-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NoJ9DnCWWIGTRsRR6D0vm7W0pwn13VpNOtb4vt53+GosNfng0vLYvJDYWWCTolP+ 3FGMbNlvAJObo5+7d33prg== 0001144204-04-016249.txt : 20041014 0001144204-04-016249.hdr.sgml : 20041014 20041014105444 ACCESSION NUMBER: 0001144204-04-016249 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20041007 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20041014 DATE AS OF CHANGE: 20041014 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PUBLICARD INC CENTRAL INDEX KEY: 0000081050 STANDARD INDUSTRIAL CLASSIFICATION: COMPUTER PERIPHERAL EQUIPMENT, NEC [3577] IRS NUMBER: 230991870 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-03315 FILM NUMBER: 041078189 BUSINESS ADDRESS: STREET 1: 620 FIFTH AVENUE ROCKEFELLER CENTER STREET 2: 7TH FLOORR CITY: NEW YORK STATE: NY ZIP: 10020 BUSINESS PHONE: 2126513102 MAIL ADDRESS: STREET 1: 620 FIFTH AVENUE ROCKEFELLER CENTER STREET 2: FIFTH FLOOR CITY: NEW YORK STATE: NY ZIP: 10020 FORMER COMPANY: FORMER CONFORMED NAME: PUBLICKER INDUSTRIES INC DATE OF NAME CHANGE: 19920703 8-K 1 v07473_8k.htm

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) October 7, 2004

PubliCARD, Inc.
 (Exact Name of Registrant as Specified in Its Charter)


 
Pennsylvania
0-29794
23-0991870
(State or Other Jurisdiction of Incorporation)
(Commission File Number)
(I.R.S. Employer Identification No.)


One Rockefeller Plaza, 14th Floor, New York, NY
10020
 
(Address of Principal Executive Offices)
(Zip Code)
 
Registrant's telephone number, including area code      (212) 651-3102

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 (see General Instruction A.2. below):

o Written communication 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

PubliCARD, Inc. (the “Company”) sponsored a defined benefit pension plan (the “Plan”) that was frozen in 1993. In January 2003, the Company filed a notice with the Pension Benefit Guaranty Corporation (the “PBGC”) seeking a “distress termination” of the Plan. Pursuant to the Agreement for Appointment of Trustee and Termination of Plan between the PBGC and the Company effective September 30, 2004, the PBGC proceeded to terminate the Plan and was appointed as the Plan’s trustee. As a result, the PBGC has assumed responsibility for paying the obligations to Plan participants. Under the terms of the Settlement Agreement effective September 23, 2004 between the PBGC and the Company (the “Settlement Agreement”), the Company is liable to the PBGC for the unfunded guaranteed benefit payable by the PBGC to Plan participants in the amount of $7.5 million. The Company satisfied this liability by issuing a non-interest bearing note (the “Note”) dated September 23, 2004 payable to the PBGC with a face amount of $7.5 million.

Pursuant to the Security Agreement and Pledge Agreement, both dated September 23, 2004, the Note is secured by (a) all presently owned or hereafter acquired real or personal property and rights to property of the Company and (b) the common and preferred stock of Infineer Ltd. (“Infineer”) and TecSec Incorporated (“TecSec”) owned by the Company. Infineer is a wholly-owned subsidiary of the Company. The Company has an approximately 5% ownership interest in TecSec, on a fully diluted basis.

The Note matures on September 23, 2011. The first payment will be equal to $1.0 million and will become due 30 days after the Company has received a total of $4.0 million in Net Recoveries (as defined below). Thereafter, on each anniversary of the first payment, the Company is required to pay the PBGC an amount equal to 25% of the Net Recoveries in excess of $4.0 million (less the sum of all prior payments made in accordance with this sentence in prior years). Net Recoveries, as defined in the Settlement Agreement, is the net cash proceeds received by the Company with respect to transactions consummated after March 31, 2003 from (a) the sale of the Company’s interest in Infineer and TecSec and real property in Louisiana and (b) any recoveries from the Company’s historic insurance program. As of September 23, 2004, Net Recoveries was approximately $3.2 million.

In the event of default by the Company under the Settlement Agreement, the PBGC may declare the outstanding amount of the Note to be immediately due and payable, proceed with foreclosure of the liens granted in favor of the PBGC and exercise any other rights available under applicable law.


Item 2.03. Creation of Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information provided in Item 1.01 above is incorporated herein by reference.


 
     
 

Item 9.01. Financial Statements and Exhibits.

(a)    Not applicable

(b)    Not applicable

(c)       Exhibits

     99.1   Settlement Agreement, dated as of September 23, 2004, by and between the Pension Benefit Guaranty Corporation and PubliCARD, Inc.
     99.2   Promissory Note, dated as of September 23, 2004
     99.3   Security Agreement, dated as of September 23, 2004, made by PubliCARD, Inc. to the Pension Benefit Guaranty Corporation
     99.4   Pledge Agreement, dated as of September 23, 2004, made by PubliCARD, Inc. in favor of the Pension Benefit Guaranty Corporation
     99.5   Agreement for Appointment of Trustee and Termination of Plan, dated as of September 30, 2004 between the Pension Benefit Guaranty Corporation and PubliCARD, Inc.



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 hereunto duly authorized.
 
     
  PubliCARD, Inc. 
  Registrant
 
 		  
 		  
 
Date: October 14, 2004 By:   /s/ Antonio L. DeLise
 
Antonio L. DeLise, President,
  Chief Executive Officer, Chief Financial Officer


 

  
     
 




EXHIBIT INDEX

Exhibit
Number     Description

     99.1   Settlement Agreement, dated as of September 23, 2004, by and between the Pension Benefit Guaranty Corporation and PubliCARD, Inc.
     99.1   Settlement Agreement, dated as of September 23, 2004, by and between the Pension Benefit Guaranty Corporation and PubliCARD, Inc.
     99.2   Promissory Note, dated as of September 23, 2004
     99.3   Security Agreement, dated as of September 23, 2004, made by PubliCARD, Inc. to the Pension Benefit Guaranty Corporation
     99.4   Pledge Agreement, dated as of September 23, 2004, made by PubliCARD, Inc. in favor of the Pension Benefit Guaranty Corporation
     99.5   Agreement for Appointment of Trustee and Termination of Plan, dated as of September 30, 2004 between the Pension Benefit Guaranty Corporation and PubliCARD, Inc.

  
     
 
 
 EX-99.1 2 v07473_ex99-1.txt EXHIBIT 99.1 SETTLEMENT AGREEMENT THIS SETTLEMENT AGREEMENT (the "Agreement") is dated as of September 23, 2004, by and between the PENSION BENEFIT GUARANTY CORPORATION ("PBGC"), and PUBLICARD, INC. ("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"); and WHEREAS, by agreement dated September 30, 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: and 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"), NOW, THEREFORE, the parties hereto mutually covenant and agree as follows: SECTION I PAYMENTS TO PBGC 1.1 The Promissory Note. On or before September 23, 2004, PubliCARD shall deliver to the PBGC a non-interest bearing promissory note (the "Note"), substantially in the form of Exhibit A attached hereto, with a face amount of Seven Million Five Hundred One Thousand Three Hundred and Ten Dollars ($7,501,310.00), payable in cash to the PBGC. The Note shall be payable over a 7-year period, commencing September 23, 2004, and all payments shall be due on or before September 23, 2011. 1.2 Payments under the Note. The first payment under the Note shall be equal to One Million Dollars ($1,000,000) and shall be due to the PBGC no later than thirty (30) days after PubliCARD has received a total of Four Million Dollars ($4,000,000.00) in Net Recoveries (as hereinafter defined). Thereafter, on each anniversary of the first payment, PubliCARD shall pay PBGC an amount equal to twenty-five percent (25%) of the Net Recoveries in excess of Four Million Dollars ($4,000,000.00) less the sum of all prior payments made pursuant to this sentence in prior years. 1.3 Net Recoveries. For purposes of this Agreement, "Net Recoveries" shall mean - the net cash proceeds received by PubliCARD with respect to transactions that are consummated on or after March 31, 2003, from, in each case, (a) the sales and dispositions of (i) PubliCARD's ownership interests in Infineer and TecSec, Incorporated, (ii) PubliCARD's real property located in Gretna, Louisiana, and (iii) any other real or personal property assets; and (b) any recoveries from settlements, buyouts or assignments of claims from PubliCARD's insurance program. At the time PubliCARD delivers the Note to PBGC, it shall also deliver a record of Net Recoveries received since March 31, 2003 (the "Initial Recoveries Report"). 1.4 Nature of Payments and Duration of Note. The parties to this Agreement recognize that payments under the Note are contingent on sales, dispositions and other activities of PubliCARD, and that the full principal amount of the Note may be paid prior to, or may not be paid before, its due date. 1.5 Effect of Payments. Any and all liability of PubliCARD for the Termination Liabilities shall be discharged by the payments under the Note. SECTION II SECURITY PubliCARD's obligations under the Note shall be secured by security interests, substantially in the form of Exhibit B, in (a) all presently owned or hereafter acquired real or personal property and rights to property of PubliCARD and (b) the common and preferred stock of Infineer and TecSec owned by PubliCARD. On the date that it delivers the Note to the PBGC, PubliCARD shall deliver all documents necessary to grant the security interests to the PBGC and such other documents as are necessary to establish and perfect those interests (the "Security Documents"). SECTION III REPRESENTATIONS AND WARRANTIES 3.1 PubliCARD represents and warrants as of the date of this Agreement and as of the date it delivers the Note and the Security Documents as follows: (a) PubliCARD is a corporation validly existing and in good standing under the laws of the State of Pennsylvania. It has full power and authority to enter into this Agreement, to incur the indebtedness and other obligations provided for in this Agreement, and to perform the obligations hereunder, and this Agreement, the Note and the Security Documents constitute legal, valid and binding obligations of PubliCARD, enforceable in accordance with the terms thereof. The person executing this Agreement on behalf of PubliCARD has authority to bind PubliCARD hereunder. (b) PubliCARD represents that there is a serious risk that the continued operations of PubliCARD and members of its controlled group will be seriously jeopardized if their obligations arising from the termination of the Plan are not determined with specificity and finally settled. (c) The execution, delivery, and performance of the obligations of this Agreement in accordance with its terms will not conflict with or result in a default under any other agreement by which PubliCARD is bound, nor will it violate any law applicable thereto. (d) PubliCARD is not in default under or with respect to any contractual obligation in any respect which could be materially adverse to the business, operations, property or financial or other condition of itself, or which could materially adversely affect its ability to perform its obligations under this Agreement, the Note or the Security Documents. (e) PubliCARD is not a party to any indenture, written agreement, lease or other instrument or subject to any charter or corporate restriction which could have any adverse effect whatsoever upon the validity, performance, or enforceability of its obligations to make payments to the PBGC under Section I and to provide security under Section II of this Agreement. [?] 3.2 The PBGC represents and warrants to PubliCARD that the making and performance by the PBGC of this Agreement is duly authorized, and that this Agreement is a valid and binding obligation of the PBGC, enforceable in accordance with its terms. SECTION IV CLOSING The closing of this Agreement shall occur on or before September 23, 2004 at which time PubliCARD will execute and deliver the Note and the Security Documents, and the Initial Recoveries Report. The place of the closing shall be agreed to by the parties. SECTION V CONDITIONS PRECEDENT PubliCARD and the PBGC shall not be obligated to perform under the terms of this Agreement until and unless each of the following conditions has been satisfied on or prior to the closing date: (a) PBGC and PubliCARD each shall have executed and received fully executed originals of the Note and the Security Documents; (b) PBGC shall have received the Initial Recoveries Report; and (c) no Event of Default (as defined in Section VIII) shall have occurred and be continuing at the time of the closing. SECTION VI TERMINATION OF AGREEMENT This Agreement shall terminate and no party shall have any further obligations hereunder on the earlier of the date the Note is paid in full or the termination date of the Note. SECTION VII COVENANTS OF PUBLICARD PubliCARD makes the following covenants which shall be in effect throughout the term of this Agreement and so long as its obligations hereunder remain unpaid. 7.1 Provision of Information. PubliCARD shall, commencing on the first anniversary of the Initial Recoveries Report, and each year thereafter on the same date through 2011, provide the PBGC with: (a) a written report of the details of the calculation of Net Recoveries since the previous report, with a certification from an officer of PubliCARD that a certified public accountant has provided PubliCARD with a report on the application of agreed-upon procedures conducted in accordance with standards established by the American Institute of Certified Public Accountants to the calculations included in the report; and (b) a copy of PubliCARD's quarterly financial statements and audited annual financial statements and, upon receipt of reasonable notice from the PBGC, such additional information and documentation, including without limitation financial plans and projections relating to its obligations under Section I of the Agreement, as the PBGC may reasonably request. 7.2 Notice of Default. Promptly upon, but in no event later than ten (10) business days after, becoming aware of the happening of any condition or event that constitutes an Event of Default, as defined in Section VIII, or a default under any of its other obligations, PubliCARD shall deliver to the PBGC a written notice specifying the nature and period of existence thereof and what action it is taking and proposes to take with respect thereto. SECTION VIII DEFAULT The following shall constitute a default ("Event of Default") under this Agreement 8.1 PubliCARD shall fail to pay any principal of the Note when due (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise); 8.2 PubliCARD shall fail to perform or observe any material covenant contained in this Agreement, the Security Documents, or the Note, and such failure, if capable of being remedied, shall remain unremedied for thirty (30) days after written notice thereof shall have been given to PubliCARD by the PBGC; 8.3 PubliCARD shall admit in writing its inability to pay its debts generally, or shall make a general assignment for the benefit of creditors; or any proceeding shall be instituted by or against PubliCARD seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution, liquidation, winding up, reorganization, arrangement, adjustment, protection, relief or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization, or seeking the entry of an order for relief or the appointment of a receiver, trustee, custodian or other similar official for PubliCARD or for any substantial part of its property; or PubliCARD shall take any action to authorize or effect any of the actions set forth above in this subsection; 8.4 Any provision of this Agreement, the Note or any other related document shall at any time for any reason be declared to be null and void by a court of competent jurisdiction, or the validity or enforceability thereof shall be contested by PubliCARD, or a proceeding shall be commenced by PubliCARD seeking to establish the invalidity or unenforceability thereof, or PubliCARD shall deny that it has any liability or obligation hereunder or thereunder. SECTION IX REMEDIES UPON DEFAULT The following remedies shall be available upon the occurrence of any Event of Default (in addition to other remedies that may be available at law): PBGC may (i) declare the outstanding principal amount of the Note to be immediately due and payable, whereupon the outstanding principal amount of the Note shall become and shall be forthwith due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived, (ii) proceed with foreclosure of the liens granted hereunder; and (iii) exercise any and all of its other rights under applicable law. SECTION X GENERAL PROVISIONS 10.1 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 10.2 No failure of any party to this Agreement to enforce at any time any of the provisions of this Agreement and no course of dealing between the parties shall be construed to be a waiver of any provision of this Agreement, or 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. 10.3 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. 10.4 This Agreement shall not be modified or amended, except by written instrument signed by the parties hereto. 10.5 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. 10.6 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. 10.7 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. 10.8 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 the PBGC: Michelle Gray, Manager Pre-Termination Processing Division Pension Benefit Guaranty Corporation 1200 K Street, N.W. Washington, D.C. 20005-4026 (202) 326-4072 (facsimile number) General Counsel Pension Benefit Guaranty Corporation Suite 340 1200 K Street, N.W. Washington, D.C. 20005-4026 (202) 326-4112 (facsimile number) To PubliCARD: Antonio L. DeLise President and Chief Executive Officer PubliCARD, Inc. One Rockefeller Plaza, 14th Floor New York, N.Y. 10020 (212) 307-5781 (facsimile number) With copies to: Arthur F. Woodard, Esq. Kaye Scholer, LLP 425 Park Avenue New York, New York 10022-3598 (212) 836-6555 (facsimile number) 10.8 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/Michelle Gray - ----------------------------- Name: Michelle Gray Title: Program Manager PUBLICARD, INC. /s/Antonio L. DeLise - ----------------------------- Name: Antonio L. DeLise Title: President EXHIBIT A to Settlement Agreement Promissory Note EXHIBIT B to Settlement Agreement Security Agreement EX-99.2 3 v07473_ex99-2.txt EXHIBIT 99.2 PROMISSORY NOTE $7,501,310.00 September 23, 2004 FOR VALUE RECEIVED, PUBLICARD, INC. ("Company"), hereby promises to pay to the order of the PENSION BENEFIT GUARANTY CORPORATION ("PBGC"), the principal sum of SEVEN MILLION FIVE HUNDRED ONE THOUSAND THREE HUNDRED TEN DOLLARS ($7,501,310.00) ("Principal") on or before September 23, 2011 in accordance with the payment terms set forth below. The Principal shall be paid as follows: The first payment hereunder shall be equal to One Million Dollars ($1,000,000) and shall be due to the PBGC no later than thirty (30) days after Company has received a total of Four Million Dollars ($4,000,000.00) in Net Recoveries (as hereinafter defined). Thereafter, on each anniversary of the first payment, Company shall pay PBGC an amount equal to twenty-five percent (25%) of the Net Recoveries in excess of Four Million Dollars ($4,000,000.00) less the sum of all prior payments made pursuant to this sentence in prior years. For purposes of this note, "Net Recoveries" shall mean: the net cash proceeds received by Company with respect to transactions that are consummated on or after March 31, 2003, from, in each case, (a) the sales and dispositions of (i) Company's ownership interests in Infineer Ltd. and TecSec, Incorporated, (ii) Company's real property located in Gretna, Louisiana, and (iii) any other real or personal property assets; and (b) any recoveries from settlements, buyouts or assignments of claims from Company's insurance program. This note evidences the indebtedness incurred under the Settlement Agreement, dated as of September 23, 2004, between Company and PBGC ("Settlement Agreement") and the payment hereof is secured as provided in the Security Agreement, dated as of even date hereof. Principal is payable in lawful money of the United States and in cash at the offices of the PBGC, or at such other place as the PBGC shall designate in writing to Company. No interest shall accrue or be payable under this Note. Company may, at its option, prepay this Note, in whole at any time or in part from time to time, without penalty or premium. The maturity hereof may be accelerated by the holder hereof following the occurrence of any Event of Default set forth in the Settlement Agreement, to which reference is made for the terms and conditions of such right as to acceleration. PUBLICARD INC. By: /s/ Antonio L. DeLise ------------------------------------- Name: Antonio L. DeLise Title: President EX-99.3 4 v07473_ex99-3.txt EXHIBIT 99.3 SECURITY AGREEMENT This SECURITY AGREEMENT ("Agreement") dated as of September 23, 2004, made by PUBLICARD, INC. ("PubliCARD"), to the PENSION BENEFIT GUARANTY CORPORATION ("PBGC"), pursuant to the Settlement Agreement dated September 23, 2004 by and between PubliCARD and PBGC (the "Settlement Agreement"). RECITALS WHEREAS, pursuant to the Settlement Agreement PubliCARD has issued a promissory note ("Note") to the PBGC in the principal amount of Seven Million Five Hundred One Thousand Three Hundred and Ten Dollars ($7,501,310.00); and WHEREAS, as security for (a) the due and punctual payment of principal under the Note and (b) the due and punctual payment of all reasonable costs and expenses incurred by the PBGC in the collection of amounts due under the Note and for the enforcement of its rights, and for other obligations that may arise, under the Settlement Agreement and this Agreement, including, without limitation, reasonable attorneys fees (collectively, the "Secured Obligations"), PubliCARD has agreed to grant to the PBGC a security interest in all presently owned or hereafter acquired personal property and rights to property all as more fully described herein; NOW, THEREFORE, in consideration of the premises and of the mutual covenants herein contained and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows: 1. DEFINITIONS. (a) Certain Definitions. Capitalized terms defined elsewhere in this Agreement have the meanings ascribed to them thereby. As used in this Agreement and in any related document attached hereto, the following terms shall have the following meanings: "Agreement" shall mean this Security Agreement as the same may from time to time be amended or supplemented. "Collateral" shall mean all of the personal property and interests in property, tangible or intangible, hereafter acquired, or now existing of PubliCARD. "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C. ss.ss. 1001-1461 (2000 & Supp. 1, 2001), as amended from time to time, and the regulations promulgated and rulings issued thereunder. "Event of Default" shall mean an Event of Default as defined in Section VIII of the Settlement Agreement. "Other Liens" shall mean liens, security interests or encumbrances in or on the Collateral. "UCC" shall mean the Uniform Commercial Code as from time to time in effect in the relevant jurisdiction. (b) UCC Terms. Any terms defined in Articles 8 or 9 of the UCC and used in this Agreement, including, but not limited to, "accounts", "documents, "instruments", and "proceeds," unless otherwise expressly provided, shall have the same meanings given to such terms thereunder 2. PAYMENT BY PUBLICARD. PubliCARD will pay when due the amounts as and when required by the Note. 3. GRANT AND PLEDGE OF SECURITY INTEREST. Pledge of Collateral. In order to secure the full and punctual payment of the Secured Obligations, PubliCARD agrees that PBGC shall have, and PubliCARD hereby pledges and grants to and creates in favor of PBGC, a security interest under the Uniform Commercial Code and other applicable law, in and to the Collateral. 4. CONDITIONS PRECEDENT. (a) The following documents, each of which must be reasonably satisfactory in form and substance to PBGC, shall be provided contemporaneously with the execution of this Agreement, unless it would cause a hardship to PubliCARD, and then in no event later than thirty (30) days after the execution date of this Agreement, or as otherwise agreed to in writing by PBGC. (i) Copies of the insurance policies or binders for fire, casualty, liability, and worker's compensation insurance with respect to the Collateral, in amounts and issued by insurers reasonably acceptable to PBGC. (ii) Any necessary UCC-1 Financing Statements with respect to the Collateral, or any other documents that may be required by the PBGC for the perfection and filing of PBGC's security interest, duly completed and executed. (iii) Resolutions of the Board of Directors of PubliCARD that the company has approved this Agreement, the Settlement Agreement, the Note and any other document required by the Settlement Agreement. 5. REPRESENTATIONS AND WARRANTIES. (a) PubliCARD represents and warrants, to the best of its knowledge, that, as of the date hereof and with respect to the Collateral in existence as of the date hereof: (i) it is duly organized and validly existing under the law of the State of Pennsylvania, and its principal place of business is located within the State of New York; (ii) it has all necessary corporate authority to execute, deliver and perform the obligations under this Agreement; (iii) it has complete authority to grant a security interest to PBGC in the Collateral; (iv) the Collateral is free of all Other Liens. (v) no financing statement covering the Collateral or any part thereof has been filed with any filing office; (vi) no material right of setoff, lien or counterclaim exists, with respect to any part of the Collateral; and (vii) all information supplied and statements made in any financial or credit statements or application for credit relating to the Collateral prior to the execution of this Agreement and supplied to the PBGC are true and correct in all material respects as of the date furnished and as of the date hereof. (b) PBGC. The PBGC represents and warrants, to the best of its knowledge, that: (i) it is a United States government corporation established under Title IV of ERISA, and its principal place of business is located in Washington, DC; and (ii) it has all necessary authority to execute, deliver and perform the obligations under this Agreement. 6. COVENANTS OF PUBLICARD. PubliCARD agrees that it will take, or refrain from taking, the following actions unless such action or failure to act would not have a material adverse effect on the Collateral. (a) Perfection of Security Interest. PubliCARD will from time to time, upon written request from PBGC, promptly execute and deliver to PBGC all assignments, certificates, supplemental writings, and financing statements, and do all such other acts or things as PBGC may reasonably request, in order to evidence and perfect PBGC's security interest. (b) Demonstration of Title. PubliCARD will take appropriate steps and execute such documents as are required to prove its title in the Collateral to PBGC as may be reasonably required and will defend the Collateral and its proceeds against the claims and demands of all other persons. (c) Performance of all Covenants. PubliCARD will punctually and properly perform all of its covenants and duties under any other security agreement, mortgage, collateral pledge agreement, or material contract of any kind now or hereafter existing. (d) Anti-Lien Provision. Without PBGC's prior written consent, not to be unreasonably withheld nor delayed, PubliCARD shall not encumber, suffer or grant any security interest or lien ("Other Lien") in any Collateral, or any part of it, nor shall PubliCARD attempt to do so. (e) Notification of Material Changes. PubliCARD will promptly notify PBGC of any material change in any fact or circumstances warranted or represented by PubliCARD in this Agreement or in any other writing furnished by PubliCARD to PBGC in connection with the Collateral or the Secured Obligations. (f) Notification of Material Claim. PubliCARD will promptly notify PBGC of any material claim, action or proceeding directly affecting the Collateral or title therein, or in any material part thereof, or the security interest created herein, and, at the request of PBGC, appear in and defend, at its own expense, any such action or proceeding. (g) Notification of Certain Changes. PubliCARD will notify PBGC of all changes in PubliCARD's name, legal structure, or chief executive office, or in the location of the Collateral (other than Collateral consisting of equipment located at third party locations), or PubliCARD's records concerning same. (h) Location of Records. PubliCARD will keep, within the State of New York, a copy of the records concerning the Collateral, which records will be of such character as will enable PBGC or its designees to determine at any time the status of the Collateral. Within thirty (30) days of the execution date of this Agreement, PubliCARD will advise the PBGC in writing the specific location where such records are being held. (i) Payment of Taxes. PubliCARD will pay all material taxes, assessments, impositions, judgments, and any other claims that would create a right of seizure or levy upon the Collateral or create a security interest in the Collateral; provided, however, PubliCARD shall be entitled to contest any such taxes, assessments, impositions, judgments or claims as long as such contest and nonpayment does not result in a lien. (j) Prohibition against Waste. PubliCARD will not misuse or waste the Collateral. (k) Violation of Law. PubliCARD will not use the Collateral in material violation of any applicable statute or ordinance. (l) Inspection. PubliCARD will permit PBGC and its designees from time to time to inspect the Collateral and to inspect, audit, and make copies of and extracts from all records and all other papers in the possession of PubliCARD pertaining to the Collateral. PubliCARD will promptly arrange for any inspections requested by PBGC. (m) Insurance. PubliCARD will at all times insure the Collateral against loss or damage by fire, theft, burglary, pilferage, loss in transit, and such other hazards as PBGC reasonably may specify, in amounts and under policies and by insurers consistent with those provided in the policies or binders furnished PBGC as of the date hereof, provided that: (i) if PubliCARD fails to so insure the Collateral, PBGC may elect to purchase insurance and any amounts so expended by PBGC shall become part of the Secured Obligations under this Agreement; (ii) no cancellation of such insurance or material change in the terms of any policy will be made without the insurance carrier's giving PBGC at least thirty (30) days prior written notice. (n) Repair. PubliCARD will keep the Collateral in good repair and operating condition, unless any such failure does not adversely affect PBGC's interest in the Collateral in any material way. 7. RIGHTS AND REMEDIES. In addition to the remedies provided under the Settlement Agreement, upon the occurrence of an Event of Default, the PBGC, in its sole discretion, may elect to pursue one or more of the following remedies. The PBGC may waive any default, or remedy any default in any reasonable manner, without waiving any other prior or subsequent default. (a) Notice. Upon the occurrence of any Event of Default, the PBGC will provide PubliCARD with written notice at least thirty (30) days prior to enforcing its rights under Settlement Agreement, during which period PubliCARD may cure the Event of Default. (b) Remedy in the Event of Certain Other Liens. If there are any Other Liens that arise and that the PBGC has not agreed may be permitted, PubliCARD shall pay and discharge the same immediately. If PubliCARD fails to do so, the PBGC may, at its option, pay or discharge such Other Liens, in whole or in part, and PubliCARD shall immediately reimburse the PBGC for all costs it has incurred in doing so. Any such payment made by the PBGC to discharge any such Other Liens, not reimbursed by PubliCARD, shall form part of the Secured Obligations and shall be secured by the Collateral. (c) Other Remedies. No remedy recited in this Agreement shall limit the PBGC in any manner from pursuing any and all additional remedies provided under ERISA or other applicable law. 8. RELEASE OF COLLATERAL. The Collateral shall be released from PBGC's security interest upon the payment in full of the Secured Obligations (including, but not limited to, reducing the Note to zero dollars ($0)). 9. INDEMNITY. PubliCARD assumes liability for, and agrees to indemnify the PBGC (and each of its employees, directors, and agents) against, and on written demand to pay, or to reimburse the PBGC for the payment of any or all liabilities, obligations, losses, damages, penalties, claims, suits, actions, costs, expenses, and disbursements, including reasonable legal fees and expenses of any kind and nature imposed on, incurred by, or asserted against the PBGC directly and principally relating to or arising out of this Agreement; provided, that PubliCARD shall not be required to indemnify the PBGC against any of the foregoing that results from the gross negligence or willful misconduct of the PBGC (or any employee, director or agent thereof). 10. MISCELLANEOUS. (a) Amendments. PubliCARD understands that this Agreement cannot be changed or terminated orally, can only be modified upon the written consent of the parties hereto, and is for the benefit of and binding upon the parties and their successors and assigns. (b) Counterparts. This Agreement may be executed in one or more counterparts, all of which taken together shall constitute one and the same instrument. (c) Governing Law. This Agreement, and the rights and obligations of the parties hereunder, shall be governed by and construed in accordance with the laws of the State of New York, except to the extent such laws are superseded by federal law. (d) Notices. All notices and other communications hereunder shall be in writing and shall be delivered to the intended recipient at the Address for Notices specified below or at such other address as shall be designated by any of them in a notice to each other party set forth therein. All notices and other communications shall be deemed to have been duly given, in the case of transmission by telecopy, when received at the recipient's telecopy machine; in the case of hand delivery, when received; or in the case of overnight express mail by a nationally recognized carrier, the following business day. Address for Notices: To the PBGC: Michelle Gray, Manager Pre-Termination Processing Division Pension Benefit Guaranty Corporation 1200 K Street, N.W. Washington, D.C. 20005-4026 (202) 326-4072 (facsimile number) With copies to: General Counsel Pension Benefit Guaranty Corporation Suite 340 1200 K Street, N.W. Washington, D.C. 20005-4026 (202) 326-4112 (facsimile number) To PubliCARD: Antonio L. DeLise President and Chief Executive Officer PubliCARD, Inc. One Rockefeller Plaza, 14th Floor New York, N.Y. 10020 (212) 307-5781 (facsimile number) With copies to: Arthur F. Woodard, Esq. Kaye Scholer, LLP 425 Park Avenue New York, New York 10022-3598 (212) 836-8689 (facsimile number) (e) The signatories to this Agreement hereby represent and warrant that they have full power and authority to enter into this Agreement, that all necessary corporate approvals or other appropriate action has been taken to cause them to possess such power and authority and that this Agreement constitutes a legal, valid and binding obligation of each of the Parties hereto enforceable against each of the Parties hereto. (f) 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/Michelle Gray - --------------------------- Name: Michelle Gray Title: Program Manager PUBLICARD, INC. Antonio L. DeLise - --------------------------- Name: Antonio L. DeLise Title: President EX-99.4 5 v07473_ex99-4.txt EXHIBIT 99.4 PLEDGE AGREEMENT PLEDGE AGREEMENT, dated as of September 23, 2004, made by PubliCARD, Inc., (the "Pledgor") in favor of Pension Benefit Guaranty Corporation ("PBGC"), pursuant to the Settlement Agreement dated September 23, 2004 by and between PubliCARD and PBGC (the "Settlement Agreement"). WITNESSETH: WHEREAS, pursuant to the Settlement Agreement PubliCARD has issued a promissory note ("Note") to the PBGC in the principal amount of Seven Million Five Hundred One Thousand Three Hundred and Ten Dollars ($7,501,310.00); and WHEREAS, as security for (a) the due and punctual payment of principal under the Note and (b) the due and punctual payment of all reasonable costs and expenses incurred by the PBGC in the collection of amounts due under the Note and for the enforcement of its rights, and for other obligations that may arise, under the Settlement Agreement and this Agreement, including, without limitation, reasonable attorneys fees (collectively, the "Secured Obligations"), PubliCARD has agreed to execute this pledge and to deliver certain shares of stock to the PBGC in furtherance of that pledge all as more fully described herein; NOW, THEREFORE, in consideration of the premises, the Pledgor hereby agrees with the PBGC as follows: 1. Defined Terms. Unless otherwise defined herein, terms defined in the Settlement Agreement and used herein shall have the meanings given to them in the Settlement Agreement. The following terms shall have the following meanings: "Agreement": this Pledge Agreement, as the same may be amended, supplemented or otherwise modified from time to time. "Code": the Uniform Commercial Code from time to time in effect in the State of New York. "Collateral": the Pledged Stock, and all Proceeds. "Event of Default" shall mean an Event of Default as defined in Section VIII of the Settlement Agreement. "Issuers": the collective reference to the companies identified on Schedule 1 attached hereto as the issuers of the Pledged Stock; individually, each an "Issuer." ------ "Pledged Stock": the shares of capital stock listed on Schedule 1, together with all stock certificates, options or rights of any nature whatsoever that may be issued or granted by any Issuer to the Pledgor in respect of such shares while this Agreement is in effect. "Proceeds": all "proceeds" as such term is defined in the Code. "Securities Act": the Securities Act of 1933, as amended, or such law of another country that applies to registration rights and requirements, as amended. The words "hereof," "herein" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and section and paragraph references are to this Agreement unless otherwise specified. The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms. 2. Pledge; Grant of Security Interest. Pledgor hereby delivers to the PBGC all the Pledged Stock and hereby grants to the PBGC a first security interest in the Collateral, as collateral security for the prompt and complete payment and performance when due (whether at the stated maturity, by acceleration or otherwise) of the Secured Obligations. 3. Stock Powers; Endorsements. Concurrently with the delivery to the PBGC of each certificate representing one or more shares of Pledged Stock to the PBGC, the Pledgor of such Pledged Stock shall deliver an undated stock power covering such certificate, duly executed in blank by such Pledgor with, if the PBGC so requests, signature guaranteed. 4. Representations and Warranties. Pledgor represents and warrants that: 1. It has the corporate power and authority and the legal right to execute and deliver, to perform its obligations under, and to grant the lien on the Collateral pursuant to, this Agreement and has taken all necessary corporate action to authorize its execution, delivery and performance of, and grant of the lien on the Collateral pursuant to, this Agreement. 2. This Agreement constitutes a legal, valid and binding obligation of Pledgor, enforceable in accordance with its terms, and upon delivery to the PBGC of the stock certificates evidencing the Pledged Stock, the lien created pursuant to this Agreement will constitute a valid, perfected first priority security interest in the Collateral, enforceable in accordance with its terms against all creditors of the Pledgor and any Persons purporting to purchase any Collateral from such Pledgor, except in each case as enforceability may be affected by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing. 3. The execution, delivery and performance of this Agreement will not violate any provision of any law of the United States or any state thereof, or contractual obligation of Pledgor and will not result in the creation or imposition of any lien on any of the properties or revenues of such Pledgor pursuant to any law or contractual obligation of Pledgor, except the security interest created by this Agreement. 4. No consent or authorization of, filing with, or other act by or in respect of, any arbitrator or governmental authority of the United States or any state thereof and no consent of any other Person (including, without limitation, any stockholder or creditor of Pledgor), is required in connection with the execution, delivery, performance, validity or enforceability of this Agreement. 5. No litigation, investigation or proceeding of or before any arbitrator or governmental authority is pending or, to the knowledge of Pledgor, threatened by or against Pledgor or against any of its properties or revenues with respect to this Agreement or any of the transactions contemplated hereby. 6. The shares of Pledged Stock set forth on Schedule 1 hereto opposite the name of each Issuer constitute the percentage of such issued and outstanding shares set forth opposite the name of such Issuer on such Schedule. 7. All the shares of the Pledged Stock have been duly and validly issued and are fully paid and nonassessable. 8. Pledgor is the record and beneficial owner of, and has good and marketable title to, the Pledged Stock, free of any and all liens or options in favor of, or claims of, any other person, except the security interest created by this Agreement. 5. Covenants. Pledgor covenants and agrees with the PBGC from and after the date of this Agreement until the Secured Obligations are paid and performed in full: 1. If such Pledgor shall, as a result of its ownership of the Pledged Stock, become entitled to receive or shall receive any stock certificate (including, without limitation, any certificate representing a stock dividend or a distribution in connection with any reclassification, increase or reduction of capital or any certificate issued in connection with any reorganization), option or rights, whether in addition to, in substitution of, as a conversion of, or in exchange for any shares of the Pledged Stock, or otherwise in respect thereof, such Pledgor shall accept the same as the agent of the PBGC, hold the same in trust for the PBGC, and deliver the same forthwith to the PBGC in the exact form received, duly indorsed by Pledgor to the PBGC, if required, together with an undated stock power covering such certificate duly executed in blank by Pledgor and with, if the PBGC so requests, signature guaranteed, to be held by the PBGC, subject to the terms hereof, as additional collateral security for the Secured Obligations, provided that the Pledgor shall be entitled to sell or otherwise dispose of such stock and utilize the proceeds of such sale or disposition to pay the Secured Obligations. Any sums paid upon or in respect of the Pledged Stock upon the liquidation or dissolution of any Issuer shall be paid over to the PBGC to be held by it hereunder as additional collateral security for the Secured Obligations, and in case any distribution of capital shall be made on or in respect of the Pledged Stock or any property shall be distributed upon or with respect to the Pledged Stock pursuant to the recapitalization or reclassification of the capital of any Issuer or pursuant to the reorganization thereof, the property so distributed shall be delivered to the PBGC to be held by it hereunder as additional collateral security for the Secured Obligations. If any sums of money or property so paid or distributed in respect of the Pledged Stock shall be received by Pledgor, it shall, until such money or property is paid or delivered to the PBGC, hold such money or property in trust, segregated from other funds of Pledgor, as additional collateral security for the Secured Obligations. 2. Without the prior written consent of the PBGC, such Pledgor will not vote to enable, or take any other action to permit, any Issuer to issue any stock or other equity securities of any nature or to issue any other securities convertible into or granting the right to purchase or exchange for any stock or other equity securities of any nature of any Issuer, sell, assign, transfer, exchange, or otherwise dispose of, or grant any option with respect to, the Collateral, create, incur or permit to exist any lien or option in favor of, or any claim of any person with respect to, any of the Collateral, or any interest therein, except for the security interests created by this Agreement or enter into any agreement or undertaking restricting the right or ability of Pledgor or the PBGC to vote, sell, assign or transfer any of the Collateral. 3. Pledgor shall maintain the security interest created by this Agreement as a first, perfected security interest and shall defend such security interest against claims and demands of all persons whomsoever. At any time and from time to time, upon the written request of the PBGC, and at the sole expense of Pledgor, it will promptly and duly execute and deliver such further instruments and documents and take such further actions as the PBGC may reasonably request for the purposes of obtaining or preserving the full benefits of this Agreement and of the rights and powers herein granted. If any amount payable under or in connection with any of the Collateral shall be or become evidenced by any promissory note, other instrument or chattel paper, such note, instrument or chattel paper shall be immediately delivered to the PBGC, duly endorsed in a manner satisfactory to the PBGC, to be held as Collateral pursuant to this Agreement. 4. Pledgor shall pay, and save the PBGC, the Co-Agents and the Lenders harmless from, any and all liabilities with respect to, or resulting from any delay in paying, any and all stamp, excise, sales or other taxes which may be payable or determined to be payable with respect to any of the Collateral or in connection with any of the transactions contemplated by this Agreement. 6. Cash Dividends and Voting Rights; Payments of Principal and Interest. Unless an Event of Default shall have occurred and be continuing and the PBGC shall have given notice to Pledgor of the PBGC's intent to exercise its corresponding rights pursuant to Section 7 below, Pledgor shall be permitted to receive all cash dividends paid in the normal course of business of the Issuers in respect of the Pledged Stock and to exercise all voting and corporate rights with respect to the Pledged Stock; provided, however, that no vote shall be cast or corporate right exercised or other action taken which, in the PBGC's reasonable judgment, would impair the Collateral or which would be inconsistent with or result in any violation of any provision of this Agreement. 7. Rights of the Lenders and the PBGC. All money Proceeds received by the PBGC hereunder shall be held by the PBGC and shall continue to be held as collateral security for all the Secured Obligations and shall not constitute payment thereof until applied as provided in paragraph 8(a). 1. If an Event of Default shall occur and be continuing and the PBGC shall give notice of its intent to exercise such rights to Pledgor, the PBGC shall have the right to receive any and all dividends paid in respect of the Pledged Stock and Pledgor shall segregate and hold in trust for the benefit of the PBGC any payments received by Pledgor after receipt of such notice and make application thereof to the Secured Obligations in such order as the PBGC may determine, all shares of the Pledged Stock shall be registered in the name of the PBGC or its nominee, and the PBGC or its nominee may thereafter exercise all voting, corporate and other rights pertaining to such shares of the Pledged Stock at any meeting of shareholders of any Issuer or otherwise and any and all rights of conversion, exchange, subscription and any other rights, privileges or options pertaining to such shares of the Pledged Stock as if it were the absolute owner thereof (including, without limitation, the right to exchange at its discretion any and all of the Pledged Stock upon the merger, consolidation, reorganization, recapitalization or other fundamental change in the corporate structure of any Issuer, or upon the exercise by Pledgor or the PBGC of any right, privilege or option pertaining to such shares of the Pledged Stock, and in connection therewith, the right to deposit and deliver any and all of the Pledged Stock with any committee, depositary, transfer agent, registrar or other designated agency upon such terms and conditions as the PBGC may determine), all without liability except to account for property actually received by it, but the PBGC shall have no duty to Pledgor to exercise any such right, privilege or option and shall not be responsible for any failure to do so or delay in so doing and the PBGC shall be entitled to, but shall in no event be obligated to, exercise any rights and remedies of the holder of any Pledged Note. 8. Remedies. If an Event of Default shall have occurred and be continuing, at any time at the PBGC's election, the PBGC may apply all or any part of Proceeds in payment of the Secured Obligations as the PBGC may elect. 9. If an Event of Default shall have occurred and be continuing, the PBGC may exercise, in addition to all other rights and remedies granted in this Agreement and in any other instrument or agreement securing, evidencing or relating to the Secured Obligations, all rights and remedies of a secured party under the Code. 10. Pledgor shall remain liable for any deficiency if the proceeds of any sale or other disposition of Collateral are insufficient to pay the Secured Obligations and the reasonable fees and disbursements of any attorneys employed by the PBGC to collect such deficiency. 11. Registration Rights; Private Sales. If the PBGC shall determine to exercise its right to sell any or all of the Pledged Stock pursuant to paragraph 8(b) hereof, and if in the opinion of the PBGC it is necessary or advisable to have the Pledged Stock, or that portion thereof to be sold, registered under the provisions of the Securities Act, Pledgor will cause the Issuer thereof to execute and deliver, and cause the directors and officers of such Issuer to execute and deliver, all such instruments and documents, and do or cause to be done all such other acts as may be, in the opinion of the PBGC, necessary or advisable to register the Pledged Stock, or that portion thereof to be sold, under the provisions of the Securities Act, use its best efforts to cause the registration statement relating thereto to become effective and to remain effective for a period of one year from the date of the first public offering of the Pledged Stock, or that portion thereof to be sold, and make all amendments thereto and/or to the related prospectus which, in the opinion of the PBGC, are necessary or advisable, all in conformity with the requirements of the Securities Act and the rules and regulations applicable thereto. Such Pledgor agrees to cause each such Issuer to comply with the provisions of the securities or "Blue Sky" laws of any and all jurisdictions which the PBGC shall designate and to make available to its security holders, as soon as practicable, an earnings statement (which need not be audited) which will satisfy the provisions of the Securities Act. 12. Pledgor recognizes that the PBGC may be unable to effect a public sale of any or all the Pledged Stock, by reason of certain prohibitions contained in the Securities Act and applicable state securities laws or otherwise, and may be compelled to resort to one or more private sales thereof to a restricted group of purchasers which will be obliged to agree, among other things, to acquire such securities for their own account for investment and not with a view to the distribution or resale thereof. Pledgor acknowledges and agrees that any such private sale may result in prices and other terms less favorable than if such sale were a public sale and, notwithstanding such circumstances, agrees that any such private sale shall be deemed to have been made in a commercially reasonable manner. The PBGC shall be under no obligation to delay a sale of any of the Pledged Stock for the period of time necessary to permit the Issuer thereof to register such securities for public sale under the Securities Act, or under applicable state securities laws, even if such Issuer would agree to do so. 13. Pledgor further agrees to use its best efforts to do or cause to be done all such other acts as may be necessary to make such sale or sales of all or any portion of the Pledged Stock pursuant to this Section valid and binding and in compliance with any and all other applicable laws. Pledgor further agrees that a breach of any of the covenants contained in this Section will cause irreparable injury to the PBGC, that the PBGC has no adequate remedy at law in respect of such breach and, as a consequence, that each and every covenant contained in this Section shall be specifically enforceable against Pledgor, and Pledgor hereby waives and agrees not to assert any defenses against an action for specific performance of such covenants except for a defense that no Event of Default has occurred. 14. Irrevocable Authorization and Instruction to Issuer. Pledgor hereby authorizes and instructs each Issuer to comply with any instruction received by it from the PBGC in writing that (a) states that an Event of Default has occurred and (b) is otherwise in accordance with the terms of this Agreement, without any other or further instructions from Pledgor, and Pledgor agrees that each Issuer shall be fully protected in so complying. 15. PBGC's Appointment as Attorney-in-Fact. Pledgor hereby irrevocably constitutes and appoints the PBGC and any officer or agent of the PBGC, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of Pledgor and in the name of Pledgor or in the PBGC's own name, from time to time in the PBGC's discretion, but only following an Event of Default by Pledgor, for the purpose of carrying out the terms of this Agreement, to take any and all appropriate action and to execute any and all documents and instruments which may be necessary or desirable to accomplish the purposes of this Agreement, including, without limitation, any financing statements, endorsements, assignments or other instruments of transfer. 16. Pledgor hereby ratifies all that said attorneys shall lawfully do or cause to be done pursuant to the power of attorney granted in paragraph 11(a) in accordance with the terms hereof. All powers, authorizations and agencies contained in this Agreement are coupled with an interest and are irrevocable until this Agreement is terminated and the security interests created hereby are released. 17. Duty of PBGC. The PBGC's sole duty with respect to the custody, safekeeping and physical preservation of the Collateral in its possession, under Section 9-207 of the Code or otherwise, shall be to deal with it in the same manner as the PBGC deals with similar securities and property for its own account, except that the PBGC may hold the same as demand deposits. Neither the PBGC, nor any of its respective directors, officers, employees or agents shall be liable for failure to demand, collect or realize upon any of the Collateral other than for gross negligence or willful misconduct in taking or refraining from taking any action, or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of Pledgor or any other person or to take any other action whatsoever with regard to the Collateral or any part thereof. 18. Authority of PBGC. Pledgor acknowledges that the rights and responsibilities of the PBGC under this Agreement with respect to any action taken by the PBGC or the exercise or non-exercise by the PBGC of any option, voting right, request, judgment or other right or remedy provided for herein or resulting or arising out of this Agreement shall be governed by this Agreement. The PBGC shall be conclusively presumed to be acting with full and valid authority so to act or refrain from acting, and neither Pledgor nor any Issuer shall be under any obligation, or entitlement, to make any inquiry respecting such authority. 19. Notices. 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 the PBGC: Michelle Gray, Manager Pre-Termination Processing Division Pension Benefit Guaranty Corporation 1200 K Street, N.W. Washington, D.C. 20005-4026 (202) 326-4072 (facsimile number) General Counsel Pension Benefit Guaranty Corporation Suite 340 1200 K Street, N.W. Washington, D.C. 20005-4026 (202) 326-4112 (facsimile number) To Pledgor: Antonio L. DeLise President and Chief Executive Officer PubliCARD, Inc. One Rockefeller Plaza, 14th Floor New York, N.Y. 10020 (212) 307-5781 (facsimile number) With copies to: Arthur F. Woodard, Esq. Kaye Scholer, LLP 425 Park Avenue New York, New York 10022-3598 (212) 836-6555 (facsimile number) The PBGC and Pledgor may change their addresses and transmission numbers for notices by notice in the manner provided in this Section. 20. Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 21. Submission to Jurisdiction; Waivers. Pledgor hereby irrevocably and unconditionally: 1. _____________ submits for itself and its property in any legal action or proceeding relating to this Agreement, or for recognition and enforcement of any judgment in respect thereof, to the non-exclusive general jurisdiction of the courts of the State of New York, the courts of the United States of America for the Southern District of New York, and appellate courts from any thereof; 2. _____________ consents that any such action or proceeding may be brought in such courts, and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same; 3. _____________ agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to Pledgor at its address set forth on Schedule 3 hereto or at such other address of which the PBGC shall have been notified pursuant to Section 15; 4. _____________ agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law or shall limit the right to sue in any other jurisdiction; and 22. PLEDGOR HEREBY UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING REFERRED TO IN PARAGRAPH (A) ABOVE. 23. Amendments in Writing; No Waiver; Cumulative Remedies. None of the terms or provisions of this Agreement may be waived, amended, supplemented or otherwise modified except by a written instrument executed by Pledgor and the PBGC, provided that any provision of this Agreement may be waived by the PBGC in a letter or agreement executed by the PBGC or by telex or telecopier transmission from the PBGC. 24. The PBGC shall not by any act (except by a written instrument pursuant to paragraph 18(a) hereof), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any default or Event of Default or in any breach of any of the terms and conditions hereof. No failure to exercise, nor any delay in exercising, on the part of the PBGC any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by the PBGC of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which the PBGC would otherwise have on any future occasion. 25. The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any other rights or remedies provided by law. 26. Section Headings. The section headings used in this Agreement are for convenience of reference only and are not to affect the construction hereof or be taken into consideration in the interpretation hereof. 27. Successors and Assigns. This Agreement shall be binding upon the successors and assigns of Pledgor and shall inure to the benefit of the PBGC, and its successors and assigns, except that Pledgor may not assign or transfer any of its rights or obligations under this Agreement without the prior written consent of PBGC. 28. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to be duly executed and delivered as of the date first above written. PubliCARD, INC. By: /s/Antonio L. DeLise -------------------- Title: President SCHEDULE 1 TO PLEDGE AGREEMENT DESCRIPTION OF PLEDGED STOCK
Stock Issuer Class of Stock* Certificate No. No. of Shares %-age - -------------------- ------------------ --------------- ------------- -------------- TecSec, Incorporated Series A Preferred 01 60,058 5% of fully diluted shares Infineer Limited Ordinary Shares 1 320,000 100% Infineer Limited Non-cumulative 1 1,060,000 100% Redeemable Preference Shares Infineer Limited Non-cumulative 1 825,00 100% Redeemable "B" Preference Shares
EX-99.5 6 v07473_ex99-5.txt EXHIBIT 99.5 AGREEMENT FOR APPOINTMENT OF TRUSTEE AND TERMINATION OF PLAN This is an AGREEMENT between the Pension Benefit Guaranty Corporation ("PBGC") and Publicard, Inc. ("Publicard"). RECITALS: A. PBGC is a United States government agency established by Title IV of the Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C. ss.ss. 1301-1461 ("ER1SA"). B. Publicard is a corporation organized under the laws of Pennsylvania with its principal place of business located in New York, New York. C. Effective January 1, 1976, Publicker Inc. established the Publicker Retirement Income Plan (`Plan") to provide retirement benefits for certain of its employees. D. The Plan is an employee pension benefit plan to which 29 U.S.C. ss. 1321(a) applies and is not exempt under 29 U.S.C. ss. 1321(b). The Plan is therefore covered by Title IV of ERISA. E. Publicker is the administrator of the Plan within the meaning of 29 U.S.C. ss.ss. 1002(16) and 1301(a)(1). F. On January 17, 2003, Publicard notified Plan participants that it intended to seek termination of the Plan effective March 31, 2003. G. On March 31, 2003, Publicard was the contributing sponsor of the Plan within the meaning of 29 U.S.C. ss. 130 1(a)(13). H. PBGC has issued to Publicard a Notice of Determination under 29 U.S.C. ss. 1342(a) that the Plan does not have assets available to pay benefits which are currently due; the Plan has not met the minimum funding standard required under section 412 of the Internal Revenue Code, and that the Plan should be terminated under 29 U.S.C. ss. 1342(c) to protect the interests of the Plan's participants and to avoid any unreasonable increase in liability of PBGC's insurance fund. NOW THEREFORE, the parties agree: 1. The Plan is terminated under 29 U.S.C. ss. 1342(c). 2. The Plan termination date is March 31, 2003, under 29 U.S.C. ss. 1348. 3. PBGC is appointed trustee of the Plan under 29 U.S.C. ss. 1342(c). 4. Publicard and any other person having possession or control of any records, assets or other property of the Plan shall convey and deliver to PBGC such records, assets or property. 5. PBGC will have, with respect to the Plan, all of the rights and powers of a trustee specified in ERISA or otherwise granted by law. The persons signing this Agreement are authorized to do so. The Agreement will take effect on the date the last person signs below. PUBLICARD, INC. Dated: September 23, 2004 By: /s/Antonio L. DeLise ------------------------------------- Antonio DeLise, President and Chief Executive Officer PENSION BENEFIT GUARANTY CORPORATION Dated: September 30, 2004 By: /s/E. Henderson ------------------------------------- Auditor -----END PRIVACY-ENHANCED MESSAGE-----