Document:

exv10w1

 

	 	 	 	 	 

EXHIBIT 10.1

ACCOUNTS RECEIVABLE PURCHASE MODIFICATION AGREEMENT

     This Accounts Receivable Purchase Modification Agreement is entered into as of March 16, 2005,
by and between Superconductor Technologies Inc. (the “Seller”) and Silicon Valley Bank (“Buyer”).

1.     DESCRIPTION OF EXISTING INDEBTEDNESS: Among other indebtedness which may be owing by
Seller to Buyer, Seller is indebted to Buyer pursuant to, among other documents, an Accounts
Receivable Purchase Agreement, dated March 28, 2003 by and between Seller and Buyer, as may be
amended from time to time (the “Accounts Receivable Purchase Agreement”). Capitalized terms used
without definition herein shall have the meanings assigned to them in the Accounts Receivable
Purchase Agreement.

Hereinafter, all indebtedness owing by Seller to Buyer shall be referred to as the “Indebtedness”.

2.     DESCRIPTION OF COLLATERAL. The Collateral as described in the Accounts Receivable
Purchase Agreement and the Intellectual Property Security Agreement, dated March 28, 2003 (“IP
Agreement”), secures repayment of the Indebtedness.

Hereinafter, the above-described security documents and guaranties, together with all other
documents securing repayment of the Indebtedness shall be referred to as the “Security Documents”.
Hereinafter, the Security Documents, together with all other documents evidencing or securing the
Indebtedness shall be referred to as the “Existing Documents”.

3.     DESCRIPTION OF CHANGE IN TERMS.

	        	A.  	Modification(s) to Accounts Receivable Purchase Agreement:

	                	1.  	Section 2.2 entitled “Acceptance of Receivables” is hereby
amended in its entirety to read as follows:
	 
	 	   	2.2. Acceptance of Receivables. Buyer shall have no obligation to
purchase any receivable listed on an Invoice Transmittal. Buyer may
exercise its sole discretion in approving the credit of each Account
Debtor before buying any receivable. Upon acceptance by Buyer of all or
any of the receivables described on any Invoice Transmittal, Buyer shall
pay to Seller 80(%) percent of the face amount of each receivable
Buyer desires to purchase, net of deferred revenue and offsets related to
each specific Account Debtor. Such payment shall be the “Advance” with
respect to such receivable. Buyer may, from time to time, in its sole
discretion, change the percentage of the Advance. Upon Buyer’s acceptance
of the receivable and payment to Seller of the Advance, the receivable
shall become a “Purchased Receivable.” It shall be a condition to each
Advance that (i) all of the representations and warranties set forth in
Section 6 of this Agreement be true and correct on and as of the date of
the related Invoice Transmittal and on and as of the date of such Advance
as though made at and as of each such date, and (ii) no Event of Default
or any event or condition that with notice, lapse of time or otherwise
would constitute an Event of Default shall have occurred and be
continuing, or would result from such Advance. Notwithstanding the
foregoing, in no event shall the aggregate amount of all Purchased
Receivables outstanding at any time exceed Five Million Dollars
($5,000,000.00).
	 
	 	2.  	Effective as of the date herewith, Section 3.2 entitled
“Finance Charges” is hereby amended in its entirety to read as follows:

 

 

	                	 	3.2. Finance Charges. On each Reconciliation Date Seller shall pay to
Buyer a finance charge in an amount equal to 2.50 percentage points above
the Prime Rate per annum (but no less than 6.75%) multiplied by the gross
average daily Account Balance outstanding during the applicable
Reconciliation Period (the “Finance Charges”).
	 
	 	3.  	Paragraphs (I) and (J) of Section 6.2 entitled “Additional
Warranties, Representations and Covenants” are hereby amended/incorporated to
read as follows:
	 
	 	 	(I) Seller will maintain its primary deposit and investments accounts with
or through Buyer, which relationship shall include Borrower maintaining
account balances in any accounts at or through Bank representing at least
85% of all account balances of Borrower at any financial institution; and
	 
	 	 	(J) Seller shall not, without Buyer’s prior written consent (which shall
be a matter of its good faith business judgment), do any of the following:
(i) merge or consolidate with another corporation or entity, unless
Seller’s stockholders hold a majority of the voting rights of the
surviving entity, and the transaction’s consideration is in the form of
stock; (ii) acquire any assets, except in the ordinary course of business;
(iii) enter into any other transaction outside the ordinary course of
business, unless the transaction involves inbound and outbound licensing;
(iv) sell or transfer any Collateral, except for the sale of finished
inventory in the ordinary course of Seller’s business, and except for the
sale of obsolete or unneeded equipment in the ordinary course of business;
(v) store any inventory or other Collateral with any ware-houseman or
other third party, which value exceeds $1,500,000; (vi) make any loans of
any money or other assets; (vii) incur any debts, outside the ordinary
course of business, which would result in a material adverse change
(described in Section 9(J)); (viii) guarantee or otherwise become liable
with respect to the obligations of another party or entity; (ix) pay or
declare any dividends on Seller’s stock (except for dividends payable
solely in stock of Seller); (x) redeem, retire, purchase or otherwise
acquire, directly or indirectly, any of Seller’s stock; (xi) make any
change in Seller’s capital structure which would result in a material
adverse change (described in Section 9(J)); or (xii) engage, directly or
indirectly, in any business other than the businesses currently engaged in
by Seller or reasonably related thereto; (xiii) dissolve or elect to
dissolve.
	 
	 	4.  	The first sentence in Section 17 entitled “Term and
Termination” is hereby amended to read as follows:
	 
	 	   	The term of this Agreement shall be through June 15, 2006 unless
terminated in writing by Buyer or Seller.

4.     CONSISTENT CHANGES. The Existing Documents are each hereby amended wherever necessary to
reflect the changes described above.

5.     NO DEFENSES OF SELLER. Seller agrees that, as of this date, it has no defenses against
the obligations to pay any amounts under the Indebtedness.

6.     PAYMENT OF LOAN FEE. Borrower shall pay Bank a fee in the amount of Thirty-One Thousand
Two Hundred-Fifty Dollars ($31,250) (“Loan Fee”) plus all out-of-pocket expenses.

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7.     CONTINUING VALIDITY. Seller understands and agrees that in modifying the existing Indebtedness, Buyer is relying upon Seller’s representations, warranties, and agreements, as set
forth in the Existing Documents. Except as expressly modified pursuant to this Accounts Receivable
Purchase Modification Agreement, the terms of the Existing Documents remain unchanged and in full
force and effect. Buyer’s agreement to modifications to the existing Indebtedness pursuant to this
Accounts Receivable Purchase Modification Agreement in no way shall obligate Buyer to make any
future modifications to the Indebtedness. Nothing in this Accounts Receivable Purchase Modification
Agreement shall constitute a satisfaction of the Indebtedness. It is the intention of Buyer and
Seller to retain as liable parties all makers and endorsers of Existing Documents, unless the party
is expressly released by Buyer in writing. No maker, endorser, or guarantor will be released by
virtue of this Accounts Receivable Purchase Modification Agreement. The terms of this paragraph
apply not only to this Accounts Receivable Purchase Modification Agreement, but also to any
subsequent Accounts Receivable Purchase modification agreements.

8.     COUNTERSIGNATURE. This Accounts Receivable Purchase Modification Agreement shall become
effective only when executed by Seller and Buyer.

9.     CONDITIONS. The effectiveness of this Accounts Receivable Purchase Modification
Agreement is conditioned upon payment of the Loan Fee.

SELLER:

SUPERCONDUCTOR TECHNOLOGIES, INC.

		
	By: 	 

		
	Name: 	 

		
	Title: 	 

BUYER:

SILICON VALLEY BANK

		
	By: 	 

		
	Name: 	 

		
	Title: 	 

3exv10w1

 

Exhibit 10.1

 
 
 
 
 
 
 

MERGER AGREEMENT

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	Asset Sale
	 	 	1	 
	Merger
	 	 	1	 
	Definitions
	 	 	1	 
	Closing Date
	 	 	1	 
	Annual Report
	 	 	1	 
	Asset Sale
	 	 	2	 
	Merger
	 	 	1	 
	Financing
	 	 	2	 
	Name Change
	 	 	2	 
	New Directors
	 	 	2	 
	New Officers
	 	 	2	 
	Information Statement
	 	 	2	 
	Form 8-K
	 	 	2	 
	Closing
	 	 	2	 
	Execution, Delivery
	 	 	3	 
	Documents
	 	 	3	 
	Conditions
	 	 	3	 
	Merger
	 	 	4	 
	Effecting the Merger
	 	 	4	 
	Conversion of Shares
	 	 	4	 
	Conversion of Warrants
	 	 	4	 
	Conversion of Warrants
	 	 	5	 
	Clearant’s Representations and Warranties
	 	 	5	 
	Organization
	 	 	5	 
	Capitalization
	 	 	5	 
	No Subsidiaries
	 	 	6	 
	Authorization
	 	 	6	 
	No Conflict
	 	 	6	 
	Financial Statements
	 	 	7	 
	Absence of Undisclosed Liabilities
	 	 	7	 
	Litigation
	 	 	7	 
	Insurance
	 	 	7	 
	Personal Property
	 	 	7	 
	Intangible Property
	 	 	8	 
	Real Property
	 	 	9	 
	Accounts Receivable
	 	 	9	 
	Tax Matters
	 	 	9	 
	Books and Records
	 	 	10	 
	Contracts and Commitments
	 	 	10	 
	Compliance with Agreements and Laws
	 	 	11	 
	Employee Relations
	 	 	12	 
	Employee Benefit Plans
	 	 	12	 
	Absence of Certain Changes or Events
	 	 	13	 
	Customers
	 	 	14	 

 i 

 

 

	 	 	 	 	 
	Indebtedness to and from Affiliates
	 	 	14	 
	Banking Facilities
	 	 	14	 
	Powers of Attorney and Suretyships
	 	 	15	 
	Conflicts of Interest
	 	 	15	 
	Regulatory Approvals
	 	 	15	 
	No Brokers
	 	 	15	 
	Disclosure
	 	 	15	 
	Tax Treatment
	 	 	15	 
	Bliss’s Representations and Warranties
	 	 	16	 
	Organization
	 	 	16	 
	Capitalization
	 	 	16	 
	No Subsidiaries
	 	 	16	 
	Authorization
	 	 	16	 
	No Conflict
	 	 	17	 
	Absence of Liabilities
	 	 	17	 
	Litigation
	 	 	17	 
	Insurance
	 	 	18	 
	Tax Matters
	 	 	18	 
	Books and Records
	 	 	18	 
	Contracts and Commitments
	 	 	18	 
	Compliance with Agreements and Laws
	 	 	19	 
	Employee Relations
	 	 	20	 
	Employee Benefit Plans
	 	 	20	 
	Absence of Certain Changes or Events
	 	 	21	 
	Indebtedness to and from Affiliates
	 	 	22	 
	Banking Facilities
	 	 	22	 
	Powers of Attorney and Suretyships
	 	 	22	 
	Conflicts of Interest
	 	 	22	 
	Regulatory Approvals
	 	 	23	 
	No Brokers
	 	 	23	 
	Disclosure
	 	 	23	 
	SEC and State Securities Law Filings
	 	 	23	 
	Tax Treatment
	 	 	24	 
	Affiliates
	 	 	24	 
	Stockholder Claims
	 	 	24	 
	Covenants
	 	 	24	 
	General
	 	 	24	 
	Notices and Consents
	 	 	24	 
	Regulatory Matters and Approvals
	 	 	24	 
	Operation of Business
	 	 	25	 
	Indemnification
	 	 	25	 
	By Clearant
	 	 	25	 
	By Majority Stockholders
	 	 	25	 
	Claims for Indemnification
	 	 	26	 
	Defense by the Indemnifying Party
	 	 	26	 
	Survival of Representations and Warranties; Claims for Indemnification
	 	 	26	 

 ii 

 

 

	 	 	 	 	 
	Confidentiality
	 	 	27	 
	Termination
	 	 	27	 
	Miscellaneous
	 	 	28	 
	Survival
	 	 	28	 
	Press Releases and Public Announcements
	 	 	28	 
	No Third-Party Beneficiaries
	 	 	28	 
	Incorporation by Reference
	 	 	28	 
	Notices
	 	 	28	 
	Waiver
	 	 	29	 
	Further Assurances
	 	 	29	 
	Successors and Assigns
	 	 	29	 
	Severability
	 	 	30	 
	Expenses
	 	 	30	 
	Governing Law
	 	 	30	 
	Section Headings; Construction
	 	 	30	 
	Counterparts
	 	 	30	 
	Amendments
	 	 	30	 
	Entire Agreement
	 	 	31	 
	Schedule 1
	 	 	32	 
	Definitions
	 	 	32	 
	Index of Definitions
	 	 	34	 
	Schedule 2
	 	 	1	 
	List of Agreements
	 	 	1	 
	Exhibit A
	 	 	i	 
	Exhibit B
	 	 	i	 

 iii 

 

 

MERGER AGREEMENT

     This Merger Agreement and Plan of Reorganization (“Agreement”) is made and entered into as of
March 31, 2005 (“Closing Date”), by and among Clearant, Inc., a Delaware corporation, formerly a
California corporation, with its principal office at 11111 Santa Monica Boulevard, Suite 650, Los
Angeles, California 90025 (“Clearant”); Bliss Essentials Corp., a Nevada corporation, with its
principal office at 5050 Kingsway, 2nd Floor, Burnaby, British Columbia, Canada V5H 4H2 (“Bliss”);
and Thomas Gelfand, Howard Gelfand and Kathleen Rufh (collectively, “Majority Stockholders”).

     This Agreement contemplates a series of transactions in which Bliss will, effective upon the
conditions and dates specified herein:

     A. Asset Sale. Dispose of substantially all of its operating assets and liabilities
to the Majority Stockholders pursuant to the Asset Purchase Agreement (“Purchase Agreement”)
between Bliss and the Majority Stockholders of even date herewith; and

     B. Merger. Acquire all of Clearant’s outstanding common stock through a reverse
triangular merger, pursuant to which (i) Clearant, Inc., a Nevada corporation, and newly-formed,
wholly-owned subsidiary of Bliss (“Name Change Sub”) will merge with and into Bliss, and Bliss will
survive and change its name to Clearant, Inc., (ii) the officers and directors of Clearant will
become the officers and directors of Bliss, and (iii) BEI Merger Corporation, a Delaware
corporation, and newly-formed, wholly-owned subsidiary of Bliss (“Merger Sub”) will merge with and
into Clearant, and Clearant will survive and become a wholly-owned subsidiary of Bliss.

     For federal income tax purposes, the Parties intend that the transactions contemplated by this
Agreement will qualify as a tax-free reorganization within the meaning of Section 368(a) of the
Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder
(the “Tax Code”).

     In consideration of the foregoing and the representations, warranties and mutual covenants
herein made, the Parties hereby agree to the foregoing and as follows:

Section 1. Definitions. Capitalized terms not otherwise defined herein have the meanings set forth
in the attached Schedule 1.

Section 2. Closing Date. On the Closing Date, or as soon as practicable thereafter:

     (a) Annual Report. Bliss will file its Annual Report on Form 10-KSB for its fiscal
year ended December 31, 2004 in accordance with the Exchange Act;

     (b) Merger. Bliss, Clearant and the Majority Stockholders will execute and deliver
all documents in connection with the Merger, to be filed with the Secretary of State of Delaware;

     (c) Asset Sale Bliss and the Majority Stockholders will execute and deliver the
Purchase Agreement and effectuate the transactions provided for therein (“Asset Sale”);

1

 

     (d) Name Change. Bliss will merge Name Change Sub into itself pursuant to a plan of
merger adopted by the board of directors of Bliss (“Board”) and articles of merger filed with the
Secretary of State of the State of Nevada in accordance with NRS 92A.180, the separate corporate
existence of Name Change Sub will cease, Bliss will continue as the surviving corporation, and the
name of Bliss will be changed to Clearant, Inc., a Nevada corporation, effective immediately (“Name
Change”) and, in connection therewith, Bliss shall obtain a new CUSIP number and a new OTC Bulletin
Board trading symbol;

     (e) Financing. Pursuant to fully executed and delivered Registration Rights
Agreements (“Registration Rights Agreement”) and Subscription Agreements (“Subscription Agreement”)
between Bliss and the investors named therein (“Investors”), the forms of which are attached hereto
as Exhibits A and B, respectively, for the purchase of $11,080,000 (minus $2,350,000 in bridge
financing already received) of Bliss common stock (the “Financing”), Escrow Holder will release all
remaining funds to Bliss;

     (f) New Directors. The Board will:

          (i) Pursuant to Section 3.2 of the bylaws of Bliss (“Bylaws”) and Article VI of the Articles
of Incorporation of Bliss (“Articles”), adopt a resolution increasing the number of directors to
five (5), effective immediately,

          (ii) Appoint two (2) individuals designated by Clearant to fill the vacancies on the Board,
effective immediately,

          (iii) File with the SEC and transmit to the stockholders of Bliss the information required by
Exchange Act Rule 14f-1 (“14f-1 Information”) with regard to the matters in sections (iv) and (v)
below,

          (iv) Accept the resignation from the Board of the Majority Stockholders, effective ten (10)
days after the Closing Date, and

          (v) Appoint three (3) additional individuals designated by Clearant to fill the vacancies on
the Board, effective ten (10) days after the Closing Date;

     (g) New Officers. The Majority Stockholders will resign as officers of Bliss,
effective immediately, and individuals designated by Clearant will be appointed as officers of
Bliss;

     (h) Form 8-K. Bliss will file a Current Report on Form 8-K disclosing the material
terms of the Agreement and the transactions contemplated herein, to
be amended on Form 8-K/A to include the required audited financial statements within 75 days
of the Closing Date.

Section 3. Closing.

     (a) Execution, Delivery. On or before the Closing Date, each of the respective
Parties will execute, acknowledge, and deliver to the Escrow Holder (or will cause to be executed,
acknowledged, and delivered) any and all certificates, opinions, financial statements, schedules,
agreements, resolutions, rulings, or other instruments necessary or appropriate to

2

 

effectuate the transactions provided for in this Agreement, together with such other items as may be reasonably
requested by any other Parties or their respective legal counsel in order to effectuate or evidence
the transactions contemplated hereby.

     (b) Documents. On or before the Closing Date, the Parties will deliver to the Escrow
Holder fully-executed originals of the following documents:

          (i) the Form 10-KSB

          (ii) the Purchase Agreement

          (iii) this Agreement

          (iv) the Conversion Agreements (as herein defined)

          (v) the IRA Amendment (as herein defined)

          (vi) the Subscription Agreements

          (vii) the Registration Rights Agreements

          (viii) the merger certificate for the Name Change

          (ix) the 14f-1 Information

          (x) the Form 8-K

          (xi) resolutions of the Board

          (xii) resignations of the Majority Stockholders

          (xiii) officers certificates

          (xiv) opinion of Clearant intellectual property counsel

          (xv) original minute books of Bliss

          (xvi) audited financial statements for Clearant’s 2003 fiscal year

     (c) Conditions. The effectiveness of this Agreement and all of the transactions
contemplated hereby are conditioned upon (i) the Investors depositing the full amount of the
Financing with the Escrow Holder by the Closing Date, (ii) Clearant providing audited financial
statements for its 2003 fiscal year on the Closing Date, and (iii) Clearant providing within 75
days of the Closing Date audited financial statements for its 2004 fiscal year signed by an
independent registered public accounting firm and not containing a going concern qualification.

3

 

Section 4. Merger. On the Closing Date:

     (a) Effecting the Merger. A properly executed and certified copy of a merger
certificate will be duly filed with the Secretary of State of Delaware, pursuant to which Merger
Sub will be merged with and into Clearant, the separate corporate existence of Merger Sub will
cease, and Clearant will continue its existence as a wholly-owned subsidiary of Bliss (the
“Merger”). The officers and directors of Clearant prior to the Closing Date will continue to serve
as the officers and directors of Clearant following the Merger.

     (b) Conversion of Shares.

          (i) Clearant will deliver (i) an amendment to the Clearant Investor Rights Agreement (“IRA
Amendment”) providing for a shareholder lock-up, and (ii) Conversion Agreements executed by each
holder of Clearant convertible promissory notes and convertible preferred stock (“Conversion
Agreements”).

          (ii) Each 1.0003 share of the shares common stock of Clearant issued and outstanding on the
Closing Date (“Shares”) will, by virtue of the Merger and without any action on the part of
Clearant, Bliss, Merger Sub or the holders of the Shares, be converted into and will become one (1)
validly issued, fully paid and nonassessable share of common stock of Bliss (“Share Ratio”), such
that holders of the Shares as of the Closing Date will hold a total of 25 million shares of Bliss
following the conversion. No fractional shares will be issued, and any right to receive a
fractional share will be rounded to the nearest whole share.

          (iii) The Shares, together with any Shares held in Clearant’s treasury, will be deemed
canceled and retired and will cease to exist, and each holder of a certificate for Shares will
cease to have any rights with respect thereto; provided, however, that, following the Closing Date,
upon surrender of an original stock certificate representing Shares, Bliss will deliver a stock
certificate for shares of common stock of Bliss to which such Person is entitled pursuant to the
Share Ratio, bearing any necessary or appropriate restrictive legend.

          (iv) If any certificate evidencing Shares shall have been lost, stolen or destroyed, upon the
making of an affidavit of that fact by the Person claiming the certificate to be lost, stolen or
destroyed and, if required by Bliss, the posting of an indemnity bond, in such reasonable amount as
the transfer agent may direct, as collateral security against any claim that may be made with
respect to the certificate, Bliss will issue in exchange for the lost, stolen or destroyed
certificate the applicable number of shares of Bliss common stock.

     (c) Conversion of Warrants.

          (i) All warrants to purchase shares of common stock of Clearant issued and outstanding on the
Closing Date (“Warrants”) will, by virtue of the Merger and without any action on the part of
Clearant, Bliss, Merger Sub or the holders of the Warrants, be converted into and will become
warrants to purchase 2,477,376 shares of common stock of Bliss, at an exercise price of $4.00 per
share (“Warrant Ratio”). No warrants for fractional shares will be issued, and any right to
receive a fractional share will be rounded to the nearest whole share.

4

 

          (ii) The Warrants will be deemed canceled and will cease to exist, and each holder of a
Warrant will cease to have any rights with respect thereto; provided, however, that, on the Closing
Date, upon surrender of an original Warrant, Bliss will deliver a replacement warrant to purchase
shares of common stock of Bliss to which such Person is entitled pursuant to the Warrant Ratio,
bearing any necessary or appropriate restrictive legend.

     (d) Conversion of Options.

          (i) All options to purchase shares of common stock of Clearant granted pursuant to its 2000
Stock Option Plan (“Plan”) and outstanding on the Closing Date (“Options”) with an exercise price
less than $3.50 per share, whether or not vested, will, by virtue of the Merger and without any
action on the part of Clearant, Bliss, Merger Sub or the holders of the options, be assumed by
Bliss pursuant to Section 13(c)(iii) of the Plan, and will become options to purchase the same
number of shares of common stock of Bliss, to a maximum of 1,918,588 shares, on and subject to the
same terms and conditions.

          (ii) All outstanding Options with an exercise price greater than $3.50 per share, whether or
not vested, will terminate and be deemed canceled pursuant to Section (c)(iv) of the Plan, and will
cease to exist, without further liability to Bliss or Clearant, and each holder of Options will
cease to have any rights with respect thereto.

Section 5. Clearant’s Representations and Warranties. Clearant represents and warrants to Bliss
and the Investors that the statements contained in this Section are true and correct as of the
Closing Date, except (i) where any variation would not be reasonably likely to have an Adverse
Effect, and (ii) as set forth herein and in the disclosure schedule delivered by Clearant to Bliss,
arranged in sections corresponding to the paragraphs in this Section and the disclosure in any
section or paragraph will qualify other paragraphs in this Section to the extent that it is
reasonably apparent from a reading of the disclosure that it also qualifies or applies to such
other paragraphs.

     (a) Organization. Clearant is a corporation validly existing and in good standing
under the laws of the State of Delaware and has all requisite power and authority and possesses all
necessary governmental approvals necessary to own, lease and operate its properties, to carry on
its business as now being conducted, to execute and deliver this Agreement and the agreements
contemplated herein, and to consummate the transactions contemplated hereby and thereby. Clearant
is duly qualified to do business and is in good standing in all jurisdictions in which its
ownership of property or the character of its business requires such qualification, except where
the failure to be so qualified would not reasonably be
expected to have an Adverse Effect. Certified copies of the Articles of Incorporation and
Bylaws of Clearant, as amended to date, have been made available to Bliss, are complete and
correct, and no amendments have been made thereto or have been authorized since the date thereof.
Clearant is not in violation of any of the provisions of its Articles of Incorporation or Bylaws.

     (b) Capitalization.

          (i) Clearant’s authorized capital stock consists solely of 50,000,000 shares of Clearant
common stock, par value $.0001.

5

 

          (ii) There are 25,008,585 shares of Clearant common stock issued and outstanding and no shares
held in the treasury of Clearant. All of the issued and outstanding shares of Clearant common
stock were duly and validly issued and fully paid, are nonassessable and free of preemptive rights,
and were issued in compliance with all applicable state and federal securities laws.

          (iii) Other than the Warrants, there are no outstanding (A) options, warrants, or other rights
to purchase from Clearant any capital stock of Clearant; (B) debt securities or instruments
convertible into or exchangeable for shares of such stock; or (C) commitments of any kind for the
issuance of additional shares of capital stock or options, warrants or other securities of
Clearant.

     (c) No Subsidiaries. Clearant does not own any capital stock or other equity interest
in any corporation, partnership, joint venture or other entity.

     (d) Authorization. Clearant has all requisite power and authority to execute and
deliver this Agreement, to perform its obligations hereunder and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by Clearant and the consummation
by Clearant of the transactions contemplated hereby have been duly and validly authorized by all
necessary corporate action by Clearant and no other corporate proceedings on the part of Clearant
and no shareholder vote or consent are necessary to authorize this Agreement or to consummate the
transactions contemplated hereby. This Agreement has been duly and validly executed and delivered
by Clearant. This Agreement and all other agreements and obligations entered into and undertaken
in connection with the transactions contemplated hereby to which Clearant is a party constitute the
valid and legally binding obligations of Clearant, enforceable against Clearant in accordance with
their respective terms, except as may be limited by principles of equity, applicable bankruptcy,
reorganization, insolvency, moratorium, fraudulent conveyance or other similar laws relating to or
affecting the rights and remedies of creditors generally. The execution, delivery and performance
by Clearant of this Agreement and the agreements provided for herein, and the consummation by
Clearant of the transactions contemplated hereby and thereby, will not, with or without the giving
of notice or the passage of time or both, violate the provisions of the Articles of Incorporation
or Bylaws of Clearant, or to Clearant’s Knowledge (i) violate the provisions of any law, rule or
regulation applicable to Clearant, (ii) violate any judgment, decree, order or award of any court,
governmental body or arbitrator; or (iii) conflict with or result in the breach or termination of
any term or provision of, or constitute a default under, or cause any acceleration under, or cause
the creation of any lien, charge or encumbrance upon the properties or assets of Clearant pursuant
to, any indenture, mortgage, deed of trust or other instrument or agreement to which Clearant is a
party or by which Clearant or any of its properties is or may be bound.

     (e) No Conflict. The execution and delivery of this Agreement by Clearant does not
require any consent or approval under, result in any breach of, any loss of any benefit under or
constitute a change of control or default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any right of termination, vesting, amendment,
acceleration or cancellation of, or result in the creation of any lien or encumbrance on any
property or asset of Clearant pursuant to any material agreement of Clearant or other instrument or
obligation of Clearant.

6

 

     (f) Financial Statements.

          (i) Clearant has previously delivered to Bliss (A) the audited balance sheets of Clearant as
of December 31, 2003 and 2002, and the related audited statements of operations, shareholders’
equity and cash flows of Clearant for these fiscal years, and (B) the unaudited balance sheet of
Clearant as of December 31, 2004 and the related unaudited statements of operations, shareholders’
equity and cash flows of Clearant for the fiscal year ended December 31, 2004.

          (ii) The foregoing have been prepared in accordance with United States generally accepted
accounting principles (“GAAP”) applied consistently with past practices, and fairly present, as of
their respective dates, the financial condition, retained earnings, assets and liabilities of
Clearant and the results of operations of Clearant’s business for the periods indicated.

     (g) Absence of Undisclosed Liabilities. Except as and to the extent reflected and
reserved against in its current balance sheet, or incurred in the ordinary course of business
after the date of the current balance sheet, either individually or in the aggregate, Clearant does
not have any liability or obligation, secured or unsecured, whether absolute, contingent,
unasserted or otherwise, which exceed $100,000.

     (h) Litigation. There is no action, suit, legal or administrative proceeding or
investigation pending or, to Clearant’s Knowledge, threatened against or involving Clearant (either
as a plaintiff or defendant) before any court or governmental agency, authority, body or
arbitrator. Neither Clearant nor to its Knowledge any officer, director or employee of Clearant,
has been permanently or temporarily enjoined by any order, judgment or decree of any court or any
governmental agency, authority or body from engaging in or continuing any conduct or practice in
connection with the business, assets, or properties of Clearant. There in existence on the date
hereof any order, judgment or decree of any court, tribunal or agency to Clearant’s Knowledge
enjoining or requiring Clearant to take any action of any kind with respect to its business, assets
or properties.

     (i) Insurance. Its disclosure schedule sets forth a listing of all current Clearant
insurance policies, and all claims in excess of $100,000 made under any policies of insurance since
the formation of Clearant. All current insurance policies are in full force and effect, are in
amounts of a nature that are adequate and customary for Clearant’s
business, and to Clearant’s Knowledge are sufficient for compliance with all legal
requirements and agreements to which it is a party or by which it is bound. All premiums due on
current policies or renewals have been paid, and there is no material default under any of the
policies.

     (j) Personal Property. True, correct and complete copies or lists of all items of
tangible personal property owned by Clearant as of the date hereof having either a net book value
per unit in excess of $100,000, or not owned by Clearant but in the possession of or used in the
business of Clearant and having non-cancelable lease payments in excess of $25,000 per year; and a
description of the owner, and any agreement relating to the use, of each item of Clearant personal
property not owned by Clearant and the circumstances under which the property is used, have been
made available to Bliss.

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          (i) Clearant has good and marketable title to each such item free and clear of all liens,
leases, encumbrances, claims under bailment and storage agreements, equities, conditional sales
contracts, security interests, charges and restrictions, except for liens, if any, for personal
property taxes not due;

          (ii) Such property is used by Clearant in the ordinary course of its business and is
sufficient for continued conduct of Clearant’s business after the Closing Date in substantially the
same manner as conducted prior to the Closing Date; and

          (iii) Such property is in good operating condition and repair, normal wear and tear excepted,
and normal maintenance has been performed.

     (k) Intangible Property. Its disclosure schedule lists of (A) all United States and
foreign patents, trademark registrations, copyright registrations, and applications for any of the
foregoing, and (B) all licenses or similar agreements or arrangements to which Clearant is a party,
either as licensee or licensor, with respect thereto.

          (i) Clearant is the sole and exclusive owner of all right, title and interest in and to all
material items of intangible property necessary for the operation of all material aspects of
Clearant’s business as it is currently conducted, and all designs, permits, labels and packaging
used on or in connection therewith, free and clear of all liens, security interests, charges,
encumbrances, equities or other adverse claims;

          (ii) Clearant has the right and authority to use, and to continue to use after the Closing
Date, such property in connection with the conduct of its business in the manner presently
conducted, and to its Knowledge such use or continuing use does not and will not materially
infringe upon or violate any rights of any other Person;

          (iii) Clearant has no Knowledge of a pleading or threatened claim, interference action or
other judicial or adversarial proceeding against Clearant that any of its operations, activities,
products, services or publications or any of its customers or distributors infringes or will
infringe any patent, trademark, copyright, trade secret or other property right of a third party,
or that it is illegally using the trade secrets or property rights of others;

          (iv) There are no outstanding, nor to its Knowledge any threatened disputes or other
disagreements with respect to any licenses or similar agreements with regard to such property; and

          (v) Clearant does not have any Knowledge that any third party is infringing, or will threaten
to infringe, upon or otherwise violate any such property in which Clearant has ownership rights.

     (l) Real Property.

          (i) Clearant does not own any real property.

          (ii) Its disclosure schedule lists all material leases of real property to which Clearant is a
party, and all amendments, modifications and supplemental agreements thereto.

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Such leases are in full force and effect, are binding and enforceable against each of the parties thereto in
accordance with their respective terms, and have not been modified or amended since the date of
delivery to Bliss. The execution, delivery and performance of this Agreement by Clearant, and the
consummation of the transaction contemplated hereby, will not effect the enforceability against any
person of any such lease agreement or the rights of Clearant to the continued use and possession of
the real property subject to such leases for the conduct of business as presently conducted.

          (iii) Clearant is in possession of the real property and assets purported to be leased under
such leases. No party to any such lease has sent written notice to the other claiming a default
thereunder which remains uncured. There has not occurred to its Knowledge any event that would
constitute a breach of or default in the performance of any covenant, agreement or condition
contained in any such lease, nor has there occurred any event which with the passage of time or the
giving of notice or both would constitute such a breach or material default.

     (m) Accounts Receivable. Its disclosure schedule lists the accounts and notes
receivable of Clearant in excess of $10,000 per item. All material accounts receivable arose out
of the sales of inventory or services in the ordinary course of business and to its Knowledge are
collectible in the face value thereof using normal collection procedures, net of the reserve for
doubtful accounts, which reserve is adequate and calculated consistent with past practice. There
is no contest, claim, or right of set-off, other than returns in the ordinary course of business,
under any contract with an obligor of accounts receivable relating to the amount or validity of
such account.

     (n) Tax Matters.

          (i) Within the times and in the manner prescribed by law, Clearant has filed all federal,
state and local tax returns and all tax returns for other governing bodies having jurisdiction to
levy taxes upon it which are required to be filed;

          (ii) Clearant has paid all taxes, interest, penalties, assessments and deficiencies which have
become due, including without limitation income, franchise, real estate, and sales and withholding
taxes;

          (iii) All tax returns filed by Clearant for all taxable years since formation constitute
complete and accurate representations of the respective tax liabilities of Clearant for such years;

          (iv) Clearant has not waived or extended any applicable statute of limitations relating to the
assessment of federal, state or local taxes;

          (v) No examinations of the federal, state or local tax returns of Clearant are currently in
progress nor threatened and no deficiencies have been asserted or to its Knowledge assessed against
Clearant as a result of any audit by the Internal Revenue Service or any state or local taxing
authority and no such deficiency has been proposed or threatened;

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          (vi) There are no pending or threatened audits, assessments or other actions relating to any
liability in respect of taxes of Clearant by any tax authority nor are there any matters under
discussion with any tax authority with respect to taxes of Clearant; and

          (vii) Clearant has not filed a consent pursuant to Section 341(f) of the Tax Code relating to
collapsible corporations nor has Clearant agreed to have Section 341(f)(2) of the Tax Code apply to
any disposition of a subsection (f) asset as such term is defined in Section 341(f)(4) of the Tax
Code.

     (o) Books and Records. The general ledger and books of account of Clearant, all
minute books of Clearant, all federal, state and local income, franchise, property and other tax
returns filed by Clearant, all of which have been made available to Bliss, are in all material
respects complete and correct and have been maintained in accordance with good business practice
and in accordance with all applicable procedures required by laws and regulations.

     (p) Contracts and Commitments.

          (i) Its disclosure schedule lists the following contracts and agreements, whether written or
oral, other than those between Clearant and Bliss:

               (A) all loan agreements, indentures, mortgages, guaranties to which Clearant is a party or by
which Clearant or any of its property is bound and any other agreement evidencing indebtedness in
excess of $100,000;

               (B) all pledges, conditional sale or title retention agreements, security agreements,
equipment obligations, personal property leases and lease purchase agreements to which Clearant is
a party or by which Clearant or any of its property is bound, evidencing indebtedness in excess of
$100,000;

               (C) all contracts, agreements, commitments, purchase orders or other understandings or
arrangements to which Clearant is a party or by which Clearant or any of its property is bound that
involve payments or receipts by Clearant of more than $100,000 in the case of any single contract,
agreement, commitment, understanding or arrangement under which full performance (including
payment) has not been rendered by all parties thereto;

               (D) all collective bargaining agreements, employment and consulting agreements providing for
payments in excess of $100,000 per year, executive compensation plans, bonus plans, deferred
compensation agreements, pension plans, retirement plans, employee stock option or stock purchase
plans and group life, health and accident insurance and other employee benefit plans, agreements,
arrangements or commitments to which Clearant is a party or by which Clearant or any of its
property is bound;

               (E) all agency, distributor, sales representative, franchise or similar agreements providing
for payments in excess of $100,000 to which Clearant is a party or by which Clearant or any of its
property is bound;

10

 

               (F) all agreements, understandings or arrangements in excess of $100,000 individually between
or among Clearant and any director, officer, shareholder or, to Clearant’s Knowledge, affiliate or
family member of such Person; and

               (G) all contracts, agreements or other arrangements imposing a non-competition obligation on
Clearant.

          (ii) each such contract is a valid and binding agreement of Clearant, enforceable against
Clearant in accordance with its terms, is in full force and effect and represents the material
terms of the agreement between the respective parties, and Clearant does not have any Knowledge
that any such contract is not a valid and binding agreement of the other parties thereto;

          (iii) Clearant (A) has not received any notice of termination or cancellation under any such
contract, (B) has not, as of the Closing Date, received any notice of material breach or default
under any such contract, which breach has not been cured and could reasonably be anticipated to
have an Adverse Effect, and (C) has not granted to any other third party any rights, adverse or
otherwise, under any such contract that would constitute a breach of any other such contract;

          (iv) Clearant has materially complied with all obligations required pursuant to such contracts
to have been performed by Clearant on its part prior to the Closing Date, and has no Knowledge that
it will not be able to comply, when due, all of its obligations under such contracts which remain
to be performed after the date hereof;

          (v) Clearant is not in breach of or default in any material respect under any such contract,
and to its Knowledge no event has occurred which with the passage of time or giving of notice or
both would constitute such a default, result in a loss of rights or result in the creation of any
lien, charge or encumbrance, thereunder or pursuant thereto;

          (vi) to its Knowledge, there is no existing breach or default by any other party to any such
contract, and no event has occurred which with the passage of time or giving of notice or both
would constitute a default by such other party, result in a loss of rights or result in the
creation of any lien, charge or encumbrance thereunder or pursuant thereto; and

          (vii) Clearant is not prevented by any such contract from carrying on its business anywhere in
the world.

     (q) Compliance with Agreements and Laws.

          (i) To its Knowledge, (A) Clearant has all requisite licenses, permits and certificates,
including environmental, health and safety permits, from federal, state and local authorities
necessary to conduct its business and own and operate its assets, except where the failure to have
such permits would not reasonably be expected to have an Adverse Effect, true, correct, and
complete copies or list of which has been made available to Bliss; (B) Clearant is not in violation
of any law, regulation or ordinance (including, without limitation, laws, regulations or ordinances
relating to building, zoning, environmental, disposal of Hazardous Waste, land use or similar
matters) relating to its properties; and (C) the business of Clearant as conducted since

11

 

formation has not violated, and on the Closing Date does not violate, in any material respect, any federal,
state, local or foreign laws, regulations or orders (including, but not limited to, any of the
foregoing relating to employment discrimination, occupational safety, environmental protection,
Hazardous Waste, conservation, or corrupt practices), the enforcement of which would have an
Adverse Effect. Clearant has not had notice or communication from any federal, state or local
governmental or regulatory authority or otherwise of any such violation or noncompliance.

          (ii) To its Knowledge, Clearant is not in violation of any federal, state, county or municipal
authority law, ruling, order, decree, regulation, permit, or other environmental or Hazardous Waste
requirement applicable to Clearant relating to health, safety, pollution, Hazardous Waste,
environmental or other similar matters, which has not been entirely corrected and which has or
would reasonably be expected to have an Adverse Effect.

     (r) Employee Relations.

          (i) To its Knowledge, Clearant is in material compliance with all federal, state, and
municipal laws respecting employment and employment practices, terms and conditions of employment,
and wages and hours, and is not engaged in any unfair labor practice, and there are no arrears in
the payment of wages or social security taxes.

          (ii) None of the employees of Clearant is represented by any labor union;

          (iii) There is no unfair labor practice complaint against Clearant pending before the National
Labor Relations Board or any state or local agency;

          (iv) There is no pending labor strike or other material labor trouble affecting Clearant
(including, without limitation, any known organizational drive); and

          (v) There is no material labor grievance pending against Clearant.

     (s) Employee Benefit Plans.

          (i) True, correct and complete copies or lists of all employee benefit plans as defined in
ERISA Section 3(3), and all bonus, stock option, stock purchase, incentive, deferred compensation,
supplemental retirement, severance and other similar employee benefit plans, and all material
unexpired severance agreements with any current or former employee of Clearant have been made
available to Bliss.

          (ii) With respect to such plans, individually and in the aggregate, no event has occurred and,
to its Knowledge, there exists no condition or set of circumstances in connection with which
Clearant could be subject to any liability that is reasonably likely to have an Adverse Effect
under ERISA, the Tax Code or any other applicable law.

          (iii) With respect to such plans, individually and in the aggregate, there are no funded
benefit obligations for which contributions have not been made or properly accrued and there are no
unfunded benefit obligations that have not been accounted for by reserves, or otherwise properly
footnoted on its financial statements in accordance with GAAP, which obligations are reasonably
likely to have an Adverse Effect.

12

 

          (iv) Clearant is not a party to any (i) agreement with any officer or other key employee of
Clearant, the benefits of which are contingent, or the terms of which are materially altered, upon
the occurrence of a transaction involving Clearant of the nature contemplated by this Agreement,
(ii) agreement with any officer of Clearant providing any term of employment or compensation
guarantee extending for a period longer than one year from the date hereof and for the payment of
compensation in excess of $100,000 per annum, or (iii) agreement or plan, including any stock
option plan, stock appreciation right plan, restricted stock plan or stock purchase plan, any of
the benefits of which will be increased, or the vesting of the benefits of which will be
accelerated, by the occurrence of any of the transactions contemplated by this Agreement, or the
value of any of the benefits of which will be calculated on the basis of any of the transactions
contemplated by this Agreement.

     (t) Absence of Certain Changes or Events. Since the date of the most recent balance
sheet made available to Bliss, Clearant has not entered into any transaction that is not in the
ordinary course of business, and, without limiting the generality of the foregoing, except in
connection with the transactions contemplated by this Agreement, Clearant has not:

          (i) incurred any material obligation or liability for borrowed money in excess of $100,000;

          (ii) discharged or satisfied any lien or encumbrance or paid any obligation or liability in
excess of $100,000, other than current liabilities reflected in balance sheet;

          (iii) mortgaged, pledged or subjected to lien, charge or other encumbrance in excess of
$100,000 any of its properties or assets;

          (iv) sold or purchased, assigned or transferred any of its tangible assets or cancelled any
debts or claims, except in the ordinary course of business;

          (v) suffered any losses of personal or real property, whether insured or uninsured, and
whether or not in the control of Clearant in excess of $100,000, or waived any rights of any such
value;

          (vi) authorized any declaration or payment of dividends by Clearant or paid any such
dividends, or authorized any transfer of assets of any kind by Clearant to any of its shareholders
with respect to any shares of their capital stock;

          (vii) engaged any new employee for a salary in excess of $100,000 per annum;

          (viii) made, or committed to make, any changes in the compensation payable to any officer of
Clearant, or any bonus payment or similar arrangements made to or with any of such officers, in
excess of $100,000 per annum;

          (ix) any settlement of pending or threatened litigation involving Clearant, whether brought by
a private party or a governmental entity, likely to have an Adverse Effect;

          (x) incurred any capital expenditure in excess of $100,000;

13

 

          (xi) any split, combination or reclassification of any of Clearant’s capital stock or any
purchase or other acquisition, directly or indirectly, by Clearant of capital stock of Clearant;

          (xii) any increase in or establishment of any bonus, severance, deferred compensation,
pension, retirement, profit sharing, stock option, stock purchase or other employee benefit plan;

          (xiii) any revaluation by Clearant of any of its material assets, other than write downs or
reserves required or permitted by GAAP;

          (xiv) made any material alteration in the manner of keeping the books, accounts or records of
Clearant, or in the accounting practices therein reflected; or

          (xv) suffered any change that would reasonably be expected to have an Adverse Effect.

     (u) Customers. Its disclosure schedule sets forth a true, correct and complete list
of the names of each customer of Clearant that accounted for more than 10% of the revenues of
Clearant in the preceding two fiscal years ended December 31, 2004. None of such customers has
notified Clearant that it intends to discontinue its relationship with Clearant.

     (v) Indebtedness to and from Affiliates. Clearant is not indebted, directly or to its
Knowledge indirectly, to any officer, director or 10% shareholder of Clearant in any amount other
than for salaries for services rendered or reimbursable business expenses, and no such Person is
indebted to Clearant except for advances made to employees of Clearant in the ordinary course of
business to meet reimbursable business expenses.

     (w) Banking Facilities. Its disclosure schedule sets forth a true, correct, and
complete list of:

          (i) each bank, savings and loan or similar financial institution in which Clearant has an
account or safety deposit box and the numbers of the accounts or safety deposit boxes maintained by
Clearant thereat; and

          (ii) the names of all signatories authorized to draw on each such account or to have access to
any such safety deposit box facility.

     (x) Powers of Attorney and Suretyships. Clearant does not have (A) any general powers
of attorney outstanding, whether as grantor or grantee thereof, or (B) except as reflected in its
financial statements, any obligation or liability, whether actual, accrued, accruing, contingent or
otherwise, as guarantor, surety, co-signer, endorser, co-maker, indemnitor, or otherwise in respect
of the obligation of any person, corporation, partnership, joint venture, association, organization
or other entity, except as endorser or maker of checks or letters of credit, respectively, endorsed
or made in the ordinary course of business.

14

 

     (y) Conflicts of Interest. No officer, director, or 10% shareholder of Clearant nor,
to its Knowledge, any affiliate of any such Person, now has or within the last three (3) years had,
either directly or indirectly:

          (i) an equity or debt interest in any Person that furnishes or sells or during such period
furnished or sold services or products to Clearant, or purchases or during such period purchased
from Clearant any goods or services, or otherwise during such period did business with Clearant; or

          (ii) a beneficial interest in any contract, commitment or agreement to which Clearant is or
was a party or under which Clearant is or was obligated or bound or to which its properties may be
or may have been subject, other than stock options and other contracts, commitments or agreements
between Clearant and such persons in their capacities as employees, officers, directors or
shareholders of Clearant.

     (z) Regulatory Approvals. All consents, approvals, authorizations or other
requirements prescribed by any law, rule or regulation that must be obtained or satisfied by
Clearant and that are necessary for the execution and delivery by Clearant of this Agreement or any
documents to be executed and delivered by Clearant in connection therewith have been, or prior to
the Closing Date will be, obtained and satisfied.

     (aa) No Brokers. No broker or finder has acted for Clearant in connection with this
Agreement or the transactions contemplated hereby, and no broker or finder is entitled to any
brokerage or finder’s fee or other commissions in respect of such transactions based upon
agreements, arrangements or understandings made by or on behalf of Clearant.

     (bb) Disclosure. The information concerning Clearant set forth in this Agreement, the
exhibits and schedules hereto and any document, statement or certificate furnished or to be
furnished pursuant hereto, does not and will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated herein or therein or necessary to make the
statements and facts contained herein or therein, in light of the circumstances in which they are
made, not false and misleading. Copies of all documents heretofore or hereafter delivered or made
available by Clearant pursuant to this Agreement were or will be complete and accurate copies of
such documents.

     (cc) Tax Treatment. Neither Clearant nor, to the Knowledge of Clearant, any of its
Affiliates has taken or agreed to take action that would prevent the Merger from constituting a
reorganization qualifying under the provisions of Section 368 of the Tax Code.

Section 6. Bliss’s Representations and Warranties. Bliss and each of the Majority Stockholders
jointly and severally represents and warrants to Clearant, the Surviving Corporation and the
Investors that the statements contained in this Section are true and correct as of the Closing
Date, and do not contain any facts, or omit any facts, that render the statements therein to be
misleading, except (i) where any variation would not be reasonably likely to have an Adverse
Effect, and (ii) as set forth herein and in the disclosure schedule delivered by Bliss to Clearant,
arranged in sections corresponding to the paragraphs in this Section and the disclosure in any
section or paragraph will qualify other paragraphs in this Section to the extent that it is

15

 

reasonably apparent from a reading of the disclosure that it also qualifies or applies to such
other paragraphs.

     (a) Organization. Bliss is a corporation validly existing and in good standing under
the laws of the State of Nevada and has all requisite power and authority and possesses all
necessary governmental approvals necessary to own, lease and operate its properties, to carry on
its business as now being conducted, to execute and deliver this Agreement and the agreements
contemplated herein, and to consummate the transactions contemplated hereby and thereby. Bliss is
duly qualified to do business and is in good standing in all jurisdictions in which its ownership
of property or the character of its business requires such qualification, except where the failure
to be so qualified would not reasonably be expected to have an Adverse Effect. Certified copies of
the Articles and Bylaws, as amended to date, have been made available to Clearant, are complete and
correct, and no amendments have been made thereto or have been authorized since the date thereof.
Bliss is not in violation of any of the provisions of its Articles or Bylaws.

     (b) Capitalization.

          (i) Bliss’s authorized capital stock consists solely of 100,000,000 shares of Bliss Common
Stock, $0.001 par value.

          (ii) There are 15,606,017 shares of Bliss Common Stock issued and outstanding and no shares of
Bliss Common Stock are held in the treasury of Bliss. All of the issued and outstanding shares of
Bliss Common Stock were duly and validly issued and fully paid, are nonassessable and free of
preemptive rights, and were issued in compliance with all applicable state and federal securities
laws.

          (iii) There are no outstanding (i) options, warrants, or other rights to purchase from Bliss
any capital stock of Bliss; (ii) debt securities or instruments convertible into or exchangeable
for shares of such stock; or (iii) commitments of any kind for the issuance of additional shares of
capital stock or options, warrants or other securities of Bliss.

     (c) No Subsidiaries. Bliss does not own any capital stock or other equity interest in
any corporation, partnership, joint venture or other entity.

     (d) Authorization. Bliss and the Majority Stockholders have all requisite power and
authority to execute and deliver this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby. The execution and delivery of this Agreement by
Bliss and the consummation by Bliss of the transactions contemplated hereby have been duly and
validly authorized by all necessary corporate action by Bliss and no other corporate proceedings on
the part of Bliss and no stockholder vote or consent is necessary to authorize this Agreement or to
consummate the transactions contemplated hereby. This Agreement has been duly and validly executed
and delivered by Bliss. This Agreement and all other agreements and obligations entered into and
undertaken in connection with the transactions contemplated hereby to which Bliss or the Majority
Stockholders is a party constitute the valid and legally binding obligations of Bliss and the
Majority Stockholders, enforceable against Bliss and the Majority Stockholders in accordance with
their respective terms, except as may be

16

 

limited by principles of equity, applicable bankruptcy,
reorganization, insolvency, moratorium, fraudulent conveyance or other similar laws relating to or
affecting the rights and remedies of creditors generally. The execution, delivery and performance
by Bliss and the Majority Stockholders of this Agreement and the agreements provided for herein,
and the consummation by Bliss and the Majority Stockholders of the transactions contemplated hereby
and thereby, will not, with or without the giving of notice or the passage of time or both, violate
the provisions of the Bylaws Articles of Incorporation or Bylaws of Clearant, or to Bliss’s
Knowledge (i) violate the provisions of any law, rule or regulation applicable to Bliss, (ii)
violate any judgment, decree, order or award of any court, governmental body or arbitrator; or
(iii) conflict with or result in the breach or termination of any term or provision of, or
constitute a default under, or cause any acceleration under, or cause the creation of any lien,
charge or encumbrance upon the properties or assets of Bliss pursuant to, any indenture, mortgage,
deed of trust or other instrument or agreement to which Bliss is a party or by which Bliss or any
of its properties is or may be bound.

     (e) No Conflict. The execution and delivery of this Agreement by Bliss and the
Majority Stockholders does not require any consent or approval under, result in any breach of, any
loss of any benefit under or constitute a change of control or default (or an event which with
notice or lapse of time or both would become a default) under, or give to others any right of
termination, vesting, amendment, acceleration or cancellation of, or result in the creation of any
lien or encumbrance on any property or asset of Bliss pursuant to any material agreement of Bliss
or other instrument or obligation of Bliss.

     (f) Absence of Liabilities. As of the Closing Date, Bliss will not have any liability
or obligation, secured or unsecured, whether accrued, absolute, contingent, unasserted or
otherwise, which exceeds $1,000.

     (g) Litigation. There is no action, suit, legal or administrative proceeding or
investigation pending or, to Bliss’s Knowledge, threatened against or involving Bliss (either as a
plaintiff or defendant) before any court or governmental agency, authority, body or arbitrator.
Neither Bliss nor to its Knowledge any officer, director or employee of Bliss, has been permanently
or temporarily enjoined by any order, judgment or decree of any court or any governmental agency,
authority or body from engaging in or continuing any conduct or practice in connection with the
business, assets, or properties of Bliss. There in existence on the date hereof any order,
judgment or decree of any court, tribunal or
agency to Bliss’s Knowledge enjoining or requiring Bliss to take any action of any kind with
respect to its business, assets or properties.

     (h) Insurance. Its disclosure schedule sets forth all material claims made under any
policies of insurance since the formation of Bliss. True, correct, and complete copies of all
Bliss insurance policies have been made available to Bliss. All current insurance policies are in
full force and effect, are in amounts of a nature that are adequate and customary for Bliss’s
business, and to Bliss’s Knowledge are sufficient for compliance with all legal requirements and
agreements to which it is a party or by which it is bound. All premiums due on current policies or
renewals have been paid, and there is no material default under any of the policies.

17

 

     (i) Tax Matters.

          (i) Within the times and in the manner prescribed by law, Bliss has filed all federal, state
and local tax returns and all tax returns for other governing bodies having jurisdiction to levy
taxes upon it which are required to be filed;

          (ii) Bliss has paid all taxes, interest, penalties, assessments and deficiencies which have
become due, including without limitation income, franchise, real estate, and sales and withholding
taxes;

          (iii) All tax returns filed by Bliss for all taxable years since formation constitute complete
and accurate representations of the respective tax liabilities of Bliss for such years;

          (iv) Bliss has not waived or extended any applicable statute of limitations relating to the
assessment of federal, state or local taxes;

          (v) No examinations of the federal, state or local tax returns of Bliss are currently in
progress nor threatened and no deficiencies have been asserted or to its Knowledge assessed against
Bliss as a result of any audit by the Internal Revenue Service or any state or local taxing
authority and no such deficiency has been proposed or threatened;

          (vi) There are no pending or threatened audits, assessments or other actions relating to any
liability in respect of taxes of Bliss by any tax authority nor are there any matters under
discussion with any tax authority with respect to taxes of Bliss; and

          (vii) Bliss has not filed a consent pursuant to Section 341(f) of the Tax Code relating to
collapsible corporations nor has Bliss agreed to have Section 341(f)(2) of the Tax Code apply to
any disposition of a subsection (f) asset as such term is defined in Section 341(f)(4) of the Tax
Code.

     (j) Books and Records. The general ledger and books of account of Bliss, all minute
books of Bliss, all federal, state and local income, franchise, property and other tax returns
filed by Bliss, all reports and filings with the SEC by Bliss, all of which have been made
available to Clearant, are in all material respects complete
and correct and have been maintained in accordance with good business practice and in
accordance with all applicable procedures required by laws and regulations.

     (k) Contracts and Commitments.

          (i) True, complete, and correct copies or lists of the following contracts and agreements,
whether written or oral, have been made available to Clearant:

               (A) all loan agreements, indentures, mortgages, guaranties to which Clearant is a party or by
which Bliss or any of its property is bound and any other agreement evidencing indebtedness in
excess of $100,000;

18

 

               (B) all pledges, conditional sale or title retention agreements, security agreements,
equipment obligations, personal property leases and lease purchase agreements to which Bliss is a
party or by which Bliss or any of its property is bound, evidencing indebtedness in excess of
$100,000;

               (C) all contracts, agreements, commitments, purchase orders or other understandings or
arrangements to which Bliss is a party or by which Bliss or any of its property is bound that
involve payments or receipts by Bliss of more than $100,000 in the case of any single contract,
agreement, commitment, understanding or arrangement under which full performance (including
payment) has not been rendered by all parties thereto;

               (D) all collective bargaining agreements, employment and consulting agreements providing for
payments in excess of $100,000 per year, executive compensation plans, bonus plans, deferred
compensation agreements, pension plans, retirement plans, employee stock option or stock purchase
plans and group life, health and accident insurance and other employee benefit plans, agreements,
arrangements or commitments to which Bliss is a party or by which Bliss or any of its property is
bound;

               (E) all agency, distributor, sales representative, franchise or similar agreements providing
for payments in excess of $100,000 to which Bliss is a party or by which Bliss or any of its
property is bound;

               (F) all agreements, understandings or arrangements in excess of $100,000 individually between
or among Bliss and any director, officer, stockholder or, to Bliss’s Knowledge, affiliate or family
member of such Person; and

               (G) all contracts, agreements or other arrangements imposing a non-competition obligation on
Bliss.

          (ii) Every contract or agreement of any kind to which Bliss is a party (A) is fully and freely
assignable and assumable, (B) will be assigned to and assumed by the Majority Stockholders on the
Closing Date, and (C) will not bind or obligate Bliss in any manner as of the Closing Date.

     (l) Compliance with Agreements and Laws.

          (i) To its Knowledge, (A) Bliss has all requisite licenses, permits and certificates,
including environmental, health and safety permits, from federal, state and local authorities
necessary to conduct its business and own and operate its assets, except where the failure to have
such permits would not reasonably be expected to have an Adverse Effect, true, correct, and
complete copies or list of which has been made available to Clearant; (B) Bliss is not in violation
of any law, regulation or ordinance (including, without limitation, laws, regulations or ordinances
relating to building, zoning, environmental, disposal of Hazardous Waste, land use or similar
matters) relating to its properties; and (C) the business of Bliss as conducted since formation has
not violated, and on the Closing Date does not violate, in any material respect, any federal,
state, local or foreign laws, regulations or orders (including, but not limited to, any of the
foregoing relating to employment discrimination, occupational safety, environmental protection,
Hazardous Waste, conservation, or corrupt practices), the enforcement of which would have an

19

 

Adverse Effect. Bliss has not had notice or communication from any federal, state or local
governmental or regulatory authority or otherwise of any such violation or noncompliance.

          (ii) To its Knowledge, Bliss is not in violation of any federal, state, county or municipal
authority law, ruling, order, decree, regulation, permit, or other environmental or Hazardous Waste
requirement applicable to Bliss relating to health, safety, pollution, Hazardous Waste,
environmental or other similar matters, which has not been entirely corrected and which has or
would reasonably be expected to have an Adverse Effect.

     (m) Employee Relations.

          (i) To its Knowledge, Bliss is in material compliance with all federal, state, and municipal
laws respecting employment and employment practices, terms and conditions of employment, and wages
and hours, and is not engaged in any unfair labor practice, and there are no arrears in the payment
of wages or social security taxes.

          (ii) None of the employees of Bliss is represented by any labor union;

          (iii) There is no unfair labor practice complaint against Bliss pending before the National
Labor Relations Board or any state or local agency;

          (iv) There is no pending labor strike or other material labor trouble affecting Bliss
(including, without limitation, any known organizational drive); and

          (v) There is no material labor grievance pending against Bliss.

     (n) Employee Benefit Plans.

          (i) Bliss has no (A) employee benefit plans as defined in ERISA Section 3(3), (B) bonus, stock
option, stock purchase, incentive, deferred compensation, supplemental retirement, severance or
other similar employee benefit plans, or (C) material unexpired severance agreements with any
current or former employee of Bliss.

          (ii) With respect to such plans, individually and in the aggregate, no event has occurred and,
to its Knowledge, there exists no condition or set of circumstances in connection
with which Bliss could be subject to any liability that is reasonably likely to have an
Adverse Effect under ERISA, the Tax Code or any other applicable law.

          (iii) With respect to such plans, individually and in the aggregate, there are no funded
benefit obligations for which contributions have not been made or properly accrued and there are no
unfunded benefit obligations that have not been accounted for by reserves, which obligations are
reasonably likely to have an Adverse Effect.

          (iv) Bliss is not a party to any (i) agreement with any officer or other key employee of
Bliss, (ii) agreement with any officer of Bliss providing any term of employment or compensation
guarantee extending for a period longer than the Closing Date, or (iii) agreement or plan,
including any stock option plan, stock appreciation right plan, restricted stock plan or stock
purchase plan, which will remain in effect or have any benefits as of the Closing Date.

20

 

     (o) Absence of Certain Changes or Events. Since the date of the most recent balance
sheet made available to Clearant, Bliss has not entered into any transaction that is not in the
ordinary course of business, and, without limiting the generality of the foregoing, except in
connection with the transactions contemplated by this Agreement, Bliss has not:

          (i) incurred any material obligation or liability for borrowed money in excess of $100,000;

          (ii) discharged or satisfied any lien or encumbrance or paid any obligation or liability in
excess of $100,000 other than current liabilities reflected in balance sheet;

          (iii) mortgaged, pledged or subjected to lien, charge or other encumbrance in excess of
$100,000 any of its properties or assets;

          (iv) sold or purchased, assigned or transferred any of its tangible assets or cancelled any
debts or claims, except in the ordinary course of business;

          (v) suffered any losses of personal or real property, whether insured or uninsured, and
whether or not in the control of Bliss in excess of $100,000, or waived any rights of any such
value;

          (vi) authorized any declaration or payment of dividends by Bliss or paid any such dividends,
or authorized any transfer of assets of any kind by Bliss to any of its stockholders with respect
to any shares of their capital stock;

          (vii) engaged any new employee;

          (viii) made, or committed to make, any changes in the compensation payable to any officer of
Bliss, or any bonus payment or similar arrangements made to or with any of such officers;

          (ix) any settlement of pending or threatened litigation involving Bliss, whether brought by a
private party or a governmental entity, likely to have an Adverse Effect;

          (x) incurred any capital expenditure in excess of $100,000;

          (xi) any split, combination or reclassification of any of Bliss’s capital stock or any
purchase or other acquisition, directly or indirectly, by Bliss of capital stock of Bliss;

          (xii) any increase in or establishment of any bonus, severance, deferred compensation,
pension, retirement, profit sharing, stock option, stock purchase or other employee benefit plan;

          (xiii) any revaluation by Bliss of any of its material assets, other than write downs or
reserves required or permitted by GAAP;

          (xiv) made any material alteration in the manner of keeping the books, accounts or records of
Bliss, or in the accounting practices therein reflected; or

21

 

          (xv) suffered any change that would reasonably be expected to have an Adverse Effect.

     (p) Indebtedness to and from Affiliates. Bliss is not indebted, directly or to its
Knowledge indirectly, to any officer, director or 10% stockholder of Bliss in any amount other than
for salaries for services rendered or reimbursable business expenses, and no such Person is
indebted to Bliss except for advances made to employees of Bliss in the ordinary course of business
to meet reimbursable business expenses.

     (q) Banking Facilities. Its disclosure schedule sets forth a true, correct, and
complete list of:

          (i) each bank, savings and loan or similar financial institution in which Bliss has an account
or safety deposit box and the numbers of the accounts or safety deposit boxes maintained by Bliss
thereat; and

          (ii) the names of all signatories authorized to draw on each such account or to have access to
any such safety deposit box facility.

     (r) Powers of Attorney and Suretyships. Bliss does not have (A) any general powers of
attorney outstanding, whether as grantor or grantee thereof, or (B) except as reflected in its
financial statements, any obligation or liability, whether actual, accrued, accruing, contingent or
otherwise, as guarantor, surety, co-signer, endorser, co-maker, indemnitor, or otherwise in respect
of the obligation of any person, corporation, partnership, joint venture, association, organization
or other entity, except as endorser or maker of checks or letters of credit, respectively, endorsed
or made in the ordinary course of business.

     (s) Conflicts of Interest. No officer, director, or 10% stockholder of Bliss nor, to
its Knowledge, any affiliate of any such Person, now has or within the last three (3) years had,
either directly or indirectly:

          (i) an equity or debt interest in any Person that furnishes or sells or during such period
furnished or sold services or products to Clearant, or purchases or during such period purchased
from Bliss any goods or services, or otherwise during such period did business with Bliss; or

          (ii) a beneficial interest in any contract, commitment or agreement to which Bliss is or was a
party or under which Bliss is or was obligated or bound or to which its properties may be or may
have been subject, other than stock options and other contracts, commitments or agreements between
Bliss and such persons in their capacities as employees, officers, directors or stockholders of
Bliss.

     (t) Regulatory Approvals. All consents, approvals, authorizations or other
requirements prescribed by any law, rule or regulation that must be obtained or satisfied by Bliss
and that are necessary for the execution and delivery by Bliss and the Majority Stockholders of
this Agreement or any documents to be executed and delivered by Bliss and the Majority Stockholders
in connection therewith have been, or prior to the Closing Date will be, obtained and satisfied.

22

 

     (u) No Brokers. No broker or finder has acted for Bliss or the Majority Stockholders
in connection with this Agreement or the transactions contemplated hereby, and no broker or finder
is entitled to any brokerage or finder’s fee or other commissions in respect of such transactions
based upon agreements, arrangements or understandings made by or on behalf of Bliss or the Majority
Stockholders.

     (v) Disclosure. The information concerning Bliss set forth in its reports and filings
with the SEC, this Agreement, the exhibits and schedules hereto and any document, statement or
certificate furnished or to be furnished pursuant hereto, does not and will not contain any untrue
statement of a material fact or omit to state a material fact required to be stated herein or
therein or necessary to make the statements and facts contained herein or therein, in light of the
circumstances in which they are made, not false and misleading. Copies of all documents heretofore
or hereafter delivered or made available by Clearant pursuant to this Agreement were or will be
complete and accurate copies of such documents

     (w) SEC and State Securities Law Filings.

          (i) Bliss has timely and properly filed all forms, reports and documents required to be filed
with the SEC since formation of Bliss. At the time filed or, with respect to registration
statements filed with the SEC under the Securities Act, as of the effective date thereof, all such
filings (A) complied in all material respects with the applicable requirements of the Securities
Act and the Exchange Act, as the case may be, and (B) did not at the time they were filed (or if
amended or superseded by a filing prior to the date of this Agreement, then on the date of such
filing) contain any untrue statement of a material fact or omit to state a material fact required
to be stated in such filings or necessary in order to make the statements in such filings, in the
light of the circumstances under which they were made, not misleading.

          (ii) Each of the financial statements (including, in each case, any related notes) contained
in Bliss’s SEC filings complied as to form in all material respects with the applicable rules and
regulations with respect thereto, was prepared in accordance with GAAP applied on a consistent
basis throughout the periods involved (except as may be indicated in the notes to such financial
statements or, in the case of unaudited statements, as permitted by Form 10-Q of the SEC) and
fairly presented the financial position of Bliss as of the dates and the results of its operations
and cash flows for the periods indicated, except that the unaudited interim financial statements
were or are subject to normal and recurring year-end adjustments which were not or are not expected
to be material in amount.

          (iii) Bliss has filed and made available to Clearant all forms, reports and documents required
to be filed by Bliss with state securities regulators since formation of Bliss. Such reports (A)
at the time filed complied in all material respects with the requirements of the applicable state
securities laws and (B) did not at the time they were filed (or if amended or superseded by a
filing prior to the date of this Agreement, then on the date of such filing) contain any untrue
statement of a material fact or omit to state a material fact required to be stated in such reports
or necessary in order to make the statements in such reports, in the light of the circumstances
under which they were made, not misleading.

23

 

          (iv) Bliss will use reasonable best efforts to cause its existing accountant to timely provide
to Bliss and the SEC the letter required by Regulation 229.304 (item 304).

     (x) Tax Treatment. Neither Bliss nor, to the Knowledge of Bliss, any of its
Affiliates has taken or agreed to take action that would prevent the Merger from constituting a
reorganization qualifying under the provisions of Section 368 of the Tax Code.

     (y) Affiliates. Except for the Parties, there are no persons who, to the Knowledge of
Bliss, may be deemed to be affiliates of Bliss under Rule 1.02(b) of Regulation S-X.

     (z) Stockholder Claims. There are no existing claims against Bliss by any current or
former stockholder of Bliss, and to Bliss’s Knowledge no facts or circumstances reasonably likely
to result in any such claims.

Section 7. Covenants. The Parties agree as follows with respect to the period from and after the
Closing Date through the date all of the conditions in Section 3(c) hereof are satisfied or waived.

     (a) General. Each of the Parties will use its reasonable best efforts to take all
actions and to do all things necessary proper, or advisable in order to consummate and make
effective the transactions contemplated by this Agreement.

     (b) Notices and Consents. Each of the Parties will give any notices to third parties,
and will use its reasonable best efforts to obtain any necessary third-party consents. Each Party
will give prompt written notice to the others of any
material adverse development causing a breach of any of its own representations and warranties
herein.

     (c) Regulatory Matters and Approvals. Each of the Parties will give any notices to,
make any filings with, and use its reasonable best efforts to obtain any authorizations, consents,
and approvals of governmental agencies in connection with the matters contemplated by this
Agreement.

     (d) Operation of Business. Neither Clearant nor Bliss will engage in any practice,
take any action, or enter into any transaction outside the ordinary course of business, consistent
with past custom and practice. Without limiting the generality of the foregoing neither Clearant
nor Bliss will:

          (1) authorize or effect any change in its charter or bylaws, except the changes to the Bylaws
stipulated by the Purchase Agreement;

          (2) grant any options, warrants, or other rights to purchase or obtain any of its stock or
issue, sell, or otherwise dispose of any of its capital stock (except upon the conversion or
exercise of options, warrants, and other rights currently outstanding);

          (3) declare, set aside, or pay any dividend or distribution with respect to its stock (whether
in cash or in kind), or redeem, repurchase, or otherwise acquire any of its capital stock;

24

 

          (4) issue any note, bond, or other debt security or create, incur, assume, or guarantee any
indebtedness for borrowed money or capitalized lease obligation outside the ordinary course of
business;

          (5) impose any lien upon any of its assets outside the ordinary course of business;

          (6) make any capital investment in, make any loan to, or acquire the securities or assets of
any other Person outside the ordinary course of business;

          (7) make any change in employment terms for any of its directors, officers, and employees
outside the ordinary course of business; or

          (8) commit to any of the foregoing.

Section 8. Indemnification.

     (a) By Clearant. From and after the Closing Date, Clearant hereby indemnifies and
holds harmless Bliss and the Majority Stockholders from and against all claims, damages, losses,
liabilities, costs and expenses (including, without limitation, legal fees and disbursements),
interest, penalties or cost of mitigation and all amounts paid in investigation, defense or
settlement of any of the foregoing, incurred in connection with, arising out of or incident to any
misrepresentation or breach of any representation or warranty, covenant, agreement or obligation
made by Clearant in this Agreement.

     (b) By Majority Stockholders. From and after the Closing Date, each of the Majority
Stockholders, who severally and but not jointly, on a pro rata basis in proportion to the number of
shares of common stock of Bliss held by each on the Closing Date, hereby indemnifies and holds
harmless Bliss, Clearant and the Surviving Corporation from and against all claims, damages,
losses, liabilities, costs and expenses (including, without limitation, legal fees and
disbursements), interest, penalties or cost of mitigation and all amounts paid in investigation,
defense or settlement of any of the foregoing, incurred in connection with, arising out of or
incident to any misrepresentation or breach of any representation or warranty, covenant, agreement
or obligation made by Bliss or such stockholder in this Agreement.

     (c) Claims for Indemnification. Whenever any claim shall arise for indemnification
under this Section, the Party seeking indemnification (the “Indemnified Party”) shall promptly
notify the Party from whom the Indemnified Party seeks indemnification (the “Indemnifying Party”)
of the claim and, when known, the facts constituting the basis for such claim. In the event of any
such claim for indemnification hereunder resulting from or in connection with any claim or legal
proceedings by a third party, the notice shall specify, if known, the amount or an estimate of the
amount of the liability arising therefrom. The Indemnified Party shall not settle or compromise
any claim by a third party for which it is entitled to indemnification hereunder without the prior
written consent, which shall not be unreasonably withheld or delayed, of the Indemnifying Party;
provided, however, that if suit shall have been instituted against the Indemnified Party and the
Indemnifying Party shall not have taken control of such suit after notification thereof as provided
below, the Indemnified Party shall have the right to settle or compromise such claim upon giving
notice to the Indemnifying Party.

25

 

     (d) Defense by the Indemnifying Party. In connection with any claim that may give
rise to indemnity hereunder resulting from or arising out of any claim or legal proceeding by a
person other than the Indemnified Party, the Indemnifying Party, at its, his or her sole cost and
expense, may, upon written notice to the Indemnified Party, assume the defense of any such claim or
legal proceeding if the Indemnifying Party acknowledge(s) to the Indemnified Party in writing the
obligation of the Indemnifying Party to indemnify the Indemnified Party with respect to all
elements of such claim. If the Indemnifying Party assume(s) the defense of any such claim or legal
proceeding, the Indemnifying Party shall select counsel reasonably acceptable to the Indemnified
Party to conduct the defense of such claims or legal proceedings and at the sole cost and expense
of the Indemnifying Party. The Indemnifying Party shall not consent to a settlement of, or the
entry of any judgment arising from, any such claim or legal proceeding, without the prior written
consent of the Indemnified Party (which consent shall not be unreasonably withheld or delayed).
The Indemnified Party shall be entitled to participate in (but not control) the defense of any such
action, with its own counsel and at its own expense. If the Indemnifying Party do(es) not assume
the defense of any such claim or litigation resulting therefrom within 30 days after the date such
claim is made: (a) the Indemnified Party may defend against such claim or litigation in such
manner as it may deem appropriate, including, but not limited to, settling such claim or
litigation, after giving notice of the same to the Indemnifying Party, on such terms as the
Indemnified Party may deem appropriate, and (b) the Indemnifying Party shall be entitled to
participate in (but not control) the defense of such action, with its counsel and at its own
expense. If the Indemnifying
Party thereafter seek to question the manner in which the Indemnified Party defended such
third party claim or the amount or nature of any such settlement, the Indemnifying Party shall have
the burden to prove by a preponderance of the evidence that the Indemnified Party did not defend or
settle such third party claim in a reasonably prudent manner.

     (e) Survival of Representations and Warranties; Claims for Indemnification. All
representations, warranties and covenants in this Agreement shall survive the Closing and any
investigation at any time made by or on behalf of any Party for a period of one year. All such
representations, warranties and covenants shall expire on the first anniversary of the Closing
Date, except for claims, if any, asserted in writing prior to such first anniversary identified as
a claim for indemnification pursuant to this Section.

Section 9. Confidentiality. Each Party shall ensure that any information provided to it by any
other Party in confidence shall be treated as strictly confidential and that all such confidential
information that each Party or any of its respective officers, directors, employees, attorneys,
agents, investment bankers, or accountants may now possess or may hereinafter create or obtain
relating to the financial condition, results of operations, businesses, properties, assets,
liabilities, or future prospects of the other such parties, any affiliate thereof, or any customer
or supplier thereof shall not be published, disclosed, or made accessible by any of them to any
other Person at any time or used by any of them, in each case without the prior written consent of
the other Party; provided, however, that the restrictions of this Section shall not apply (a) as
may otherwise be required by law, (b) as may be necessary or appropriate in connection with the
enforcement of this Agreement, or (c) to the extent such information was in the public domain when
received or thereafter enters the public domain other than because of disclosures by the receiving
Party. Each such Party shall, and shall cause all of such other Persons who received confidential

26

 

information, from time to time to deliver to the disclosing Party all tangible evidence of such
confidential information to which the restrictions of this Section apply upon written request.

Section 10. Termination.

     (a) The Parties may terminate this Agreement by mutual written consent at any time prior to
the Closing Date.

     (b) Bliss or the Majority Stockholders may terminate this Agreement, by giving written notice
to Clearant at any time prior to the Closing Date, in the event (i) Clearant fails to deliver any
of the documents or instruments required as of the Closing Date, or (ii) Clearant has breached any
representation, warranty, or covenant contained in this Agreement in any respect, and has failed to
cure such breach promptly upon written notice reasonably specifying same.

     (c) Clearant may terminate this Agreement, by giving written notice to Bliss at any time prior
to the Closing Date, in the event (i) Bliss or any of the Majority Stockholders fails to deliver
any of the documents or instruments required as of the Closing Date, (ii) the entire amount of the
Financing is not deposited with the Escrow Holder, or (iii) Bliss or any of the Majority
Stockholders has breached any representation, warranty, or covenant contained in this
Agreement in any respect, and has failed to cure such breach promptly upon written notice
reasonably specifying same.

     (d) If any Party terminates this Agreement as provided in (b) and (c) above, all rights and
obligations of the Parties hereunder will terminate without any liability of any Party to any other
Party (except for any liability of any Party then in breach); provided, however, that the
confidentiality provisions contained in Section 9 above will survive termination.

Section 11. Miscellaneous.

     (a) Survival. The representations, warranties, and covenants of the Parties will
survive for a period of one year following the Closing Date.

     (b) Press Releases and Public Announcements. No Party will issue any press release or
make any public announcement relating to the subject matter of this Agreement without the prior
written approval of the other Parties; provided, however, that any Party may make any public
disclosure it believes in good faith based upon written opinion of counsel is required by
applicable law or any listing or trading agreement concerning its publicly traded securities (in
which case the disclosing Party will use its reasonable best efforts to advise the other Party
prior to making the disclosure).

     (c) No Third-Party Beneficiaries. This Agreement will not confer any rights or
remedies upon any Person other than the Parties and their respective successors and permitted
assigns; provided, however, that (i) the provisions concerning payment of the Financing are
intended for the benefit of Clearant shareholders and (ii) the provisions above concerning
insurance and indemnification are intended for the benefit of the individuals specified therein and
their respective legal representatives.

27

 

     (d) Incorporation by Reference. The exhibits, schedules and other agreements and
instruments referenced or identified in this Agreement are incorporated herein by reference and
made a part hereof as though fully set forth herein.

     (e) Notices. All notices required or permitted under this Agreement will be in
writing and will be given by certified or regular mail or by any other reasonable means (including
personal delivery, facsimile, or reputable express courier) to the Party to receive notice at the
following addresses or at such other address as any Party may, by notice, direct:

	 	 	 
	To Majority Stockholders:

	 	Thomas Gelfand
	

	 	Howard Gelfand
	

	 	Kathleen Rufh
	

	 	5050 Kingsway, 2nd Floor
	

	 	Burnaby, British Columbia
	

	 	Canada V5H 4H2
	

	 	Fax number: (604) 681-8445
	 
	 	 
	To Bliss:

	 	Bliss Essentials Corp.
	

	 	Attention: President
	

	 	5050 Kingsway, 2nd Floor
	

	 	Burnaby, British Columbia
	

	 	Canada V5H 4H2
	

	 	Fax number: (604) 681-8445
	 
	 	 
	With a copy to:

	 	Bryan Cave LLP
	(which will not

	 	Attention: Randolf W. Katz, Esq.
	constitute notice)

	 	2020 Main Street, Suite 600
	

	 	Irvine, California 92614
	

	 	Fax number: (949) 223-7100
	 
	 	 
	To Clearant:

	 	Clearant, Inc.
	

	 	Attention: Chief Financial Officer
	

	 	11111 Santa Monica Boulevard, Suite 650
	

	 	Los Angeles, California 90025
	

	 	Fax number: (310) 479-2959
	 
	 	 
	With a copy to:

	 	Greenberg Traurig, LLP
	(which will not

	 	Attention: John C. Kirkland, Esq.
	constitute notice)

	 	2459 Colorado Avenue, Suite 400E
	

	 	Santa Monica, California 90404

	

	 	Fax number: (310) 586-7800

All notices given by certified mail will be deemed as given on the delivery date shown on the
return mail receipt, and all notices given in any other manner will be deemed as given when
received.

28

 

     (f) Waiver. The rights and remedies of the Parties to this Agreement are cumulative
and not alternative. Neither the failure nor any delay by any Party in exercising any right,
power, or privilege under this Agreement or the documents referred to in this Agreement will
operate as a waiver of such right, power, or privilege, and no single or partial exercise of any
right, power, or privilege will preclude any other or further exercise of such right, power, or
privilege or the exercise of any other right, power, or privilege. To the maximum extent permitted
by applicable law, (a) no claim or right arising from this Agreement or the documents referred to
in this Agreement can be discharged by one Party, in whole or in part, by a waiver or renunciation
of the claim or right unless in writing signed by the waiving Party, (b) no waiver that may be
given by a Party will be applicable except in the specific instance for which it is given, and (c)
no notice to or demand on one Party will be deemed to be a waiver of any obligation of such Party
or of the right of the Party giving such notice or demand to take further action without notice or
demand as provided in this Agreement or the documents referred to in this Agreement.

     (g) Further Assurances. The Parties agree (a) to furnish upon request to each other
such further information, (b) to execute and deliver to each other such other documents, and (c) to
do such other acts and things, all as the other Party may
reasonably request for the purpose of carrying out the intent of this Agreement and the
documents referred to in this Agreement.

     (h) Successors and Assigns. This Agreement will be binding upon and inure to the
benefit of the Parties and their respective successors and permitted assigns. No Party may assign
either this Agreement or any of its rights, interests, or obligations hereunder without the prior
written approval of the other Parties, which may be granted or withheld at the sole discretion of
such other Parties. Any unauthorized assignment is void.

     (i) Severability. Any provision of this Agreement that is invalid, illegal or
unenforceable in any jurisdiction will, as to that jurisdiction, be ineffective to the extent of
such invalidity, illegality or unenforceability, without affecting in any way the remaining
provisions hereof in such jurisdiction or rendering that or any other provision of this Agreement
invalid, illegal or unenforceable in any other jurisdiction.

     (j) Expenses. Each Party will pay all fees and expenses (including, without
limitation, legal and accounting fees and expenses) incurred by that Party in connection with the
transactions contemplated by this Agreement. Upon the request of Clearant from time to time, Bliss
will inform Clearant of its anticipated fees and expenses.

     (k) Governing Law. This Agreement will be governed by and construed in accordance
with the laws of the State of California, without giving effect to principles of conflicts of laws
and any actions related hereto shall be brought in a court of competent jurisdiction located in the
County of Los Angeles, State of California.

     (l) Section Headings; Construction. The section headings are for the convenience of
the Parties and in no way alter, modify, amend, limit or restrict the contractual obligations of
the Parties. The language used in this Agreement is the language chosen by the Parties to express
their mutual intent, and no rule of strict construction will be applied against any Party.

29

 

     (m) Counterparts. This Agreement may be executed in one or more counterparts, each of
which will be deemed to be an original, but all of which will be one and the same document.

     (n) Amendments. The Parties may amend or modify this Agreement, in such manner as may
be agreed upon, by a written instrument executed by the Parties.

30

 

     (o) Entire Agreement. This Agreement, the schedules and exhibits hereto, and the
agreements and instruments to be delivered by the Parties on Closing represent the entire
understanding and agreement between the Parties and supersede all prior oral and written and all
contemporaneous oral negotiations, commitments and understandings, including without limitation the
letter agreement between Clearant and Bliss dated January 3, 2005.

     IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above
written.

	 	 	 	 	 
	BLISS ESSENTIALS CORP., a Nevada corporation	 	 
	 
	 	 	 	 
	By:

	 	 	 	 
	

	 	 	 	 
	

	 	   Thomas Gelfand
	 	 
	

	 	   Chairman, President & CEO	 	 
	 
	 	 	 	 
	By:

	 	 	 	 
	

	 	 	 	 
	

	 	   Howard Gelfand
	 	 
	

	 	   Secretary, Treasurer & CFO	 	 
	 
	 	 	 	 
	By:

	 	 	 	 
	

	 	 	 	 
	

	 	   Kathleen Rufh, Vice President	 	 

	 	 	 	 	 
	 	 	CLEARANT, INC., a Delaware corporation
	 
	 	 	 	 
	

	 	By:
	 	 
	

	 	 	 	 
	

	 	 	 	Alain Delongchamp

CEO
	 
	 	 	 	 
	

	 	By:
	 	 
	

	 	 	 	 
	

	 	 	 	Donald J. Lewis

CFO

	 	 	 
	Thomas Gelfand

	 	 
	 
	 	 
	Howard Gelfand
	 	 
	 
	 	 
	Kathleen Rufh
	 	 

31

 

Schedule 1

Definitions

“Adverse Effect” means, with respect to each Party, any effect or change that would have a material
adverse effect on the results of operations, financial condition, assets, properties or business of
the Party, taken as a whole, or to the ability of the Party to consummate timely the transactions
contemplated hereby; provided that none of the following will be deemed to constitute, and none of
the following will be taken into account in determining whether there has been, an Adverse Effect:
(a) any adverse change, event, development, or effect arising from or relating to (i) general
business or economic conditions, including such conditions related to the business of the Party,
(2) national or international political or social conditions, including the engagement by the
United States in hostilities, whether or not pursuant to the declaration of a national emergency or
war, or the occurrence of any military or terrorist attack upon the United States, or any of its
territories, possessions, or diplomatic or consular offices or upon any military installation,
equipment or personnel of the United States, (3) financial, banking, or securities markets
(including any disruption thereof and any decline in the price of any security or any market
index), (4) changes in GAAP, (5) changes in laws, rules, regulations, orders, or other binding
directives issued by any governmental entity, or (6) the taking of any action contemplated by this
Agreement and the other agreements contemplated hereby.

“Affiliate” has the meaning set forth in Exchange Act Rule 12b-2.

“GCL” means the General Corporation Law of the State of Delaware.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the regulations
promulgated thereunder.

“Escrow Holder” means Bryan Cave LLP, 2020 Main Street, Suite 600, Irvine, California 92614.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.

“Hazardous Waste” means “hazardous waste” as defined in the Resource Conservation and Recovery Act,
as amended, 42 U.S.C. § 6921 et. seq., and the regulations adopted pursuant thereto.

“Knowledge” means the actual knowledge of the executive officers of a Party, without independent
investigation.

“Party” means any one of the following: Bliss, any Bliss subsidiary formed for purposes of
effectuating the transaction contemplated hereby, e.g. Name Change Sub and Merger Sub, Clearant,
and each of the Majority Stockholders.

“Person” includes any person, individual, partnership, corporation, limited liability company,
association, joint stock company, trust, joint venture, unincorporated organization, local, state,

32

 

provincial, territorial, or federal government, or department, agency or political subdivision
thereof, and any other entity of any kind.

“SEC” means the Securities and Exchange Commission and its staff.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.

33

 

Index of Definitions

	 	 	 	 	 
	“Articles”
	 	 	2	 
	“Asset Sale”
	 	 	2	 
	“Board”
	 	 	1	 
	“Bylaws”
	 	 	1	 
	“Clearant Preferred Stock”
	 	 	6	 
	“Closing Date”
	 	 	1	 
	“Financing”
	 	 	2	 
	“14-F1 Information”
	 	 	2	 
	“GAAP”
	 	 	8	 
	“Indemnified Party”
	 	 	26	 
	“Indemnifying Party”
	 	 	26	 
	“Information Statement”
	 	 	2	 
	“IRA Amendment”
	 	 	5	 
	“Majority Stockholders”
	 	 	1	 
	“Merger”
	 	 	5	 
	“Merger Sub”
	 	 	1	 
	“NRS”
	 	 	2	 
	“Name Change”
	 	 	2	 
	“Name Change Sub”
	 	 	1	 
	“Purchase Agreement”
	 	 	1	 
	“Shares”
	 	 	5	 
	“Share Ratio”
	 	 	5	 
	“Tax Code”
	 	 	1	 
	“Warrants”
	 	 	6	 
	“Warrant Ratio”
	 	 	6	 

34

 

Schedule 2

List of Agreements

	 	 	 	 	 
	Asset Purchase Agreement
	 	 	1	 
	 
	 	 	 	 
	Registration Rights Agreement
	 	 	2	 
	 
	 	 	 	 
	Subscription Agreement
	 	 	2	 
	 
	 	 	 	 
	Conversion Agreements
	 	 	4	 
	 
	 	 	 	 
	IRA Agreement
	 	 	4	 

B-1

 

Exhibit A

Form of Registration Rights Agreement

 i 

 

 

Exhibit B

Form of Subscription Agreement

 i

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