Exhibit 10.1

EMPLOYMENT AGREEMENT

     AGREEMENT made as of the 27th day of October, 2004 by and between Surendra
Pai, residing at _____________ (hereinafter referred to as the "Employee") and
AuthentiDate Holding Corp., a Delaware corporation with principal offices
located at 2165 Technology Drive, Schenectady, New York 12308.

W I T N E S S E T H:

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

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

     WHEREAS, the Employee desires to accept employment with the Company
effective November 15, 2004 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 and, to the extent the First Year Bonus has not been paid in full, the
unpaid portion of the First Year Bonus, pro rated in the event Termination is
for Cause or by the Employee without Good Reason, (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.

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     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.

     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.

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          (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

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  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 a
transfer to a Subsidiary, in one transaction or a series of related
transactions; or

          (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.

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     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).

     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; (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; (F)
relocation of the principal office of the Company or the Employee’s principal
place of employment to a location other than Manhattan in New York City or
within the New York City metropolitan area in the State of 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 within 120 days of the
service of the Notice of Termination by the Employee; 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.

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     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 the sum of 12 months of the greater of (A) the Employee’s Base Salary in
effect on the Termination Date and (B) the highest Base Salary in effect at any
time during the ninety (90) day period prior to the Termination Date. The
Severance Payment shall be payable as provided in Section 9. For purposes of
computing the Severance Payment, Base Salary shall include any automatic
increases to Base Salary to which the Employee would have been entitled had this
Agreement not been terminated.

     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 employs and agrees to continue the employment of the Employee,
and the Employee hereby accepts such continued employment in his capacity as
President and Chief Executive Officer. The Company shall appoint the Employee to
the Board upon the effective date of this Agreement and nominate, and use its
best efforts to have elected, the Employee to the Board of Directors of the
Company (the “Board”) throughout the term of this Agreement. The Employee agrees
to resign from the Board upon the termination of employment for any reason.

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 and
Chief Executive Officer. 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 and executives
of the Company shall report, either directly or indirectly (through other
executives of the Company or its subsidiaries who report directly to the
Employee) to the Employee.

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     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 in accordance with the
Company’s policy for executive officers.

ARTICLE IV

COMPENSATION

     4.1      During the term of this Agreement, Employee shall be compensated
at the rate of $350,000 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.

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     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, except
that the First Year Bonus (as defined below) shall be guaranteed. Employee will
have an opportunity to earn a Bonus of up to 50% of Employee’s Base Salary for
each fiscal year of employment; provided, however, that the bonus for the first
year of employment (the “First Year Bonus”) shall be no less than 50% of
Employee’s Base Salary. 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 First Year Bonus shall be paid to the Employee in full no
later than one year from the effective date of this Agreement , unless this
Agreement is sooner terminated, and all other Bonuses 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. Except for the First Year Bonus and in the event the
established performance targets are satisfied, nothing in this subparagraph 4.4
shall be deemed or construed to require the Board to award any bonus or
additional compensation.

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     4.5      In the event it shall be determined that any payment or
distribution by the Company or any other person or entity to or for the benefit
of the Employee is a "parachute payment" within the meaning of Section 280G of
the Internal Revenue Code of 1986, as amended (the "Code"), whether paid or
payable or distributed or distributable pursuant to the terms of this Agreement
or otherwise, in connection with, or arising out of, his employment with the
Company or a change in control of the Company or a substantial portion of its
assets (a "Payment"), and would be subject to the excise tax imposed by Section
4999 of the Code (the "Excise Tax"), and further, if the event which caused the
imposition of the Excise Tax is either (i) a Change of Control that is a sale or
merger of the Company for a valuation of at least $13.75 per share; (ii) a
transaction approved by the Board; or (iii) a Change of Control as defined in
Section 1.3(b), concurrent with the making of such Payment, the Company shall
pay to the Employee an additional payment (the "Gross-Up Payment") in an amount
such that the net amount retained by the Employee after deduction of any Excise
Tax on such Payment and any federal, state or local income tax and Excise Tax on
the Gross-Up Payment shall equal the amount of such Payment. In the event the
Internal Revenue Service subsequently may assess or seek to assess from the
Employee an amount of Excise Tax in excess of that determined in accordance with
the foregoing, the Company shall pay to the Employee an additional Gross-Up
Payment, calculated as described above in respect of such excess Excise Tax,
including a Gross-Up Payment in respect of any interest or penalties imposed by
the Internal Revenue Service with respect to such excess Excise Tax. The
Gross-Up Payment shall be paid as soon as practicable after it is determined by
the Company or the Employee and reviewed for accuracy by the Company’s certified
public accountants and in no event later than thirty (30) days after the
conclusion of the transaction to which this paragraph applies.

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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 Employee shall receive an expense allowance for automobile and
other living expenses of $2,500 per month, prorated and payable with each
payroll check. In addition, 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.

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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 the manufacture, development and/or distribution of
computers and/or document imaging systems, or digital image authentication 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 manufacture, development and/or
distribution of computers and/or document imaging systems, 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.

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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 November
15, 2004 (the "Commencement Date") and terminate on November 14, 2006 (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 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 by giving a Notice of
Termination to the Company in accordance with this Agreement, at any time.

     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 greater of (A) the Base Salary to the Expiration Date, or
(B) the Severance Payment; and (iii) the Continuation Benefits.

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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 aggregate amount of the Continuation
Benefits shall be paid as follows: 25% in one lump sum on the first regular pay
date after the Termination Date, and the balance in five equal monthly
installments commencing one month after the Termination Date(or earlier, if
required by applicable law) on the Company’s regular pay dates.

    c. The Severance Payments shall be paid as follows: 25% in one lump sum
within five business days of the Termination Date, and the balance in five equal
monthly installments commencing one month after the Termination Date(or earlier,
if required by applicable law) on the Company’s regular pay dates;

    d. Notwithstanding the foregoing, in the event counsel for the Employee
advises the Employee that any payments should be deferred for six months after
the Termination Date, the Company shall defer the payment of all such payments
for six months (the “Deferral Period”), and pay, in one lump sum on the sixth
month anniversary of the Termination Date, all payments deferred during the
Deferral Period, and thereafter all payments shall continue as otherwise
provided in this Agreement.

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     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.

     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

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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.

ARTICLE XI

STOCK OPTIONS

     11.1      As an inducement to Employee to enter into this Agreement the
Company hereby grants, as of the date of this Agreement, to Employee options to
purchase shares of the Company’s Common Stock, $.001 par value, as follows:

          Subject to the terms and conditions of the Company’s 2000 Employees’
Stock Option Plan (the “Plan”), and the terms and conditions set forth in the
Stock Option Agreement which are incorporated herein by reference, the Employee
is hereby granted options to purchase 400,000 shares of the Company’s Common
Stock, of which options to purchase 100,000 shares shall vest on the date of
this Agreement and the balance of 300,000 options shall vest monthly, as long as
Employee continues to be an employee of the Company but subject to Section 11.2
hereto, at the rate of 12,500 per month (the “Options”). The exercise price of
the Options shall be the fair market value per share of the Company’s Common
Stock as of the date of grant and shall contain such other terms and conditions
as set forth in the stock option agreement. The foregoing Options shall be
qualified as incentive stock options to the maximum as allowed by law. The
Options provided for herein are not transferable by Employee and shall be
exercised only by Employee, or by his legal representative or executor, as
provided in the Plan. Such Options shall terminate as provided in the Plan,
except as otherwise modified by this Agreement.

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     11.2      In the event of a termination of Employee’s employment with the
Company pursuant to Section 9.1(c) 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. 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 York 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.

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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.

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.
2165 Technology Drive
 Schenectady, NY 12308                         WITH A COPY TO:   Victor J.
DiGioia
Goldstein & DiGioia, LLP
45 Broadway
New York, NY 10006                              IF TO THE EMPLOYEE:   Surendra
Pai     WITH A COPY TO:   Victor H. Boyajian
Sonnenschein, Nath & Rosenthal, LLP
1221 Avenue of the Americas
New York, New York 10020                            

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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.

ARTICLE XVII

GOVERNING LAW

     This Agreement has been negotiated and executed in the State of New York.
The law of the State of New York 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 York, and Employee and the Company each hereby consent to the
jurisdiction of any local, state, or federal court located within the State of
New York.

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:___________________________________
      J. Edward Sheridan
      Chairman of the Compensation Committee

Employee

______________________________________
Surendra Pai
Employee

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