Exhibit 10.1

 

COMMON STOCK AND WARRANT PURCHASE AGREEMENT

 

THIS COMMON STOCK AND WARRANT PURCHASE AGREEMENT (the “Agreement”) is entered
into as of August 18, 2005, by and among CREATIVE COMPUTER APPLICATIONS, INC., a
California corporation (the “Company”), with headquarters located at 26115-A
Mureau Road, Calabasas, California 91302, and the purchasers (collectively, the
“Purchasers” and each a “Purchaser”) set forth on Schedule 1 hereof, with regard
to the following:

 

RECITALS

 

A.                                   The Company and Purchasers are executing
and delivering this Agreement in reliance upon the exemption from securities
registration afforded by the provisions of Regulation D (“Regulation D”), as
promulgated by the United States Securities and Exchange Commission (the “SEC”)
under the Securities Act of 1933, as amended (the “Securities Act”).

 

B.                                     The Purchasers desire to (a) purchase,
upon the terms and conditions stated in this Agreement, shares of the Company’s
Common Stock, no par value per share (the “Common Stock”) and (b) purchase, upon
the terms and conditions stated in this Agreement, the Stock Purchase Warrants
(the “Warrants”) to purchase shares of Common Stock, in the form attached hereto
as Exhibit A.  The shares of Common Stock issuable upon exercise of or otherwise
pursuant to the Warrants are referred to herein as “Warrant Shares.”  The shares
of Common Stock issued to the Purchasers hereunder (exclusive of the Warrant
Shares) are referred to herein as the “Common Shares.”  The Common Shares, the
Warrants and the Warrant Shares are collectively referred to herein as the
“Securities”.

 

C.                                     Contemporaneously with the execution and
delivery of this Agreement, the parties hereto are executing and delivering a
Registration Rights Agreement in the form attached hereto as Exhibit B (the
“Registration Rights Agreement,” and collectively with this Agreement, the
Warrants and any other documents or agreements executed in connection with the
transactions contemplated hereunder, the “Transaction Documents”), pursuant to
which the Company has agreed to provide certain registration rights under the
Securities Act, the rules and regulations promulgated thereunder and applicable
state securities laws.

 

D.                                    Contemporaneously with the Closing of this
transaction, the Company contemplates a merger of equals between itself and
StorCOMM, Inc., a privately held Delaware corporation (“StorCOMM”) (the
“CCA-StorCOMM Merger”).

 

AGREEMENTS

 

NOW, THEREFORE, in consideration of their respective promises contained herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Company and Purchasers hereby agree as follows:

 

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ARTICLE I
PURCHASE AND SALE OF COMMON STOCK AND WARRANTS

 

1.1                                 Purchase of Common Stock and Warrants. 
Subject to the terms and conditions of this Agreement, the issuance, sale and
purchase of the Common Shares and Warrants shall be consummated in a “Closing.” 
The purchase price (the “Purchase Price”) shall be TWO DOLLARS ($2.00) per Unit,
for up to ONE MILLION FIVE HUNDRED THOUSAND (1,500,000) Units.  Each “Unit” will
consist of (a) one (1) share of Common Stock, and (b) one-fifth (1/5th) of a
Warrant for the purchase of one (1) Warrant Share at an exercise price of THREE
DOLLARS ($3.00) per share, with a term of two (2) years.  On the date of the
Closing, subject to the satisfaction or waiver of the conditions set forth in
ARTICLES VI and VII hereof, the Company shall issue and sell to each Purchaser,
and each Purchaser severally agrees to purchase from the Company, the number of
Common Shares and a Warrant to purchase the number of Warrant Shares set forth
on Schedule 1 hereto.  Each Purchaser’s obligation to purchase Common Shares and
Warrants hereunder is distinct and separate from each other Purchaser’s
obligation to purchase, and no Purchaser shall be required to purchase hereunder
more than the number of Common Shares and a Warrant to purchase the number of
Warrant Shares set forth on Schedule 1 hereto.  The obligations of the Company
with respect to each Purchaser shall be separate from the obligations of each
other Purchaser and shall not be conditioned as to any Purchaser upon the
performance of obligations of any other Purchaser.

 

1.2                                 Form of Payment.  Each Purchaser shall pay
the aggregate Purchase Price for the Units being purchased by such Purchaser as
set forth on Schedule 1 hereto, by wire transfer to the account designated by
the Company at the escrow account (the “Escrow”) described below.  At that time,
the Company will deliver the Common Stock and Warrants into the Escrow.  The
Closing of this transaction will occur simultaneously with the closing of the
CCA-StorCOMM Merger, and the aggregate Purchase Price will be deposited by the
Purchasers into an Escrow to be established with U.S. BANK (the “Escrow
Agent”).  The form of Escrow Agreement is attached hereto as Exhibit C. The
Escrow will be closed upon delivery by the Company to the Escrow Agent of a
Certificate issued by the State of Delaware showing that the CCA-StorCOMM Merger
has occurred.  The funds will be delivered to the Company and the Transfer Agent
will deliver the certificates representing the Common Shares and the Warrants to
the Purchasers.

 

1.3                                 Closing Fee.  At the Closing, the Company
will direct the Escrow Agent to pay to GREAT AMERICAN INVESTORS, INC. (the
“Placement Agent”) five percent (5%) of the aggregate Purchase Price deposited
in the Escrow as a placement fee.  The Company hereby agrees to indemnify and
hold harmless the Placement Agent and its officers, directors, employees, agents
and shareholders, individually and collectively (“Placement Agent Indemnified
Person(s)”) from and against any and all claims, liabilities, losses, damages,
costs and reasonable expenses incurred by any Placement Agent Indemnified Person
(including reasonable fees and disbursements of counsel) which are related to or
arising out of: (i) any untrue statement of any material fact made by the
Company; or (ii) any omission of material fact  necessary to make any statement
not misleading, made by the Company.  The Company will not however, be
responsible for any claims, liabilities, losses, damages, or expenses, which
resulted directly or indirectly from the Placement Agent’s negligence or willful
misconduct.

 

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1.4                                 Closing Date.  Subject to the satisfaction
(or waiver) of the conditions set forth in ARTICLES VI and VII below, the date
and time of the issuance, sale and purchase of the Common Shares and Warrants
pursuant to this Agreement shall be at 10:00 a.m. California time, on August 18,
2005.

 

ARTICLE II
PURCHASER’S REPRESENTATIONS AND
WARRANTIES

 

Each Purchaser represents and warrants to the Company, as of the date hereof and
as of the Closing, severally and not jointly with respect to itself and its
purchase hereunder and not with respect to any other Purchaser or the purchase
hereunder by any other Purchaser, that the following statements are true and
correct:

 

2.1                                 Investment Purpose.  Purchaser is purchasing
the Common Shares and the Warrants for Purchaser’s own account for investment
only and not with a view toward or in connection with the public sale or
distribution thereof. Purchaser will not, directly or indirectly, offer, sell,
pledge or otherwise transfer its Common Shares, Warrants or any interest therein
except pursuant to transactions that are exempt from the registration
requirements of the Securities Act and/or sales registered under the Securities
Act.  Purchaser understands that Purchaser must bear the economic risk of this
investment indefinitely, unless the Securities are registered pursuant to the
Securities Act and any applicable state securities laws or an exemption from
such registration is available, and that the Company has no present intention of
registering any such Securities other than as contemplated by the Registration
Rights Agreement.

 

2.2                                 Accredited Investor Status.  Purchaser is an
“accredited investor” as that term is defined in Rule 501(a) of Regulation D.

 

2.3                                 Reliance on Exemptions.  Purchaser
understands that the Common Shares and Warrants are being offered and sold to
Purchaser in reliance upon specific exemptions from the registration
requirements of United States federal and state securities laws and that the
Company is relying upon the truth and accuracy of, and Purchaser’s compliance
with, the representations, warranties, agreements, acknowledgments and
understandings of Purchaser set forth herein in order to determine the
availability of such exemptions and the eligibility of Purchaser to acquire the
Common Shares and Warrants.

 

2.4                                 Information.  The Company has made available
all materials relating to the business, finances and operations of the Company
and materials relating to the offer and sale of the Securities which have been
specifically requested by Purchaser, including without limitation the documents
publicly filed by the Company with the SEC (such documents collectively, the
“SEC Documents”).  Purchaser has been afforded the opportunity to ask questions
of the Company, was permitted to meet with the Company’s officers and has
received what the Purchaser believes to be complete and satisfactory answers to
any such inquiries.  Neither such inquiries nor any other due diligence
investigation conducted by Purchaser or any of its representations shall modify,
amend or affect Purchaser’s right to rely on the Company’s representations and
warranties contained in ARTICLE III.  Purchaser understands that

 

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Purchaser’s investment in the Securities involves a high degree of risk,
including without limitation the risks and uncertainties disclosed in the SEC
Documents.

 

2.5                                 Governmental Review.  Purchaser understands
that no United States federal or state agency or any other government or
governmental agency has passed upon or made any recommendation or endorsement of
the Securities.

 

2.6                                 Transfer or Resale.  Purchaser understands
that (i) except as provided in the Registration Rights Agreement, the Securities
have not been and are not being registered under the Securities Act or any state
securities laws, and may not be offered, sold, pledged or otherwise transferred
unless subsequently registered thereunder or an exemption from such registration
is available (which exemption the Company expressly agrees may be established as
contemplated in clauses (b) and (c) of Section 5.1 hereof); (ii) any sale of
such Securities made in reliance on Rule 144 under the Securities Act (or a
successor rule) (“Rule 144”)  may be made only in accordance with the terms of
Rule 144 and further, if Rule 144 is not applicable, any resale of such
Securities without registration under the Securities Act under circumstances in
which the seller may be deemed to be an underwriter (as that term is defined in
the Securities Act) may require compliance with some other exemption under the
Securities Act or the rules and regulations of the SEC thereunder in order for
such resale to be allowed, (iii) the Company is under no obligation to register
such Securities under the Securities Act or any state securities laws or to
comply with the terms and conditions of any exemption thereunder (in each case,
other than pursuant to this Agreement or the Registration Rights Agreement) and
(iv) the Company has agreed to register the Common Shares and Warrant Shares as
provided in the Registration Rights Agreement.

 

2.7                                 Legends.  Purchaser understands that,
subject to ARTICLE V hereof, the certificates for the Warrants and, until such
time as the Warrant Shares and Common Shares have been registered under the
Securities Act as contemplated by the Registration Rights Agreement or otherwise
may be sold by Purchaser pursuant to Rule 144 (subject to and in accordance with
the procedures specified in ARTICLE V hereof), the certificates for the Common
Shares and the Warrant Shares will bear a restrictive legend (the “Legend”),
which will include language in substantially the following form:

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE OF
THE UNITED STATES. THE SECURITIES REPRESENTED HEREBY MAY NOT BE OFFERED OR SOLD
OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
FOR THE SECURITIES UNDER APPLICABLE SECURITIES LAWS OR UNLESS OFFERED, SOLD OR
TRANSFERRED PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THOSE LAWS.

 

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2.8                                 Authorization; Enforcement.  This Agreement
and the Registration Rights Agreement have been duly and validly authorized,
executed and delivered on behalf of Purchaser and are valid and binding
agreements of Purchaser enforceable in accordance with their respective terms,
except to the extent that such validity or enforceability may be subject to or
affected by any bankruptcy, insolvency, reorganization, moratorium, liquidation
or similar laws relating to, or affecting generally the enforcement of,
creditors’ rights or remedies of creditors generally, or by other equitable
principles of general application.

 

2.9                                 Residency.  Purchaser is a resident of the
jurisdiction set forth under Purchaser’s name on the signature page hereto
executed by Purchaser.

 

2.10                           Hedging Transactions.  Purchaser does not have an
existing short position with respect to the Company’s Common Stock.

 

ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

The Company represents and warrants to each Purchaser as of the date hereof and
as of the Closing (without giving effect to the CCA-StorCOMM Merger) that the
following statements are true and correct, except as set forth on the disclosure
schedules attached hereto as Schedule 3 (the “Company Disclosure Schedules”) and
accept as disclosed in the SEC Documents.  Notwithstanding the foregoing or
anything else contained herein, none of the representations and warranties by
the Company contained herein shall relate to or take into account the effects of
the CCA-StorCOMM Merger.

 

3.1                                 Organization and Qualification.  Each of the
Company and its subsidiaries is a corporation duly organized and existing in
good standing under the laws of the jurisdiction in which it is incorporated,
and has the requisite corporate power to own its properties and to carry on its
business as now being conducted. The Company and each of its subsidiaries is
duly qualified as a foreign corporation to do business and is in good standing
in every jurisdiction where the failure so to qualify or be in good standing
could reasonably be expected to have a Material Adverse Effect. “Material
Adverse Effect” means any effect which, individually or in the aggregate with
all other effects, reasonably would be expected to be materially adverse to the
business, operations, properties, financial condition, operating results or
prospects of the Company and its subsidiaries, taken as a whole on a
consolidated basis or on the transactions contemplated hereby.

 

3.2                                 Authorization; Enforcement.  (a) The Company
has the requisite corporate power and authority to enter into and perform under
the Transaction Documents, and to issue, sell and perform its obligations with
respect to the Securities in accordance with the terms hereof and thereof and in
accordance with the terms and conditions of the Securities; (b) the execution,
delivery and performance of the Transaction Documents by the Company and the
consummation by it of the transactions contemplated hereby and thereby
(including, without limitation, the issuance of the Common Shares and the
Warrants, and the reservation for issuance of the Warrant Shares) have been duly
authorized by all necessary corporate action and no further consent or
authorization of the Company, its board of directors, or its stockholders or any
other Person is required with respect to any of the transactions contemplated
hereby or thereby; (c)

 

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this Agreement, the Registration Rights Agreement, the Common Shares, and the
Warrants have been duly executed and delivered by the Company; and (d) this
Agreement, the Registration Rights Agreement, the Common Shares, and the
Warrants constitute legal, valid and binding obligations of the Company
enforceable against the Company in accordance with their respective terms,
except (i) to the extent that such validity or enforceability may be subject to
or affected by any bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws relating to, or affecting generally the enforcement
of, creditors’ rights or remedies of creditors generally, or by other equitable
principles of general application, and (ii) as rights to indemnity and
contribution under the Registration Rights Agreement may be limited by federal
or state securities laws. “Person” means any individual, sole proprietorship,
partnership, limited liability company, joint venture, trust, unincorporated
association, corporation, entity or government (whether federal, state, county,
city or otherwise, including, without limitation, any instrumentality, division,
agency or department thereof).

 

3.3                                 Capitalization.  The capitalization of the
Company as of March 31, 2005, including the authorized capital stock, the number
of shares issued and outstanding, the number of shares reserved for issuance
pursuant to the Company’s stock option plans, the number of shares reserved for
issuance pursuant to securities (other than the Warrants) exercisable for, or
convertible into or exchangeable for, any shares of Common Stock and the number
of shares to be reserved for issuance upon exercise of the Warrants is set forth
on Schedule 3.3 hereof. All of such outstanding shares of capital stock have
been, or upon issuance will be, validly issued, fully paid and nonassessable. 
No shares of capital stock of the Company (including the Common Shares and the
Warrant Shares) are subject to preemptive rights or any other similar rights of
the stockholders of the Company or any liens or encumbrances.  Except as
disclosed in Schedule 3.3 hereof, as of the date of this Agreement, (i) there
are no outstanding options, warrants, scrip, rights to subscribe for, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into or exercisable or exchangeable for, any shares of capital stock
of the Company or any of its subsidiaries, or contracts, commitments,
understandings or arrangements by which the Company or any of its subsidiaries
is or may become bound to issue additional shares of capital stock of the
Company or any of its subsidiaries, (ii) issuance of the Securities will not
trigger anti-dilution rights for any other outstanding or authorized securities
of the Company, and (iii) there are no agreements or arrangements under which
the Company or any of its subsidiaries is obligated to register the sale of any
of its or their securities under the Securities Act (except the Registration
Rights Agreement).  The Company has made available to Purchaser true and correct
copies of the Company’s Articles of Incorporation as in effect on the date
hereof (“Articles of Incorporation”), and the Company’s By-laws as in effect on
the date hereof (the “By-laws”).  The Company has set forth on Schedule 3.3
hereof all instruments and agreements (other than the Articles of Incorporation
and By-laws) governing securities convertible into or exercisable or
exchangeable for Common Stock of the Company (and the Company shall provide to
Purchaser copies thereof upon the request of Purchaser).

 

3.4                                 No Conflicts.  The execution, delivery and
performance of the Transaction Documents by the Company, and the consummation by
the Company of transactions contemplated hereby and thereby (including, without
limitation, the issuance and reservation for issuance, as applicable, of the
Securities) do not and will not (a) result in a violation of the Articles of
Incorporation or By-laws or (b) conflict with, or constitute a default (or an
event which, with notice or lapse of time or both, would become a default)
under, or give to others any

 

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rights of termination, amendment, acceleration or cancellation of, any
agreement, indenture or instrument to which the Company or any of its
subsidiaries is a party, or result in a violation of any law, rule, regulation,
order, judgment or decree (including U.S. federal and state securities laws)
applicable to the Company or any of its subsidiaries, or by which any property
or asset of the Company or any of its subsidiaries, is bound or affected (except
for such possible conflicts, defaults, terminations, amendments, accelerations,
cancellations and violations as would not, individually or in the aggregate,
have a Material Adverse Effect).  Neither the Company nor any of its
subsidiaries is in violation of its Articles of Incorporation or other
organizational documents. Neither the Company nor any of its subsidiaries, is in
default (and no event has occurred which has not been waived which, with notice
or lapse of time or both, could reasonably be expected to put the Company or any
of its subsidiaries in default) under, nor has there occurred any event giving
others (with notice or lapse of time or both) any rights of termination,
amendment, acceleration or cancellation of, any agreement, indenture or
instrument to which the Company or any of its subsidiaries is a party, except
for possible violations, defaults or rights as would not, individually or in the
aggregate, have a Material Adverse Effect.  The businesses of the Company and
its subsidiaries are not being conducted, and shall not be conducted so long as
a Purchaser owns any of the Securities, in violation of any law, ordinance or
regulation of any governmental entity, except for possible violations the
sanctions for which either individually or in the aggregate would not have a
Material Adverse Effect.  Except as (A) such as may be required under the
Securities Act in connection with the performance of the Company’s obligations
under the Registration Rights Agreement, (B) filing of a Form D with the SEC,
and (C) compliance with the state securities or Blue Sky laws of applicable
jurisdictions, the Company is not required to obtain any consent, authorization
or order of, or make any filing or registration with, any court or governmental
agency or any regulatory or self-regulatory agency in order for it to execute,
deliver or perform any of its obligations under this Agreement or the
Registration Rights Agreement or to perform its obligations in accordance with
the terms hereof or thereof.

 

3.5                                 Consents.  The execution, delivery and
performance by the Company of the Transaction Documents and the offer, issuance
and sale of the Securities require no consent of, action by or in respect of, or
filing with, any Person, governmental body, agency, or official other than
(i) filings that have been made pursuant to applicable state securities laws,
(ii) post-sale filings pursuant to applicable state and federal securities laws,
and (iii) any consent, action or filing that either individually or in the
aggregate would not have a Material Adverse Effect.  Subject to the accuracy of
the representations and warranties of each Purchaser set forth in ARTICLE II
hereof, the Company has taken all action necessary to exempt (i) the issuance
and sale of the Common Shares, (ii) the issuance of the Common Shares, (iii) the
issuance of the Warrants, and (iv) the issuance of the Warrant Shares, from the
provisions of any stockholder rights plan or other “poison pill” arrangement,
any anti-takeover, business combination or control share law or statute binding
on the Company or to which the Company or any of its assets and properties may
be subject and any provision of the Company’s Articles of Incorporation or
By-laws that is or could reasonably be expected to become applicable to the
Purchasers as a result of the transactions contemplated hereby, including
without limitation, the issuance of the Securities and the ownership,
disposition or voting of the Securities by the Purchasers or the exercise of any
right granted to the Purchaser pursuant to this Agreement or the other
Transaction Documents.

 

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3.6                                 SEC Documents; Financial Statements.  Since
December 31, 2004, the Company has timely filed the SEC Documents required to be
filed by it with the SEC pursuant to the reporting requirements of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”).  The Company
has made available to each Purchaser true and complete copies of the SEC
Documents.  As of their respective dates, the SEC Documents complied in all
material respects with the requirements of the Exchange Act and the rules and
regulations of the SEC promulgated thereunder applicable to the SEC Documents,
and none of the SEC Documents, at the time they were filed with the SEC,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.  None of the statements made in any such SEC Documents which is
required to be updated or amended under applicable law has not been so updated
or amended.  The consolidated financial statements of the Company included in
the SEC Documents have been prepared in accordance with U.S. generally accepted
accounting principles, consistently applied, and the rules and regulations of
the SEC during the periods involved (except (i) as may be otherwise indicated in
such consolidated financial statements or the notes thereto, or (ii) in the case
of unaudited interim statements, to the extent they do not include footnotes or
are condensed or summary statements) and present accurately and completely the
consolidated financial position of the Company and its consolidated subsidiaries
as of the dates thereof and the consolidated results of their operations and
cash flows for the periods then ended (subject, in the case of unaudited
statements, to normal year-end audit adjustments).  Except as set forth in a
manner clearly evident to a sophisticated institutional investor in the
consolidated financial statements or the notes thereto of the Company included
in the SEC Documents, the Company has no liabilities, contingent or otherwise,
other than (i) liabilities incurred in the ordinary course of business
consistent with past practice subsequent to the date of such financial
statements and (ii) obligations under contracts and commitments incurred in the
ordinary course of business consistent with past practice and not required under
generally accepted accounting principles to be reflected in such financial
statements.  To the extent required by the rules of the SEC applicable thereto,
the SEC Documents contain a complete and accurate list of all material
undischarged written or oral contracts, agreements, leases or other instruments
to which the Company or any subsidiary is a party or by which the Company or any
subsidiary is bound or to which any of the properties or assets of the Company
or any subsidiary is subject (each a “Contract”).  None of the Company, its
subsidiaries or, to the Company’s Knowledge, any of the other parties thereto,
is in breach or violation of any Contract, which breach or violation would have
a Material Adverse Effect.  No event, occurrence or condition exists which, with
the lapse of time, the giving of notice, or both, could become a default by the
Company or its subsidiaries thereunder which could reasonably be expected to
have a Material Adverse Effect.  For purposes of this Agreement, “Company’s
Knowledge” means the actual knowledge of the executive officers (as defined in
Rule 405 under the Securities Act) of the Company, after due inquiry.

 

3.7                                 Absence of Certain Changes.  Since March 31,
2005, there has been no material adverse change and no material adverse
development in the business, properties, operations, financial condition,
results of operations or prospects of the Company, or clearly evident to a
sophisticated institutional investor from the  SEC Documents, including, without
limitation:

 

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(i)                  any change in the consolidated assets, liabilities,
financial condition or operating results of the Company from that reflected in
the financial statements included in the Company’s Quarterly Report on
Form 10-QSB for the quarter ended March 31, 2005, except for changes in the
ordinary course of business which have not and could not reasonably be expected
to have a Material Adverse Effect, individually or in the aggregate;

 

(ii)               any declaration or payment of any dividend, or any
authorization or payment of any distribution, on any of the capital stock of the
Company, or any redemption or repurchase of any securities of the Company;

 

(iii)            any material damage, destruction or loss, whether or not
covered by insurance to any assets or properties of the Company or its
subsidiaries;

 

(iv)           any waiver, not in the ordinary course of business, by the
Company or any subsidiary of a material right or of a material debt owed to it;

 

(v)              any satisfaction or discharge of any lien, claim or encumbrance
or payment of any obligation by the Company or a subsidiary, except in the
ordinary course of business and which is not material to the assets, properties,
financial condition, operating results or business of the Company and its
subsidiaries taken as a whole (as such business is presently conducted and as it
is proposed to be conducted);

 

(vi)           any change or amendment to the Company’s Articles of
Incorporation or By-laws, or material change to any material contract or
arrangement by which the Company or any subsidiary is bound or to which any of
their respective assets or properties is subject;

 

(vii)        any material labor difficulties or labor union organizing
activities with respect to employees of the Company or any subsidiary;

 

(viii)     any material transaction entered into by the Company or a subsidiary
other than in the ordinary course of business;

 

(ix)             the loss of the services of any key employee, or material
change in the composition or duties of the senior management of the Company or
any subsidiary;

 

(x)                the loss or threatened loss of any customer which has had or
could reasonably be expected to have a Material Adverse Effect; or

 

(xi)             any other event or condition of any character that has had or
could reasonably be expected to have a Material Adverse Effect.

 

3.8                                 Absence of Litigation.  There is no action,
suit, proceeding, inquiry or investigation before or by any court, public board,
government agency, or self-regulatory

 

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organization or body pending or, to the Company’s Knowledge or any of its
subsidiaries, threatened against or affecting the Company, any of its
subsidiaries, or any of their respective directors or officers in their
capacities as such.  There are no facts known to the Company which, if known by
a potential claimant or governmental authority, could reasonably be expected to
give rise to a claim or proceeding which, if asserted or conducted with results
unfavorable to the Company or any of its subsidiaries, could reasonably be
expected to have a Material Adverse Effect.

 

3.9                                 Tax Matters.  The Company and each
subsidiary has timely prepared and filed all tax returns required to have been
filed by the Company or such subsidiary with all appropriate governmental
agencies and timely paid all taxes shown thereon or otherwise owed by it.  The
charges, accruals and reserves on the books of the Company in respect of taxes
for all fiscal periods are adequate in all material respects, and there are no
material unpaid assessments against the Company or any subsidiary nor, to the
Company’s Knowledge, any basis for the assessment of any additional taxes,
penalties or interest for any fiscal period or audits by any federal, state or
local taxing authority except for any assessment which is not material to the
Company and its subsidiaries, taken as a whole.  All taxes and other assessments
and levies that the Company or any subsidiary is required to withhold or to
collect for payment have been duly withheld and collected and paid to the proper
governmental entity or third party when due.  There are no tax liens or claims
pending or, to the Company’s Knowledge, threatened against the Company or any
subsidiary or any of their respective assets or property.  There are no
outstanding tax sharing agreements or other such arrangements between the
Company and any subsidiary or other corporation or entity.

 

3.10                           Transactions with Affiliates.  Except as
disclosed in the SEC Documents, none of the officers or directors of the Company
and, to the Company’s Knowledge, none of the employees of the Company is
presently a party to any transaction with the Company or any subsidiary (other
than as holders of stock options and/or warrants, and for services as employees,
officers and directors), including any contract, agreement or other arrangement
providing for the furnishing of services to or by, providing for rental of real
or personal property to or from, or otherwise requiring payments to or from any
officer, director or such employee or, to the Company’s Knowledge, any entity in
which any officer, director, or any such employee has a substantial interest or
is an officer, director, trustee or partner.

 

3.11                           Internal Controls.  The Company and the
subsidiaries maintain a system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed in accordance
with management’s general or specific authorizations, (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain asset
accountability, (iii) access to assets is permitted only in accordance with
management’s general or specific authorization, and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any difference.  The
Company maintains and will continue to maintain a standard system of accounting
established and administered in accordance with GAAP and the applicable
requirements of the Exchange Act. The Company’s officers certified to the
Company’s internal controls as of the filing of the Company’s Form 10-QSB for
the quarter ending March 31, 2005 and since that date, that there have been no
significant changes in the Company’s internal controls (as such term is defined
in Section 307(b)

 

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of Regulation S-K) or, to the Company’s Knowledge, any other facts that would
significantly affect the Company’s internal controls.  The Company is not
required at this date to certify its internal controls under Section 404 of the
Sarbanes-Oxley Act of 2002 and has not taken any steps necessary to evaluate its
internal controls to determine whether it will be able to take such a
certification.

 

3.12                           Disclosure.  No information relating to or
concerning the Company set forth in this Agreement contains an untrue statement
of a material fact.  No information relating to or concerning the Company set
forth in any of the SEC Documents contains a statement of material fact that was
untrue as of the date such SEC Document was filed with the SEC.  The Company has
not omitted to state a material fact necessary in order to make the statements
made herein or therein, in light of the circumstances under which they were
made, not misleading.  Except for the execution and performance of this
Agreement, no material fact (within the meaning of the federal securities laws
of the United States and of applicable state securities laws) exists with
respect to the Company which has not been publicly disclosed.

 

3.13                           Acknowledgment Regarding Purchaser’s Purchase of
the Securities.  The Company acknowledges and agrees that Purchaser is not
acting as a financial advisor or fiduciary of the Company (or in any similar
capacity) with respect to this Agreement or the transactions contemplated
hereby, that this Agreement and the transaction contemplated hereby, and the
relationship between each Purchaser and the Company, are “arms-length,” and that
any statement made by Purchaser (except as set forth in ARTICLE II), or any of
its representatives or agents, in connection with this Agreement and the
transactions contemplated hereby is not advice or a recommendation, is merely
incidental to Purchaser’s purchase of the Securities and has not been relied
upon as such in any way by the Company, its officers or directors.  The Company
further represents to Purchaser that the Company’s decision to enter into this
Agreement and the transactions contemplated hereby has been based solely on an
independent evaluation by the Company and its representatives.

 

3.14                           No General Solicitation.  Neither the Company nor
any distributor participating on the Company’s behalf in the transactions
contemplated hereby (if any) nor any person acting for the Company, or any such
distributor, has conducted any “general solicitation,” as described in
Rule 502(c) under Regulation D, with respect to any of the Securities being
offered hereby.

 

3.15                           No Integrated Offering.  Neither the Company, nor
any of its affiliates, nor any person acting on its or their behalf, has
directly or indirectly made any offers or sales of any security or solicited any
offers to buy any security under circumstances that would prevent the parties
hereto from consummating the transactions contemplated hereby pursuant to an
exemption from the registration under the Securities Act pursuant to the
provisions of Regulation D.  The transactions contemplated hereby are exempt
from the registration requirements of the Securities Act, assuming the accuracy
of the representations and warranties herein contained of each Purchaser.

 

3.16                           No Brokers.  The Company has taken no action
which would give rise to any claim by any person for brokerage commissions,
finder’s fees or similar payments by Purchaser relating to this Agreement or the
transactions contemplated hereby.

 

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3.17                           Intellectual Property.

 

(i)                  To the Company’s Knowledge, all Intellectual Property of
the Company and its subsidiaries is currently in compliance with all legal
requirements (including timely filings, proofs and payments of fees) and is
valid and enforceable, except where the failure to be in compliance or to be
valid and enforceable has not and could not reasonably be expected to have a
Material Adverse Effect on the Company and its subsidiaries taken as a whole. 
No Intellectual Property of the Company or its subsidiaries which is necessary
for the conduct of Company’s and each of its subsidiaries’ respective businesses
as currently conducted or as currently proposed to be conducted has been or is
now involved in any cancellation, dispute or litigation, and, to the Company’s
Knowledge, no such action is threatened.  No patent of the Company or its
subsidiaries has been or is now involved in any interference, reissue,
re-examination or opposition proceeding.  “Intellectual Property” means all of
the following: (a) patents, patent applications, patent disclosures and
inventions (whether or not patentable and whether or not reduced to practice);
(b) trademarks, service marks, trade dress, trade names, corporate names, logos,
slogans and Internet domain names, together with all goodwill associated with
each of the foregoing; (c) copyrights and copyrightable works;
(d) registrations, applications and renewals for any of the foregoing; and
(e) proprietary computer software (including but not limited to data, data bases
and documentation).

 

(ii)               All of the licenses and sublicenses and consent, royalty or
other agreements concerning Intellectual Property which are necessary for the
conduct of the Company’s and each of its subsidiaries’ respective businesses as
currently conducted or as currently proposed to be conducted to which the
Company or any subsidiary is a party or by which any of their assets are bound
(other than  generally commercially available, non custom, off the shelf
software application programs having a retail acquisition price of less than
$10,000 per license) (collectively, “License Agreements”) are valid and binding
obligations of the Company or its subsidiaries that are parties thereto and, to
the Company’s Knowledge, the other parties thereto, enforceable in accordance
with their terms, except to the extent that enforcement thereof may be limited
by bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
other similar laws affecting the enforcement of creditors’ rights generally, and
there exists no event or condition which will result in a material violation or
breach of or constitute (with or without due notice or lapse of time or both) a
default by the Company or any of its subsidiaries under any such License
Agreement.

 

(iii)            The Company and its subsidiaries own or have the valid right to
use all of the Intellectual Property that is necessary for the conduct of the
Company’s and each of its subsidiaries’ respective businesses as currently
conducted or as currently proposed to be conducted and for the ownership,
maintenance and operation of the Company’s and its subsidiaries’ properties and
assets, free and clear of all liens, encumbrances, adverse claims or obligations
to license all such owned Intellectual Property, other than licenses entered
into in the

 

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ordinary course of the Company’s and its subsidiaries’ businesses.  The Company
and its subsidiaries have a valid and enforceable right to use all third party
Intellectual Property and confidential information used or held for use in the
respective businesses of the Company and its subsidiaries.

 

(iv)           To the Company’s Knowledge, the conduct of the Company’s and its
subsidiaries’ businesses as currently conducted does not infringe or otherwise
impair or conflict with (collectively, “Infringe”) any Intellectual Property
rights of any third party or any confidentiality obligation owed to a third
party, and, to the Company’s Knowledge, the Intellectual Property and
confidential information of the Company and its subsidiaries which are necessary
for the conduct of Company’s and each of its subsidiaries’ respective businesses
as currently conducted or as currently proposed to be conducted are not being
Infringed by any third party.  There is no litigation or order pending or
outstanding or, to the Company’s Knowledge, threatened or imminent, that seeks
to limit or challenge or that concerns the ownership, use, validity or
enforceability of any Intellectual Property or confidential information of the
Company and its subsidiaries and the Company’s and its subsidiaries’ use of any
Intellectual Property or confidential information owned by a third party, and,
to the Company’s Knowledge, there is no valid basis for the same.

 

(v)              The consummation of the transactions contemplated hereby will
not result in the alteration, loss, impairment of or restriction on the
Company’s or any of its subsidiaries’ ownership or right to use any of the
Intellectual Property or confidential information which is necessary for the
conduct of Company’s and each of its subsidiaries’ respective businesses as
currently conducted or as currently proposed to be conducted.

 

(vi)           The Company and its subsidiaries have taken reasonable steps to
protect the Company’s and its subsidiaries’ rights in their Intellectual
Property.  Each employee, consultant and contractor who has had access to
confidential information which is necessary for the conduct of Company’s and
each of its subsidiaries’ respective businesses as currently conducted or as
currently proposed to be conducted has executed an agreement to maintain the
confidentiality of such confidential information and has executed appropriate
agreements that are substantially consistent with the Company’s standard forms
thereof.  Except under confidentiality obligations, there has been no material
disclosure of any of the Company’s or its subsidiaries’ confidential information
to any third party.

 

3.18                           Environmental Matters.  Neither the Company nor
any subsidiary is in violation of any statute, rule, regulation, decision or
order of any governmental agency or body or any court, domestic or foreign,
relating to the use, disposal or release of hazardous or toxic substances or
relating to the protection or restoration of the environment or human exposure
to hazardous or toxic substances (collectively, “Environmental Laws”), owns or
operates any real property contaminated with any substance that is subject to
any Environmental Laws, is liable for any off-site disposal or contamination
pursuant to any Environmental Laws, or is subject to

 

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any claim relating to any Environmental Laws; and there is no pending or, to the
Company’s Knowledge, threatened investigation that might lead to such a claim.

 

3.19                           Certificates, Authorities and Permits.  The
Company and each subsidiary possess adequate certificates, authorities or
permits issued by appropriate governmental agencies or bodies necessary to
conduct the business now operated by it, and neither the Company nor any
subsidiary has received any notice of proceedings relating to the revocation or
modification of any such certificate, authority or permit that, if determined
adversely to the Company or such subsidiary, could reasonably be expected to
have a Material Adverse Effect, individually or in the aggregate.

 

3.20                           Key Employees.  No Key Employee, to the Company’s
Knowledge, is, or is now expected to be, in violation of any material term of
any employment contract, confidentiality, disclosure or proprietary information
agreement, non-competition agreement, or any other contract or agreement or any
restrictive covenant, and the continued employment of each Key Employee does not
subject the Company or any of its subsidiaries to any liability with respect to
any of the foregoing matters.  No Key Employee has, to the Company’s Knowledge,
any intention to terminate his employment with, or services to, the Company or
any of its subsidiaries. “Key Employee” means STEVEN M. BESBECK, the President
and Chief Executive Officer.

 

3.21                           Labor Matters.

 

(i)                  The Company is not a party to or bound by any collective
bargaining agreements or other agreements with labor organizations.  The Company
has not violated in any material respect any laws, regulations, orders or
contract terms, affecting the collective bargaining rights of employees, labor
organizations or any laws, regulations or orders affecting employment
discrimination, equal opportunity employment, or employees’ health, safety,
welfare, wages and hours.

 

(ii)               (A) There are no labor disputes existing, or to the Company’s
Knowledge, threatened, involving strikes, slow-downs, work stoppages, job
actions, disputes, lockouts or any other disruptions of or by the Company’s
employees, (B) there are no unfair labor practices or petitions for election
pending or, to the Company’s Knowledge, threatened before the National Labor
Relations Board or any other federal, state or local labor commission relating
to the Company’s employees, (C) no demand for recognition or certification
heretofore made by any labor organization or group of employees is pending with
respect to the Company and (D) to the Company’s Knowledge, the Company enjoys
good labor and employee relations with its employees and labor organizations.

 

(iii)            To the Company’s Knowledge, the Company is, and at all times
has been, in full compliance in all material respects with all applicable laws
respecting employment (including laws relating to classification of employees
and independent contractors) and employment practices, terms and conditions of

 

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employment, wages and hours, and immigration and naturalization.  There are no
claims pending against the Company before the Equal Employment Opportunity
Commission or any other administrative body or in any court asserting any
violation of Title VII of the Civil Rights Act of 1964, the Age Discrimination
Act of 1967, 42 U.S.C. §§ 1981 or 1983 or any other federal, state or local law,
statute or ordinance barring discrimination in employment.

 

(iv)           The Company is not a party to, or bound by, any employment or
other contract or agreement that contains any severance, termination pay or
change of control liability or obligation, including, without limitation, any
“excess parachute payment,” as defined in Section 2806(b) of the Internal
Revenue Code.

 

ARTICLE IV
COVENANTS

 

4.1                                 Reasonable Efforts.  The parties shall use
their commercially reasonable efforts to timely satisfy each of the conditions
described in ARTICLES VI and VII of this Agreement and to seek its Board of
Directors’ approval of this Agreement.

 

4.2                                 Securities Laws; Disclosure; Press Release. 
The Company agrees to file a Form D with respect to the Securities with the SEC
as required under Regulation D.  The Company shall, on or prior to the date of
Closing, take such action as is necessary to sell the Securities to each
Purchaser under applicable securities laws of the states of the United States. 
The Company agrees to file a Form 8-K disclosing this Agreement and the
transactions contemplated hereby with the SEC within four (4) business days
following the date of Closing.  The Company and each Purchaser shall consult
with each other in connection with the Form 8-K disclosing this Agreement and
the transactions contemplated hereby, and in issuing any other press releases
with respect to the transactions contemplated hereby, and no Purchaser shall
issue any such press release or otherwise make any such public statement without
the prior consent of the Company, which consent shall not unreasonably be
withheld, except if such disclosure is required by law, in which case the
disclosing party shall promptly provide the other party with prior notice of
such public statement or communication.

 

4.3                                 Reporting Status.  So long as any Purchaser
beneficially owns any of the Securities, the Company shall use commercially
reasonable efforts to timely file all reports required to be filed with the SEC
pursuant to the Exchange Act, and the Company shall not voluntarily terminate
its status as an issuer required to file reports under the Exchange Act even if
the Exchange Act or the rules and regulations thereunder would permit such
termination.

 

4.4                                 Reservation of Common Stock. The Company has
currently ONE MILLION EIGHT HUNDRED THOUSAND (1,800,000) shares of Common Stock
duly authorized and reserved for issuance of the Common Shares and the Warrant
Shares.  Such shares, as well as any additional shares of Common Stock
subsequently authorized by the Company’s stockholders and Board of Directors for
issuance of the Common Shares, and, in the case of the Warrant Shares, upon the
exercise of the Warrants in accordance with the terms thereof, as applicable,
shall be reserved by the Company, and the Company shall continue to

 

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reserve and keep available at all times, free of preemptive rights, a sufficient
number of shares of Common Stock for the purpose of enabling the Company to
issue the Warrant Shares pursuant to any exercise of the Warrants.

 

4.5                                 Listing of Common Stock.  The Company hereby
agrees to use commercially reasonable efforts to maintain the listing of the
Common Stock on the American Stock Exchange.  The Company further agrees, if,
following the effective date of a registration statement covering the Warrant
Shares, the Company applies to have the Common Stock traded on any other trading
market, it will include in such application all of the Warrant Shares, and will
take such other action as is reasonably necessary to cause all of the Warrant
Shares to be listed on such other trading market as promptly as possible.  The
Company will take all action reasonably necessary to continue the listing and
trading of its Common Stock on a trading market and will use its commercially
reasonable efforts to comply in all respects with the Company’s reporting,
filing and other obligations under the bylaws or rules of the trading market.

 

4.6                                 Right of First Offer.  Subject to the terms
and conditions specified in this Section 4.6, the Company hereby grants to each
Purchaser a right of first offer with respect to future sales by the Company of
its Shares (as hereinafter defined). Each time the Company proposes to offer any
shares of, or securities convertible into or exercisable or exchangeable for any
shares of, any class of its capital stock (“Shares”), the Company shall first
make an offering of such Shares to each Purchaser in accordance with the
following provisions:

 

(i)                  The Company shall deliver a notice by certified mail
(“Notice”) to the Purchasers stating (i) its bona fide intention to offer such
Shares, (ii) the number of such Shares to be offered, and (iii) the price and
terms, if any, upon which it proposes to offer such Shares.

 

(ii)               By written notification received by the Company, within ten
(10) business days after receipt of the Notice, each Purchaser may elect to
purchase or obtain, at the price and on the terms specified in the Notice, up to
that portion of such Shares which equals the proportion that the number of
shares of Common Stock issued and held, or issuable upon exercise of the
Warrants then held, by such Purchaser bears to the total number of shares of
Common Stock outstanding as of the date of the Notice (assuming full conversion
and exchange of all the then outstanding shares of the capital stock of the
Company convertible into or exchangeable for Common Stock) (such proportion
hereinafter referred to as such Purchaser’s “Pro Rata Share”).  If all of the
Shares offered to the Purchasers are not purchased by the Purchasers, the
Company shall reoffer any remaining Shares to the Purchasers purchasing their
full allotment upon the terms set forth in Sections 4.6(i) and 4.6(ii), except
that such Purchasers must exercise or decline such additional purchase rights
within ten (10) calendar days after the receipt of such reoffer.

 

(iii)            If all Shares referred to in the Notice are not elected to be
obtained as provided in Section 4.6(ii) hereof, the Company may, during the 90
day period following the expiration of the period provided in subsection 4.6(ii)

 

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hereof, offer the remaining unsubscribed portion of such Shares to any person or
persons at a price not less than, and upon terms no more favorable to the
offeree than those specified in the Notice.  If the Company does not enter into
an agreement for the sale of the Shares within such period, or if such agreement
is not consummated within 90 days of the execution thereof, the right provided
hereunder shall be deemed to be revived and such Shares shall not be offered
unless first reoffered to the Purchasers in accordance herewith.

 

(iv)           The right of first offer in this 4.6 shall not be applicable
(i) to shares of capital stock (or options, warrants or other rights to purchase
or subscribe for such capital stock) issuable or issued to (x) employees,
consultants, directors or advisors of the Company pursuant to a stock option
plan, restricted stock plan or other similar arrangement approved by the
Company’s Board of Directors, or (y) vendors, financial institutions, equipment
leasing companies, lessors or customers of the Company pursuant to arrangements
approved by the Company’s Board of Directors, (ii) to the issuance of securities
pursuant to the conversion, exercise or exchange of convertible, exercisable or
exchangeable securities outstanding as of the date of this Agreement, (iii) to
the issuance of securities in connection with a bona fide acquisition by the
Company of any business or assets or any joint venture or strategic allegiance
or similar transaction, the terms of which are approved by the Board of
Directors, (iv) to the issuance of securities in connection with any stock
split, stock dividend, combination or other recapitalization of the Company, and
(v) to the issuance of any securities pursuant to any transactions approved by
the Board of Directors, primarily for the purpose of (a) joint ventures,
licensing or research and development activities, or (b) distribution or
manufacture of this corporation’s products or services.

 

(v)              Notwithstanding any other provision of this Section 4.6, any
Purchaser may waive his, her or its rights with respect to any particular offer
or right given under, or any provision contained in Section 4.6 by notice in
writing to the Company.

 

4.7                                 Corporate Existence.  So long as any
Purchaser beneficially owns any Securities, the Company shall maintain its
corporate existence, except in the event of a merger, consolidation or sale of
all or substantially all of the Company’s assets, as long as the surviving or
successor entity in such transaction assumes the Company’s obligations hereunder
and under the agreements and instruments entered into in connection herewith.

 

4.8                                 Hedging Transactions.  No Purchaser has an
existing short position with respect to the Company’s Common Stock.  Each
Purchaser agrees not to, directly or indirectly, enter into any short sales with
respect to the Common Stock prior to the date on which such Purchaser is
entitled to sell, transfer the number of shares of Common Stock as to which such
Purchaser proposes to establish a short position.  This Section 4.8 shall not
prohibit such Purchaser from at any time entering into options contracts with
respect to the Common Stock, including puts and calls including delivering
Common Stock in satisfaction of any exercised options.

 

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4.9                                 Election of Director.  So long as the
Purchasers collectively own not less than SEVEN HUNDRED AND FIFTY THOUSAND
(750,000) shares of Common Stock of the Company, the Purchasers collectively
may, by a vote of a majority of the Common Shares owned by them, appoint one
(1) nominee to the Company’s Board of Directors.  Such nominee will be entitled
to such indemnification and officers’ and directors’ liability insurance
coverage which is applicable to the other Directors of the Company.

 

4.10                           Use of Proceeds.  The Company will use the
proceeds of the sale of the Securities to complete the CCA-StorCOMM Merger and
for working capital needs consistent with financial budgets approved from time
to time by the Company’s Board of Directors.

 

ARTICLE V
LEGEND REMOVAL, TRANSFER, CERTAIN SALES, ADDITIONAL SHARES

 

5.1                                 Removal of Legend.  The Legend shall be
removed and the Company shall issue a certificate without such Legend to the
holder of any Security upon which it is stamped, and a certificate for a
security shall be originally issued without the Legend, if, (a) the sale of such
Security is registered under the Securities Act, (b) such holder provides the
Company with an opinion of counsel, in form, substance and scope customary for
opinions of counsel in comparable transactions and reasonably satisfactory to
the Company and its counsel (the reasonable cost of which shall be borne by the
Company if, after one (1) year, neither an effective registration statement
under the Securities Act or Rule 144 is available in connection with such sale)
to the effect that a public sale or transfer of such Security may be made
without registration under the Securities Act pursuant to an exemption from such
registration requirements or (c) such Security can be sold pursuant to Rule 144
and the holder provides the Company with reasonable assurances that the Security
can be so sold without restriction or (d) such Security can be sold pursuant to
Rule 144(k).  The Company may not make any notation on its records or give
instructions to any transfer agent of the Company that enlarge the restrictions
on transfer set forth in this Section.  Each Purchaser agrees to sell all
Securities, including those represented by a certificate(s) from which the
Legend has been removed, or which were originally issued without the Legend,
pursuant to an effective registration statement, in accordance with the manner
of distribution described in such registration statement and to deliver a
prospectus in connection with such sale, or in compliance with an exemption from
the registration requirements of the Securities Act.  In the event the Legend is
removed from any Security or any Security is issued without the Legend and the
Security is to be disposed of other than pursuant to the registration statement
or pursuant to Rule 144, then prior to, and as a condition to, such disposition
such Security shall be relegended as provided herein in connection with any
disposition if the subsequent transfer thereof would be restricted under the
Securities Act.  Also, in the event the Legend is removed from any Security or
any Security is issued without the Legend and thereafter the effectiveness of a
registration statement covering the resale of such Security is suspended or the
Company determines that a supplement or amendment thereto is required by
applicable securities laws, then upon reasonable advance notice to Purchaser
holding such Security, the Company may require that the Legend be placed on any
such Security that cannot then be sold pursuant to an effective registration
statement or Rule 144 or with respect to which the opinion referred to in clause
(b) next above has not been rendered, which Legend shall be removed when such
Security may be sold pursuant to an effective

 

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registration statement or Rule 144 or such holder provides the opinion with
respect thereto described in clause (b) next above.

 

5.2                                 Transfer Agent Instructions.  The Company
agrees that following the effective date of the registration statement or at
such time as such legend is no longer required under  Section 5.1, it will, no
later than ten (10)  days following the delivery by a Purchaser to the Company
or the Company’s transfer agent of a certificate representing Warrant Shares
issued with a restrictive legend (such date, the “Legend Removal Date”), deliver
or cause to be delivered to such Purchaser a certificate representing such
Securities that is free from all restrictive and other legends, registered in
the name of each Purchaser or its nominee for the Warrant Shares in such amounts
determined in accordance with the terms of the Warrants.  The Company covenants
that no instruction other than such instructions referred to in this ARTICLE V,
and stop transfer instructions to give effect to Section 2.6 hereof in the case
of the Warrant Shares prior to registration of the Warrant Shares under the
Securities Act, will be given by the Company to its transfer agent and that the
Securities shall otherwise be freely transferable on the books and records of
the Company.  Nothing in this Section shall affect in any way each Purchaser’s
obligations and agreement set forth in Section 5.1 hereof to resell the
Securities pursuant to an effective registration statement and to deliver a
prospectus in connection with such sale or in compliance with an exemption from
the registration requirements of applicable securities laws.  If (a) a Purchaser
provides the Company with an opinion of counsel, which opinion of counsel shall
be in form, substance and scope customary for opinions of counsel in comparable
transactions and reasonably satisfactory to the Company and its counsel (the
reasonable cost of which shall be borne by the Company if, after one (1) year,
neither an effective registration statement under the Securities Act or Rule 144
is available in connection with such sale), to the effect that the Securities to
be sold or transferred may be sold or transferred pursuant to an exemption from
registration or (b) a Purchaser transfers Securities to an affiliate which is an
accredited investor (within the meaning of Regulation D under the Securities
Act) and which delivers to the Company in written form the same representations,
warranties and covenants made by Purchaser hereunder or pursuant to Rule 144,
the Company shall permit the transfer, and, in the case of the Warrant Shares,
promptly instruct its transfer agent to issue one or more certificates in such
name and in such denomination as specified by such Purchaser.  The Company
acknowledges that a breach by it of its obligations hereunder will cause
irreparable harm to a Purchaser by vitiating the intent and purpose of the
transaction contemplated hereby.  Accordingly, the Company acknowledges that the
remedy at law for a breach of its obligations under this ARTICLE V will be
inadequate and agrees, in the event of a breach or threatened breach by the
Company of the provisions of this ARTICLE V, that a Purchaser shall be entitled,
in addition to all other available remedies to an injunction restraining any
breach and requiring immediate issuance and transfer, without the necessity of
showing economic loss and without any bond or other security being required.

 

ARTICLE VI
CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL

 

6.1                                 Conditions to the Company’s Obligation to
Sell.  The obligation of the Company hereunder to issue and sell the Common
Shares and Warrants to a Purchaser at the Closing is subject to the
satisfaction, as of the date of the Closing and with respect to such

 

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Purchaser, of each of the following conditions thereto, provided that these
conditions are for the Company’s sole benefit and may be waived by the Company
at any time in its sole discretion:

 

(i)                  Such Purchaser shall have executed and delivered the
signature page to this Agreement and the Registration Rights Agreement;

 

(ii)               Such Purchaser shall have wired its aggregate Purchase Price
set forth on Schedule 1 hereto to the Escrow;

 

(iii)            The representations and warranties of such Purchaser shall be
true and correct as of the date when made and as of the Closing with the same
force and effect as though such representations and warranties had been made on
and as of the date of Closing (except for representations and warranties that
speak as of a specific date), and such Purchaser shall have performed, satisfied
and complied in all material respects with the covenants, agreements and
conditions required by this Agreement to be performed, satisfied or complied
with by the applicable Purchaser at or prior to the Closing;

 

(iv)           No statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by any
court or governmental authority of competent jurisdiction or any self-regulatory
organization having authority over the matters contemplated hereby which
restricts or prohibits the consummation of any of the transactions contemplated
by this Agreement;

 

(v)              The Company shall have obtained all waivers, authorizations,
approvals and consents needed to consummate the transaction contemplated by this
Agreement which the Company agrees to diligently procure;

 

(vi)           Purchaser shall have delivered an officer’s certificate, in form
and substance reasonably acceptable to the Company, as to the accuracy of such
Purchaser’s representations and warranties pursuant to ARTICLE II; and

 

(vii)        The CCA-StorCOMM Merger shall have been completed, which the
Company agrees to diligently prosecute.

 

ARTICLE VII
CONDITIONS TO EACH PURCHASER’S OBLIGATION TO PURCHASE

 

7.1                                 The obligation of each Purchaser hereunder
to purchase the Common Shares and Warrants to be purchased by it on the date of
the Closing is subject to the satisfaction of each of the following conditions,
provided that these conditions are for each Purchaser’s sole benefit and may be
waived by such Purchaser at any time in such Purchaser’s sole discretion:

 

(i)                  The Company shall have executed and delivered the signature
page to this Agreement and the Registration Rights Agreement;

 

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(ii)               The Company shall have delivered to the Escrow duly issued
certificates for the Common Shares being so purchased by Purchaser and Warrants
being issued to such Purchaser at the Closing;

 

(iii)            The representations and warranties of the Company shall be true
and correct in all material respects as of the date when made and as of the
Closing with the same force and effect as though such representations and
warranties had been made on and as of the date of Closing (except for
representations and warranties that speak as of a specific date and without
taking into account the effects of the CCA-StorCOMM Merger), and the Company
shall have performed, satisfied and complied in all material respects with the
covenants, agreements and conditions required by this Agreement to be performed,
satisfied or complied with by the Company at or prior to the Closing;

 

(iv)           No statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by any
court or governmental authority of competent jurisdiction or any self-regulatory
organization having authority over the matters contemplated hereby which
prohibits the consummation of any of the transactions contemplated by this
Agreement;

 

(v)              The Company shall have delivered an officer’s certificate, in
form and substance reasonably acceptable to the Purchaser, as to the accuracy of
the Company’s representations and warranties pursuant to ARTICLE III; and

 

(vi)           The CCA-StorCOMM Merger shall have been completed.

 

ARTICLE VIII
GOVERNING LAW; MISCELLANEOUS

 

8.1                                 Governing Law: Jurisdiction.  This Agreement
shall be governed by and construed in accordance with the California Corporation
Law (in respect of matters of corporation law) and the laws of the State of
California (in respect of all other matters) applicable to contracts made and to
be performed in the State of California.  The parties hereto irrevocably consent
to the jurisdiction of the United States federal courts and state courts located
in the County of Los Angeles in the State of California in any suit or
proceeding based on or arising under this Agreement or the transactions
contemplated hereby and irrevocably agree that all claims in respect of such
suit or proceeding may be determined in such courts.  The Company and each
Purchaser irrevocably waives the defense of an inconvenient forum to the
maintenance of such suit or proceeding in such forum.  The Company and each
Purchaser further agrees that service of process upon the Company or such
Purchaser, as applicable, mailed by the first class mail in accordance with
Section 8.6 shall be deemed in every respect effective service of process upon
the Company or such Purchaser in any suit or proceeding arising hereunder. 
Nothing herein shall affect Purchaser’s right to serve process in any other
manner permitted by law.  The parties hereto agree that a final non-appealable
judgment in any such suit or proceeding shall be conclusive and may be enforced
in other jurisdictions by suit on such judgment or in any other

 

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lawful manner.  The parties hereto irrevocably waive any right to a trial by
jury under applicable law.

 

8.2                                 Counterparts.  This Agreement may be
executed in two or more counterparts, including, without limitation, by
facsimile transmission, all of which counterparts shall be considered one and
the same agreement and shall become effective when counterparts have been signed
by each party and delivered to the other party.  In the event any signature
page is delivered by facsimile transmission, the party using such means of
delivery shall cause additional original executed signature pages to be
delivered to the other parties as soon as practicable thereafter.

 

8.3                                 Headings.  The headings of this Agreement
are for convenience of reference and shall not form part of, or affect the
interpretation of, this Agreement.

 

8.4                                 Severability.  If any provision of this
Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity
or unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement or the validity or enforceability of this Agreement
in any other jurisdiction.

 

8.5                                 Entire Agreement; Amendments.  This
Agreement and the instruments referenced herein contain the entire understanding
of the parties with respect to the maters covered herein and therein and, except
as specifically set forth herein or therein, neither the Company nor any
Purchaser makes any representation, warranty, covenant or undertaking with
respect to such matters.  No provision of this Agreement may be waived other
than by an instrument in writing signed by the party to be charged with
enforcement and no provision of this Agreement may be amended other than by an
instrument in writing signed by the Company and each Purchaser.

 

8.6                                 Notice.  Any notice herein required or
permitted to be given shall be in writing and may be personally served or
delivered by nationally-recognized overnight courier or by facsimile machine
confirmed telecopy, and shall be deemed delivered at the time and date of
receipt (which shall include telephone line facsimile transmission).  The
addresses for such communications shall be:

 

if to the Company:
Creative Computer Applications, Inc.
26115-A Mureau Road
Calabasas, CA  91302
Attention:  Steven M. Besbeck
Facsimile: 818-880-4398

 

with copy to:
Sheppard Mullin Richter & Hampton, LLP
800 Anacapa Street
Santa Barbara, CA 93101
Attention:  Joseph E. Nida, Esq.
Facsimile: (805) 568-1955

 

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If to the Purchasers:

 

See Schedule 1

 

with a copy to:

 

Jay Weil, Esq.
27 Viewpoint Road
Wayne, New Jersey 07470
Attn:  Jay Weil, Esq.
Facsimile:  212-688-7273

 

If to any other Purchaser, to such address set forth under such Purchaser’s name
on the signature page hereto executed by such Purchaser.  Each party shall
provide notice to the other parties of any change in address.

 

8.7                                 Successors and Assigns.  This Agreement
shall be binding upon and inure to the benefit of the parties and their
successors and assigns.  Neither the Company nor any Purchaser shall assign this
Agreement or any rights or obligations hereunder without the prior written
consent of the other.  Notwithstanding the foregoing, each Purchaser may assign
its rights and obligations hereunder to any of its “affiliates,” as that term is
defined under the Securities Act, without the consent of the Company so long as
such affiliate is an accredited investor (within the meaning of Regulation D
under the Securities Act) and agrees in writing to be bound by this Agreement. 
This provision shall not limit each Purchaser’s right to transfer the Securities
pursuant to the terms of this Agreement or to assign such Purchaser’s rights
hereunder to any such transferee.  In that regard, if Purchaser sells all or
part of its Common Shares to someone that acquires the shares subject to
restrictions on transferability (other than restrictions, if any, arising out of
the transferee’s status as an affiliate of the Company), Purchaser shall be
permitted to assign its rights hereunder, in whole or in part, to such
transferee.

 

8.8                                 Third Party Beneficiaries.  This Agreement
is intended for the benefit of the parties hereto and their respective permitted
successors and assigns and is not for the benefit of, nor may any provision
hereof be enforced by, any other Person.

 

8.9                                 Survival; Indemnification.  The
representations and warranties of the Company and the agreements and covenants
shall survive the closing hereunder notwithstanding any due diligence
investigation conducted by or on behalf of Purchaser.  The Company agrees to
indemnify and hold harmless each Purchaser and each of each Purchaser’s
officers, directors, employees, partners, agents and affiliates from and against
any and all losses, claims, damages, liabilities and expenses (including without
limitation reasonable attorneys’ fees and disbursements and other expenses
incurred in connection with investigating, preparing or defending any action,
claim or proceeding, pending or threatened and the costs of enforcement thereof)
(collectively, “Losses”)  arising as a result of or related to any breach or
alleged breach by the Company of any of its representations or covenants set
forth herein, including advancement of expenses as they are incurred.  The
representations and warranties of the Purchasers shall survive the Closing
hereunder and each Purchaser shall indemnify and hold harmless the Company and
each of its officers, directors, employees, partners, agents and

 

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affiliates from and against any and all Losses arising as a result of the breach
of such Purchaser’s representations and warranties.

 

8.10                           Further Assurances.  Each party shall do and
perform, or cause to be done and performed, all such further acts and things,
and shall execute and deliver all such other agreements, certificates,
instruments and documents, as the other party may reasonably request in order to
carry out the intent and accomplish the purposes of this Agreement and the
consummation of the transactions contemplated hereby.

 

8.11                           Remedies.  No provision of this Agreement
providing for any remedy to a Purchaser shall limit any remedy which would
otherwise be available to such Purchaser at law or in equity.  Nothing in this
Agreement shall limit any rights a Purchaser may have with any applicable
federal or state securities laws with respect to the investment contemplated
hereby.  The Company acknowledges that a breach by it of its obligations
hereunder will cause irreparable harm to a Purchaser.  Accordingly, the Company
acknowledges that the remedy at law for a material breach of its obligations
under this Agreement will be inadequate and agrees, in the event of a breach or
threatened breach by the Company of the provisions of this Agreement, that a
Purchaser shall be entitled, in addition to all other available remedies, to an
injunction restraining any breach and requiring immediate compliance, without
the necessity of showing economic loss and without any bond or other security
being required.

 

8.12                           Final Agreement.  This Agreement, when executed
by the parties hereto, shall constitute the final agreement between the parties
and upon such execution Purchasers and the Company accept the terms hereof and
have no cause of action against each other for prior negotiations preceding the
execution of this Agreement.  This Agreement shall supersede the Term Sheet For
Potential Investment between the parties hereto.

 

8.13                           Termination.  If the CCA-StorCOMM Merger shall
not have been completed by November 30, 2005, then without any further action of
any party hereto being required, unless such date shall be extended by a written
agreement of all of the parties, this Agreement shall be terminated.  The Escrow
Agreement shall also provide that if the CCA-StorCOMM Merger shall not have been
completed by November 30, 2005, all Escrow Property (as such term is defined in
the Escrow Agreement) shall be returned to the party which deposited it with the
Escrow Agreement.

 

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IN WITNESS WHEREOF, the undersigned Purchasers and the Company have caused this
Agreement to be duly executed as of the date first above written.

 

COMPANY:

 

CREATIVE COMPUTER APPLICATIONS, INC.

 

By:

/s/      Steven M. Besbeck

 

 

Name:

Steven M. Besbeck

 

Title:

President and Chief Executive Officer

 

 

PURCHASERS:

 

ANN KRUEGER and KYLE KRUEGER,

joint tenants by the entirety

 

By:

    /s/      Ann Krueger

 

 

      ANN KRUEGER

 

 

By:

    /s/      Kyle Krueger

 

 

      KYLE KRUEGER

 

 

 

GREGORY H. EKIZIAN REVOCABLE TRUST

 

By:

    /s/      Gregory H. Ekizian

 

 

Name:

Gregory H. Ekizian

 

Title:

CEO

 

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TEBO PARTNERS II, LLC,

a Kansas limited liability company

 

By:

    /s/      Todd Tumbleson

 

 

Name:

Todd Tumbleson

 

Title:

CEO

 

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