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                    [TRANSFER PRINT FOILS, INC. LETTERHEAD]

                                                                   Exhibit 10.37

                              EMPLOYMENT AGREEMENT


         This Agreement is made as of the 29th day of June by and between
HoloPak Technologies, Inc. a Delaware corporation (the "Company") and Arthur
Karmel (the "Employee").

                                    RECITALS

         The Company desires to employ the Employee, and the Employee desires to
become an employee of the Company, upon the terms and conditions hereinafter set
forth.

                                   WITNESSETH:

         NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, the parties hereto, each intending to be legally bound hereby,
agree as follows:

1.       Employment

         The Company hereby employs the Employee as Chief Financial Officer and
the Employee hereby accepts such employment. During the term of employment under
this Agreement (the "Employment Term"), the Employee shall perform such duties
as are requested by the Chief Executive Officer, Chief Operating Officer or,
from time to time, by the Board of Directors of the Company or the Chairman of
the Board of Directors of the Company.

2.       Performance

         During the Employment Term, the Employee shall devote his entire
business efforts to the performance of his duties hereunder.

3.       Term

         Unless otherwise terminated in accordance with Sections 5 or 6, the
Employment Term shall be for an initial term of one year commencing on the date
of this Agreement and continuing thereafter for successive one-year renewal
terms.

4.       Compensation for Employment

         (a) The basic annual compensation of the Employee for his employment
services to the Company and to all of its affiliated companies during the
Employment Term shall be $95,000.00 (the "Salary"), which the Company shall pay
to the Employee in accordance with its normal payroll policy. These are the
initial terms of annual compensation. The amount of salary may change and
compensation will be reflected.

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         (b) During the Employment Term, the Company shall also provide the
Employee with those fringe benefits that are specified on Exhibit "A" hereto
(the "Fringe Benefits"). The Company shall also reimburse the Employee for any
reasonable business expenses incurred on the Company's behalf in connection with
the performance of this services during the Employment Term.

         (c)(i) HoloPak will grant to the Employee under its Non-Qualified Stock
Option Plan (the "Plan") options to purchase shares of Common Share ("Options")
for 5,000 shares of HoloPak Common Stock at an exercise price of $3.00 per
share. The Options will vest and become exercisable in three equal installments
on the first three (3) anniversaries of this Agreement.

            (ii) The Employee will be an eligible participant in the Plan and,
therefore, will be eligible for grants of stock options in addition to the
Options referred to above. The administrator of the Plan, which is currently a
committee of the Board of Directors, will determine from time to time whether
any such additional options shall be granted to the Employee and the exercise
price vesting schedule and other terms of any such additional options that may
be granted.

         (d) HoloPak's commitment to grant the Options is subject to HoloPak's
obtaining approval of such items by HoloPak's Board of Directors.

5.       Termination Without Compensation

         (a) Partial or Total Disability. If the Employee is unable to perform
his duties and responsibilities hereunder to the full extent required hereunder
by reason of non-employment related illness, injury or incapacity for six months
(during which time he shall continue to be compensated hereunder), the Company
may terminate the Employment Term, and the Company shall not have any further
liability or obligation to the Employee hereunder except for any unpaid Salary,
unpaid bonus, adjusted pro rata based upon the portion of such bonus period in
which the Employee was actually employed by the company hereunder and any Fringe
Benefits accrued to the date of termination, provided, however, that Employee
reserves any rights that he may have against the Company with respect to any
claims for damages and/or benefits under any Workers' Compensation Act, or
otherwise, arising out of injuries, illness or incapacity incurred as a result
of his employment with the Company (an "Employment Injury"). In the event of any
dispute under this Section 5(a), the Employee shall submit to a physical
examination by a licensed physician mutually satisfactory to the Company and the
Employee, the cost of such examination to be paid by the Company, and the
determination of such physician shall be determinative. If, after termination
due to disability as provided herein, the Employee obtains, at his sole expense,
medical certification from a licensed physician reasonably satisfactory to the
Company that such disability has ended, the Company shall offer to employ the
Employee pursuant to the terms of this Agreement for the remainder of the
initial term or any renewal term in effect at the time of termination, except
that the Company shall not be required to reemploy the Employee at the same
officer position if the Company shall have elected another person to such
position during the period of the Employee's disability and such other person
continues in such position at the time of the Employee's return to employment.

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         (b) Death. If the Employees dies, this Employment Agreement (except for
the provisions of Sections 6, 10 and 11 hereof) shall terminate, and thereafter
the Company shall not have any further liability or obligation to the Employee,
his executors, administrator, heirs, assigns or any other person claiming under
or through him except for unpaid Salary, any unpaid bonus earned by Employee for
the bonus period in which Employee's death occurs adjusted pro rata based upon
the portion of such bonus period in which the Employee was actually employed by
the Company hereunder and any Fringe Benefits accrued to the date of his death.

         (c) Cause. The Company may terminate the Employment Term for "cause" by
giving the Employee 30 days' written notice of the termination date, and
thereafter the Company shall not have any further liability or obligation to the
Employee. For purposes of the Agreement, "cause" shall mean the failure of the
Employee to observe or perform (other than by reason of illness, injury or
incapacity) any of the responsibilities or provisions of this Agreement,
dishonesty, willful misconduct, material neglect of the Company's business,
conviction of a felony or other crime involving moral turpitude,
misappropriation of funds or habitual insobriety.

6.       Termination With Compensation

         (a) Non-Renewal of Term. The Employment Term may be terminated by
either party hereto as of the end of the initial term or any renewal term then
in effect by giving written notice of the intention to terminate the Employment
Term at least 90 days prior to the proposed termination date. If the Company
terminates the Employment Term under such circumstances, the Company shall
provide the Employee with the Termination Compensation specified in Section 6
(c).

         (b) Without Cause. The Company shall have the right to terminate the
Employment Term without cause at any time by giving the Employee 60 days'
written notice of the termination date. Under such circumstances, the Company
shall provide the Employee with the Termination Compensation specified in
Section 6(c).

         (c) Termination Compensation. The "Termination Compensation" shall
consist of payment of the Employee's Salary under Section 4(a), at the level in
effect at the date of termination, for the longer of (A) any remaining part of
the initial term of the Employment Term or (B) 6 months. The Employee shall not
be entitled to any Termination Compensation under this Section 6 unless the
Employee executes and delivers to the Company after a notice of termination a
release in a form satisfactory to the Company in its sole discretion by which
the Employee releases the Company and its affiliates, and the Company so
releases the Employee, from any obligations and liabilities of any type
whatsoever, except for the Company's obligation to provide the Salary specified
in this Section 6, any unpaid bonus earned by Employee for the bonus period in
which termination of employment occurs, adjusted pro rata based upon the portion
of such bonus period in which the Employee was actually employed by the Company
hereunder and any liability for any Employment Injury. The parties hereto
acknowledge that the Salary to be provided under this Section 6 is to be
provided in consideration for a above-specified release. Compensation under the
terms and conditions of Section 6(c) and any obligations that the Company may
have for any Employment Injury.

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         (d) Exclusivity. Upon any termination by the Company under Section 6(a)
or Section 6(b), the Company shall not have any obligation to the Employee, his
executors, administrators, heirs, assigns or any other claiming under or through
him other than to provide the Termination Compensation under the terms and
conditions of Section 6(c) and any obligations that the Company may have for any
Employment Injury.

7.       Agreement Not to Compete

         (a) During the Non-Competition Period (defined below), the Employee
shall not, within the Restricted Area ( defined below) directly or indirectly,
in any capacity, without the express written consent of the Chairman of the
Board of Directors of the Company, render his services, engage in any business
activity or have a financial interest in, any business (other than as the holder
of not more than one percent of the total outstanding stock of any publicly-held
company) that is competitive with any of those business activities in which
HoloPak, Transfer Print Foils, Inc., Alubec Industries Inc. or any person,
partnership, association, corporation or other entity (each a "Person")
controlled by any of them (any such party is referred to herein as a "HoloPak
Party") shall have been engaged during his employment by the Company, nor shall
the Employee assist any person or entity that is engaged in such business,
including by making HoloPak Information (defined below) available to any such
person or entity. In addition, the Employee shall not directly or indirectly
solicit or otherwise encourage any of employees of any HoloPak Party to
terminate their employment with the applicable HoloPak Party. As used herein,
the "Restricted Area" means (i) the United States of America and (ii) Canada. If
a court determines that the foregoing restrictions are too broad or otherwise
unreasonable under applicable law, including with respect to time space, the
court is hereby requested and authorized by the parties hereto to review the
foregoing restriction to include the maximum restrictions allowable under
applicable law. The "Non-Competition Period" means the period during which the
Employee is employed hereunder. In addition, (A) in the case of termination of
employment pursuant to Section 6 hereof, the "Non-Competition Period" shall be
extended from the date of such termination of employment for a period equal to
the greater of (x) the period in which any payment of compensation (except for
an employment related injury) is made to Employee pursuant to this Agreement and
(y) one year, or (B) in the case of termination of employment pursuant to
Section 5 hereof, the "Non-Competition Period" shall be extended from the date
of such termination of employment for a period of one year.

         (b) The terms of this Section 7 shall apply to the Employee and any
Person controlled by the Employee, including any relative of the Employee, to
the same extent as if they were parties hereto, and the Employee shall take
whatever actions may be necessary to cause any such Persons or entities to
adhere to the terms of this Section 7.

8.       Inventions Designs and Product Developments.

         All inventions, innovations, designs ideas and product developments
(collectively, the "Developments"), developed or conceived by the Employee,
solely or jointly with others, whether or not patentable or copyrightable, at
any time during the Employment Term and that relate to the actual or planned
business activities of any HoloPak Party and all of the Employee's rights, title
and interest therein, shall be the exclusive property of the applicable HoloPak
Party. The 

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Employee hereby assigns, transfers and conveys to any applicable HoloPak Party
all of his rights, title and interest in and to any and all such Developments.
As requested from time to time by the Board, the Employee shall disclose fully,
as soon as practicable and in writing, all Developments to the Chairman of the
Board of Directors of the Company. At any time and from time to time, upon the
request of the Board, the Employee shall execute and deliver to the Company any
and all instruments, documents and papers, give evidence and do any and all
other acts that, in the opinion of counsel for the Company, are or may be
necessary or desirable to document such transfer or to enable any applicable
HoloPak Party to file and prosecute applications for and to acquire, maintain
and enforce any and all patents, trademark registrations or copyrights under
United States or foreign law with respect to any such Developments or to obtain
any extension, validation, reissue, continuance or renewal of any such patent,
trademark or copyright. The applicable HoloPak Party will be responsible for the
preparation of any such instruments, documents and papers and for the
prosecution of any such proceedings and will reimburse the Employee for all
reasonable expenses incurred by him in compliance with the provisions of this
Section.

9.       Confidential Information

         (a) The Employee has had and will have possession of or access to
confidential information relating to the business of one or more HoloPak
Parties, including writings, equipment, processes, drawings, reports, manuals,
invention records, financial information, business plans, customer lists, the
identity of or other facts relating to prospective customers, inventory lists,
arrangements with suppliers and customers, computer programs, or other material
embodying trade secrets, customer or product information or technical or
business information of certain HoloPak Parties. All such information, other
than any information that is in the public domain through no act or omission of
the Employee or which he is authorized to disclose, or that the Employee had in
his possession prior to this employment with the Company is referred to
collectively as the "HoloPak Information". During and after the Employment Term,
the Employee shall not knowingly, willfully or intentionally (i) use or exploit
in any manner the HoloPak Information for himself or any Person other than a
HoloPak Party, (ii) remove any HoloPak Information, or any reproduction thereof,
from the possession or control of any HoloPak Party or (iii) treat HoloPak
Information otherwise than in a confidential manner.

         (b) All HoloPak Information developed, created or maintained by the
Employee, alone or with others while employed by the Company, and all HoloPak
Information maintained by the Employee thereafter, shall remain at all time the
exclusive property of the applicable HoloPak Party. The Employee shall return to
the Company all HoloPak Information, and reproductions thereof, whether prepared
by him or others, that are in his possession immediately upon request and in any
event upon the completion of his employment by the Company.

10.      Remedies.

         The Employee expressly acknowledges that the remedy at law for any
breach of Sections 7, 8 or 9 will be inadequate and that upon any such breach or
threatened breach, the Company (or the applicable HoloPak Party) shall be
entitled as a matter of right to injunctive relief in any court of competent
jurisdiction, in equity or otherwise, and to enforce the specific performance of
the 

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Employee's obligations under these provisions without the necessity of proving
the actual damage or the inadequacy of a legal remedy. Subject to the remainder
of this Section 10, the rights conferred upon the Company (and any HoloPak
Party) by the preceding sentence shall not be exclusive of, but shall be in
addition to, any other rights or remedies which HoloPak may have at law, in
equity or otherwise.

11.      Survival.

         Notwithstanding the termination of the Employment Term pursuant to
Section 5 or 6, the obligations of the Employee under Sections 7, 8 or 9 hereof
shall survive and remain in full force and effect and the Company shall be
entitled to relief against the Employee pursuant to the provisions of Section 10
hereof.

12.      General.

         (a) Governing Law. The terms of this Agreement shall be governed by the
laws of the State of New Jersey.

         (b) Interpretation. Unless the context of this Agreement clearly
requires otherwise, (i) references to the plural include the singular, and to
the singular include the plural, (ii) "or" has the inclusive meaning frequently
identified with the phrase "and/or" and (iii) "including" has the inclusive
meaning frequently identified with the phrase "but not limited to". The section
and other headings contained in this Agreement are for reference purposes only
and shall not control or affect the construction of this Agreement of the
interpretation thereof in any respect. Section, subsection, schedule and exhibit
references are to this Agreement unless otherwise specified. Each accounting
term used herein that is not specifically defined herein shall have the meaning
given to it under GAAP.

         (c) Binding Effect. All of the terms and provisions of this Agreement
shall be binding upon and inure to the benefit and be enforceable by the
respective heirs, representatives, successors (including any successor as a
result of a merger or similar reorganization) and assigns of the parties hereto,
except that the duties and responsibilities of the Employee hereunder are of a
personal nature and shall not be assignable in whole or in part by the Employee.
Any HoloPak Party other than the Company is a third party beneficiary of this
Agreement and may enforce the provisions of this Agreement that pertain to such
HoloPak Party, including Sections 7, 8 and 9, to the same extent as if a party
hereto.


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         (d) Notices. All notices required to be given under this Agreement
shall be in writing and shall be deemed to have been given when personally
delivered or when mailed be registered or certified mail, postage prepaid,
return receipt requested, or when sent by Federal Express or other overnight
delivery service, addressed as follows (or to such other address that a party
may provide from time or time by notice to the other parties):

         TO EMPLOYEE:

                  Arthur Karmel
                  4 Gary Drive
                  Englishtown, NJ 07726





         TO HOLOPAK:

                  HoloPak Technologies Inc.
                  9 Cotters Lane
                  East Brunswick, NJ 08816
                  Attention:  Chairman of the Board


         TO THE COMPANY:

                  Transfer Print Foils, Inc.
                  9 Cotters Lane
                  East Brunswick, NJ 08816
                  Attention:  Chief Executive Officer or Chief Operating Officer


         (e) Entire Agreement: Termination of Prior Agreement Modification. This
Agreement (including Exhibit A hereto) and the additional agreements specified
in Sections 4(c) and 4(d) (to the extend that the parties enter into any of such
agreements) constitute the entire agreement of the parties hereto with respect
to the subject matter hereof. This Agreement may not be modified or amended in
any way except in writing by the parties hereto.

         (f) Duration. Notwithstanding the termination of the Employment Term
and of the Employee's relationship with the Company, this Agreement shall
continue to bind the parties for so long as any obligations remain under this
Agreement, and in particular, the Employee shall continue to be bound by the
terms of Sections 7, 8 and 9.

         (g) Waiver. No waiver of any breach of this Agreement shall be
construed to be a waiver as to succeeding breaches.

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         (h) Severability. If any provision of this Agreement or application
thereof to anyone under any circumstances is adjudicated to be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect any other provisions or applications of this Agreement which can be given
effect without the invalid or unenforceable provision or application and shall
not invalidate or render unenforceable such provision in any other jurisdiction.

         (i) Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures hereto upon the same instrument.


         IN WITNESS WHEREOF, the parties hereto, intending to be legally bound,
have hereunto duly executed this Agreement the day and year first written above.



HOLOPAK TECHNOLOGIES, INC.


By:      /s/ J.T. Webb                                    /s/ Arthur Karmel
         Name:    J.T. Webb                               Arthur Karmel
         Title:   Chief Operating Officer



/s/ BONNIE EICHEL
[NOTARY PUBLIC STAMP]


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                                                                       EXHIBIT A


                                 FRINGE BENEFITS


1.       Typical Officer Benefits: Inclusion in the benefit plans generally
         given to executive officers of the Company from time to time, including
         any benefits provided with respect to life and disability insurance,
         and participation in any of the Company's profit sharing and pension
         plans.

2.       Medical Insurance The Company shall waive the three-month waiting
         period for participation in Medical, Prescription and Dental benefits.

3.       Vacation You will be eligible for 1 week during your first six months
         of employment and 2 additional vacation weeks during the balance of our
         fiscal year ending March 31, 1999. Effective April 1, 1999 you will
         qualify for three weeks vacation followed by four weeks during fifth
         year forward.

4.       Company Vehicle: A Company automobile, in accordance with Company
         policy, will be provided. Insurance, maintenance and Company business
         mileage are covered by TPF.