosure schedule (the "Schedule") attached
hereto, as follows:
(a) Organization of the Company. The Company is duly
incorporated and is validly existing as a corporation in good
standing under the laws of the Commonwealth of Massachusetts with
full corporate power and authority to own, lease and operate its
properties and to conduct its business as now conducted. The
Company is duly qualified to do business as a foreign corporation
and is in good standing in all jurisdictions where the nature of
its assets or business requires such qualification, except where
failure to be so qualified would not have a material adverse
7<PAGE>
effect on the financial condition, business or operations of the
Company, and such jurisdictions are listed in Part A of the
Schedule. The Company owns, directly or indirectly, all the
outstanding capital stock of the subsidiary companies listed in
Part A of the Schedule (collectively the "Subsidiaries"). Except
as set forth in Part A of the Schedule, the Company does not own,
directly or indirectly, shares of capital stock in any
corporation other than the Subsidiaries. The Subsidiaries are
duly incorporated and validly existing as corporations in good
standing under the laws of their respective jurisdictions of
incorporation with full corporate power and authority to own,
lease and operate their properties and to conduct their
businesses as now conducted. The Subsidiaries are duly qualified
to do business as foreign corporations and are in good standing
in all jurisdictions where the nature of their assets or business
requires such qualification, except where failure to be so
qualified would not have a material adverse effect on the finan-
cial condition, business or operations of such Subsidiaries, and
such jurisdictions are listed in Part A of the Schedule. The
Articles of Organization and the By-Laws (or similar
organizational documents) of the Company and of each of the
Subsidiaries heretofore delivered by the Company to Pall are
complete and correct.
(b) Authority of the Company. The Company has the
corporate power to enter into this Agreement and, subject to the
approval of the Merger by its stockholders, to carry out the
transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation of the Merger and the other
transactions contemplated hereby have been duly approved and
authorized by the Board of Directors of the Company and the Board
of Directors of the Company will recommend that holders of
Company Shares adopt this Agreement and approve the Merger;
except for the adoption of this Agreement and approval of the
Merger by its stockholders, no other corporate acts or proceed-
ings on the part of the Company are necessary to authorize this
Agreement or the consummation of the transactions contemplated
hereby. Subject to the approval of the Merger by its stock-
holders, this Agreement constitutes the valid and legally binding
obligation of the Company enforceable against the Company in
accordance with its terms, except as the same may be limited by
bankruptcy, insolvency, reorganization or other laws affecting
creditors' rights generally, and by general equitable principles.
Except as set forth in Part B of the Schedule, the execution and
delivery of this Agreement by the Company does not, and the
consummation of the transactions contemplated hereby will not,
violate or constitute a default under (i) any provision of the
Articles of Organization or By-Laws of the Company, (ii) subject
to obtaining the consents set forth in Part B of the Schedule,
any provision of (or result in acceleration of any obligation
under) any mortgage, note, lien, lease, agreement, instrument,
8 <PAGE>
arbitration award, judgment or decree to which the Company or any
of the Subsidiaries is a party or by which the Company or any of
the Subsidiaries is bound or to which any property of the Company
or any of the Subsidiaries is subject or (iii) any laws of the
United States or any state or jurisdiction in which the Company
or any of the Subsidiaries conducts business.
(c) Capitalization. The authorized capital stock of
the Company consists of 10,000,000 shares of Common Stock. As of
the date hereof, 5,705,250 shares of Common Stock of the Company
are validly issued and outstanding, fully paid and nonassessable,
and 226,090 Company Shares are issued and held in the treasury of
the Company. As of the date hereof, 87,162 Company Shares were
reserved under the Company's stock option plans for issuance
pursuant to Options heretofore granted thereunder. As of the
date hereof, the Company has no commitments to issue or sell any
shares of its capital stock or any securities or obligations
convertible into or exchangeable for, or giving any person any
right to subscribe for or acquire from the Company any shares of
capital stock of the Company and no securities or obligations
evidencing any such rights are outstanding, except pursuant to
the outstanding Options described above.
(d) Consents, etc. Except for (i) the filings (the
"HSR Filings") under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended ("HSR"), which were made by Pall and the
Company on November 1, 1994, and (ii) the submission for filing
of the Articles of Merger with the Secretary, no consent,
authorization, order or approval of, or filing or recording with,
any governmental commission, board or other regulatory body is
required for or in connection with the execution and delivery of
this Agreement by the Company and the consummation by the Company
of the transactions contemplated hereby.
(e) Financial Statements. The Company has previously
furnished Pall with a true and complete copy of (i) the audited
consolidated balance sheets of the Company and the Subsidiaries
as of December 31, 1993 and December 31, 1992 and the related
audited statements of consolidated income and retained earnings
and of consolidated changes in financial position for the fiscal
years then ended including the notes thereto, all reported on by
Coopers & Lybrand, independent certified public accountants, and
(ii) the unaudited balance sheet and income statement of the
Company and the Subsidiaries as at and for the nine month period
ended September 30, 1994 (collectively, the "Company Financial
Statements"). The Company Financial Statements present fairly
the consolidated financial position of the Company and the
Subsidiaries as of, and the consolidated income and retained
earnings of the Company and the Subsidiaries for the periods
ended on, the dates thereof in conformity with generally accepted
accounting principles in the United States ("GAAP") applied on a
9 <PAGE>
consistent basis, subject in the case of unaudited financial
statements, to normal year-end adjustments and any other
adjustments described therein. The Company Financial Statements
as at and for the period ended September 30, 1994 are herein
referred to as the "Recent Financial Statements".
The Company and the Subsidiaries have no liabilities,
contingent or otherwise, (including liabilities for Taxes (as
hereinafter defined)) other than (i) liabilities shown or re-
flected in the Recent Financial Statements, (ii) liabilities
incurred in the ordinary course of business since the date of the
Recent Financial Statements, and (iii) those liabilities
described in Part E of the Schedule.
(f) Absence of Certain Changes or Events. Except as
set forth in Part F of the Schedule, since the date of the Recent
Financial Statements there has not been (i) any material adverse
change in the financial condition, properties, business, results
of operations or, to the best knowledge of the Company or the
Company Insiders, prospects of the Company or the Subsidiaries,
(ii) any change in the authorized, issued or outstanding capital
stock or material change in the funded debt of the Company and
the Subsidiaries on a consolidated basis other than changes due
to payments in accordance with the terms of such debt; (iii) any
declaration, setting aside or payment of any dividend on, or
other distribution in respect of, any shares of the capital stock
of the Company or the acquisition for value by the Company or any
of the Subsidiaries of any shares of capital stock of the
Company; or (iv) any grant by the Company of any warrant, option
or right to acquire any Company Shares or other securities
whatsoever. Neither the Company nor the Subsidiaries is
currently in default on any installment or installments on
indebtedness for borrowed money, or on any rental payment on any
long-term lease.
(g) Governmental Authorization and Compliance with
Laws. The business of the Company and the Subsidiaries has been
operated in compliance with all laws, ordinances, regulations and
orders of all Federal, state, local and foreign jurisdictions and
governmental entities to which they are subject. The Company and
the Subsidiaries have all permits, certificates, licenses,
approvals and other authorizations required in connection with
the operation of their businesses. A complete list of such
permits, certificates, licenses, approvals and other
authorizations is set forth in Part G of the Schedule.
(h) Tax Matters.
(A) The amounts shown as tax liabilities on the con-
solidated balance sheet of the Company and the Subsidiaries in-
cluded in the Recent Financial Statements will be sufficient for
10 <PAGE>
the payment of all Federal, state, county, local and foreign
Taxes (as hereinafter defined) of the Company and the
Subsidiaries, whether or not disputed, which were properly
accruable at that date. There are no agreements by the Company
or any of the Subsidiaries for the extension of the time for the
assessment of any Taxes.
Except as set forth in Part H of the Schedule, neither
the Internal Revenue Service (the "IRS") nor any other taxing
authority is now asserting, or to the knowledge of the Company
threatening to assert, against the Company or any of the
Subsidiaries any claim for additional Taxes, nor to the knowledge
of the Company or the Company Insiders is the IRS or any other
taxing authority auditing any tax return filed by the Company or
any of the Subsidiaries.
(B) Each of the Company and the Subsidiaries has
timely filed (and until the Closing will timely file) all
returns, declarations, reports, estimates, information returns
and statements ("Returns") required to be filed or sent by or
with respect to them in respect of any Taxes;
(C) As of the time of filing, such Returns were (and,
as to Returns not filed as of the date hereof, will be) true,
complete and correct in all material respects;
(D) The Company and the Subsidiaries have timely paid
or provided for (and until the Closing will timely pay or in good
faith contest) all Taxes that are due and payable;
(E) Except as set forth in Part H of the Schedule, the
Company and the Subsidiaries have complied in all material
respects with all applicable laws, rules and regulations relating
to the payment and withholding of Taxes and have timely withheld
from employee wages or other payments to creditors or independent
contractors and paid over to the proper governmental authorities
all amounts required to be so withheld and paid over under all
applicable laws and regulations;
(F) None of the Company or the Subsidiaries has filed
a consent pursuant to Section 341(f) of the Code or agreed to
have Section 341(f)(2) of the Code apply to any disposition of a
subsection (f) asset (as such term is defined in Section
341(f)(4) of the Code) owned by the Company or any of the
Subsidiaries;
(G) No property used by the Company or the Sub-
sidiaries is property that the Company or any such Subsidiary
is or will be required to treat as being owned by another person
pursuant to the provisions of Section 168(f)(8) of the Internal
Revenue Code of 1954 as it existed prior to the enactment of the
11 <PAGE>
Tax Reform Act of 1986 or is "tax-exempt use property" within the
meaning of Section 168(h) of the Code;
(H) None of the Company or the Subsidiaries is
required to include in income any adjustment pursuant to Section
481(a) of the Code by reason of a voluntary change in accounting
method initiated by the Company, or for any other reason, nor
does the Company have any knowledge that the IRS has proposed any
such adjustment or change in accounting method;
(I) Except as set forth in Part H of the Schedule, no
notice of claim has ever been made by a government authority in a
jurisdiction where the Company does not file Returns that it is
or may be subject to Taxes in that jurisdiction;
(J) The Company is not a party to any contractual
obligation requiring the indemnification or reimbursement of any
person or entity with respect to the payment of any Taxes;
(K) None of the assets of the Company directly or
indirectly secures any debt, the interest in which is tax exempt
under Section 103(a) of the Code;
(L) The Company is not a party to any agreement, con-
tract, arrangement or plan that has resulted or would result,
separately or in the aggregate, in the payment of any "excess
parachute payments" within the meaning of Section 280G of the
Code;
(M) The Company is not a party to any joint venture,
partnership, or other arrangement or contract that could be
treated as a partnership for Federal income tax purposes;
(N) No material issues have been raised by the
relevant taxing authorities on audit that are of a recurring
nature and that would have an effect upon the Taxes of the
Company or any of the Subsidiaries;
(O) No extension of the statute of limitations with
respect to any claim for Taxes has been granted by the Company or
any of the Subsidiaries;
(P) There are no liens for Taxes upon the assets of
the Company or any of the Subsidiaries except liens for Taxes not
yet due;
(Q) The Company has made available for inspection all
Tax Returns of the Company and the Subsidiaries for which the
applicable statute of limitations has not expired;
12 <PAGE>
(R) All material elections with respect to Taxes
affecting the Company or the Subsidiaries as of the date hereof
are set forth in Part H of the Schedule. After the date hereof,
no election with respect to any Taxes or Tax Returns affecting
the Company or any of the Subsidiaries will be made without the
written consent of Pall;
(S) Except as set forth in Part H of the Schedule,
none of the shareholders of the Company is a person other than a
United States person within the meaning of the Code;
(T) Except as set forth in Part H of the Schedule, the
transactions contemplated herein are not subject to the tax with-
holding provisions of Section 3406 of the Code, or of Subchapter
A of Chapter 3 of the Code, or of any other provision of law;
(U) Except as set forth in Part H of the Schedule, the
Company does not have and has not had a branch in any foreign
country;
(V) The Company has disclosed on its Federal income
Tax Returns all positions taken therein that could give rise to a
substantial understatement of Federal income Tax within the
meaning of Section 6662 of the Code; and
(W) The Company neither owns nor leases real property
in the State of New York.
For purposes of this Agreement, "Taxes" shall mean all
taxes, charges, fees, levies or other assessments, including,
without limitation, all net income, gross income, gross receipts,
sales, use, ad valorem, transfer, franchise, profits, license,
withholding, payroll, employment, excise, severance, stamp, occu-
pation, property or other taxes, customs duties, fees,
assessments or charges of any kind whatsoever, imposed by the
United States, or any state, local or foreign government or sub-
division or agency thereof; and such term shall include any
interest and any penalties, additions to tax or additional
amounts attributable to such assessments and any contractual or
other obligation to indemnify or reimburse any person or entity
with respect to such Taxes.
(i) Title to Properties; Absence of Liens and
Encumbrances, etc. Except for leased properties, the Company and
the Subsidiaries have good and marketable title to all of their
tangible properties and assets, real, personal and mixed, used in
their businesses, including without limitation those reflected in
the consolidated balance sheet included in the Recent Financial
Statements (other than properties or assets disposed of in the
ordinary course of business since the date of such balance
sheet), free and clear of all liens, charges, pledges, security
13 <PAGE>
interests or other encumbrances, except as reflected in the
Recent Financial Statements or in Part I of the Schedule.
(j) Contracts, etc. The Company shall as soon as
practical prior to Closing furnish Pall and its counsel with a
complete and accurate list, together with true and complete
copies if requested by Pall, of:
(i) all sales contracts of the Company or any of
the Subsidiaries having a sales price of $50,000 or more or
which are not to be performed within one year regardless of
amount, and all purchase orders having a purchase price of
$50,000 or more;
(ii) all other material contracts of the Company
or any of the Subsidiaries (other than sales contracts and
purchase orders), leases, mortgages, indentures, promissory
notes, deeds, loan or credit agreements, or similar
instruments;
(iii) all pension, profit-sharing or employee
benefit plans, employment contracts, contracts with unions
and other agreements relating to employees of the Company or
any of the Subsidiaries;
(iv) all the Company's and the Subsidiaries' poli-
cies of insurance issued during the past five years; and
(v) all deeds to real property owned by the
Company or any of the Subsidiaries.
Part J of the Schedule contains a true and complete
list of all of the above described contracts and leases. Except
as set forth in Part J of the Schedule, none of the Company or
the Subsidiaries is in default, and no event has occurred which
(whether with or without notice, lapse of time or the happening
or occurrence of any other event) would constitute a default
under any of the above described contracts and leases, and all
such contracts and leases are valid and legally binding.
(k) Litigation. Except as set forth in Part K of the
Schedule, there is no claim, action, suit, arbitration, mediation
or proceeding in or before any court or administrative or regula-
tory agency or arbitrator or mediator pending, or to the know-
ledge of the Company or the Company Insiders contemplated or
threatened, against the Company or any of the Subsidiaries or any
of their properties.
(l) Patents, Copyrights, Trademarks, etc. The
Company and the Subsidiaries have good and marketable title to,
or valid and continuing licenses to use, all patents, patent
14 <PAGE>
applications, copyrights, trademarks and trade names, brand
names, proprietary and other technical information, technology,
inventions, discoveries, improvements, processes, know-how,
formulae, drawings, specifications, production data, trade
secrets and computer software and programs, and licenses thereof
(the "Proprietary Rights") including the good-will relating
thereto, which are necessary for the operation of their
businesses as presently conducted, a true and complete list of
which is included in Part L of the Schedule. Except as set forth
in Part L of the Schedule, there are no claims or proceedings
pending or, to the knowledge of the Company and the Company
Insiders, contemplated or threatened against the Company or any
of the Subsidiaries asserting that the Company or any of the
Subsidiaries is infringing any such Proprietary Rights of any
other person.
(m) Employee Benefit Plans. Other than those set
forth in Part M of the Schedule, the Company and the Subsidiaries
do not maintain, administer or contribute to any bonus, profit
sharing, pension, stock bonus, retirement, stock right, stock
appreciation right, stock purchase, stock option, deferred
compensation, incentive compensation, hospitalization, medical,
dental, vision, life insurance, disability, tuition, education or
legal assistance, dependent care assistance, fringe benefit (cash
and non-cash), cafeteria, severance pay, salary continuation,
death benefit, survivor benefit or other benefit plan arrangement
or program, including, but not limited to, any employee benefit
plan within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"),
covering any of the Company's or the Subsidiaries' employees (the
"Plans").
The Company has furnished Pall with (i) complete and
accurate copies of all documents comprising or pertaining to each
Plan, including each amendment and any trust agreement, insurance
contract, collective bargaining agreements or other funding or
investment arrangements for the benefits under such Plans, (ii)
copies of all determination letters or private rulings issued by
the IRS with respect to each Plan and copies of all applications
and requests filed with the IRS for such determinations or
rulings, (iii) a copy of the most recent annual report (Form
5500) for each Plan, (iv) a copy of the most recent summary plan
description ("SPD"), and all summaries of material modifications
to such SPD, for each Plan and (v) the latest financial statement
and actuarial report for each Plan.
Each Plan that is intended to meet the requirements for
qualification under Section 401(a) of the Internal Revenue Code
of 1986, as amended (the "Code") or that is intended to qualify
for special tax treatment under any other provision of the Code,
is, and at all times since its inception has been, in compliance
15 <PAGE>
with all conditions necessary for such Plan to so qualify, except
with respect to any required retroactive amendment for which the
remedial amendment period has not expired. The Company and the
Company Insiders are not aware of any fact that might cause any
such Plan to lose its qualified status.
Each Plan is, and at all times since its inception has
been, in compliance in all material respects with all the provi-
sions of ERISA and the Code applicable to such Plan, and with all
other laws, rules and regulations applicable to such Plan.
No prohibited transaction within the meaning of the
applicable provisions of ERISA and the Code have occurred with
respect to any Plan. No transaction has occurred, and to the
best knowledge of the Company and the Company Insiders no circum-
stances exist, with respect to any Plan that could result in
liability, tax or penalty for or due from the Company or any of
the Subsidiaries (or for any successor to the Company or any of
the Subsidiaries), or the imposition of any liens, under Title IV
of ERISA. No "reportable event", as such term is defined in
Section 4043 of ERISA, for which the 30-day notice has not been
waived by the Pension Benefit Guarantee Corporation has occurred
with respect to any Plan which is subject to ERISA.
All health, medical, hospital, dental, disability or
death benefits payable under any Company Plan which is a "welfare
benefit plan", within the meaning of Section 3(1) of ERISA, are
provided through policies of insurance. Except as set forth in
Part M of the Schedule, no Company Plan which provides retiree
health benefits or death benefits or both has any unfunded
liabilities. No Plan has provided any benefit which is a
"disqualified benefit", as such term is defined in Section
4976(b) of the Code, for which an excise tax would be imposed.
The Company, the Subsidiaries and each fiduciary for
each of the Plans is in compliance in all material respects with
the terms of each Plan, and with the requirements and duties of
any and all laws, statutes, orders, decrees, rules and
regulations, including but not limited to ERISA and the Code,
applicable to each Plan. All contributions and other payments
required to be made by the Company or any of the Subsidiaries
under or with respect to each Plan under the terms of such Plan,
ERISA (including Part 3 of Subtitle B of Title I of ERISA), the
Code (including Code Section 412), or otherwise have been made or
accruals adequate for such purposes as of the date of the Recent
Financial Statements have been provided therefor and reflected in
the Recent Financial Statements in accordance with GAAP. No Plan
has an accumulated funding deficiency within the meaning of
Section 412 of the Code or Section 302 of ERISA (whether or not
waived).
16 <PAGE>
There is no pending, or to the best of the knowledge of
the Company and the Company Insiders, contemplated or threatened
legal action, proceeding or investigation against the Company,
any of the Subsidiaries or any Plan, other than routine claims
for benefits, which could result in liability being imposed upon
any of the Plans or upon the Company or any of the Subsidiaries
with respect to any of the Plans and to the best knowledge of the
Company or the Company Insiders there is no basis for any such
legal action or proceeding.
The actuarial present value of accrued benefits (both
vested and unvested) of each of the Plans which is funded does
not exceed the assets of such Plans valued on an ongoing basis
and based upon actuarial assumptions which are reasonable in
light of the experience of each such Plan.
Except as set forth in Part M of the Schedule, there
are no agreements between the Company or any of the Subsidiaries
and any labor union and the Company and the Subsidiaries are not,
and have never been, a participating employer in any multiem-
ployer plan, as such term is defined in Section 3(37) of ERISA,
or in any multiple employer plan described in Section 413(c) of
the Code. To the extent that the Company or any of the Subsid-
iaries is or has been a participating employer in any multiem-
ployer plan (as so defined), none of the Company or the Subsid-
iaries is now, or would upon a complete or partial withdrawal
therefrom become, liable for any withdrawal liability to or in
respect of such multiemployer plan.
The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby will not
result in any payment (whether of severance pay or otherwise)
becoming due from any of the Plans, or from the Company or any of
the Subsidiaries with respect to any of the Plans, to any indivi-
dual, or result in the vesting, acceleration or payment or in-
creases in the amount of any benefit payable under any of the
Plans to any individual.
(n) Finder's Fee. No brokers or finders were employed
by the Company or any of the Subsidiaries in connection with any
of the transactions contemplated by this Agreement.
(o) No Failure to Disclose. The Company has not
failed to disclose to Pall any agreement, arrangement, event or
occurrence, or threatened or anticipated event or occurrence
known to the Company or the Company Insiders, which would or
might reasonably be deemed to have a material and adverse effect
on the financial condition, the business, the operations or the
prospects of the Company or any of the Subsidiaries.
17 <PAGE>
(p) Proxy Statement. The information concerning the
Company and the Subsidiaries and the Merger contained in the
Proxy Statement (i) will include all statements of material facts
which are required to be stated therein, and (ii) will not
include any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to
make the statements therein not misleading.
(q) Insider Interests. No officer or director of the
Company or any of the Subsidiaries has any agreement with the
Company or any of the Subsidiaries or any interest in any
property, real, personal or mixed, tangible or intangible (in-
cluding, without limitation, patents, patent applications, trade-
marks, trade names or other intellectual property), used in or
pertaining to the business of the Company or the Subsidiaries
except as a shareholder or employee and except as set forth in
Part Q of the Schedule.
(r) Labor Controversies. Except as set forth in Part
R of the Schedule, there are no controversies between the Company
or any of the Subsidiaries and any employees of the Company or
the Subsidiaries or any unresolved labor union grievances or
unfair labor practices or labor arbitration proceedings pending
or, to the knowledge of the Company and the Company Insiders,
contemplated or threatened relating to the Company or any of the
Subsidiaries and, to the best knowledge of the Company or the
Company Insiders, there are not any organizational efforts pre-
sently being made or threatened involving any of the Company's or
any of the Subsidiaries' employees. None of the Company or the
Subsidiaries has received notice of any claim that it has not
complied with any laws relating to the employment of labor, in-
cluding any provisions thereof relating to wages, hours, col-
lective bargaining, the payment of social security and similar
taxes, equal employment opportunity, employment discrimination or
employment safety, or that it is liable for any arrears of wages
or any taxes or penalties for failure to comply with any of the
foregoing.
(s) Use of Real Property. The real properties owned
and leased by the Company and the Subsidiaries are used and
operated in compliance and conformity in all material respects
with all applicable leases, contracts, commitments, licenses and
permits. None of the Company or the Subsidiaries has received
notice of violation of any applicable zoning or building regu-
lation, ordinance or other law, order, regulation or requirement
relating to the operations of the Company or the Subsidiaries and
to the knowledge of the Company and the Company Insiders there is
no such violation. All plants and other buildings which are
owned or leased by the Company or any of the Subsidiaries conform
in all material respects with all applicable ordinances, codes,
regulations and requirements, and no law or regulation presently
18 <PAGE>
in effect or condition precludes or restricts continuation of the
present use of such properties.
(t) Accounts Receivable. The accounts receivable re-
flected on the unaudited consolidated balance sheet of the
Company and the Subsidiaries included in the Recent Financial
Statements, and all accounts receivable of the Company and the
Subsidiaries arising since the date of such balance sheet, arose
from bona fide transactions in the ordinary course of business,
and the materials or services involved have been provided to the
account obligor, and, except as contemplated by the relevant
contract, no further materials or services are required to be
provided in order to complete the sales and to entitle the
Company or the Subsidiaries, or their assignees, to collect the
accounts receivable in full (net of the reserve for doubtful
accounts shown on the Recent Financial Statements). Except as
set forth in Part T of the Schedule, no such account receivable
has been assigned or pledged to any other person, firm or
corporation, and no defense or setoff to any such account has
been asserted by the obligor. The consolidated balance sheet of
the Company and the Subsidiaries included in the Recent Financial
Statements contains a fully sufficient reserve for doubtful
accounts.
(u) Compliance with Environmental Laws. Except as set
forth in Part U of the Schedule:
(i) The Company and the Subsidiaries are in com-
pliance with all environmental laws, regulations, permits
and orders applicable to them, including, without
limitation, all laws, regulations, permits and orders
governing or relating to asbestos removal or abatement.
Neither the Company nor any of the Subsidiaries has received
or is the subject of any Environmental Claim.
(ii) Except for temporary storage on premises
pending removal, none of the Company or the Subsidiaries has
transported, stored, treated, disposed of or released, nor
has it arranged for any third parties, not a party to this
agreement, to transport, store, treat, dispose of or
release, Hazardous Substances to or at any location other
than a site lawfully permitted to receive such Hazardous
Substances for such purposes; and the Company and the
Subsidiaries have not performed or arranged for by any
method or procedure such transportation, storage, treatment,
disposal or release in contravention of any applicable laws
or regulations. Except as allowed pursuant to a valid
permit or other authorization, none of the Company or the
Subsidiaries has disposed, treated, stored, released or
arranged for any third parties to dispose, treat, store or
19 <PAGE>
release Hazardous Substances upon any property or facility
owned or leased by it.
(iii) There has not occurred, nor is there
presently occurring, a Release, treatment, storage or
disposal of any Hazardous Substance on, into, above or
beneath the surface of any parcel of real property in which
the Company or any of the Subsidiaries has or has had an
ownership interest or any leasehold interest or which the
Company or the Subsidiaries manages or operates or has
managed or operated.
(iv) None of the Company or the Subsidiaries has
transported or disposed of, nor have they arranged for any
third parties to transport or dispose of, any Hazardous
Substance to or at a site, nor does or has any property or
facility owned, leased, managed or operated by the Company
or the Subsidiaries constitute or constituted a site, which,
pursuant to the U.S. Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended
("CERCLA") or any similar state law, (A) has been placed on
the National Priorities List or its state equivalent or
otherwise been designated as an environmental or hazardous
waste clean-up site, or (B) the U.S. Environmental
Protection Agency or the relevant state agency has proposed
or is proposing to place on the National Priorities List or
its state equivalent or otherwise designate as an
environmental or hazardous waste clean-up site. None of the
Company or the Subsidiaries has received notice, or has
knowledge of any facts which could give rise to any notice,
that the Company or any of the Subsidiaries is a potentially
responsible party for a federal or state environmental
cleanup site or for corrective action under CERCLA or any
other applicable law or regulation, or of any other
Environmental Claim. None of the Company or the
Subsidiaries has submitted nor was required to submit any
notice pursuant to Section 103(c) of CERCLA. None of the
Company or the Subsidiaries has received any written or oral
request for information in connection with any site known or
alleged to be contaminated with Hazardous Substances or has
undertaken (or been requested to undertake) any response or
remedial actions with respect to any Hazardous Substances at
the request of any federal, state or local governmental
entity, or at the request of any other person or entity.
(v) There are no laws, regulations, ordinances,
licenses, permits or orders relating to environmental or
worker safety matters requiring any material work, repairs,
construction or capital expenditures with respect to the
assets or properties of the Company or any of the
Subsidiaries or otherwise required to be performed by the
20 <PAGE>
Company or the Subsidiaries with respect to any properties
or facilities owned, leased, managed or operated by the
Company or the Subsidiaries.
(vi) Part U of the Schedule identifies (A) all
environmental audits, assessments or occupational health
studies undertaken by the Company or any of the Subsidiaries
or agents of any of them or by any governmental agencies
with respect to the operations or properties of the Company
or any of the Subsidiaries; (B) the results of any
groundwater, soil, air or asbestos monitoring known by the
Company or the Company Insiders to have been undertaken with
respect to any real property owned or leased by the Company
or any of the Subsidiaries; (C) all written communications
of the Company or any of the Subsidiaries with environmental
agencies; and (D) all citations issued with respect to the
Company or any of the Subsidiaries under the Occupational
Safety and Health Act (29 U.S.C. Sections 651 et seq.).
(vii) For the purposes of this Agreement,
"Environmental Claim" shall mean any demand, claim,
governmental notice or threat of litigation or the actual
institution of any action, suit or proceeding at any time by
a person or entity which asserts that an Environmental
Condition constitutes a violation of or otherwise may give
rise to any liability or obligation under, any statute,
ordinance, regulation, or other governmental requirement or
the common law, including, any such statute, ordinance,
regulation, or other governmental requirement relating to
the emission, discharge, or release of any Hazardous
Substance into the environment or the generation, treatment,
storage, transportation, or disposal of any Hazardous Sub-
stance. "Environmental Condition" shall mean the presence
on the Closing Date, or the occurrence on or at any time
prior to the Closing Date of any storage, treatment,
disposal or Release, or the presence on the Closing Date of
any condition or circumstances which thereafter causes or
gives rise to any storage, treatment, disposal or Release,
whether discovered or undiscovered on the Closing Date, in
surface water, ground water, drinking water supply, land
surface, subsurface strata or ambient air or any other
location, of any pollutant, contaminant, industrial solid
waste or Hazardous Substance, arising out of or otherwise
related to (i) the operations or other activities of the
Company or any of the Subsidiaries, conducted or undertaken
prior to the Closing Date or (ii) any property, facility
owned, leased, managed or operated by the Company or any of
the Subsidiaries. "Hazardous Substance" shall mean any sub-
stance defined in the manner set forth in 42 U.S.C.
Section 9601(14), and shall include any additional
substances designated under 42 U.S.C. Section
9602(a) or any other substance which is or
21 <PAGE>
contains asbestos in any form, urea formaldehyde
foam insulation, methane, petroleum, gasoline, diesel fuel
or another petroleum hydrocarbon product, transformers or
other equipment which contain dielectric fluid containing
levels of polychlorinated biphenyls in excess of 50 parts
per million, or any other chemical material or substance
which is regulated as toxic or hazardous or exposure to
which is prohibited, limited, or regulated by federal,
state, county, regional, local or other governmental
authority. "Release" shall have the meaning set forth in 42
U.S.C. Section 9601(22).
4.2. Representations and Warranties by the Company
Insiders. Each Company Insider severally represents, warrants
and covenants to Pall as follows:
(a) That each such Company Insider will prior to the
Closing Date properly and accurately complete, execute and
deliver to Pall a Purchaser Questionnaire, in such form as Pall
shall request, representing and warranting to Pall as to whether
or not such Company Insider is an "accredited investor" within
the meaning of Regulation D under the Securities Act of 1933, as
amended (the "Securities Act");
(b) The Company Insider understands that (i) the issu-
ance of Pall Stock to him in the Merger is not being registered
under the Securities Act or the securities or blue sky laws of
any states and is being effected in reliance upon exemptions from
registration provided by the Securities Act and such laws (and
that the certificates representing the Pall Stock so issued may,
if Pall determines it to be appropriate, bear legends reflecting
the foregoing), (ii) the exemption for resales of such Pall Stock
provided by Rule 144 under the Securities Act will not be avail-
able until at least the second anniversary date of the Closing
Date, and (iii) no federal or state agency has passed on, re-
commended or endorsed an investment in the Pall Stock issuable in
the Merger;
(c) The Company Insider, alone or with his advisor(s),
has received, read, carefully considered and fully understood (i)
Pall's Annual Report on Form 10-K for the fiscal year ended July
30, 1994 and Pall's Quarterly Report on Form 10-Q for the
quarterly period ended October 31, 1994, (ii) Pall's 1994 Annual
Report to its shareholders, and (iii) the proxy statement
relating to the Annual Meeting of Pall's Shareholders held on
November 17, 1994;
(d) The Company Insider is able (i) to bear
indefinitely the economic risk of investment in the Pall Stock
issuable to him in the Merger, and (ii) to afford a complete loss
of such investment;
22 <PAGE>
(e) In reaching an informed decision to invest in
Pall, the Company Insider has relied upon independent
investigations made by him and/or by his professional tax and
other advisors. The Company Insider and/or such advisor(s) have
obtained sufficient information to evaluate the merits and risks
of investment in Pall. In that connection, employees of Pall and
other persons acting on its behalf (i) have fully and satis-
factorily answered any questions which the Company Insider and/or
such advisor(s) desired to ask concerning Pall, the terms and
conditions of the Merger, and an investment in Pall Stock, and
(ii) have furnished the Company Insider and/or such advisor(s)
with any additional information or documents requested to verify
the accuracy of or supplement any information previously
furnished, to the extent Pall possessed such additional
information or could acquire it without unreasonable effort or
expense, and to the extent that disclosure of such additional
information would not entail the unpermitted disclosure of
confidential or proprietary information by Pall;
(f) The Pall Stock being acquired in the Merger by the
Company Insider is being purchased for the sole account of the
Company Insider, as principal, for investment and not with a view
to, or in connection with, any resale, distribution, subdivision
or fractionalization. The Company Insider has no agreement or
other arrangement with any person to sell, transfer or, except as
contemplated by this Agreement, pledge any of such Pall Stock,
and the undersigned has no plans to enter into any such agreement
or arrangement prior to the effectiveness of the Registration
Statement on Form S-3 referred to in Section 5.2(g) of this
Agreement;
(g) No commission, discount, fee or other remuneration
has or shall be paid or given, directly or indirectly, to any
person for soliciting the Company Insider to execute this
Agreement or to vote as a Company shareholder for adoption of
this Agreement and approval of the Merger; and
(h) The Merger is intended to qualify as a reorgani-
zation under Sections 368(a)(1)(A) and 368(a)(2)(E) of the Code.
In respect thereof, the following representations are made:
(i) There is no plan or intention on the part of
the Company Insiders, and to the best of the knowledge
of the Company Insiders, there is no plan or intention
on the part of the remaining holders of Company Shares
to sell, exchange or otherwise dispose of a number of
shares of Pall Stock received in the Merger that would
reduce the holders of Company Shares' ownership of Pall
Stock to a number of shares having a value, as of the
date of the Merger, of less than 50 percent of the
value of all of the formerly outstanding Company Shares
23 <PAGE>
as of the same date (provided that for this purpose the
Pall Stock received by Wicor, Inc. as a result of the
Merger shall not be treated as part of the stock as to
which there is no plan or intention to dispose). For
purposes of this representation, Company Shares
exchanged for cash or other property, surrendered by
dissenters or exchanged for cash in lieu of fractional
shares of Pall Stock will be treated as outstanding
Company Shares on the date of the Merger. Moreover,
Company Shares and shares of Pall Stock held by holders
of Company Shares and otherwise sold, redeemed or
disposed of prior or subsequent to the Merger will be
taken into account in making this representation.
(ii) Upon completion of the Merger, the Surviving
Corporation will hold at least 90 percent of the fair
market value of its net assets and at least 70 percent
of the fair market value of its gross assets held prior
to the Merger. For purposes of this representation,
amounts paid by the Surviving Corporation to
dissenters, amounts paid by the Surviving Corporation
to holders of Company Shares who receive cash,
Surviving Corporation or Company assets used to pay
expenses of the Merger, and all redemptions and
distributions (except for regular and normal dividends)
made by the Company preceding the Merger will be
included as assets of the Company held prior to the
Merger.
(iii) Each holder of Company Shares will pay
their respective expenses incurred in connection with
the Merger.
4.3 Representations and Warranties by Pall and
Acquisition. Each of Pall and Acquisition jointly and severally
represents and warrants to, and agrees with, the Company and the
Company Insiders, as follows:
(a) Organization of Pall and Acquisition. Pall is a
corporation duly organized, validly existing and in good standing
under the laws of the State of New York and Acquisition is a
corporation duly organized, validly existing and in good standing
under the laws of the Commonwealth of Massachusetts.
(b) Authority of Acquisition. Pall and Acquisition
have the corporate power to enter into this Agreement and the
other agreements and documents to be executed and delivered by
Pall and Acquisition pursuant hereto and to carry out the
transactions contemplated hereby and thereby. The execution and
delivery of this Agreement and the other agreements and documents
to be executed and delivered by Pall and Acquisition pursuant
24 <PAGE>
hereto and the consummation of the Merger and the transactions
contemplated hereby and thereby have been duly authorized by the
Board of Directors of Pall (either by action of the whole Board
or by the Executive Committee thereof, which Committee has all
necessary authority to take such action) and by the Board of
Directors and the sole stockholder of Acquisition; and (i) no
other corporate acts or proceedings on the part of Pall or
Acquisition are necessary to authorize this Agreement and the
other agreements and documents to be executed and delivered by
Pall and Acquisition pursuant hereto or the consummation of the
transactions contemplated hereby and thereby, and (ii) this
Agreement constitutes, and when executed and delivered the other
agreements and documents to be executed by Pall and Acquisition
pursuant hereto will constitute, valid and legally binding
obligations of Pall and Acquisition, as the case may be,
enforceable against Pall and Acquisition in accordance with their
respective terms, except as the same may be limited by
bankruptcy, insolvency, reorganization or other laws affecting
creditors' rights generally, and by general equitable principles.
The execution and delivery of this Agreement by Pall and
Acquisition does not, and the consummation of the transactions
contemplated hereby will not, violate or constitute a default
under any provision of the Certificate of Incorporation or By-
Laws of Pall or the Articles of Organization or By-Laws of
Acquisition or any provision of (or result in the acceleration of
any obligation under) any mortgage, note, lien, lease, agreement,
instrument, arbitration award, judgment or decree to which Pall
or Acquisition is a party or by which they are bound or to which
any of their property is subject, or any laws of the United
States or any state or jurisdiction in which Pall or Acquisition
conducts business.
(c) Consents, etc. Except for (i) the HSR Filings,
which were made by Pall and the Company on November 1, 1994, (ii)
the filing of the Articles of Merger with the Secretary, (iii)
the filing with the New York Stock Exchange of a subsequent
listing application for the shares of Pall Stock issuable in the
Merger, (iv) the filing of a Form D with the Securities and
Exchange Commission pursuant to Regulation D under the Securities
Act, (v) filings under the securities or blue sky laws of New
York and other jurisdictions where holders of Company Shares are
located, and (vi) the filing and effectiveness of the Form S-3
Registration Statement contemplated by Section 5.2(g) hereof, no
consent, authorization, order or approval of, or filing or
registration with, any governmental commission, board or other
regulatory body is required for or in connection with the
execution and delivery of this Agreement by Pall and Acquisition
and the consummation by Pall and Acquisition of the transactions
contemplated hereby.
25 <PAGE>
(d) Availability of Funds. Pall has available and
will have available on the Closing Date sufficient funds to
enable it to consummate the transactions contemplated by this
Agreement.
(e) Litigation. There is no claim, action, suit,
arbitration, mediation or proceeding in or before any court or
administrative or regulatory agency or arbitrator or mediator
pending or, to the knowledge of Pall or Acquisition, contemplated
or threatened, which questions or challenges the validity of this
Agreement or any action taken or to be taken by Pall or Acquisi-
tion pursuant to this Agreement or in connection with the
transactions contemplated hereby.
(f) Pall Stock. The authorized capital stock of Pall
consists of 500,000,000 shares of Pall Common Stock and the
issued and outstanding shares of Pall Common Stock are validly
issued, fully paid and nonassessable. When issued pursuant to
Section 2.4 hereof, the Pall Stock will be validly issued, fully
paid and nonassessable.
(g) Finder's Fee. No brokers or finders were employed
by Pall or Acquisition in connection with any of the transactions
contemplated by this Agreement.
(h) Proxy Statement. All information concerning Pall
and Acquisition furnished or to be furnished by Pall for inclu-
sion in the Proxy Statement is and will be true and correct in
all material respects; the information concerning Pall and
Acquisition contained in the Proxy Statement furnished by Pall
(i) will include, or incorporate by reference to Pall's filings
under the Securities Exchange Act of 1934, all statements of
material facts which are required to be stated therein, and (ii)
will not include any untrue statement of a material fact or omit
to state any material fact required to be stated therein or
necessary to make the statements therein not misleading.
(i) Reorganization. The Merger is intended to qualify
as a reorganization under Section 368(a)(1)(A) and (a)(2)(E) of
the Code. In respect thereof, the following representations are
made:
(i) Pall will report, and will cause the Company and
Acquisition to report, the Merger as a tax-free reorganiza-
tion within the meaning of Code Section 368(a)(1)(A) and
(a)(2)(E).
(ii) Prior to the Merger, Pall will be in control of
Acquisition within the meaning of Code Section 368(c)(1).
26 <PAGE>
(iii) Pall has no plan or intention to reacquire any of
its stock issued in the Merger.
(iv) Pall has no plan or intention to liquidate the
Company; to merge the Company with or into another corpora-
tion; to sell or otherwise dispose of the stock of the Com-
pany except for transfers of stock to corporations
controlled by Pall; or to cause the Company to sell or
otherwise dispose of any of its assets or of any of the
assets acquired from Acquisition, except for dispositions
made in the ordinary course of business or transfers of
assets to a corporation controlled by the Company.
(v) Acquisition will have no liabilities assumed by
the Company, and will not transfer to the Company any assets
subject to liabilities, in the Merger. All of the stock of
Acquisition is owned by Pall, and Pall formed Acquisition
for the sole purpose of undertaking the Merger.
(vi) Following the Merger, Pall will cause the Company
to hold at least 90 percent of the fair market value of the
Company's net assets and at least 70 percent of the fair
market value of its gross assets and at least 90 percent of
the fair market value of Acquisition's net assets and at
least 70 percent of the fair market value of Acquisition's
gross assets held immediately prior to the Merger. For
purposes of the representation, amounts paid by the Company
or Acquisition to dissenters, amounts paid by the Company or
Acquisition to shareholders who receive cash or other
property, amounts used by the Company or Acquisition to pay
reorganization expenses and all redemptions and
distributions (except for regular, normal dividends) made by
the Company will be included as assets of the Company or
Acquisition, respectively, immediately prior to the Merger.
(vii) Following the Merger, the Company will continue
its historic business or use a significant portion of its
historic business assets in a business within the meaning of
Treasury Regulation Section 1.368-1(d).
(viii) Pall does not own, nor has it owned during the
past five years, any shares of the stock of the Company.
(ix) Following the Merger, Pall will not cause the Com-
pany to issue additional shares of its stock that would
result in Pall having ownership of less than either 80
percent of the combined voting power of all classes of the
Company stock entitled to vote or 80 percent of the total
number of shares of nonvoting stock of the Company.
27 <PAGE>
(x) The Rights are substantially similar to those des-
cribed in Revenue Ruling 90-11 for purposes of the tax
treatment described therein.
ARTICLE V
COVENANTS AND AGREEMENTS
5.1 Covenants and Agreements of the Company and the
Company Insiders. The Company and the Company Insiders covenant
and agree with Pall and Acquisition as follows:
(a) Submission to Stockholders. The Company will, as
soon as practicable following the execution of this Agreement,
call a meeting of its stockholders to consider and vote upon
approval of this Agreement and the Merger and the Board of
Directors of the Company will recommend to such stockholders
approval thereof. The Company will use its best efforts to
solicit and secure from the stockholders of the Company such
approval.
(b) Conduct of Business. Without the prior written
consent of Pall, between the date of this Agreement and the
Effective Time:
(i) the Company will not, and will not cause or
permit any of the Subsidiaries to, engage in any activities
or transactions which will be outside the ordinary course of
their respective businesses consistent with past practices,
except as shall be provided for or specifically contemplated
by this Agreement, and the Company and the Subsidiaries will
consult with Pall and obtain Pall's written consent prior to
making any material capital expenditures or other
significant business decisions;
(ii) the Company will not subdivide or reclassify
the Company Shares, issue any shares of its capital stock,
except upon the exercise of outstanding Options then
exercisable by their terms, or amend its Articles of
Organization or By-Laws;
(iii) the Company will not declare or pay any divi-
dend or other distribution in respect of its shares of
capital stock or acquire for value, or permit any of the
Subsidiaries to acquire for value, any shares of capital
stock of the Company;
(iv) the Company will afford to the officers,
attorneys, accountants and other authorized representatives
of Pall reasonable access to its and the Subsidiaries'
plants, properties, books, tax returns and minute books and
other corporate records in order that Pall may have full
28 <PAGE>
opportunity to make such investigation as Pall shall desire
of the affairs of the Company and the Subsidiaries. If for
any reason the Merger is not consummated, Pall will cause
confidential information obtained in connection with such
investigation to be treated as confidential;
(v) the Company will comply with all applicable
securities laws and will obtain such governmental permits,
orders or consents, if any, as may be required of it in
connection with the transactions contemplated by this Agree-
ment;
(vi) the Company will not, and will not cause or
permit the Subsidiaries to, take any action to institute any
new severance or termination pay practices with respect to
any directors, officers, or employees of the Company or any
of the Subsidiaries or to increase the benefits payable
under its severance or termination pay practices in effect
on the date hereof;
(vii) the Company will not, and will not cause or
permit the Subsidiaries to, adopt or amend, in any material
respect, except as may be required by applicable law or
regulation, any collective bargaining, bonus, profit
sharing, compensation, stock option (except as contemplated
by this Agreement), restricted stock, pension, retirement,
deferred compensation, employment or other employee benefit
plan, agreement, trust, fund, plan or arrangement for the
benefit or welfare of any directors, officers or employees
of the Company or any of the Subsidiaries;
(viii) the Company and the Subsidiaries will use
their best efforts to maintain their relationships with
their suppliers and customers, and if and as requested by
Pall, (i) the Company and the Subsidiaries shall make
reasonable arrangements for representatives of Pall to meet
with suppliers and customers of the Company and the
Subsidiaries, and (ii) the Company and the Subsidiaries
shall schedule, and the management of the Company and the
Subsidiaries shall participate in, meetings of representa-
tives of Pall with employees of the Company and the
Subsidiaries or their union representatives;
(ix) the Company will, and will cause the
Subsidiaries to, maintain all of its and their respective
properties in customary repair, order and condition, reason-
able wear and tear excepted, and will maintain, and will
cause the Subsidiaries to maintain, insurance upon all of
its and their properties and with respect to the conduct of
its and their businesses in such amounts and of such kinds
comparable to that in effect on the date of this Agreement;
29 <PAGE>
(x) the Company and the Subsidiaries will
maintain their books, accounts and records in the usual,
regular and ordinary manner, on a basis consistent with
prior years;
(xi) the Company and the Subsidiaries will duly
comply in all material respects with all laws applicable to
each of them and to the conduct of their respective
businesses;
(xii) no change shall be made in the banking and
safe deposit arrangements of the Company or the Subsidiaries
existing on the date hereof without the prior written
consent of Pall and no powers of attorney shall be granted
by the Company or any of the Subsidiaries;
(xiii) except as contemplated by this Agreement, the
Company will not, and will not permit any of the Subsid-
iaries to, acquire or agree to acquire by merging or
consolidating with, purchasing substantially all of the
assets of or otherwise, any business or any corporation,
partnership, association, or other business organization or
division thereof;
(xiv) the Company will not, and will not cause or
permit any of the Subsidiaries to, take any action or do any
thing which will cause the Company to be, as of the
Effective Time, in violation of any of the representations
or warranties contained in Section 4.1 of this Agreement;
and
(xv) the Company will promptly advise Pall in
writing of any material adverse change in the financial
condition, business or operations of the Company or any of
the Subsidiaries and of any breach of its representations or
warranties contained herein.
(c) Stock Options. After the date hereof, the Company
will not issue any Options.
(d) No Other Negotiations. Except as contemplated
hereunder, prior to the earlier of the Closing or the termination
of this Agreement, neither the Company nor the Company Insiders
shall directly or indirectly solicit, initiate or encourage in-
quiries or proposals with respect to, furnish any information
relating to, or participate in, continue or enter into any nego-
tiations or discussions concerning, any merger, consolidation or
other business combination with or the purchase of all or a
portion of the assets of, or any equity interest in the Company
or any of the Subsidiaries; and the Company shall instruct each
officer, director, affiliate and advisor of the Company and the
30 <PAGE>
Subsidiaries to refrain from doing any of the above. The Company
and the Company Insiders agree to advise Pall immediately in
writing of, and to communicate therein the terms of, any such
inquiry or proposal which any of them shall receive.
(e) Financial Statements. The Company will deliver to
Pall all regularly prepared unaudited financial statements of the
Company or of any of the Subsidiaries prepared after the date
hereof in the format historically used internally, as soon as
available.
(f) Certification of Stockholder Vote. On or prior to
the Closing Date, the Company shall deliver to Pall a certificate
of its secretary or clerk setting forth (i) the number of
Company Shares outstanding and entitled to vote on the adoption
of this Agreement and approval of the Merger, the number of
Company Shares voted in favor of adoption of this Agreement and
approval of the Merger, and the number of Company Shares voted
against adoption of this Agreement and approval of the Merger;
and (ii) the names of all holders of Dissenting Shares and the
number of Dissenting Shares held by each such holder.
5.2 Other Covenants and Agreements.
(a) Cooperation of Pall and the Company. Pall and the
Company will fully cooperate with each other in the preparation
of the Proxy Statement.
(b) Efforts to Consummate Transactions. Pall, Acqui-
sition, the Company and the Company Insiders will each use their
best efforts to consummate the Merger and to cause to be
satisfied each of the conditions of Closing contained in Section
6.1 and each of the conditions contained in Section 6.2 (to be
satisfied by the Company and/or the Company Insiders) and Section
6.3 (to be satisfied by Pall and Acquisition).
(c) Vote by the Company Insiders, etc. The Company
Insiders each hereby covenants and agrees that until the earlier
of the Closing Date or the termination of this Agreement, he will
(i) continue to hold all Company Shares now held by him, and (ii)
vote at the meeting of the stockholders of the Company referred
to in Section 1.7 hereof all of such Company Shares in favor of
adoption of this Agreement and authorization of the Merger.
Simultaneously with the execution of this Agreement, each of the
Company Insiders and their spouses have executed and delivered to
Pall irrevocable proxies to vote their Company Shares at such
meeting in the form of Exhibit D hereto.
(d) Employment Agreements. Concurrently with the
Closing of this Agreement, each of the Company Insiders agrees to
31 <PAGE>
execute and deliver three-year Employment Agreements in the form
of Exhibit E hereto (the "Employment Agreements").
(e) Indemnification.
(i) Indemnification by Company Insiders. Subject to
the provisions of this Section 5.2(e), Section 5.2(f) and Section
8.10 of this Agreement, the Company Insiders jointly and
severally agree to save, defend and indemnify the Surviving
Corporation and Pall against and hold them harmless from any and
all claims, liabilities, losses, costs and expenses (including
without limitation, counsel's fees and expenses in connection
with any action,claim or proceeding relating thereto or seeking
enforcement of the indemnification or other obligations of the
Company Insiders hereunder) ("Losses"), reasonably incurred by
the Surviving Corporation or Pall arising out of any breach of
any representation, warranty, covenant or agreement made by the
Company or the Company Insiders under this Agreement.
(ii) Indemnification by Pall. Subject to the
provisions of this Section 5.2(e) and Section 8.10 of this
Agreement, Pall agrees to save, defend and indemnify the Company
(to the extent that the Closing hereunder has not yet occurred)
and the holders of the Company Shares immediately prior to the
Closing against and hold them harmless from any and all Losses
reasonably incurred by the Company or the holders of the Company
Shares immediately prior to the Closing, as the case may be,
arising out of any breach of any representation, warranty,
covenant or agreement made by Pall or Acquisition under this
Agreement.
(iii) (A) Claims for Indemnification.
Whenever any Losses as to which any party is entitled
to be indemnified and held harmless under this Section 5.2(e)
become reasonably quantifiable, the party seeking indemnification
(the "Indemnified Party") shall promptly notify the party or
parties from whom indemnification is sought (the "Indemnifying
Party") of the Losses, which notice shall include reasonable
detail in support of the amount of such Losses, provided,
however, that the failure to give timely notice shall not affect
the right to indemnification hereunder except to the extent that
the Indemnified Party is actually damaged or prejudiced by such
delay. The Indemnified Party shall not settle or compromise any
claim by any third party for which it is entitled to
indemnification hereunder without the prior written consent of
the Indemnifying Party (which shall not be unreasonably with-
held), except as otherwise provided below.
(B) Defense by Indemnifying Party.
32 <PAGE>
(x) In connection with any claim giving rise to
indemnity hereunder resulting from or arising out of any claim,
action or legal proceeding by a person who is not a party to this
Agreement, the Indemnifying Party, at its sole cost and expense
may, upon written notice to the Indemnified Party, assume the
defense of any such claim, action or legal proceeding if it
acknowledges to the Indemnified Party in writing its obligations
to indemnify the Indemnified Party with respect to all elements
of such claim (provided, however, that the Company Insiders shall
have no such right to assume the defense of any such claim if the
amount of such claim, when added to the aggregate amount of other
indemnification claims against the Company Insiders hereunder,
exceeds the maximum aggregate amount stated in Section
5.2(e)(iv)(B) below); provided that the Indemnifying Party shall
exercise its right to assume such defense within twenty (20) days
after notice was given by the Indemnified Party. If the Indemni-
fying Party does not assume the defense of any such claim or
litigation resulting therefrom as aforesaid, the Indemnified
Party may defend any such claim, action or proceeding, in such
manner as it may deem appropriate; provided, however, the
Indemnified Party may not settle such claim, action or proceeding
without the prior written consent of the Indemnifying Party,
which consent will not be unreasonably withheld. The
Indemnifying Party agrees to cooperate and make available to the
Indemnified Party all books and records and such officers,
employees and agents as are reasonably necessary and useful in
connection with the defense. To the extent that any settlement
may have a material adverse effect on the business (present or
prospective) of the Surviving Corporation other than as a result
of a monetary award, no such settlement shall be entered into
without the prior written consent of Pall, which consent will not
be unreasonably withheld.
(y) If the Indemnifying Party assumes the defense of
any such claim, action or proceeding, the Indemnified Party shall
be entitled to participate in the defense of such claim, action
or proceeding with its own counsel and at its own cost and
expense. The Indemnifying Party shall not, in the defense of
such claim, action or proceeding, consent to the entry of any
judgment or award, or enter into any settlement, except in either
event with the prior written consent of the Indemnified Party,
which consent will not be unreasonably withheld, which does not
include as an unconditional term thereof the giving by the
claimant or the plaintiff to the Indemnified Party of an
unconditional release from all liability in respect of such
claim, action or proceeding without requiring any payment to be
made by the Indemnified Party.
(C) Set-Off Right of Pall and Surviving Corporation.
The amount of the Losses set forth in any notice by Pall or the
Surviving Corporation to the Company Insiders hereunder or, if
33 <PAGE>
disputed by the Company Insiders by written notice to Pall and
the Surviving Corporation within forty-five (45) days after their
receipt of such notice, the amount determined by mutual agreement
or arbitration as set forth in (D) below, may be set-off as
provided in Section 5.2(f) of this Agreement; provided, however,
that neither Pall nor the Surviving Corporation shall finally
set-off and retain for their own account any such amounts until
such time as either (i) the Company Insiders whose payments are
to be set-off so agree, or (ii) the amount of the Losses is
determined by arbitration as set forth in (D) below. In the
event that any such dispute exists at the time any payment is due
and payable under the Noncompetition Agreements to the Company
Insiders, the amount of such payment shall, if the Company
Insiders so request in writing to Pall, be held in escrow on
terms reasonably acceptable to Pall and the Company Insiders
pending resolution of such dispute (any fees, costs or expenses
of any escrow agent involved in such escrow arrangement to be
borne by the Company Insiders).
(D) Arbitration. In the event of any dispute arising
under this Section 5.2(e), the parties shall use good faith
efforts to negotiate a settlement of such dispute. If the
parties are unable to reach a settlement, and in any event within
ninety (90) days after any notice by the Company Insiders
disputing Losses claimed by Pall or the Surviving Corporation,
the dispute shall be submitted to arbitration by the American
Arbitration Association in New York, New York under the
commercial arbitration rules then in effect for that Association.
The arbitration award shall be conclusive and binding upon the
respective parties and may be entered in any court having
jurisdiction. Notwithstanding any provision to the contrary set
forth herein, the parties hereto agree that the prevailing party
of any such arbitration shall be entitled to recover reasonable
attorneys' fees and costs as awarded or determined by the
arbitrators.
(iv) Notwithstanding the foregoing:
(A) The indemnifications in favor of Pall, the
Surviving Corporation, the Company and the holders of the Company
Shares immediately prior to the Closing contained in Sections
5.2(e)(i) and 5.2(e)(ii) hereof shall not be effective until the
aggregate Losses represented by such party's indemnification
claims exceed $300,000, in which event the Indemnified Party
shall be entitled to recover all of such Losses, including the
first $300,000 thereof; and
(B) The aggregate of all indemnification payments made
by any Indemnifying Party hereunder, including all Company
Insiders collectively, shall not exceed $3,000,000.
34 <PAGE>
(v) Pall's and the Surviving Corporation's exclusive
remedy with respect to any breach by the Company or the Company
Insiders of any representation, warranty, covenant or agreement
made by the Company or the Company Insiders under this Agreement
shall be indemnification under this Section 5.2(e); provided,
however, that this provision shall not act as a release or waiver
of any right, claim or cause of action which the Surviving
Corporation may have against the Company Insiders arising
independently from the transactions contemplated by this
Agreement as a result of fraud, embezzlement or other criminal
acts, breaches of fiduciary duties or of any contract with the
Company, indebtedness to the Company or other transactions or
dealings between the Company and any Company Insider occurring on
or prior to the Closing Date. So long as the full amount of any
indemnification claims hereunder by Pall and the Surviving
Corporation can be satisfied entirely through the exercise of the
set-off rights and stock pledge referred to in Section 5.2(f)
below, Pall and the Surviving Corporation agree to satisfy any
such indemnification claims by resort to such set-off rights and
stock pledge, allocated among the Company Insiders according to
the following percentages: Messrs. Hirsch, Friedman, Goulston
and Rozembersky - 21.1% each; Messrs. Mozzicato and Herczeg -
7.8% each.
(f) Set-Off and Pall Stock Pledge. Subject to the
provisions of Section 5.2(e)(iii)(C), Pall and the Surviving
Corporation shall have the right to set-off amounts owing to them
by the Company Insiders under Section 5.2(e) against the
outstanding amounts payable under the Noncompetition Agreements
and other amounts payable to the Company Insiders. In addition,
shares of Pall Stock received by Messrs. Hirsch, Friedman,
Goulston and Rozembersky as a result of the Merger having a Pall
Stock Value of $3,000,000 (in numbers proportionate to each
Company Insider's relative ownership of Company Shares) will be
pledged to Pall (i.e., Pall will be granted a security interest
therein) to secure the indemnification obligations of the Company
Insiders and shall be held by Pall pursuant to a Pledge Agreement
in the form of Exhibit F hereto which will be executed and
delivered by the parties on the Closing Date.
(g) Registered Resales of Pall Stock. Pall agrees to
prepare and file with the Securities and Exchange Commission a
Registration Statement on Form S-3 at or as promptly after the
Effective Time as is reasonably practicable (and, in any event,
no later than 10 days after the Closing Date) for resales of Pall
Stock received by Filtron stockholders in the Merger and to keep
such Registration Statement effective for a period of at least
two years from the Effective Time, all in accordance with the
Schedule of Registration Procedures and Related Matters attached
hereto as Exhibit G.
35 <PAGE>
(h) Agreement Not to Sell. Each of the Company
Insiders hereby agrees not to sell any of the Pall Stock he
receives as a result of the Merger except in accordance with the
following restrictions: (A) at any time prior to the first
anniversary of the Closing Date, up to one-quarter of the shares
so received, (B) on or after the first anniversary of the Closing
Date and prior to the second anniversary of the Closing Date, an
additional one-quarter of the shares so received (on a cumulative
basis with the one-quarter allowed to be sold prior to the first
anniversary, so that a total of up to one-half can be sold prior
to the second anniversary), (C) on or after the second
anniversary of the Closing Date and prior to the third
anniversary of the Closing Date, an additional one-quarter of the
shares received (on a cumulative basis with the one-half allowed
to be sold prior to the second anniversary, so that a total of up
to three-quarters can be sold prior to the third anniversary),
and (D) on or after the third anniversary of the Closing Date,
all shares received may be sold without restriction. The Company
Insiders understand and agree that the certificates they receive
representing Pall Stock will bear legends disclosing the
foregoing restrictions. Until the third anniversary of the
Closing Date, each Company Insider agrees to give Pall at least
three days advance written notice of their intention to sell any
Pall Stock (including the number of shares intended to be sold
and the proposed manner of sale) and to advise Pall in writing
when such sales have been completed or when such intention has
ceased, provided, however, that any failure to so notify Pall
shall not affect the foregoing rights of the Company Insiders to
sell Pall Stock.
(i) Purchaser Representative. Martin H. Hirsch hereby
agrees to act as a "purchaser representative" (within the meaning
of Regulation D under the Securities Act) for all Filtron stock-
holders who are not "accredited investors" (within the meaning of
said Regulation D) and to complete, execute and deliver to Pall,
on or prior to the date that the Proxy Statement is distributed
to Filtron stockholders, a Purchaser Representative Questionnaire
in such form as Pall shall reasonably request. The Company
hereby agrees to defend, indemnify and hold harmless Mr. Hirsch
from any and all Losses reasonably incurred by him as a result of
any claim, action or proceeding made or commenced against him by
any Filtron stockholder as a result of, relating to or arising
out of his appointment as a purchaser representative or any
action or omission by him in his capacity as a purchaser
representative (provided, however, that the Company shall not
indemnify Mr. Hirsch with respect to any losses incurred as a
result of inaccuracies or omissions by him in completing the
Purchaser Representative Questionnaire or any breach of any
representation or warranty made by him in the Purchaser
Representative Questionnaire).
36 <PAGE>
ARTICLE VI
CONDITIONS
6.1 Mutual Conditions. None of Pall, Acquisition or
the Company shall be obligated to complete or cause to be com-
pleted the transactions contemplated by this Agreement unless:
(a) Stockholder Approval. Adoption of this Agreement
and approval of the Merger by the stockholders of the Company as
may be required by law and by any applicable provisions of its
Articles of Organization or By-Laws shall have been obtained.
(b) Absence of Restraint. No order to restrain,
enjoin or otherwise prevent the consummation of this Agreement or
the Merger shall have been entered by any court or administrative
body and shall then remain effective.
(c) Blue Sky Compliance. There shall have been
obtained any and all permits, approvals and consents under the
securities or "blue sky" laws of New York, Massachusetts and any
other jurisdiction and of any other governmental body or agency,
which counsel for Pall or for the Company may reasonably deem
necessary or appropriate so that consummation of the transactions
contemplated by this Agreement and the Merger will be in
compliance with applicable laws.
(d) Cutoff Date. The Merger shall in any event have
been completed not later than February 28, 1995.
(e) Filings and Approvals. All applicable filings and
regulatory approvals necessary to consummation of the Merger
except for the requisite filing of the Articles of Merger as
contemplated herein, shall have been made or obtained.
(f) Dissenting Stockholders. The holders of not more
than 5% in the aggregate of the outstanding Company Shares shall
have filed with the Company written objections and notices of in-
tention to dissent pursuant to Chapter 156B, Section 86 of the
MBCL. If holders of more than 5% of the outstanding Company
Shares have filed such notices, the parties shall have the right
to (i) waive this condition and close, (ii) terminate this
Agreement, or (iii) adjourn the Closing to any date not later
than the cutoff date referred to in Section 6.1(d) hereof to
determine whether such percentage is reduced to 5% or less by
holders who abandon or lose their right to appraisal pursuant to
the procedures of Sections 86-98 of the MBCL. At such time as
such percentage is thus reduced to 5% or less, this condition
shall be deemed satisfied.
6.2 Conditions to Obligations of Pall and Acquisition.
Consummation of the transactions contemplated by this Agreement
is subject to the fulfillment to the reasonable satisfaction of
37 <PAGE>
Pall prior to or at the Closing of each of the following
conditions:
(a) Compliance with Representations, Warranties,
Covenants and Agreements. All of the representations and war-
ranties of the Company and the Company Insiders contained in this
Agreement shall be true and correct in all material respects at
and as of the Closing Date with the same force and effect as if
they had been made at and as of such date (except for changes
contemplated or permitted by this Agreement or otherwise approved
in writing by Pall); the Company and the Company Insiders shall
have complied with and performed in all material respects all of
the covenants and agreements contained in this Agreement to be
performed by them at or prior to the Closing Date (including,
without limitation, the completion, execution and delivery of the
Purchaser Questionnaires contemplated by Section 4.2(a) hereof);
and on the Closing Date, Pall shall have received from the
Company a certificate dated that day, signed by the President and
by the Treasurer of the Company, certifying the foregoing. Until
the Closing, the Company agrees to give Pall prompt written
notice of any matter or matters which come to the Company's
attention which would constitute a breach of the condition
contained in this Section 6.2(a), together with reasonably
complete details of such matter or matters.
(b) Opinion of Counsel. Pall and Acquisition shall
have received an opinion dated the Closing Date from Choate, Hall
& Stewart, counsel for the Company, that:
(i) The Company and each of the Subsidiaries is a
corporation legally existing and in good standing under the
laws of the jurisdiction of its incorporation with full cor-
porate power and authority to own its properties and to
conduct its business as then being conducted;
(ii) The authorized, issued and outstanding capital
stock of the Company is as stated in such opinion, the out-
standing Company Shares have been duly and validly
authorized and issued and are fully paid and nonassessable;
and there are no preemptive or similar rights on the part of
the holders of any class of securities of the Company;
(iii) The Company is the record owner, and (to the
best of such counsel's knowledge) the beneficial owner, of
all outstanding capital stock of each of the Subsidiaries as
stated in such opinion; and the outstanding stock of each of
the Subsidiaries has been duly and validly authorized and
issued and is fully paid and nonassessable;
(iv) The Company has full corporate power to
carry out the transactions contemplated by this Agreement
and the other agreements entered into by the Company
38 <PAGE>
hereunder (the "Related Agreements"); this Agreement and the
Related Agreements have been duly executed and delivered by
the Company; all necessary corporate action has been taken
by the Company and its Board of Directors and stockholders
to authorize the Company to execute and deliver this
Agreement and the Related Agreements and to consummate the
transactions contemplated hereby and thereby; upon the
effectiveness of the Articles of Merger filed with the
Secretary, the Merger will be validly consummated under
Massachusetts law, the outstanding Company Shares (other
than Dissenting Shares) will have been validly converted
into rights to receive Pall Stock or cash in lieu of frac-
tional shares and Pall Stock pursuant to the Merger and the
rights of all outstanding Options shall have been termi-
nated; and this Agreement is a valid and legally binding
obligation of the Company, enforceable against the Company
in accordance with its terms, except as such enforcement may
be limited by applicable bankruptcy, insolvency, moratorium
or other similar laws affecting creditors' rights generally
or by general principles of equity;
(v) The execution, delivery and performance by the
Company of this Agreement and the Related Agreements and the
consummation of the transactions contemplated by this
Agreement and the Related Agreements will not constitute a
violation of any provision of the Articles of Organization
or By-Laws (or other similar organizational documents) of
the Company or any of the Subsidiaries or, giving effect to
any consents which may have been obtained, of any material
agreement, instrument or other document known to such
counsel after reasonable investigation, to or by which the
Company or any of the Subsidiaries is a party or is bound,
or any judgment, decree or order known to such counsel after
reasonable investigation, of any court or other governmental
authority which is binding on the Company or any of the
Subsidiaries or any of its or their property;
(vi) To the best knowledge and information of such
counsel after reasonable investigation, there is no material
litigation or governmental proceeding pending or threatened
against the Company or any of the Subsidiaries which has not
been disclosed in Part K of the Schedule to this Agreement;
(vii) No consent or approval by any United States
federal or Massachusetts governmental authority which has
not been obtained is required in connection with the
consummation by the Company of the transactions contemplated
by this Agreement and the Related Agreements; and
(viii) the portion of the Proxy Statement under the
caption "Appraisal Rights" is an accurate and complete
39 <PAGE>
summary of the appraisal rights of the Company's
stockholders resulting from the Merger.
(c) Options. The Company shall have obtained the sur-
render and cancellation of all Options and made the cash payments
to holders of Options contemplated by Section 2.2 hereof.
(d) No Material Adverse Change. Since the date of the
Recent Financial Statements, no event shall have occurred, and no
condition shall exist, which has a material adverse effect on the
condition (financial or otherwise) or the business or prospects
of the Company or the Subsidiaries or their respective assets.
(e) Other Agreements. The Employment Agreements, the
Noncompetition Agreements and the Pledge Agreement shall have
been executed and delivered by the Company Insiders and the
Company shall have received employee agreements executed by all
other employees of the Company who will become employees of the
Surviving Corporation immediately following the Closing in the
form used by Pall for its employees, a copy of which form is
attached hereto as Exhibit H.
(f) FIRPTA Certification. The Company shall have
delivered to Pall a certification as required under Section 1445
of the Code and the regulations thereunder that the Company has
not been at any time during the previous five years a "U.S. real
property holding corporation" as defined in Section 897(c)(2) of
the Code.
(g) Good Standing Certificates. The Company shall
have delivered to Pall good standing certificates for the Company
and each of the Subsidiaries from their jurisdictions of
incorporation and from each of the other jurisdictions listed in
Part A of the Schedule.
(h) Purchaser Questionnaires. Pall shall have
received with respect to each Filtron stockholder either a
Purchaser Questionnaire representing that the stockholder is
(and, with respect to any Company Insider, was on the date of
this Agreement) an "accredited investor" within the meaning of
Regulation D under the Securities Act or, with respect to
stockholders who are not "accredited investors", a Purchaser
Representative Questionnaire from a properly designated purchaser
representative reasonably acceptable to Pall, in each case in
form and substance satisfactory to Pall.
6.3 Conditions to Obligations of the Company. Con-
summation of the transactions contemplated by this Agreement is
subject to the fulfillment to the reasonable satisfaction of the
Company prior to or at the Closing of each of the following
conditions:
40 <PAGE>
(a) Compliance with Representations, Warranties,
Covenants and Agreements. All of the representations and war-
ranties of Pall and Acquisition contained in this Agreement shall
be true and correct at and as of the Closing Date with the same
force and effect as if they had been made at and as of such date
(except for changes contemplated or permitted by this Agreement
or otherwise approved in writing by the Company); Pall and
Acquisition shall have performed all of the covenants and agree-
ments contained in this Agreement to be performed by them at or
prior to the Closing Date; and on the Closing Date, the Company
shall have received from Pall and Acquisition a certificate dated
that day, signed by the President and Chief Financial Officer of
Pall, certifying the foregoing.
(b) Opinion of Counsel. The Company shall have
received an opinion addressed to the holders of the Company
Shares immediately prior to the Closing and dated the Closing
Date from Carter, Ledyard & Milburn, counsel for Pall and
Acquisition, that:
(i) Pall is a corporation validly existing and in
good standing under the laws of the State of New York and
Acquisition is a corporation validly existing and in good
standing under the laws of the Commonwealth of Massachusetts
with full corporate power and authority to own their pro-
perties and to conduct their businesses as conducted on the
Closing Date (in giving such opinion concerning the
existence and good standing of Acquisition, such opinion may
state that counsel is relying exclusively on the
certificates of public officials of the Commonwealth of
Massachusetts);
(ii) Pall and Acquisition have full corporate power
to carry out the transactions contemplated by this Agreement
and the other agreements entered into by Pall and
Acquisition hereunder (the "Related Agreements"); this
Agreement and the Related Agreements have been duly executed
and delivered by Pall and Acquisition and all necessary
corporate action has been taken by Pall and its Board of
Directors and by Acquisition, its Board of Directors and
shareholders in order to consummate the transactions con-
templated by this Agreement and the Related Agreements.
This Agreement and the Related Agreements are valid and
legally binding obligations of Pall and Acquisition enfor-
ceable against Pall and Acquisition in accordance with their
terms, except as such enforcement may be limited by
applicable bankruptcy, insolvency, moratorium or other
similar laws affecting creditors' rights generally or by
general principles of equity;
(iii) The execution, delivery and performance of
this Agreement and the Related Agreements by Pall and
41 <PAGE>
Acquisition and the consummation of the transactions
contemplated by this Agreement and the Related Agreements
will not constitute a violation, breach or default under the
Certificate of Incorporation or By-Laws of Pall or the
Articles of Organization or By-Laws of Acquisition or, to
the best of such counsel's knowledge, under any agreement or
other document to or by which Pall or Acquisition is a party
or is bound or any judgment, decree, or order of any court
or other governmental authority which is binding on Pall or
Acquisition or any of their properties;
(iv) No consent or approval by any United States
federal or New York governmental authority which has not
been obtained is required in connection with the consumma-
tion by Pall and Acquisition of the transactions
contemplated by this Agreement and the Related Agreements;
and
(v) The authorized capital stock of Pall consists
of 500,000,000 shares of Common Stock, par value $.10 per
share; all of the shares of Pall Stock to be issued to the
shareholders of the Company pursuant to this Agreement have
been duly authorized and when issued in accordance with the
terms of this Agreement will be validly issued, fully paid
and nonassessable.
(c) Adequacy of Pall Stock and Funds. Simultaneously
with the consummation of the transactions contemplated hereby,
Pall and Acquisition shall have caused to be deposited with the
Paying Agent shares of Pall Stock and funds in an amount
sufficient to permit consummation of the Merger in accordance
with the terms hereof and the Company shall have received
evidence reasonably satisfactory to it and its counsel that such
shares and funds have been received by the Paying Agent.
ARTICLE VII
TERMINATION
7.1 Termination. This Agreement may be terminated and
cancelled, and the transactions contemplated hereby may be
abandoned, notwithstanding stockholder authorization, at any time
prior to the filing of the Articles of Merger with the Secretary
(a) by mutual consent of Pall and the Company, (b) by any party
not in material breach hereof, in the event that any of the
conditions specified in Section 6.1 shall not have been satisfied
within the time contemplated by this Agreement, (c) by Pall if
not in material breach hereof, if any of the conditions specified
in Section 6.2 shall not have been satisfied within the time
contemplated by this Agreement, and (d) by the Company, if not in
material breach hereof, if any of the conditions specified in
Section 6.3 shall not have been satisfied within the time
contemplated by this Agreement.
42 <PAGE>
Any party intending to terminate this Agreement
pursuant to clause (b), (c) or (d) hereof shall give notice of
intention to terminate to the other parties, specifying the
breach of condition giving rise thereto, which termination shall
become effective (i) upon receipt thereof if the condition shall
then be impossible of performance, or (ii) on the tenth day after
receipt thereof if the breach is susceptible of cure and the
condition is not satisfied within such period.
7.2 Effect of Termination. If this Agreement is
terminated pursuant to Section 7.1, this Agreement shall no
longer be of any force or effect and there shall be no liability
on the part of any party or its respective directors, officers or
shareholders; provided, however, that in the case of a
termination pursuant to Section 7.1(b), (c) or (d) where the
nonfulfillment of the condition giving rise to termination re-
sulted from a breach of this Agreement by another party, the
damages which the aggrieved party or parties may recover from the
defaulting party shall be as determined by law (provided,
however, that any claim against any Company Insider shall be
limited in the manner contemplated by Section 5.2(e)(iv)(B)
hereof).
ARTICLE VIII
MISCELLANEOUS
8.1 Extension of Time; Waivers. At any time prior to
the filing of the Articles of Merger with the Secretary:
(a) By Pall. Pall may (i) extend the time for the
performance of any of the obligations or other acts of the
Company, (ii) waive any inaccuracies in the representations and
warranties of the Company and the Company Insiders contained
herein or in any document delivered pursuant hereto by the
Company or the Company Insiders, and (iii) waive compliance with
any of the agreements or conditions contained herein to be per-
formed by the Company or the Company Insiders. Any agreement on
the part of Pall to any such extension or waiver shall be valid
only if set forth in an instrument in writing signed on behalf of
Pall.
(b) By the Company. The Company may (i) extend the
time for the performance of any of the obligations or other acts
of Pall or Acquisition, (ii) waive any inaccuracies in the
representations and warranties of Pall or Acquisition contained
herein or in any document delivered pursuant hereto by Pall or
Acquisition, and (iii) waive compliance with any of the agree-
ments or conditions contained herein to be performed by Pall or
Acquisition. Any agreement on the part of the Company to any
such extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of the Company.
43 <PAGE>
8.2 Costs and Expenses. The term "Costs and Expenses"
as used herein means all costs and expenses incurred in connec-
tion with the letter of intent dated October 26, 1994 executed by
the parties (the "Letter of Intent"), this Agreement and the
other agreements and documents contemplated hereby and the
transactions contemplated hereby and thereby, including but not
limited to fees and expenses of counsel, accountants and other
advisors and filing fees paid to government agencies. All fees
and expenses of counsel, accountants and other advisors retained
by and representing Pall or Acquisition, filing fees with respect
to filings required to be made by Pall (including Pall's HSR
filing and SEC filing pursuant to Section 5.2(g)) and other Costs
and Expenses incurred by Pall for its benefit shall be borne by
Pall. The first $150,000 of fees and expenses of counsel,
accountants and other advisors retained by and representing the
Company and/or the Company Insiders and other holders of Company
Shares, filing fees with respect to filings required to be made
by the Company (including its HSR filing) and/or the Company
Insiders and other holders of Company Shares, and other Costs and
Expenses incurred by the Company and/or the Company Insiders and
other holders of Company Shares, for its or their benefit shall
be paid by the Surviving Corporation and all of such Costs and
Expenses in excess of $150,000 shall be borne and paid by the
Company Insiders.
8.3 Amendments. This Agreement may be amended with
the approval of Pall and the Company at any time before or after
approval thereof by the stockholders of the Company, but after
any such stockholder approval, no amendment shall be made which
reduces the amount or changes the form of the consideration
distributable to the stockholders of the Company without the
further approval of the stockholders of the Company. This Agree-
ment may not be amended except by an instrument in writing signed
on behalf of each of the parties hereto.
8.4 Assignability. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their
respective heirs, executors, personal representatives, successors
and assigns, provided that this Agreement may not be assigned by
any party without the prior written consent of the other parties.
8.5 Reliance by Counsel. In rendering any opinion
referred to herein, counsel may rely, as to any factual matters
involved in their opinion, on certificates of public officials
and of corporate officers, opinions of corporate general counsel,
and such other evidence as such counsel may reasonably deem
appropriate and, as to matters governed by the laws of jurisdic-
tions other than the United States or the State in which such
counsel is licensed, an opinion of local counsel in such jurisd-
ictions, which counsel shall be satisfactory to the other parties
in the exercise of their reasonable judgment, provided, however,
that instead of relying upon such an opinion of local counsel,
44 <PAGE>
counsel for Pall and Acquisition may, for the purposes of
rendering the opinion contemplated by Section 6.3(b) hereof,
assume that the laws of the Commonwealth of Massachusetts are the
same as the laws of the State of New York and that the
transactions contemplated hereby are to be fully performed in the
State of New York.
8.6 Notices. Any notice to a party hereto pursuant to
this Agreement shall be in writing, shall be deemed given when
received, and shall be delivered personally or sent by certified
or registered mail or by telecopier addressed as follows:
To Pall or Acquisition:
Pall Corporation
2200 Northern Boulevard
East Hills, New York 11548
Attention: Peter Schwartzman, Secretary
Telecopier No.: 516-484-3529
with a copy to:
Carter, Ledyard & Milburn
2 Wall Street
New York, New York 10005
Attention: Heywood Shelley, Esq.
Telecopier No.: 212-732-3232
To the Company or the Company Insiders or Company
stockholders:
Filtron Technology Corporation
50 Bearfoot Road
Northborough, Massachusetts 01532
Attention: Martin H. Hirsch, President
Telecopier No.: 508-393-1874
with a copy to:
Choate, Hall & Stewart
Exchange Place
53 State Street
Boston, Massachusetts 02109
Attention: Cameron Read, Esq.
Telecopier No.: 617-248-4000
8.7 Entire Agreement; Law Governing. This Agreement
together with all other agreements contemplated hereby (a) con-
stitute the entire agreement and supersede all prior agreements
and understandings, both written and oral, among the parties with
respect to the subject matter hereof, including, without
limitation, the Letter of Intent, (b) may be executed in several
counterparts, each of which will be deemed an original and all of
45 <PAGE>
which shall constitute one and the same instrument, and (c)
except as otherwise stated in any other agreement, shall be
governed in all respects, including validity, interpretation and
effect, by the substantive laws of the Commonwealth of
Massachusetts, without regard to the conflict of laws principles
thereof.
8.8 Publicity and Disclosures. Except as may be
required by law (including, without limitation, Federal or state
securities laws or regulations thereunder) or by stock exchange
rules or agreements, no press releases or public disclosures of
the transactions contemplated by this Agreement, either oral or
written, shall be made without the prior written consent of Pall
and the Company, provided, however, that no such consent shall be
unreasonably withheld or delayed. Each party shall give the
other parties hereto prior written notice of the substance of any
proposed press release as far in advance as is practicable before
the proposed date of such release.
46 <PAGE>
8.9 Headings. The headings and captions of the
sections and subsections of this Agreement are included for
convenience of reference only and shall have no effect on the
construction or meaning of this Agreement.
8.10 Survival. Each and every representation,
warranty, covenant and agreement contained in this Agreement or
in any document delivered pursuant to or in connection with this
Agreement shall survive the Closing and shall not be affected by
any investigation made by any party, provided, however, that the
representations and warranties of the parties contained in
Articles IV and V hereof shall only survive until the second
anniversary of the Closing Date (or, with respect to
representations and warranties related to Taxes contained in
Sections 4.1(h) and 4.3(i) hereof, shall survive until the
expiration of the applicable statute of limitations) and no claim
may be made by any party with respect to a breach of such
representations and warranties unless written notice thereof is
given to the breaching party or parties on or prior to such
second anniversary or the expiration of such statute of
limitations in accordance with Section 5.2(e) of this Agreement.
8.11 Actions by Company Insiders. The Company
Insiders shall act by a majority in interest (measured by
reference to the number of Company Shares held on the Closing
Date) of the Company Insiders with respect to any provision of
this Agreement which provides for action to be taken by, or a
waiver, consent or notice to be given by, the Company Insiders.
* * * * *
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above written.
PALL CORPORATION
By:____________________________________
Name:
Title:
PALL ACQUISITION CORPORATION
By:____________________________________
Name: Eric Krasnoff
Title: Chairman
By:____________________________________
Name: Jeremy Hayward-Surry
Title: President
47 <PAGE>
FILTRON TECHNOLOGY CORPORATION
By:____________________________________
Name: Martin H. Hirsch
Title: President
By:____________________________________
Name: Denis R. Friedman
Title: Treasurer
_______________________________________
Martin H. Hirsch
_______________________________________
Denis R. Friedman
_______________________________________
Richard C. Goulston
_______________________________________
John J. Rozembersky
_______________________________________
Nicholas J. Mozzicato
_______________________________________
Attila E. Herczeg
48 <PAGE>
EXHIBIT A
LIST OF COMPANY INSIDERS
Martin H. Hirsch
Denis R. Friedman
Richard C. Goulston
John J. Rozembersky
Nicholas J. Mozzicato
Attila E. Herczeg
<PAGE>
EXHIBIT B
OPTION SURRENDER COMPENSATION
Cash
Optionholders Consideration
Al Stone....................................... $ 8,766
Alex Innamorati................................ 8,712
Altina Moura................................... 6,879
Barry Breslau.................................. 28,982
Barry Whitney.................................. 53,149
Brian Walsh.................................... 13,061
Cheryl Bibeau.................................. 5,830
Cheryl Berry................................... 6,830
Diana Ricker.................................. 20,874
Elaine Russell................................. 38,890
Hollie Whiteaker............................... 17,886
Joe Small...................................... 21,768
Judy Forsberg.................................. 6,795
Judy Thompson.................................. 22,902
Mary Ryan...................................... 5,830
Polly Stucke................................... 9,578
Ron Cavanaugh.................................. 6,906
Sara Smith O'Loughin........................... 15,473
Tom Heighton................................... 19,592
Sandy Grant.................................... 4,395
George Orne.................................... 4,395
Cindy Morgan................................... 5,860
Hollie Brochu.................................. 5,860
Yvonne Wheeler................................. 5,860
Christian Rocton (France)...................... 46,142
Frank Glabiszewski (Germany)................... 28,983
Herman Wegstein (Germany)...................... 2,487
Uli Marx (Germany)............................. 22,481
Ursula Himmelsbach (Germany)................... 2,583
John Van Der Veeken (Netherlands).............. 24,200
Guy Latour (France)............................ 31,408
Burnt Euler (Germany).......................... 1,260
Total.......................................... $504,617
<PAGE>
EXHIBIT C
NONCOMPETITION AGREEMENT
This Agreement is made this ___ day of _________, 1995
between PALL CORPORATION, a New York corporation ("Pall"), and
___________ (the "Covenantor").
WHEREAS, pursuant to the terms of an Agreement and Plan
of Merger (the "Merger Agreement") dated as of December __, 1994
among Pall, Pall Acquisition Corporation, a Massachusetts
corporation ("Acquisition") which is a wholly-owned subsidiary of
Pall, Filtron Technology Corporation, a Massachusetts corporation
("Filtron"), Martin H. Hirsch, Denis R. Friedman, Richard C.
Goulston, John J. Rozembersky, Nicholas J. Mozzicato and Attila
E. Herczeg, Filtron and Acquisition will merge, with Filtron
being the surviving corporation (Filtron as the surviving
corporation of such merger is hereinafter sometimes referred to
as the "Surviving Corporation");
WHEREAS, the Covenantor is a shareholder and/or
employee of Filtron; and
WHEREAS, the execution and delivery of this Agreement
is a condition to the closing under the Merger Agreement and this
Agreement is an inducement to the willingness of Pall and
Acquisition to consummate such closing.
NOW, THEREFORE, the parties agree as follows:
1. Definitions. Terms not otherwise defined herein
shall have the meanings ascribed to such terms in the Merger
Agreement.
2. Noncompetition Covenant. The parties hereto
recognize that the value of the Surviving Corporation to Pall
would be diminished if the Covenantor were to engage in the
business of providing products or services for sale to third
parties of the types manufactured, provided or sold by Pall or
its subsidiaries and affiliates, including the Surviving
Corporation and its subsidiaries (the "Pall Group"). The
Covenantor covenants and agrees that, until the date two years
after the end of the "Term of Employment" under and as defined in
the Employment Agreement of even date herewith between the
Covenantor and the Surviving Corporation, except as an employee
of the Pall Group, the Covenantor will not, anywhere in the
United States or any foreign country where the Pall Group
conducts business or sells products or services at the time in
question, engage, directly or indirectly, either as stockholder,
partner, officer, director, employee, consultant, agent or
otherwise, in any business which is in any manner engaged in the
<PAGE>
manufacture, sale, licensing or distribution of products or
services of the types manufactured, provided or sold by any
member of the Pall Group provided, however, that nothing in this
Agreement shall prohibit Covenantor's ownership of securities of
corporations which are listed on a national securities exchange
or traded in the national over-the-counter-market provided that
such securities either (a) were acquired by Covenantor prior to
October 26, 1994 or (b) if acquired after said date, were
acquired by purchase in the public market at the market price at
the time of such purchase. For the purposes of this Agreement,
"affiliate" shall mean any person who, directly or indirectly,
through one or more intermediaries, controls, is controlled by,
or is under common control with, Pall.
3. Obligations Unconditional. The agreements and
obligations of the Covenantor under this Agreement are
unconditional and shall remain binding agreements and obligations
of the Covenantor in accordance with their terms notwithstanding
the termination of the Covenantor's employment with the Surviving
Corporation or the Pall Group and notwithstanding any breaches by
any party under, or any termination of or disputes in respect of,
any other agreements among or between any of the parties hereto;
provided, however, that if the Covenantor's employment with the
Surviving Corporation or the Pall Group is terminated by the
Surviving Corporation or the Pall Group and such termination
constitutes a breach by the Surviving Corporation or the Pall
Group of their obligations under the Covenantor's employment
agreement, then the Covenantor's continuing obligations under the
provisions of Section 2 of this Agreement shall cease upon the
date of such termination, provided, that the Covenantor's
liabilities for any breach by the Covenantor prior to the date of
such termination shall not be affected thereby.
4. Consideration. The consideration for the
covenants and agreements of the Covenantor contained in this
Agreement shall be as set forth in the "WHEREAS" clauses hereof.
[In the contracts with Messrs. Herczeg and Mozzicato, delete the
preceding sentence and substitute the following: In
consideration of the covenants and agreements of the Covenantor
contained in this Agreement, Pall will pay the Covenantor or his
legal representatives $_________ payable in four equal
installments of $________ each, to be paid on the date hereof and
on each of the first, second and third anniversaries of the date
hereof].
5. Construction. While the parties hereto believe
that the terms hereof are fair, reasonable and enforceable in all
respects, it is agreed that any provision of this Agreement which
is held to be prohibited, invalid or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to
the extent of such prohibition, invalidity or unenforceability
without invalidating the remaining provisions hereof; that any
-2- <PAGE>
such prohibition, invalidity or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction; and that any prohibited,
invalid or unenforceable provisions shall be deemed, without
further action on the part of the parties, modified, amended and
limited solely to the extent necessary to render the same valid
and enforceable.
6. (a) Specific Performance; Legal Fees. In the
event of a breach or threatened breach by the Covenantor of his
obligations under Section 2 hereof, the Covenantor acknowledges
that Pall and the Surviving Corporation may not have an adequate
remedy at law for money damages. Accordingly, in the event of
such a breach or threatened breach, Pall and the Surviving
Corporation or either of them will be entitled to such equitable
and injunctive relief as may be available to restrain the
Covenantor from violation of the provisions hereof as well as to
any other remedy to which they may be entitled, at law or in
equity.
(b) In the event of any litigation between Covenantor,
on the one hand, and Pall and/or any other member of the Pall
Group, on the other, arising out of this Agreement, the party
which does not prevail in such litigation shall pay the
reasonable legal fees of the other party.
7. Notices. Any notice to a party hereto pursuant to
this Agreement shall be in writing, shall be deemed given when
received, and shall be delivered personally or sent by certified
or registered mail or by telecopier addressed as follows (or to
such other address as any party shall designate by written notice
to the other parties):
If to Pall or the Surviving Corporation to:
Pall Corporation
2220 Northern Boulevard
East Hills, New York 11548
Attention: Peter Schwartzman
Secretary
Telecopier No.: 516-484-3529
with a copy to:
Carter, Ledyard & Milburn
2 Wall Street
New York, New York 10005
Attention: Heywood Shelley, Esq.
Telecopier No.: 212-732-3232
-3- <PAGE>
If to the Covenantor to the last address for such
Covenantor reflected in the Pall Group's employment
records.
8. Amendments. This Agreement may not be amended
except by an instrument in writing signed on behalf of each of
the parties hereto.
9. Assignability. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their
respective successors, personal representatives, executors, heirs
and permitted assigns, provided, however, that this Agreement may
not be assigned by either party without the prior written consent
of the other party and any purported assignment without such
consent shall be null and void, except as follows: (a) at any
time or from time to time Pall's rights under this Agreement may
be assigned, subject to Pall's obligations and liabilities, to
any member of the Pall Group provided that the assignee shall
assume the Company's obligations and liabilities under this
Agreement and Pall shall guarantee performance by the assignee
and (b) in the event that Pall, or any entity resulting from any
merger or consolidation referred to in this paragraph or which
shall be a purchaser or transferree so referred to, shall at any
time be merged or consolidated into or with any other entity or
entities, or in the event that substantially all of the assets of
Pall or any such entity shall be sold or otherwise transferred to
another entity, the provisions of this Agreement shall be binding
upon and shall inure to the benefit of the continuing entity in
or the entity resulting from such merger or consolidation or the
entity to which such assets shall be sold or transferred.
10. Third Party Beneficiary. Except for the
Surviving Corporation and other members of the Pall Group, there
are no intended third party beneficiaries of this Agreement.
11. Entire Agreement; Governing Law. This Agreement
(a) constitutes the entire agreement and supersedes all prior
agreements and understandings, both written and oral, among the
parties with respect to the subject matter hereof, (b) may be
executed in several counterparts, each of which will be deemed an
original and all of which shall constitute one and the same
instrument, and (c) shall be governed in all respects, including
validity, interpretation and effect, by the substantive laws of
the State of New York without regard to the conflict of laws
principles thereof.
12. Headings. The headings and captions in this
Agreement are included for convenience of reference only and
shall have no effect on the construction or meaning of this
Agreement.
-4- <PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above written.
PALL CORPORATION
By:____________________________
Name
Title:
_______________________________
Covenantor
-5- <PAGE>
EXHIBIT D
IRREVOCABLE PROXY
THIS IRREVOCABLE PROXY (this "Agreement") is dated as
of the _____ day of December, 1994 by and between PALL
ACQUISITION CORPORATION, a Massachusetts corporation
("Acquisition"), and ______________ (the "Stockholder").
WHEREAS, Filtron Technology Corporation, a
Massachusetts corporation ("Filtron"), Pall Corporation, a New
York corporation ("Pall"), Acquisition, Martin H. Hirsch, Denis
R. Friedman, Richard C. Goulston, John J. Rozembersky, Nicholas
J. Mozzicato and Attila E. Herczeg propose on the date hereof to
enter into an Agreement and Plan of Merger (the "Merger
Agreement") pursuant to which Acquisition will be merged with and
into Filtron on the terms and subject to the conditions contained
in the Merger Agreement; and
WHEREAS, a final execution version of the Merger Agree-
ment has been delivered to the Stockholder and has been reviewed
by the Stockholder (it being understood that for purposes hereof
the term "Merger Agreement" shall mean such version of the Merger
Agreement with only such changes or amendments as the Stockholder
shall approve in writing); and
WHEREAS, as a condition to its willingness to enter
into the Merger Agreement, Acquisition has requested that the
Stockholder and other stockholders of Filtron grant to
Acquisition irrevocable proxies with respect to all of the shares
of Common Stock of Filtron owned by such stockholders; and
WHEREAS, in order to induce Acquisition and Pall to
enter into the Merger Agreement, the execution and delivery of
which will inure to the direct and material benefit of the
Stockholder, the Stockholder has agreed to execute and deliver
this Agreement in favor of Acquisition.
NOW, THEREFORE, in consideration of the execution and
delivery of the Merger Agreement by Acquisition and Pall and the
mutual covenants and agreements set forth herein, the parties
hereto agree as follows:
1. Grant of Irrevocable Proxy. The Stockholder
hereby irrevocably appoints and constitutes Acquisition or any
designee of Acquisition, with full power of substitution, the
lawful agent, attorney and proxy of the Stockholder during the
term of this Agreement to vote in its sole discretion all of the
<PAGE>
shares of Common Stock of Filtron ("Common Stock") of which the
Stockholder is the owner of record (the "Shares") (inc-
luding any and all Common Stock acquired by the Stockholder
after the date hereof) in the following manner for the
following purposes: (i) to call one or more meetings of
the stockholders of Filtron in accordance with the By-Laws
of Filtron and applicable law for the purpose of consid-
ering the transactions contemplated by the Merger Agreement
such that the stockholders shall have the full opportunity to
approve the Merger Agreement and any and all amendments,
modifications and waivers thereof and the transactions
contemplated thereby; (ii) in favor of the Merger Agreement or
any of the transactions contemplated by the Merger Agreement at
any stockholders meetings of Filtron held to consider the Merger
Agreement (whether annual or special and whether or not an
adjourned meeting); (iii) to approve, pursuant to Section
280G(b)(5)(B) of the Internal Revenue Code of 1986, as amended
(the "Code") (which requires for such approval a favorable vote
of more than three-fourths (75%) of the shares of Filtron common
stock held by all Filtron stockholders other than Messrs. Attila
E. Herczeg and Nicholas J. Mozzicato), the payment to Mr. Herczeg
of $1,248,749 and to Mr. Mozzicato of $1,022,055 (such amounts to
be paid in four equal installments payable on the Closing Date of
the Merger Agreement and on the first, second and third
anniversaries of such Closing Date) pursuant to certain non-com-
petition agreements to be entered into between Messrs. Herczeg
and Mozzicato and Pall upon the closing of the Merger Agreement
so as to prevent any part of such payments from possible
treatment as "Parachute Payments" as defined by Section 280G of
the Code; (iv) against any other proposal for any
recapitalization, merger, sale of assets or other business
combination between Filtron and any other person or entity other
than Acquisition or the taking of any action which would result
in any of the conditions to Acquisition's obligations under the
Merger Agreement not being fulfilled; and (v) as otherwise
necessary or appropriate to enable Acquisition to consummate the
transactions contemplated by the Merger Agreement and, in con-
nection with such purposes, to otherwise act with respect to the
Shares which the Stockholder is entitled to vote. THIS
IRREVOCABLE PROXY HAS BEEN GIVEN IN CONSIDERATION OF THE
UNDERTAKINGS OF ACQUISITION AND PALL IN THE MERGER AGREEMENT AND
SHALL BE IRREVOCABLE AND COUPLED WITH AN INTEREST UNTIL THE
TERMINATION DATE AS DEFINED IN SECTION 2 HEREOF. This Agreement
shall revoke all other proxies granted by the Stockholder with
respect to the Shares.
2. Termination Date. This Irrevocable Proxy shall
expire on the earlier to occur of the Closing under the Merger
Agreement or the termination of the Merger Agreement pursuant to
its terms.
3. Representation and Warranty by the Stockholder.
The Stockholder represents and warrants to Acquisition that the
Stockholder is on the date hereof the owner of record of _______
-2- <PAGE>
shares of Common Stock of Filtron and has authority to vote such
shares.
4. Covenant of the Stockholder. The Stockholder
covenants and agrees with Acquisition that he will continue to
hold, and will not sell, assign, transfer, pledge, hypothecate or
otherwise dispose of the Shares until the date of termination of
this Agreement pursuant to Section 2 hereof.
5. Specific Performance. The parties hereto agree
that the Shares are unique and that money damages are an
inadequate remedy for breach of this Agreement because of the
difficulty of ascertaining the amount of damage that will be
suffered by Acquisition and Pall in the event that this Agreement
is breached. Therefore, the Stockholder agrees that in addition
to and not in
lieu of any other remedies available to Acquisition at law or in
equity, Acquisition may obtain specific performance of this
Agreement.
6. Assignment. This Agreement shall not be assigned
by Acquisition to any person other than Pall or any affiliate of
Pall.
7. Amendments. This Agreement may not be modified,
amended, altered or supplemented except upon the execution and
delivery of a written agreement executed by both parties hereto.
8. Governing Law. This Agreement shall be governed
by and construed in accordance with the substantive laws of the
Commonwealth of Massachusetts, without regard to the conflict of
laws principles thereof.
9. Binding Effect. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their
respective successors, personal representatives, executors, heirs
and permitted assigns.
10. Headings. The Section headings herein are for
convenience of reference only and shall not affect the
construction hereof.
11. Counterparts. This Agreement may be executed in
several counterparts, and on separate counterparts by each party
hereto, each of which shall be an original, but all of which
together shall constitute one and the same Agreement.
-3- <PAGE>
IN WITNESS WHEREOF, Acquisition and the Stockholder
have duly executed this Agreement as of the date and year first
above written.
PALL ACQUISITION CORPORATION
By:___________________________
Name: Eric Krasnoff
Title: Chairman
By:___________________________
Name: Jeremy Hayward-Surry
Title: President
______________________________
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EXHIBIT E
EMPLOYMENT AGREEMENT
AGREEMENT made as of _____________, 199_ (the "Date of
this Agreement") between PALL FILTRON CORPORATION, a
Massachusetts corporation (the "Company") and
("Executive").
Recitals
Executive has been a key employee of Filtron Technology
Corporation, a Massachusetts corporation ("Filtron"), and the
stockholders of Filtron have voted to approve the acquisition of
all of the capital stock of Filtron by Pall Corporation, a New
York corporation ("Pall") by a merger of Filtron with Pall
Acquisition Corporation, a Massachusetts corporation
("Acquisition") which is a wholly-owned subsidiary of Pall,
pursuant to an Agreement and Plan of Merger (the "Merger
Agreement") dated as of December __, 1994 among Pall,
Acquisition, Filtron and certain stockholders and employees of
Filtron. A condition of the closing under the Merger Agreement
is that Executive enter into this employment agreement with the
Company and this employment agreement is an inducement to Pall's
and Acquisition's willingness to consummate such closing.
In consideration of the foregoing and the mutual
covenants herein contained, the parties agree as follows:
Section 1. Employment and Term
The Company hereby employs Executive, and Executive
hereby agrees to serve, as an executive employee of the Company
with the duties set forth in Section 2, for a term (hereinafter
called the "Term of Employment") beginning on the Date of this
Agreement (the "Term Commencement Date") and ending, unless
sooner terminated under Section 4, on the day preceding the third
anniversary of the Term Commencement Date.
Section 2. Duties
(a) Executive agrees that during the Term of
Employment he will hold such offices or positions with the
Company, and perform such duties and assignments relating to the
business of the Company, as the Company shall direct except that
Executive shall not be required to hold any office or position or
to perform any duties or assignment inconsistent with his
experience and qualifications. Executive shall not be required
to relocate his principal office to any location which is more
than 35 miles away from the present principal office of the
Company in Northborough, Massachusetts without his prior written
consent.
<PAGE>
(b) If the Company so directs, Executive shall serve
as an officer of one or more subsidiaries or affiliates of the
Company (provided that the duties of such office are not
inconsistent with Executive's experience and qualifications and
subject to the last sentence of Section 2(a) hereof) and part or
all of the compensation to which Executive is entitled hereunder
may be paid by any such subsidiary or affiliate. However, such
employment and/or payment of compensation to Executive by a
subsidiary or affiliate shall not relieve the Company from any of
its obligations under this Agreement except to the extent of
payments actually made to Executive by a subsidiary or affiliate.
(c) During the Term of Employment Executive shall,
except during customary vacation periods and periods of illness,
devote substantially all of his business time and attention to
the performance of his duties hereunder and to the business and
affairs of the Company and its subsidiaries and affiliates and to
promoting the best interests of the Company and its subsidiaries
and affiliates and he shall not, either during or outside of
normal business hours, engage in any activity inimical to the
best interests of the Company or any other member of the Pall
Group (as defined in Section 7 hereof).
Section 3. Compensation During Term of Employment
(a) Salary. With respect to the period beginning on
the Term Commencement Date and ending at the end of the Term of
Employment, the Company shall pay to Executive compensation at
the rate of not less than $__________ per annum ("Salary"). The
Salary shall be paid in such periodic installments as the Company
may determine but not less often than monthly.
(b) Fringe Benefits. Executive shall be entitled to
participate in all employee benefit arrangements that are made
available to all non-union U.S.-based employees of the Company
such as the Company's medical plan, the Pall Corporation Profit-
Sharing Plan and the Pall Corporation Pension Plan.
(c) Vacations. Executive shall be entitled each year
to a vacation or vacations in accordance with the policies of the
Company as determined by the Company from time to time. In
determining the amount of vacation to which Executive is entitled
in accordance with such Company policy, the time during which
Executive was employed by Filtron prior to the date hereof shall
be deemed part of his employment by the Company. The Company
shall not pay Executive any additional compensation for any
vacation time not used by Executive.
-2- <PAGE>
Section 4. Termination by Reason of Disability or
Death
If, during the Term of Employment, Executive, by reason
of physical or mental disability, is incapable of performing his
principal duties hereunder for an aggregate of 130 working days
out of any period of twelve consecutive months, the Company at
its option may terminate the Term of Employment effective
immediately by notice to Executive given within 90 days after the
end of such twelve-month period. If Executive shall die during
the Term of Employment or if the Company terminates the Term of
Employment pursuant to the immediately preceding sentence by
reason of Executive's disability, the Company shall pay to
Executive, or to Executive's legal representatives, or in
accordance with a direction given by Executive to the Company in
writing, Executive's Salary to the end of the month in which such
death or termination for disability occurs.
Section 5. Company's Right to Injunctive Relief
Executive acknowledges that his services to the Company
are of a unique character, which gives them a peculiar value to
the Company, the loss of which cannot be reasonably or adequately
compensated in damages in an action at law, and that similarly an
action for damages alone may not be an adequate remedy for a
breach of certain other provisions hereof, particularly Sections
7 and 8. Accordingly, in addition to any other remedy which the
Company may have at law or in equity, the Company shall be
entitled to injunctive relief for a breach of this Agreement by
Executive.
Section 6. Noncompetition
Simultaneously with the making of this Agreement and in
connection with the Merger, Executive and Pall are entering into
a Noncompetition Agreement of even date herewith, pursuant to the
Merger Agreement. Said Noncompetition Agreement imposes certain
limitations on Executive's right to compete with the business of
the Company or other members of the Pall Group, [in consideration
of a cash payment or payments by Pall to Executive in the amount
and at the time or times set forth therein.]* Reference is made
to said Noncompetition Agreement for information as to such
limitations.
Section 7. Confidential Information
(a) As used herein: (i) "Pall Group" means Pall and its
subsidiaries (including the Company) and affiliates collectively.
___________________
* Bracketed clause to be included only in agreements with
Messrs. Herczeg and Mozzicato.
-3- <PAGE>
(ii) "Confidential Information" means information, whether or not
in written form, which (i) is not generally made available by the
Pall Group to the public and (ii) relates to the Pall Group's
products, processes or business, including but not limited to
information relating to the Pall Group's research and
development, manufacturing, purchasing, engineering or marketing
or to the Pall Group's suppliers or its distributors or other
customers. Examples of Confidential Information are: business,
manufacturing and research methods and projects, techniques,
apparatus, equipment and systems, materials and products, product
design and specifications, manufacturing procedures and
tolerances, research tools, test procedures, prices and pricing
formulae and cost information, customer's special material and
product specifications and requirements, suppliers, sales
records, sample records, salesmen's reports, customer contact
reports, and customer records, information, know-how, notebooks,
reports, memoranda, data, designs, drawings and blueprints.
(b) Except as may be necessary in the course of his
duties as an employee of the Company, Executive shall not, either
during his employment with the Company or thereafter, use or
disclose Confidential Information without the prior written
consent of the Company.
(c) Except as may be necessary in the course of his
duties as an employee of the Company, Executive shall not,
without the prior written consent of the Company, remove from the
premises of any member of the Pall Group any printed, written,
recorded or graphic material, or any reproduction thereof,
constituting, containing or reflecting Confidential Information,
and at the time that Executive ceases to be an employee of the
Company he shall turn over to the Company all such material and
reproductions in his possession or under his custody or control.
Section 8. Ownership of Inventions
(a) As used in this Section 8: (i) "Filtron" means and
includes both the Company and Filtron Technology Corporation, a
Massachusetts corporation to which the Company is successor by
merger. (ii) "Competing Product" means any product or process in
existence or under development which is the same as or similar to
or competes with any product or process (x) which the Company or
any other member of the Pall Group manufactures, sells or
licenses, or (y) to which the Company or any other member of the
Pall Group has devoted a significant research or development
effort and plans to manufacture, sell or license. (iii)
"Invention" means any invention, discovery, improvement,
modification, or refinement made or conceived by Executive, alone
or jointly with others (whether made within or outside his usual
working hours and whether made on or off Filtron's premises).
The term "Covered Invention" means any
-4- <PAGE>
invention made or conceived during the period of Executive's
employment with Filtron or within one year thereafter if either
(I) such invention relates in any way to the products, processes
or business of the Pall Group or to any Competing Product, or
(II) in connection with such Invention Executive used any
equipment, supplies, facilities or Confidential Information or
worked on such Invention during his regular working hours while
employed by Filtron. (If Executive claims that an Invention is
not a Covered Invention because not falling within clause "(II)"
of the preceding sentence, Executive shall have the burden of
proving that he did not use any equipment, supplies, facilities
or Confidential Information in connection with such Invention and
that he did not work on such Invention during his regular working
hours while employed by Filtron.)
(b) All Covered Inventions shall be the property of
Pall. Executive shall promptly, without request, disclose to the
Company all Inventions. If (i) such Invention is not a Covered
Invention or (ii) Pall in its sole discretion determines that the
Pall Group has no interest in any such Invention and Executive is
so advised in writing by an officer of Pall, then the rights in
and to such Invention shall belong or revert to Executive.
(c) For purposes of this Agreement, any Invention
which during Executive's employment with Filtron or within one
year thereafter Executive discloses to anyone or reduces to
writing or which is the subject of a patent application by
Executive or any assignee of Executive shall be conclusively
presumed to have been made or conceived by Executive during his
employment with Filtron or within one year thereafter unless at
or before the delivery of this Agreement such Invention is
disclosed to Pall and is identified in an exhibit attached to
this Agreement. (The fact that an Invention does not fall within
the conclusive presumption created by the preceding sentence
shall not be deemed to preclude the Company from establishing by
other evidence that such Invention is a Covered Invention as
hereinabove defined).
(d) Upon request by Pall, either during or following
Executive's employment by the Company, Executive or his legal
representatives shall apply for a patent or patents on all
Covered Inventions in the United States and in foreign countries,
and shall execute and deliver all papers necessary to obtain such
patent or patents, together with assignments to Pall (or such of
its subsidiaries or affiliates as it may designate) of all
Executive's right, title and interest in and to such Inventions,
patent applications and patents, without further compensation to
Executive. Such patent applications shall be filed at the
expense of and under the exclusive control of Pall (or such of
its subsidiaries or affiliates as it may designate). Executive
shall perform all other proper acts, without further compensation
but at
-5- <PAGE>
the expense of the Company, which Pall may consider necessary or
desirable to secure to Pall (or such of its subsidiaries or
affiliates as it may designate) the fullest rights to such
Inventions and to patents covering them.
Section 9. Mergers and Consolidations; Assignability
In the event that the Company, or any entity resulting
from any merger or consolidation referred to in this Section 9 or
which shall be a purchaser or transferee so referred to, shall at
any time be merged or consolidated into or with any other entity
or entities, or in the event that substantially all of the assets
of the Company or any such entity shall be sold or otherwise
transferred to another entity, the provisions of this Agreement
shall be binding upon and shall inure to the benefit of the
continuing entity in or the entity resulting from such merger or
consolidation or the entity to which such assets shall be sold or
transferred. In addition, at any time or from time to time the
Company's rights under this Agreement may be assigned, subject to
the Company's obligations and liabilities, to any member of the
Pall Group provided that the assignee shall assume this Agreement
and, if the assignee is not Pall, that Pall shall guarantee
performance by the assignee. Except as provided in the two
preceding sentences of this Seciton 9, this Agreement shall not
be assignable by the Company or by any entity referred to in ei-
ther of such two preceding sentences. This Agreement shall not
be assignable by Executive, but in the event of his death it
shall be binding upon and inure to the benefit of his legal
representatives to the extent required to effectuate the terms
hereof.
Section 10. Captions
The captions in this Agreement are not part of the
provisions hereof, are merely for the purpose of reference and
shall have no force or effect for any purpose whatsoever,
including the construction of the provisions of this Agreement,
and if any caption is inconsistent with any provisions of this
Agreement, said provisions shall govern.
Section 11. Choice of Law
This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts.
Section 12. Entire Contract
This instrument contains the entire agreement of the
parties on the subject matter hereof; it may not be changed
orally, but only by an agreement in writing signed by the party
against
-6- <PAGE>
whom enforcement of any waiver, change, modification, extension
or discharge is sought.
Section 13. Notices
All notices given hereunder shall be in writing and
shall be sent by telecopier or by registered or certified mail or
delivered by hand, and, if intended for the Company, shall be
addressed to it (if sent by telecopier or mail) or delivered to
it (if delivered by hand) at its principal office for the
attention of the Secretary of the Company, or at such other
address and for the attention of such other person of which the
Company shall have given notice to Executive in the manner herein
provided, and, if intended for Executive, shall be delivered to
him personally or shall be addressed to him (if sent by mail) at
his most recent residence address shown in the Company's
employment records or at such other address or to such designee
of which Executive shall have given notice to the Company in the
manner herein provided. Each such notice shall be deemed to be
given on the date of mailing or telecopier transmission thereof
or, if delivered personally, on the date so delivered.
Section 14. Termination of Any Prior Employment
Agreement
Any Employment Agreement in effect between Filtron and
Executive on the date hereof is hereby terminated by mutual
consent effective on said date and is superseded and replaced by
this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the day and year first above written.
PALL FILTRON CORPORATION
By_________________________________
Name:
Title:
___________________________________
Executive
-7- <PAGE>
EXHIBIT F
STOCK PLEDGE AGREEMENT
THIS STOCK PLEDGE AGREEMENT (this "Agreement") dated as
of _____________, 1994, by and among MARTIN H. HIRSCH, DENIS R.
FRIEDMAN, RICHARD C. GOULSTON and JOHN J. ROZEMBERSKY, having
addresses c/o Filtron Technology Corporation, 50 Bearfoot Road,
Northborough, Massachusetts 01532 (each, individually, a
"Pledgor" and collectively, "Pledgors") and PALL CORPORATION, a
New York corporation having an office at 2200 Northern Boulevard,
East Hills, New York 11548 ("Pall" or "Pledgee").
W I T N E S E T H:
WHEREAS, pursuant to an Agreement and Plan of Merger
among Pledgors, Pledgee, Pall Acquisition Corporation, a
Massachusetts corporation ("Acquisition"), Filtron Technology
Corporation, a Massachusetts corporation ("Filtron"), and certain
stockholders and employees of Filtron, dated as of December __,
1994 (hereinafter, as the same may from time to time be amended
or modified, the "Merger Agreement"), Pledgors have agreed to in-
demnify Pledgee and Acquisition with respect to certain matters
pursuant to Section 5.2(e) of the Merger Agreement; and
WHEREAS Pledgors, in order to induce Pledgee to enter
into the Merger Agreement, agreed pursuant to Section 5.2(f) of
the Merger Agreement to pledge and grant a lien and security
interest to Pledgee in the shares of Pall Stock owned by and
registered in the name of Pledgors as indicated on Schedule A
(such stock with all additions thereto and changes therein being
hereinafter referred to as the "Pledged Stock").
NOW, THEREFORE, as an inducement to Pledgee and
Acquisition to close the transactions contemplated by the Merger
Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged,
Pledgors and Pledgee hereby agree as follows:
1. Definitions and Construction of Terms. Unless the
context otherwise requires, all capitalized terms used herein but
not expressly defined herein shall have the meanings, if any,
given to them in the Merger Agreement.
2. Pledge of the Pledged Stock; Power of Attorney.
(a) As security for the performance by Pledgors of
their covenants and obligations to Pall and Acquisition under
Section 5.2(e) of the Merger Agreement (the "Indemnification
Provisions"), Pledgors hereby pledge with Pledgee and grant to
Pledgee a lien on and security interest in all of the shares of
<PAGE>
Pledged Stock, which shares Pledgors represent and warrant are
owned by Pledgors free and clear of any lien or encumbrance, and
any other right or interest of any other person, of any kind
whatsoever. Pledgors have delivered to Pledgee stock certifi-
cates for all of the Pledged Stock, each accompanied by an
undated stock power signed in blank by each Pledgor.
(b) Pledgee shall have no obligation with respect to
the Pledged Stock or any other property held or received by it
hereunder except to use reasonable care in the custody and pre-
servation thereof to the extent required by law.
(c) Pledgee shall hold the Pledged Stock in the form
in which it is delivered to Pledgee unless and until the
occurrence of an Event of Default hereunder, in which event and
so long as such Event of Default continues, each Pledgor hereby
constitutes and irrevocably appoints Pledgee (and any officer of
or agent of Pledgee, with full power of substitution and revo-
cation) as such Pledgor's true and lawful attorney-in-fact, in
Pledgee's stead and in its name or in Pledgor's name, in
Pledgee's discretion, to transfer the Pledged Stock on the books
of Pall, in whole or in part, to the name of Pledgee or such
other person or persons as Pledgee may designate and to take all
such other and further actions as Pledgors could have taken with
respect to the Pledged Stock which Pledgee in its absolute
discretion determines to be necessary or appropriate to accom-
plish the purposes of this Agreement.
(d) The power of attorney granted pursuant to this
Agreement and all authority hereby conferred are granted and
conferred solely to protect Pledgee's interests in the Pledged
Stock and shall not impose any duty upon the attorney-in-fact to
exercise such powers. Such powers of attorney shall be
irrevocable prior to the termination of this Agreement as
contemplated by Section 14 hereof and shall not be terminated
prior thereto or affected by any act of Pledgors or by operation
of law, including, but not limited to, the dissolution, death,
disability or incompetency of any person, the termination of any
trust, or the occurrence of any other event, and if Pledgors
should die or become disabled or incompetent or any other event
should occur before the termination of this Agreement such
attorney-in-fact shall nevertheless be fully authorized to act
under such powers of attorney as if such dissolution, death,
disability or incompetency or other event had not occurred and
regardless of notice thereof.
(e) Each person who shall be a transferee of the
beneficial ownership of the Pledged Stock (such transfer being
prohibited pursuant to Section 5 unless Pledgee otherwise
consents) by the acceptance of such a transfer shall be deemed to
have irrevocably appointed the Pledgee, with full power of
substitution and revocation, such person's true and lawful
attorney-in-fact in such person's name and otherwise to do any
-2- <PAGE>
and all acts permitted to, and to exercise any and all powers
herein conferred upon, such attorney-in-fact.
(f) Pledgors hereby ratify all actions taken by or on
behalf of the Pledgee pursuant to this power of attorney or
otherwise as provided in this Agreement and neither Pledgee nor
any of its officers or agents shall be liable for any acts or
omissions or for any error of judgment or mistake of fact or law
in its or their capacity as such attorney-in-fact, other than, in
the case of Pledgee or any of its officers, as a result of their
gross negligence or willful misconduct. This power of attorney
is coupled with an interest and shall be irrevocable until this
Agreement is terminated. The powers conferred upon Pledgee
hereunder are solely to protect its interests and shall not
impose any duty upon it to exercise any of such powers.
3. Rights of Pledgors. (a) During the term of this
Agreement, and so long as no Event of Default hereunder has
occurred and is continuing, Pledgors shall have the right to vote
the Pledged Stock owned by them in all corporate matters.
(b) Upon the occurrence and during the continuance of
an Event of Default, at the sole and absolute discretion of
Pledgee and upon notice by the Pledgee to Pledgors, all rights of
Pledgors to exercise or refrain from exercising the voting and
other consensual rights which it would otherwise be entitled to
exercise pursuant to Section 3(a) shall cease, except to the ex-
tent otherwise agreed upon in writing from time to time and, to
the extent indicated by Pledgee in the notice, such rights shall
thereupon become vested in the Pledgee, which shall thereupon
have the sole right to exercise or refrain from exercising such
voting and other consensual rights.
4. No Restrictions on Transfer. Pledgors each,
jointly and severally, warrant and represent that there are no
restrictions on the transfer of the Pledged Stock except such, if
any, as appears on the face of the certificates or are imposed by
operation of law or are contemplated by the Merger Agreement,
that there are no options, warrants or rights pertaining thereto
and that Pledgors have the right to transfer such stock pursuant
to this Agreement free of any encumbrances and without the
consent of their creditors or any other person, firm or
corporation, or any governmental agency whatsoever and that the
Pledged Stock is and will remain freely marketable. Pledgors
each, jointly and severally, represent and warrant to Pledgee
that Pledgee, upon exercise of its rights herewith, will at all
times be free to sell the Pledged Stock either privately or to
the public, subject to the requirements of United States and
applicable state securities laws. Pledgors shall take all steps
necessary to ensure that the Pledged Stock continues to be freely
transferable as stated in the immediately preceding sentence.
-3- <PAGE>
5. Transfers or Liens. Pledgors agree not to sell,
transfer or convey any interest in, or suffer or permit any lien,
security interest or encumbrance to be created upon or with
respect to, any of the Pledged Stock pledged hereunder during the
term of this Agreement without the prior written consent of
Pledgee, provided, however, that Pledgee hereby agrees that, so
long as no Event of Default hereunder has occurred and is
continuing and so long as Pledgee or the Surviving Corporation
have not asserted any claim against Pledgors under the
Indemnification Provisions which claim has not been satisfied by
Pledgors or finally resolved in Pledgors' favor, Pledgors may
sell such number of shares of the Pledged Stock at such times as
are contemplated by Section 5.2(h) of the Merger Agreement
(treating the Pledged Stock as being the last shares held by
Pledgors which are available for sale under said Section of the
Merger Agreement) and any shares so sold shall be released from
the lien and security interest created by this Agreement. If no
Event of Default hereunder shall have occurred and be continuing
and if Pledgee and the Surviving Corporation have not asserted
any claim against Pledgors under the Indemnification Provisions
which claim has not been satisfied by Pledgors or finally
resolved in Pledgors' favor, shares of the Pledged Stock shall be
released from the lien and security interest created by this
Agreement and certificates representing such shares shall be
delivered to Pledgors at such times as such shares first become
available for sale under the terms of Section 5.2(h) of the
Merger Agreement (treating the Pledged Stock as being the last
shares held by Pledgors which are available for sale under said
Section of the Merger Agreement). If any such shares are not so
released because Pall or the Surviving Corporation have asserted
claims against Pledgors under the Indemnification Provisions, the
number of shares of Pledged Stock retained which would otherwise
be released as contemplated above shall not exceed such number as
represents a Pall Stock Value (measured as of such date)
sufficient in Pall's reasonable judgment to satisfy such claims
and all other shares which are to be released as contemplated
above shall be released.
6. Adjustments of Stock; Application of Dividends. In
the event that during the term of this Agreement any stock divi-
dend, reclassification, readjustment or other change is declared
or made in the capital structure of Pall or if any other or addi-
tional shares of stock of Pall are issued to Pledgors, all new,
substituted and additional shares or other securities issued by
reason of any such change or issuance shall immediately be deli-
vered by Pledgors to Pledgee and shall be deemed to be part of
"the Pledged Stock" under the terms of this Agreement in the same
manner as the shares of stock originally pledged hereunder. All
non-cash dividends or other property received by or payable to
Pledgors by reason of such Pledgors' ownership of the Pledged
Stock, including any additional shares of stock received by
Pledgors as a result of their record ownership of the Pledged
Stock but excluding ordinary cash dividends, shall immediately be
-4- <PAGE>
delivered by Pledgors to Pledgee, to be held by Pledgee as
additional collateral hereunder. So long as no Event of Default
hereunder has occurred and is continuing, Pledgors will be
entitled to receive and retain all ordinary cash dividends paid
on the Pledged Stock. Upon the occurrence and during the
continuance of an Event of Default, all ordinary cash dividends
on the Pledged Stock shall immediately be delivered by Pledgors
to Pledgee to be held by Pledgee as additional collateral
hereunder.
7. Warrants and Options. In the event that during the
term of this Agreement subscription warrants or other rights or
options shall be issued or granted in connection with the Pledged
Stock, all such stock warrants, rights and options shall forth-
with be assigned by Pledgors to Pledgee and said stock warrants,
rights and options shall be, and, if exercised by Pledgors, all
new stock issued pursuant thereto shall be pledged by Pledgors to
Pledgee to be held as, and shall be deemed to be part of, "the
Pledged Stock" under the terms of this Agreement in the same
manner as the shares of stock originally pledged hereunder.
8. Return of Pledged Stock Upon Termination. Subject
to the provisions of Section 14 of this Agreement, upon the
release, discharge or expiration of the term of the Indem-
nification Provisions, Pledgee shall cause to be redelivered to
Pledgors all of the Pledged Stock remaining in Pledgee's hands
hereunder and any money, property and rights received by Pledgors
pursuant hereto, to the extent Pledgee has not taken, sold or
otherwise realized upon the same pursuant to its rights here-
under.
9. Events of Default; Remedies. In the event that any
"Event of Default" occurs, Pledgee shall have and at any time
thereafter may exercise with respect to the Pledged Stock, the
proceeds thereof, and any other property or money held by Pledgee
hereunder, all rights and remedies available to it under the law,
including but not limited to those given, allowed or permitted to
a secured party by or under the New York Uniform Commercial Code,
and all rights and remedies provided for herein. "Event of
Default" shall mean any default by a Pledgor in the payment when
due of any Losses payable by Pledgor to Pledgee or Acquisition
under the Indemnification Provisions.
Without limiting the foregoing, in the event that
Pledgee elects to sell the Pledged Stock, Pledgee shall have the
power and right in connection with any such sale, exercisable at
its option and in its absolute discretion, to sell, assign, and
deliver the whole or any part of the Pledged Stock or any addi-
tions thereto at private or public sale for cash, on credit or
for future delivery and at such price as Pledgee deems to be
satisfactory. In the event that federal or state securities laws
restrict the methods of disposition of the Pledged Stock which
are readily available to Pledgee, Pledgor agrees that Pledgee may
-5- <PAGE>
from time to time attempt to sell the Pledged Stock by means of a
private placement restricting the offering or sale to a limited
number of prospective purchasers who meet suitability standards
Pledgee deems appropriate and who agree that they are purchasing
for investment and not with a view to distribution, and if
Pledgee solicits offers from not less than two such prospective
purchasers, Pledgee's acceptance of the highest offer obtained
therefrom shall be deemed to be a commercially reasonable dis-
position of the Pledged Stock.
Pledgee or its assigns may purchase all or any part of
the Pledged Stock at any such sale, and any purchaser thereof
shall thereafter hold the same absolutely free from any right or
claim of any kind including any equity of redemption of Pledgors,
which, together with all rights of redemption, stay or appraisal
Pledgors have or may have under any rule or statute now existing
or hereafter adopted, Pledgors hereby specifically and uncon-
ditionally waive to the fullest extent permitted by law. Pledgee
shall not be obligated to make any such sale pursuant to any such
notice and may, without notice or publication, adjourn any public
or private sale by announcement at the time and place fixed for
the sale, and such sale may be held at any time or place to which
the same may be adjourned. If any of the Pledged Stock is sold
by Pledgee upon credit or for future delivery, Pledgee shall not
be liable for the failure of the purchaser to pay for same and in
such event, Pledgee may resell such Pledged Stock.
Without limiting the foregoing, Pledgors agree that in
the event that any Event of Default has occurred and is
continuing and in addition to the other remedies available
hereunder, Pledgee in its discretion shall have the right to give
Pledgors written notice to the effect that if such Event of
Default is not cured on or prior to a payment date specified in
such notice (the "Payment Date"), which date shall not be less
than 14 days after the date such notice is given to Pledgors,
Pledgee shall have the right to retain and cancel shares of
Pledged Stock, crediting against the payment due from Pledgors
the market value (as hereinafter defined) of such cancelled
shares on the Payment Date and Pledgors shall remain liable for
any balance due after such crediting. For such purposes, "market
value" means the mean between the high and low sales prices of
Pall Stock on the Payment Date as reported by and for the New
York Stock Exchange Composite Transactions.
Any requirement of reasonable notice imposed by law
shall be deemed met if such notice is in writing and is mailed,
telegraphed or hand delivered to each Pledgor at its address set
forth on page one hereof at least ten days prior to the sale,
disposition or other event giving rise to such notice
requirement.
10. Expenses of Pledgee. Pledgors agree to pay or to
reimburse Pledgee for all expenses (including reasonable fees and
-6- <PAGE>
disbursements of counsel and of any agent not regularly in its
employ) which Pledgee may incur in connection with (i) the sale
of, collection from or other realization upon, any of the Pledged
Stock, (ii) the exercise by Pledgee of any of its rights or
powers hereunder, including any actual or attempted sale,
exchange or cancellation of the Pledged Stock, (iii) any failure
by Pledgors to perform or observe the provisions hereof, (iv) any
enforcement, collection, compromise or settlement respecting the
Pledged Stock or any other property or money held hereunder, or
(v) any other action taken by Pledgee hereunder whether directly
or as attorney-in-fact pursuant to the power of attorney herein
conferred, and all such expenses shall be deemed a part of the
amount secured by this Agreement for all purposes of this
Agreement and Pledgee may apply the Pledged Stock or any other
property or money held hereunder to payment of or reimbursement
of itself for such expenses.
11. Waivers and Amendments. The rights and remedies
given hereby are in addition to all others however arising, but
it is not intended that any right or remedy be exercised in any
jurisdiction in which such exercise be prohibited by law. No
action, failure to act or knowledge of Pledgee shall be deemed to
constitute a waiver of any power, right or remedy hereunder, nor
shall any single or partial exercise thereof preclude any further
exercise thereof or the exercise of any other power, right or
remedy. Any right or power of Pledgee hereunder respecting the
Pledged Stock and any other property or money held hereunder may
at the option of Pledgee be exercised as to all or any part of
the same and the term "the Pledged Stock" wherever used herein,
unless the context clearly requires otherwise, shall be deemed to
mean (and shall be read as) "the Pledged Stock and any other
property or money held hereunder or any part thereof". This
Agreement shall not be amended nor shall any right hereunder be
deemed waived except by a written agreement expressly setting
forth the amendment or waiver and signed by the party against
whom or with which such amendment or waiver is sought to be
charged.
12. Governing Law. This Agreement and the rights and
obligations of Pledgor and Pledgee hereunder shall be governed by
and construed in accordance with the laws of the State of New
York.
13. Indemnity. Pledgors agree to indemnify Pledgee
from and against any and all claims, losses and liabilities
growing out of or resulting from any breach by Pledgors of this
Agreement (including, without limitation, enforcement of this
Agreement and any actions taken pursuant to Section 9 hereof or
any failure to act hereunder), except only for claims, losses or
liabilities resulting from Pledgee's gross negligence or willful
misconduct.
-7- <PAGE>
14. Termination and Miscellaneous Provisions. This
Agreement shall continue in full force and effect until the later
to occur of (i) the date which is two years from the date hereof
(the "Second Anniversary"), or (ii) such date as all claims which
are made on or prior to the Second Anniversary by Pledgee or
Acquisition against Pledgors under the Indemnification Provisions
are finally satisfied, settled or resolved. During any period of
time after the Second Anniversary and prior to the date all
claims which are made on or prior to the Second Anniversary by
Pledgee or Acquisition against Pledgors under the Indemnification
Provisions are finally satisfied, settled or resolved, the amount
of Pledged Stock remaining subject to this Agreement shall be
limited to the amount necessary to satisfy the amount of the
unsatisfied Losses claimed under the Indemnification Provisions
(calculated by reference to the Pall Stock Value on the Second
Anniversary) and all other Pledged Stock shall be released from
this Agreement pursuant to Section 8 hereof. This Agreement
shall be binding upon and shall inure to the benefit of Pledgors,
Pledgee and their respective heirs, successors and permitted
assigns. Pledgors agree that they shall not assign this
Agreement except with the express written consent of Pledgee and
any purported assignment without such consent shall be null and
void. No failure or delay on the part of the Pledgee in
exercising any right, power or privilege hereunder or under any
other agreement or instrument in connection herewith or therewith
shall operate as a waiver thereof or preclude any other or
further exercise thereof or of any other right, power or
privilege. No amendment or waiver of any provision of this
Agreement, nor consent to any departure by any Pledgor herefrom,
shall in any event be effective unless the same shall be in
writing and signed by Pledgee, and then such waiver or consent
shall be effective only in the specific instance and for the
specific purpose for which given. Section headings used herein
are for convenience only and shall not affect the meaning or
construction of any of the provisions hereof. This Agreement may
be executed in any number of counterparts with the same effect as
if the signatures thereto and hereto were upon the same
instrument.
15. Notices. Any notice or demand or request
hereunder shall be in writing and shall be deemed to have been
received and shall be effective (a) on the day on which delivered
if personally delivered or transmitted by telex, telecopier or
telegram, or (b) three business days after the date on which the
same is mailed if sent by certified or registered mail, and if
mailed shall be addressed to the party to be notified at the
address of such party specified at the commencement of this
Agreement or to such other address as either party may hereafter
designate for itself by written notice to the other party in the
manner herein prescribed.
16. WAIVER OF CONSEQUENTIAL DAMAGES.
-8- <PAGE>
NEITHER PLEDGEE NOR ANY EMPLOYEE, AGENT OR ATTORNEY OF
PLEDGEE SHALL BE LIABLE TO ANY PLEDGOR FOR CONSEQUENTIAL DAMAGES
ARISING FROM ANY BREACH OF CONTRACT, TORT OR OTHER WRONG RELATING
TO THE ESTABLISHMENT, ADMINISTRATION OR COLLECTION OF THE
PLEDGORS' LIABILITIES UNDER THE INDEMNIFICATION PROVISIONS OR
OTHERWISE UNDER THIS AGREEMENT.
IN WITNESS WHEREOF, Pledgors and Pledgee have caused
this Agreement to be duly executed as of the day and year first
above written.
PLEDGORS:
______________________________
MARTIN H. HIRSCH
______________________________
DENIS R. FRIEDMAN
______________________________
RICHARD C. GOULSTON
______________________________
JOHN J. ROZEMBERSKY
PLEDGEE:
PALL CORPORATION
By:___________________________
-9- <PAGE>
Schedule A
Pledged Stock
Name Number of
of Pledgor Shares Pledged
Martin H. Hirsch ______________
Denis R. Friedman ______________
Richard C. Goulston ______________
John J. Rozembersky ______________
-10- <PAGE>
EXHIBIT G
SCHEDULE OF REGISTRATION PROCEDURES AND RELATED MATTERS
Registration Procedures. Upon Pall's preparation and
filing a Form S-3 Registration Statement with the Securities and
Exchange Commission pursuant to Section 5.2(g) of the Merger
Agreement, for a period of two years from the Closing Date of the
Merger (the "Effective Period"), Pall shall use its reasonable
efforts to keep the Registration Statement continuously effective
and exclusively usable as a resale prospectus by any and all
persons who receive Pall Stock in the Merger (collectively, the
"Holders"). In that regard, Pall shall:
(a) prepare and file with the Commission such
amendments, post-effective amendments and supplements to the
Registration Statement and any and all prospectuses used in
connection therewith as may be necessary to keep such
Registration Statement and such prospectuses continuously
effective and exclusively usable under the Securities Act by
all Holders for the entire Effective Period and comply fully
and completely with the provisions of the Securities Act
applicable to Pall with respect to the resale or other dis-
position of any or all of the Pall Stock covered by such
Registration Statement and the prospectuses used in
connection therewith whenever the Holders of such Pall Stock
shall desire to sell or otherwise dispose of the same;
(b) furnish to each Holder, without charge, such
number of copies of the prospectus used in connection with
the Registration Statement and any prospectus supplement
thereto, in full conformity with the requirements of the
Securities Act, and such other documents as such Holder may
reasonably request to facilitate the public sale or other
disposition of the Pall Stock owned thereby, and Pall hereby
consents to the use of such prospectuses and documents by
the Holder in connection with the offering and sale of the
Pall Stock held thereby;
(c) use its reasonable best efforts to register
or qualify the resale by Holders of Pall Stock under the
securities or blue sky laws of such states or other juris-
dictions as each Holder may request, to the extent Pall
shall determine on the advice of its counsel that such
registration or qualification is required, and do any and
all other acts and things that may be necessary or advisable
to enable each such Holder to consummate the public sale or
other disposition of such Pall Stock in such states or
jurisdictions, except that Pall shall not for any such
purpose be required to qualify to do business as a foreign
corporation in any jurisdiction wherein it is not so
<PAGE>
qualified or to file therein any general consent to service
or process or submit to the general taxation of any such
jurisdiction;
(d) use its reasonable efforts to prevent the
issuance of any stop order suspending the effectiveness of
the Registration Statement or of any order suspending or
preventing the use of any prospectus used in connection
therewith or suspending the qualification of any of the Pall
Stock for sale in any jurisdiction, and, if such order is
issued, use its reasonable efforts to obtain the withdrawal
thereof at the earliest possible moment;
(e) immediately notify all Holders if Pall
becomes aware that the Registration Statement or the
prospectus used in connection therewith includes an untrue
statement of material fact or omits to state any material
fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under
which they were made, not misleading, and promptly prepare
and furnish to each Holder a reasonable number of copies of
a supplemented or amended prospectus so that, on delivery to
any purchaser of any shares of Pall Stock, such material
misstatement or omission has been properly and completely
corrected;
(f) use its reasonable efforts to comply with the
Securities Act, the Exchange Act and all applicable rules
and regulations of the Commission, and make generally
available to it security holders, as soon as reasonably
practicable, an earnings statement covering the period of at
least 12 consecutive months, beginning with the first day of
the first fiscal quarter following the effective date of the
Registration Statement, which earnings statement shall
satisfy the provisions of Section 11(a) of the Securities
Act and Rule 158 thereunder; and
(g) bear all fees and expenses relating to any of
the matters set forth above, including reasonable fees and
expenses of Pall's counsel.
Notwithstanding anything contained herein in to the contrary, on
the earlier to occur of (i) the end of the two-year period set
forth above and (ii) the termination of all restrictions on the
resale of Pall Stock held by any Holder, Pall may cease per-
formances of the registration procedures set forth above. It
shall be a condition precedent to the obligation of Pall to take
any action with respect to these registration procedures that
each Holder shall furnish to Pall such information regarding his
or her shares of Pall Stock acquired in the Merger, the intended
method of disposition of such shares and any other information
concerning such Holder required by Form S-3 and Regulation S-K,
as Pall shall reasonably request.
-2- <PAGE>
EXHIBIT H
PALL CORPORATION EMPLOYEE AGREEMENT
I am an employee of Filtron Technology Corporation, a
Massachusetts corporation, or one of its subsidiaries
(collectively "Filtron") and I have been advised that Filtron is
being acquired by Pall Corporation, a New York corporation, with
its headquarters in East Hills, New York, through a merger with
Pall Acquisition Corporation, a Massachusetts corporation which
is a wholly owned subsidiary of Pall Corporation ("Acquisition").
I have been offered employment by the corporation surviving such
merger (which will be named Pall Filtron Corporation) or one of
its subsidiaries on the condition that I execute and deliver this
Agreement. Accordingly, in consideration of my employment by
said Pall Filtron Corporation or one of its subsidiaries as well
as to induce the Company (as hereinafter defined) to afford me
access to Confidential Information (as hereinafter defined), I
agree as follows:
CERTAIN DEFINITIONS
As used in this Agreement:
(a) The "Company" means Pall Corporation, its
subsidiaries (including Acquisition and Pall Filtron Corporation)
and affiliated corporations, and Filtron, collectively. Filtron
is included in the foregoing definition of "Company" for the
purpose of making clear and insuring that the Confidential
Information covered by this Agreement includes Confidential
Information of Filtron prior to its acquisition by Pall
Corporation and that Covered Inventions (as hereinafter defined)
includes Inventions (as hereinafter defined) made or conceived
while I was an employee of Filtron prior to its acquisition by
Pall Corporation.
(b) "Confidential Information" means information,
whether or not in written form, which (i) is not generally made
available by the Company to the public and (ii) relates to the
Company's products, processes or business, including but not
limited to information relating to the Company's research and
development, manufacturing, purchasing, engineering or marketing
or to the Company's suppliers or its distributors or other
customers. Examples of Confidential Information are: business,
manufacturing and research methods and projects, techniques,
apparatus, equipment and systems, materials and products, product
design and specifications, manufacturing procedures and
tolerances, research tools, test procedures, prices and pricing
formulas and cost information, customer's special material and
product specifications and requirements, suppliers, sales
records, sample records, salesmen's reports, customer contact
reports, and customer records, information, know-how, notebooks,
reports, memoranda, data, designs, drawings and blueprints.
<PAGE>
(c) "Competing Product" means any product or process
in existence or under development which is the same as or similar
to or competes with any product or process (i) which the Company
manufactures, sells or licenses, or (ii) to which the Company has
devoted a significant research or development effort and plans to
manufacture, sell or license.
(d) "Competitor" means any organization or person
engaged in or about to or planning to become engaged in research,
development, production, marketing, leasing or selling of a
Competing Product.
PART I: PROTECTION OF CONFIDENTIAL INFORMATION
1. I will not, either during my employment with the
Company or thereafter, except as may be necessary in the course
of my duties as an employee of the Company, use or disclose
Confidential Information without the prior written consent of the
Company.
2. I will not, without the prior written consent of
the Company, except as may be necessary in the course of my
duties as an employee of the Company, remove from the Company's
premises any printed, written, recorded or graphic material, or
any reproduction thereof, constituting, containing or reflecting
Confidential Information, and at the time that I cease to be an
employee of the Company I will turn over to the Company all such
material and reproductions in my possession or under my custody
or control.
PART II: OWNERSHIP OF INVENTIONS
3. (a) As used herein: (i) the term "Invention" means
any invention, discovery, improvement, modification, or
refinement made or conceived by me, alone or jointly with others
(whether made within or outside my usual working hours and
whether made on or off the Company's premises). (ii) The term
"Covered Invention" means any invention made or conceived during
the period of my employment with the Company or within one year
thereafter if either (i) such invention relates in any way to the
products, processes or business of the Company or to any
Competing Product, or (II) in connection with such Invention I
used any equipment, supplies, facilities or Confidential
Information of the Company or I worked on such Invention during
my regular working hours while employed by the Company. (I
understand that if I claim that an Invention is not a Covered
Invention because not falling within clause "(II)" of the
preceding sentence, I will have the burden of proving that I did
not use any equipment, supplies, facilities or Confidential
Information of the Company in connection with such Invention and
that I did not work on such Invention during my regular working
hours while employed by the Company.)
-2- <PAGE>
(b) All Covered Inventions shall be the property of
Pall Corporation. I will promptly, without request, disclose to
the Company all Inventions. If (i) such Invention is not a
Covered Invention or (ii) Pall Corporation in its sole discretion
determines that the Company has no interest in any such Invention
and I am so advised in writing by an officer of Pall Corporation,
then I understand that the rights in and to such Invention shall
belong or revert to me.
(c) For purposes of this Agreement, any Invention
which during my employment with the Company or within one year
thereafter I disclose to anyone or reduce to writing or which is
the subject of a patent application by me or any assignee of mine
shall be conclusively presumed to have been made or conceived by
me during my employment with the Company or within one year
thereafter unless at or before the delivery of this Agreement
such Invention is disclosed and identified in Exhibit A to this
Agreement. (The fact that an Invention does not fall within the
conclusive presumption created by the preceding sentence shall
not be deemed to preclude the Company from establishing by other
evidence that such Invention is a Covered Invention as
hereinabove defined.)
4. Upon request by Pall Corporation, either during or
following my employment by the Company, I or my legal representa-
tives will apply for a patent or patents on all Covered
Inventions in the United States and in foreign countries, and
will execute and deliver all papers necessary to obtain such
patent or patents, together with assignments to Pall Corporation
(or such of its subsidiaries or affiliates as it may designate)
of all my rights, title and interest in and to such Inventions,
patent applications and patents, without further compensation to
me. Such patent applications shall be filed at the expense of
and under the exclusive control of Pall Corporation (or such of
its subsidiaries or affiliates as it may designate). Further, I
will perform all other proper acts, without further compensation
to me but at the expense of the Company, which the Company may
consider necessary or desirable to secure Pall Corporation (or
such of its subsidiaries or affiliates as it may designate) the
fullest rights to such Inventions and to patents covering them.
PART III: COVENANT NOT TO COMPETE
5. Until the end of the Non-Competition Period (as
hereinafter defined), I will not, except with the prior written
consent of an officer of Pall Corporation: (i) work for or render
services to any Competitor (whether as an employee, consultant or
otherwise) in any line of work or activity in which I was engaged
at the Company during any part of the two years immediately
preceding the cessation of my employment with the Company or (ii)
acquire or hold any financial interest (whether as a partner,
stockholder or otherwise) in any Competitor, provided, however,
that nothing in this Agreement shall prohibit my ownership of
-3- <PAGE>
securities of corporations which are listed on a national
securities exchange or traded in the national over-the-counter
market provided that either (a) such securities were acquired by
me more than one year before the date on which I ceased to be an
employee of the Company or (b) if acquired after said date one
year before I ceased to be an employee of the Company, such
securities were acquired by me by purchase in the public market
at the market price at the time of such purchase. The Non-
Competition Period shall run until the date one year after I
cease to be an employee of the Company (i.e., until the first
anniversary of the date on which I cease to be an employee of the
Company). However, if, prior to such first anniversary, I
propose to work for or render services to a Competitor, I shall
give at least ten days advance notice of my intentions to the
Director of Personnel of Pall Corporation. If I fail to give
such notice, the Non-Competition Period shall not end until the
date one year after Pall Corporation learns that I have entered
into an employment or consulting relationship with or acquired a
financial interest in a Competitor.
GENERAL PROVISIONS
6. This Agreement is made for the benefit of Pall
Corporation and each and all of its subsidiaries and affiliated
corporations and may be enforced against me by any of said
corporations, jointly or severally, or by their successors or
assignees. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
7. Part I, Part II and Part III of this Agreement
shall each be deemed separate agreements severally and
independently enforceable regardless of the enforcement of any
other such parts. I understand and acknowledge that in the event
of any breach of this Agreement an action for damages alone may
not be an adequate remedy for the Company and that the Company
will have the right to seek specific enforcement, by injunction
or other appropriate court order, of my obligations under this
Agreement. The rights and remedies granted to the Company under
this Agreement are intended to be in addition to and not in
derogation of any rights and remedies which the Company would
have by law (whether statutory or
-4- <PAGE>
case law) in the absence of this Agreement, and this Agreement
shall not be construed as a waiver by the Company of any such
statutory or common law rights or remedies.
Date:_____________, 19__
___________________________________
Name of Employee (type or print)
___________________________________
Signature of Employee
Witness:
_______________________
-5- <PAGE>
Exhibit A
List of Employee's preexisting Inventions pursuant
to Section 3(c) of the foregoing Agreement:
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
-6- <PAGE>
EXHIBIT 5
<PAGE>
CARTER, LEDYARD & MILBURN
Counsellors at Law
2 Wall Street
New York, New York 10005
(212) 238-8720
January 30, 1995
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Pall Corporation
Ladies and Gentlemen:
We have acted as counsel for Pall Corporation, a New
York corporation (the "Corporation"), in connection with the
transfer of 1,280,325 treasury shares (the "Shares") of the
Common Stock, par value $.10 per share, of the Corporation
(the "Common Stock") and 1,280,325 Common Share Purchase
Rights (the "Rights") to the shareholders of Filtron
Technology Corporation ("Filtron") pursuant to the Agreement
and Plan of Merger dated as of December 22, 1994, among the
Corporation, Pall Acquisition Corporation, Filtron and certain
stockholders and employees of Filtron (the "Merger
Agreement"). Each Right is attached to one of the Shares and,
prior to the Distribution Date (as defined in the Rights
Agreement providing for the Rights), will be transferable with
and only with, and will be evidenced by the certificate evi-
dencing, such Share.
We have examined the Merger Agreement as well as
originals, or copies certified or otherwise identified to our
satisfaction, of such corporate records and such other
documents as we have deemed relevant as a basis for our
opinion hereinafter expressed.
Based on the foregoing, we are of the opinion that
the Shares and Rights are legally issued and the Shares are
fully paid and non-assessable.
We hereby consent to the filing of this opinion as
an exhibit to the Corporation's Registration Statement on Form
S-3 being filed in connection with the resale of the Shares
and Rights, and to the reference to us appearing under the
caption "Legal Matters" in the prospectus constituting Part I
of the said Registration Statement.
Heywood Shelley, a member of this firm, is a
director of the Corporation.
Very truly yours,
/s/Carter, Ledyard & Milburn
JEA:lrh <PAGE>
EXHIBIT (23)(b)
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
Board of Directors
Pall Corporation:
We consent to the incorporation by reference, in the
Registration Statement on Form S-3 of Pall Corporation, of our
reports dated September 7, 1994, relating to the consolidated
balance sheets of Pall Corporation and its subsidiaries as of
July 30, 1994, and July 31, 1993, and the related consolidated
statements of earnings, stockholders' equity and cash flows
and related schedules for each of the years in the three-year
period ended July 30, 1994, which reports are incorporated by
reference or appear in the annual report on Form 10-K of Pall
Corporation for the fiscal year ended July 30, 1994, and the
reference to our firm under the heading "Experts." Such
reports refer to a change, in 1992, in the Company's method of
accounting for income taxes to adopt the provisions of the
Financial Accounting Standards Board Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes."
KPMG PEAT MARWICK LLP
Jericho, New York
January 27, 1995
