Exhibit 10.3

CONSULTING AGREEMENT

This agreement is made as of this 1st day of February, 2005 (the “Effective
Date”) and when executed by the parties, will constitute an agreement between
Authentidate Holding Corp., with its principal place of business at 2165
Technology Drive, Schenectady, New York 12308 (the “Company”) and John T. Botti,
with his principal place of business at Loudonville, New York (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, solely as directed by the Chief
Executive Officer of the Company, 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. 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 $10,000 per each thirty
days of services rendered during the Term (as defined in Paragraph 9, below) of
this Agreement. In addition to its 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. During the Term,
Company shall pay Consultant all Retainer Fees due at the end of each thirty-day
period for which said Retainer Fee is due. Consultant shall invoice the Company
on or about the first business day of every thirty-day period during the Term.

3. Relationship. Consultant shall use his best efforts and shall devote such
time and effort to the performance of its 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 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 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,

--------------------------------------------------------------------------------

Back to Contents

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.

(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) No license is granted hereunder by Company to its Confidential Information
or to any intellectual property right therein delivered or made available to
Consultant except for the limited purpose of developing the deliverables in
accordance with this Agreement. Company retains all right, title and interest in
and to its Confidential Information. 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. 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. Consultant hereby 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 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.

2

--------------------------------------------------------------------------------

Back to Contents

7. Indemnification. 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 negligence, willful misconduct or breach of this Agreement.
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.

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
is for an initial term of twelve months (the “Term”). Paragraphs 5, 6, 7, 9, 10,
and 11 shall survive the expiration or termination of this Agreement under all
circumstances. 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.

3

--------------------------------------------------------------------------------

Back to Contents

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/ Surendra Pai_________
Suren Pai, Chief Executive Officer

CONSULTANT

By: /s/ John T. Botti                   
John T. Botti

 

4

--------------------------------------------------------------------------------