Exhibit 99
RELEASE AND SETTLEMENT AGREEMENT
THIS RELEASE AND SETTLEMENT AGREEMENT (this "Agreement") is made this 18th
day of August, 2009 by and among Atlantic City Associates, LLC ("ACA"), and
Cordish Power Plant Number Two, LLC ("CPP") (ACA and CPP will, hereinafter, be
referred to collectively as the "Cordish Parties"), on the one hand, and Explore
Atlantic City, LLC, formerly known as ITA Atlantic City, LLC ("ITA Atlantic
City"), ITA Baltimore, LLC ("ITA Baltimore") and ICTS International N.V.
("ICTS") (ITA Atlantic City, ITA Baltimore and ICTS will, hereinafter, be
referred to collectively as the "ICTS Parties"), on the other hand. The Cordish
Parties and the ICTS Parties will be referred to collectively, hereinafter, as
the "Parties".
EXPLANATORY STATEMENT
WHEREAS, on or about May 16, 2002, ACA and ITA Atlantic City entered into
a certain Lease (as amended, the "Atlantic City Lease") for the premises located
at 000 X. Xxxxxxxx Xxxxxx, Xxxxxxxx Xxxx, Xxx Xxxxxx 00000, located in The Walk
(the "Atlantic City Premises");
WHEREAS, on or about May 16, 2002, as a condition precedent to ACA
entering into the Atlantic City Lease with ITA Atlantic City, ICTS executed a
Guaranty in which it guaranteed "the full, faithful and timely payment and
performance by Tenant of all Rent (as defined in the [Atlantic City] Lease) and
of all other payments, covenants and other obligations of Tenant under or
pursuant to the [Atlantic City] Lease." (the "Atlantic City Lease Guaranty");
WHEREAS, disputes have arisen between ACA and ITA Atlantic City and ICTS
concerning the Atlantic City Lease and the Atlantic City Lease Guaranty which
have resulted in litigation between ACA and ITA Atlantic City and ICTS;
WHEREAS, ACA filed a complaint against ITA Atlantic City and ICTS in the
action captioned as Atlantic City Associates, LLC v. ITA Atlantic City, LLC and
ICTS International, N.V.,
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in the Superior Court of New Jersey, Law Division, Atlantic County, Docket No.
ATL-L-7125-06 (consolidated with ATL-L-016747-06) (the "Atlantic City Civil
Action"), which caption was amended as Atlantic City Associates, LLC v. Explore
Atlantic City, LLC, formerly known as ITA Atlantic City, LLC and ICTS
International N.V.;
WHEREAS, in the Atlantic City Civil Action, ACA alleges that the total
amount owed to ACA by ITA Atlantic City and ICTS, less the amount already
received and anticipated to be received from a Lease with Old Navy, is
$3,716,549.58. In addition, ACA alleges that ITA Atlantic City and ICTS are also
liable to ACA for all costs and expenses incurred by ACA, including, without
limitation, attorneys' fees for enforcing its rights under the Atlantic City
Lease. ACA also alleges that ITA Atlantic City anticipatorily breached the
Atlantic City Lease (hereinafter the "Atlantic City Complaint"). The ICTS
Parties deny the allegations contained in the Atlantic City Complaint;
WHEREAS, in the Atlantic City Civil Action, ITA Atlantic City and ICTS
have filed Counterclaims against ACA (the "ICTS Parties' Counterclaim"). The
Cordish Parties deny the allegations contained in the ICTS Parties'
Counterclaim;
WHEREAS, the Atlantic City Civil Action is scheduled for trial on October
5, 2009;
WHEREAS, on or about December 16, 2002, CPP entered into the Lease with
ITA Baltimore (the "Baltimore Lease") for the property known as 000 X. Xxxxx
Xxxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxx (the "Baltimore Premises");
WHEREAS, on or about December 4, 2002, ICTS executed a Guaranty pursuant
to which it became the Guarantor of all of ITA Baltimore's obligations under the
Baltimore Lease (the "Baltimore Lease Guaranty");
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WHEREAS, ITA Baltimore failed to pay rent since May 1, 2006 which
constitutes a default under the Baltimore Lease and, accordingly, CPP has
elected to accelerate all of the future rent, pursuant to the terms of the
Baltimore Lease;
WHEREAS, CPP filed a complaint against ITA Baltimore and ICTS in the
action captioned as Cordish Power Plant Number Two, LLC v. ITA USA Baltimore,
LLC, et al., in the Circuit Court for Baltimore City, Maryland, Case No.
24-C-06-006015-CN (the "Baltimore City Civil Action");
WHEREAS, on January 9, 0000, xxx Xxxxxxx Xxxxx xx Xxxxxxxxx Xxxx granted
CPP summary judgment against ITA Baltimore in the Baltimore City Civil Action.
On January 10, 2008, the Circuit Court for Baltimore City awarded CPP a judgment
against ICTS and ITA in the amount of $2,559,343.67 (the "Judgment"). On January
29, 2008, ICTS filed an appeal of the Judgment with the Court of Special Appeals
of Maryland, September Term, 2007, No. 02733 (the "Baltimore City Appeal");
WHEREAS, the Atlantic City Civil Action, the Atlantic City Complaint, the
ICTS Parties' Counterclaim, the Baltimore City Civil Action and the Baltimore
City Appeal (including the Judgment) will, hereinafter, be collectively referred
to as the "Civil Action"; and
WHEREAS, the Parties now desire to settle and compromise all claims
asserted or that could have been asserted in the Civil Action, without resort to
any further costly and protracted court proceedings in connection therewith.
NOW, THEREFORE, in consideration of the ICTS Parties' agreement to pay the
Cordish Parties the sum of Two Million Six Hundred Thousand Dollars
($2,600,000.00), and other valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, it is agreed as follows:
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1. Incorporation of Recitals. The above recitals are hereby incorporated
herein by reference into the terms of this Agreement as representations of the
Parties to this Agreement as applicable to each statement and are made part of
the terms of this Agreement.
2. Payment by the ICTS Parties to the Cordish Parties. As consideration
for the terms and provisions of this Agreement, including, without limitation,
this Section 2 and the waiver and release provisions of Section 4, the Parties
agree to the following:
The ICTS Parties shall pay to the Cordish Parties the total sum of Two
Million Six Hundred Thousand Dollars ($2,600,000.00) payable on or before the
following dates:
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Date Amount
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1. Simultaneously with the execution of $650,000.00
this Agreement
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2. December 31, 2009 $650,000.00
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3. June 30, 2010 $650,000.00
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4. December 31, 2010 $650,000.00
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The aforementioned settlement payments (each a "Settlement Payment",
collectively, the "Settlement Payments") shall be guaranteed by: (a) a Guaranty
of Payment from Xxxxxxxx Xxxxxx, individually ("Atzmon"), in the form and
substance attached hereto as Exhibit A (the "Personal Guaranty"), and (b) an
Irrevocable Standby Letter of Credit from a United States branch of UBS AG, UBS
Americas Inc. or UBS Financial Services, Inc. (as the case may be, "UBS")
located in New York, New York, in the amount of $1,950,000.00, in the form and
substance attached hereto as Exhibit B (the "Letter of Credit"). Within five (5)
business days of the Cordish Parties' receipt of: (i) the fully executed
Personal Guaranty; (ii) the Letter of Credit; and (iii) the Settlement Payment
in the amount of $650,000.00 to be made simultaneously with the execution of
this Agreement (the "First Payment"), the Parties will jointly: (y) stipulate to
the dismissal, with prejudice, of the Atlantic City Civil Action, the Atlantic
City Complaint, the
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ICTS Parties' Counterclaim and the Baltimore City Appeal, and (z) file a Notice
of Satisfaction of the Judgment.
Each Settlement Payment set forth in this Section 2 shall be delivered to
the Cordish Parties, c/o Xxxxxxx X. Xxxxxx, Esquire, The Cordish Company, The
Power Plant, 000 Xxxx Xxxxx Xxxxxx, 0xx Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000 on or
before the dates set forth above. The ICTS Parties may prepay all or any portion
of the outstanding principal balance due at any time without penalty. Each
Settlement Payment shall be made by certified or cashier's check, in United
States currency, made jointly payable to Atlantic City Associates, LLC and
Cordish Power Plant Number Two, LLC.
Anything in this Agreement to the contrary notwithstanding, any of the
Cordish Parties, at its option, may, as to any of the ICTS Parties or Atzmon,
accelerate the indebtedness evidenced hereunder or guaranteed by the Personal
Guaranty in the event of: (a) the default by the ICTS Parties in making timely
Settlement Payments to the Cordish Parties hereunder; (b) the making by any of
the ICTS Parties or Atzmon of an assignment for the benefit of creditors; (c)
the appointment of a custodian for any of the ICTS Parties or Atzmon or for any
property of any of the ICTS Parties or Guarantor, respectively; (d) the
commencement of any proceeding by any of the ICTS Parties or Atzmon under any
bankruptcy, reorganization, arrangement, insolvency, readjustment, receivership
or like law or statute; or (e) the commencement of any proceeding against the
any of the ICTS Parties or Atzmon under any bankruptcy, reorganization,
arrangement, insolvency, readjustment, receivership or like law or statute which
is not discharged or dismissed within sixty (60) days after institution thereof.
It is understood and agreed that the Cordish Parties must initiate a claim
under the Letter of Credit in accordance with its terms (i.e. request UBS for
payment), prior to making a claim
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against Atzmon under the Personal Guaranty. Each of the parties further
acknowledges and agrees that upon the satisfaction by the Cordish Parties of the
condition of the preceding sentence, the Cordish Parties may thereafter
immediately proceed to enforce any and all of its rights and remedies against
Atzmon pursuant to the terms of the Personal Guaranty.
3. Irrevocable Standby Letter of Credit from a United States branch of UBS
and Personal Guaranty by Atzmon. To secure the ICTS Parties' promise to
punctually make the Settlement Payments, as set forth above in Section 2, the
ICTS Parties shall contemporaneously with the execution of this Agreement
deliver to the Cordish Parties: (a) the Letter of Credit; and (b) the fully
executed Personal Guaranty. Promptly after receipt of all amounts due the
Cordish Parties under this Agreement, the Cordish Parties agree to forward to
the ICTS Parties the original Personal Guaranty and the Letter of Credit marked
"CANCELED".
4. Complete Release. Effective as of the Cordish Parties' receipt of: (i)
the fully executed Personal Guaranty; (ii) the Letter of Credit; and (iii) the
First Payment from the ICTS Parties, pursuant to this Agreement:
(a) The Cordish Parties and their respective successors, assigns,
affiliated entities, agents, representatives, and/or any and all person(s) who
might claim by and/or through the Cordish Parties (collectively referred to as
the "First Releasing Parties") and the ICTS Parties and their respective
successors, assigns, affiliated entities, agents, representatives, and/or any
and all person(s) who might claim by and/or through the ICTS Parties
(collectively referred to as the "Second Releasing Parties") hereby forever
release, waive, acquit, exonerate and discharge each other of and from all and
every manner of action and actions, cause and causes of action, grievances,
arbitrations, obligations, damages, demands, liabilities, defenses, suits,
debts, judgments, expenses, claims and/or counterclaims whatsoever, known or
unknown, accrued or
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hereafter maturing in law and/or equity, mixed or otherwise, which the First
Releasing Parties and the Second Releasing Parties (or any one or more of them
individually, collectively, jointly or severally) ever had, now have or
hereafter can, shall or may have against each other, for, upon, or arising in
connection with (i) the Civil Action, (ii) the Atlantic City Lease, (iii) the
Baltimore Lease, (iv) the Atlantic City Lease Guaranty, or (v) the Baltimore
Lease Guaranty. It is specifically agreed and understood that the releases given
pursuant to this Agreement shall be construed in the broadest possible manner.
The Cordish Parties and the ICTS Parties agree that the release will extend to
bar claims asserted against any person or entity released hereby which are
asserted by any entity which is controlled, directly or indirectly, by any of
the parties to this Agreement.
(b) Nothing in Section 4(a) above shall be deemed to release any
claims, rights or causes of action that any of the Parties may now or hereafter
have for enforcement of this Agreement or enforcement of the Personal Guaranty,
or enforcement of the Letter of Credit.
(c) THE CORDISH PARTIES AND THE ICTS PARTIES HEREBY ACKNOWLEDGE THAT
THEY HAVE FREELY AND VOLUNTARILY ENTERED INTO THIS AGREEMENT AFTER AN ADEQUATE
OPPORTUNITY AND SUFFICIENT PERIOD OF TIME TO REVIEW, ANALYZE AND DISCUSS (I) ALL
TERMS AND CONDITIONS OF THIS AGREEMENT, AND (II) ALL FACTUAL AND LEGAL MATTERS
RELEVANT TO THIS AGREEMENT AND/OR ANY AND ALL SUCH OTHER DOCUMENTS, WITH COUNSEL
FREELY AND INDEPENDENTLY SELECTED. THE PARTIES FURTHER ACKNOWLEDGE AND AGREE
THAT THEY HAVE ACTIVELY AND WITH FULL UNDERSTANDING PARTICIPATED IN THE
NEGOTIATION OF THIS AGREEMENT AFTER CONSULTATION AND REVIEW WITH COUNSEL, THAT
ALL OF THE TERMS
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AND CONDITIONS OF THIS AGREEMENT HAVE BEEN NEGOTIATED AT ARM'S-LENGTH, AND THAT
THIS AGREEMENT HAS BEEN NEGOTIATED, PREPARED AND EXECUTED WITHOUT FRAUD, DURESS,
UNDUE INFLUENCE, OR COERCION OF ANY KIND OR NATURE WHATSOEVER HAVING BEEN
EXERTED BY OR IMPOSED UPON ANY PARTY TO THIS AGREEMENT UPON ANY OTHER PARTY. NO
PROVISION OF THIS AGREEMENT OR SUCH OTHER DOCUMENTS SHALL BE CONSTRUED AGAINST
OR INTERPRETED TO THE DISADVANTAGE OF ANY PARTY TO THIS AGREEMENT BY ANY COURT
OR OTHER GOVERNMENTAL OR JUDICIAL AUTHORITY BY REASON OF SUCH PARTY OR ITS
COUNSEL HAVING OR BEING DEEMED TO HAVE STRUCTURED, DICTATED OR DRAFTED SUCH
PROVISION.
5. Authority. Each of the ICTS Parties and each of the Cordish Parties
hereby represents and warrants to the other parties that it has the company or
corporate power and authority, to execute and deliver this Agreement and to
perform its respective obligations hereunder. The execution and delivery of this
Agreement by each of the ICTS Parties and the Cordish Parties, and the
performance of their respective obligations hereunder, have been duly authorized
by their respective members, managers, officers, directors and/or stockholders,
as applicable. No other company or corporate proceedings on the part of any of
the parties is necessary to authorize the execution and delivery of this
Agreement by it or the performance of its respective obligations hereunder. This
Agreement has been duly executed and delivered by each of the parties and is a
valid and binding agreement of each of the respective parties and enforceable in
accordance with its terms.
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6. No Assignment of Claims. The Parties warrant and represent that they
have not assigned or transferred or purported to assign or transfer, voluntarily
or involuntarily, to any person or entity, any claims or matters released
pursuant to this Agreement.
7. No Admission of Liability or Fault. It is understood and agreed by and
among the Parties that the settlement of their disputes is not to be construed
as an admission of any liability or fault. The Parties acknowledge that this
settlement is intended to avoid further costly and time-consuming legal
proceedings, and that any purported liability of any Party, their respective
agents, servants, employees, directors, officers, parents, subsidiaries,
affiliates, predecessors, successors, assigns, attorneys and/or insurers is
hereby expressly denied.
8. Payment of Costs and Attorneys' Fees. Except as otherwise provided in
this Agreement or the Personal Guaranty, the Parties will pay their own costs
and attorneys' fees incurred in connection with this Agreement as well as any
matter arising out of the entire transaction and relationship between the ICTS
Parties and the Cordish Parties. Notwithstanding the above, if any party hereto
brings suit or other legal proceedings to enforce the provisions of this
Agreement against any of the other parties hereto, then the party prevailing in
such suit or proceeding shall be reimbursed by the non-prevailing party or
parties for all reasonable attorneys' fees and litigation costs and expenses
incurred by the prevailing party in connection with such suit or proceeding.
9. Binding Effect. This Agreement shall be binding upon the partners,
directors, officers, employees, agents, heirs, executors, administrators,
representatives, successors, predecessors, privies, assigns and attorneys of
each signatory hereto.
10. Proper Law. This Agreement shall be construed, interpreted and
enforced in accordance with the laws of the State of New York without regard to
conflicts of law principles.
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11. Jurisdiction and Venue. The Parties irrevocably submit to personal
jurisdiction and venue by any state or federal court located in the State of New
York in any suit, action or proceeding arising out of or relating to this
Agreement. Each of the parties irrevocably waives, to the fullest extent
permitted by law, any objection that such party may now or hereafter have to the
laying of venue of any such suit, action, or proceeding brought in any such
court and any claim that any such suit, action, or proceeding brought in any
such court has been brought in an inconvenient forum. Final judgment in any such
suit, action, or proceeding brought in any such court shall be conclusive and
binding upon the applicable parties and may be enforced in any court in which
the applicable parties are subject to jurisdiction by a suit upon such judgment.
12. Severability. Should any provision of this Agreement be deemed
illegal, invalid or otherwise unenforceable, in whole or in part, by a court of
competent jurisdiction, the remainder of this Agreement shall be valid and
enforceable to the fullest extent permitted by law.
13. Entire Agreement. This Agreement contains the entire agreement between
the Parties and is the complete written integration of the Agreement and
supersedes any prior Agreements between them regarding resolution of the
Parties' disputes. No inducements, representations, understandings or agreements
have been made or relied upon in the making of this Agreement. The Agreement
shall not be amended except in writing executed by all Parties hereto, and no
course of conduct by any party or among the Parties shall be deemed to amend the
terms and conditions hereof except if such is reduced to writing and executed by
all Parties hereto. The terms of this Agreement are contractual and not a mere
recital. This Agreement constitutes the final agreement of all Parties hereto.
14. WAIVER OF JURY TRIAL. THE PARTIES EACH HEREBY WAIVE TRIAL BY JURY IN
ANY ACTION OR PROCEEDING TO WHICH THE
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CORDISH PARTIES AND ICTS PARTIES MAY BE PARTIES, ARISING OUT OF OR IN ANY WAY
PERTAINING TO THIS AGREEMENT. IT IS AGREED AND UNDERSTOOD THAT THIS WAIVER
CONSTITUTES A WAIVER OF TRIAL BY JURY OF ALL CLAIMS AGAINST ALL PARTIES TO SUCH
ACTIONS OR PROCEEDINGS, INCLUDING CLAIMS AGAINST PARTIES WHO ARE NOT PARTIES TO
THIS AGREEMENT.
THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE BY THE PARTIES,
AND THE PARTIES EACH HEREBY REPRESENT AND WARRANT THAT NO REPRESENTATIONS OF
FACT OR OPINION HAVE BEEN MADE BY ANY INDIVIDUAL TO INDUCE THIS WAIVER OF TRIAL
BY JURY OR TO IN ANY WAY MODIFY OR NULLIFY ITS EFFECT. THE PARTIES FURTHER
REPRESENT THAT THEY HAVE EACH BEEN REPRESENTED IN THE SIGNING OF THIS AGREEMENT
AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, SELECTED OF THEIR
OWN FREE WILL, AND THAT THEY HAVE HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER
WITH COUNSEL.
15. Other Agreements. The Parties further agree:
(a) As used in this Agreement, the singular number shall include the
plural, the plural the singular and the use of the masculine, feminine or neuter
gender shall include all genders, as the context may require.
(b) The headings, titles and captions of this Agreement are for the
convenience only and are not part of this Agreement.
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(c) All references to "dollars", "Dollars", "cents", "Cents" or the
symbol "$" and all other monetary or currency references shall be interpreted
solely to mean the lawful currency of the United States of America.
(d) The obligations and liabilities of the ICTS Parties hereunder
shall be construed to be joint and several. The obligations and liabilities of
the Cordish Parties hereunder shall be construed to be joint and several.
(e) This Agreement may be executed in any number of duplicate
originals or counterparts, each of such duplicate originals or counterparts
shall be deemed to be an original and all taken together shall constitute but
one and the same agreement. The parties agree that their respective signatures
may be delivered by facsimile or other electronic means. Any party who chooses
to deliver its signature by facsimile or other electronic means agrees to
provide promptly to the other parties a counterpart of this Agreement with its
original, inked signature.
(f) Each party hereto shall promptly execute (or cause to be
executed) and deliver to each other party hereto any and all further instruments
and documents and/or perform (or cause to be performed) any and all further acts
reasonably requested or appropriate to evidence or give effect to the provisions
of this Agreement.
[Signatures Contained On Following Pages]
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IN WITNESS WHEREOF, the Parties, being expressly authorized to do so,
have executed this Agreement on the date first written above.
WITNESS/ATTEST: CORDISH PARTIES:
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Atlantic City Associates, LLC,
By: /s/ Xxxx Xxxxx
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Date: Printed Name: Xxxx Xxxxx
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Title: Authorized Person
Cordish Power Plant Number Two, LLC
By: /s/ Xxxxxxx X. Xxxxxx
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Date: Printed Name: Xxxxxxx X. Xxxxxx
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Title: Authorized Person
[Signatures continued on following page]
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WITNESS/ATTEST: ICTS PARTIES:
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Explore Atlantic City, LLC,
formerly known as
ITA Atlantic City, LLC
By: /s/ Xxxxxxx Xxx
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Date: Printed Name: Xxxxxxx Xxx
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Title: Director
ITA Baltimore, LLC
By: /s/ Xxxxxxx Xxx
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Date: Printed Name: Xxxxxxx Xxx
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Title: Director
ICTS International N.V.
By: /s/ Ran Xxxxxx /s/ Xxxxxxx Xxx
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Date: Printed Name: Ran Xxxxxx/Avraham Dam
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Title: Managing Directors
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EXHIBIT A
FORM OF PERSONAL GUARANTY
[Attached]
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EXHIBIT B
FORM OF LETTER OF CREDIT
[Attached]
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