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                                                                    EXHIBIT 10.2

                               SECURITY AGREEMENT

         THIS SECURITY AGREEMENT (this "Agreement") dated as of December 24,
2001 is made by Zylab International, Inc., a Virginia corporation with its
principal address at 12800 Middlebrook Road, Suite 410, Germantown, MD 20874
("the Company") and Authentidate Holding Corp., a Delaware corporation with its
principal address at 2165 Technology Drive, Schenectady, NY 12308 (the "Secured
Party").

                                    RECITALS

         WHEREAS, the Secured Party has agreed to provide loans to the Company
in the principal amount of up to $500,000 evidenced by certain secured
promissory notes (collectively the "Notes");

         WHEREAS, to induce the Secured Party to make the loans evidenced by the
Notes, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company has agreed to pledge,
assign and grant a security interest in the Collateral, as defined below, as
security for the Secured Obligations.

         NOW, THEREFORE, in consideration of the mutual obligation herein
contained, the parties here agree as follows:

         1. Definitions and Interpretation.

         1.1 Certain Defined Terms. The following terms shall have the following
meanings under this Agreement:

                  "BASIC DOCUMENT" shall mean the Notes and this Agreement.

                  "CODE" or "UCC" shall mean the Uniform Commercial Code as in
effect in the State of Virginia from time to time or, by reason of mandatory
application, any other applicable jurisdiction.

                  "COLLATERAL" shall mean (a) All inventory, accounts,
equipment, and other tangible assets the Company now has or hereafter may
acquire an interest, wherever located, and all substitutions, renewals and
replacements thereof, together with all rights to payment and other rights
accruing to the Company, as the case may be, by reason of its interest therein;
(b) All general intangibles and other property the Company now has or hereafter
acquires an interest including, but not limited to, goodwill, patents
(including, without limitation, the patents described on Schedule A annexed
hereto), licenses, trade names or styles, trademarks, service marks, source code
to software, customer lists, location rights, correspondence files and credit
records with customers and suppliers, accounts receivable records, books and
records not otherwise described herein, and all computer software or other data
processing material on which such information may be

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maintained; (c) All cash and non-cash proceeds of all of the foregoing and all
rights to the payment of money, including, but not limited to, the proceeds of
any policy or policies of insurance, tax refund claims and commissions; and (d)
all cash proceeds and all rights to the payment of money payable on any life
insurance policy on the life of Jonathan Karlin.

                  "DEFAULT" shall mean any default described in the Notes.

                  "EVENT OF DEFAULT" shall mean event of Default as described in
the Notes.

                  "HOLDERS" means the holder or holders of the Notes.

                  "LIEN" shall mean, with respect to any property, any mortgage,
lien, pledge, charge, security interest or encumbrance of any kind in respect of
such property or any agreement to give, or notice of, any of the foregoing.

                  "MAJORITY HOLDERS" means holders of a majority of the
principal amount of the outstanding Notes.

                  "SECURED OBLIGATIONS" shall mean any and all obligations of
the Company for the performance of its agreements, covenants and undertakings
under or in respect of the Notes, including the payment of all amounts of
principal and interest thereunder.

         1.2 Interpretation. In this Agreement, unless otherwise indicated, the
singular includes the plural and plural the singular; words importing either
gender include the other gender; references to statutes or regulations are to be
construed as including all statutory or regulatory provisions consolidating,
amending or replacing the statute or regulation referred to; references to
"writing" include printing, typing, lithography and other means of reproducing
words in a tangible visible form; the words "including," "includes" and
"include" shall be deemed to be followed by the words "without limitation";
references to articles, sections (or subdivisions of sections), exhibits,
annexes or schedules are to this Agreement; references to agreements and other
contractual instruments shall be deemed to include all subsequent amendments,
extensions and other modifications to such instruments (without, however,
limiting any prohibition on any such amendments, extensions and other
modifications by the terms of any such document); and references to persons or
entities including their respective permitted successors and assigns.

         2. Collateral

         2.1 Grant. As collateral security for the prompt payment in full when
due (whether at stated maturity, by acceleration or otherwise) and performance
of the Secured Obligations, the Company hereby pledges, assigns and grants to
the Secured Party a security interest in all of the Company's right, title and
interest in and to the Collateral.

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         2.2 Perfection. Concurrently with the execution and delivery of this
Agreement, the Company shall (i) file such financing statements and other
documents in such offices as the Secured Party may reasonably request in writing
to perfect and establish the Lien granted by this Agreement, and (ii) take all
such other actions as shall be necessary or as the Secured Party may request to
perfect and establish the priority of the Lien granted by this Agreement.

         2.3 Preservation and Protection of Security Interests

                  The Company shall:

                  (a) upon the acquisition after the date of this Agreement by
the Company of any instrument or chattel paper evidencing all or any part of the
interests constituting the Collateral, promptly deliver and pledge to the
Secured Party all such instruments or chattel paper, endorsed or accompanied by
such instruments of assignment and transfer in such form and substance as the
Secured Party may reasonably request; and

                  (b) give, execute, deliver, file or record any and all
financing statements, notices, contracts, agreements or other instruments,
obtain any and all governmental approvals and take any and all steps that may be
necessary or as the Secured Party may request to create, perfect, establish the
priority of, or to preserve the validity, perfection or priority of, the Lien
granted by this Agreement or to enable the Secured Party to exercise and enforce
its rights, remedies, powers and privileges under this Agreement with respect to
such Lien.

         2.4 Rights and Obligations

                  (a) The Company shall remain liable to perform its duties and
obligations under the contracts and agreements included in the Collateral in
accordance with their respective terms to the same extent as if this Agreement
had not been executed and delivered. The exercise by the Secured Party of any
right, remedy, power or privilege in respect of this Agreement shall not release
the Company from any of its duties and obligations under such contracts and
agreements. The Secured Party shall not have any duty, obligation or liability
under such contracts and agreements by reason of this Agreement or any other
Basic Document, nor shall the Secured Party be obligated to perform any of the
duties or obligations of the Company under any such contract or agreement or to
take any action to collect or enforce any claim under any such contract or
agreement.

                  (b) No Lien granted by this Agreement in the Company's right,
title and interest in any contract or agreement shall be deemed to be a consent
by the Secured Party to any such contract or agreement.

                  (c) No reference in this Agreement to proceeds or to the sale
or other disposition of Collateral shall authorize the Company to sell or
otherwise dispose of any Collateral.

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                  (d) The Secured Party shall not be required to take steps
necessary to preserve any rights against prior parties to any part of the
Collateral.

                  (e) So long as no Default shall have occurred and be
continuing, the Company shall have the right to exercise all powers of ownership
pertaining to the Collateral for all purposes not inconsistent with the terms of
this Agreement.

                  (f) If any Default shall have occurred and be continuing, and
the Secured Party exercises its right to declare any Secured Obligation due and
payable or seeks or pursues any other right, remedy, power or privilege
available to it under applicable law, this Agreement or any other Basic
Document, all payments and other distributions on the Collateral shall be paid
directly to the Secured Party and applied as set forth in Section 4.4.

                  (g) The holders of the Notes as Secured Party(s) shall share
ratably in the distribution of benefits and any expenditures relating to this
Agreement based on the ratio of the principal amount of their respective Notes
to the total loan amount represented by all of the Notes.

                  (h) The Secured Party may exercise their rights with respect
to the Collateral without resort or regard to other collateral or sources of
reimbursement for liability. The Secured Party shall not be deemed to have
waived any of their rights with respect to the Secured Obligations or the
Collateral unless such waiver be in writing and signed by the Secured Party. No
delay or omission on the part of the Secured Party in exercising any right shall
operate as a waiver of such right or any other right. A waiver on any one
occasion shall not be construed as a bar to or waiver of any right or any future
occasion. All rights and remedies of the Secured Party with respect to the
Secured Obligations or the Collateral, whether evidenced hereby or by any other
instrument or papers, shall be cumulative and may be exercised separately or
concurrently.

         3. Representations, Warranties and Covenants. As of the date of this
Agreement, the Company represents, warrants and covenants to the Secured Party
as follows:

         3.1 Title. The Company is the sole beneficial owner of the Collateral
in which it purports to grant a Lien pursuant to this Agreement, and such
Collateral is free and clear of all Liens. The Lien granted by this Agreement in
favor of the Secured Party has attached and constitutes a perfected security
interest in all of such Collateral. The Company shall pay, when due, the Secured
Obligations and any other obligations owing under the Notes or hereunder. The
Company shall defend title to the Collateral against the claims and demands of
all persons.

         3.2 Sales and Other Liens. So long as any portion of the Notes remains
unpaid, the Company shall not create or incur any Liens upon any of the
Collateral except for: (i) Liens granted to the Holders; (ii) Liens being
contested in good faith by the Company; (iii) purchase money Liens on newly
acquired assets in connection with the establishment or acquisition of, or
investment or participation in, any business, which Liens shall extend solely to
the assets so acquired; (iv) Liens on any assets of the Company granted in
connection with the purchase or lease

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of new capital equipment and the incurrence of the obligations or indebtedness
related thereto; (v) Liens securing account receivable financing which do not
exceed $150,000 principal amount are limited solely to accounts receivables of
the Company (and Authentidate Holding Corp hereby agrees to subordinate any lien
and security interest under this Security Agreement to the provider of account
receivable financing) and (vi) Liens junior in right to those created by this
Security Agreement. Until the occurrence of an Event of Default under this
Security Agreement, the Company may use, sell or exchange the Collateral in the
ordinary course of business without the written consent of the Holders, if such
sales or exchanges are in accordance with the Company's usual customary
practices and if, with regard to equipment, such transaction results (a) in the
acquisition of a substitute item of at least comparable value; or (b) from the
disposition of obsolete or worn out equipment.

         3.3 Preservation of the Collateral; Inspection. The Company shall use
reasonable care in the custody and preservation of the Collateral, and shall
comply with all legal and insurance requirements permitted with respect to its
use. The Company shall permit the Holders from time to time during regular
business hours, to enter upon the premises where the Collateral is located and
examine it.

         3.4 Principal Place of Business. The Company's chief executive office
and principal place of business is located at the address set forth below.

         3.5 Further Assurances; Attorney in Fact. At any time and from time to
time, upon the written request of a Holder, at the sole expense of the Company,
the Company will promptly and duly execute and deliver such further instruments
and documents and take such further action as the Holder may reasonably request
for the purpose of obtaining or preserving the full benefits of this Agreement
and the rights and powers herein granted, including, without limitation, the
filing of any financing or continuation statements under the UCC in effect in
any jurisdiction with respect to the liens created hereby. The Company hereby
authorizes the Holders to file any such financing or continuation statement
without the signature of the Company, as the case may be, to the extent
permitted by applicable law, and the Holders agree to use reasonable efforts to
provide the Company with a copy of any such statement filed by them, but shall
have no liability to the Company for its failure to do so, and hereby appoints
the Holders as the Company's attorney-in-fact for the purpose of signing the
Company's names to any such financing and continuation statements. A carbon,
photograph or other reproduction of this Agreement shall be sufficient as a
financing statement for filing in any jurisdiction.

         3.6 Inspection Rights. The Company hereby grants to the Holders and its
employees, representatives and agents the right to visit, during reasonable
hours upon prior reasonable written notice to the Company, any of the Company's
properties and/or facilities holding, utilizing and/or representing any of the
Collateral, and to inspect the records relating thereto upon reasonable written
notice to the Company and as often as may be reasonably requested.

         3.7 Additional Covenants and Warranties. The Company represents,
warrants, covenants and agrees as follows:

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                  (a) Performance of this Agreement does not conflict with or
result in a breach of any agreement to which the Company is bound.

                  (b) The Company will not (a) change the location of its chief
executive office or other places of business or remove its books and records
from such location, or (b) remove any equipment or inventory from any location
in which it may be located (except for sales in the ordinary course of
business), (c) change its identity or corporate structure to such an extent that
any financing statement filed by or on behalf of the Holders would become
misleading, unless, in each of the foregoing cases the Company shall have given
the Holders at least 30 days prior written notice thereof and shall do all
things necessary to maintain the first priority status (subject only to the
holders of senior indebtedness) of the Holders' security interest.

                  (c) If any Event of Default (as defined in the Notes) shall
occur, the Holders may exercise any and all rights and remedies of a Secured
Party after default under the UCC.

                  (d) No security agreement or financing statement with respect
to all or any part of the Collateral is on file or of record in any public
office. When appropriate financing statements have been filed by or on behalf of
the Secured Party against the Company, the security interest granted pursuant to
this Agreement will constitute a perfected security interest (to the extent such
liens can be perfected by filing) on the Collateral in favor of the Secured
Party, which security interest will be prior to all other liens on the
Collateral created by the Company and in existence on the date hereof and which
security interests are enforceable as such against all creditors of the Company.

                  (e) The Company agrees to pay, and to hold the Secured Party
harmless from, any and all liabilities, costs and expenses (including without
limitation, reasonable legal fees and expenses) (i) with respect to fees, taxes
or other costs incurred with respect to recording financing statements under the
Code and (ii) in connection with any of the transactions contemplated by this
Agreement or the enforcement of the Secured Party' rights hereunder, except
those liabilities, costs and expenses arising out of the willful misconduct of
the Secured Party. In any suit, proceeding or action brought by the Secured
Party under any account for any sum owing thereunder, or to enforce any
provisions of any account for any sum owing thereunder, or to enforce any
provisions of any account or contract, the Secured Party shall be indemnified by
the Company from and against all expense, loss or damage suffered by the Secured
Party in any such action, except for expenses, loss or damage arising out of the
willful misconduct of the Secured Party (in the case of indemnified amounts
which would otherwise be owing to the Secured Party);

                  (f) The Company shall keep, or cause the Collateral to be
kept, insured against such risks, including fire, casualty and public liability,
as are usually insured against by persons engaged in the same or similar
business in the same location in at least such amounts as such insurance is
usually carried by persons engaged in the same or similar businesses. The
Company will use its best efforts to cause the Secured Party to be added as an
additional insured to all policies insuring the Collateral;

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                  (g) The Company shall pay promptly when due all taxes and
assessments upon the Collateral or for its use or operation; and

                  (f) All information heretofore, herein or hereafter supplied
to the Secured Party by or on behalf of the Company with respect to the
Collateral is accurate and complete in all material respects.

         4. Escrow of ZyLAB Source Code. Simultaneously herewith, the Company is
delivering to Fort Knox Escrow Services, Inc., as escrow agent ("Escrow Agent"),
to hold in escrow, the source code known as HAPI32 and ZDK (the "Source Code").
The Escrow Agent shall hold the source in escrow and shall not release except
upon an Event of Default as provided herein. Neither the Escrow Agent not the
Secured Party shall make use, in any manner, of the Source Code pending release
pursuant to the terms hereof. Upon payment in full of the Notes, Escrow Agent
shall return the Source Code to the Company.

         5. Remedies

         5.1 Events of Default. If any Event of Default shall have occurred and
be continuing, and without limiting the generality of the remedies available to
the Holders, without demand of performance or other demand, presentment,
protest, advertisement or notice of any kind (except any notice required by
law), to or upon the Company, all and each of which demands, presentments,
protests, advertisements and notices are hereby waived:

                  (a) The Holders in their discretion may make any reasonable
compromise or settlement they deem desirable with respect to any of the
Collateral and may extend the time of payment, arrange for payment in
installments, or otherwise modify the terms of, all or any part of the
Collateral;

                  (b) The Holders in their discretion may, in their name or in
the name of the Company or otherwise, demand, sue for, collect or receive any
money or property at any time payable or receivable on account of or in exchange
for all or any part of the Collateral, but shall be under no obligation to do
so;

                  (c) The Holders in their discretion may with respect to all or
any part of the Collateral which shall then be or shall thereafter come into the
possession, custody or control of the Holders in their discretion or any of
their agents, sell, lease or otherwise dispose of all or any part of such
Collateral, at such place or places as the Holders in their discretion deems
best, upon such terms and conditions as they deem advisable and at such prices
as they may deem best, for cash, for credit or for future delivery (without
thereby assuming any credit risk) and at public or private sale, without demand
of performance or notice of intention to effect any such disposition or of time
or place of any such sale, and the Holders in their discretion or any other
person or entity may be the purchaser, lessee or recipient of any or all of the
Collateral so disposed of at any public sale (or, to the extent permitted by
law, at any private sale) and thereafter hold the same absolutely, free from any
claim

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or right of whatsoever kind, including any right or equity of redemption
(statutory or otherwise), of the Company, any such demand, notice and right or
equity being hereby expressly waived and released. The Holders in their
discretion may, without notice or publication, adjourn any public or private
sale or cause the same to be adjourned from time to time by announcement at the
time and place fixed for the sale, and such sale may be made at any time or
place to which the sale may be so adjourned (if any notice of a proposed sale or
other disposition of Collateral shall be required by law, such notice shall be
deemed reasonable and proper if given at least 10 days before such sale or other
disposition.) The Company further agrees, at the Holders' request, to assemble
the Collateral and make it available to the Holders, at the place which the
Holders shall reasonably select, whether at the Company's premises or elsewhere.

                  (d) The Holders shall have, and in their discretion may
exercise, all of the rights, remedies, powers and privileges with respect to the
Collateral of a secured party under the Code (whether or not the Code is in
effect in the jurisdiction where such rights, remedies, powers and privileges
are asserted) and such additional rights, remedies, powers and privileges to
which a secured party is entitled under the laws in effect in any jurisdiction
where any rights, remedies, powers and privileges in respect of this Agreement
or the Collateral may be asserted, including the right, to the maximum extent
permitted by law, to exercise all voting, consensual and other powers of
ownership pertaining to the Collateral as if the Secured Party were the sole and
absolute owner of the Collateral (and the Company agrees to take all such action
as may be appropriate to give effect to such right).

The proceeds of, and other realization upon, the Collateral by virtue of the
exercise of remedies under this Section 4.1 shall be applied in accordance with
Section 4.4.

         5.2 Deficiency. If the proceeds of, or other realization upon, the
Collateral by virtue of the exercise of remedies under Section 5.1 are
insufficient to cover the costs and expenses of such exercise and the payment in
full of the other Secured Obligations, the Company shall remain liable for any
deficiency.

         5.3 Private Sale

                  (a) The Secured Party shall incur no liability as a result of
the sale, lease or other disposition of all or any part of the Collateral at any
private sale pursuant to Section 4.1 conducted in a commercially reasonable
manner. The Company hereby waives any claims against the Secured Party arising
by reason of the fact that the price at which the Collateral may have been sold
at such a private sale was less than the price which might have been obtained at
a public sale or was less than the aggregate amount of the Secured Obligations,
even if the Secured Party accepts the first offer received and does not offer
the Collateral to more than one offeree.

                  (b) The Company recognizes that, by reason of certain
prohibitions contained in the Securities Act of 1933 and applicable state
securities laws, the Secured Party may be compelled, with respect to any sale of
all or any part of the Collateral, to limit purchasers to those who will agree,

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among other things, to acquire the Collateral for their own account, for
investment and not with a view to distribution or resale. The Company
acknowledges that any such private sales may be at prices and on terms less
favorable to the Secured Party than those obtainable through a public sale
without such restrictions, and, notwithstanding such circumstances, agree that
any such private sale shall be deemed to have been made in a commercially
reasonable manner and that the Secured Party shall have no obligation to engage
in public sales and no obligation to delay the sale of any Collateral for the
period of time necessary to permit a public sale.

         5.4 Application of Proceeds. Except as otherwise expressly provided in
this Agreement and except as provided below in this Section 5.1, the proceeds
of, or other realization upon, all or any part of the Collateral by virtue of
the exercise of remedies under Section 5.1 and any other cash at the time held
by the Secured Party under this Agreement, shall be applied as follows:

                  First, to the payment of the costs and expenses of such
exercise of remedies, including reasonable out-of-pocket costs and expenses of
the Secured Party, the fees and expenses of its agents and counsel and all other
expenses incurred and advances made by the Secured Party in that connection, as
provided in this Agreement and/or the Note;

                  Next, to the payment in full of the remaining Secured
Obligations in such manner as the Secured Party may determine; and

                  Finally, to the payment to the Company, or its respective
successors or assigns, or as a court of competent jurisdiction may direct, of
any surplus then remaining.

         As used in this Section 5, "proceeds" of Collateral shall mean cash,
securities and other property realized in respect of, and distributions in kind
of, Collateral, including any property received under any bankruptcy,
reorganization or other similar proceeding as to the Company or any issuer of,
or account debtor or other obligor on, any of the Collateral.

         6. Miscellaneous

         6.1 Waiver. No failure on the part of the Secured Party to exercise and
no delay in exercising, and no course of dealing with respect to, any right,
remedy, power or privilege under this Agreement shall operate as a waiver of
such right, remedy, power or privilege, nor shall any single or partial exercise
of any right, remedy, power or privilege under this Agreement preclude any other
or further exercise of any such right, remedy, power or privilege or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges provided in this Agreement are cumulative and not
exclusive of any rights, remedies, powers and privileges provided by law.

         6.2 Notices. All notices and communications to be given under this
Agreement shall be given or made in writing to the intended recipient at the
address specified below or, as to any party, at such other address as shall be
designated by such party in a notice to each other party. Except as otherwise
provided in this Agreement, all such communications shall be deemed to have been
duly

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given when transmitted by telex or telecopier, delivered to the telegraph or
cable office or personally delivered or, in the case of a mailed notice, upon
receipt, in each case, given or addressed as provided in this Section 5.2:

         To the Company:            Zylab International, Inc.
                                    12800 Middlebrook Road
                                    Suite 410
                                    Germantown, MD 20874
                                    Attn: John Karlin

         With a copy to:            Gorham S. Clark, Esq.
                                    Foust & Clark, P.C.
                                    8345-A Greensboro Drive
                                    McLean, Virginia 22102
                                    Attn: Rory Clark, Esq.

         To the Secured Party:      Authentidate Holding Corp.
                                    2165 Technology Center
                                    Schenectady, NY  12308
                                    Attn: John T. Botti, Pres.

         With a copy to:            Goldstein & DiGioia, LLP
                                    369 Lexington Avenue
                                    New York, New York 10017
                                    Fax No.: (212) 557-0295
                                    Attn: Victor J. DiGioia, Esq.

         6.3 Expenses. The Company agrees to pay or to reimburse the Secured
Party for all costs and expenses (including reasonable attorney's fees and
expenses) that may be incurred by the Secured Party in any effort to enforce any
of the provisions of Section 4 or any of the obligations of the Company in
respect of the Collateral or in connection with (a) the preservation of the Lien
of, or the rights of the Secured Party under this Agreement or (b) any actual or
attempted sale, lease, disposition, exchange, collection, compromise, settlement
or other realization in respect of, or care of, the Collateral, including all
such costs and expenses (and reasonable attorney's fees and expenses) incurred
in any bankruptcy, reorganization, workout or other similar proceeding relating
to the Company.

         6.4 Amendments. Any provision of this Agreement may be modified,
supplemented or waived only by an instrument in writing duly executed by the
Company and the Secured Party. Any such modification, supplement or waiver shall
be for such period and subject to such conditions as shall be specified in the
instrument effecting the same and shall be binding upon the Secured Party, each
holder of any of the Secured Obligations and the Company, and any such waiver
shall be effective only in the specific instance and for the purposes for which
given.

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         6.5 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the Company, the Secured Party and each holder of any of
the Secured Obligations and their respective successors and permitted assigns.
The Company shall not assign or transfer its rights under this Agreement without
the prior written consent of the Secured Party.

         6.6 Survival. All representations and warranties made in this Agreement
or in any certificate or other document delivered pursuant to or in connection
with this Agreement shall survive the execution and delivery of this Agreement
or such certificate or other document (as the case may be) or any deemed
repetition of any such representation or warranty.

         6.7 Agreements Superseded. This Agreement and the Notes and
subscription documents executed in connection therewith, supersede all prior
agreements and understandings, written or oral, among the parties with respect
to the subject matter of this Agreement.

         6.8 Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions of this Agreement, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

         6.9 Continuing Effect. All agreements, representations and warranties
herein made by Debtor shall be continuing as long as the Note remains
outstanding and unpaid.

         6.10 Headings. Section headings are for reference purposes only.

         6.11 Counterparts. This Agreement may be executed in two (2) or more
counterparts, each of which shall be deemed an original, but all of which, when
taken together, shall constitute but one agreement, and shall become effective
when copies which, when taken together, bear the signature of each of the
parties hereto shall have been delivered to Secured Party and Debtor.

         6.12 GOVERNING LAW; SUBMISSION TO JURISDICTION. THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAW. THE COMPANY HEREBY SUBMITS
TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN NEW
YORK, NEW YORK FOR THE PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.
THE COMPANY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE
OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH
PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

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         IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered as of the day and year first above written.

                                         Zylab International, Inc.


                                         By
                                           -------------------------------------
                                              John Karlin, President


                                         SECURED PARTY

                                         Authentidate Holding Corp.


                                         By
                                           -------------------------------------
                                              John T. Botti, President

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                                   Schedule A


ZyLAB International Inc. owns no patents




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