Exhibit 2.1
DISTRIBUTION
AGREEMENT
THIS DISTRIBUTION AGREEMENT, made and effective
as of March 20, 2007, is entered into by and between Dotronix,
Inc., a Minnesota corporation (“Dotronix”) and PuraMed
BioScience, Inc., a Minnesota corporation
(“PuraMed”).
WITNESSETH, WHEREAS Dotronix currently owns 100%
of the outstanding common stock of PuraMed, which is the only class
of capital stock of PuraMed; and
WHEREAS, the Board of Directors of Dotronix has
determined that it is in the best interest of Dotronix to
distribute its entire ownership interest in PuraMed through a
pro-rata distribution of all the outstanding common shares of
PuraMed to the holders of Dotronix common stock pursuant to the
terms and subject to the conditions of this Agreement (the
“Distribution”); and
WHEREAS, the Distribution is intended to qualify
as a tax-free spin-off pursuant to Section 355 of the Internal
Revenue Code of 1986; and
WHEREAS, the parties hereto intend this
agreement to set forth the principal terms and arrangements among
and between them regarding the Distribution.
NOW THEREFORE, in consideration of the premises
and the mutual covenants herein contained and intending to be
legally bound hereby, the parties hereto agree as
follows:
1. Distribution . Dotronix’ Board
of Directors, as of the date of this Agreement, has authorized the
Distribution, payable to shareholders of record of Dotronix as of
the Record Date. The Distribution shall be pro rata, so that
shareholders of Dotronix have the same proportionate interest and
ownership in PuraMed as held by them in Dotronix immediately prior
to the record date of this spin-off. The Distribution also shall be
conducted to qualify as a tax-free spin-off.
2. Governing Dates.
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a.
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Record Date – the close of business of April 12, 2007,
being the date for determining the holders of Dotronix common stock
entitled to receive common shares of PuraMed in the
Distribution.
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b.
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Effective Date – also the close of business on April 12,
2007, being the same as the Record Date and the date when the
business, management and affairs of Dotronix and PuraMed become
completely independent and separate from each other.
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c.
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Distribution Date – The actual date when PuraMed common
shares begin being distributed to Dotronix shareholders as of the
Record Date, and which Distribution Date shall not occur until
PuraMed is registered under the Securities Exchange Act of 1934.
The estimated Distribution Date is on or about August 31,
2007.
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3. Distribution Ratio . Shareholders of
Dotronix will receive in the Distribution that number of common
shares of PuraMed which is equal to one common share of PuraMed for
each five (5) common shares of Dotronix held by them as of the
Record Date. No fractional shares or payment therefore shall be
made incident to the Distribution; rather the PuraMed shares to be
received by Dotronix shareholders shall be rounded off to the
nearest whole share.
4. Conditions to Distribution . The
consummation of the Distribution will be subject to the following,
unless waived by the parties hereto prior to the Effective
Date:
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i.
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Prior to the Effective Date, the parties hereto
will prepare and mail to the shareholders of Dotronix, such
information regarding PuraMed and the Distribution as the parties
reasonably determine and as may be required by law. Dotronix also
will file with the SEC any such documentation that Dotronix
determines is necessary or desirable to effect the
Distribution.
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Page 3 of 6
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ii.
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Prior to the Effective Date, Dotronix shall have
tendered an amount of One Hundred Seventy-Five Thousand Dollars
($175,000) to PuraMed for its working capital subsequent hereto,
with the nature and terms of such payment to be agreed to by both
parties hereto.
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iii.
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Prior to the effective date, Dotronix shall sell
and convey all of its PuraMed BioScience assets and rights,
intellectual property, and any other tangible or intangible
property related to PuraMed products, to PuraMed, free and clear of
any liens or encumbrances whatsoever.
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iv.
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PuraMed shall prior to the Effective date have
issued to Dotronix that number of PuraMed common shares necessary
to effect the Distribution as set forth in this
agreement.
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v.
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No order, injunction, decree or regulation
issued by any court or agency of competent jurisdiction or other
legal restraint or prohibition preventing the consummation of the
Distribution will be in effect and no other event outside the
control of Dotronix will have occurred or failed to occur that
prevents the consummation of the Distribution.
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5. Further Obligations of Parties .
Promptly after the Effective Date, PuraMed shall commence and
prepare a registration of its common stock under the Securities
Exchange Act of 1934, as amended, on Form 10SB and further file
with and respond to the SEC to obtain the effectiveness of such
registration of PuraMed as a reporting company with the SEC.
Dotronix shall pay up to Twenty-Five Thousand Dollars ($25,000) of
the cost of legal, auditing, filing and other fees related to such
SEC registration of PuraMed.
Promptly upon becoming registered with the SEC
as a reporting company, PuraMed shall take the necessary actions to
effect the actual distribution of stock certificates for PuraMed
common stock due to Dotronix shareholders as of the Record Date of
the Distribution.
6. Status of Parties on Effective Date .
As of the effective date, the following actions
