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Exhibit 10.1

June 15, 2017
Mr. Todd Oseth
1915 Cantwell Grove
Colorado Springs, CO 80906
Dear Todd:
The FalconStor Software (the “Company”) management team and Board of Directors
are excited to work with you to build a great company. We believe that you will
be an outstanding leader for FalconStor and, thereafter, a key relationship not
only for the Company but also for its major stakeholders including Hale Capital
Partners and the Company’s board members. It is with pleasure that I confirm
FalconStor’s offer of employment to you for the position of Chief Executive
Officer. The principal terms of the Company’s offer are outlined in this letter.
Based in the Company’s office in Melville, NY, your employment with the Company
will commence on the day you report for work, currently targeted as July 1, 2017
(the “Hire Date”), and shall be subject to and contingent upon obtaining
satisfactory results from a background check. We are pleased to enter into this
letter agreement (this “Agreement”) with you regarding the terms and conditions
of your employment.
1.Position and Responsibilities. While you are employed by the Company, you
shall serve as Chief Executive Officer for the Company. In that capacity, you
will shall report to the Board of Directors of the Company (your “Manager”), and
perform such duties as the Manager may direct from time to time. You shall be
obligated to work full time for the Company and to devote your full time,
attention, energy, knowledge and skills to carrying out your duties and
responsibilities. You agree to perform the duties required by this Agreement
faithfully, diligently and to the best of your ability in a manner that is in
the best interests of the Company and its members and with such care as an
ordinary prudent person in a like position would use under similar
circumstances. You also agree that you will not use any confidential information
or trade secrets of any third party in violation of any agreement or the rights
of such third party in the performance of your duties required by this
Agreement, and that you will not knowingly violate any United States federal,
provincial, state or local laws or regulations applicable to you, the Company,
its products, services or operations including, without limitation, the
provisions of the United States Foreign Corrupt Practices Act or the regulations
promulgated thereunder in the performance of such duties. You acknowledge that
the Company’s Common Stock is registered under Section 12(b) of the Securities
Exchange Act of 1934, as amended (the “Act”) and accordingly the Company is
required to make public filings under Section 13 of the Act. In connection with
such filings, you will be deemed the principal executive officer of the Company
and You are aware of your obligations under the securities laws with respect to
being designated the principal executive officer. A trade secret shall have the
meaning provided by law, and is generally intended to mean information,
including a formula, pattern, compilation, program, device, method, technique or
process, that (a) derives independent economic value, actual or potential, from
not being generally known to, and not being readily ascertainable by proper
means

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by, other persons who can obtain economic value from its disclosure or use; and
(b) is the subject of efforts that are reasonable under the circumstances to
maintain its secrecy. You will be subject to and must comply fully with all
Company policies and procedures that may be adopted that are applicable to
employees, as may be established or amended from time to time.
2.    Compensation.
(a)    While you are employed by the Company, your base salary (the “Base
Salary”) on an annualized basis shall initially be $US350,000. Your Base Salary
shall be payable in regular installments in accordance with the Company’s
general payroll practices and shall be subject to taxes and withholding
deductions as are required by applicable law and as may be made in connection
with the Company’s benefit plans and programs. The Base Salary for any payment
period in which your employment commences or terminates will be prorated on a
daily basis, and you will be entitled to receive the prorated amount of the Base
Salary for the actual number of days in the applicable payment period that you
were employed with the Company.
(b)    You shall be eligible to earn incentive compensation of an annual bonus
of up to US$227,500 based upon the achievement of goals as determined by the
Manager, in consultation with you, and as described in a separate Incentive
Compensation Agreement that shall be consistent with an incentive plan for the
senior management of the team. It is intended that cash bonuses shall be paid
quarterly at 12.5% of the target amount for the results obtained in each of the
first three quarters of a fiscal year with the balance, equivalent to 62.5% of
the target amount, paid upon full year achievement. Positive EBITDA shall be
required for achievement of incentive compensation. We anticipate each senior
executive shall have a small number of quarterly goals such as maintenance
renewal rate measured by ACV achieved vs. ATR and New Named Account billings as
well as a small number of mutually agreed upon individual outputs.
(c)    You will be eligible for paid time off (“PTO”) of 15 days per calendar
year, in accordance with the policies of the Company, commencing on your start
date. Additionally you will be entitled to such Federal holidays observed by the
Company each year, which are established based upon the NYSE Holiday Schedule.
We encourage employees to use their accrued PTO. All PTO must be used during the
calendar year in which it accrues. No PTO may be carried over into the following
calendar year unless otherwise required by state law.
(d)    You and any eligible family members will be entitled to participate in
the Company’s group employee benefit programs (such as group medical, dental and
vision insurance), on the same basis as other employees, in accordance with the
terms of those programs, as they may be amended from time to time.
(e)    Upon your acceptance of this Offer, the Company intends to form a new
equity incentive plan. While the terms of the equity incentive plan will be
decided by the Manager and voted upon by shareholders, we believe the following
key components will align the interests of management with shareholders: The
initial grant (15% of equity) will be based upon the dilution adjusted post
money valuation to the extent that the Company undertakes a recapitalization,
meaning that you will only participate to the extent the net proceeds of a
Company sale are in excess of the post money valuation of any recapitalization
including the dilution from the option pool; two

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additional tranches (at 2.5% each) would have strike prices at 25% step ups in
valuation; the plan would vest only upon a sale of a majority of the Company’s
assets or capital stock (other than to HCP); and 30% of the equity plan would be
set aside for new hires. All equity-based incentive compensation pools shall be
subject to change at the sole discretion of the Manager.
3.    Reimbursement of Expenses. The Company shall reimburse you for all
reasonable, ordinary and necessary expenses you incur in connection with the
performance of your duties on behalf of the Company, provided that all requests
for expense reimbursement must be submitted on forms and documented in
accordance with and subject to the reimbursement policies and procedures of the
Company. It is understood that the Company will pay for mutually agreed upon
apartment and travel expenses with this view that you will generally be on site
from Monday through Friday when not visiting customers.
4.    Termination of Employment. At the Company, your employment is at will.
This means that either you or the Company may terminate your employment at any
time, for any reason or no reason, with or without notice, and with or without
cause, without further obligation or liability. Without modifying the foregoing,
the Company appreciates your consideration of its business needs and convenience
if you choose to end your employment, and requests that you consult with the
Manager to determine a period of reasonable notice (e.g., at least two weeks)
that would allow for an orderly transition of your duties. The Company reserves
the right to change your job duties and other terms and conditions of
employment, with or without notice, as it deems appropriate. No amendment or
exception to the Company’s at-will employment policy can be made at any time,
for any reason, unless it is in writing, directed to you personally, signed by
the Chairman of the Compensation Committee. Nothing in this letter creates or
constitutes, or should be construed to create or constitute, a contract of
employment for a set term between you and the Company. This letter supersedes
any prior representations or agreements, whether written or oral, regarding
employment with the Company. Your covenants under this Section 4 and Sections 5,
6, 7, 8, 11 and 12 shall survive any termination of your employment with the
Company regardless of the circumstances of the termination. Immediately upon the
termination of your employment with the Company, or at such earlier time as
requested by the Company, you shall (i) return or cause to be returned to the
Company (and will not keep in your possession or deliver or cause to be
delivered to any other person) (A) all documents, property, information,
software, materials, files, mailing lists, database information and other
records of or relating to the Company or its affiliates or portfolio companies
or that were compiled, acquired or generated by you, or which you had access to,
or possession, care, custody or control of, during your employment with the
Company (and all copies thereof) and (B) all keys, credit cards, identification
cards, personal computers and other property of the Company, in each case within
your possession, custody or control, copies of any Confidential Information (as
defined below) in your possession or otherwise subject to your control, and (ii)
execute and deliver to the Company a certificate, in form and substance
satisfactory to the Company, to the effect that you have complied with your
obligations under this paragraph. Notwithstanding the forgoing, if you are let
go by the Company for any reason other than cause or your decision to terminate
your employment, and upon signing a separation agreement, the Company will pay
severance equal to your base salary based on the following:
•
Under 12 months:  6 months

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•
12+ months:  12 months

In addition, if within six months of this Agreement, the Company (i) consummates
a Change of Control (as hereinafter defined) involving any counter-party other
than HCP-FVA, LLC or entities affiliated with HCP-FVA, LLC and such Change of
Control occurs prior to the adoption of the equity incentive plan referred to in
Section 2(e) , (ii) the total proceeds received by the Company or its
stockholders in the Change of Control ( regardless of whether such Change of
Control occurred before or after any recapitalization) exceeds $19,000,000 and
(iii) the Company or its successor terminates your employment, other than for
Cause, within six months of the date of this Agreement, then you shall be
entitled to 12 months of severance.
For purposes of this Agreement, Change of Control is defined as (i) the
consummation of a reorganization, merger, statutory share exchange or
consolidation or similar corporate transaction involving the Company or any of
its subsidiaries, other than a corporate transaction which would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) at least fifty percent (50%) of
the total voting power represented by the voting securities of the Company or
such surviving entity outstanding immediately after such corporate transaction
or (ii) the sale or other disposition of all or substantially all of the assets
of the Company to any person, other than a transfer to any corporation or other
person of which a majority of its voting power or its voting equity securities
or equity interest is owned, directly or indirectly, by the Company.
For purposes of this Agreement, your employment with the Company will be deemed
to have been involuntarily terminated for Cause if your services are terminated
by the Company for one or more of the following reasons: (i) willful and
repeated failure to perform duties or contravention in any material respect of
specific written lawful directions related to a material duty or responsibility
which is directed to be undertaken by the Manager; (ii) conviction of guilty or
nolo contendere plea to, a misdemeanor which is materially and demonstrably
injurious to the Company or any felony; (iii) commission of an act, or a failure
to act, that constitutes fraud, gross negligence or willful misconduct
(including without limitation, embezzlement, misappropriation or breach of
fiduciary duty resulting or intending to result in personal gain at the expense
of the Company); and (iv) violation of any applicable laws, rules or regulations
or failure to comply with the ongoing confidentiality, non-solicitation and
non-competition obligations to the Company, corporate code of business conduct
or other material policies of the Company in connection with or during
performance of your duties to the Company that could, in the Manager’s opinion,
cause material injury to the Company, which violation, if curable, is not cured
within thirty (30) days after notice thereof to you.
Payment will be due in a lump sum upon termination or in regular pay periods
over the prescribed period at the discretion of the Company. The Company will
cover COBRA expenses during the same time period.

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5.    Confidentiality.
(a)    During the course of your employment with the Company, you acknowledge
that you will learn about, acquire, have access to, be provided with, and/or
have possession, custody or control of Confidential Information (as defined
below) regarding the business, operations, activities, products, services,
clients, customers, accounts, and finances of the Company and its affiliates and
portfolio companies, as well as third parties with whom the Company may do
business or contemplate transactions from time to time. Accordingly, you agree
to maintain and ensure the strictest confidentiality of all Confidential
Information, and that, without the prior written consent of the Company, you
will not, directly or indirectly, at any time whether during or after your
employment with the Company:
(i)
except in the performance of services for the Company or one of its affiliates
or portfolio companies, reproduce, distribute, transmit, reverse engineer,
decompile, disassemble, or transfer, directly or indirectly, in any form, or for
any purpose, any Confidential Information;

(ii)
disclose, divulge or reveal any Confidential Information to anyone other than an
officer, director, employee, or authorized representative of the Company who has
a need to know such Confidential Information; or

(iii)
use any Confidential Information for any purpose other than for the sole benefit
of the Company or its affiliates or portfolio companies’ in the proper conduct
of the Company’s or such affiliates’ or portfolio companies’ business,

provided, however, that this restriction shall not apply to (i) any Confidential
Information that is or becomes generally known to the public through no fault on
your part, and (ii) any Confidential Information that you are required to
disclose pursuant to an enforceable order of a court of competent jurisdiction
or another government agency having appropriate authority.
(b)    If you are ordered by a court or other government agency to disclose any
Confidential Information, you shall (i) promptly notify the Company of such
order, including providing the Company with a copy of any order, (ii) upon the
request of the Company, diligently contest such order, (iii) upon the request of
the Company, seek to obtain such confidential treatment as may be available
under applicable laws for any information disclosed under such order, and the
Company shall reimburse you for the reasonable legal costs you incur in
connection with (ii) and (iii) within the time frame of your obligation to pay
such costs, and (iv) in any event only disclose the exact Confidential
Information, or portion thereof, specifically requested by the order.
(c)    For the purposes of this Agreement, “Confidential Information” means
trade secrets and other confidential or proprietary information and property
pertaining to the business and affairs of the Company and/or the Company’s
affiliates, and the respective clients, customers, licensees, licensors,
distributors, contractors, suppliers and developer of, for or to any of them,
including, without limitation, data, databases, works in progress or not in fact
published, know-how, concepts and ideas, methods, techniques and technical
information, research and development, records, forecasts, data, files or other
information of the Company relating to products, services,

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operations, processes, procedures, designs, drawings, formula, test data,
software, firmware and computer programs (including source code and
documentation) and elements of design (including, for example, programming data
bases), customer lists, prospect lists and other information, business plans, or
any other confidential information of, about, or concerning the Company’s
business. Confidential Information shall also include marketing and promotional
plans, opportunities and strategies, cost and pricing information and strategies
and/or other subject matter pertaining to any business of the Company or any of
its clients, customers, consultants, licensees or affiliates, which you may
produce, obtain or otherwise acquire during the course of your employment. You
further agree not to deliver, reproduce or in any way allow any such
Confidential Information, or any documentation relating thereto, to be delivered
or used by any third parties without specific direction or consent of a duly
authorized representative of the Company.
(d)    The obligations of this Section 5 shall continue in perpetuity.
(e)    Notwithstanding the foregoing, in the event that the Company or one of
its affiliates should become party to a confidentiality or similar agreement
with respect to the confidential information of a third party, and you are
exposed to, have possession of or otherwise know any of such third party
confidential information, you shall comply with the terms and provisions of such
confidentiality agreement to the extent that they are more stringent than the
terms of this Agreement.
(f)    From time to time, you may also be required to sign separate
confidentiality agreements with the Company.
(g)    The terms of this Agreement are confidential and must not be discussed by
you with any person or entity other than the Company’s signatory to this
Agreement, or in confidence with your spouse or personal financial or legal
advisors.
6.    Non-Solicitation and Non-Competition. In consideration of the grant of the
Units from the equity incentive plan when completed:
(a)    Grantee covenants and agrees that, for the period commencing upon the
date hereof and ending 18 months after Employment Termination (the “Restrictive
Period”), Grantee shall not, and shall not influence any other person or entity
to in any manner, directly or indirectly, (i) solicit, call on, entice, induce
or contact, or attempt to solicit, call on, entice, induce or contact, any
Person or business that is a customer or business partner of the Company or its
Affiliates to terminate or otherwise restrict, limit, reduce or alter its
relationship with the Company or its Affiliates or to become a customer of any
other Person or business for the purpose of obtaining competitive products, (ii)
solicit, call on, entice, induce or contact, or attempt to solicit, call on,
entice, induce or contact, any Person that is a licensee, licensor, distributor
or supplier of or developer for the Company or its Affiliates to terminate its
relationship with the Company or its Affiliates with respect thereto or to
become a licensee, licensor, distributor, supplier of or developer for any other
Person or business which designs, develops, produces, licenses, sells or
distributes products or services that are competitive with the products or
services sold, marketed, offered, provided, developed or planned by the Company
(or its Affiliates but solely with respect to such competitive business of such
other Person or business), or (iii) maliciously or willfully interfere or
attempt to interfere with

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or hinder, or use any Confidential Information to interfere or attempt to
interfere with or hinder, the relationship of the Company or its Affiliates with
any Person or business that, during the 12 month period immediately prior to
Employment Termination, was a customer, licensee, licensor, distributor,
supplier or developer or business partner of the Company or its Grantee
covenants and agrees that, during the Restrictive Period, Grantee will not
personally or in association with others, and whether on behalf of or in
conjunction with any Person or business, directly or indirectly, hire or cause
any other Person or business to hire any Person who is, or at any time during
the 3 month period prior to Employment Termination was, an employee, consultant,
agent, or independent contractor of the Company or its Affiliates, or solicit,
aid in the solicitation of, raid, induce, encourage, persuade or recruit, or
attempt to solicit, raid, induce, encourage, persuade or recruit, any Person who
is, or at any time during the 3 month period prior to Employment Termination
was, an employee, consultant, agent, or independent contractor of the Company or
its Affiliates, to terminate or alter such employment, retention or engagement
with the Company or its Affiliates, or to apply for or accept employment,
retention or engagement with any Person or entity other than the Company or its
Affiliates.
(b)    Grantee covenants and agrees that, during Grantee’s employment with the
Company as Chief Executive Officer or its Affiliates, and in the Geographic
Territory for a period of one year following Employment Termination, Grantee
shall not, directly or indirectly, whether individually or in conjunction with
others, as a director, officer, CEO, member, stockholder, partner, owner,
employee, independent contractor, consultant, joint venturer, principal, or
agent of any business, or in any other capacity, other than on behalf of the
Company or its Affiliates, organize, establish, own, operate, manage, control,
engage in, participate in, invest in, permit Grantee’s name to be used by, act
as a consultant or advisor to, render services for (alone or in association with
any Person or business), or otherwise assist any Person or business that engages
in or owns, invests in, operates, manages or controls any venture or enterprise,
which engages in any business conducted by the Company or any of its
subsidiaries on the date of Employment Termination or within 12 months prior to
Employment Termination (the “Business”). Geographic Territory means any state,
province or non-U.S. country in which the Company or its Affiliates conducts
business.
7.    Non-Disparagement. From and after the date hereof, you shall not publish
or communicate, make any statement, comment or remark, whether oral or written,
to any person or entity, about any other employee or former employee of the
Company, the Company, any of the Company’s affiliates or portfolio companies,
including without limitation any member of the Company or any of their
respective affiliates or representatives, or any other investment entity for
which the Company (or any affiliate of the Company) serves as investment CEO or
adviser or acts in a similar capacity which could reasonably be construed to be
derogatory, defamatory or disparaging to such other person or entity in any way
or which could impair the name, reputation and goodwill of such other person or
entity, including without limitation remarks, comments or statements that impugn
the character, honesty, integrity or morality or business acumen or abilities in
connection with any aspect of the operation of business of the individual or
entity being disparaged.
8.    Assignment of Inventions. You acknowledge and agree that all inventions,
innovations, improvements, developments, methods, designs, analyses, drawings,
reports, works of authorship and all similar or related information (whether or
not patentable) that relate to any of

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the actual or anticipated business of the Company, and all research and
development or existing or future products or services that relate to any of the
actual or anticipated business of the Company and are conceived, developed or
made by you (whether alone or jointly with others) while employed by the Company
and all intellectual property rights inherent in or related to the foregoing
(“Work Product”), belong to the Company to the full extent allowable by Section
2870 of the California Labor Code or any like statute of any other state and you
hereby assign and transfer to the Company your entire right, title and interest
that you may have in and to such Work Product. Section 2870 provides as follows:
(a)    Any provision in an employment agreement which provides that an employee
shall assign, or offer to assign, any of his or her rights in an invention to
his or her employer shall not apply to an invention that the employee developed
entirely on his or her own time without using the employer’s equipment,
supplies, facilities, or trade secret information except for those inventions
that either:
(1)    Relate at the time of conception or reduction to practice of the
invention to the employer’s business, or actual or demonstrably anticipated
research or development of the employer.
(2)    Result from any work performed by the employee for his employer.
(b)    To the extent a provision in an employment agreement purports to require
an employee to assign an invention otherwise excluded from being required to be
assigned under subdivision (a), the provision is against the public policy of
this state and is unenforceable.
9.    Assignment or Waiver of Moral Rights. Any assignment of copyright
hereunder (and any ownership of a copyright as a work made for hire) includes
all rights of paternity, integrity, disclosure and withdrawal and any other
rights that may be known as or referred to as “moral rights” (collectively
“Moral Rights”). To the extent such Moral Rights cannot be assigned under
applicable law and to the extent the following is allowed by the laws in the
various countries where Moral Rights exist, you hereby waive such Moral Rights
and consent to any action of the Company that would violate such Moral Rights in
the absence of such consent. You will confirm any such waivers and consents in
writing from time to time as requested by the Company.
10.    Disclosure of Inventions. You promise and agree to promptly disclose to
your immediate supervisor or to such other person designated by Company, such
Work Product, and to perform all actions reasonably requested by the Company
(whether or not during or after your employment with the Company) to establish
and confirm such ownership (including, without limitation, assignments,
consents, powers of attorney and other instruments). The terms and provisions of
this paragraph shall survive the termination of your employment with the
Company. You will also disclose to the Chief Executive Officer or President (or
other person designated by the Company) all inventions and works of authorship
that would be Work Product if made during the period of your employment with the
Company and that are made, discovered, conceived, reduced to practice, or
developed by you within six (6) months after the termination of your employment
with the Company which resulted, in whole or in part, from your prior employment
by the Company. Such disclosures will be received by the Company in confidence
(to the extent such Work Product

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are not assigned to the Company pursuant to this Agreement), and do not extend
the assignment made in this Agreement. You agree that the remuneration you
receive pursuant to this Agreement, includes any bonuses or remuneration which
you may be entitled to under applicable law for any “works made for hire,”
“inventions made for hire” or other Work Product assigned to the Company
pursuant to this Agreement.
11.    Execution of Documents. In connection with section 8, you further agree
to execute, acknowledge and deliver to the Company or its nominee upon request
and at its expense all such documents, including without limitation,
applications for patents and copyrights and assignments of inventions, patents
and copyrights to be issued therefore as the Company may determine necessary or
desirable to apply for and obtain patents and copyrights on such assignable
inventions in any and all countries and/or to protect the interest of the
Company or its nominee in such inventions, patents and copyrights and to vest
title thereto in the Company or its nominee. You hereby irrevocably designate
and appoint the Company and its duly authorized officers and agents, as your
agents and attorney- in-fact to act for and on your behalf and instead of you,
to execute and file any documents, applications or related findings and to do
all other lawfully permitted acts to further the purposes set forth above in
this Section 11, including, without limitation, the perfection of assignment and
the prosecution and issuance of patents, patent applications, copyright
applications and registrations, trademark applications and registrations or
other rights in connection with such Work Product and improvements thereto with
the same legal force and effect as if executed by you.
12.    Maintenance of Records. You agree to keep and maintain adequate and
current written records of all inventions made by you (in the form of notes,
sketches, drawings and as may be specified by the Company), which records shall
be available to and remain the sole property of the Company at all times. All
Company Documents and Materials are and will be the sole property of the
Company. “Company Documents and Materials” include, but are not limited to,
blueprints, drawings, photographs, charts, graphs, notebooks, customer lists,
computer disks, tapes or printouts, sound recordings and other electronic,
printed, typewritten or handwritten documents, sample products, prototypes and
models. You agree that during your employment by the Company, you will not
remove any Company Documents and Materials from the business premises of the
Company or deliver any Company Documents and Materials to any person or entity
outside the Company, except as you are required to do in connection with
performing the duties of your employment. You further agree that, immediately
upon the termination of your employment by you or by the Company for any reason,
or during your employment if so requested by the Company, you will return all
Company Documents and Materials, apparatus, equipment and other physical
property, or any reproduction of such property, excepting only (i) your personal
copies of records evidencing your hire, compensation and benefits as an employee
of the Company; (ii) your personal copies of any materials generally distributed
to stockholders of the Company that you received in your capacity as a
stockholder of the Company; and (iii) your copy of this Agreement.
13.    Prior Inventions. It is understood and agreed that all inventions, if
any, patented or unpatented, which you make prior to your employment by the
Company, are excluded from the scope of this Agreement. To preclude any possible
uncertainty, you shall set forth on Exhibit 1, attached hereto, a complete list
of all of your prior inventions, including numbers of all patents and patent
applications, a brief description of all unpatented inventions which are not the
property of a

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previous employer. You represent and covenant that the list is complete and that
if no items are on the list, you have no such prior inventions. You agree to
notify the Company in writing before you make any disclosure or perform any work
on behalf of the Company which appears to threaten or conflict with proprietary
rights you claim in any invention or idea. In the event or your failure to give
such notice, you agree that you will make no claim against the Company with
respect to any such inventions or ideas. If in the course of your employment
with the Company, you incorporate into a Company product, process, machine or
other deliverable a prior invention owned, controlled or licensable by you or in
which you have an interest, the Company is hereby granted and will have a
nonexclusive, royalty-free, fully paid up, irrevocable, perpetual,
sublicensable, transferable, worldwide license under all intellectual property
rights in and to such prior invention to make, have made, modify, use, market,
sell, offer to sell, import, distribute, make derivative works of, and otherwise
exploit any product or offer any service.
14.    Other Obligations. You acknowledge that the Company from time to time may
have agreements with other persons, which impose obligations or restrictions on
the Company regarding inventions made during the course or work thereunder or
regarding the confidential nature of such work. You agree to be bound by all
such obligations and restrictions and to take all action necessary to discharge
the obligations of the Company thereunder.
15.    Trade Secrets of Others. You represent that your performance of all the
terms of this Agreement, and as an employee of the Company, does not and will
not breach any agreement to keep in confidence proprietary information,
knowledge or data acquired by you in confidence or in trust prior to your
employment with the Company, and you will not disclose to the Company, or induce
the Company to use, any confidential or proprietary information or material
belonging to any previous employer or others, and you agree not to enter into
any agreement either written or oral in conflict herewith.
16.    Representation. You represent that your execution, delivery, performance
and observance of this Agreement and your employment with the Company as
contemplated hereby do not and will not conflict with, result in any breach of
the terms of, or constitute a default under any other agreement to which you are
a party or by which you are bound, or any policy or rules to which you are
subject, including but not limited to any agreement with, or policies or rules
of, your current, or any prior, employer. You represent that you are not subject
to any duties as an officer, director, employee or partner or other fiduciary of
any current or prior employer or other entity or person that will or could cause
you to breach the terms of Section 1 of this Agreement. You represent that on
your first day of work you will be free to accept employment hereunder without
any contractual restrictions, express or implied, with respect to any of your
current or prior employers.
17.    Successors and Assigns. This Agreement will bind upon, inure to the
benefit of, and be enforceable by you and the Company and the Company’s
successors and permitted assigns. Your personal services are of the essence of
this Agreement, and you may not assign or delegate any of your rights or duties
under this Agreement to any other party without the prior consent of the
Company, and any attempted assignment or delegation by you without such consent
shall be void and of no effect.

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18.    Governing Law; Jurisdiction. This Agreement will be construed in
accordance with the laws of the State of New York without regard to any choice
of law principles that would require or permit the application of the laws of
any other jurisdiction, and, subject to Section 18, exclusive jurisdiction will
be in a court of competent subject matter jurisdiction in New York, New York.
Each party hereby irrevocably consents to the personal jurisdiction of any such
court for purposes of any proceeding relating to this Agreement and waives any
objection to the convenience of any such court.
19.    Arbitration.
(a)    You and the Company shall attempt in good faith to resolve any
disagreement, dispute, controversy or claim arising out of or relating to this
Agreement, your employment by the Company or the termination thereof (a
“Dispute”) promptly by negotiations between you and the Company. Each party
hereto agrees that all Disputes that cannot be resolved in a timely manner shall
be resolved by binding arbitration in New York, NY, before the American
Arbitration Association (“AAA”), in accordance with rules of the AAA then in
effect.
(b)    Any party to this Agreement may give any other party a written notice of
any Dispute not resolved in a timely manner (a “Dispute Notice”), specifying the
nature of the asserted Dispute and requesting a meeting to resolve the same. If
no resolution of the Dispute is reached within ten (10) days after the delivery
of the Dispute Notice, the party that delivered the Dispute Notice (the
“Disputing Party”) may, within twenty (20) days after the delivery of the
Dispute Notice, commence arbitration hereunder by delivering to each other party
involved in the Dispute (the “Respondent”) a notice of arbitration (a “Notice of
Arbitration”). The parties will cooperate with each other in causing the
arbitration to be held in as efficient and expeditious a manner as practicable.
(c)    The arbitrator shall be selected by the mutual agreement of the parties,
if possible. If the parties fail to reach agreement on the appointment of the
arbitrator within thirty (30) days following receipt by the Respondent of the
Notice of Arbitration, the AAA shall appoint the arbitrator for the Dispute.
(d)    It is the intention of the parties hereto that discovery, if any, shall
be limited in nature and scope, shall be conducted expeditiously, shall have as
its sole purpose the obtaining of information that is directly relevant and
necessary to the presentation of the requesting party’s case, shall be conducted
in a fair, cooperative and courteous manner, and shall be accomplished primarily
if not exclusively by the voluntary exchange of documents and information.
Unless the parties otherwise mutually agree in writing, (i) all discovery will
be completed within sixty (60) days following the selection of the arbitrator,
and (ii) no depositions will be taken.
(e)    Any submission of a matter to arbitration shall include joint written
instructions of the parties requiring the arbitrator to render a decision
resolving the Dispute within thirty (30) days following the submission thereof.
(f)    Each party hereto agrees that the arbitrator’s decision will be final and
binding on both parties on all claims which were raised or which could have been
raised and agrees to waive

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its rights to seek any remedies in court, including its right to a jury trial.
Notwithstanding the foregoing, any proceeding for equitable relief in respect of
an actual, alleged, or threatened breach of Section 4, 5, 6, 7 or 8 hereof, and
any action to enforce any arbitration order, may be commenced and conducted in
any court of competent jurisdiction.
20.    Entire Agreement. This Agreement contains the entire understanding
between you and the Company with respect to your employment by the Company and
may be modified only in a document signed by you and the Company and referring
explicitly to this Agreement. You represent that you have (1) read this
Agreement in full; and (2) been herein advised to retain your own counsel to
answer your questions associated with this Agreement. In executing this
Agreement, you represent that you have not relied on any representation or
statement not set forth herein, and you expressly disavow any such
representations or statements.
21.    Severability. The invalidity or unenforceability of any term or provision
hereof in any circumstances shall not affect the validity or enforceability of
any other term or provision hereof or of such term or provision in other
circumstances. In the event any provision of this Agreement is found for any
reason to be invalid or unenforceable, any court of competent jurisdiction is
hereby authorized to reform this Agreement by replacing such invalid or
unenforceable provision with a valid and enforceable provision that, to the
fullest extent possible, achieves the purposes of the provision found to be
invalid or unenforceable. Without limiting the generality of the foregoing, if
at any time any provision of Sections 5-9 shall be found to be invalid or
unenforceable by reason of being vague or unreasonable as to duration,
geographic scope, or scope of activities restricted, or for any other reason,
any court of competent jurisdiction is hereby authorized to reform this
Agreement by deleting such invalid or unenforceable provision and/or replacing
such invalid or unenforceable provision with a valid and enforceable provision
that applies to the maximum possible duration, geographic scope, and scope of
activities.
22.    Counterparts. This Agreement may be executed 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.
23.    Remedies. You acknowledge that (a) a breach of one or more of the
covenants set forth herein would be likely to result in immediate irreparable
injury to the Company for which money damages would not be an adequate remedy,
and (b) equitable remedies, including orders for specific performance and ex
parte relief, are appropriate in case of an actual, apparent, or threatened
breach of any such Section. In addition, without limiting the remedies for any
breach of any restriction on you set forth in Sections 5-9, if you breach the
covenants applicable to you contained in Section 5-9, the Incentive Units (or
any contractual rights substituted therefore) shall immediately terminate and
any Shares issued upon the exercise of the Warrants shall be forfeited. The
covenants and restrictions set forth in this letter shall survive termination of
your employment with the Company. If you breach any covenant set forth in this
Agreement, you acknowledge and agree that the duration of any covenant so
violated shall automatically be tolled from the date of the first breach until
the date judicial relief providing effective remedy for such breach or breaches
is obtained by the Company, or until Company states in writing that it will seek
no judicial relief for such breach.

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24.    Personal Development. The Company believes in developing its executives
and will fund your enrollment in 3 PSI Personal Development classes with the
expectation that you will be able to complete these classes prior to year-end.
If you find these classes useful, we welcome working with you to sponsor the
Company’s key executives for the introductory Basic Seminar.
25.    Section 409A. Compensation under this Agreement is intended to be exempt
from or to comply with Section 409A of the Internal Revenue Code of 1986 (and
any interpretive guidance promulgated thereunder), as amended from time to time
(“Section 409A”), including, but not limited to, the exceptions for short-term
deferrals, reimbursements, and in-kind distributions, and shall be administered
accordingly. The Agreement shall be construed and interpreted with such intent.
Any reimbursement or allowance provided to you under this Agreement that would
constitute nonqualified deferred compensation subject to Section 409A shall be
subject to the following additional rules: (i) no allowance or reimbursement of
any expense shall affect your right to allowance or reimbursement in any other
taxable year; (ii) allowance or reimbursement shall be made, if at all,
promptly, but not later than the end of the calendar year following the calendar
year in which the expense was incurred or for which the allowance was provided;
and (iii) the right to allowance or reimbursement shall not be subject to
liquidation or exchange for any other benefit.
Notwithstanding anything herein to the contrary, (i) if at the time of your
termination of employment with the Company, you are a “specified employee” as
defined in Section 409A and the deferral of the commencement of any payments or
benefits otherwise payable hereunder as a result of such termination of
employment is necessary in order to prevent any accelerated or additional tax
under Section 409A, then the Company will defer the commencement of the payment
of any such payments or benefits hereunder (without any reduction in such
payments or benefits ultimately paid or provided to you until the date that is
six months following your termination of employment with the Company (or the
earliest date as is permitted under Section 409A) and (ii) if any other payments
of money or other benefits due to you hereunder could cause the application of
an accelerated or additional tax under Section 409A, such payments or benefits
shall be deferred if deferral will make such payments or other benefits
compliant under Section 409A, or otherwise such payment or other benefits shall
be restructured, to the extent possible, in a manner, determined by the Company,
that does not cause such an accelerated or additional tax.
The Company makes no representation or warranty and shall have no liability to
you or any other person if any provisions of the Agreement are determined to
constitute deferred compensation subject to Section 409A but do not satisfy an
exemption from, or the conditions of, such Section.
[signature page follows]

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Please note this offer is contingent upon your providing proof to the Company
(as required by Federal law) of your legal right to work in the United States
within the first three days of work. Please indicate your acceptance of this
offer of employment on the terms and conditions of employment contained in this
Agreement by signing in the space provided below and returning to us a copy of
this Agreement bearing your signature.
 
Sincerely,
 
 
 
FalconStor Software
 
 
 
 
 
By:
/s/ Martin Hale Jr.
 
 
Martin Hale Jr., Member of the Board of Directors & Chairman of Compensation
Committee

Accepted and Agreed:
 
 
/s/ Todd Oseth
Todd Oseth
 
Date:
June 15, 2017

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Exhibit 1
TERMINATION CERTIFICATION
This is to certify that I do not have in my possession, have under my control,
or have access to, nor have I failed to return, any originals or any copies of
any records, documents, data specifications, drawings, blueprints,
reproductions, sketches, notes, filed, reports, proposals, including any
evidence of any software, computer programs and elements of design (including
for example, programming techniques, algorithms, inference structures and
knowledge or data bases) or other documents, materials, equipment or other
property belonging to the Company (as that term is defined in that certain
employment letter agreement between FalconStor Software and me (the
“Agreement”).
I further certify that I have complied with and will continue to comply with all
of the terms of the Agreement, including the reporting of any inventions (as
defined therein) conceived or made by me covered by the Agreement.
I further agree that in compliance with the Agreement, I will preserve as
confidential all trade secrets, Confidential Information (as that term is
defined in the “Agreement”), knowledge, data or other information relating to
products, processes, know-how, designs, formulae, test data, customer lists or
other subject matter pertaining to any business of the Company or any of its
clients, customers, consultants, licensees or affiliates.
 
 
Todd Oseth

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Exhibit 2
LIST OF PRIOR INVENTIONS
IDENTIFYING NUMBER (if any):     
DATE OF INVENTION:     
DESCRIPTION: