Exhibit 10.1

EMPLOYMENT AGREEMENT

AGREEMENT made as of the 1st day of January, 2008 by and between O’Connell
Benjamin, residing at _____________________ (hereinafter referred to as the
“Employee”) and Authentidate Holding Corp., a Delaware corporation with
principal offices located at 300 Connell Drive, Berkeley Heights, NJ 07922.

WITNESSETH:

WHEREAS, Authentidate Holding Corp. and its subsidiaries (the “Company”) are
engaged in the business of providing Internet and software-based document
authentication services and related business enterprises; and

WHEREAS, the Company desires to continue the employment of the Employee for the
purpose of securing for the Company the experience, ability and services of the
Employee; and

WHEREAS, the Employee desires to continue employment with the Company pursuant
to the terms and conditions herein set forth, superseding all prior oral and
written employment agreements and term sheets and letters between the Company,
its subsidiaries and/or predecessors and Employee.

NOW, THEREFORE, it is mutually agreed by and between the parties hereto as
follows:

ARTICLE I

DEFINITIONS

1.1 Accrued Compensation. “Accrued Compensation” shall mean an amount which
shall include all amounts earned or accrued through the “Termination Date” (as
defined below) but not paid as of the Termination Date, including (i) Base
Salary, (ii) reimbursement for business expenses incurred by the Employee on
behalf of the Company, pursuant to the Company’s expense reimbursement policy in
effect at such time, (iii) expense allowance, (iv) vacation pay per Company
Policy, and (v) bonuses and incentive compensation earned and awarded prior to
the Termination Date.

1.2 Cause. “Cause” shall mean: (i) willful disobedience by the Employee of a
reasonable, material and lawful instruction of the Board of Directors of the
Company consistent with the duties and functions of Employee’s position;
(ii) conviction of the Employee of any misdemeanor involving fraud or
embezzlement or similar crime, or any felony; (iii) fraud, gross negligence or
willful misconduct in the performance of any material duties to the Company; or
(iv) excessive absences from work, other than for illness or Disability;
provided that the Company shall not have the right to terminate the employment
of Employee pursuant to the foregoing clauses (i), (iii) or (iv) above unless
written notice specifying such breach shall have been given to the Employee and,
in the case of breach which is capable of being cured, the Employee shall have
failed to cure such breach within thirty (30) days after his receipt of such
notice.

 

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1.3 Change in Control. “Change in Control” shall mean any of the following
events:

a.(i) An acquisition (other than directly from the Company) of any voting
securities of the Company (the “Voting Securities”) by any “Person” (as the term
person is used for purposes of Section 13(d) or 14(d) of the Securities Exchange
Act of 1934, as amended (the “1934 Act”)) immediately after which such Person
has “Beneficial Ownership” (within the meaning of Rule 13d-3 promulgated under
the 1934 Act) of twenty percent (20%) or more of the combined voting power of
the Company’s then outstanding Voting Securities; provided, however, that in
determining whether a Change in Control has occurred, Voting Securities which
are acquired in a “Non-Control Acquisition” (as defined below) shall not
constitute an acquisition which would cause a Change in Control. A “Non-Control
Acquisition” shall mean an acquisition by (1) an employee benefit plan (or a
trust forming a part thereof) maintained by (x) the Company or (y) any
corporation or other Person of which a majority of its voting power or its
equity securities or equity interest is owned directly or indirectly by the
Company (a “Subsidiary”), or (2) the Company or any Subsidiary.

(ii) Notwithstanding the foregoing, a Change in Control shall not be deemed to
occur solely because a Person (the “Subject Person”) gained Beneficial Ownership
of more than the permitted amount of the outstanding Voting Securities as a
result of the acquisition of Voting Securities by the Company which, by reducing
the number of Voting Securities outstanding, increases the proportional number
of shares Beneficially Owned by the Subject Person, provided that if a Change in
Control would occur (but for the operation of this sentence) as a result of the
acquisition of Voting Securities by the Company, and after such share
acquisition by the Company, the Subject Person becomes the Beneficial Owner of
any additional Voting Securities which increases the percentage of the then
outstanding Voting Securities Beneficially Owned by the Subject Person, then a
Change in Control shall occur.

b. The individuals who, as of the date this Agreement is approved by the Board,
are members of the Board (the “Incumbent Board”), cease for any reason to
constitute at least two-thirds of the Board; provided, however, that if the
election, or nomination for election by the Company’s stockholders, of any new
director was approved by a vote of at least two-thirds of the Incumbent Board,
such new director shall, for purposes of this Agreement, be considered and
defined as a member of the Incumbent Board; and provided, further, that no
individual shall be considered a member of the Incumbent Board if such
individual initially assumed office as a result of either an actual “Election
Contest” (as described in Rule 14a-11 promulgated under the 1934 Act) or other
solicitation of proxies or consents by or on behalf of a Person other than the
Board (a “Proxy Contest”); or

c. Approval by stockholders of the Company of:

(i) A merger, consolidation or reorganization involving the Company, unless:
(1) the stockholders of the Company, immediately before such merger,
consolidation or reorganization, own, directly or indirectly immediately
following such merger, consolidation or reorganization, at least sixty percent
(60%) of the combined voting power of the outstanding voting securities of the
corporation resulting from such merger or consolidation or reorganization (the
“Surviving Corporation”) in substantially the same proportion as their ownership
of the Voting Securities immediately before such merger, consolidation or
reorganization, (2) the individuals who were members of the Incumbent Board
immediately prior to the execution of the agreement providing for such merger,
consolidation or reorganization constitute at least two-thirds of the members of
the board of directors of the Surviving Corporation, and (3) no Person (other
than the Company, any Subsidiary, any employee benefit plan (or any trust
forming a part thereof) maintained by the Company, the Surviving Corporation or
any Subsidiary) becomes Beneficial Owner of twenty percent (20%) or more of the
combined voting power of the Surviving Corporation’s then outstanding voting
securities as a result of such merger, consolidation or reorganization, a
transaction described in clauses (1) through (3) shall herein be referred to as
a “Non-Control Transaction”; or

 

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(ii) An agreement for the sale or other disposition of all or substantially all
of the assets of the Company, to any Person, other than 1) a transfer to a
Subsidiary, in one transaction or a series of related transactions; or 2) the
sale, spin-off or divestiture of a subsidiary or business unit other than the US
security software business unit.

(iii) The stockholders of the Company approve any plan or proposal for the
liquidation or dissolution of the Company.

d. Notwithstanding anything contained in this Agreement to the contrary, if the
Employee’s employment is terminated prior to a Change in Control and the
Employee reasonably demonstrates that such termination (i) was at the request of
a third party who has indicated an intention or taken steps reasonably
calculated to effect a Change in Control (a “Third Party”) or (ii) otherwise
occurred in connection with, or in anticipation of, a Change in Control, then
for all purposes of this Agreement, the date of a Change in Control with respect
to the Employee shall mean the date immediately prior to the date of such
termination of the Employee’s employment.

1.4 Continuation Benefits. “Continuation Benefits” shall be the continuation of
the Benefits, as defined in Section 5.1, for the period from the Termination
Date to either (i) the later of the Expiration Date, or the end of the month in
which the one-year anniversary of the Termination Date occurs, or (ii) such
other period as specifically stated by this Agreement (the “Continuation
Period”), at the Company’s expense, less any normal payroll deductions, on
behalf of the Employee and his dependents; provided, however, if any of the
Benefits required to be provided by the Company during the Continuation Period
under the Company’s benefit plans are, pursuant to the terms of such plans, not
available to non-employees of the Company, the Company, at its sole cost and
expense, less any normal payroll deductions, shall be required to provide such
benefits as shall be reasonably available and substantially similar to the
benefits provided to employees of the Company. The Company’s obligation
hereunder with respect to the foregoing benefits shall also be limited to the
extent that if the Employee obtains such benefits pursuant to a subsequent
employer’s benefit plan, the Company may reduce the coverage of any benefits it
is required to provide the Employee hereunder as long as the aggregate coverage
and benefits of the combined benefit plans is no less favorable to the Employee
than the coverage and benefits required to be provided hereunder. This
definition of Continuation Benefits shall not be interpreted so as to limit any
benefits to which the Employee, his dependents or beneficiaries may be entitled
under any of the Company’s employee benefit plans, programs or practices
following the Employee’s termination of employment, including, without
limitation, retiree medical and life insurance benefits.

1.5 Disability. “Disability” shall mean a physical or mental infirmity which
impairs the Employee’s ability to substantially perform his duties with the
Company for a period of three consecutive months, and the Employee has not
returned to his full time employment prior to the Termination Date as stated in
the “Notice of Termination” (as defined below).

 

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1.6 Good Reason. “Good Reason” shall mean without the written consent of the
Employee: (A) a material breach of any provision of this Agreement by the
Company; (B) failure by the Company to pay when due any compensation to the
Employee; (C) a reduction in the Employee’s Base Salary; (D) failure by the
Company to maintain the Employee in the positions referred to in Section 2.1 of
this Agreement, unless such change was due to a Change of Control;
(E) assignment to the Employee of any duties materially and adversely
inconsistent with the Employee’s positions, authority, duties, responsibilities,
powers, functions, reporting relationship or title as contemplated by
Section 2.1 of this Agreement or any other action by the Company that results in
a material diminution of such positions, authority, duties, responsibilities,
powers, functions, reporting relationship or title, unless such change was due
to a Change of Control; (F) relocation of the principal office of the Company or
the Employee’s principal place of employment to a location outside a 15
(fifteen) mile radius of the present location in Berkeley Heights, New Jersey,
without the Employee’s written consent; or (G) a Change in Control, provided the
event on which the Change of Control is predicated occurs not less than 90 nor
more than 150 days of the service of the Notice of Termination by the Employee,
it being understood that Employee shall have the right to terminate his
employment under this Section 1.6 (G) for any reason or no reason within such 60
day period; and provided further, however, that the Employee agrees not to
terminate his employment for Good Reason pursuant to clauses (A) through
(F) unless (a) the Employee has given the Company at least 30 days’ prior
written notice of his intent to terminate his employment for Good Reason, which
notice shall specify the facts and circumstances constituting Good Reason; and
(b) the Company has not remedied such facts and circumstances constituting Good
Reason to the reasonable and good faith satisfaction of the Employee within a
30-day period after receipt of such notice.

1.7 Notice of Termination. “Notice of Termination” shall mean a written notice
from the Company, or the Employee, of termination of the Employee’s employment
which indicates the specific termination provision in this Agreement relied
upon, if any, and which sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Employee’s
employment under the provision so indicated.

1.8 Severance Payment. “Severance Payment” shall mean an amount equal to 12
months of Employee’s Base Salary in effect on the Termination Date.

1.9 Termination Date. Termination Date shall mean (i) in the case of the
Employee’s death, his date of death; (ii) in the case of Good Reason, 30 days
from the date the Notice of Termination is given to the Company, provided the
Company has not remedied such facts and circumstances constituting Good Reason
to the reasonable and good faith satisfaction of the Employee; (iii) in the case
of termination of employment on or after the Expiration Date, the last day of
employment; and (iv) in all other cases, the date specified in the Notice of
Termination; provided, however, if the Employee’s employment is terminated by
the Company for any reason except Cause, the date specified in the Notice of
Termination shall be at least 30 days from the date the Notice of Termination is
given to the Employee, and provided further that in the case of Disability, the
Employee shall not have returned to the full-time performance of his duties
during such period of at least 30 days.

 

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ARTICLE II

EMPLOYMENT

2.1 Subject to and upon the terms and conditions of this Agreement, the Company
hereby agrees to continue the employment of the Employee, and the Employee
hereby accepts such continued employment in his capacity as President.

ARTICLE III

DUTIES

3.1 The Employee shall, during the term of his employment with the Company, and
subject to the direction and control of the Board, report directly to the Board
and shall exercise such authority, perform such executive duties and functions
and discharge such responsibilities as are reasonably associated with his
executive position or as may be reasonably assigned or delegated to him from
time to time by the Board, consistent with his position as President. In
general, Employee shall have management authority with respect to, and
responsibility for, the overall operations and day-to-day business and affairs
of the Company and all major operating units.

3.2 During the term of this Agreement and excluding periods of vacation and sick
leave to which the Employee is entitled, the Employee agrees to devote
substantially all of his business time and attention to the affairs of the
Company and, to the extent necessary to discharge the responsibilities assigned
hereunder, use his best efforts in the performance of his duties for the Company
and any subsidiary corporation of the Company. During the term of this Agreement
the Employee may, so long as it does not materially interfere with his duties
hereunder: (i) subject to Article VII hereof, serve on the board of directors
(or equivalent bodies) of civic, non-profit, or charitable organizations or
entities unaffiliated with the Company, (ii) deliver lectures or otherwise
participate in speaking engagements, and (iii) manage his personal investments
and affairs.

3.3 Employee shall undertake regular travel to the Company’s executive and
operational offices, and such other occasional travel within or outside the
United States as is or may be reasonably necessary in the interests of the
Company. All such travel shall be at the sole cost and expense of the Company
and all airplane travel shall be first or business class, or otherwise fully
reimbursed at cost, to the extent that such reimbursements do not exceed the
approximate equivalent published fare for first or business class travel.

 

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ARTICLE IV

COMPENSATION

4.1 During the term of this Agreement, Employee shall be compensated at the rate
of $290,000 per annum, subject to such increases to be determined by the Board,
or if the Board so designates, the Compensation Committee, in its discretion, at
the commencement of each of the Company’s fiscal years during the term of this
Agreement (the “Base Salary”). Base Salary shall be paid to the Employee in
regular installments on each of the Company’s regular pay dates for executives,
but no less frequently than monthly.

4.2 Employee shall be eligible to receive a bonus (the “Bonus”) in the
discretion of the Board, or if the Board so designates, the Compensation
Committee of the Board based on the annual performance of the Company. Employee
will have an opportunity to earn a Bonus targeted at 50% of Employee’s Base
Salary for each fiscal year of employment. The Bonus will be based on Employee’s
achievement of revenue and income targets and other key objectives established
at the commencement of each fiscal year by the Board or if the Board so
designates, the Compensation Committee of the Board and reasonably acceptable to
the Employee.

4.3 The Bonus shall be paid to the Employee on the earlier to occur of (x) the
first pay period after the filing of the Company’s report on Form 10-K with the
Securities and Exchange Commission or (y) at such time as the amount of the
Bonus for such period can reasonably be audited by the Company’s independent
accountants. The Company shall deduct from Employee’s compensation all federal,
state, and local taxes which it may now or may hereafter be required to deduct
under applicable law.

4.4 Employee may receive such other additional compensation as may be determined
from time to time by the Board including bonuses and other long term
compensation plans. Nothing in this subparagraph 4.4 shall be deemed or
construed to require the Board to award any bonus or additional compensation.

ARTICLE V

BENEFITS

5.1 During the term hereof, the Company shall provide Employee with the
following benefits, as such benefits may change from time to time (the
“Benefits”): (i) group health care and insurance benefits as generally made
available to the Company’s senior management; and (ii) such other benefits
(including insurance related benefits, holiday, sick leave, personal days, etc.)
obtained by the Company or made generally available to the Company’s senior
management;

5.2 The Company shall reimburse Employee, upon presentation of the Company’s
standard expense report accompanied by appropriate vouchers and other suitable
documentation, incurred by Employee on behalf of the Company, provided such
expenditure is consistent with Company policy.

5.3 In the event the Company wishes to obtain Key Man life insurance on the life
of Employee, Employee agrees to cooperate with the Company in completing any
applications necessary to obtain such insurance and promptly submit to such
physical examinations and furnish such information as any proposed insurance
carrier may request.

5.4 For the term of this Agreement, Employee shall be entitled to paid vacation
at the rate of (4) weeks per annum.

 

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ARTICLE VI

NON-DISCLOSURE

6.1 The Employee shall not, at any time during or after the termination of his
employment hereunder, except when acting on behalf of and with the authorization
of the Company, or when required by law or legal process, or where appropriate
in response to regulatory authorities, make use of or disclose to any person,
corporation, or other entity, for any purpose whatsoever, any trade secret or
other confidential information concerning the Company’s business, finances,
marketing, computerized payroll, accounting and information business, personnel
and/or employee leasing business of the Company and its subsidiaries, including
information relating to any customer of the Company, or any other nonpublic
business information of the Company and/or its subsidiaries learned as a
consequence of Employee’s employment with the Company, except for information
available publicly or from other non-confidential sources (collectively referred
to as the “Proprietary Information”). The Employee acknowledges that Proprietary
Information, as they may exist from time to time, are valuable and unique assets
of the Company, and that disclosure of any such information would cause
substantial injury to the Company. Proprietary Information shall cease to be
Proprietary Information, as applicable, at such time as such information becomes
public other than through disclosure, directly or indirectly, by Employee in
violation of this Agreement.

6.2 If Employee is requested or required (by oral questions, interrogatories,
requests for information or document subpoenas, civil investigative demands, or
similar process) to disclose any Proprietary Information, Employee shall, unless
prohibited by law, promptly notify the Company of such request(s) so that the
Company may seek an appropriate protective order.

ARTICLE VII

RESTRICTIVE COVENANT

7.1 In the event of the termination of Employee’s employment with the Company at
any time, Employee agrees that he will not, for a period of one (1) year
following such termination, directly or indirectly, enter into or become
associated with or engage in any other business (whether as a partner, officer,
director, shareholder, employee, consultant, or otherwise), which business is
primarily involved in Internet and software-based document authentication
services, or digital image authentication services and related business
enterprises or is otherwise engaged in the same or similar business as the
Company in direct competition with the Company, or which the Company was in the
process of developing during the term of Employee’s employment with the Company
and such development is based on actual or demonstrative anticipated research.
Notwithstanding the foregoing, (x) the ownership by Employee of less than five
percent of the shares of any publicly held corporation shall not violate the
provisions of this Article VII, and (y) the Employee shall not be required to
comply with any provision of this Article VII following termination of this
Agreement if the amounts required to be paid under Article IX are not timely
paid.

7.2 In furtherance of the foregoing, Employee shall not during the aforesaid
period of non-competition, directly or indirectly, in connection with any
business primarily involved in the Internet and software-based document
authentication services and related business enterprises, or digital image
authentication services, or any business similar to the business in which the
Company was engaged, or in the process of developing during Employee’s tenure
with the Company and such development is based on actual or demonstrative
anticipated research, solicit any customer or employee of the Company who was a
customer or employee of the Company within one year of the Termination Date.

 

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7.3 Except as otherwise may be agreed by the Company in writing, in
consideration of the employment of Employee by the Company, and free of any
additional obligations of the Company to make additional payment to Employee,
Employee agrees to irrevocably assign to the Company any and all inventions,
software, manuscripts, documentation, improvements or other intellectual
property whether or not protectable by any state or federal laws relating to the
protection of intellectual property, relating to the present or future business
of the Company that are developed by Employee during the term of his/her
employment with the Company, either alone or jointly with others, and whether or
not developed during normal business hours or arising within the scope of
his/her duties of employment. Employee agrees that all such inventions,
software, manuscripts, documentation, improvement or other intellectual property
shall be and remain the sole and exclusive property of the Company and shall be
deemed the product of work for hire. Employee hereby agrees to execute such
assignments and other documents as the Company may consider appropriate to vest
all right, title and interest therein to the Company and hereby appoints the
Company Employee’s attorney-in-fact with full powers to execute such document
itself in the event employee fails or is unable to provide the Company with such
signed documents. Notwithstanding the foregoing, this provision does not apply
to an invention for which no equipment, supplies, facility, or trade secret
information of the Company was used and which was developed entirely on
Employee’s own time, unless (a) the invention relates (i) to the business of the
Company, or (ii) to the Company’s actual or demonstrably anticipated research or
development, or (b) the invention results from any work performed by Employee
for the Company.

7.4 If any court shall hold that the duration of non-competition or any other
restriction contained in this Article VII is unenforceable, it is our intention
that same shall not thereby be terminated but shall be deemed amended to delete
therefrom such provision or portion adjudicated to be invalid or unenforceable
or, in the alternative, such judicially substituted term may be substituted
therefor.

ARTICLE VIII

TERM

8.1 This Agreement shall be effective upon execution by both parties hereto and
the employment term (the “Initial Term”) shall commence on January 1, 2008 (the
“Commencement Date”) and terminate on December 31, 2008 (the “Expiration Date”),
unless sooner terminated upon the death of the Employee, or as otherwise
provided herein.

8.2 The Company shall notify in writing the Employee of the Company’s intention
to continue Employee’s employment after the Expiration Date no less than 90 days
prior to the Expiration Date.

8.3 Upon termination of the Employee’s employment with the Company, the Company
shall pay Employee, in addition to any other payments due hereunder, the amounts
due under Article IX.

 

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ARTICLE IX

TERMINATION

9.1 The Company may terminate this Agreement by giving a Notice of Termination
to the Employee in accordance with this Agreement:

a. for Disability;

b. for Cause

c. without Cause.

9.2 Employee may terminate this Agreement at any time by giving 30 days prior
written Notice of Termination to the Company in accordance with this Agreement.

9.3 If the Employee’s employment with the Company shall be terminated, the
Company shall pay and/or provide to the Employee the following compensation and
benefits:

a. if the Employee was terminated by the Company for Cause, or the Employee
terminates without Good Reason, the Accrued Compensation;

b. if the Employee was terminated by the Company for Disability, the Accrued
Compensation, the Severance Payment and the Continuation Benefits; or

c. if termination was due to the Employee’s death, the Accrued Compensation; or

d. if the Employee was terminated by the Company without Cause or the Employee
terminates this Agreement for Good Reason, (i) the Accrued Compensation;
(ii) the Severance Payment; and (iii) the Continuation Benefits.

e. In the event the Company fails to notify the Employee in accordance with
Section 8.2, or after notifying the Employee fails to reach an agreement on a
new employment agreement prior to the Expiration Date, Employee’s employment
shall terminate on the Expiration Date and the Company shall pay the Employee
the Severance Payment; Accrued Compensation, and the Continuation Benefits.

9.4 The amounts payable under this Section 9.3, shall be paid as follows:

a. Accrued Compensation shall be paid on the first regular pay date after the
Termination Date (or earlier, if required by applicable law).

b. If the Continuation Benefits are paid in cash, the payments shall be made on
the first day of each month during the Continuation Period (or earlier, if
required by applicable law).

c. The Severance Payments shall be paid in equal installments in accordance with
the Company’s regular pay dates for executives (or earlier, if required by
applicable law) during a period of one year commencing with the first regular
pay date after the Termination Date;

9.5 The Employee shall not be required to mitigate the amount of any payment,
including the value of any Continuation Benefit, provided for in this Agreement
by seeking other employment or otherwise and no such payment shall be offset or
reduced by the amount of any compensation or benefits provided to the Employee
in any subsequent employment except as provided in Sections 1.4.

 

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9.6 For a period of three years following the termination of this Agreement,
Employee agrees that he will not make any negative or derogatory statements in
verbal, written, electronic or any other form about the Company, including, but
not limited to, a negative or derogatory statement made in, or in connection
with, any article or book, on a website, in a chat room or via the internet
except where such statement is required by law or regulation. During such three
year period, none of the executive officers and directors shall make any
negative or derogatory statements in verbal, written, electronic or any other
form about the Employee, including, but not limited to, a negative or derogatory
statement made in, or in connection with, any article or book, on a website, in
a chat room or via the internet except where such statement is required by law
or regulation

ARTICLE X

TERMINATION OF PRIOR AGREEMENTS

10.1 This Agreement, and the stock option, bonus plan and benefit plans, sets
forth the entire agreement between the parties and supersedes all prior
agreements, letters and understandings between the parties, whether oral or
written prior to the effective date of this Agreement, except for the terms of
employee stock option plans and option certificates.

ARTICLE XI

STOCK OPTIONS

11.1 In the event of a termination of Employee’s employment with the Company
pursuant to Section 9.1(c) or 9.3(e) or by the Employee for Good Reason,
notwithstanding anything herein or in any stock option agreement to the
contrary, (a) the Employee’s right to purchase shares of Common Stock of the
Company pursuant to any stock option or stock option plan shall immediately
fully vest and become exercisable, (b) the exercise period in which Employee may
exercise his options to purchase Company common stock shall be extended to the
duration of their original term, as if Employee remained an employee of the
Company, and the terms of such options shall be deemed amended to take into
account the foregoing provisions. For purposes of clarity, Employee and Company
agree that the occurrence of a Change in Control shall not affect the provisions
of this Section 11.1. The terms of such options shall be deemed amended to take
into account the foregoing provisions. In the event of a termination of
Employee’s employment with the Company pursuant to Section 9.1(b), options
granted and not exercised as of the Termination Date shall terminate immediately
and be null and void. In the event of a termination of Employee’s employment
with the Company due to the Employee’s death, or Disability, the Employee’s (or
his estate’s or legal representative’s) right to purchase shares of Common Stock
of the Company pursuant to any stock option or stock option plan to the extent
vested as of the Termination Date shall remain exercisable for a period of
twelve (12) months following the Termination Date, but in no event after the
expiration of the exercise period. In the event of a termination of Employee’s
employment with the Company by the Employee other than for Good Reason, the
Employee’s right to purchase shares of Common Stock of the Company pursuant to
any stock option or stock option plan to the extent vested as of the Termination
Date shall remain exercisable for a period of three months following the
Termination Date, but in no event after the expiration of the exercise period.

 

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ARTICLE XII

ARBITRATION AND INDEMNIFICATION

12.1 Any dispute arising out of the interpretation, application, and/or
performance of this Agreement with the sole exception of any claim, breach, or
violation arising under Articles VI or VII hereof shall be settled through final
and binding arbitration before a single arbitrator in the State of New Jersey in
accordance with the Rules of the American Arbitration Association. The
arbitrator shall be selected by the American Arbitration Association and shall
be an attorney-at-law experienced in the field of corporate law. Any judgment
upon any arbitration award may be entered in any court, federal or state, having
competent jurisdiction of the parties.

12.2 The Company hereby agrees to indemnify, defend, and hold harmless the
Employee for any and all claims arising from or related to his employment by the
Company at any time asserted, at any place asserted, to the fullest extent
permitted by law. The Company shall maintain such insurance as is necessary and
reasonable (with minimum coverage of not less than $5,000,000) to protect the
Employee from any and all claims arising from or in connection with his
employment by the Company during the term of Employee’s employment with the
Company and for a period of six (6) years after the date of termination of
employment for any reason. The provisions of this Section are in addition to and
not in lieu of any indemnification, defense or other benefit to which Employee
may be entitled by statute, regulation, common law or otherwise.

ARTICLE XIII

SEVERABILITY

If any provision of this Agreement shall be held invalid and unenforceable, the
remainder of this Agreement shall remain in full force and effect. If any
provision is held invalid or unenforceable with respect to particular
circumstances, it shall remain in full force and effect in all other
circumstances.

 

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ARTICLE XIV

NOTICE

For the purposes of this Agreement, notices and all other communications
provided for in the Agreement shall be in writing and shall be deemed to have
been duly given when (a) personally delivered or (b) sent by (i) a nationally
recognized overnight courier service or (ii) certified mail, return receipt
requested, postage prepaid and in each case addressed to the respective
addresses as set forth below or to any such other address as the party to
receive the notice shall advise by due notice given in accordance with this
paragraph. All notices and communications shall be deemed to have been received
on (A) if delivered by personal service, the date of delivery thereof; (B) if
delivered by a nationally recognized overnight courier service, on the first
business day following deposit with such courier service; or (C) on the third
business day after the mailing thereof via certified mail. Notwithstanding the
foregoing, any notice of change of address shall be effective only upon receipt.

The current addresses of the parties are as follows:

 

IF TO THE COMPANY:

   Authentidate Holding Corp.    Connell Corporate Center    300 Connell Drive,
Fifth Floor    Berkeley Heights, NJ 07922

WITH A COPY TO:

   Victor J. DiGioia    Becker & Poliakoff, LLP    45 Broadway    New York, NY
10006

IF TO THE EMPLOYEE:

   O’Connell Benjamin

ARTICLE XV

BENEFIT

This Agreement shall inure to, and shall be binding upon, the parties hereto,
the successors and assigns of the Company, and the heirs and personal
representatives of the Employee.

ARTICLE XVI

WAIVER

The waiver by either party of any breach or violation of any provision of this
Agreement shall not operate or be construed as a waiver of any subsequent breach
of construction and validity.

 

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ARTICLE XVII

GOVERNING LAW

This Agreement has been negotiated and executed in the State of New Jersey. The
law of the State of New Jersey shall govern the construction and validity of
this Agreement.

ARTICLE XVIII

JURISDICTION

Any or all actions or proceedings which may be brought by the Company or
Employee under this Agreement shall be brought in courts having a situs within
the State of New Jersey, and Employee and the Company each hereby consent to the
jurisdiction of any local, state, or federal court located within the State of
New Jersey.

ARTICLE XIX

ENTIRE AGREEMENT

This Agreement contains the entire agreement between the parties hereto. No
change, addition, or amendment shall be made hereto, except by written agreement
signed by the parties hereto.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement and affixed
their hands and seals the day and year first above written.

 

Authentidate Holding Corp. By:   /s/ David Luce

David Luce

Chairman of the Compensation Committee

 

Employee /s/ O’Connell Benjamin

O’Connell Benjamin

Employee

 

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