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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