EXHIBIT
      10.4

    


    APPENDIX
      B

    STOCK
      OPTION AGREEMENT


    


    THIS
      AGREEMENT, dated as of July 21, 2006, is made by and between PubliCARD, Inc.,
      a
      Pennsylvania corporation (the “Company”) and Joseph E. Sarachek (the
“Optionee”).

    


    WHEREAS,
      pursuant to the letter agreement dated July 21, 2006 (the “Retention Agreement”)
      between the Optionee and the Company, on the date hereof, the Optionee has
      been
      selected by the Committee to receive a grant of stock options under the
      PubliCARD, Inc. 1999 Long Term Incentive Plan (the “Plan”).

    


    NOW,
      THEREFORE, the Company and the Optionee agree as follows:

    


    Definitions.

    


    Any
      capitalized term not defined herein shall have the meaning set forth in the
      Plan.

    


    Grant
      of Option.

    


    Grant;
      Grant Date.
      Subject to the terms and conditions hereof, the Company hereby grants under
      the
      Plan to the Optionee as of July 21, 2006 (the “Grant Date”) an option to
      purchase up to 1,793,650 Shares at an exercise price of $0.0279 per
      Share.

    


    Adjustments
      in Option.
      In the event that the outstanding Shares subject to the Option are changed
      into
      or exchanged for a different number or kind of shares or securities of the
      Company, or of another corporation, by reason of reorganization, merger or
      other
      subdivision, consolidation, recapitalization, reclassification, stock split,
      issuance of warrants, stock dividend or combination of shares or similar event,
      the Committee shall make an appropriate and equitable adjustment in the Option
      so that the Optionee’s proportionate interest shall be maintained as before the
      occurrence of such event.

    


    Form
      of Option.
      The option is not intended to be an incentive stock option. 

    


    Term.
      The Option shall expire on the 10th
      anniversary of the Grant Date, unless terminated earlier in accordance with
      this
      Agreement.

    


    Vesting.
      The Option shall become vested and immediately exercisable upon the consummation
      of the Initial Transaction (as defined in the Retention Agreement).

    


    Exercise.
      The Optionee shall exercise an Option in whole or in part at any time by
      delivering written notice of such exercise to the Secretary of the Company
      of
      the number of Shares as to which the Option is being exercised, and enclosing
      payment for the Shares with respect to which the Option is being exercised.
      Such
      payment shall be in cash or by check, or if approved by the Committee, by the
      delivery of Shares previously owned by the Optionee, duly endorsed for transfer
      to the Company, with a Fair Market Value on the date of delivery equal to the
      aggregate purchase price of the Shares with respect to which the Option is
      being
      exercised, or any combination of the foregoing approved by the Committee, in
      its
      sole discretion. Partial exercise shall be for whole Shares only and shall
      not
      be for less than one hundred (100) Shares unless the number of Shares purchased
      constitutes the total number of Shares then remaining subject to the Option
      or
      the Committee permits such smaller exercise in its sole discretion.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    


    Exercise
      Following Termination of Engagement.
      Notwithstanding the provisions of the Plan: 

    


    In
      the event the Optionee’s engagement by the Company is terminated for cause or if
      the Optionee voluntarily terminates such engagement, if the Option shall not
      be
      exercisable at such time, it shall be deemed to have terminated as of the day
      preceding the date on which the Optionee’s engagement by the Company terminates.


    


    In
      all other cases, the Option shall be exercisable for the shorter of ninety
      (90)
      days following such termination of the Optionee’s engagement by the Company, or
      the remainder of its original term, to the extent it had become or becomes
      exercisable in accordance with Section 2(5).

    


    Nontransferability.
      The Option shall not be transferable other than by will or the laws of descent
      and distribution, and no transfer so effected shall be effective to bind the
      Company unless the Company has been furnished with written notice thereof and
      a
      copy of the will and/or such other evidence as the Committee may deem necessary
      to establish the validity of the transfer and the acceptance by the transferee
      or transferees of the terms and conditions of the Option, provided, however,
      that, in the discretion of the Committee, Options may be transferred pursuant
      to
      a Qualified Domestic Relations Order (within the meaning of the
      Code).

    


    Conditions
      to Issuance of Stock Certificates.

    


    The
      Shares deliverable upon the exercise of the Option, or any portion thereof,
      may
      be either previously authorized but unissued Shares or issued Shares which
      have
      been reacquired by the Company. Such Shares shall be fully paid and
      non-assessable. The stock certificates evidencing the Shares shall bear such
      legends restricting transferability as the Committee deems necessary or
      advisable.

    


    The
      Company shall not be required to issue or deliver any certificate or
      certificates for Shares deliverable upon any exercise of the Option prior to
      fulfillment of all of the following conditions:

    


    The
      completion of any registration or other qualification of such Shares under
      any
      state or federal law or under rulings or regulations of the Securities and
      Exchange Commission or of any other governmental regulatory body, or the
      obtaining of approval or other clearance from any state or federal governmental
      agency which the Committee shall, in its sole discretion, deem necessary or
      advisable.

    


    If
      the Committee, in its sole discretion, deems it necessary or advisable, the
      execution by the Optionee of a written representation and agreement, in a form
      satisfactory to the Committee, in which the Optionee represents that the Shares
      acquired by him upon exercise are being acquired for investment and not with
      a
      view to distribution thereof.

    


    Rights
      as Stockholder.
      The Optionee shall not be, nor have any of the rights or privileges of, a
      stockholder of the Company in respect of any Shares purchasable upon the
      exercise of the Option unless and until certificates representing such Shares
      have been issued by the Company.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    


    Miscellaneous.

    


    Administration.
      The Committee shall have the power to interpret the Plan and this Agreement,
      and
      to adopt such rules for the administration, interpretation and application
      of
      the Plan as are consistent therewith and to interpret or revoke any such rules.
      All actions taken and all interpretations and determinations made by the
      Committee shall be final and binding upon the Optionee, the Company, and all
      other interested persons.

    


    No
      Right to Continued Engagement.
      Nothing in this Agreement or in the Plan shall confer upon the Optionee any
      right to continue to be engaged by the Company or shall interfere with or
      restrict in any way the rights of the Company, which are hereby expressly
      reserved, to discharge the Optionee at any time for any reason whatsoever,
      with
      or without cause.

    


    Entire
      Agreement; Amendment.
      This Agreement, the Retention Agreement and the Plan, constitute the entire
      agreement between the parties with respect to the subject matter hereof, and
      supersede all prior agreements and understandings between the parties with
      respect to such subject matter. Any term or provision of this Agreement may
      be
      waived at any time by the party which is entitled to the benefits thereof,
      and
      any term or provision of this Agreement may be amended or supplemented at any
      time by the mutual consent of the parties hereto, except that any waiver of
      any
      term or condition, or any amendment, of this Agreement must be in
      writing.

    


    Governing
      Law.
      The laws of the State of New York shall govern the interpretation, validity
      and
      performance of the terms of this Agreement regardless of the law that might
      be
      applied under principles of conflict of laws.

    


    Successors.
      This Agreement shall be binding upon and inure to the benefit of the successors,
      assigns and heirs of the respective parties.

    


    Notices.
      All notices or other communications made or given in connection with this
      Agreement shall be in writing and shall be deemed to have been duly given when
      delivered or mailed by registered or certified mail, return receipt requested,
      to those listed below at their following respective addresses or at such other
      address as each may specify by notice to the others:

    


    To
      the Optionee:

    Joseph
      E. Sarachek

    22
      Harvest Drive

    Scarsdale,
      NY 10583

    


    To
      the Company:

    PubliCARD,
      Inc.

    One
      Rockefeller Plaza

    14th
      Floor

    New
      York, NY 10020

    Attention:
      Corporate secretary


    


    Waiver.
      The failure of a party to insist upon strict adherence to any term of this
      Agreement on any occasion shall not be considered a waiver thereof or deprive
      that party of the right thereafter to insist upon strict adherence to that
      term
      or any other term of this Agreement.

    
      
         

      

      
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    Conflict
      with the Plan.
      In the event of any conflict or inconsistency between the provisions of this
      Agreement and the Plan, except as otherwise provided in this Agreement, the
      provisions of the Plan shall control.

    


     Titles;
      Construction.
      Titles are provided herein for convenience only and are not to serve as a basis
      for interpretation or construction of the Agreement. The masculine pronoun
      shall
      include the feminine and neuter and the singular shall include the plural,
      when
      the context so indicates.

    


    IN
      WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
      the
      day and year first above written.

    


    PubliCARD,
      Inc.

    


    


    By  
      /s/Antonio L. DeLise
Name:
      Antonio L. DeLise
Title:
      President

    


    


    OPTIONEE:

    


    /s/Joseph
      E. Sarachek

    


    


    


    



    
      
         

      

      
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