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:


 





















 


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.


 





















 


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


 





















 


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.


 





















 


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)


 





















 


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


 





















 


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.


 





















 


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:


 





















 


(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


 





















 


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)


 





















 


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.


 





















 


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


 





















 


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


 





















 


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


 





















 


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


 





















 


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)


 





















 


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.


 





















 


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


 





















 


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


 





















 


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;


 





















 


(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


 





















 


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


 





















 


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


 





















 


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.


 





















 


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

  
								



 





















 


	
  TEBO
  PARTNERS II, LLC,

  
	
  a Kansas limited liability
  company

  
	
   

  
	
  By:

  	
      /s/      Todd
  Tumbleson

  	
   

  
	
   

  	
  Name:

  	
  Todd Tumbleson

  
	
   

  	
  Title:

  	
  CEO