8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): December 7, 2007

PALL CORPORATION

(Exact name of registrant as specified in its charter)

New York	001- 04311	11-1541330
(State or other jurisdiction	(Commission file number)	(I.R.S. Employer
of incorporation)		Identification No.)

2200 Northern Boulevard, East Hills, NY	11548
(Address of principal executive offices)	(Zip Code)

(516) 484-5400
(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 1.01 Entry into a Material Definitive Agreement.

On December 7, 2007, Pall Corporation (the “Company”) and the lenders under its $500 million five-year revolving credit facility entered into a second amendment and waiver of the aforementioned credit facility relating to the material understatement of the Company’s U.S. income tax payments and of its provision for income taxes in certain prior periods and its need to restate some or all of its financial statements for the affected periods, as described in the Company’s press releases and related reports on Form 8-K dated July 19, August 2, and September 25, 2007. The second amendment and waiver extends the period during which the Company must return to compliance with its financial reporting obligations until March 31, 2008 and replaces the first amendment and waiver which would have expired on December 31, 2007. The first amendment and waiver was described in the Company’s press release and related report on Form 8-K dated August 20, 2007. This Item 1.01 is qualified in its entirety by reference to the second amendment and waiver, which is attached hereto and incorporated by reference herein as Exhibit 10.

ITEM 2.02 Results of Operations and Financial Condition.

On December 10, 2007, Pall Corporation issued a press release announcing its preliminary unaudited condensed consolidated financial highlights for the first quarter ended October 31, 2007. A copy of the press release is furnished as Exhibit 99 to this report.

ITEM 9.01 Financial Statements and Exhibits.

     (d) Exhibits.

10

Second Amendment and Waiver, dated as of December 7, 2007 to the Five-Year Credit Agreement, dated as of June 21, 2006, among Pall Corporation (the “Company”), the subsidiaries of the Company named on the signature pages thereto, the lenders from time to time party thereto, JPMorgan Chase Bank, N.A., as facility agent for the Lenders, and J.P. Morgan Europe Limited, as London agent for the Lenders (filed pursuant to Item 1.01).

99

Press Release, dated December 10, 2007 (furnished pursuant to Item 2.02).

2

SIGNATURES

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

		Pall Corporation
	/s/	FRANCIS MOSCHELLA
December 11, 2007		Francis Moschella
		Vice President – Corporate Controller
		Chief Accounting Officer

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INDEX TO EXHIBITS

Exhibit
Number	Description
10	Second Amendment and Waiver, dated as of December 7, 2007 to the Five-Year Credit Agreement, dated as of June 21, 2006, among Pall Corporation (the “Company”), the subsidiaries of the Company named on the signature pages thereto, the lenders from time to time party thereto, JPMorgan Chase Bank, N.A., as facility agent for the Lenders, and J.P. Morgan Europe Limited, as London agent for the Lenders (filed pursuant to Item 1.01).
99	Press Release, dated December 10, 2007 (furnished pursuant to Item 2.02).

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EX-10

EXHIBIT 10

EXECUTION COPY

     SECOND AMENDMENT AND WAIVER dated as of December 7, 2007 (this “Amendment”), to the FIVE-YEAR CREDIT AGREEMENT dated as of June 21, 2006 (as amended, supplemented or otherwise modified from time to time the “Credit Agreement”), among PALL CORPORATION (the “Company”), the Subsidiaries of the Company named on the signature pages thereto, the LENDERS from time to time party thereto, JPMORGAN CHASE BANK, N.A., as facility agent for the Lenders (the “Facility Agent”) and J.P. MORGAN EUROPE LIMITED, as London agent for the Lenders (the “London Agent” and, together with the Facility Agent, the “Agents”).

          WHEREAS the Company has informed the Agents and the Lenders that (a) it has understated its U.S. income tax payments and its provision for income taxes, (b) the understatement relates to the taxation of certain intercompany payable balances that mainly resulted from sales of products by a foreign subsidiary of the Company to a U.S. subsidiary of the Company, (c) as of the date of this Amendment, the Company has paid $135,000,000 principally in respect of the foregoing, (d) the amount of additional tax provisions required to be recorded by the Company has not been determined as of the date of this Amendment and (e) the Company expects that it will be required to restate some or all of its financial statements for the fiscal years 1999 through 2006 and each of the fiscal quarters ended October 31, 2006, January 31, 2007 and April 30, 2007 and that, for its fiscal year ended July 31, 2007, it may be required to report one or more material weaknesses in its internal control over financial reporting (the matters referred to in this paragraph being called the “Specified Matters”).

          WHEREAS the Company has further informed the Agents and the Lenders that, as a result of the Specified Matters, (a) certain certifications, representations and warranties of the Company contained in or made pursuant to the Credit Agreement or other Loan Documents (or any document delivered in connection therewith) may have been inaccurate when made or may not be accurate if required to be made in the event of additional borrowings under the Credit Agreement, (b) the covenants set forth in Sections 5.01, 5.02, 5.03, 5.04, 5.08 or 5.09 of the Credit Agreement may have been violated, (c) certain defaults may have occurred under other credit agreements, debt indentures or ISDA agreements of the Company, (d) the Company expects that it may not be able to deliver its Annual Report on Form 10-K for the fiscal year ended July 31, 2007 (the “Affected Annual Report”) or its Quarterly Reports on Form 10-Q for its fiscal quarters ending October 31, 2007 and January 31, 2008 (the “Affected Quarterly Reports”), to the Facility Agent as and when it is required to do so by Section 5.01 of the Credit Agreement and (e) the foregoing inaccuracies, violations and other matters may, if not waived by the Lenders, have resulted in or will result in Events of Default pursuant to Section 7.01 of the Credit Agreement.

          WHEREAS the Company has requested that the Lenders waive, and the Lenders have agreed to waive, certain Defaults and failures of conditions precedent arising from the Specified Matters and the Company has requested that the Lenders amend, and the Lenders have agreed to amend, Section 5.01 to extend the period of time

during which the Company must deliver the Affected Annual Report and Affected Quarterly Reports on the terms and subject to the conditions set forth herein.

          NOW, THEREFORE, in consideration of the above premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

          SECTION 1. Defined Terms. Each capitalized term used and not defined herein shall have the meaning assigned to it in the Credit Agreement (as modified hereby).

          SECTION 2. Waiver. Effective as of the Second Amendment and Waiver Effective Date (as defined below), the Lenders hereby waive (a) all breaches of representations and warranties under the Credit Agreement, Defaults caused by violations of Sections 5.01, 5.02, 5.03, 5.04, 5.08 and 5.09 of the Credit Agreement and failures to satisfy conditions precedent set forth in Section 4.02 of the Credit Agreement (including conditions precedent to any further borrowing under the Credit Agreement) resulting from the Specified Matters and (b) any Default that may occur pursuant to Section 7.01(e)(i)(B) or 7.01(e)(ii)(A) of the Credit Agreement as a result of violations of the Other Debt Agreements (as defined below) due to (i) the Specified Matters or (ii) the failure to file with the Securities and Exchange Commission or to transmit to holders thereunder the Affected Annual Report or the Affected Quarterly Reports as and when required by the terms thereof (A) in the case of the Other Debt Agreements (other than the Material Debt Agreements (as defined below)) until March 31, 2008 and (B) in the case of the Material Debt Agreements, until December 31, 2007.

          SECTION 3. Amendment to Section 5.01. Effective as of the Second Amendment and Waiver Effective Date, Section 5.01 of the Credit Agreement is hereby amended by:

          (a) replacing paragraph (a) of such Section with the following paragraph:

          (a) (i) with respect to each Fiscal Year of the Company (other than the Fiscal Year ended July 31, 2007), as soon as available, but in any event within 90 days after the end of each such Fiscal Year or at such earlier time as the SEC may require the Company to deliver its Form 10-K (commencing with the Fiscal Year ended July 31, 2006) and (ii) with respect to the Fiscal Year of the Company ended July 31, 2007, as soon as available, but in any event by March 31, 2008, a consolidated balance sheet of the Company and the Subsidiaries as at the end of such Fiscal Year, and the related consolidated statements of earnings, shareholders’ equity and cash flows for such Fiscal Year, setting forth in each case in comparative form the figures for the previous Fiscal Year, all in reasonable detail and prepared in accordance with GAAP consistently applied throughout the periods covered thereby, except as otherwise expressly noted therein, audited and accompanied by a report and opinion of an independent certified public accountant of nationally recognized standing reasonably acceptable to the Required Lenders, which report and opinion shall be prepared in accordance with generally

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accepted auditing standards and shall not be subject to any “going concern” or like qualification or exception or any qualification or exception as to the scope of such financial statement audit; provided that (i) the requirements of this paragraph shall be deemed satisfied by delivery within the time period specified above of (A) a copy of the Company’s Annual Report on Form 10-K for such Fiscal Year (together with the Company’s annual report to shareholders, if any, prepared pursuant to Rule 14a-3 under the Exchange Act) (“Form 10-K”) prepared in accordance with the requirements therefor and filed with the SEC or (B) a notice setting forth a written reference to a website that contains such Form 10-K (together with the Company’s annual report to shareholders, if any, prepared pursuant to Rule 14a-3 under the Exchange Act); and

          (b) replacing paragraph (b) of such Section with the following paragraph:

          (b) (i) with respect to each of the first three fiscal quarters of the Company in any Fiscal Year (other than the fiscal quarters ending October 31, 2007 and January 31, 2008), as soon as available, but in any event within 45 days after the end of each such fiscal quarter or at such earlier time as the SEC may require the Company to deliver its Form 10-Q (commencing with the fiscal quarter ended October 31, 2006) and (ii) with respect to the fiscal quarters of the Company ending October 31, 2007 and January 31, 2008, as soon as available, but in any event by March 31, 2008, (A) a consolidated balance sheet of the Company and the Subsidiaries as at the end of such quarter and (B) consolidated statements of earnings of the Company and its Subsidiaries for such quarter and (in the case of the second and third quarters) for the portion of the Fiscal Year ending with such quarter, and a statement of cash flows for the portion of the Fiscal Year ending with such quarter, setting forth in each case in comparative form the figures for the corresponding periods in the previous Fiscal Year, all in reasonable detail, prepared in accordance with GAAP applicable to quarterly financial statements generally consistently applied throughout the periods covered thereby, except as otherwise expressly noted therein, and certified by a Responsible Officer of the Company as fairly presenting, in all material respects, the financial position of the Company and its Subsidiaries being reported on and their results of operations and cash flows, subject to the changes resulting from year-end adjustments; provided that (i) the requirements of this paragraph shall be deemed satisfied by delivery within the time period specified above of (A) a copy of the Company’s Quarterly Report on Form 10-Q (“Form 10-Q”) prepared in compliance with the requirements therefor and filed with the SEC or (B) a notice setting forth a written reference to a website that contains such Form 10-Q, (ii) on or prior to December 10, 2007, the Company shall deliver to the Facility Agent, in form and detail reasonably satisfactory to the Facility Agent and the Lenders, an unaudited condensed consolidated statement of earnings before interest and taxes, setting forth in comparative form the figures for the corresponding period in the previous Fiscal Year, and balance sheet highlights comprised of accounts receivable, inventory and indebtedness, in each case with respect to the Company and its Subsidiaries as of and for the fiscal quarter ending October 31, 2007 and (iii) on or prior to March 11, 2008, the Company shall deliver to the Facility Agent, in form and detail reasonably satisfactory to the Facility Agent and the Lenders, an unaudited condensed consolidated statement of earnings before interest and taxes, setting forth in comparative form the figures for the corresponding period in the

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previous Fiscal Year, and balance sheet highlights comprised of accounts receivable, inventory and indebtedness, in each case with respect to the Company and its Subsidiaries as of and for the fiscal quarter ending January 31, 2008.

          SECTION 4. Limitation on Waiver and Amendment. The waivers set forth in Section 2 extend only to the provisions referred to therein and shall not, directly or by implication, constitute a waiver of any other provision of the Credit Agreement. Such waivers and the amendments set forth in Section 3 shall automatically expire and be of no further force or effect, with the same effect as if they had not been granted, without the necessity of any action by the Agents or any Lender, if:

          (a) at any time (i) any Default or Event of Default (other than those waived pursuant to Section 2) occurs under the Credit Agreement, (ii) the Facility Agent, acting at the direction of the Required Lenders, provides written notice to the Company that the Required Lenders have become aware, after the date of this Amendment, of information that, in the Required Lenders’ reasonable judgment, renders assertions made by the Company as of the date of this Amendment with respect to the Specified Matters incorrect or misleading in any material respect or indicates that the liabilities expected to be incurred by the Company and its Subsidiaries in connection with the Specified Matters will exceed $225,000,000, (iii) the Company shall have become aware that the Company’s counterparties under the Material Debt Agreements or any other agreement governing Indebtedness of the Company or its Subsidiaries (and together with the Material Debt Agreements, the “Other Debt Agreements”) (A) shall have declared the unpaid principal amount of the notes or the loans or the other obligations thereunder, as the case may be, immediately due and payable or (B) are unwilling to grant a waiver of any violation or default existing under the Other Debt Agreements, as the case may be;

          (b) on or prior to December 31, 2007, the Company shall have failed to deliver to the Facility Agent, counterparts of waivers of any violations or defaults under the Material Debt Agreements duly executed and delivered by each of the parties thereto; or

          (c) on or prior to March 31, 2008, the Company shall have failed to deliver to the Facility Agent, counterparts of waivers of any violations or defaults under the Other Debt Agreements, other than the Material Debt Agreements, duly executed and delivered by each of the parties thereto.

The following agreements constitute the “Material Debt Agreements”: (i) the Second Amended and Restated Term Note, dated as of June 20, 2007 (the “Yen Term Note”), among the Company and Bank of America, N.A., (ii) the ISDA Master Agreement and the related Schedule thereto, each dated as of October 15, 1997 (the “Bank of America ISDA”), between Fleet National Bank and Pall Corporation; and (iii) the ISDA Master Agreement and the related Schedule thereto, each dated as of September 13, 2005 (the “Wachovia ISDA”), between Wachovia Bank, National Association and Pall Netherlands B.V., as supplemented by the Amended and Restated Cross Currency Rate Swap

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Transaction Confirmation, dated August 25, 2005, between Wachovia Bank, National Association and Pall Netherlands B.V., and the Credit Support Document dated as of September 13, 2005, between Wachovia Bank, National Association and the Company.

          SECTION 5. Fees. The Company agrees to pay on the Second Amendment and Waiver Effective Date to the Facility Agent, for the account of each Lender that executes and delivers a copy of this Amendment to the Administrative Agent (or its counsel) at or prior to 2:00 p.m., New York City time, on December 7, 2007, an amendment fee (the “Amendment Fee”) in the amount of 0.025% on the amount of such Lender’s Commitment. All such fees shall be payable in immediately available funds and shall not be refundable.

          SECTION 6. Representations and Warranties. The Company hereby represents and warrants to the Agents and the Lenders that, as of the Second Amendment and Waiver Effective Date and after giving effect hereto:

          (a) This Amendment has been duly authorized, executed and delivered by the Company, and each of this Amendment and the Credit Agreement (as modified hereby) constitutes the Company’s legal, valid and binding obligation, enforceable against it in accordance with its terms, except to the extent enforcement may be limited by applicable bankruptcy, reorganization, moratorium, insolvency and similar laws affecting creditors’ rights generally or by equitable principles of general application, regardless of whether considered in a proceeding in equity or at law.

          (b) Except for the Specified Matters, all representations and warranties of each Loan Party contained in the Loan Documents (as modified hereby) are true and correct in all material respects on and as of the Second Amendment and Waiver Effective Date (except with respect to representations and warranties expressly made only as of an earlier date, in which case such representations and warranties were true and correct in all material respects as of such earlier date).

          (c) Except for the Specified Matters, no Default or Event of Default has occurred and is continuing.

          SECTION 7. Effectiveness. This Amendment shall become effective on the first date (the “Second Amendment and Waiver Effective Date”) on which the Facility Agent shall have received (i) counterparts hereof duly executed and delivered by the Company and the Required Lenders and (ii) the Amendment Fees.

          SECTION 8. No Amendments or Other Waivers; Confirmation. (a) Except as expressly set forth herein, this Amendment shall not by implication or otherwise limit, impair, constitute a waiver of, or otherwise affect the rights and remedies of the Agents or the Lenders under the Credit Agreement or any other Loan Document, and shall not alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement or any other

6

Loan Document, all of which are ratified and affirmed in all respects and shall continue in full force and effect. Nothing herein shall be deemed to entitle any Loan Party to a consent to, or a waiver, amendment, modification or other change of, any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement or any other Loan Document in similar or different circumstances. This Amendment shall apply and be effective only with respect to the provisions of the Credit Agreement specifically referred to herein. This Amendment shall constitute a Loan Document.

          (b) On and after the Second Amendment and Waiver Effective Date, each reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof”, “herein” or words of like import, and each reference to the Credit Agreement in any other Loan Document, shall be deemed a reference to the Credit Agreement as modified hereby.

          SECTION 9. Expenses. The Company agrees to reimburse the Agents for their out-of-pocket expenses in connection with this Amendment, including the reasonable and documented fees, charges and disbursements of counsel for the Agents.

          SECTION 10. Governing Law; Counterparts. (a) This Amendment shall be governed by, and construed in accordance with, the laws of the State of New York.

          (b) This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, an all such counterparts together shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page of this Amendment by facsimile transmission or other electronic imaging means shall be as effective as delivery of a manually executed counterpart hereof.

          SECTION 11. Headings. The headings of this Amendment are for purposes of reference only and shall not limit or otherwise affect the meaning hereof.

[Signature pages to follow]

          IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment and Waiver to be duly executed by their duly authorized officers, all as of the date and year first above written.

PALL CORPORATION,
	by
		/s/ LISA MCDERMOTT
		Name: Lisa McDermott
		Title: Chief Financial Officer
JPMORGAN CHASE BANK, N.A.,
as Facility Agent and as a Lender,
	by
		/s/ TARA LYNNE MOORE
		Name: Tara Lynne Moore
		Title: Vice President
J.P. MORGAN EUROPE LIMITED,
as London Agent,
	by
		/s/ CHING LOH
		Name: Ching Loh
		Title: Associate

Lender signature page to the
Second Amendment and Waiver to the
Pall Corporation Credit Agreement

To approve the Second Amendment and Waiver:

Name of Lender,
Comerica Bank
	by
		/s/ SARAH R. WEST Name: Sarah R. West
		Title: Assistant Vice President

For any Lender requiring a second signature line:

by
	Name:
	Title:

Lender signature page to the
Second Amendment and Waiver to the
Pall Corporation Credit Agreement

To approve the Second Amendment and Waiver:

Name of Lender,
	The Royal Bank of Scotland plc
	by
		/s/ L. PETER YETMAN Name: L. Peter Yetman
		Title: Senior Vice President

Lender signature page to the
Second Amendment and Waiver to the
Pall Corporation Credit Agreement

To approve the Second Amendment and Waiver:

Name of Lender,
Bank of America, N.A.
	by
		/s/ MARTHA NOVAK Name: Martha Novak
		Title: Senior Vice President

For any Lender requiring a second signature line:

by
	Name:
	Title:

Lender signature page to the
Second Amendment and Waiver to the
Pall Corporation Credit Agreement

To approve the Second Amendment and Waiver:

Name of Lender,
	Wachovia Bank, N.A.
	by
		/s/ EDWARD NALLAN Name: Edward Nallan
		Title: Senior Vice President

For any Lender requiring a second signature line:

by
	Name:
	Title:

Lender signature page to the
Second Amendment and Waiver to the
Pall Corporation Credit Agreement

To approve the Second Amendment and Waiver:

Name of Lender,
	BNP Paribas
	by
		/s/ SHAYN MARCH Name: Shayn March
		Title: Director

For any Lender requiring a second signature line:

by
	/s/ BERANGERE ALLEN Name: Berangere Allen
	Title: Vice President

Lender signature page to the
Second Amendment and Waiver to the
Pall Corporation Credit Agreement

To approve the Second Amendment and Waiver:

Name of Lender,
	Commerzbank AG, London Branch
	by
		/s/ J. WEBER Name: J. Weber
		Title: Director

For any Lender requiring a second signature line:

by
	/s/ M. LOHMANN Name: M. Lohmann
	Title: Associate Director

Lender signature page to the
Second Amendment and Waiver to the
Pall Corporation Credit Agreement

To approve the Second Amendment and Waiver:

Name of Lender,
Sumitomo Mitsui Banking Corporation
	by
		/s/ LEO E. PAGARIGAN Name: Leo E. Pagarigan
		Title: General Manager

For any Lender requiring a second signature line:

by
	Name:
	Title:

Lender signature page to the
Second Amendment and Waiver to the
Pall Corporation Credit Agreement

To approve the Second Amendment and Waiver:

Name of Lender,
	HSBC Bank USA, NA
	by
		/s/ CHRISTOPHER MENDELSOHN Name: Christopher Mendelsohn
		Title: First Vice President

For any Lender requiring a second signature line:

by
	Name:
	Title:

Lender signature page to the
Second Amendment and Waiver to the
Pall Corporation Credit Agreement

To approve the Second Amendment and Waiver:

Name of Lender,
	Bank of Tokyo-Mitsubishi UFJ Trust Company
	by
		/s/ SPENCER HUGHES Name: Spencer Hughes
		Title: Vice President

For any Lender requiring a second signature line:

by
	Name:
	Title:

Lender signature page to the
Second Amendment and Waiver to the
Pall Corporation Credit Agreement

To approve the Second Amendment and Waiver:

Name of Lender,
	The Bank of New York
	by
		/s/ KENNETH P. SNEIDER, JR. Name: Kenneth P. Sneider, Jr.
		Title: Vice President

For any Lender requiring a second signature line:

by
	Name:
	Title:

Lender signature page to the
Second Amendment and Waiver to the
Pall Corporation Credit Agreement

To approve the Second Amendment and Waiver:

Name of Lender,
	UBS Loan Finance LLC
	by
		/s/ DAVID B. JULIE
		Name:	David B. Julie
		Title:	Associate Director Banking Products Services, US

For any Lender requiring a second signature line:

by
	/s/ RICHARD L. TAVROW
	Name:	Richard L. Tavrow
	Title:	Director Banking Products Services, US

Lender signature page to the
Second Amendment and Waiver to the
Pall Corporation Credit Agreement

To approve the Second Amendment and Waiver:

Name of Lender,
	INTESA SANPAOLO New York Branch
	by
		/s/ JOHN J. MICHALISIN Name: John J. Michalisin
		Title: First Vice President

For any Lender requiring a second signature line:

by
	/s/ FRANCESCO DI MARIO Name: Francesco Di Mario
	Title: FVP, Credit Manager

EX-99

EXHIBIT 99

Pall Corporation Reports Preliminary First Quarter Financial Highlights

First Quarter Earnings Before Interest and Income Taxes Up Sharply on Sales Increase of 12%

     EAST HILLS, N.Y.—(BUSINESS WIRE)—Pall Corporation (NYSE: PLL) today reported preliminary unaudited financial highlights for the first quarter ended October 31, 2007. This information is subject to review by the Company’s external auditors and the other limitations discussed below.

     The Company previously announced that it missed the filing deadline for its audited financial results for the fiscal year ended July 31, 2007 and will miss the filing deadline for its unaudited financial results for the first quarter of fiscal 2008 pending completion of an independent inquiry by its Audit Committee. The Company also continues to work on the restatement of certain prior period financial statements, including the prior period reflected in this release. The restatement is expected to relate principally to the Company’s understatement of its U.S. income taxes and provision for income taxes in the affected periods and, accordingly, will affect the Company’s net earnings, as well as amounts reportable on its consolidated balance sheets and statements of cash flows for those periods.

     Separately, the Company announced that it has entered into a second amendment and waiver with its lenders under its $500 million revolving credit facility. The second amendment and waiver relates to the tax compliance matter referred to above and extends the period during which the Company must return to compliance with its financial reporting obligations until March 31, 2008 and replaces the first amendment and waiver which would have expired on December 31, 2007.

     Preliminary Unaudited Sales and Earnings Before Interest and Income Taxes

     Sales for the quarter were $561 million, up 12.4% compared with the first quarter last year. In local currency, sales increased $33.9 million, or 6.8%.

     Earnings before interest and income taxes (“EBIT”) in the quarter were $64.7 million compared to $35 million in the first quarter last year. Excluding items reflected as restructuring and other charges, EBIT in the quarter were $73.4 million compared to $52.5 million for the same period a year ago, an increase of 40%.

     Eric Krasnoff, Chairman and CEO, stated, “We maintained sales momentum with broad-based growth across both our Life Sciences and Industrial segments. Strong systems sales were led by the Municipal Water market and also reflect continued customer demand for our Total Fluid Management(sm) capabilities. Pall Corporation’s well-established productivity improvement initiatives continue to drive efficiencies with both cost of sales and selling, general & administrative expenses reducing as a percentage of sales. Gross margin improved 180 basis points compared to last year’s first quarter alongside the strong growth in systems sales”.

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Life Sciences — First Quarter Preliminary Unaudited Highlights

(Dollar Amounts in Thousands)						% CHANGE
						IN LOCAL
Sales:	OCT. 31, 2007		% CHANGE			CURRENCY
Medical	$	110,172		6.4			2.6
BioPharmaceuticals		104,442		16.7			9.8
Total Life Sciences segment	$	214,614		11.2			6.0
			% OF SALES
Gross profit	$	111,148		51.8	%
Operating profit	$	39,783		18.5	%

     Results in BioPharmaceuticals were driven by strong systems sales in the Western Hemisphere and a double-digit increase in consumables
sales in Europe.

     Life Sciences gross margin improved 250 basis points to 51.8% from 49.3% last year. The increase in gross margin reflects improved pricing and savings generated from ongoing continuous improvement efforts and the facilities rationalization program.

     Operating profit increased 36% to $39.8 million. Operating profit margin improved 340 basis points to 18.5% from 15.1% last year.

Industrial — First Quarter Preliminary Unaudited Highlights

(Dollar Amounts in Thousands)						% CHANGE
						IN LOCAL
Sales:	OCT. 31, 2007		% CHANGE			CURRENCY
General Industrial	$	208,689		19.2			12.0
Aerospace and Transportation		66,259		9.8			4.8
Microelectronics		71,445		0.8			(2.1	)
Total Industrial segment	$	346,393		13.1			7.3
			% OF SALES
Gross profit	$	150,168		43.4	%
Operating profit	$	45,077		13.0	%

     Within General Industrial, consumables sales increased in all markets. Sales in the Municipal Water market almost doubled led by
over 200% growth in systems in the Western Hemisphere.

     In Aerospace and Transportation, double-digit growth in Commercial Aerospace and Transportation sales was partly offset by a reduction in Military business.

     Microelectronics sales decreased as expected. Modest growth in Asia and Europe was offset by overall weakness in OEM sales in the Western Hemisphere.

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     Pall Industrial’s gross margin increased 130 basis points to 43.4% from 42.1% driven by ongoing cost reduction initiatives.

     Operating profit increased about 35% to $45.1 million and operating margin improved 210 basis points to 13.0% from 10.9% last year.

     Conclusion

     Mr. Krasnoff concluded, “Continued execution on our broad strategic initiatives is reflected in sales and operating profit improvement. We look forward to completing our restatement as soon as practicable following the Audit Committee’s inquiry into the tax matter”.

     Conference Call

     Tomorrow, December 11, 2007, at 8:30 am ET, Pall Corporation will host a conference call to review these results. The call will be webcast and individuals can access it at www.pall.com/investor. Listening to the webcast requires audio speakers and Microsoft Windows Media Player software. The webcast will be archived for 30 days.

     About Pall Corporation

     Pall Corporation is the global leader in the rapidly growing field of filtration, separation and purification. Pall is organized into two businesses: Life Sciences and Industrial. These businesses provide leading-edge products to meet the demanding needs of customers in biotechnology, pharmaceutical, transfusion medicine, energy, electronics, water purification, aerospace, transportation and broad industrial markets. Total revenues for fiscal year 2007 were $2.2 billion. The East Hills, New York based Company has extensive operations throughout the world. For more information visit Pall at http://www.pall.com.

     Cautionary Statement and Forward Looking Statements

     On August 2, 2007, the Company disclosed in a Current Report on Form 8-K that its previously issued financial statements for each of the eight fiscal years in the period ended July 31, 2006 and for the each of the fiscal quarters ended October 31, 2006, January 31, 2007 and April 30, 2007 should no longer be relied upon and that a restatement of some or all of those financial statements will be required. This conclusion results from the Company’s previously announced understatement of U.S. income tax payments and of its provision for income taxes as disclosed in a Current Report on Form 8-K on July 19, 2007. The Company cannot predict the impact of the restatement on its financial statements. Such restatement may affect other disclosures in the Company’s SEC filings, including information appearing under the headings “Management’s Discussion and Analysis of Results of Operations and Financial Condition” and “Risk Factors” in such filings and disclosures with respect to the effectiveness of the Company’s disclosure controls and procedures and internal control over financial reporting and disclosures about other factors that may affect its results of operations, financial condition and prospects. The Company also believes that, as a result of these circumstances, it may have one or more material weaknesses in its internal control over financial reporting.

     The Audit Committee of the Company’s Board of Directors is conducting an independent inquiry into the circumstances that gave rise to the need to restate its financial statements. That inquiry is ongoing, and the Company cannot predict when it will be completed. As the Audit Committee pursues its inquiry and as the Company completes the restatement, the Company may learn of other matters that may affect the scope of the restatement or remedial actions and their impact on the Company’s consolidated financial statements, prospects and outlook, including its cash

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management plans and effective tax rate in future periods. There can be no assurance that the information contained herein will not be subject to adjustment upon completion of such inquiry and restatement and the audit of the Company’s financial statements for the fiscal year ended July 31, 2007 by its independent registered public accounting firm.

     Forward-looking statements contained in this and other written and oral reports are based on current Company expectations and are subject to risks and uncertainties, which could cause actual results to differ materially. All statements regarding future performance, earnings projections, earnings guidance, events or developments are forward-looking statements. Such risks and uncertainties include, but are not limited to: changes in product mix and product pricing particularly as we expand our systems business in which we experience significantly longer sales cycles and less predictable revenue with no certainty of future revenue streams from related consumable product offerings and services; increases in costs of manufacturing and operating costs including energy and raw materials; the Company’s ability to achieve the savings anticipated from cost reduction and margin improvement initiatives including the timing of completion of the facilities rationalization initiative; fluctuations in foreign currency exchange rates and interest rates; regulatory approval and market acceptance of new technologies; changes in business relationships with key customers and suppliers including delays or cancellations in shipments; success in enforcing patents and protecting proprietary products and manufacturing techniques; successful completion or integration of acquisitions; domestic and international competition in the Company’s global markets; risks arising from potential material weaknesses in our control environment; potential adverse effects to our financial condition, results of operations or prospects as a result of any restatement of prior period financial statements; risks associated with our inability to satisfy covenants under our syndicated credit facility or to obtain waivers of compliance with those covenants or waivers of defaults under our debt and other agreements; potential adverse effects if we are required to recognize adverse tax- or accounting-related developments other than those previously disclosed; risks relating to litigation or regulatory inquiries associated with the restatement of prior period financial statements or other related matters; and global and regional economic conditions and legislative, regulatory and political developments. The Company makes these statements as of the date of this disclosure and undertakes no obligation to update them.

     Management uses certain non-GAAP measurements to assess the Company’s current and future financial performance. The non-GAAP measurements do not replace the presentation of Pall’s GAAP financial results. These measurements provide supplemental information to assist management in analyzing the Company’s financial position and results of operations. The Company has chosen to provide this information to facilitate meaningful comparisons of past, present and future operating results and as a means to emphasize the results of ongoing operations.

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PALL CORPORATION
PRELIMINARY CONDENSED CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)
(Dollar Amounts in Thousands)

Preliminary Condensed Consolidated Earnings Before Interest and Income Taxes

	FIRST QUARTER ENDED
	OCT. 31, 2007			OCT. 31, 2006
Net sales	$	561,007		$	499,288
Cost of sales		299,691			275,616	(b)
Gross profit		261,316			223,672
% of sales		46.6	%		44.8	%
Selling, general and administrative expenses		170,987			157,375
Research and development		16,895			14,234
Earnings before restructuring and other charges/(gains), net (“ROTC”), interest and income taxes		73,434			52,063
ROTC		8,769	(a)		17,088	(b)
Earnings before interest and income taxes	$	64,665		$	34,975

(a)

ROTC in the quarter includes charges of $5,003 primarily comprised of severance and other costs related to the Company’s cost reduction programs, including its facilities rationalization initiative. ROTC also includes $3,766 primarily comprised of legal and other professional fees related to the independent inquiry conducted by the Audit Committee of the Company’s Board of Directors. The inquiry principally relates to the circumstances that led to the Company’s understatement of its U.S. income taxes.

(b)

Cost of sales includes $427 comprised of incremental depreciation recorded in conjunction with the Company’s facilities rationalization initiative.

ROTC includes $13,581 primarily comprised of severance costs and an impairment charge for the planned disposal and early retirement of a building and certain other long-lived assets related to the Company’s cost reduction programs, including its facilities rationalization initiative. In addition, the quarter includes other charges of $3,507 primarily related to an increase in environmental reserves.

Preliminary Condensed Consolidated Balance Sheet Highlights

	OCT. 31, 2007		JUL. 31, 2007
Cash and cash equivalents (“C&CE”)	$	407,777	$	443,036
Accounts Receivable, net	$	538,058	$	551,393
Inventories, net	$	522,494	$	471,467
Total indebtedness (including current portion of $45,147 and $41,720, respectively) (1)	$	756,553	$	633,311
Total indebtedness, net of C&CE	$	348,776	$	190,275

(1) As previously announced, the Company deposited $135,000 with the Internal Revenue Service in September 2007, virtually all of which relates to the Company’s aforementioned tax matter, that was partially financed with approximately $90,000 of additional indebtedness.

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PALL CORPORATION
PRELIMINARY SUMMARY OPERATING PROFIT BY SEGMENT
(Unaudited)
(Dollar Amounts in Thousands)

	FIRST QUARTER ENDED
	OCT. 31, 2007			OCT. 31, 2006
Life Sciences
Sales	$	214,614		$	193,002
Cost of sales (a)		103,466			97,776
Gross profit		111,148			95,226
% of sales		51.8	%		49.3	%
Selling, general and administrative expenses		61,747			58,392
Research and development		9,618			7,646
Operating profit	$	39,783		$	29,188
% of sales		18.5	%		15.1	%
Industrial
Sales	$	346,393		$	306,286
Cost of sales		196,225			177,413
Gross profit		150,168			128,873
% of sales		43.4	%		42.1	%
Selling, general and administrative expenses		97,814			88,996
Research and development		7,277			6,588
Operating profit	$	45,077		$	33,289
% of sales		13.0	%		10.9	%
CONSOLIDATED:
Operating profit	$	84,860		$	62,477
General corporate expenses		11,426			9,987
Earnings before ROTC, interest and income taxes		73,434			52,490
ROTC (a)		8,769			17,515
Earnings before interest and income taxes	$	64,665		$	34,975

(a) Included in ROTC for the purpose of evaluation of segment profitability are other adjustments recorded in cost of sales. Such adjustments relate to incremental depreciation recorded in conjunction with the Company’s facilities rationalization initiative amounting to $427 for the quarter ended October 31, 2006.

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PALL CORPORATION
PRELIMINARY SUPPLEMENTAL SEGMENT SALES INFORMATION BY MARKET AND GEOGRAPHY
(Unaudited)
(Dollar Amounts in Thousands)

							EXCHANGE		% CHANGE
FIRST QUARTER	OCT. 31,		OCT. 31,				RATE		IN LOCAL
ENDED	2007		2006		% CHANGE		IMPACT		CURRENCY
					‌ — — — — — — — Increase/(Decrease) — — — — — — — ‌
Life Sciences
By Market:
Medical	$	110,172	$	103,512		6.4	$	3,953		2.6
BioPharmaceuticals		104,442		89,490		16.7		6,180		9.8
Total Life Sciences	$	214,614	$	193,002		11.2	$	10,133		6.0
By Geography:
Western Hemisphere	$	87,002	$	84,196		3.3	$	293		3.0
Europe		101,022		84,672		19.3		8,464		9.3
Asia		26,590		24,134		10.2		1,376		4.5
Total Life Sciences	$	214,614	$	193,002		11.2	$	10,133		6.0
Industrial
By Market:
General Industrial	$	208,689	$	175,073		19.2	$	12,610		12.0
Aerospace and Transportation		66,259		60,332		9.8		3,037		4.8
Microelectronics		71,445		70,881		0.8		2,082		(2.1	)
Total Industrial	$	346,393	$	306,286		13.1	$	17,729		7.3
By Geography:
Western Hemisphere	$	96,933	$	88,966		9.0	$	782		8.1
Europe		132,459		119,433		10.9		11,890		1.0
Asia		117,001		97,887		19.5		5,057		14.4
Total Industrial	$	346,393	$	306,286		13.1	$	17,729		7.3

Contact:

Pall Corporation
Patricia Iannucci, 516-801-9848
V.P. Investor Relations & Corporate Communications
piannucci@pall.com

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