AUTHENTIDATE HOLDING CORP
AGREEMENT AND RELEASE
<DOCUMENT>
<TYPE>EX-10.4
<SEQUENCE>6
<FILENAME>b404486ex10-4.htm
<DESCRIPTION>AGREEMENT AND RELEASE
<TEXT>
<html>
<head><title>
Prepared and filed by St Ives Burrups
</title>
</head>
<div style="page-break-before:always"></div>
<page>
<body bgcolor="#FFFFFF"> <p align="right"><b><font size="2" face="Times New Roman, Times, serif">Exhibit 10.4</font></b></p>
<p align="center"><font size="2" face="serif"><b><u>AGREEMENT AND RELEASE</u></b></font></p>
<div style="text-indent: 3%">
  <p><font size="2" face="serif"><b>CONSULT WITH AN ATTORNEY
        BEFORE SIGNING THIS AGREEMENT AND RELEASE.</b></font></p>
</div>
<div style="text-indent: 3%">
  <p><font size="2" face="serif"><b>BY SIGNING THIS AGREEMENT
        AND RELEASE, YOU GIVE UP AND WAIVE IMPORTANT LEGAL RIGHTS.</b></font></p>
</div>
<div style="text-indent: 3%"><font size="2" face="Times New Roman, Times, serif">Agreement
    between Authentidate Holding Corp., its stockholders, subsidiaries, affiliates,
    divisions, successors and assigns,
  their respective past and present officers, directors, employees, agents, attorneys,
  whether as individuals or in their official capacity, and each of their respective
  successors and assigns (hereinafter collectively referred to as &#8220;AHC&#8221; or
  the &#8220;Company&#8221;) and by his own free will, Peter R. Smith (&#8220;Smith&#8221; or &#8220;Employee&#8221;).</font>
  <p align="left"><font size="2" face="serif">WHEREAS, Smith has been an employee
        of AHC, and</font></p>
    <p align="left"><font size="2" face="serif">WHEREAS, Smith has been employed
        pursuant to a written offer letter dated as of November 4, 2003 (the &#8220;Offer
        Letter&#8221;); and </font></p>
    <p align="left"><font size="2" face="serif">WHEREAS, Employee and AHC each
        desire an amicable cessation of the employment relationship,</font></p>
    <p align="left"><font size="2" face="serif">NOW, THEREFORE, in consideration
        of the covenants and promises contained herein and for other good and
        valuable consideration, receipt of which is hereby acknowledged, Employee
        and AHC (who hereinafter collectively may be referred to as the &#8220;Parties&#8221;)
        hereby agree as follows:</font></p>
    <p align="left"><font size="2" face="serif">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Employee
        acknowledges and agrees that effective the close of business December
        31, 2004, Employee&#8217;s employment is terminated (the &#8220;Termination
        Date&#8221;).</font></p>
    <p align="left"><font size="2" face="serif">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
        consideration for Employee&#8217;s execution of this Agreement, and in
        consideration for the release of claims against AHC, the Company will
        give Employee the following:</font></div>
<div style="text-indent: 6%"><font size="2" face="Times New Roman, Times, serif">a.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Solely for the
  purpose of determining the benefits under the Offer Letter, Employee&#8217;s
  termination shall be deemed a termination without cause within the contemplation
  of the definition of the term &#8220;cause&#8221; in the Offer Letter. </font>
  <p align="left"><font size="2" face="serif">b.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Subject
        to Employee&#8217;s compliance with the provisions of this Agreement,
        Employee shall receive a severance benefit of up to 12 months of his
        current base salary of $300,000 (&#8220;Severance Payments&#8221;), payable
        in equal installments on each of the Company's regular pay dates for
        executives, commencing on the first regular executive pay date following
        the Termination Date (such 12 month period commencing on the Termination
        Date may be referred to herein as the &#8220;Severance Period&#8221;).
        Notwithstanding the foregoing, the Company&#8217;s obligation to pay
        the Severance Payments shall immediately cease: (i) on June 30, 2005,
        in the event Employee accepts or commences new full-time employment on
        or before June 30, 2005; (ii) upon the date that Employee commences new
        full-time employment if such event occurs after June 30, 2005 but before
        December 31, 2005; or (iii) if Employee does not accept new full-time
        employment during the Severance Period, on December 31, 2005. </font></div>
<p align="left">&nbsp;</p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
<div style="text-indent: 9%"><font size="2" face="Times New Roman, Times, serif">A.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Commencing
    on July l, 2005, in the event Employee commences new full-time employment
    on a date
  other than the first business day of a month, the Severance Payment for that
  month shall be paid on a <i>pro rata</i> basis.</font>
  <p align="left"><font size="2" face="serif">&nbsp;B. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Subsequent
          to June 30, 2005, in the event Employee fails to promptly advise the
          Company that he has accepted or commenced new employment during the
          Severance Period, Employee will be deemed to have committed a material
          breach of this Agreement and shall immediately refund all Severance
          Payments made by the Company subsequent to the Termination Date. </font></p>
      <p align="left"><font size="2" face="serif">C.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; For
          the purposes of this Agreement, the term &#8220;full-time employment&#8221; shall
          mean becoming an employee (or co-employee) of another employer without
          regard to the level of compensation earned or available thereunder.
          Full-time employment shall also include any consultancy or other self-employment
          whereby Employee provides services to third parties and has a reasonable
          expectation to provide such services for a period longer than three
          consecutive months on a basis substantially similar to those he would
          receive in an employment relationship.</font></p>
</div>
<div style="text-indent: 3%"><font size="2" face="Times New Roman, Times, serif">3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To the extent Employee
  has unreimbursed business expenses incurred through the Termination Date, Employee
  must immediately submit the expenses with all appropriate documentation; those
  expenses which meet the Company&#8217;s guidelines will be reimbursed. Any
  expense account that Employee has with the Company terminates effective on
  the Termination Date, and any expenses already incurred will be reviewed and
  processed in accordance with the policies and procedures of the Company. No
  new expenses may be incurred after the Termination Date. Employee agrees to
  promptly pay any outstanding balance on these accounts that represent non-reimbursable
  expenses. Company will pay accepted expenses within twenty (20) business days
  from the date Employee and Company execute this Agreement, in accordance with
  the Company&#8217;s expense reimbursement guidelines existing as of the date
  that this Agreement is executed by both the Company and Employee. </font>
  <p align="left"><font size="2" face="serif">4. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Employee
      understands that this Agreement does not constitute an admission by the
      Company of any liability, error or omission, including without limitation,
      any: (a) violation of any statute, law, or regulation; (b) breach of contract,
      actual or implied; or (c) commission of any tort.</font></p>
  <p align="left"><font size="2" face="serif">5. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Employee
      acknowledges that the consideration provided in this Agreement exceed that
      to which Employee would otherwise be entitled under the normal operation
      of any benefit plan, policy or procedure of the Company or under any previous
      agreement (written or oral) between Employee and the Company. Employee
      further acknowledges that the agreement by AHC to provide consideration
      pursuant to this Agreement beyond Employee&#8217;s entitlement is conditioned
      upon Employee&#8217;s release of all claims against AHC and Employee&#8217;s
      compliance with all the terms and conditions of this Agreement.</font></div>
<p align="center"><font face="serif" size="2">2</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
<div style="text-indent: 3%"><font size="2" face="Times New Roman, Times, serif">6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Parties agree
  that, except as provided for herein, there shall be no other payments or benefits
  payable to Employee, including but not limited to, salary, bonuses, commissions,
  finder&#8217;s fees and/or other payments.</font>
<p align="left"><font size="2" face="serif">7. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Arbitration:</font></div>
<div style="text-indent: 6%"><font size="2" face="Times New Roman, Times, serif">a.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The Parties specifically
  and knowingly and voluntarily agree to arbitrate any controversy, dispute or
  claim which has arisen or should arise in connection with Employee&#8217;s
  employment, the cessation of Employee&#8217;s employment, or in any way related
  to the terms of this Agreement. The Parties agree to arbitrate any and all
  such controversies, disputes, and claims 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 Association and shall
  be an attorney-at-law experienced in the field of corporate law and admitted
  to practice in the State of New York. In the course of any arbitration pursuant
  to this Agreement, Employee and the Company agree (i) to request that a written
  award be issued by the arbitrator and (ii) that each side is entitled to receive
  any and all relief it would be entitled to receive in a court proceeding. The
  Parties knowingly and voluntarily agree to enter into this arbitration clause
  and to waive any rights that might otherwise exist to request a jury trial
  or other court proceeding, except that Employee agrees that AHC has the right
  to seek injunctive or other equitable relief from a court to enforce Paragraphs
  9, 10 and 11 of this Agreement. This paragraph is intended to be both a post-dispute
  and pre-dispute arbitration clause. Any judgment upon any arbitration award
  may be entered in any court, federal or state, having competent jurisdiction
  of the parties.</font>
  <p align="left"><font size="2" face="serif">b. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The
        Parties&#8217; agreement to arbitrate disputes includes, but is not limited
        to, any claims of unlawful discrimination and/or unlawful harassment
        under Title VII of the Civil Rights Act of 1964, as amended, the Age
        Discrimination in Employment Act 1967, as amended, the Americans with
        Disabilities Act, the New Jersey and New York Civil Rights Laws, the
        New Jersey Law Against Discrimination, the New York Executive Law, the
        New York City Human Rights Law, the New Jersey Conscientious Employee
        Protection Act, the New Jersey Family Leave Act, or any other federal,
        state or local law relating to discrimination in employment and any claims
        relating to wage and hour claims and any other statutory or common law
        claims.</font></div>
<div style="text-indent: 3%"><font size="2" face="serif">8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Employee
    and AHC agree that the terms and existence of this Agreement are and shall
    remain confidential and agrees not to disclose any terms or provisions of
    this Agreement, or to talk or write about the negotiation, execution or implementation
    of this Agreement, without the prior written consent of the other, except
    (a) as required by law; (b) as required by regulatory authorities; (c) as
    required within AHC to process this Agreement; or (d) in connection with
    any arbitration or litigation arising out of this Agreement. Anything herein
    to the contrary notwithstanding, Employee may disclose the terms of this
    Agreement to Employee&#8217;s immediate family, accountant or attorney, provided
    they are made aware of and agree to the confidentiality provisions.</font></div>
<p align="center"><font face="serif" size="2">3</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
<div style="text-indent: 3%"><font size="2" face="Times New Roman, Times, serif">9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
    Employee further agrees that he shall not, at any time before or after the
    Termination Date,
  make use of or disclose to any person, corporation, or other entity, for any
  purpose whatsoever, any trade secret or other confidential and/or proprietary
  information of or concerning the Company&#8217;s business, finances, marketing,
  technology, software, accounting and other information 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
  disclosed to, prepared by or otherwise learned as a consequence of Employee&#146;s
  employment with the Company (collectively referred to as the &#8220;Proprietary
  Information&#8221;). For the purposes of this Agreement, trade secrets and
  confidential information shall mean information disclosed to the Employee or
  known by him as a consequence of his employment by the Company, whether or
  not pursuant to this Agreement, and not generally known in the industry. The
  Employee acknowledges that Proprietary Information, as it may exist from time
  to time, is a valuable and unique asset of the Company, and that disclosure
  of any such information would cause substantial injury to the Company. Trade
  secrets and confidential information shall cease to be trade secrets or confidential
  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. 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.</font>
  <p align="left"><font size="2" face="serif">10.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Employee
        agrees that in consideration for the payments and other consideration
        provided in this Agreement, Employee will not, for a period of one (1)
        year following the Termination Date, 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 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 tenure of Employee&#8217;s employment
        by the Company (a &#8220;Competitive Business&#8221;). Notwithstanding
        the foregoing, the ownership by Employee of less than five percent of
        the shares of any publicly held corporation shall not violate the provisions
        of this provision. In furtherance of the foregoing, Employee shall not
        during the aforesaid period of non-competition, directly or indirectly,
        (a) solicit any customer, employee or prospective customers (a customer
        that was being solicited by the Company during the time of his employment)
        of the Company who was a customer, employee or prospective customer of
        the Company during the tenure of his employment or (b) otherwise interfere
in any manner with the business of the Company.</font></div>
<p align="center"><font face="serif" size="2">4</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
<div style="text-indent: 3%"><font size="2" face="Times New Roman, Times, serif">11.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In consideration
  of the foregoing, you agree to irrevocably assign to the Company any and all
  inventions, software (including source code and source code documentation for
  all computer programs developed or modified), manuscripts, documentation, improvements
  or other intellectual property whether or not protectible by any state or federal
  laws relating to the protection of intellectual property, relating to the present
  or future business of the Company that have been developed by you during the
  course of your 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 (all of the foregoing &#8220;Intellectual
  Property&#8221;). You agree that all such Intellectual Property, including
  without limitation all copyrights, trademarks, trade secrets and patent rights
  therein, is irrevocably assigned to and shall be and remain the sole and exclusive
  property of the Company and shall be deemed the product of work for hire. You
  further agree 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 appoint the Company your attorney-in-fact with full powers
  to execute such document itself in the event you fail or are unable to provide
  the Company with such signed documents.</font>
  <p align="left"><font size="2" face="serif">12.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Employee
        agrees that as long as Employee is entitled to receive any payments under
        this Agreement, Employee shall not make any negative or derogatory statements
        in verbal, written, electronic or any other form about the Company, or
        its officers, employees and directors 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.</font></p>
<p align="left"><font size="2" face="serif">13.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Transition. </font></div>
<div style="text-indent: 6%"><font size="2" face="Times New Roman, Times, serif">a.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Litigation</u>.
  Employee shall, subject to the reasonable requirements of new employment, cooperate
  fully with the Company in the prosecution or defense, as the case may be, of
  any and all actions, governmental inquiries or other legal or regulatory proceedings
  in which Employee&#8217;s assistance may be reasonably requested by the Company.
  Reasonable expenses arising from the cooperation will be reimbursed within
  the Company&#8217;s guidelines. Consistent with the &#8220;Certificate of Incorporation
  of Authentidate Holding Corp.,&#8221; and the Company&#8217;s Amended and Restated
  By-Laws, AHC will hold harmless and indemnify Employee from and against any
  expenses (including attorneys&#8217; fees), judgments, fines and amounts paid
  in settlement arising from any claim, suit or other action against Employee
  by any third party, on account of any action or inaction by Employee taken
  or omitted to be taken by Employee on behalf of AHC during the course of his
  employment, up to his date of termination, provided that such action or inaction
  by Employee was within the scope of Employee&#8217;s employment and consistent
  with the Company&#8217;s policies and procedures. Employee acknowledges that
  he has advised the Company completely and candidly of all facts of which he
  is aware that may give rise to legal matters.</font>
  <p align="left"><font size="2" face="serif">b.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>General</u>.
      In consideration of the Company&#8217;s payments hereunder, for a period
      of sixty (60) days after the Termination Date, Employee shall make himself
      reasonably available to, and cooperate with, the Company and its officers,
      directors, employees and advisors in order to assist the Company in (i)
      reviewing matters that were Employee&#8217;s responsibility prior to the
      Termination Date and (ii) transitioning to new personnel. </font></div>
<p align="center"><font face="serif" size="2">5</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
<div style="text-indent: 3%"><font size="2" face="Times New Roman, Times, serif">14.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You
    agree to cause all requests for references to be forwarded in writing to
    the Company, attention:
  Office of the President. The Company will state in response to such inquiries
  your dates of employment and positions held and no executive officer or director
  or the Company shall make any derogatory statements about Employee during the
  period specified in paragraph 12. The Company shall not be responsible for
  responses to reference requests sought or obtained other than under the procedures
  set forth in this paragraph.</font>
  <p align="left"><font size="2" face="serif">15.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Employee
        realizes there are many laws and regulations prohibiting employment discrimination,
        or otherwise regulating employment or claims related to employment pursuant
        to which Employee may have rights or claims. These include but are not
        limited to Title VII of the Civil Rights Act of 1964, as amended; the
        Americans with Disabilities Act of 1990; the Pregnancy Discrimination
        Act; the National Labor Relations Act, as amended; 42 U.S.C 1981; the
        Employee Retirement Income Security Act of 1974, as amended; the Age
        Discrimination in Employment Act of 1967, as amended; the Civil Rights
        Act of 1991; the Worker Adjustment and Retraining Notification Act; the
        New York State and City Human Rights Laws; the New Jersey Law Against
        Discrimination; the New Jersey Conscientious Employee Protection Act,
        the New Jersey Family Leave Act, and other Federal, State and local human
        rights, fair employment and other laws. Employee also understands there
        are other statutes and contract and tort laws which relate to Employee&#8217;s
        employment and/or the termination of Employee&#8217;s employment. Employee
        hereby knowingly and voluntarily agrees to waive and release any rights
        or claims Employee may have under these and other laws, but does not
        intend to, nor is Employee waiving any rights or claims that may arise
        after the date that this Agreement is signed by Employee. Notwithstanding
        the foregoing sentence, Employee&#8217;s waiver and release shall not
        extend to (i) any rights, remedies, or claims Employee may have in enforcing
        the terms of the Agreement; and (ii) any rights Employee may have to
        receive vested amounts under AHC&#8217;s stock option plans or pension
        plans.</font></p>
    <p align="left"><font size="2" face="serif">16.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
        Agreement shall be deemed to have been made within the County of New
        York, State of New York, and shall be interpreted and construed and enforced
        in accordance with the laws of the State of New York without regard to
        its conflicts of law provision.</font></p>
    <p align="left"><font size="2" face="serif">17.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Employee
        is hereby advised of Employee&#8217;s rights to review this Agreement
        with counsel of Employee&#8217;s choice. Employee has had the opportunity
        to consult with an attorney and/or other advisor of Employee&#8217;s
        choosing before signing the Agreement, and was given a period of twenty-one
        (21) days to consider the Agreement. Employee is permitted, at his discretion,
        to return the Agreement prior to the expiration of this 21-day period.
        Employee acknowledges that in signing this Agreement, Employee has relied
        only on the promises written in this Agreement, and not on any other
        promise made by the Company or any other entity or person.</font></p>
    <p align="left"><font size="2" face="serif">18.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Employee
        shall, subject to the reasonable requirements of new employment, cooperate
        fully with the Company in the prosecution or defense, as the case may
        be, of any and all actions, governmental inquiries or other legal or
        regulatory proceedings in which Employee&#8217;s assistance may be reasonably
        requested by the Company, until December 31, 2005. Subsequently, Employee
        and Company may agree to Employee&#8217;s assistance for an agreed upon
        fee.</font></div>
<p align="center"><font face="serif" size="2">6</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
<div style="text-indent: 3%"><font size="2" face="Times New Roman, Times, serif">19.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Employee
    represents that Employee has not filed any complaints, charges or claims
    against AHC with
  any local, State, or Federal agency or court, or with any other forum.</font>
  <p align="left"><font size="2" face="serif">20.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Employee
        agrees to immediately return any AHC property in his possession or custody
        or under his control, no matter where located including, but not limited
        to, AHC I.D. or security cards, corporate credit card, keys, computer
        disks, equipment, furniture, computers, peripherals and other electronic
        devices, and any written or electronic material prepared or received
        in the course of his employment at AHC, including without limitation,
        memoranda, reports, files, correspondence, manuals, notes, specifications,
        data, whether existing in hard copy or other media.</font></p>
    <p align="left"><font size="2" face="serif">21.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
        any provision of this Agreement, or any part thereof, is held to be invalid
        or unenforceable because of the scope or duration of or the area covered
        by such provision, Employee and AHC agree that the court or other appropriate
        decision-making authority making such determination shall reduce the
        scope, duration and/or area of such provision (and shall substitute appropriate
        provisions for any such invalid or unenforceable provisions) in order
        to make such provision enforceable to the fullest extent permitted by
        law and/or shall delete specific words and phrases, and such modified
        provision shall then be enforceable and shall be enforced. In the event
        that any court or other appropriate decision-making authority determines
        that the time period or the area, or both, are unreasonable and that
        any of the covenants is to that extent invalid or unenforceable, the
        parties hereto agree that such covenants will remain in full force and
        effect, first, for the greatest time period, and second, in the greatest
        geographical area that would not render them unenforceable. If any provision
        of this Agreement is held to be invalid or unenforceable, the remaining
        provisions of this Agreement shall nonetheless survive and be enforced
        to the fullest extent permitted by law.</font></p>
    <p align="left"><font size="2" face="serif">22&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.Except
        as otherwise expressly provided herein, this Agreement and Release, together
        with the General Release attached hereto, constitute the entire agreement
        between the Parties and supersede any and all prior agreements, whether
        written or oral. This Agreement may not be modified or changed, except
        in a written agreement signed by both Parties.</font></p>
    <p align="left"><font size="2" face="serif">23.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
        Agreement may be executed in multiple counterparts, each of which shall
        be considered an original but all of which shall constitute one agreement.</font></div>
<p align="left"><font size="2" face="serif"><i>Remainder of page intentionally left blank.  Signature page follows.</i></font></p>
<p align="center"><font face="serif" size="2">7</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
<div style="text-indent: 3%"><font size="2" face="Times New Roman, Times, serif">IN WITNESS WHEREOF, the parties have executed this
  Agreement as of the dates set forth below.</font>
  <p align="left"><font size="2" face="serif"><b>I have read this Agreement,
          and I understand all of its terms. I enter into and sign this Agreement
          knowingly and voluntarily with full knowledge of what it means. I understand
          that I have twenty-one (21) days to consider this Agreement and return
          it to AHC. I also understand that I have seven (7) days to revoke this
          Agreement in writing after I sign it. I understand that a revocation
          will become effective only if I furnish AHC with written notice, within
          such seven (7) day period. This Agreement will not become effective
          or enforceable until AHC&#8217;s receipt back of Employee&#8217;s executed
          Agreement and the expiration of the seven day revocation period.</b></font></div>
<p align="left"><font size="2" face="serif"></font><font size="2" face="serif"><b></b></font></p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td align="left" width="60%"><font size="2" face="serif"><u>/s/ Peter R. Smith&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></font><br>
<font size="2" face="serif">Peter R. Smith</font></td>
<td align="left"><font size="2" face="serif"><u>February 4, 2005&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></font><br>
<font size="2" face="serif">Date</font></td>
</tr>
<tr valign="top">
<td>&nbsp;</td>
<td>&nbsp;</td> </tr>
<tr valign="top">
<td align="left"><p><font size="2" face="serif"><b>Authentidate Holding Corp.</b></font></p>
  <p><font size="2" face="serif"><u>/s/ Surendra Pai&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></font><br>
        <font size="2" face="serif">By: Surendra Pai</font><br>
    <font size="2" face="serif">Title: Chief Executive Officer</font></p></td>
<td align="left"><p>&nbsp;</p>
  <p><font size="2" face="serif"><u>February 8, 2005&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></font><br>
        <font size="2" face="serif">Date</font></p></td>
</tr>
</table>
<p align="center"><font face="serif" size="2">8</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
<p align="left"><font size="2" face="serif"><b>CONSULT WITH AN ATTORNEY BEFORE SIGNING GENERAL RELEASE. BY SIGNING THIS GENERAL RELEASE, YOU GIVE UP AND WAIVE IMPORTANT LEGAL RIGHTS.</b></font></p>
<p align="center"><font size="2" face="serif"><b><u>GENERAL RELEASE</u></b></font></p>
<div style="text-indent: 3%"><font size="2" face="Times New Roman, Times, serif">Peter R. Smith understands and, of his own free
  will, enters into this General Release.</font>
  <p align="left"><font size="2" face="serif">In consideration of the payments,
        benefits, agreements, and other consideration to be provided by Authentidate
        Holding Corp. as described in the agreement of which this General Release
        is a part (such agreement, this General Release, together, the &#8220;Agreement&#8221;),
        Peter R. Smith, for himself or herself and for his heirs, executors,
        administrators, and their respective successors and assigns (collectively, &#8220;Employee&#8221;), <b>HEREBY
        RELEASES AND FOREVER DISCHARGES</b>, to the maximum extent permitted
        by law, Authentidate Holding Corp., its stockholders, subsidiaries, affiliates,
        divisions, successors and assigns, their respective current and former
        officers, directors, employees, agents, attorneys, whether as individuals
        or in their official capacity, and each of their respective successors
        and assigns (hereinafter collectively referred to as &#8220;AHC&#8221;)
        of and from all or any manner of actions, causes and causes of action,
        suits, debts, obligations, damages, complaints, liabilities, losses,
        covenants, contracts, controversies, agreements, promises, variances,
        trespasses, judgments and expenses (including attorneys&#8217; fees and
        costs), extents, executions, claims and demands whatsoever at law or
        in equity (&#8220;claims&#8221;), specifically including by way of example
        but not limitation, Title VII of the Civil Rights Acts of 1964 and 1991,
        as amended; the Civil Rights Act of 1866; the Employee Retirement Income
        Security Act of 1974, as amended; the National Labor Relations Act, as
        amended; the Americans with Disabilities Act of 1990; the Age Discrimination
        in Employment Act of 1967, as amended; the Worker Adjustment and Retraining
        Notification Act; the Pregnancy Discrimination Act; and all Federal,
        State and local statutes, regulations, decisional law and ordinances
        and all human rights, fair employment, contract and tort laws relating
        to Employee&#8217;s employment with AHC and/or the termination thereof
        including, again by way of example but without limitation, the New Jersey
        and New York Civil Rights Laws, the New Jersey Law Against Discrimination,
        the New York Executive Law, the New York City Human Rights Law, the New
        Jersey Conscientious Employee Protection Act, the New Jersey Family Leave
        Act, any civil rights or human rights law, as well as all claims for
        wrongful discharge, breach of contract, personal injury, defamation,
        mental anguish, injury to health and reputation, and sexual harassment,
        which Employee ever had, now has, or which Employee hereafter can, shall
        or may have for, upon or by reason of any matter, cause or thing whatsoever
        arising out of Employee&#8217;s employment by AHC or the termination
        thereof, provided that this General Release shall not extend to (i) any
        rights, remedies, or claims Employee may have in enforcing the terms
        of this Agreement; (ii) any rights Employee may have to receive vested
        amounts under AHC&#8217;s stock option plan, 401-K or pension plans;
        (iii) Employee&#8217;s rights to medical benefit continuation coverage,
        on a self-pay basis, pursuant to federal law (COBRA); and (iv) claims
        for indemnification (whether under state law, AHC&#8217;s by-laws or
        otherwise) for acts performed as an officer of AHC or any of its affiliates.
        Employee takes this action fully aware of Employee&#8217;s rights arising
        under the laws of the United States (and any State or local governmental
        entity thereof) and voluntarily waives and releases all such rights or
        claims under these or other laws, but does not intend to, nor is Employee
        waiving any rights or claims that may arise after the date that this
        Agreement is signed by Employee. The provisions of any laws providing
        in substance that releases shall not extend to claims which are at the
        time unknown to or unsuspected by the person executing such release,
        are hereby waived.</font></div>
<p align="center"><font face="serif" size="2">9</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
<div style="text-indent: 3%"><font size="2" face="Times New Roman, Times, serif">Employee
    represents that Employee has been advised to and has had an opportunity to
    consult with an attorney and/or any other
  advisors of Employee&#8217;s choosing before signing this Agreement, and was
  given a period of twenty-one (21) days to consider this Agreement. Employee
  is permitted, at his discretion, to return the Agreement prior to the expiration
  of this 21-day period. Employee has relied only on the promises written in
  the Agreement, and not on any other promise made by AHC or any other entity
  or person.</font>
  <p align="left"><font size="2" face="serif"><b>Employee has seven (7) days
          to revoke the Agreement after Employee signs it. The Agreement will
          not become effective or enforceable until AHC&#8217;s receipt back
          of Employee&#8217;s executed Agreement and the expiration of the seven
          day revocation period.</b></font></p>
    <p align="left"><font size="2" face="serif">Employee has read and understood
        the Agreement and enters into it knowingly and voluntarily.</font></p>
    <p align="left"><font size="2" face="serif">IN WITNESS WHEREOF, Peter R.
        Smith has set his hand this ___ day of December, 2004 having had the
        opportunity to review this with counsel of his choice.</font></div>
<p align="left"><font size="2" face="serif"></font><font size="2" face="serif"></font></p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td align="left" width="60%"><font size="2" face="serif"><u>/s/ Peter R. Smith&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></font><br>
  <font size="2" face="serif">Peter R. Smith</font></td>
<td align="left"><font size="2" face="serif"><u>2/5/05&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></font><br><font size="2" face="serif">Date</font></td>
</tr>
</table>
<p align="center"><font face="serif" size="2">10</font></p>
<hr noshade align="center" width="100%" size="2">
</body>
</html>
</TEXT>
</DOCUMENT>
