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                                                                      Exhibit 14

                            FALCONSTOR SOFTWARE, INC.
                                 CODE OF CONDUCT

I.          Introduction

            1.  A  Statement  of  Principles.   The  conduct  of  each  employee
represents a part of the most important asset of FalconStor  Software,  Inc. - a
reputation for integrity. FalconStor's reputation is nothing more or less than a
reflection of the conduct of its  employees.  It is the  responsibility  of each
employee to preserve that reputation.

            This Code of Conduct (the "Code")  states  FalconStor's  fundamental
principles.  Adherence  to  the  Code's  principles  is  important  to  maintain
FalconStor's  stature  and to  promote  its  success in a  competitive  business
community.  The principles are important to all employees as individuals because
the Code addresses  conduct that could lead to criminal  and/or civil  liability
for the employees involved in the conduct.

            FalconStor  expects all of its  employees to comply with  applicable
laws,  rules and  regulations.  FalconStor  also expects all of its employees to
abide by both the  letter and the  spirit of the  Code's  provisions.  It is the
Company's  intent to exceed the  minimum  requirements  of the law and  industry
practice.  The Code identifies behavior that is never acceptable and will always
be considered to be outside the scope of employment.

            FalconStor views seriously any violation of the Code. The misstep of
a single employee can undermine FalconStor's  reputation and success and reflect
negatively on all other employees. Thus, code violations may lead to significant
sanctions by the Company, including, among others, dismissal.

            2. Scope of the Code. The Code applies to FalconStor Software, Inc.,
to all  subsidiaries  or affiliates in which  FalconStor  directly or indirectly
owns more than 50 percent of the voting control and to all  directors,  officers
and employees of each. All references to "FalconStor"  or the "Company"  include
FalconStor Software,  Inc., and its subsidiaries and affiliates.  All references
to "employees" include directors,  officers, and employees of FalconStor and its
subsidiaries or affiliates.

            3. Compliance  with Code.  Failure to read and/or to acknowledge the
Code does not exempt an employee from his/her  responsibility to comply with the
Code, applicable laws,  regulations,  and all FalconStor policies and guidelines
that are related to his/her job.

            The Code is not  intended  to cover  every  issue  or  situation  an
employee may face as an employee.  Nor does the Code replace other more detailed
policies and guidelines.  Employees  should use the Code as a reference guide in
addition  to  FalconStor's  policies  and  guidelines,  including  the  Employee
Handbook, required for each particular job.

            4. Code  Administration.  If you need details on a specific  policy,
you may contact the Company's General Counsel,  Director of Human Resources,  or
Chief Financial Officer.

            The responsibility for the Code's enforcement extends throughout the
Company.  All  managers  are  accountable  for the Code's  enforcement  in their
departments. Employees should immediately report possible violations of the Code
to the Company's  Director of Human Resources.  Reports may also be made through
the Company's compliance hotlines:

            All United States Employees:  Call toll free, 1-800- 418-6423 x 571

            All Employees Worldwide:      e-mail to CONFIDE2SV@SECURITYVOICE.COM

These hotlines are operated by a third party and are completely anonymous.

            Complaints   submitted  will  be  referred  to  other  personnel  as
determined to be  appropriate  or as required  under the directives of the Audit
Committee.  A copy of any complaint that relates to accounting issues,  internal
accounting controls or auditing matters will be forwarded to the Audit Committee
for review.

            5. Non-Retaliation

            The Company is committed to providing a workplace  conducive to open
discussion of its business  practices.  It is Company  policy to comply with all
applicable  laws that  protect  employees  against  unlawful  discrimination  or
retaliation  by  their  employer  as  a  result  of  their  lawfully   reporting
information  regarding,  or their  participating  in,  investigations  involving
alleged corporate fraud or other alleged violations by the Company or its agents
of federal or state law. Specifically, Company policy prevents any employee from
being subject to disciplinary or retaliatory action by the Company or any of its
employees or agents as a result of the  employee:  disclosing  information  to a
government or law enforcement agency, where the employee has reasonable cause to
believe  that the  information  discloses a violation  or possible  violation of
federal  or  state  law  or  regulation;   or  providing  information,   causing
information  to  be  provided,   filing,   causing  to  be  filed,   testifying,
participating in a proceeding filed or about to be filed, or otherwise assisting
in an  investigation  or  proceeding  regarding  any conduct  that the  employee
reasonably  believes  involves a violation of: federal  criminal law relating to
securities  fraud,  mail fraud, bank fraud, or wire, radio and television fraud,
or any rule or  regulation of the  Securities  and Exchange  Commission,  or any
provision  of  federal  law  relating  to fraud  against  shareholders,  or this
Code,where,  with respect to  investigations,  such information or assistance is
provided to or the  investigation  is being  conducted  by a federal  regulatory
agency,  a member of Congress,  or a person at the Company with  supervisory  or
similar authority over the employee.

            However,  please be  advised  that  employees  who file  reports  or
provide  evidence  that they know to be false or without a reasonable  belief in
the truth and  accuracy of such  information  will not be protected by this Code
and may be  subject  to  disciplinary  action,  including  termination  of their
employment.  In addition, except to the extent required by law, the Company does
not intend this Code to protect employees who violate the confidentiality of any
applicable  lawyer-client  privilege  to which the  Company or its agents may be
entitled  under statute or common law  principles,  or to protect  employees who
violate their  confidentiality  obligations  with regard to the Company's  trade
secret information. Employees considering providing information that may violate
these  privileges  or reveal  Company  trade  secrets  are advised to consult an
attorney before doing so.

            If any Employee  believes he or she has been subjected to any action
that  violates  this Policy,  he or she may file a complaint  directly  with our
legal  department  or the Audit  Committee of the Company.  To contact our Audit
Committee or to submit a report to them, please use the hotline described in the
previous  section.  If it is  determined  that an Employee has  experienced  any
improper  employment  action in  violation  of this Code,  the Company will take
appropriate corrective action.

            6. Investigation of Suspected Violations

            Suspected  violations will be investigated  under the supervision of
the Company's legal department or the Company's  outside  counsel,  as the legal
department  deems  appropriate.  Employees  are  expected  to  cooperate  in the
investigation of reported  violations.  When practical and appropriate under the
circumstances,  and in order to protect  the  privacy of the  persons  involved,
those  people  investigating  the  suspected  violation  will  attempt  to  keep
confidential  the  identity of someone who reports a suspected  violation or who
participates in the investigation.  There may be situations,  however, when this
information must be disclosed as part of our investigation.

            Employees  should be aware that the  Company's  legal  department is
legally obligated to act in the best interests of the Company as a company. They
do not act as lawyers or personal  representatives for any individual employees,
including our CEO. Our Board of Directors has ultimate  responsibility for final
interpretation  of this Code and for determining  whether any violations of this
Code have occurred.

            7. Violations.

            Violations  of the  Code  will  be  met  with  discipline  up to and
including termination of employment.

            Appropriate  disciplinary  action will be taken promptly against any
Employee, determined to have violated any applicable federal, state or local law
or regulation, or this Code or any future version of this Code.

            Among other things, employees of the Company may be disciplined for:

            Committing, authorizing, or directing an illegal act.

            Failing  to  exercise  proper  compliance  oversight  or  tolerating
illegal conduct, if acting as a supervisor of another employee of the Company.

            Failing  to  report  illegal  business  conduct  of  which he or she
directly knows or observes.

            Discouraging  another  employee from reporting a violation of law or
of this Code.

            Improperly  disclosing  the  identity  of a  person  who  reports  a
violation of this Code.

            Retaliating  or  condoning  retaliation  against  any  Employee  who
reports such a violation.

            The  code is not  intended  to and  does not  create  an  employment
contract,  and does not create any contractual rights between FalconStor and its
employees  or create any express or implied  promise for  specific  treatment in
specific situations.

II.         Use, Protection and Management of Corporate Assets

            1.  Financial  Integrity.   FalconStor  follows  generally  accepted
accounting  principles  and  standards,  and applicable  laws,  regulations  and
practices for accounting and financial reporting.  To meet its obligations,  the
Company  must rely on  employee  truthfulness  to  ensure  the  accuracy  of its
financial statements. Complete and accurate data must be maintained and provided
to  appropriate  Company  personnel so that the Company's  financial  statements
present  fairly its financial  position and the results of its  operations.  Any
employee who is aware of material  misstatements or omissions affecting the fair
presentation  or  accuracy of the  Company's  financial  statements  is under an
obligation to use reasonable efforts to have them corrected or, failing that, to
report this  information  promptly  to an  appropriate  officer of the  Company.
Reports may also be made to the Company's hotlines, identified above.

            All communications  with the Company's outside auditors must be true
and complete.  FalconStor employees must cooperate fully with representatives of
the Company's auditors by responding promptly,  accurately and completely to all
inquiries made by those representatives.

            2. Code of  Ethics.  The  Company  has  adopted a Code of Ethics for
Chief Executive  Officer and Senior  Financial  Officers.  A copy is attached to
this Code of Conduct.

            3.  Use of  Corporate  Assets.  The  misuse  of any of  FalconStor's
property or the property of others in the care, custody or control of FalconStor
is prohibited. The removal from FalconStor facilities of any of its property for
a  purpose  other  than  use  in  FalconStor's  business  is  prohibited  unless
specifically  authorized  by the  appropriate  department  head.  The  foregoing
policies apply to property such as furnishings,  equipment and supplies, as well

as to property created,  obtained or copied by FalconStor for its exclusive use,
such  as  files,  reference  materials  and  reports,  computer  software,  data
processing systems and databases.

            4.  Intellectual  Property.  All employees must comply with the laws
and regulations  that govern the rights to and protection of our own and others'
copyrights,  trademarks, patents, trade secrets, and other forms of intellectual
property.

            5. Third-Party Software. All employees must use software and content
information only in accordance with the associated licenses and/or terms of use.
The Company prohibits the making or using of copies of non-licensed  copyrighted
material, including software,  documentation,  graphics,  photographs, clip art,
animation, movie/video clips, sound, and music.

            6.  Trade  Secrets  and  Confidential  or  Proprietary  Information.
"Confidential" information is information that the Company considers private and
which is not common  knowledge among other persons or  organizations  that might
find it useful for  competitive or other reasons.  "Proprietary"  information is
information that the Company owns, develops,  pays to develop,  possesses, or to
which it has an exclusive right.

            During  the  course  of  business,   Confidential   or   Proprietary
Information or Company trade secrets may become available to the employee. It is
very important for all employees to safeguard such  information.  Employees must
also follow confidentiality  restrictions from previous employers and not use or
share that information at the Company.

            Both during and after the employee's  association  with the Company,
it is a violation of this policy to disclose,  use,  release or discuss any such
Confidential, Proprietary or trade secret information, except as required by the
Company.  It is also a violation  of this policy for an employee to  appropriate
any Confidential, Proprietary or trade secret information for the employee's own
use or to use such information in any way inconsistent with the interests of the
Company.

            This section applies to employee conduct toward other companies,  as
well as to employee  activities  within the  Company.  While an employee  should
always obtain as much information as possible about the marketplace, an employee
must do that only in  accordance  with this  policy.  Employees  must never be a
party to a situation in which  proprietary or confidential  information has been
obtained  improperly from another company.  If an employee is approached with an
offer of confidential  information which may have been obtained improperly,  the
employee must immediate  discuss this matter with her/his  supervisor and/or the
Company's legal department.

            The files, manuals,  reports, notes, lists and other records or data
of the Company, in any form, including electronic, are the exclusive property of
the Company and must be returned at the end of employment with the Company.  Any
Confidential,  Proprietary or trade secret  information to which an employee has
access  remains  so after  employment  and may not be  disclosed  or use for any
purpose after employment.

            7. Ownership of Work. All  intellectual  property which any employee
makes,  conceives,  reduces to practice or develops (in whole or in part, either
alone or jointly  with  others)  during the  employee's  employment  is the sole
property of the  Company.  The Company  shall be the sole owner of all  patents,
copyrights  and  other  intellectual  property  or other  rights  in  connection
therewith.

III.        Legal and Regulatory Compliance

            1.  Communications  with  Government.  All  communications  made  by
FalconStor employees to government officials must be truthful.  The Company will
not tolerate false  statements  (verbal or written) by any of its employees to a
government agency - local, state or federal. This extends to communications made
to the Company's legal department in conjunction with the preparation and filing
of applications on behalf of the individual  employee with a government  agency.

Deliberate misstatements to government officials or false statements made with a
reckless  disregard  for their  accuracy  can expose  both the  Company  and the
individual employee involved to civil and criminal penalties.

            Contact with government  agencies should be brought to the attention
of the Company's General Counsel. Any governmental  investigation  involving the
Company,  however  informal,  must be brought to the immediate  attention of the
Company's General Counsel. Such investigation can take the form of a subpoena, a
letter, a visit, or a telephone conversation.

            2. Bribery,  Gratuities and Improper Payments.  FalconStor  complies
with the  anti-corruption  laws of the  countries  in  which  it does  business,
including  the United States  Foreign  Corrupt  Practices Act ("FCPA").  In full
compliance  with the FCPA,  neither  FalconStor  nor anyone acting on its behalf
will make any  direct or  indirect  payment  or  promise  of  payment to foreign
government  officials for the purpose of inducing the  individual to use his/her
position to obtain or to retain FalconStor business.

            3. Anti-Boycott Requirements. FalconStor complies with United States
law  that  prohibits  participation  in  international  boycotts  that  are  not
sanctioned by the United States government.

            4. Export Control.  In order to protect U.S. national  security,  to
implement U.S.  foreign  policy,  and to preserve scarce  resources,  the United
States  government  restricts  the export of certain  technology  and  products,
including  certain  computer  software and technical goods and data. We strictly
observe all  restrictions  placed on the export and re-export of a United States
product or component of a product, good, service, or technical data.

            5. International  Business Activities.  FalconStor  acknowledges and
respects the diverse cultures,  customs and business  practices it encounters in
the global  marketplace.  FalconStor will apply with both the applicable  United
States  laws and  regulations  that  govern  its  operations  and the local laws
wherever it does  business.  If an employee feels at any time that United States
laws and regulations  and local laws applicable to FalconStor's  business are in
conflict, s/he should immediately contact the Company's General Counsel.

            6. Political  Activity.  Political activity should be an exercise of
individual  choice  and  conviction.  FalconStor  encourages  all  employees  to
participate actively in the political process; our public institutions depend on
such  participation.  However,  employees  should be  careful  not to  associate
FalconStor  with  their  political  activity.  All  political  activity  must be
undertaken  with  the  employee's  own  resources  and on  their  own  time.  No
contribution  or support may be provided on behalf of the Company to a political
candidate or committee  without the approval of the Company's  General  Counsel.
Neither the Company nor any FalconStor employee may require any employee to make
a personal  contribution  to a  political  action  committee  or to a  political
candidate or committee,  and no FalconStor  employee will face  retribution from
the  Company  or any other  employee  for  declining  a  request  to make such a
contribution.

IV.         Conflicts of Interest

            1.  Avoidance of  Conflicts.  Employees  should avoid any  situation
which involves or may involve a conflict between their personal interest and the
interests of the  Company.  As in all other  facets of their  duties,  employees
dealing with customers, suppliers, contractors, competitors, or any person doing
or seeking to do business with the Company,  are to act in the best interests of
the Company.  Each employee  must make prompt and full  disclosure in writing to
their  manager  of any  potential  situation  which may  involve a  conflict  of
interest. Such conflicts include, but are not limited to:

Ownership by the employee or by a member of the employee's family of an interest
in any  outside  enterprise  which  does or  seeks  to do  business  with,  is a
competitor  of,  or is a  vendor,  supplier,  competitor  or  contractor  to the
Company.

            Serving  as  a  director,  officer,  partner,  consultant,  or  in a
            managerial or technical  capacity with an outside  enterprise  which
            does or is seeking to do  business  with or is a  competitor  of the
            Company.  Exceptions to this can be approved by the Company's  Board
            of Directors.

            Being  promised  or  receiving  a fee  from a third  party  doing or
            seeking  to do  business  with the  Company  for acting as a broker,
            finder or go-between.

            Borrowing  from or being  financially  indebted to a  competitor  or
            supplier of goods and services of the  Company,  other than banks or
            other  financial  institutions  for typical  consumer debt generally
            available to non-Company employees.

            Any other  arrangement or  circumstance,  including  family or other
            personal  relationships,  which might  dissuade  the  employee  from
            acting in the best interests of the Company.

            2. Gifts and Entertainment. FalconStor policy and practice encourage
the use of good judgment,  discretion  and  moderation  when giving or accepting
gifts or entertainment related to business activities. Gift giving and practices
may vary in different  cultures;  however,  any gifts and entertainment given or
received must be in compliance with law, must not violate the giver's and/or the
receiver's  policies on the matter, and must be consistent with local custom and
practice. FalconStor employees may not solicit gifts, entertainment or favors of
any value from persons or firms with which FalconStor does, or potentially does,
business.  Nor may any  employee  act in a manner that would place any vendor or
customer in a position  where s/he may feel  obligated  to make a gift,  provide
entertainment, or provide personal favors in order to do business or to continue
to do business with FalconStor.  All employees are required to report gifts with
a value of greater than one hundred  dollars  ($100.00) to the  Company's  Chief
Financial Officer.

            3. Relationships with Vendors and Suppliers

            Transactions  with vendors and  suppliers  must be carried out on an
arms-length  basis. This means conditions should exist for competitive,  willing
buyer  and  willing  seller  transactions.  Competitive  bidding  should be used
whenever  possible.  Decisions  should be made on the basis of  quality,  price,
availability and service. All vendors and suppliers should be dealt with fairly,
honestly and openly. This policy extends to all services provided to the Company
as well as goods used by the Company. In addition, if the representative for the
vendor or supplier is a former employee, family member or close personal friend,
you should disclose this information to your manager.

            4. Diversion of Corporate Opportunity

            Employees are prohibited from: (a) taking for themselves  personally
opportunities   related  to  Company  business;   (b)  using  Company  property,
information,  or position for personal  gain; or (c) competing  with the Company
for business  opportunities,  provided,  however, if the Company's disinterested
directors determine that the Company will not pursue an opportunity that relates
to Company's business, an employee may do so.

V.          Work Environment

            1. Equal Opportunity  Employment.  FalconStor promotes a cooperative
and productive work  environment by supporting the cultural and ethnic diversity
of its workforce and is committed to providing equal  employment  opportunity to
all  qualified  employees  and  applicants.  Employment  decisions  will be made
without  regard  to any  individual's  race,  color,  religion,  gender,  sexual
orientation,  national origin, age, marital status,  physical or mental handicap
or disability, or such characteristics of any individual's relatives, friends or
associates.

            2.  Harassment.  Harassment,  intentional or  unintentional,  has no
place  in the  work  environment.  FalconStor  will  not  tolerate  any  form of
harassment of employees based on their real or perceived race, color,  religion,
gender,  sexual orientation,  national origin, age, marital status,  physical or
mental  handicap  or  disability,  or  based  on  such  characteristics  of  any
employee's relatives, friends or associates.

VI.         Communications With the Public and Insider Trading

            1. Communications with the Public.  FalconStor's advertising,  sales
and  promotional  material seeks to be truthful,  accurate,  and free from false
claims.  FalconStor  provides  its  shareholders  with  timely  and  appropriate
information  subject  only to  competitive  and  legal  constraints.  FalconStor
provides a link on its website for  shareholders to communicate with the Company
and its directors.

            2. Insider  Trading.  All  employees are  prohibited  from buying or
selling  public  securities  of  FalconStor  or any other company if they are in
possession of material non-public  information about the company.  All employees
are subject to the  Company's  Policy of the Trading of Securities of FalconStor
Software,  Inc.  Any  questions  regarding  the purchase or sale of any security
should be directed to the Company's General Counsel.

VII.        Antitrust

            FalconStor  expects its employees to conduct the Company's  business
in full compliance with applicable  federal,  state and international  antitrust
and trade regulation laws.

            All business  decisions  should be made by FalconStor  independently
and not as part of any collective decision-making involving competitors. Because
antitrust laws are constantly evolving,  no guidelines can adequately anticipate
every  situation  to which  these  laws  apply.  The  guidelines  are  intended,
therefore,  only to alert employees to potential problem areas. Employees should
consult the Company's General Counsel whenever a situation presents itself which
might appear to raise potential antitrust questions.

            The  following  activities  present  a  serious  risk  of  antitrust
exposure and should be reviewed in advance with FalconStor's General Counsel:

            Agreements  with any competitor on the types of business the Company
            will  conduct,  the  terms  pursuant  to which the  Company  will do
            business,  the prices the Company will  charge,  the  customers  the
            Company will serve or the products the Company will offer.

            Agreements  with anyone outside the Company to avoid dealing with or
            boycotting  any  individual  or  group  of  potential  customers  or
            suppliers.

            Attendance  at  trade  association  or  group  meetings  without  an
            approved agenda.

            Refusing to sell one  product or service  unless the  customer  also
            agrees to buy  another  product or service or refusing to purchase a
            product  or  service  unless  the  seller  agrees to buy some  other
            product or service from the Company.

                            FALCONSTOR SOFTWARE, INC.

                   Code of Ethics for Chief Executive Officer
                          and Senior Financial Officers

            The Board of Directors of FalconStor Software, Inc. (the "Company"),
has developed and adopted this Code of Ethics  applicable to its Chief Executive
Officer  ("CEO") and Senior  Financial  Officers  to promote  honest and ethical
conduct,  full,  fair,  accurate,  timely  and  understandable  disclosure,  and
compliance with applicable laws, rules and regulations

            Senior  Financial  Officers  ("SFOs")  include the  Company's  Chief
Financial  Officer and such other Company officials as the Board designates from
time to time.

            The CEO and SFOs must:

     o      Act with honesty,  integrity and  independence,  avoiding  actual or
            apparent   conflicts  of  interest  in  personal  and   professional
            relationships.

     o      Comply with Company policies and procedures.

     o      Provide  full,  fair,  accurate,  complete,  objective,  timely  and
            understandable  financial  disclosure in internal reports as well as
            documents  filed with or  submitted to the  Securities  and Exchange
            Commission,   any  other  governmental   agency  or  self-regulatory
            organization, or used in public communications.

     o      Promptly  bring  to  the  attention  of  the  Company's   Audit  and
            Disclosure  Committees any  information  concerning (a)  significant
            deficiencies  in the design or operation of internal  controls which
            could  adversely  affect the Company's  ability to record,  process,
            summarize and report  financial  data, or (b) any fraud,  whether or
            not  material,  or any  actual or  apparent  conflicts  of  interest
            involving any  management or other  employees who have a significant
            role in the Company's financial  reporting,  disclosures or internal
            controls.

     o      Comply with laws, rules and regulations of federal,  state and local
            governments,  the  Securities  and  Exchange  Commission,  and other
            appropriate private and public regulatory agencies.

     o      Act in good faith, responsibly with due care, competence, diligence,
            and without  knowingly  misrepresenting  material  facts or allowing
            one's independent judgment to be subordinated.

     o      Protect and respect the  confidentiality of information  acquired in
            the course of one's work except when authorized or otherwise legally
            obligated to disclose. Confidential information must not be used for
            personal advantage.

     o      Promote  and be an  example  of ethical  behavior  as a  responsible
            partner among peers, in the work environment and the community.

     o      Responsibly use and control assets and other  resources  employed or
            trusted to their supervision.

     o      Inform the Company's Board of Directors in the event that a material
            conflict  or a  significant  issues  arises  that  would  impact the
            ability  of the CEO or the SFO to  perform  his or her  duties or to
            comply with this Code of Ethics.
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