This excerpt taken from the HTRN 8-K filed Oct 9, 2009.
Commitments and Contingencies
On June 5, 2009, we sent notice to Galil Medical Ltd., an Israeli corporation (Galil) terminating the previously
announced Agreement and Plan of Merger, dated November 10, 2008 (the Galil Merger Agreement), by and among
Endocare, Orange Acquisitions Ltd. (Orange Acquisitions), a wholly owned subsidiary of Endocare, and Galil
Medical Ltd., which provided for the merger of Orange Acquisitions with and into Galil (the Galil Merger) with
Galil surviving the Galil Merger and becoming a wholly-owned subsidiary of Endocare. We terminated the Galil
Merger Agreement as a result of the failure by the United States Federal Trade Commission to close its
investigation into whether the Galil Merger violated certain U.S. antitrust laws, which caused certain conditions
to closing of the Galil Merger to become incapable of fulfillment. Pursuant to the Galil Merger Agreement, each
party had the unilateral right to terminate the Galil Merger Agreement under such circumstances.
On June 9, 2009, Galil filed a lawsuit in the Court of Chancery of the State of Delaware against Endocare seeking enforcement
of the Galil Merger Agreement and unspecified damages.
As discussed in
Note 10, the litigation was settled on July 7, 2009 for a payment of $1.75 million to Galil. At June 30, 2009,
the settlement liability was included in other accrued liabilities. The advance did not affect the purchase price
payable in the HealthTronics Offer.
In the normal course of business, we are subject to various other legal matters, which we believe will not
individually or collectively have a material adverse effect on our consolidated financial condition, results of
operations or cash flows. However, the results of litigation and claims cannot be predicted with certainty, and
we cannot provide assurance that the outcome of various legal matters will not have a material adverse effect on
our consolidated financial condition, results of operations or cash flows.