8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED):  January 9, 2006

AUTHENTIDATE HOLDING CORP.
(Exact name of registrant as specified in its charter)

COMMISSION FILE NUMBER:  0-20190

Delaware	14-1673067
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

Three Connell Drive, 5^th Floor

Berkeley Heights, New Jersey 07922

(Address and zip code of principal executive offices)

(908) 787-1700
(Registrant's telephone number, including area code)

2165 Technology Drive, Schenectady, New York 12308

(Former name or former address, if changed since last report.)

CHECK THE APPROPRIATE BOX BELOW IF THE FORM 8-K FILING IS INTENDED TO SIMULTANEOUSLY SATISFY THE FILING OBLIGATION OF THE REGISTRANT UNDER ANY OF THE FOLLOWING PROVISIONS:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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Item 1.01	Entry into Material Definitive Agreement
	On January 9, 2006, Authentidate Holding Corp. (the “Registrant”) entered into a Termination Agreement and a separate consulting agreement with John J. Waters, its Executive Vice President – Chief Administrative Officer and a member of its board of directors. Pursuant to the Termination Agreement, Mr. Waters agreed to change his employment relationship with the Registrant, effective as of January 1, 2006 and provided the Registrant with a general release. In connection with the execution of this Termination Agreement, the Registrant has entered into a consulting agreement with Mr. Waters pursuant to which, Mr. Waters will provide consulting services to the Registrant as requested by the Chief Executive Officer or Chairman of the Board. In consideration for the foregoing, the Registrant will pay to and/or provide Mr. Waters (a) an amount of $350,416.67, in accordance with the terms and conditions of the consulting agreement; (b) an amount of $5,000 for attorneys’ fees; and (c) the accelerated vesting of all options granted to him, along with the continuation of the exercise period for the duration of their original term. In addition, Mr. Waters will continue to serve on the Registrant’s board of directors.
Item 1.02	Termination of Material Definitive Agreement
	As described in Item 1.01 of this Current Report, the Registrant has entered into a Termination Agreement and a consulting agreement with Mr. John J. Waters, its Executive Vice President – Chief Administrative Officer, dated as of January 1, 2006, resulting in the termination of the employment agreement, dated August 6, 2004, between them. To the extent required by Item 1.02 of Form 8-K, the information contained or incorporated by reference in Item 1.01 and Item 5.02 of this Current Report regarding Mr. Waters is incorporated by reference in this Item 1.02.
Item 5.02	Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers
(b)	Mr. John J. Waters, the Executive Vice President and Chief Administrative Officer of the Registrant, relinquished his employment position in favor of a consulting arrangement with the Registrant, in accordance with the Termination Agreement which is effective as of January 1, 2006. As described in Item 1.01 of this Current Report, Mr. Waters will remain on the Registrant’s board of directors and will provide certain services to the Registrant pursuant to a consulting agreement.
Item 7.01	Regulation FD Disclosure
	On January 10, 2006, the Registrant issued a press release regarding the events described in this Current Report. A copy of the press release is attached as Exhibit 99.1 and is being “furnished” and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except as shall be expressly set forth by specific reference in such filing.
Item 9.01	Financial Statements And Exhibits
(c)	Exhibits
	The following exhibits are filed or furnished herewith:

10.1	Termination Agreement between Authentidate Holding Corp. and John J. Waters.
10.2	Consulting Agreement between Authentidate Holding Corp. and John J. Waters.
99.1	Press Release dated January 10, 2006

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SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

AUTHENTIDATE HOLDING CORP.

By: /s/ Surendra Pai

Name: Surendra Pai

Title:   Chief Executive Officer and President

Date: January 10, 2006

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EXHIBIT INDEX

Exhibit Number	Description
10.1	Termination Agreement between Authentidate Holding Corp. and John J. Waters.
10.2	Consulting Agreement between Authentidate Holding Corp. and John J. Waters.
99.1	Press Release dated January 10, 2006

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EX-10.1

Exhibit 10.1

AGREEMENT AND RELEASE

     CONSULT WITH AN ATTORNEY BEFORE SIGNING THIS AGREEMENT AND RELEASE.

     BY SIGNING THIS AGREEMENT AND RELEASE, YOU GIVE UP AND WAIVE IMPORTANT LEGAL RIGHTS.

     Agreement between Authentidate Holding Corp., its stockholders (solely in their capacity as stockholders of Authentidate Holding Corp.), 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 “AHC” or the “Company”) and by his own free will, John J. Waters (“Waters” or “Employee”).

     WHEREAS, Waters has been an employee of AHC, and

     WHEREAS, Waters has been employed pursuant to a written employment agreement dated as of August 6, 2004 (the “Employment Agreement”); and

     WHEREAS, Employee and AHC each desire an amicable cessation of the employment relationship,

     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 “Parties”) hereby agree as follows:

     1.   Employee acknowledges and agrees that effective the close of business January 1, 2006, Employee’s employment is terminated (the “Termination Date”.)

     2.   In consideration for Employee’s execution of this Agreement, and in consideration for the release of claims against AHC, the Company will pay or provide to Employee the following:

          a.      The payment of (i) $350,416.67.33 in accordance with the terms and conditions of that certain Consulting Agreement entered into between Employee and Company dated as of January 1. 2006 (the “Consulting Agreement”) and as described in Section 7, and the benefits as described in Section 3 below; and (ii) Five Thousand ($5,000.00) Dollars within ten (10) days of the execution of this Agreement for attorney’s fees .

          b.      Solely for the purpose of determining the vesting and exercisability of Employee’s stock options pursuant to Section 11.2 of the Employment Agreement, Employee’s termination shall be deemed a termination without cause, and the conditions to the vesting of any outstanding stock options granted to the Employee under any of the Company’s stock option plans, shall be deemed void and all such incentive awards shall be immediately and fully vested as of the date of this agreement and the terms of the awards shall be deemed amended to provide that the awards shall remain exercisable until August 6, 2009, the duration of their original term.

          c.      Employee agrees and acknowledges that the Company’s payment of the compensation described in this Section 2 of this Agreement is in lieu of all other compensation to which Employee may have been entitled pursuant to the Employment Agreement, and all other agreements and plans, including without limitation, the Accrued Compensation and the Severance Payment (as such terms are defined in the Employment Agreement).

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     3.   Benefits:

          a.      Until December 31, 2006, the Company shall reimburse Employee for expenses actually incurred by Employee in securing medical benefit continuation coverage on a self-pay basis under federal law (COBRA).

          b.      Except as otherwise expressly provided in this Agreement, Employee will not be entitled to receive any other benefits after the Termination Date.

     4.   To the extent Employee has unreimbursed business expenses, incurred through the Termination Date, Employee must promptly submit the expenses with all appropriate documentation; those expenses which meet the Company’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’s expense reimbursement guidelines existing as of the date that this Agreement is executed by both the Company and Employee.

     5.   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.

     6.   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’s entitlement is conditioned upon Employee’s release of all claims against AHC and Employee’s compliance with all the terms and conditions of this Agreement.

     7.   Simultaneously with the execution of this agreement, the Company will enter into the Consulting Agreement with the Employee. The Consulting Agreement shall be executed simultaneously with this Agreement, and all of its terms and conditions are hereby incorporated by reference, and shall be a part of this Agreement. The Consulting Agreement shall be for a term commencing January 1, 2006 and expiring September 15, 2006, and the amounts payable to Employee pursuant to the Consulting Agreement shall be deemed to be in satisfaction of all Severance Payments Employee is entitled to under the Employment Agreement, and all other agreements and plans. The Employee shall be required to perform such services as may reasonably be requested in writing by the Chief Executive Officer of the Company and/or the Chairman of the Board and shall not hold himself out as a representative of the Company except upon the prior written direction of the Chief Executive Officer of the Company.           

     8.   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’s fees and/or other payments.

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     9.   Arbitration:

          a.      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’s employment, the cessation of Employee’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 and AHC have the right to seek injunctive or other equitable relief from a court to enforce Paragraph 10 of this Agreement and that AHC has the right to seek injunctive or other equitable relief from a court to enforce Paragraph 12 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.

               b.       The Parties’ 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.

               c.      Notwithstanding the foregoing, Employee acknowledges and agrees that its breach of its non-disparagement, confidentiality, non-competition, or cooperation obligations (as provided by Paragraphs 10 – 15 and 21 of this Agreement) will cause the Company irreparable injury not compensable by money damages and therefore, the Company will not have an adequate remedy at law. Accordingly, if the Company institutes an action or proceeding to enforce such obligations, it shall be entitled to injunctive or other equitable relief to prevent or curtail any such breach, threatened or actual.

     10.   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, including as may be required under the Securities Exchange Act of 1934, as amended, and the rules and regulations of the U.S. Securities and Exchange Commission promulgated thereunder; (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’s immediate family, accountant or attorney, provided they are made aware of and agree to the confidentiality provisions.

     11.   Employee further acknowledges and agrees that any non-public and/or proprietary information of the Company and/or its customers disclosed to or prepared by Employee during Employee’s employment remains confidential and may not be used and/or disclosed by Employee hereafter without the prior written consent of AHC. Employee further agrees that the provisions of Article VI of the Employment Agreement (“Non-Disclosure”) shall remain in full force and effect.

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     12.   Solely for the purpose of determining the applicability of the Restrictive Covenant in Article VII of the Employment Agreement, Employee shall be deemed to have voluntarily terminated his employment as of the termination date of the Consulting Agreement, and Employee hereby agrees that all of the provisions of Article VII, as modified by this paragraph, shall remain in full force and effect. Further, in addition to the provisions of Article VII, Employee also agrees that in consideration for the payments and other consideration provided in this Agreement, Employee will not for a period of six months after the termination of the Consulting Agreement, either directly or indirectly, (a) solicit any person who is employed by AHC (or who was employed by AHC within 90 days of the termination of the Consulting Agreement) to: (i) terminate his employment with AHC; (ii) accept employment with anyone other than AHC, or (iii) in any manner interfere with the business of AHC.

     13.   In consideration of the foregoing, Employee agrees 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 Employee during the course of his 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 “Intellectual Property”). Employee agrees 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. Employee further 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 appoint the Company your 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.

     14.   Employee agrees that in accordance with Section 9.6 of the Employment Agreement, which shall remain in full force and effect, 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. The Company agrees not to issue, and will advise its executive officers and directors not to make, any negative or derogatory statements in verbal, written, electronic or any other form about Waters.

     15.   Litigation

          a.      Employee shall 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’s assistance may be reasonably requested by the Company. Reasonable expenses arising from the cooperation will be advanced or reimbursed within the Company’s guidelines. Consistent with the “Certificate of Incorporation of Authentidate Holding Corp.,” and the Company’s Amended and Restated By-Laws, AHC will hold harmless and indemnify Employee from and against any expenses (including attorneys’ 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’s employment and consistent with the Company’s policies and procedures. Notwithstanding anything to the contrary contained herein, the obligations of the Company pursuant to Section 13.2 of the Employment Agreement shall survive the termination of the Employment Agreement and are specifically incorporated herein as if fully set forth herein. In accordance with Section 13.2 of the Employment Agreement, the Company further agrees to maintain such insurance, including, but not limited to, directors’ and officers’ liability insurance, and liability insurance, as is necessary and reasonable to protect the Employee from any and all claims arising from or in connection with his employment by the Company for a period of six (6) years after the Termination Date.

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          b.      Employee agrees that he will not provide support or assistance, directly or indirectly, to any individual, corporation, or other non-governmental entity in connection with any claim, action, suit or proceeding involving the Company or any of its affiliates unless required to do so by law (in which case Employee agrees to promptly notify the Company of such legal requirement).

          c.      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.

     16.   Employee shall direct 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. The Company shall not be responsible for responses to reference requests sought or obtained other than under the procedures set forth in this paragraph.

     17.   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’s employment and/or the termination of Employee’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’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’s stock option plans, 401-K or pension plans.

     18.   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.

     19.   Employee is hereby advised of Employee’s rights to review this Agreement with counsel of Employee’s choice. Employee has had the opportunity to consult with an attorney and/or other advisor of Employee’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.

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     20.   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.

     21.   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.

     22.   In the event Employee breaches any of the terms contained herein, Employee agrees to promptly forfeit the entire consideration given for this release and to pay the Company any actual damages caused by Employee’s breach.

     23.      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.

     24.      Except as otherwise expressly provided herein, this Agreement and Release, together with the General Release 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. The failure of either party at any time to require performance by the other party of any provision hereof shall in no way affect the full right to require such performance at any time thereafter. Nor shall the waiver by either party of a breach of any provision hereof constitute a waiver of any succeeding breach of the same or any other such provision nor constitute a waiver of the provision itself. The Agreement may be executed in multiple counterparts, each of which shall be considered an original but all of which shall constitute one agreement.

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the dates set forth below.

     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 toAHC. 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’s receipt back of Employee’s executed Agreement and the expiration of the seven day revocation period.      

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Employee: /s/ John J. Waters John J. Waters	AuthentiDate Holding Corp.: /s/ Suren Pai By: Title:
Date: January 5, 2006	Date: January 9, 2006

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CONSULT WITH AN ATTORNEY BEFORE SIGNING GENERAL RELEASE. BY SIGNING THIS GENERAL RELEASE, YOU GIVE UP AND WAIVE IMPORTANT LEGAL RIGHTS.

GENERAL RELEASE

     I, John J. Waters, understand and, of my own free will, enter into this General Release.

     In consideration of the payments, benefits, agreements, and other consideration to be provided by Authentidate Holding Corp. (“AHC”) as described in the agreement of which this General Release is a part (such agreement, this General Release, together, the “Agreement”), John J. Waters, for himself or herself and for his heirs, executors, administrators, and their respective successors and assigns (collectively, “Employee”), HEREBY RELEASES AND FOREVER DISCHARGES, to the maximum extent permitted by law, Authentidate Holding Corp., its stockholders (solely in their capacity as stockholders of AHC), 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 “AHC”) 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’ fees and costs), extents, executions, claims and demands whatsoever at law or in equity (“claims”), 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’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’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’s stock option plan, 401-K or pension plans; (iii) Employee’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, the Company's by-laws or otherwise) for acts performed as an officer or director of the Company or any of its affiliates. Employee takes this action fully aware of Employee’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.

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     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’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.

     Employee has seven (7) days to revoke the Agreement after Employee signs it. The Agreement will not become effective or enforceable until AHC’s receipt back of Employee’s executed Agreement and the expiration of the seven day revocation period.

     Employee has read and understood the Agreement and enters into it knowingly and voluntarily.

     IN WITNESS WHEREOF, John J. Waters has set his hand this 5 day of January, 2006 having had the opportunity to review this with counsel of his or her choice.

/s/ John J. Waters
John J. Waters

Date: January 5, 2006

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EX-10.2

Exhibit 10.2

CONSULTING AGREEMENT

     This agreement is made as of this 1st day of January, 2006 (the “Effective Date”) and when executed by the parties, will constitute an agreement between Authentidate Holding Corp., with its principal place of business at Connell Corporate Center, Three Connell Drive, Berkeley Heights, N.J. 07922 (the “Company”) and John J. Waters, with his principal place of business at 205 Micmac Lane, Jupiter, Florida 33478 (the “Consultant”), pursuant to which the Company agrees to retain Consultant and Consultant agrees to be retained by the Company under the terms and conditions set forth below.

     1.       Retention.   The Company hereby retains Consultant to perform consulting services related to the business of the Company, on a non-exclusive basis, solely as directed by the Chief Executive Officer of the Company, and/ or the Chairman of the Board and Consultant hereby accepts such retention. Nothing herein shall require the Company to utilize or implement Consultant's services in any specific situation. Subject to the terms set forth below, Consultant shall furnish to the Company advice and recommendations with respect to such aspects of the business and affairs of the Company as the Company shall, from time to time, reasonably request upon reasonable notice. Consultant shall deliver services at Consultant’s place of business, the Company’s place of business, or at various other sites as required and mutually and reasonably agreeable to the Company and the Consultant.

     2.      Compensation; Expenses; Payment. (a)   As compensation for the services described in paragraph 1 above, and subject to the provisions of Paragraph 9 below, the Company agrees to pay Consultant a retainer fee (the “Retainer Fee”) of $350,416.67 payable as follows: $200,000, on or before January 10, 2006, $100,000 on or before April 1, 2006, and the balance shall be paid on September 1, 2006. In addition to this compensation, the Company will reimburse Consultant for any and all expenses incurred by Consultant, subject to the Company’s prior written approval, in the performance of its duties hereunder and, Consultant shall account for such expenses to the Company. Such reimbursement shall cumulate and be paid on a monthly basis.

     (b)      Except as may be expressly set forth in that certain Settlement Agreement and Release between the Consultant and Company, dated as of January 1, 2006, Consultant acknowledges and agrees that the compensation paid to him in accordance with this paragraph 2 shall be in lieu of all compensation to which he is entitled pursuant to that certain Employment Agreement entered into between Consultant and Company dated as of August 6, 2004.

     3.      Relationship.   Consultant shall use his best efforts and shall devote such time and effort to the performance of his duties hereunder as is reasonably necessary for such performance. Consultant is an independent contractor and not an employee, agent or representative of the Company. Consultant has no authority to bind the Company to any obligation or agreement. Consultant expressly agrees that he shall at all times advise all third parties contacted in furtherance of this Agreement that he is an independent contractor with no authority to bind the Company.

     4.      Covenants.   Consultant shall coordinate his activities with the Company and report to the Chairman of the Board and/or the Chief Executive Officer of the Company. All activities of Consultant shall require the prior written consent of the Chief Executive Officer of the Company. During the term hereof, neither Consultant nor any affiliate, partner, employee, agent or representative of Consultant, shall render the same or similar services to any business, entity or person engaged in any business which is the same as or similar to or competitive with, the businesses of the Company or its subsidiaries.

     5.      Confidentiality.

      (a)       During the Term and for a period of five years thereafter, Consultant shall (i) hold Company’s Confidential Information in strict trust and confidence and avoid the disclosure or release thereof to any other person or entity by using at least the same degree of care as it uses to avoid unauthorized use, disclosure, or dissemination of its own Confidential Information of a similar nature, but not less than reasonable care, (ii) not use the Confidential Information for any purpose whatsoever except as expressly contemplated under this Agreement, and (iii) not to, directly or indirectly, copy, reproduce, use, publish, misappropriate, assign, or otherwise transfer or disclose to any person the Confidential Information, other than as permitted pursuant to the terms of this Agreement, regardless of whether such information was actually delivered to Consultant prior to the effective date of this Agreement. Confidential Information, as used herein, shall mean all information, trade secrets, inventions, process, or other records relating to the Company’s business, financial affairs or operations, including but not limited to information related to business plans, technology, source code, product or service requirements, customers, pricing, techniques and methods, which is either marked or identified as confidential or which the receiving party knew or reasonably should have known, under the circumstances, was confidential. All files, records, documents, notes, or other items relating to or embodying Confidential Information that may be delivered to Consultant, or to which Consultant may be granted access, shall remain the exclusive property of the Company.

      (b)       Notwithstanding the foregoing, Consultant shall not be required to maintain confidentiality with respect to information (i) which is or becomes part of the public domain not due to the breach of this agreement by Consultant; (ii) of which it had independent knowledge prior to disclosure by the Company; (iii) which comes into the possession of Consultant in the normal and routine course of its own business from and through independent non-confidential sources; or (iv) which is required to be disclosed by Consultant by governmental requirements. If Consultant is requested or required (by oral questions, interrogatories, requests for information or document subpoenas, civil investigative demands, or similar process) to disclose any confidential information supplied to it by the Company, or the existence of other negotiations in the course of its dealings with the Company or its representatives, Consultant shall, unless prohibited by law, promptly notify the Company of such request(s) so that the Company may seek an appropriate protective order.

      (c)      Failure on the part of the Consultant to abide by this section shall cause Company irreparable harm for which damages, although available, will not be an adequate remedy at law. Accordingly, Company has the right to obtain injunctive to prevent any threatened or actual violations of this section in addition to whatever remedies it may have at law. Consultant expressly waives the defense that a remedy in damages will be adequate and any requirement in an action for specific performance or injunction for the posting of a bond by the Company.

     6.      Intellectual Property.

     (a)      Consultant agrees and acknowledges that the Company shall own and retain all right, title and interest in and to all of its Confidential Information, products, technology and derivatives thereof and all intellectual property rights therein or thereto. Nothing contained herein shall be construed so as to grant the Consultant any ownership or other rights in and to the intellectual property of the Company except as expressly stated herein. No license is granted by Company to its Confidential Information or to any intellectual property right therein except for the limited purpose of enabling the Consultant to perform the consulting services pursuant to this Agreement.

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     (b)      In consideration of the retention of Consultant by the Company, and free of any additional obligations of the Company to make additional payment to Consultant, Consultant agrees to promptly disclose and 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 are developed, conceived or reduced to practice by Consultant, either alone or jointly with others, and whether or not developed during normal business hours or arising within the scope of his duties of employment, during or as a result of performance of this Agreement (all of the foregoing “Intellectual Property”). Consultant agrees 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. If it is determined that any Deliverables are not works made for hire, Consultant hereby irrevocably assigns to Company Consultant’s entire right, title, and interest in and to such Deliverables and all intellectual property rights, including patents, copyrights and trade secrets, and other proprietary rights of Consultant, in and to the Deliverables, that Consultant now has or may hereafter acquire, together with the sole and exclusive right to seek copyright, patent or other protection therefore and to recover for the past infringement thereof.

     (c)      Consultant hereby agrees to execute such assignments and other documents as the Company may consider appropriate to vest all right, title and interest in and to all deliverables to the Company and hereby appoints the Company Consultant’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. 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 Consultant'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 Consultant for the Company.

     7.      Indemnification. (a)   Consultant agrees to indemnify and hold harmless the Company, its employees, agents, representatives and controlling persons (and the officers, directors, employees, agents, representatives and controlling persons of each of them) from and against any and all losses, claims, damages, liabilities, costs and expenses (and all actions, suits, proceedings or claims in respect thereof) and any legal or other expenses in giving testimony or furnishing documents in response to a subpoena or otherwise (including, without limitation, the cost of investigating, preparing or defending any such action, suit, proceeding or claim, whether or not in connection with any action, suit, proceeding or claim in which the Company is a party), as and when incurred, directly or indirectly, caused by, relating to, based upon or arising out of Consultant’s gross negligence, willful misconduct or unauthorized acts. Consultant’s obligation to indemnify the other party shall be conditioned on the following: (a) the Company shall notify the other party in writing as soon as practicable after its receipt of a claim and (b) Consultant shall control of the defense and all related settlement negotiations, provided, however, that any settlement be made with the consent of the Company and such settlement include as an unconditional term thereof the giving by the claimant of an unconditional release from all liability in favor of the Company.

     (b)      Company agrees to indemnify and hold harmless the Consultant from and against any and all losses, claims, damages, liabilities, costs and expenses (and all actions, suits, proceedings or claims in respect thereof) and any legal or other expenses in giving testimony or furnishing documents in response to a subpoena or otherwise (including, without limitation, the cost of investigation, preparing or defending any such action, suit, proceeding or claim, whether or not in connection with any action, suit, proceeding or claim in which the Consultant is a party), as and when incurred to the greater of the fullest extent of the law and the fullest extent of Company’s by-laws or other policies concerning indemnification as if Consultant was an employee of Company.  Company’s obligation to indemnify Consultant shall be conditioned on the following:  (a) the Consultant shall notify Company in writing as soon as practicable after its receipt of a claim and (b) Company shall control the defense and all related settlement negotiations, provided, however, that any settlement be made with the consent of the Consultant and such settlement include as an unconditional term thereof the giving by the claimant of an unconditional release from all liability in favor of the Consultant.

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     8.      Non-Assignment.   This Agreement may not be transferred, assigned or delegated by any of the parties hereto without the prior written consent of the other party hereto.

     9.      Term and Termination.   This Agreement shall commence on the Effective Date and expires on September 30, 2006 (the “Term”). Paragraphs 5, 6, 7, 9, 10, and 11 shall survive the expiration or termination of this Agreement under all circumstances. The Company may immediately terminate this Agreement upon written notice in the event (i) Consultant is in breach of any obligation under this Agreement, which default is incapable of cure or which, being capable of cure, has not been cured within thirty (30) days after receipt of notice of such default or (ii) Consultant breaches any of its obligations arising under Paragraphs 5 or 6. Upon the expiration or termination of this Agreement, (a) each party shall return the other’s Confidential Information in its possession or control, (b) all amounts not disputed in good faith that are owed by each party to the other party under this Agreement which accrued before such termination or expiration will be immediately due and payable and (c) Consultant shall deliver to Company all deliverables completed and accepted up to the date of termination and Company shall have all right, title and interest thereto. If the Company terminates the Agreement prior to the expiration of the Term, or the Consultant dies or becomes disabled (as determined by Employee’s physician), prior to the expiration of the Term of the Agreement, then the Company may terminate this Agreement upon payment to the Employee or his estate in a lump sum all sums remaining due for the balance of the Term of the Agreement.

     10.      Notices.   Any notices hereunder shall be sent to the Company and to Consultant at their respective addresses set forth above. Any notice shall be given by certified mail, return receipt requested, postage prepaid, overnight courier or personal delivery. Notices shall be deemed to have been given when deposited in the United States mail or delivered to a nationally-recognized courier service. Either party may designate any other address to which notice shall be given, by giving written notice to the other of such change of address in the manner herein provided.

     11.      General.   This Agreement has been made in the State of New York and shall be construed and governed in accordance with the laws thereof without giving effect to principles governing conflicts of law. This Agreement contains the entire agreement between the parties, may not be altered or modified, except in writing and signed by the party to be charged thereby, and supersedes any and all previous agreements between the parties relating to the subject matter hereof. This Agreement shall be binding upon the parties hereto, the indemnified parties referred to in Paragraph 7, and their respective heirs, administrators, successors and permitted assigns. The failure or neglect of the parties hereto to insist, in any one or more instances, upon the strict performance of any of the terms or conditions of this Agreement, or their waiver of strict performance of any of the terms or conditions of this Agreement, shall not be construed as a waiver or relinquishment in the future of such term or condition, but the same shall continue 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. This Agreement may be signed in counterparts, which together shall constitute one Agreement.

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SIGNATURE PAGE TO CONSULTING AGREEMENT

     IN WITNESS WHEREOF, the parties have caused their respective duly authorized representatives to execute this Agreement as of the Effective Date.

AUTHENTIDATE HOLDING CORP.

By: /s/ Suren Pai

Suren Pai, Chief Executive Officer

CONSULTANT

By: /s/ John J. Waters

John J. Waters

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EX-99.1

Exhibit 99.1

Authentidate Holding Corp. Chief Administrative Officer to Step Down

BERKELEY HEIGHTS, N.J. January 10, 2006 – Authentidate Holding Corp. (Nasdaq: ADAT) today announced that John Waters is stepping down as Chief Administrative Officer, effective immediately. Mr. Waters will continue to serve as a consultant on specific company projects and remain on Authentidate’s Board of Directors.

Mr. Waters joined Authentidate in July 2004 during a period of transition for the company. Authentidate had recently completed a significant financing and was developing a new strategy for the commercialization of its content authentication technology. A new chief executive officer was recruited in November 2004, and Mr. Waters assisted in the transition to new management and the implementation of the new business plan.

“I enjoyed working with Authentidate and have confidence in management’s ability to drive the future performance of the business,” Mr. Waters stated. “Our new arrangement will enable me to pursue other ventures and still allow me to assist Authentidate on a project basis.”

Suren Pai, Chief Executive Officer of Authentidate, said, “John Waters has made significant contributions to our company and we thank him for his efforts. We believe John will continue to serve as a valuable resource in his consultative role and as a member of our Board.”

About Authentidate Holding Corp.

Authentidate Holding Corp. (AHC) is the holding company which operates its software and services businesses in three segments: the Security Software Solutions Segment (fka Authentidate Segment, including Authentidate, Inc., Trac Medical Solutions, Inc. and Authentidate International AG), the Document Management Solutions Segment (fka Docstar Division) and the Systems Integration Segment (fka DJS).

The Company is a worldwide provider of secure enterprise workflow management solutions that incorporate its proprietary and patent pending content authentication technology. Authentidate's offerings include the United States Postal Service® Electronic Postmark® Service (USPS® EPM®), electronic signing solutions, and electronic forms processing solutions. Authentidate also provides secure document management solutions, and enterprise network security products and services. For more information, visit the company's website at http://www.Authentidate.com.

This press release contains forward-looking statements within the meaning of section 27A of the Securities Act of 1933 and section 21E of the Securities Act of 1934. When used in this release, the words “believe,” “anticipate,” “think,” “intend,” “plan,” “will be,” “expect,” and similar expressions identify such forward-looking statements. Such statements regarding future events and/or the future financial performance of the Company are subject to certain risks and uncertainties, which could cause actual events or the actual future results of the Company to differ materially from any forward-looking statement. Such risks and uncertainties include, among other things, the availability of any needed financing, the Company's ability to implement its business plan for various applications of its technologies, related decisions by the USPS, the impact of competition, the management of growth, and the other risks and uncertainties that may be detailed from time to time in the Company's reports filed with the Securities and Exchange Commission. In light of the significant risks and uncertainties inherent in the forward-looking statements included herein, the inclusion of such statements should not be regarded as a representation by the Company or any other person that the objectives and plans of the Company will be achieved.

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