EX 10.6


    EXHIBIT
      10.6

    


    PAYMENT,
      RETIREMENT AND RELEASE AGREEMENT

     

    This
      Payment, Retirement and Release Agreement (the “Agreement”) is dated as of July
      27, 2006 by and between the Pension Benefit Guaranty Corporation, an agency
      of
      the Federal Government of the United States of America (“PBGC”) and PubliCARD,
      Inc., a Pennsylvania corporation (“PubliCARD”). 

    


    WITNESSETH:

    


    WHEREAS,
      PubliCARD maintained a pension plan for certain of its employees known as the
      Publiker Retirement Income Plan (“Plan”), a defined benefit pension plan covered
      by Title IV of the Employee Retirement Income Security Act of 1974,
      as
      amended
      (“ERISA”); 

    


    WHEREAS,
      by agreement dated September 23, 2004, PubliCARD and PBGC agreed that the Plan
      should be terminated with an effective termination date of March 31, 2003 (the
      “Termination Date”), and that PBGC should thereafter act as statutory trustee of
      the Plan;

    


    WHEREAS,
      as a result of the termination of the Plan and pursuant to Section 4062 of
      ERISA, PubliCARD and each member of its controlled group (as that term is
      defined in Section 4001(a)(14) of ERISA), including its wholly-owned subsidiary,
      Infineer, Ltd. (“Infineer”), became jointly and severally liable to the PBGC, as
      a United States government agency and as the statutory trustee of the Plan,
      for
      the amount of unfunded benefit liabilities (as that term is defined in Section
      4001(a)(18) of ERISA) under the Plan and for the amount of unpaid contribution
      owed to the Plan as of the Termination Date (the unfunded benefit liabilities
      and the unpaid contributions are hereinafter collectively referred to as the
      “Termination Liabilities”);

    


    WHEREAS,
      PBGC and PubliCARD entered into a Settlement Agreement dated as of September
      23,
      2004 (as amended and restated as of June 1, 2005, the “Settlement Agreement”)
      providing for the settlement of the Termination Liabilities and delivery of
      PubliCARD’s Promissory Note dated September 23, 2004, payable to the order of
      PBGC in the amount of $7,501,310 (the “Note”); 

    


    WHEREAS,
      no payments have been made in respect of the Note; and

    


    WHEREAS,
      PBGC and PubliCARD wish to provide for the settlement and discharge of
      PubliCARD’s obligations under the Settlement Agreement and the
      Note.

    


    WHEREAS,
      PBGC and PubliCARD (1) intend that the transaction set forth in this Agreement
      shall constitute a contemporaneous exchange for new value given to PubliCARD,
      and (2) stipulate that the transaction is fair and equitable and is the result
      of arm's length negotiations between PBGC and PubliCARD.

    


    NOW,
      THEREFORE, the parties hereto mutually covenant and agree as
      follows:

    


    SECTION
      I

    PAYMENTS
      TO PBGC

    


    1.1 Initial
      Payment.
      On the
      date of this Agreement, PubliCARD shall pay to PBGC the amount of $256,391.31
      by
      wire transfer of immediately available funds as provided in the wire
      instructions attached as Exhibit A. The date and time on which such wire
      transfer is sent is the “Effective Time.”

    


    1.2 Discharge
      of Note and Settlement Agreement.
      At the
      Effective Time, and as a result of the payment called for by Section 1.1, the
      obligations of PubliCARD under or with respect to the Settlement Agreement
      and
      the Note shall be satisfied and discharged in their entirety and the Settlement
      Agreement and the

    
      
         

      

      
         

        
          

        

      

      
         

      

    


    Note
      shall terminate and be of no further effect. Promptly after the Effective Time,
      PBGC shall use its best efforts to return the Note to PubliCARD, marked
      cancelled.

    


    1.3 Release
      of Security.
      At the
      Effective Time, all security interests, liens or other encumbrances in assets
      (including capital stock of subsidiaries) of PubliCARD and each present or
      former member of its Controlled Group (as that term is defined in Section
      4001(a)(14) of ERISA), including Infineer, in favor of PBGC shall be released
      and discharged and the obligations of PubliCARD under or with respect to the
      Security Documents (as defined in Section II of the Settlement Agreement) and
      such security interests, liens or other encumbrances shall be terminated and
      of
      no further effect. On and after the Effective Date, PBGC shall execute and
      deliver all documents and take such other action as PubliCARD may reasonably
      request in order to effect or evidence the discharge of such security interests,
      liens or other encumbrances and shall use its best efforts to return to
      PubliCARD any stock certificates or other instruments pledged as
      security.

    


    SECTION
      II

    ADDITIONAL
      PAYMENTS TO PBGC

    


    2.1 Through
      July 27, 2011.
      If,
      during the period from the date of this Agreement through July 27, 2011,
      PubliCARD receives Net Proceeds in excess of $250,000, PubliCARD shall pay
      to
      PBGC 50% of the amount of such excess. Net Proceeds shall mean the amount
      received by PubliCARD in cash or marketable securities, less the amount of
      reasonable transaction costs and expenses (including marketing costs and
      expenses, closing costs and expenses, commissions of investment bankers, brokers
      and other intermediaries, attorneys’ fees and expenses and deed preparation fees
      and expenses) and debt paid, retained or assumed, from any of the
      following:

    


    
      	 	 	 	
              a.
                the sale by PubliCARD of any or all capital stock of
                Infineer;

            


    

    


    
      	 	 	 	
              b.
                the sale by Infineer of all or substantially all of its assets and
                a
                distribution of the proceeds of such sale to
                PubliCARD;

            


    

    


    
      	 	 	 	
              c.
                the sale by PubliCARD of any or all capital stock of TecSEC, Incorporated
                (“TecSEC”); or

            


    

    


    
      	 	 	 	
              d.
                proceeds received by PubliCARD from settlements, buyouts or assignments
                of
                claims with respect to insurance policies covering environmental
                liabilities for which claims were made prior to the date
                hereof.

            


    

    


    The
      first
      payment of amounts due under this Section 2.1 shall be made within 15 days
      after
      the first date on which Net Proceeds exceeds $250,000 and additional payments
      shall be made from time to time thereafter within 15 days after additional
      Net
      Proceeds are received. Deferred payments of purchase price, escrowed amounts
      and
      the like shall not be taken into account until actually received by
      PubliCARD.

    


    2.2 On
      July 27, 2011.
      If, on
      July 27, 2011, (i) PubliCARD exists as a going concern and (ii) PubliCARD holds
      capital stock of Infineer (and Infineer exists as a going concern) or capital
      stock of TecSEC (and TecSEC exists as a going concern), for purposes of Section
      5.1, PubliCARD shall be deemed to have sold such capital stock of Infineer
      and
      TecSEC so held by it on July 27, 2011 for its fair market value (“Deemed Net
      Proceeds”), as reasonably determined by the Board of Directors of PubliCARD and
      agreed to by the PBGC. At the request of PBGC, PubliCARD shall provide to PBGC
      information in its possession deemed relevant to confirming the fair market
      value of such capital stock. Such Deemed Net Proceeds shall be added to Net
      Proceeds under Section 2.1 for purposes of determining the amount of additional
      payments to the PBGC, if any.

    
      
         

      

      
        -2-

        
          

        

      

      
         

      

    

     

    SECTION
      III

    RELEASE

    


    PBGC
      hereby releases and forever discharges PubliCARD and each present or former
      member of its Controlled Group (as that term is defined in Section 4001(a)(14)
      of ERISA), including Infineer, and their respective past and present corporate
      parents, subsidiaries, affiliates, shareholders, custodians, agents, advisors,
      officers, directors, assigns, employees, representatives, receivers, heirs,
      executors, trustees and administrators, and/or the heirs, executors,
      administrators, successors and assigns of each of the foregoing, from any and
      all claims, actions, demands, causes of action and allegations of liability
      past
      or present, known or unknown, arising from or in connection with the Plan,
      the
      Termination Liabilities, the Settlement Agreement or the Note that PBGC may
      have
      had or may now have or may in the future have, in law (federal, state, or
      foreign, including ERISA), admiralty or equity. However, the foregoing release
      shall not apply to any claim arising under this Agreement.

    


    SECTION
      IV

    REPRESENTATIONS
      AND WARRANTIES

     

    4.1 PubliCARD
      represents and warrants to PBGC as follows: It has full power and authority
      to
      enter into this Agreement and to perform its obligations hereunder, and this
      Agreement constitutes a legal, valid, and binding obligation of PubliCARD,
      enforceable in accordance with the terms hereof. The person executing this
      Agreement on behalf of PubliCARD has authority to bind PubliCARD
      hereunder.

    


    4.2 PBGC
      represents and warrants to PubliCARD as follows: It has full power and authority
      to enter into this Agreement and to perform its obligations hereunder, and
      this
      Agreement constitutes a legal, valid, and binding obligation of PBGC,
      enforceable in accordance with the terms hereof. The person executing this
      Agreement on behalf of PBGC has authority to bind PBGC hereunder. PBGC has
      not
      transferred or assigned the Note or any right or interest arising under the
      Settlement Agreement, the Note, or the Security Documents (as defined in Section
      II of the Settlement Agreement).

    


    SECTION
      V

    GENERAL
      PROVISIONS

    


    5.1 This
      Agreement and the rights and obligations of the parties hereunder shall be
      governed by and construed in accordance with ERISA, and to the extent not
      preempted by ERISA or other federal law, the laws of the State of New York,
      without regard to conflicts of law principles. The parties consent to the
      jurisdiction of the United States District Court for the Southern District
      of
      New York for any action in connection with this Agreement. If any legal action
      or actions are instituted under or with respect to this Agreement, the
      prevailing party shall be entitled to recover from the other party all expenses
      incurred by the prevailing party relative to such legal action or actions,
      including, but not limited to, court costs and reasonable attorneys'
      fees.

     

    5.2 Failure
      of any party to this Agreement to enforce at any time any of the provisions
      of
      this Agreement and course of dealing between the parties shall not be construed
      to be a waiver of any provision of this Agreement, nor shall in any way affect
      the validity of this Agreement or the right of either party to enforce each
      and
      every one of the provisions of this Agreement.

    


    5.3 This
      Agreement constitutes the entire and final agreement with respect to the matters
      provided for herein, and no other agreement or understanding exists between
      the
      parties.

     

    5.4 This
      Agreement shall not be modified or amended, except by written instrument signed
      by the parties hereto.

     

    5.5 The
      invalidity or unenforceability of any provision of this Agreement shall not
      affect the validity or enforceability of any other provision or provisions
      of
      this Agreement, which shall remain in full force and effect.

    
      
         

      

      
        -3-

        
          

        

      

      
         

      

       

    

    5.6 This
      Agreement shall inure to the benefit of, and may be enforced solely by, the
      parties hereto, and, in each case, their respective successors and
      assigns.

    


    5.7 This
      Agreement may be executed in identical counterparts, each of which when taken
      together shall constitute one and the same instrument. A facsimile transmission
      of signature pages shall be sufficient for the purposes of this
      Agreement.

    


    5.8 Any
      notices, requests or other communications hereunder shall be in writing, and
      shall be deemed to have been duly given when mailed by United States registered
      or certified mail postage prepaid, or upon receipt if overnight delivery
      service, telecopy, or telex is used, addressed as follows:

    


    To
      PBGC:

    


    Lou
      Batchelor

    Deputy
      Treasurer

    Treasury
      Division

    Pension
      Benefit Guaranty Corporation

    1200
      K
      Street, N.W.

    Washington,
      D.C. 20005-4026

    (202)
      326-4000 ext. 3482

    


    Cecile
      Shaya

    Lead
      Financial Analyst

    Treasury
      Division

    Pension
      Benefit Guaranty Corporation

    1200
      K
      Street N.W.

    Washington,
      D.C. 20005

    (202)
      326-4000 ext. 3223

    


    Jeffrey
      B. Cohen

    Chief
      Counsel

    Pension
      Benefit Guaranty Corporation

    Suite
      340

    1200
      K
      Street, N.W.

    Washington,
      D.C. 20005-4026

    (202)
      326-4112 (facsimile number)

    
      
         

      

      
        -4-

        
          

        

      

      
         

      

       

    

    To
      JPMorgan Asset Management, Inc.

    


    David
      A.
      Groshoff

    Vice
      President

    JPMorgan
      Asset Management, Inc.

    8044
      Montgomery Road

    Suite
      555

    Cincinnati,
      OH 45236

    


    To
      PubliCARD:

    


    PubliCARD,
      Inc.

    One
      Rockefeller Plaza, 14th
      Floor

    New
      York,
      N.Y. 10020

    Attention:
      Chairman of the Board

    (212)
      307-5781 (facsimile number)

    


    With
      copies to:

    


    Kaye
      Scholer, LLP

    425
      Park
      Avenue 

    New
      York,
      New York 10022-3598

    Attention:
      Joel I. Greenberg and Arthur F. Woodard

    (212)
      836-6555 (facsimile number)

    


    5.9 The
      captions set forth in this Agreement have been inserted for convenience of
      reference only and shall not in any way affect the meaning or construction
      of
      any of the provisions of this Agreement.

    


    IN
      WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby,
      have
      executed this Agreement as of the day and year first above
      mentioned.

    


    PENSION
      BENEFIT GUARANTY CORPORATION

    


     

    /s/
      W.
      Scott Telford III

      
        

      

    

    Name:
      W.
      Scott Telford III

    Title:
      Vice President JPMorgan Asset Management, Inc. as agent for the Pension Benefit
      Guaranty Corporation

    


    


    PubliCARD,
      INC.

    


    /s/
      Antonio L. DeLise

      
        

      

    

    Name:
      Antonio L. DeLise

    Title:
      President

    
      
         

      

        -5-