Exhibit 10.1

 
 
 
 
ASSET PURCHASE AGREEMENT
 
 
by and between
 
Novastor Corporation
 
as Seller
 
and
 
Data Storage Corporation
 
as Purchaser
 
 
 
 
November 10, 2008
 

 
 
 
 
 

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

 

 

ASSET PURCHASE AGREEMENT
 
This ASSET PURCHASE AGREEMENT (this “Agreement”) is entered into as of November
10, 2008, by and between Data Storage Corporation, a Delaware Corporation
(“Purchaser”), and Novastor Corporation., a California corporation (“Seller” or
“Novastor”).
 
WHEREAS, Seller is engaged in the business of developing and marketing data
protection and availability software (the “Business”);
 
WHEREAS, Seller wishes to sell to Purchaser and Purchaser wishes to purchase and
assume from Seller, certain assets and liabilities with respect to the Business
on the terms and subject to the conditions set forth in this Agreement;
 
NOW THEREFORE, In consideration of the mutual covenants, agreements,
representations and warranties contained in this Agreement, the parties agree as
follows:
 
 
ARTICLE I
PURCHASE AND SALE OF ASSETS
 
1.1           Sale and Transfer of Assets.  On and subject to the terms and
conditions set forth in this Agreement, Seller agrees to sell, convey, transfer,
assign and deliver to Purchaser, and Purchaser agrees to purchase and acquire
from Seller, free and clear of any encumbrances, all of Seller’s right, title,
and interest in and to all of the assets of Seller as set forth on Schedule 1.1
attached hereto (“Purchased Assets”) at the Closing in consideration for the
payment by Purchaser of the Purchase Price as specified below in Section
1.3.  The Purchased Assets shall not include any of Novastor’s accounts
receivable, intellectual property, software or hardware.
 
1.2 No Assumption of Liabilities.  Other than as set forth in Schedule 1.2, the
Purchaser shall in no event assume or be responsible for any liabilities, liens,
security interests, claims, obligations or encumbrances of Seller, contingent or
otherwise.
 
1.3 Consideration.  Upon the terms and subject to the satisfaction of the
conditions contained in this Agreement, in consideration of the aforesaid sale,
assignment, transfer and delivery of the Purchased Assets, Buyer will pay or
cause to be paid a purchase price consisting of (i) the sum of One Hundred
Seventeen Thousand Eighteen Dollars and Fifty-Six Cents ($117,018.56) in cash at
Closing (the “Closing Payment”), (ii) the Assumed Liabilities (as defined in
Section 1.2 below), (iii) the Guaranteed Post-Closing Payments (as defined
below) and (iv) and the Thirteenth Month Payment (as defined below)
(collectively, the “Purchase Price”).
 
1.3.1 Payment of Purchase Price
 
(a) Closing Payment.  The Closing Payment will be made by the Purchaser to the
Seller at Closing.  The Purchaser will wire funds of One Hundred Thirteen
Thousand, Three Hundred Fifty Dollars and Sixty-Three Cents ($113,350.63) to
Seller’s bank adjusting Closing Payment for deferred revenues of Twelve Thousand
Four Hundred Twenty-Three Dollars and Ninety Cents ($12,423.90) already received
by NovaStor plus uncollected accounts receivables aged 90 days or less of Two
Thousand Seven Hundred Fifty-Six Dollars and Three Cents ($2,756.03) and
hosting, support and management fees during the transition period of Six
Thousand Dollars ($6,000.00).
 
 
 
-1-

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

 
 
 
(b) Guaranteed Post-Closing Payment.  For the calendar month of May 2009 up to
and including the calendar month of October 2009, monthly payments (each a
“Guaranteed Post-Closing Payment” and collectively, the “Guaranteed Post-Closing
Payments”) shall be made by the Purchaser to the Seller.  Each Guaranteed
Post-Closing Payment shall be equal to Nine Thousand Seven Hundred Fifty-One
Dollars and Fifty-Five Cents ($9,751.55).
 
(c) Thirteenth Month Payment.  Within thirty (30) days after the end of the
October 2009 calendar month, a payment (the “Thirteenth Month Payment”) shall be
made by the Purchaser to the Seller equal to (a) twenty-four (24) times the GAAP
monthly revenue amount related to the Purchased Assets for October 2009, minus
(b) the sum of: (i) the Closing Payment; and (ii) each Guaranteed Post-Closing
Payment; provided, however, that in no event shall the total of all payments
including the Thirteenth Month Payment be either: (A) greater than Two Hundred
Ninety-Two Thousand, Five Hundred Forty-Six Dollars and Forty Cents
($292,546.40) which represents 1.25 times the Original Amount (as defined below)
, or (B) less than One Hundred Seventy-Five Thousand Five Hundred Twenty-Seven
Dollars and Eighty-Four Cents ($175,527.84) which represents 0.75 times the
Original Amount.  The “Original Amount” means two (2) times the aggregate GAAP
revenue amount related to the Purchased Assets for the twelve (12) calendar
months prior to the Closing.
 
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER
 
Seller represents and warrants to Purchaser that the statements contained in
this Article II are correct and complete as of the date hereof:
 
2.1 Due Incorporation.  Seller is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation and
has the requisite corporate power to own its properties and to carry on its
business as now being conducted.  Seller is duly qualified as a foreign
corporation to do business and is in good standing in each jurisdiction where
the nature of the business conducted or property owned by it makes such
qualification necessary, other than those jurisdictions in which the failure to
so qualify would not have a material adverse effect on the business, operations
or financial condition of Seller.
 
2.2 Authority; Enforceability.  This Agreement and any other agreements
delivered together with this Agreement or in connection herewith have been duly
authorized, executed and delivered by Seller and are valid and binding
agreements enforceable in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights generally and
to general principles of equity; and Seller has full corporate power and
authority necessary to enter into this Agreement and such other agreements
delivered together with this Agreement or in connection herewith and to perform
its obligations hereunder and under all other agreements entered into by Seller
relating hereto.
 
 
 
-2-

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

 
 
 
2.3 Approvals; Consents.  Seller has, and on the Closing Date will have, the
right, power and authority to enter into this Agreement and to sell, transfer
and deliver the Purchased Assets and to perform all undertakings and obligations
hereunder.  No approval, authorization, consent, order or other action of, or
filing with, any third party, including without limitation, any public,
governmental, administrative or regulatory authority, agency or body
(collectively, “consents”), is required in connection with the execution,
delivery and/or performance of this Agreement by Seller or the consummation of
the transactions contemplated hereby.
 
2.4 Liens.  Seller has good and marketable title to  the Purchased Assets and
has full power and authority to sell, assign and transfer to Purchaser all of
the Purchased Assets free and clear of restrictions on or conditions to transfer
or assignment, and free and clear of mortgages, liens, pledges, charges,
encumbrances, equities, claims, covenants, conditions, or restrictions.
 
2.5 Taxes.  Seller has filed all federal, state, local, foreign or other tax
returns which are required Taxes to be filed by any of them or been approved for
an extension of same, and such returns are, to the best knowledge of Seller,
true and correct.  There is no material liability for the payment of any
federal, state, local, foreign or other taxes whatsoever (including any interest
or penalties) with respect to Seller except for which non-compliance would not
have a material adverse effect on the Purchased Assets (a “Material Adverse
Effect”).
 
2.6 Applicable Laws.  Seller has complied with all applicable laws, rules and
regulations of the City, County, State and federal government as required except
for which non-compliance would not have a Material Adverse Effect.
 
2.7 No Brokers.  No broker, finder or intermediary has been employed by or on
behalf of Purchaser in connection with the transactions contemplated hereby, and
there is no such person entitled, as a result of Purchaser’s action, to any fee
or commission upon the consummation of the transactions contemplated hereby.
 
2.8 Legal Proceedings.  To the best knowledge of the Seller, there is no (a)
legal proceeding pending or threatened, against, involving or affecting the
Seller and/or any of its respective assets or rights, including the Purchased
Assets; (b) judgment, decree, injunction, rule, or order of any governmental
entity applicable to the Seller that has had or is reasonably likely to have,
either individually or in the aggregate, a Material Adverse Effect; (c) legal
proceeding pending or threatened, against the Seller that seeks to restrain,
enjoin or delay the consummation of this Agreement or any of the other
transactions contemplated by this Agreement or that seeks damages in connection
therewith; or (d) injunction, of any type. Should this be both ways?
 
2.9 Licenses; Compliance with Regulatory Requirements.  The Seller holds all
licenses, franchises, ordinances, authorizations, permits, certificates,
variances, exemptions, concessions, leases, rights of way, easements,
instruments, orders and approvals, domestic or foreign (collectively, the
“Licenses”) required for or which are material to the ownership of the Purchased
Assets. The Seller is in compliance with, and has conducted its business so as
to comply with, the terms of its respective Licenses and with all applicable
laws, rules, regulations, ordinances and codes (domestic or foreign).  Without
limiting the generality of the foregoing, the Seller (i) has all Licenses of
foreign, state and local governmental entities required for the operation of the
facilities being operated on the date hereof by the Seller (the “Permits”), (ii)
has duly and currently filed all reports and other information required to be
filed with any governmental entity in connection with such Permits and (iii) is
not in violation of any of such Permits.
 
 
 
-3-

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

 
 
ARTICLE III
PURCHASER'S REPRESENTATIONS
 
Purchaser hereby represents and warrants to Seller that the statements contained
in this Article III are correct and complete as of the date hereof:
 
3.1 Approvals; Consents.  Purchaser has, and on the Closing Date will have, the
right, power and authority to enter into this Agreement and to perform all
undertakings and obligations hereunder.  No approval, authorization, consent,
order or other action of, or filing with, any third party, including without
limitation, any public, governmental, administrative or regulatory authority,
agency or body (collectively, “consents”), is required in connection with the
execution, delivery and/or performance of this Agreement by Purchaser or the
consummation of the transactions contemplated hereby.
 
3.2 Legal Proceedings.  To the best knowledge of Purchaser, there is no legal
proceeding pending or threatened against Purchaser that seeks to restrain,
enjoin or delay the consummation of the transactions contemplated in this
Agreement.
 
3.3 Due Incorporation.  Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation and has the requisite corporate power to own its properties and to
carry on its business as now being conducted.  Purchaser is duly qualified as a
foreign corporation to do business and is in good standing in each jurisdiction
where the nature of the business conducted or property owned by it makes such
qualification necessary, other than those jurisdictions in which the failure to
so qualify would not have a material adverse effect on the business, operations
or financial condition of Purchaser or its subsidiaries.
 
3.4 Authority; Enforceability.  This Agreement, the and any other agreements
delivered together with this Agreement or in connection herewith have been duly
authorized, executed and delivered by Purchaser and are valid and binding
agreements enforceable in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights generally and
to general principles of equity; and Purchaser has full corporate power and
authority necessary to enter into this Agreement, the and such other agreements
delivered together with this Agreement or in connection herewith and to perform
its obligations hereunder and under all other agreements entered into by
Purchaser relating hereto.
 
3.5 No Brokers.  No broker, finder or intermediary has been employed by or on
behalf of Purchaser in connection with the transactions contemplated hereby, and
there is no such person entitled, as a result of Purchaser’s action, to any fee
or commission upon the consummation of the transactions contemplated hereby.
 
 
 
-4-

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

 
 
ARTICLE IV
THE CLOSING
 
4.1 Seller's Obligations at Closing.  At the Closing, which shall occur
simultaneously with the execution of this Agreement, Seller shall deliver or
cause to be delivered to Purchaser:
 
4.1.1 Instruments transferring to Purchaser all right, title and interest in and
to Purchased Assets, or such other forms as Purchaser may reasonably request.
 
4.1.2 A Bill of Sale transferring all of the Purchased Assets of Seller being
purchased hereunder in a form acceptable to Purchaser and its counsel.
 
4.1.3 Such other items as may be reasonably necessary for the Closing to occur.
 
4.2 Cooperation by Seller.  Seller, at any time before or after the Closing
Date, will execute, acknowledge, and deliver any further assignments,
conveyances, and other assurances, documents, and instruments of transfer,
reasonably requested by Purchaser, and will take any other Seller consistent
with the terms of this Agreement that may reasonably be requested by Purchaser
for the purpose of assigning, transferring, granting, conveying, and confirming
to Purchaser, or reducing to possession, any or all property to be conveyed and
transferred by this Agreement.
 
4.3 Purchaser's Obligations at Closing.  Purchaser will deliver the required
consideration; and such other items as may be reasonably necessary for the
Closing to occur.
 
4.4 Related Agreements.  Purchaser and Seller shall enter into a (i) Transition
Services Agreement between Purchaser and Seller in the form attached hereto as
Exhibit A, and (ii) a Strategic Alliance Agreement between the Purchaser and
Seller in the form attached hereto as Exhibit B (collectively the “Related
Agreements”).
 
ARTICLE V
 
POST CLOSING COVENANTS
 
5.1 Premium Partner Status.  Seller will provide Purchaser with the benefits of
Premium Partner Status for a period of two (2) years from the date of
Closing.   “Preferred Partner Status” shall have the meaning referred to in the
Strategic Alliance Agreement attached hereto as Exhibit B.
 

ARTICLE VI
 
GENERAL
 
6.1 Indemnities.
 
6.1.1 Seller shall indemnify, defend and hold Purchaser, each of the officers,
agents and directors and current shareholders of Purchaser as of the Closing
Date, harmless against and in respect of any and all claims, demands, losses,
costs, expenses, obligations, liabilities, damages, recoveries and deficiencies,
including, without limitation, reasonable attorneys' fees (collectively,
“Losses”), that it shall incur or suffer, which directly or indirectly arise out
of, result from, or relate to any breach, or failure to perform, any of Seller's
representations, warranties, covenants, or agreements in this Agreement or in
any schedule, certificate, exhibit, or other instrument furnished or to be
furnished by Seller under this Agreement.  
 
 
 
-5-

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

 
 
The indemnification described herein shall also apply in the event of an
assertion against Purchaser, or the Purchased Assets, by any person, entity,
government or subdivision thereof, of any claim, demand, penalty, fine, or tax
accruing prior to the Closing. The indemnification provided for in this
paragraph shall survive the Closing and consummation of the transactions
contemplated hereby and termination of this Agreement.  The indemnified Losses
described herein shall not exceed the amount paid by Purchaser to Seller for the
Purchased Assets.
 
6.1.2 Upon Notice to Seller specifying in reasonable detail the basis
therefor.  Purchaser may set off any amount to which it may be entitled under
this Article V against amounts otherwise payable under this Agreement.  Neither
the exercise nor the failure to exercise such right of setoff shall limit
Purchaser in any manner in the enforcement of any other remedies that may be
available to it.
 
6.2 Confidentiality.  Each party hereto agrees with the other party that, unless
and until the transactions contemplated by this Agreement have been consummated,
they and their representatives will hold in strict confidence all data and
information obtained with respect to another party or any subsidiary thereof
from any representative, officer, director or employee, or from any books or
records or from personal inspection, of such other party, and shall not use such
data or information or disclose the same to others, except:  (i)  to the extent
such data is a matter of public knowledge or is required by law to be published;
and (ii)  to the extent that such data or information must be used or disclosed
in order to consummate the transactions contemplated by this Agreement.
 
6.3 Transition.  For a period of three (3) months following Closing, Seller
shall cooperate and shall use best efforts to assist Purchaser in the smooth
transition of the ownership of the Purchased Assets and in the preservation for
Purchaser of the goodwill of Seller’s advertisers, customers, suppliers, and
others having business relations with Sellers and related to the Purchased
Assets including the use of their web site and back office e-commerce systems
until such time that the clients are stable and DSC’s hardware and software are
in place and ready to perform the transition.   Further, Novastor will train DSC
employees in Level 1 and 2 support in accordance with the Transition Services
Agreement attached as Exhibit A and the Strategic Marketing Alliance Agreement
attached as Exhibit B.  Novastor makes no representation or warranty with
respect to the continued volume of business generated by the Purchased Assets or
the number of licenses included in the Preferred Assets that will remain in
effect after the Closing.
 
6.4 Effect of Heading.  The subject headings of the paragraphs and subparagraphs
of this Agreement are included for purposes of convenience only and shall not
affect the construction or interpretation of any of its provisions.
 
 
 
-6-

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

 
 
 
6.5 Counterparts.  This Agreement may be executed simultaneously in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
 
6.6 Schedules.  All schedules referred to herein shall be deemed incorporated by
reference in their entirety as though fully set forth at the places to which
they are referred.  Unless otherwise stated, all references to schedules are
references to schedules to this Agreement.
 
6.7 Gender.  Wherever appropriate in this Agreement, plural shall be deemed also
to refer to the singular, the neuter shall be deemed to refer to the masculine,
and vice versa.
 
6.8 Parties in Interest.  Nothing in this Agreement whether express or implied,
is intended to confer any rights or remedies under or by reason of this
Agreement on any persons other than the parties to it and their respective
successors and assigns, nor is anything in this Agreement intended to relieve or
discharge the obligation or liability of any third persons to any party to this
Agreement, nor shall any provision give any third person any right of
subrogation or Seller over or against any party to this Agreement.
 
6.9 Assignment.  This Agreement shall be binding on, and shall inure to the
benefit of, the parties to it and their respective heirs, legal representatives,
successors and assigns; provided, however, no party may assign any or all of its
rights under this Agreement without the prior written consent of the others.
 
6.10 Survival. All representations, warrants and covenants contained in this
Agreement shall survive the Closing and remain in full force and effect until
the third anniversary of the Closing Date.
 
6.11 Preparation of Agreement.  Each party acknowledges that:  (i) the party had
the advice of, or sufficient opportunity to obtain the advice of, legal counsel
separate and independent of legal counsel for any other party hereto; (ii) the
terms of the transactions contemplated by this Agreement are fair and reasonable
to such party; and (iii) such party has voluntarily entered into the
transactions contemplated by this Agreement without duress or coercion.  Each
party further acknowledges that such party was not represented by the legal
counsel of any other party hereto in connection with the transactions
contemplated by this Agreement, nor was he or it under any belief or
understanding that such legal counsel was representing his or its
interests.  Each party agrees that no conflict, omission or ambiguity in this
Agreement, or the interpretation thereof, shall be presumed, implied or
otherwise construed against any other party to this Agreement on the basis that
such party was responsible for drafting this Agreement.
 
6.12 Governing Law; Waiver of Jury Trial.  All questions concerning the
construction, interpretation and validity of this Agreement shall be governed by
and construed and enforced in accordance with the domestic laws of the State of
New York without giving effect to any choice or conflict of law provision or
rule (whether in the State of New York or any other jurisdiction) that would
cause the application of the laws of any jurisdiction other than the State of
New York.  In furtherance of the foregoing, the internal law of the State of New
York will control the interpretation and construction of this Agreement, even if
under such jurisdiction's choice of law or conflict of law analysis, the
substantive law of some other jurisdiction would ordinarily or necessarily
apply.
 
 
 
-7-

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

 
 
BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS ARE
MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND
THE PARTIES WISH APPLICABLE LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE
PARTIES DESIRE THAT THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH
APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF
THE JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO
TRIAL BY JURY IN ANY SELLER, SUIT OR PROCEEDING BROUGHT TO ENFORCE OR DEFEND ANY
RIGHTS OR REMEDIES UNDER THIS AGREEMENT OR ANY DOCUMENTS RELATED HERETO.
 
6.13 Submission to Jurisdiction.  Any legal action or proceeding with respect to
this Agreement must be brought in the courts of the State of New York or the
appropriate federal court located in New York and, by execution and delivery of
this Agreement, the parties hereby accept for themselves and in respect to their
property, generally and unconditionally, the jurisdiction of the aforesaid
courts.  The parties hereby irrevocably waive, in connection with any such
Seller or proceeding, any objection, including, without limitation, any
objection to the venue or based on the grounds of forum non-convenience, which
it may now or hereafter have to the bringing of any such Seller or proceeding in
such respective jurisdictions.
 
6.14 Severability.  It is the desire and intent of the parties that the
provisions of this Agreement be enforced to the fullest extent permissible under
the law and public policies applied in each jurisdiction in which enforcement is
sought.  Accordingly, in the event that any provision of this Agreement would be
held in any jurisdiction to be invalid, prohibited or unenforceable for any
reason, such provision, as to such jurisdiction, shall be ineffective, without
invalidating the remaining provisions of this Agreement or affecting the
validity or enforceability of such provision in any
jurisdiction.  Notwithstanding the foregoing, if such provision could be more
narrowly drawn so as not to be invalid, prohibited or unenforceable in such
jurisdiction, it shall, as to such jurisdiction, be so narrowly drawn, without
invalidating the remaining provisions of this Agreement or affecting the
validity or enforceability of such provision in any other jurisdiction.
 
6.15 Marketing Support.  In consideration of the purchase price paid Novastor
will use best efforts to supply DSC with all client leads derived from
Cnet.com/download.com related to the online backup service only.   Further
Novastor will permit DSC to use any and all content of their current web site
referring to the online backup service, not including source code, as well as
utilize the current active web site and back office ecommerce systems for the
purposes of the online backup service only, as described in the Transition
Services Agreement with the exception that DSC must during the transition period
move to their own Merchant Banking Account for process and clearing.  Novastor
will also submit to DSC all accounts over the past twelve (12) months listed as
bad debt (credit card issues, et.al)
 
 
-8-

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

 
 
 
 
6.16 Expenses.  Each of Seller and Purchaser will bear its own costs and
expenses (including, without limitation, fees and expenses of attorneys,
accountants, investment bankers and other advisors) incurred in connection with
this Agreement and the transactions contemplated hereby.
 
6.17 Notices.  Any notices or other communications required or permitted
hereunder shall be sufficiently given if personally delivered to it or sent by
registered mail or certified mail, postage prepaid, or by facsimile addressed as
follows:
 
If to Seller:
 
Novastor Corporation
Attn: Mike Andrews
80B West Cochran St.
Simi Valley, CA 93065
 
If to Purchaser:
 
Data Storage Corporation
Attn: Charles M. Piluso
875 Merrick Avenue
Westbury, NY 11590
Tel: (212) 564-4922
Fax: (212) 202-7966
 
with a copy to (which shall not constitute notice):
 
Anslow & Jaclin, LLP
Attn: Richard I. Anslow, Esq.
195 Route 9 South, Suite 204
Manalapan, New Jersey 07726
Tel: (732) 409-1212
Fax: (732) 577-1188
 
or such other addresses as shall be furnished in writing by any party in the
manner for giving notices hereunder, and any such notice or communication shall
be deemed to have been given as of  the date so delivered, mailed or faxed.
 
6.18 Entire Agreement; Modification; Waiver.  This Agreement and the exhibits
attached hereto constitute the entire agreement between the parties pertaining
to the subject matter contained in it and supersedes all prior and
contemporaneous agreements, representations and understandings of the
parties.  No supplement, modification, or amendment of this Agreement shall be
binding unless executed in writing by all parties.  No waiver of any of the
provisions of this Agreement shall be deemed, or shall constitute, a waiver of
any other provision, whether or not similar, nor shall any waiver constitute a
continuing waiver.  No waiver shall be binding unless executed in writing by the
party making the waiver.
 
 
 
[Signature page follows]
 
 
 
-9-

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

 
 

 
 
IN WITNESS WHEREOF the parties have duly executed this Asset Purchase Agreement
as of the date first written above.
 
 
“Seller”
 
NOVASTOR CORPORATION
 
 
By:                                                            
                                             
Name:
Title:
   
 
“Purchaser”
 
DATA STORAGE CORPORATION
 
 
By:                                                              
                                               
Name:  Charles M. Piluso
Title:    President, Chief Executive Officer

 
-10-

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

 

 

SCHEDULE 1.1
 
PURCHASED ASSETS
 
All existing end user customers and associated licenses of Novastor’s online
backup service licenses as of October 31, 2008 (the “Existing Clients”)
 
An additional 500 client licenses to ramp up new business opportunities.
 

 
NB: Novastor will provide an allowance for 25% additional licenses compared to
the number of licenses handed over at the time of Close.  Additional license
should only be made available until the date of last payment and any lost
licenses from the original purchase, should be re-used before any of the 25% are
allocated.
 
If purchase clients attempt to cancel services and require a price reduction or
additional storage, Novastor and DSC will use their best efforts to resolve and
hold the client on the service.  This impact of holding the client may cause a
reduction in annual contract renewals and overages monthly billing.
 
 
 
 

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

 
 
 
SCHEDULE 1.2
 
ASSUMED LIABILITIES

 
Obligations to perform under the licenses included in the Purchased Assets.
 
 
 
 
 

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

 
 
 
 
EXHIBIT A
 
TRANSITION SERVICES AGREEMENT

 
To be agreed upon by the Purchaser and Seller within a reasonable time after the
Closing.

 

 
 

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

 

EXHIBIT B
 
 STRATEGIC ALLIANCE AGREEMENT
 
To be agreed upon by the Purchaser and Seller within a reasonable time after the
Closing.