EXHIBIT
      10.1

    


    July
      21, 2006

    


    Joseph
      E. Sarachek

    22
      Harvest Drive

    Scarsdale,
      NY 10583

    


    Re:
      Engagement as Chief Executive Officer and Member of the Board of
      Directors

    


    Dear
      Mr. Sarachek :

    


    This
      letter agreement (this “Agreement”) confirms the terms pursuant to which
      PubliCARD, Inc. (the “Company”) engages Joseph E. Sarachek (“Sarachek”) to serve
      as Chief Executive Officer of the Company. In connection with his service as
      Chief Executive Officer, Sarachek will provide financial and restructuring
      advisory services on behalf of the Company which may include serving as the
      senior operations officer of the Company, overseeing the Company’s operations,
      analyzing, assisting and developing a financial restructuring plan involving
      the
      Company, assisting the Company in developing and negotiating a prospective
      plan
      of reorganization with its creditors, selling the Company through a merger
      or
      otherwise, selling the Company’s assets, purchasing assets or companies, and/or
      raising additional debt/equity capital for the Company (each, a “Transaction”),
      and such other tasks that may be reasonably requested by the Company’s Board of
      Directors. The Company will take such actions within its authority to cause
      Sarachek to be elected as a member of the Company’s Board of Directors (and to
      retain such status) during the term of this Agreement.

    


    Sarachek
      shall have control of the manner and means by which his services are performed
      under this Agreement and shall report to, and be subject to the general
      direction of, the Company’s Board of Directors. Sarachek shall be treated as an
      independent contractor for all employment and tax law purposes. Sarachek agrees
      to devote such time and effort as he reasonably determines is necessary to
      perform the services required of him under this Agreement. The Company
      acknowledges that Sarachek’s engagement as an independent contractor under this
      Agreement shall not require him to devote his full attention and business time
      to the Company. During the term of this Agreement, Sarachek may engage in,
      provide services to or possess an interest in any other business ventures of
      any
      nature or description, independently or with others, to the extent such actions
      do not breach Sarachek’s fiduciary duties as an officer and director of the
      Company.

    


    This
      Agreement shall become effective as of the date hereof upon the execution by
      both the Company and Sarachek and may be terminated on 30 days’ prior written
      notice by the Company or Sarachek. The termination of this Agreement shall
      not
      affect: a) any compensation earned by Sarachek up to the date of termination;
      b)
      any compensation which Sarachek may otherwise become entitled to hereunder;
      c)
      the reimbursement of expenses incurred by Sarachek up to the date of
      termination; or d) Sarachek’s rights to indemnification in accordance with this
      Agreement and the attached indemnification provisions, which are incorporated
      herein, all of which shall remain in full force and effect. 

    


    Compensation
      of Services

    


    
      	
              I.

            	
              The
                Company shall pay Sarachek a monthly fee of $15,000 (“Monthly Fee”). The
                initial Monthly Fee shall be paid upon the execution of this Agreement
                and
                each subsequent Monthly Fee shall be paid on the 21st of each month
                thereafter. 

            


    

    


    
      	
              II.

            	
              In
                addition to the Monthly Fee, promptly after the date hereof Sarachek
                shall
                be granted options (the “Initial Grant”) priced at the market price of the
                Company’s common stock at the date of grant for 10% of the fully diluted
                shares of the Company, which shall become vested and immediately
                exercisable upon the consummation of the Initial Transaction (as
                defined
                below) and shall include such other terms and conditions, including
                registration rights, as provided in the stock option agreement attached
                hereto as Appendix B (the “Stock Option Agreement”). The Initial Grant
                shall be made, to the extent shares are available, under the Company’s
                stock incentive plans, and any additional shares shall be outside
                of such
                plans. In connection with the consummation of the first Transaction
                after
                the date hereof (the “Initial Transaction”), Sarachek shall be granted, in
                the amount provided below, additional options (“Additional Options”) to
                purchase shares of the Company’s common stock (or any successor company)
                priced at the market price of the Company’s common stock at the date of
                grant which shall be immediately vested and exercisable and shall
                otherwise be on the same terms and conditions, including registration
                rights, as the Initial Grant. The amount of Additional Options to
                be
                granted shall equal such number of shares as shall provide Sarachek
                with
                options to purchase 10% of the fully diluted shares of the Company
                (or any
                successor company) after giving effect to the Initial Transaction
                and
                taking into consideration the Initial
                Grant.

            


    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
              III.

            	
              In
                addition to the Monthly Fee, during the term of this Agreement, the
                Company shall pay Sarachek a cash Transaction Fee (the “Transaction Fee”),
                subject to V below, upon consummation of each Transaction based on
                the
                aggregate value thereof received by the Company or its stockholders,
                including the gross proceeds of any financing (whether in cash, securities
                or other-in-kind consideration, including assumption of debt ) as
                follows:

            


    

    


    
      	
              Aggregate
                Transaction Value

            	
              Cumulative
                Transaction Fee

            
	
              From
                0 to $1,000,000

            	
              4%,
                plus

            
	
              From
                $1,000,000 to $5,000,000

            	
              5%
                of the incremental, plus

            
	
              From
                $5,000,000 to $10,000,000

            	
              6%
                of the incremental, plus,

            
	
              Over
                $10,000,000

            	
              7%
                of any amount over $10,000,000

            


    

    


    
      	
              IV.

            	
              Sarachek
                shall be reimbursed for all reasonable out-of-pocket expenses incurred
                in
                carrying out the terms of this Agreement, including telephone, travel,
                facsimile, courier, computer time charges and attorneys’ fees (to the
                extent necessary), food, messenger services, postage and copying.
                

            


    

    


    
      	
              V.

            	
              The
                Transaction Fee and any other fees that are unpaid, shall be paid
                out of
                the proceeds of any Transaction. Sarachek shall be entitled to payment
                in
                full of his Monthly Fees and expenses, regardless of whether any
                Transaction is successfully completed.


            


    

    


    Payment
      of all fees and expenses incurred under this Agreement, are solely the
      responsibility of the Company. The Company shall reimburse Sarachek up to $7,000
      for the legal fees of Kronish Lieb Weiner & Hellman LLP incurred in
      connection with the preparation and negotiation of this Agreement. For a period
      of one year following termination of this Agreement by the Company without
      cause, Sarachek shall be entitled to receive Transaction Fees in connection
      with
      each Transaction the Company or its successors consummates with any party (or
      its affiliates) with whom Sarachek or the Company have contacted during the
      term
      of this Agreement.

    


    Indemnification/Insurance

    


    The
      Company shall indemnify (including advancement of expenses) and hold harmless
      Sarachek to maximum extent permitted by law and shall execute the
      Indemnification Agreement attached hereto as Appendix A, the terms and
      conditions of which are hereby incorporated herein by reference.

    
      
         

      

      
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    If
      at any time after the termination of this Agreement, Sarachek is called upon
      by
      the Company or is legally required to render services directly or indirectly
      relating to the subject matter of this Agreement beyond the services
      contemplated herein (including, but not limited to, producing of documents,
      answering interrogatories, giving depositions, giving expert or other testimony,
      whether by agreement, subpoena or otherwise), the Company shall pay Sarachek’s
      then current hourly rates for the time expended in rendering such services,
      including, but not limited to, time for meetings, conferences, preparation
      and
      travel, and all related costs and expenses, including the reasonable legal
      fees
      and expenses of Sarachek’s counsel.

    


    During
      the term of this Agreement, the Company shall not amend, repeal or otherwise
      modify its articles of incorporation or by-laws, each as amended (together,
      the
“Charter Documents”), in a manner that would adversely affect Sarachek’s rights
      to indemnification and exculpation thereunder. For a period of six years
      following the termination of this Agreement, the Company shall indemnify
      (including advancement of expenses) and hold harmless Sarachek to maximum extent
      permitted by law and, in addition, to the same extent as he will be indemnified
      by the Company as an officer and director of the Company or in connection with
      any other capacities indemnifiable thereunder pursuant to the Company’s Charter
      Documents immediately prior to the termination of this Agreement for acts or
      omissions which occurred at or prior to such termination. 

    


    During
      the term of this Agreement, the Company shall use reasonable efforts to maintain
      officers’ and directors’ liability insurance with at least as favorable terms
      and coverage amounts as it currently has in place, which policy shall cover
      Sarachek in his capacity as an officer and director of the Company and in
      connection with any other capacities coverable thereunder. 

    


    If
      the Company or any of its successors or assigns (i) consolidates with or merges
      into any other person and shall not be the continuing or surviving corporation
      or entity of such consolidation or merger or (ii) transfers or conveys all
      or
      substantially all of its properties and assets to any person, then, and in
      each
      such case, to the extent necessary, proper provision shall be made so that
      the
      successors and assigns of the Company or its assets shall assume the obligations
      set forth in this Agreement.

    


    Disclosure

    


    All
      non-public information provided by the Company to Sarachek will be considered
      as
      confidential information and shall be maintained as such by Sarachek, except
      as
      required by law or as required to enable Sarachek to perform his services
      pursuant to this Agreement, until the same becomes known to the public without
      release thereof by Sarachek.

    


    Sarachek
      will not be responsible for independently verifying the accuracy of any
      information provided to Sarachek by the Company or its agents (the
“Information”) and he shall not be liable for inaccuracies in any Information
      provided to Sarachek by or at the direction of the Company. 

    


    Entire
      Agreement, Governing Laws and Jurisdiction, Etc.

    


    This
      Agreement, the Stock Option Agreement and the Indemnification Agreement set
      forth the entire understanding of the parties relating to the subject matter
      hereof and supersede and cancel any prior communications, understandings and
      agreements between the parties with respect to the subject matter hereof. This
      Agreement cannot be terminated or changed, nor can any of its provisions be
      waived, except by written agreement signed by the Company and Sarachek. This
      Agreement shall be binding upon and inure to the benefit of any successors,
      assigns, heirs and personal representatives of the Company and
      Sarachek.

    
      
         

      

      
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    This
      Agreement shall be governed by and construed to be in accordance with the laws
      of the State of New York applicable to contracts made and to be performed solely
      in such state by citizens thereof. Any dispute arising out of this Agreement
      shall be adjudicated by the American Arbitration Association.

    


    Acceptance

    


    Please
      confirm that the foregoing is in accordance with your understanding by signing
      in the space indicated below and returning an executed copy of this Agreement
      to
      the Company. A telecopy of a signed original of this Agreement shall be
      sufficient to bind the parties whose signatures appear hereon.

    


    Very
      truly yours,

    


    PubliCARD,
      Inc.

    


    By:
      /s/ Antonio L. DeLise

    


     

    ACCEPTED
      AND AGREED TO:

    


    


    By:
      /s/
      Joseph E. Sarachek

    Joseph
      E. Sarachek

    


     

    Date:
      July 21, 2006

     

    
      
         

      

      
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