INTRODUCTION

Bitwise Designs, Inc. ("Bitwise"), and its subsidiaries DJS Marketing Group, Inc. ("DJS"), Authentidate, Inc. and Authentigraph.com, Inc. (sometimes collectively referred to herein as the "Company"), are engaged in the manufacture and distribution of document imaging systems, computer systems and related peripheral equipment, components, and accessories, network and internet services and Internet-based authentication services.

In March 1996, the Company acquired DJS (d.b.a. Computer Professionals), a system integrator, and computer reseller in Albany, New York. DJS is an authorized sales and support provider for Novell, Microsoft...