Exhibit 10.1

BOARD NOMINATION AGREEMENT

This Board Nomination Agreement (this “Agreement”), dated as of December 10,
2014 (the “Effective Date”), is by and among Authentidate Holding Corp., a
Delaware corporation (the “Company”) and the persons and entities listed on
Schedule A hereto (collectively, the “Lazarus Group”, and individually a
“member” of the Lazarus Group).

Unless otherwise specified herein, all of the capitalized terms used herein are
defined in Section 6 hereof.

WHEREAS, the Lazarus Group has filed an amendment to its Schedule 13D on
September 4, 2014, discussing certain understandings that the Lazarus Group has
with respect to the composition of the Company’s Board of Directors (the
“Board”); and

WHEREAS, each of the Company and the Lazarus Group have determined that it is in
their best interests to enter into this Agreement.

NOW, THEREFORE, in consideration of and reliance upon the mutual covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:

 

Section 1. Board Composition and Related Procedures.

(a) Subject to the terms and conditions of this Agreement (including the
provisions of Section 2(a)) and provided he is an Independent Director (as
defined herein), the Board shall take all action reasonably necessary to appoint
Marc A. Horowitz (the “Lazarus Nominee”) to serve as a director of the Company
until no earlier than the 2015 Annual Meeting and his successor is duly elected
and qualified.

(b) In connection with the agreement set forth in Section 1(a), the Company
shall, subject to its rights under Section 2: (i) if necessary to establish a
vacancy on the Board, promptly increase the size of the Board by one (1) member
and (ii) at all times during the Designation Period, include, and use its best
efforts to cause the Board, whether acting through the Company’s Nominating and
Corporate Governance Committee of its Board of Directors (the “Nominating
Committee”) or otherwise, to include the Lazarus Nominee in the slate of
nominees recommended to the stockholders of the Company for election as a
director at any annual or special meeting of the stockholders held during the
Designation Period (or, if permitted, by any action by written consent of the
stockholders taken during the Designation Period) at or by which directors of
the Company are to be elected.

(c) If a Board vacancy occurs during the Designation Period solely because of
the death, disability, disqualification, resignation or removal of the Lazarus
Nominee, the Lazarus Group shall be entitled to designate such person’s
successor in accordance with the following conditions and compliance with
Section 2(b) of this Agreement. In the event the Lazarus Group has the right
under this Section 1(c) to designate a successor to the initial Lazarus Nominee,
the Lazarus Group shall have the right (subject to Section 2(b) of this
Agreement) to designate a reasonably qualified replacement for the Lazarus
Nominee, with the consent of the Company (which consent shall not be
unreasonably withheld or delayed), and the Company shall take all necessary
action to implement the foregoing as promptly as practicable. In connection with
the foregoing, unless otherwise expressly agreed upon by the Company in writing,
a successor nominee designated pursuant to this Section1(c), shall be an
Independent Director. Any such designated replacement who becomes a Board member
shall be deemed to be a Lazarus Nominee for all purposes under this Agreement.

 

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(d) If during the Designation Period the Lazarus Nominee is not nominated or
elected to the Board because of his or her death, disability, disqualification,
withdrawal as a nominee or such Lazarus Nominee is for any other reason
unavailable or unable to serve on the Board, the Lazarus Group shall be entitled
to promptly designate another nominee in accordance with the applicable
provisions of Section 1(c) and Section 2(b) and the director position for which
such Lazarus Nominee was nominated shall not be filled pending such designation.

(e) The Lazarus Nominee shall be entitled to the same compensation paid and
expense reimbursement payable to other non-employee Directors.

(f) If in the reasonable judgment of the Company, the rights granted to the
Lazarus Group under this Agreement, including the right to elect or appoint the
Lazarus Nominee, would cause the Company to not comply with the relevant listing
rules of the Nasdaq Stock Market (the “Listing Rules”), including the
requirement that the Company’s Board be comprised of a majority of Independent
Directors, then the Company may defer the appointment and/or election of such
Lazarus Nominee, or take such other action (as the Board determines in the
exercise of its discretion) as would enable the Company to maintain compliance
with the Listing Rules, until it is able to take commercially reasonable
measures to ensure that the exercise by the Lazarus Group of its rights
hereunder would not cause the Company to violate the Listing Rules. For the
purpose of clarity, it is agreed that such measures may include a further
increase in the size of the Board and the appointment and/or election of one or
more additional individuals to serve as an Independent Director, which
individual(s) shall be selected in the sole discretion of the Company.

(g) Notwithstanding the foregoing, if at any time after the date hereof, the
Lazarus Group, together with all Affiliates of the Lazarus Group (such
Affiliates, collectively and individually, the “Lazarus Affiliates”), ceases
collectively to Beneficially Own at least 20% of the Outstanding Equity, the
Lazarus Group shall cause the Lazarus Nominee to promptly tender his or her
resignation from the Board and any committee of the Board on which he or she
then sits.

(h) Each Lazarus Nominee shall at all times while such Lazarus Nominee is a
Director of the Company (i) comply with the provisions of this Agreement and all
policies and guidelines of the Board, any committees thereof or the Company
applicable to Board members and (ii) to keep confidential all Company
confidential information consistent with Board practices and applicable
policies, laws, rules and regulations and to not publicly disclose discussions
and matters considered in meetings of the Board and Board committees. Each
Lazarus Nominee acknowledges that his or her obligations under this Agreement
are in addition to the fiduciary and common law duties of any director of a
Delaware corporation.

 

Section 2. Company Obligations.

(a) Notwithstanding anything herein to the contrary, the Company shall not be
obligated to appoint any Lazarus Nominee to serve on the Board or cause to be
nominated for election to the Board or recommend to the stockholders the
election of any Lazarus Nominee: (i) who fails to submit to the Company on a
timely basis such questionnaires as the Company may reasonably require of its
directors generally and such other information as the Company may reasonably
request in connection with the preparation of its filings under the Securities
Laws; or (ii) if the Board or the Nominating Committee (if any) determines in
good faith, after consultation with outside legal counsel, that (A) such action
would constitute a breach of its fiduciary duties or applicable law or violate
the Company’s Certificate of Incorporation or By-Laws; or (B) such Lazarus
Nominee would not be qualified under any applicable law, rule or regulation
(including the rules of the Nasdaq Stock Market) to serve as a Director of the
Company; provided, however, that upon the occurrence of either (i) or
(ii) above, the Company shall promptly notify the Lazarus Group of the
occurrence of such event and permit the Lazarus Group to

 

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provide an alternate nominee sufficiently in advance of any Board action, the
meetings of the stockholders called or written action of stockholders with
respect to such election of nominees and the Company shall use commercially
reasonable efforts to perform its obligations under this Agreement with respect
to such alternate nominee (provided that if the Company provides at least 45
days advance notice of the occurrence of any such event, such alternative
nominee must be designated by the Lazarus Group not less than 30 days in advance
of any Board action, notice of meeting of the stockholders or written action of
stockholders with respect to such election of nominees), and in no event shall
the Company be obligated to postpone, reschedule or delay any scheduled meeting
of the stockholders with respect to such election of nominees.

(b) If at any time during the Designation Period a Board vacancy occurs solely
because of the death, disability, disqualification, resignation or removal of
the Lazarus Nominee, then the Board, or any committee thereof, shall not fill
such vacancy until the earliest to occur of: (i) the Lazarus Group’s designation
of a successor nominee (which successor nominee shall be designated in
accordance with Section 1(c) and subject to the terms of Section 2(a)) and the
Board’s appointment of such successor nominee to fill the vacancy; (ii) the
Lazarus Group’s failure to designate a successor nominee within 20 Business Days
after receiving notification of the vacancy from the Company; or (iii) the
Lazarus Group’s specifically waiving in writing its rights under this
Section 2(b). For the purposes of clarity, the Company shall have the right to
fill any Board vacancy which may occur due to any reason other than the death,
disability, disqualification, resignation or removal of the Lazarus Nominee in
accordance with the terms of the Company’s By-Laws and Certification of
Incorporation.

 

Section 3. Term and Termination.

Notwithstanding anything to the contrary contained herein, upon the occurrence
of a Termination Event, this Agreement shall be automatically terminated and of
no further force and effect, and no party hereto shall have any surviving
obligations, rights, or duties hereunder after such termination, other than as
may applicable to either party pursuant to Sections 1(g) and 1(h). Within three
Business Days after the occurrence of a Termination Event (i) that results from
a Transfer of Common Stock by any member of the Lazarus Group, the Lazarus Group
shall notify the Company of such event and (ii) that results from any other
event or occurrence, the Company shall notify the Lazarus Group of such event
(in each case, a “Termination Notice”).

 

Section 4. Confidentiality.

The Company hereby agrees that: (i) the Lazarus Nominee is permitted to and may
provide confidential information to certain specified persons subject to and
solely in accordance with the terms of the confidentiality agreement in the form
attached hereto as Exhibit A (the “Confidentiality Agreement”) (which the
Lazarus Group shall execute and deliver to the Company simultaneously with the
Lazarus Group’s execution and delivery of this Agreement) and (ii) the Company
shall execute and deliver the Confidentiality Agreement to the Lazarus Group
substantially contemporaneously with execution and delivery thereof by the other
signatories thereto. The Lazarus Group shall cause the Lazarus Nominee to
execute such Confidentiality Agreement as a condition of such Person being
appointed to the Board.

 

Section 5. Representations and Warranties. 

(a) Each of the parties represents and warrants to the other party that:
(i) such party has all requisite power and authority to execute and deliver this
Agreement and to perform its obligations hereunder; (ii) this Agreement has been
duly and validly authorized, executed and delivered by it and is a valid and
binding obligation of such party, enforceable against such party in accordance
with its terms; (iii) this Agreement will not result in a violation of any terms
or conditions of any agreements to which

 

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such person is a party or by which such party may otherwise be bound or of any
law, rule, license, regulation, judgment, order or decree governing or affecting
such party; and (iv) there is currently no pending or outstanding litigation
between the Lazarus Group and the Company or affiliates thereof concerning
requests or demands by the Lazarus Group pursuant to Section 220 of the Delaware
General Corporation Law or otherwise.

(b) Each member of the Lazarus Group represents and warrants to the Company
(i) that, as of the date of this Agreement, the Lazarus Group beneficially owns
such number of shares of Common Stock as is set forth in that certain Amendment
to Schedule 13D filed by the Lazarus Group on September 4, 2014, and that
neither the Lazarus Group, nor any Affiliate thereof, beneficially owns any
shares of Common Stock other than as a member of the Lazarus Group,
and (ii) that it has no agreements, arrangements or understandings (written or
oral) with respect to any shares of Common Stock (including voting arrangements)
other than this Agreement and the 2012 Board Agreement.

 

Section 6. Definitions.

“Affiliate” means, with respect to any Person, any other Person that directly,
or indirectly through one or more intermediaries, controls, is controlled by, or
is under common control with, such first Person.

“Agreement” has the meaning set forth in the preamble.

“Beneficially Own” has the meaning ascribed to it in Rule 13d-3 and 13d-5 (or
successor rules then in effect) promulgated under Exchange Act.

“Business Day” means any day that is not a Saturday, Sunday, legal holiday or
other day on which commercial banks in New York, New York are authorized or
required by applicable law to close.

“By-Laws” means the Company’s By-Laws, as in effect on the date hereof, as the
same may be amended from time to time.

“Certificate of Incorporation” means the Company’s Certificate of Incorporation,
as in effect on the date hereof, as the same may be amended from time to time.

“Common Stock” means the common stock, par value $0.001 per share, of the
Company.

“Company” has the meaning set forth in the preamble.

“Designation Period” means the period commencing on the Effective Date and
expiring on the first to occur of a Termination Event or the third anniversary
of the Effective Date.

“Director” means a duly elected member of the Board.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Independent Director” means a Director that is an “independent director” as
such term is defined from time to time in the Nasdaq Stock Market’s listing
standards (or the principal national securities exchange on which Common Stock
is then traded) and is not an “affiliate” or an “associate” (as such terms are
defined in Rule 12b-2 of the Exchange Act) or any member of the “immediate
family” (as such term is defined in Rule 16a-1 of the Exchange Act) of a
director or executive officer of the Company or the Lazarus Group and shall not
have (or have had during the past three years) any employment arrangement or
other material commercial arrangement with any such person. For the avoidance of
doubt,

 

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ownership of a 5% or less limited partnership interest in any fund managed by
the Lazarus Group shall not be considered to constitute a material commercial
arrangement.

“Outstanding Equity” means, at any time, the issued and outstanding Common Stock
of the Company (assuming (i) the conversion of all outstanding shares of
convertible preferred stock and (ii) exercise of all common stock purchase
warrants then held by the Lazarus Group).

“Person” means an individual, a partnership, a corporation, a limited liability
company, an association, a joint stock company, a trust, a joint venture, an
unincorporated organization and a governmental entity or any department, agency
or political subdivision thereof.

“Securities Act” means the Securities Act of 1933, as amended from time to time.

“Securities Laws” means the Securities Act and the Exchange Act, and the rules
promulgated thereunder.

“Termination Event” means the first to occur of (i) the date on which the
Lazarus Group, together with the Lazarus Affiliates, ceases to Beneficially Own
at least 20.0% of the Outstanding Equity, whether as a result of dilution,
Transfer or otherwise; (ii) the expiration of the Designation Period; or
(iii) the expiration of any time period within which the Lazarus Group may
designate a successor nominee in accordance with Section 2(b) of this Agreement
without such designation having been timely made.

“Transfer” means any sale, transfer, assignment or other disposition of (whether
with or without consideration and whether voluntary or involuntary or by
operation of law) of Common Stock or securities that may be exercisable or
convertible into shares of Common Stock.

 

Section 7. Provisions of General Applicability.

(a) Notices. Any notice provided for in this Agreement shall be in writing and
shall be deemed validly given, made or served, if (i) given by telecopy or
email, when such telecopy or email is transmitted to the telecopy number set
forth below or sent to the email address set forth below and the appropriate
confirmation is received or (ii) if given by any other means, when actually
received during normal business hours at the address specified in this
subsection. For the purpose of notices hereunder, it is agreed that notices to
be delivered to the Lazarus Nominee may be addressed and delivered to the
Lazarus Group.

 

The Company’s address is:    Authentidate Holding Corp.    300 Connell Drive,
5th Floor    Berkeley Heights, NJ 07922    Attention:    O’Connell Benjamin,
President    Facsimile:    (908) 673-9921    Email:   
obenjamin@authentidate.com with a copy to (which shall not constitute notice):
   Becker & Poliakoff, LLP    45 Broadway, 8th Floor    New York, NY 10006   
Attention:    Michael A. Goldstein, Esq.    Facsimile:    (212) 557-0295   
Email:    mgoldstein@bplegal.com

 

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The Lazarus Group’s address is:    Lazarus Investment Partners, LLLP    3200
Cherry Creek South Drive, Suite 670    Denver, CO 80209    Attention:    Mr.
Justin Borus    Facsimile:    (303) 309-2675    Email:    jborus@lazarusip.com
with a copy to (which shall not constitute notice):    Lazarus Investment
Partners, LLLP    3200 Cherry Creek South Drive, Suite 670    Denver, CO 80209
   Attention:    Adam Averbach, Esq.    Facsimile:    (303) 309-2675    Email:
   aaverbach@lazarusip.com

(b) Adjustments. If, and as often as, there are any changes in the Common Stock
by way of stock split, stock dividend, combination or reclassification, or
through merger, consolidation, reorganization, recapitalization or sale, or by
any other means, appropriate adjustment shall be made in the provisions of this
Agreement, as may be required, so that the rights, privileges, duties and
obligations hereunder shall continue as so changed.

(c) Governing Law. All issues and questions concerning the construction,
validity, interpretation and enforceability of this Agreement shall be governed
by, and construed in accordance with, the laws of the State of Delaware, without
giving effect to any choice of law or conflict of law rules or provisions
(whether of the State of Delaware or any other jurisdiction) that would cause
the application of the laws of any jurisdiction other than the State of
Delaware.

(d) Mutual Waiver of Jury Trial. The parties hereto hereby irrevocably waive any
and all rights to trial by jury in any legal proceeding arising out of or
related to this Agreement. Any action or proceeding whatsoever between the
parties hereto relating to this Agreement shall be tried in a court of competent
jurisdiction by a judge sitting without a jury.

(e) Remedies. The Company and the Lazarus Group shall be entitled to enforce
their rights under this Agreement specifically, to recover damages by reason of
any breach of any provision of this Agreement and to exercise all other rights
existing in their favor. The parties hereto agree and acknowledge that a breach
of this Agreement would cause irreparable harm and money damages would not be an
adequate remedy for any such breach and that, in addition to other rights and
remedies hereunder, the Company and the Lazarus Group shall be entitled to seek
specific performance and/or injunctive or other equitable relief (without
posting a bond or other security) from any court of law or equity of competent
jurisdiction in order to enforce or prevent any violation of the provisions of
this Agreement.

(f) Assignment; Benefit of Parties. No party may assign this Agreement or any of
its rights or obligations hereunder without the written consent of the other
party. This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and permitted assigns for the
uses and purposes set forth and referred to herein. Nothing in this Agreement,
express or implied, is intended or shall be construed to confer upon, or give
to, any person or entity other than the parties hereto and their respective
successors and assigns, any remedy or claim under or by reason of this Agreement
or any terms, covenants or conditions hereof, and all of the terms, covenants,
conditions, promises and agreements contained in this Agreement shall be for the
sole and exclusive benefit of the parties hereto and their respective successors
and assigns.

 

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(g) Further Assurances. Each of the parties hereby agrees that it will hereafter
execute and deliver any further document, agreement, instruments of assignment,
transfer or conveyance as may be necessary or desirable to effectuate the
purposes hereof.

(h) Counterparts. This Agreement may be executed in one or more counterparts,
and may be delivered by means of facsimile or electronic transmission in
portable document format, each of which shall be deemed to be an original and
shall be binding upon the party who executed the same, but all of such
counterparts shall constitute the same agreement.

(i) Complete Agreement; Inconsistent Agreements. This Agreement and the
Confidentiality Agreement represent the complete agreement between the parties
hereto as to all matters covered hereby, and supersede any prior agreements or
understandings between the parties. Notwithstanding the foregoing, however, this
Agreement is independent of the Board Nomination and Observer Agreement between
the Company and the Lazarus Investment Partners, LLLP dated as of September 25,
2012, and as amended to date (the “2012 Board Agreement”) and nothing herein
shall serve to amend or terminate either parties’ obligations or rights arising
under such 2012 Board Agreement.

(j) Severability. In the event any one or more of the provisions contained in
this Agreement should be held invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby (it being understood
that the invalidity of a particular provision in a particular jurisdiction shall
not in and of itself affect the validity of such provision in any other
jurisdiction). The parties shall endeavor in good-faith negotiations to replace
the invalid, illegal or unenforceable provisions with valid provisions the
economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.

(k) Amendment and Waiver. Except as otherwise provided herein, no modification,
amendment or waiver of any provision of this Agreement shall be effective
against the Company or the Lazarus Group unless such modification is approved in
writing, in the case of an amendment, by the Company and the Lazarus Group, and
in the case of a waiver, by each party against whom the waiver is to be
effective. The failure of any party to enforce any of the provisions of this
Agreement shall in no way be construed as a waiver of such provisions and shall
not affect the right of such party thereafter to enforce each and every
provision of this Agreement in accordance with its terms.

(l) No Strict Construction. The language used in this Agreement shall be deemed
to be the language chosen by the parties hereto to express their mutual intent,
and no rule of strict construction shall be applied against any party.

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement, or caused
the same to be executed by its duly authorized representative, as of the day and
year first above written.

 

THE COMPANY: AUTHENTIDATE HOLDING CORP. By:  

/s/ Charles C. Lucas

Name:  

Charles C. Lucas III

Title:  

Chairman of the Board

THE LAZARUS GROUP: MR. JUSTIN B. BORUS By:  

/s/ Justin B. Borus

Name:  

Justin B. Borus

LAZARUS INVESTMENT PARTNERS LLLP By:  

Lazarus Management Company LLC

 

its General Partner

By:  

/s/ Justin B. Borus

Name:  

Justin B. Borus

Title:  

Managing Member

LAZARUS MANAGEMENT COMPANY LLC By:  

/s/ Justin B. Borus

Name:  

Justin B. Borus

Title:  

Managing Member

THE LAZARUS NOMINEE: (with respect to the obligations set forth in Section 1(h)
of the Board Nomination Agreement) By:  

/s/ Marc A. Horowitz

Name:  

Marc A. Horowitz

Signature Page to Board Nomination Agreement

 

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SCHEDULE A

Mr. Justin B. Borus

Lazarus Investment Partners LLLP

Lazarus Management Company LLC

 

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CONFIDENTIALITY AGREEMENT

AUTHENTIDATE HOLDING CORP.

December 10, 2014

 

To: Each of the persons or entities listed on Schedule A hereto (the “Group” or
“you”)

Ladies and Gentlemen:

This letter agreement shall become effective upon the appointment of any Lazarus
Nominee to the Board of Directors (the “Board”) of Authentidate Holding Corp.
(the “Company”) pursuant to that certain Board Nomination Agreement, dated as of
December 10, 2014, among the Company and the Lazarus Group (the “Nomination
Agreement”). Capitalized terms used but not otherwise defined herein shall have
the meanings given to such terms in the Nomination Agreement. The Company
understands and agrees that, subject to the terms of, and in accordance with,
this letter agreement, the Lazarus Nominee may, if and to the extent he or she
desires to do so, disclose information he or she obtains while serving as a
member of the Board to you and your Representatives (as hereinafter defined),
and may discuss such information with any and all such persons, subject to the
terms and conditions of this agreement. As a result, you may receive certain
non-public information regarding the Company. You acknowledge that this
information is proprietary to the Company and may include trade secrets or other
business information the disclosure of which could harm the Company. In
consideration for, and as a condition of, the information being furnished to you
and, subject to the restrictions in paragraph 2, the persons set forth on
Schedule B hereto (collectively, the “Representatives”), you agree to treat any
and all information concerning or relating to the Company or any of its
subsidiaries or affiliates that is furnished to you or your Representatives
(regardless of the manner in which it is furnished, including in written or
electronic format or orally, gathered by visual inspection or otherwise) by
either (i) any Lazarus Nominee, (ii) the individual nominated by Lazarus
Investment Partners LLLP and elected to the Board of the Company in accordance
with the terms of the Board Nomination and Observer Agreement between the
Company and Lazarus Investment Partners LLLP, dated as of September 25, 2012
(such person being the “Prior Lazarus Nominee”), or (iii) by or on behalf of the
Company, together with any notes, analyses, reports, models, compilations,
studies, interpretations, documents, records or extracts thereof containing,
referring, relating to, based upon or derived from such information, in whole or
in part (collectively, “Evaluation Material”), in accordance with the provisions
of this letter agreement, and to take or abstain from taking the other actions
hereinafter set forth.

1. The term “Evaluation Material” does not include information that (i) is or
has become generally available to the public other than as a result of a direct
or indirect disclosure by you or your Representatives in violation of this
letter agreement or any other obligation of confidentiality, (ii) was within
your or any of your Representatives’ possession on a non-confidential basis
prior to its being furnished to you by any Lazarus Nominee (including the Prior
Lazarus Nominee), or by or on behalf of the Company or its agents,
representatives, attorneys, advisors, directors, officers or employees
(collectively, the “Company Representatives”) or (iii) is received from a source
other than any Lazarus Nominee, the Prior Lazarus Nominee, the Company or any of
the Company Representatives; provided, that in the case of (ii) or (iii) above,
the source of such information was not believed by you, after reasonable inquiry
of the disclosing person, to be bound by a confidentiality agreement with or
other contractual, legal or fiduciary obligation of confidentiality to the
Company or any other person with respect to such information at the time the
information was disclosed to you.

2. You and your Representatives will, and you will cause your Representatives
to, (a) keep the Evaluation Material strictly confidential and (b) not disclose
any of the Evaluation Material in any

 

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manner whatsoever without the prior written consent of the Company; provided,
however, that you may privately disclose any of such information: (A) to your
Representatives (i) who need to know such information for the sole purpose of
advising you on your investment in the Company and (ii) who are informed by you
of the confidential nature of such information; provided, further, that you will
be responsible for any violation of this letter agreement by your
Representatives as if they were parties hereto; and (B) to the Company and the
Company Representatives. It is understood and agreed that no Lazarus Nominee
(including the Prior Lazarus Nominee) shall disclose to you or your
Representatives any Legal Advice (as defined below) that may be included in the
Evaluation Material with respect to which such disclosure would constitute
waiver of the Company’s attorney client privilege or attorney work product
privilege; provided, however, that a Lazarus Nominee may provide such disclosure
of Legal Advice if he or she shall not have taken any action, or failed to take
any action, that has the purpose or effect of waiving attorney-client privilege
or attorney work product privilege with respect to any portion of such Legal
Advice and if reputable outside legal counsel provides the Company with a
written opinion that such disclosure will not waive the Company’s attorney
client privilege or attorney work product privilege with respect to such Legal
Advice. “Legal Advice” as used herein shall be solely and exclusively limited to
the advice provided by legal counsel and shall not include factual information
or the formulation or analysis of business strategy that is not protected by the
attorney-client or attorney work product privilege.

3. In the event that you or any of your Representatives are required by
applicable subpoena, legal process or other legal requirement to disclose any of
the Evaluation Material, you will promptly notify (except where such notice
would be legally prohibited) the Company in writing by email or facsimile and
overnight courier so that the Company may seek a protective order or other
appropriate remedy (and if the Company seeks such an order, you will provide
such cooperation as the Company shall reasonably request), at its cost and
expense. Nothing herein shall be deemed to prevent you or your Representatives,
as the case may be, from honoring a subpoena, legal process or other legal
requirement that requires discovery, disclosure or production of the Evaluation
Material if (a) you produce or disclose only that portion of the Evaluation
Material which your outside legal counsel advises you is legally required to be
so produced or disclosed and you inform the recipient of such Evaluation
Material of the existence of this letter agreement and the confidential nature
of such Evaluation Material; or (b) the Company consents in writing to having
the Evaluation Material produced or disclosed pursuant to the subpoena, legal
process or other legal requirement. In no event will you or any of your
Representatives oppose action by the Company to obtain a protective order or
other relief to prevent the disclosure of the Evaluation Material or to obtain
reliable assurance that confidential treatment will be afforded the Evaluation
Material. For the avoidance of doubt, it is understood that there shall be no
“legal requirement” requiring you to disclose any Evaluation Material solely by
virtue of the fact that, absent such disclosure, you would be prohibited from
purchasing, selling, or engaging in derivative or other voluntary transactions
with respect to the Common Stock of the Company or otherwise proposing or making
an offer to do any of the foregoing, or you would be unable to file any proxy
materials in compliance with Section 14(a) of the Exchange Act or the rules
promulgated thereunder.

4. You acknowledge that (a) none of the Company or any of the Company
Representatives makes any representation or warranty, express or implied, as to
the accuracy or completeness of any Evaluation Material, and (b) none of the
Company or any of the Company Representatives shall have any liability to you or
to any of your Representatives relating to or resulting from the use of the
Evaluation Material or any errors therein or omissions therefrom. You and your
Representatives (or anyone acting on your or their behalf) shall not directly or
indirectly initiate contact or communication with any executive or employee of
the Company other than the Chief Executive Officer or Chief Financial Officer of
the Company, and/or such other persons approved in writing by the foregoing or
the Board concerning Evaluation Material, or to seek any information in
connection therewith from any such person other than

 

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the foregoing, without the prior consent of the Company; provided, however, the
restriction in this sentence shall not in any way apply to any Lazarus Nominee
or other Board members.

5. All Evaluation Material shall remain the property of the Company. Neither you
nor any of your Representatives shall by virtue of any disclosure of and/or your
use of any Evaluation Material acquire any rights with respect thereto, all of
which rights (including all intellectual property rights) shall remain
exclusively with the Company. At any time after the date on which no Lazarus
Nominee is a director of the Company, upon the request of the Company for any
reason, you will promptly return to the Company or destroy all hard copies of
the Evaluation Material and use commercially reasonable efforts to permanently
erase or delete all electronic copies of the Evaluation Material in your or any
of your Representatives’ possession or control (and, upon the request of the
Company, shall certify to the Company that such Evaluation Material has been
erased or deleted, as the case may be). Notwithstanding the return or erasure or
deletion of Evaluation Material, you and your Representatives will continue to
be bound by the obligations contained herein.

6. You acknowledge, and will advise your Representatives, that the Evaluation
Material may constitute material non-public information under applicable federal
and state securities laws, and that you shall not, and you shall use your
commercially reasonable efforts to ensure that your Representatives, do not,
trade or engage in any derivative or other transaction, on the basis of such
information in violation of such laws.

7. You hereby represent and warrant to the Company that (i) you have all
requisite company power and authority to execute and deliver this letter
agreement and to perform your obligations hereunder, (ii) this letter agreement
has been duly authorized, executed and delivered by you, and is a valid and
binding obligation, enforceable against you in accordance with its terms,
(iii) this letter agreement will not result in a violation of any terms or
conditions of any agreements to which you are a party or by which you may
otherwise be bound or of any law, rule, license, regulation, judgment, order or
decree governing or affecting you, and (iv) your entry into this letter
agreement does not require approval by any owners or holders of any equity or
other interest in you (except as has already been obtained).

8. Any waiver by the Company of a breach of any provision of this letter
agreement shall not operate as or be construed to be a waiver of any other
breach of such provision or of any breach of any other provision of this letter
agreement. The failure of the Company to insist upon strict adherence to any
term of this letter agreement on one or more occasions shall not be considered a
waiver or deprive the Company of the right thereafter to insist upon strict
adherence to that term or any other term of this letter agreement.

9. You acknowledge and agree that the value of the Evaluation Material to the
Company is unique and substantial, but may be impractical or difficult to assess
in monetary terms. You further acknowledge and agree that in the event of an
actual or threatened violation of this letter agreement, immediate and
irreparable harm or injury would be caused for which money damages would not be
an adequate remedy. Accordingly, you acknowledge and agree that, in addition to
any and all other remedies which may be available to the Company at law or
equity, the Company shall be entitled to an injunction or injunctions to prevent
breaches of this letter agreement and to enforce specifically the terms and
provisions of this letter agreement exclusively in the Court of Chancery or
other federal or state courts of the State of Delaware. In the event that any
action shall be brought in equity to enforce the provisions of this letter
agreement, you shall not allege, and you hereby waive the defense, that there is
an adequate remedy at law.

10. Each of the parties hereto (a) consents to submit itself to the personal
jurisdiction of the Court of Chancery or other federal or state courts of the
State of Delaware in the event any dispute arises

 

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out of this letter agreement or the transactions contemplated by this letter
agreement, (b) agrees that it shall not attempt to deny or defeat such personal
jurisdiction by motion or other request for leave from any such court,
(c) agrees that it shall not bring any action relating to this letter agreement
or the transactions contemplated by this letter agreement in any court other
than the Court of Chancery or other federal or state courts of the State of
Delaware, and each of the parties irrevocably waives the right to trial by jury,
(d) agrees to waive any bonding requirement under any applicable law, in the
case any other party seeks to enforce the terms by way of equitable relief, and
(e) irrevocably consents to service of process by a reputable overnight delivery
service, signature requested, to the address of such party’s principal place of
business or as otherwise provided by applicable law. THIS LETTER AGREEMENT SHALL
BE GOVERNED IN ALL RESPECTS, INCLUDING VALIDITY, INTERPRETATION AND EFFECT, BY
THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO CONTRACTS EXECUTED AND TO BE
PERFORMED WHOLLY WITHIN SUCH STATE WITHOUT GIVING EFFECT TO THE CHOICE OF LAW
PRINCIPLES OF SUCH STATE.

11. This letter agreement and the Nomination Agreement contain the entire
understanding of the parties with respect to the subject matter hereof and
thereof and supersedes all prior or contemporaneous agreements or
understandings, whether written or oral. This letter agreement may be amended
only by an agreement in writing executed by the parties hereto.

12. All notices, consents, requests, instructions, approvals and other
communications provided for herein and all legal process in regard hereto shall
be in writing and shall be deemed validly given, made or served, if (a) given by
telecopy or email, when such telecopy is transmitted to the telecopy number set
forth below or such email is sent to the email address set forth below and the
appropriate confirmation is received or (b) if given by any other means, when
actually received during normal business hours at the address specified in this
subsection. For the purpose of notices hereunder, it is agreed that notices to
be delivered to the Lazarus Nominee may be addressed and delivered to the
Lazarus Group.

 

If to the Company:    Authentidate Holding Corp.    300 Connell Drive, 5th Floor
   Berkeley Heights, NJ 07922    Attention:    O’Connell Benjamin, President   
Facsimile:    (908) 673-9921    Email:    obenjamin@authentidate.com with copies
to (which shall not constitute notice):    Becker & Poliakoff, LLP    45
Broadway, 8th Floor    New York, NY 10006    Attention:    Michael A. Goldstein,
Esq.    Facsimile:    (212) 557-0295    Email:    mgoldstein@bplegal.com The
Lazarus Group’s address is:    Lazarus Investment Partners LLLP    3200 Cherry
Creek South Drive, Suite 670    Denver, CO 80209    Attention:    Mr. Justin
Borus    Facsimile:    (303) 309-2675    Email:    jborus@lazarusip.com

 

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with copies to (which shall not constitute notice):    Lazarus Investment
Partners LLLP    3200 Cherry Creek South Drive, Suite 670    Denver, CO 80209   
Attention:    Adam Averbach, Esq.    Facsimile:    (303) 309-2675    Email:   
aaverbach@lazarusip.com

13. If at any time subsequent to the date hereof, any provision of this letter
agreement shall be held by any court of competent jurisdiction to be illegal,
void or unenforceable, such provision shall be of no force and effect, but the
illegality or unenforceability of such provision shall have no effect upon the
legality or enforceability of any other provision of this letter agreement.

14. This letter agreement may be executed (including by facsimile or PDF) in two
or more counterparts which together shall constitute a single agreement.

15. This letter agreement and the rights and obligations herein may not be
assigned or otherwise transferred, in whole or in part, by you without the
express written consent of the Company. This letter agreement, however, shall be
binding on successors of the parties hereto.

16. The Lazarus Group shall cause any Lazarus Nominee (including any
Replacement) appointed to the Board pursuant to the Nomination Agreement to
execute a copy of this letter agreement.

17. This letter agreement shall expire two (2) years from the date on which any
Lazarus Nominee ceases to be a director of the Company; except that you shall
maintain in accordance with the confidentiality obligations set forth herein any
Evaluation Material constituting trade secrets for such longer time as such
information constitutes a trade secret of the Company as defined under 18 U.S.C.
§ 1839(3).

18. No licenses or rights under any patent, copyright, trademark, or trade
secret are granted or are to be implied by this letter agreement.

19. Each of the parties hereto acknowledges that it has been represented by
counsel of its choice throughout all negotiations that have preceded the
execution of this letter agreement, and that it has executed the same with the
advice of said counsel. Each party and its counsel cooperated and participated
in the drafting and preparation of this agreement and the documents referred to
herein, and any and all drafts relating thereto exchanged among the parties
shall be deemed the work product of all of the parties and may not be construed
against any party by reason of its drafting or preparation. Accordingly, any
rule of law or any legal decision that would require interpretation of any
ambiguities in this agreement against any party that drafted or prepared it is
of no application and is hereby expressly waived by each of the parties hereto,
and any controversy over interpretations of this agreement shall be decided
without regards to events of drafting or preparation. The term “including” shall
in all instances be deemed to mean “including without limitation.”

[Signature Page Follows]

 

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Please confirm your agreement with the foregoing by signing and returning one
copy of this letter agreement to the undersigned, whereupon this letter
agreement shall become a binding agreement between you and the Company.

 

Very truly yours, AUTHENTIDATE HOLDING CORP. By:  

/s/ Charles C. Lucas

Name:  

Charles C. Lucas III

Title:  

Chairman of the Board

Accepted and agreed as of the date first written above:

THE LAZARUS GROUP:

 

MR. JUSTIN B. BORUS By:  

/s/ Justin B. Borus

Name:  

Justin B. Borus

LAZARUS INVESTMENT PARTNERS LLLP By:  

Lazarus Management Company LLC

 

its General Partner

By:  

/s/ Justin B. Borus

Name:  

Justin B. Borus

Title:  

Managing Member

LAZARUS MANAGEMENT COMPANY LLC By:  

/s/ Justin B. Borus

Name:  

Justin B. Borus

Title:  

Managing Member

THE LAZARUS NOMINEE: By:  

/s/ Marc A. Horowitz

Name:  

Marc A. Horowitz

[Signature Page to the Confidentiality Agreement between

Authentidate Holding Corp. and Lazarus Group]

 

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SCHEDULE A

Mr. Justin B. Borus

Lazarus Investment Partners LLLP

Lazarus Management Company LLC

 

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SCHEDULE B

Mr. Justin B. Borus

 

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