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.

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     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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