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Board of Directors Board Committes Management Code of Conduct Articles of Association Bylaws

The English version of the articles of association is a translation from the original German language. The German formulation shall prevail in case of discrepancies between the German and the English version.

 

Articles of association of mondoBIOTECH holding AG (Ltd./SA)

mdHOLDING articles of association 15092011

 

I. Company, Location, Duration, Purpose

 

Company, Location, Duration

Article 1

Under the name

mondoBIOTECH holding AG (mondoBIOTECH holding Ltd.) (mondoBIOTECH holding SA) a limited liability company is created under Art. 620 and ss.  of the Swiss Code of Obligations  (OR), with headquarters in Stans. Its duration is unlimited.

 

Purpose

Article 2

1 The purpose of the company is the acquisition, holding, management, sale

and financing of direct and indirect participations in companies of all kinds in Switzerland and abroad, particularly in the field of economic and scientific creation of new approaches and solutions to the treatment of rare diseases.

 

2 The Company may, moreover, exercise any commercial, financial or other kinds of activities directly or indirectly associated with the purpose of the Company. In particular, the Company may provide loans, guarantees and other types of financing and securities for group companies.

 

3 The company may set up offices and subsidiaries in Switzerland and abroad, acquire manage, make use and dispose of real estate and intellectual property rights.

 

II. Share Capital, shares and share register

 

Share Capital

Articles 3

1 The share capital of the Company amounts to CHF 712,480.73, divided into 71,248,073 registered shares with a par value of CHF 0.01 each. The shares are fully paid up.

 

2 By an amendment to the articles of association, the Company may at any time convert registered shares into bearer shares or bearer shares into registered shares.

 

Authorised share capital

Article 3a

1 The Board of Directors is authorized, at any time until 26 May 2013, to increase the share capital by a maximum amount of CHF 291,648.20 by issuing up to 29,164,820 registered shares to be fully paid up with a par value of CHF 0.01 each. An increase in partial amounts is permitted. Furthermore, within the limits of Article 659 and ss. of the Swiss Code of Obligations, an increase by original subscription of shares by the Company for the purpose of subsequent offers to shareholders or third parties or distribution among them is permitted. The new registered shares, after their acquisition, will be subject to restrictions on entry into the share register as set out in Article 5 of the articles of association. The Board of Directors will determine the appropriate issue price, the date of dividend entitlement and the type of investment.

The Board of Directors may issue new shares by means of underwriting or in any other manner by one or more banks and subsequent offer to shareholders or third parties.

The Board may forfeit unexercised subscription rights, or it can distribute these and shares for which subscription rights have been granted but not exercised under market conditions or otherwise use them for the benefit of the company.

 

2 The Board of Directors is entitled to restrict or cancel the subscription rights of shareholders and third parties, or the Company, in the event of the use of shares: (1) for the acquisition of businesses or company divisions or holdings or for new investment projects or in the event of share placement for the financing or refinancing of such transactions, (2) for the purpose of expanding the shareholder base by individuals or legal entities having a direct or indirect association with the diseases (especially as patients or as relatives and friends of patients) or who are professionally involved either directly or indirectly with the disease (in particular  producers of drugs, scientists, research institutions, universities, patient and donation organizations or hospitals), for which the Company or any of its subsidiaries invents, researches, develops, offers or sells new approaches or treatment solutions;  (3) for purposes of the participation of strategic partners, or for purposes of expanding the shareholder base in certain investor markets or in the context of the listing, trade licensing or registration of the shares on domestic or foreign stock exchanges, (4) for the participation of employees, members of the Board of Directors and consultants of the Company or its subsidiaries in accordance with one or more regulations adopted by the Board or (5) in connection with an offering of securities in order to cover the green shoe option (surplus allocation option) granted to one or more banks.

 

Conditional share capital

 Article 3b

1 The share capital of the Company may be increased by the issuance of up to 15,669,507 registered shares to be fully paid up, each with a par value of CHF 0.01 to the nominal value of CHF 156,695.07 through the exercising of options granted to employees, members of the Board of Directors and consultants of the Company or its subsidiaries.

Rights of pre-emption and subscription rights of shareholders are ruled out.

Option rights for employees, members of the board of directors and consultants are issued by the Company. The option terms, such as the issue price of the shares, date of dividend entitlement and the Board in the context of regulations will set out type of investment.

The acquisition of registered shares through the exercising of option rights and the subsequent transfer of registered shares will be subject to the registration restrictions of Article 5 of the Articles of Association.

 

2 The Company’s share capital may be increased by the issuance of up to

14,694,130 registered shares to be fully paid up, each with a par value of CHF 0.01 to a nominal value of CHF 146,941.30 by the exercising of conversion or option rights granted to entitled parties in association with bonds and similar financial instruments of the company or its subsidiaries, or option rights granted to existing and/or new shareholders in connection with capital increases. Subscription rights of shareholders are ruled out. The Board of Directors shall determine the conversion and option terms, the issue price and the date of dividend entitlement. The Board of Directors is authorized to limit or cancel the pre-emptive rights of existing shareholders in the event of:

 

(1) The financing or refinancing of the acquisition of businesses, company divisions or holdings or new investment projects of the Company, (2) the financing or refinancing of the Company or its subsidiaries, (3) the issuance of convertibles and/or option bonds for the purpose of placement on national or international capital markets for the strategic diversification of the investor base including placement with one or more strategic partners or (4) for purposes of the underwriting of such bonds and other financial instruments by one or more banks with subsequent public offer. If the pre-emptive right is ruled out and not even granted indirectly,

(i) Convertibles or option bonds are to be distributed on market terms and (ii) the time limit for the exercising of conversion and/or option rights set at a maximum of 10 years from the date of the relevant issue. Option rights granted to existing and/or new shareholders in connection with capital increases have a time limit for exercising of up to five years. The acquisition of registered shares by the exercising of conversion or option rights and the subsequent transfer of registered shares are subject to the registration restrictions of article 5 of the Articles of Association.

 

Form of shares

Article 4

1 The Company's registered shares will be issued and managed subject to paragraphs 3 and 5 as as book-entry securities.

 

2 Regulations on book-entry securities, including the provision of collateral are subject to the law on book entry securities.   If book-entry securities are transferred by assignment, this is subject to notification of the Company in order to be valid.

 

3 The Company may withdraw shares managed as book-entry securities from the custody system.

 

4 The shareholder may, if he is registered in the stock book, at any time request the Company to issue a certificate of his registered shares.

 

5 The shareholder has no right to print and deliver certificates or conversions of registered shares issued in a specific form in another form. The Company may however at any time issue certificates (individual documents and certificates or global certificates) or convert book-entry securities or certificates into a different form and cancel issued certificates delivered to it.

 

Share register, Registration Restrictions, Nominees

Article 5

1 For the registered shares a share register is kept, in which the surname and first name of holders and beneficiaries are entered (for legal entities, the company name), together with address and nationality (for legal entities the registered office). Should a person entered in the share register change their address, they must inform the Company.

Where this has not been done, all written communications are valid if made to the address entered in the share register. In relation to the Company, only the person or entity entered in the share register is recognized as a shareholder or beneficiary.

 

2 Purchasers of registered shares will be entered into the share register with voting rights if they explicitly declare that they have acquired these registered shares in their own name and on their own account. If the purchaser is not willing to make such a declaration, the Board of Directors may refuse registration with voting rights.

 

3 The registration restriction set out in paragraph 2 shall also apply to shares subscribed or acquired through the exercising of a derivative subscription, option or conversion right.

 

4 The Board of Directors may, after hearing the registered shareholder or nominee, where appropriate, remove entries from the share register with retroactive effect to the date of registration if the registration was made on the basis of false information or in the event of a breach of the agreement between the company and the nominee. The party concerned must be informed immediately of the cancellation.

 

5 The Board of Directors establishes the principles relating to registration of nominees and adopts the provisions necessary for compliance with the above regulations. Nominees in the sense of this provision are considered to be persons who do not expressly declare in the application for registration that they have acquired the shares for their own account, and with whom the Company has concluded a corresponding agreement.

 

6 The Board of Directors announces in the invitation to the General Meeting the closing date for entry in the share register for participation and voting rights.

 

Public takeover bid

Article 6

A purchaser of shares in the Company is not obliged to make a public purchase offer in accordance with the provisions of Article 32 of the Federal Act on Stock Exchanges and Securities Trading (Stock Exchange Act).

 

III. Company organization

 

Organs

Article 7

The organs of the company are as follows:

A. Annual General Meeting

B. Board of Directors

C. Auditors

 

A. General Meeting

 

Powers

Article 8

The supreme organ of the company is the General Assembly. It shall have the inalienable powers decreed by law.

 

Ordinary and Extraordinary General Meetings

Article 9

1 The Annual General Meeting takes place within six months after the close of the financial year.

 

 2 Extraordinary General Meetings take place when the Board of Directors or the Auditors deem this to be appropriate, or as decided by a general meeting. In addition, shareholders representing at least 10 percent of the share capital, may jointly request the calling of an extraordinary general meeting, in writing specifying the items to be discussed, and the proposal, and in the case of elections, the name of the proposed candidate.

 

Convocation

Article 10

1 The General Assembly is convened by the Board of Directors or by the organs and people designated by law.

 

2 The meeting is called by a single announcement in the Swiss Commercial Gazette. Registered shareholders may in addition be informed in writing. In the convocation, the agenda as well as the proposals of the Board of Directors and the shareholders who requested a General Meeting or the listing of an item on the agenda are to be announced.

 

3 At least twenty days before the Annual General Meeting, the Annual Report

and the Audit Report are to be presented at the company’s head office for inspection by the shareholders. This must be mentioned in the convocation.

 

4 The owners or representatives of all shares may, if no objection is raised, hold a general meeting without compliance with the prescribed formalities for convening (Shareholders’ Meeting). This meeting can validly discuss and decide upon any matters within the remit of the General Assembly provided that the holders or representatives of all the shares are present.

 

Agenda

Article 11

1 Shareholders representing either alone or together shares with a nominal value of at least CHF 1,000,000 or at least 10 percent of the share capital may request the inclusion of an agenda item. The inclusion of the agenda item must be applied for in writing to the Board of Directors at least 45 days before the meeting and shall specify the agenda item and the shareholders’ proposals.

 

2 The General Meeting cannot take any decisions regarding applications for items not duly announced; exceptions to this are applications for the convening of an extraordinary general meeting or the conducting of a special audit.

 

3 Requests for items to be included on the agenda and for discussion without the taking of a decision do not require prior notice.

 

Chair of the General Assembly, Representatives, Vote Counters, Minutes

Article 12

1 The Chairman of the Board of Directors shall preside at the General Meeting, and in his absence the Vice-Chairman of the Board of Directors. If he too is absent, the Chairman is elected by the General Assembly.

 

2 The chairman has all the powers and authority necessary for the proper conducting of the General Assembly.

 

3 The Chairman appoints a recording secretary and scrutinizer, who need not be shareholders.

 

4 The Board of Directors is responsible for the keeping of the minutes, which are to be signed by the chairman and the secretary. The minutes shall give information about decisions and elections and to declarations made on record by the shareholders.

 

Voting rights, Representation

Article 13

1 Each share registered as a share with voting rights in the share register gives entitlement to one vote.

 

2 A shareholder may only be represented at the General Meeting by his legal representative, who does not have to be a shareholder, another shareholder with voting rights, the corporate proxy, the voting proxy or a portfolio representative. All shares held by a shareholder shall be represented by only one person.

 

3 The Board of Directors makes the arrangements necessary for determining voting rights. The Chairman makes the decision regarding admission to the general meeting and the recognition of proxies.

 

Decisions, Elections

Article 14

1 The General Meeting forms a quorum regardless of the number of shareholders present or the shares represented.

 

2 The General Meeting shall pass its resolutions and carry out its elections with an absolute majority of the votes cast, excluding abstentions, blank and invalid votes, provided that the law or the articles of association contain no provisions to the contrary. In case of elections, if an election is not made in the first-round of voting and if more than one candidate is available, a relative majority is sufficient in the second round.

 

3 The chairman has no casting vote.

 

4 Decisions are taken by open vote in the General Meeting, unless the General Meeting approves a written vote or the Chairman orders such. Voting can also be carried out electronically on the orders of the Chairman. The Chairman may have an open vote repeated at any time by a written or electronic ballot, where, in his opinion, there are doubts about the vote. In this case, the previous vote is considered not to have occurred.

 

Important decisions

Article 15

1 A decision by the General Meeting consolidating at least two thirds of the votes represented and an absolute majority of the share par values represented is required for:

 

1. A change in the corporate purpose;

2. The introduction and abolition of voting shares;

3. Restrictions on the transferability of registered shares;

4. Authorized or conditional capital increase;

5. Capital increase from equity for investment in kind or for the purpose of acquisition of assets and the granting of special privileges;

6. The restriction or abolition of subscription rights;

7. The transfer of the headquarters of the company;

8. Facilitating or waiver of restrictions on transferability of registered shares;

9. The dissolution of the Company.

 

2 Decisions on mergers, divisions and transformations shall be governed by the provisions of merger law.

 

3 Provisions of the articles of association that specify a majority greater than that decreed by law for the taking of certain decisions shall only be introduced or modified with the specified majority.

 

B. The Board of Directors

 

Election, Term of Office, Constitution

Article 16

1 The Board of Directors consists of at least three members. The members of the Board of Directors are individually elected each for a period of one year. Re-election is permitted. A year of office is considered to be the period between one ordinary General Meeting and the end of the next Annual General Meeting. The right to premature resignation or removal shall be retained.

 

2 The Board of Directors constitutes itself. It chooses a Chairman and one or more Vice Presidents from among its members. It appoints a secretary who need not be a member of the Board of Directors.

 

3 The Board of Directors arranges moreover, subject to law and the articles of association, its own organization and decision-making by means of regulations.

 

Functions and powers

Article 17

1 The Board is responsible for the leadership of the Company and the monitoring of its management.

 

2 The Board of Directors may take decisions on all matters that are not delegated by law or the articles of association to the General Assembly. It shall lead all operations of the Company, where it has not delegated its management. It represents the company externally and attends to all matters that are not under the law, articles of association or regulations of the Company delegated to another body.

 

3 The Board of Directors may, in accordance with organizational rules, assign the management or individual parts thereof to one or more persons, members of the Board of Directors or third parties, who need not be shareholders. The organizational rules regulate the management, the posts required for it, defines their tasks and in particular regulates reporting.

 

Decisions, Minutes

Article 18

1 The Board of Directors forms a quorum if a majority of its members are present. Decisions via telephone, video conferencing or electronic media are permitted, provided that no member requests that a session be held.

The presence of one member is sufficient in case a decision limited to an increase of capital and to the related changes to the articles of association has to be made.

 

2 Subject to the provisions of the organizational rules, the Board of Directors meets as often as business requires and as often as is requested by a member. Subject to the provisions of the organizational rules, decisions are made by majority vote of members present. In the event of a tie, the Chairman has the casting vote.

 

3 If a written application is duly filed, the decision may be made by means of a circular letter, facsimile or electronic transmission provided no member requests verbal deliberation.

A resolution by circular requires the consent of all members, in which signing can take place on different copies of the decision.

 

4 Advises and decisions are recorded in a protocol, signed by the Chairman and the Secretary.

 

Expenses, fees and shares in the profits

Article 19

1 The members of the Board of Directors are entitled to reimbursement of expenses incurred in the interest of company as well as remuneration for their work (fee), the amounts of which shall be determined by the Board itself.

 

2 The setting of shares in the profits for the members of the Board of Directors shall be the responsibility of the General Meeting, within the limits set by law.

 

C. Auditors

 

Article 20

The General Meeting shall elect as auditor for one year in each case, a state-supervised audit company for the purposes of the Audit Supervision Act (ASA).

The auditors exercise the powers conferred upon them by law and obligations.

 

IV. Financial year, financial issues

 

Financial year

Article 21

The financial year is determined by the Board of Directors.

 

Use of retained earnings, reserves, dividends

Article 22

1 The General Meeting shall decide upon the use of the balance-sheet profit, taking into account the provisions of the law.

 

2 In addition to the statutory reserve the General Assembly may establish additional reserves.

 

3 Dividends that have not been drawn for 5 years from their due date shall

pass to the Company and will be allocated to the general reserve.

 

V. Dissolution and liquidation

 

Article 23

1 The General Assembly may at any time decide the dissolution and liquidation of the Company in accordance with the legal and statutory provisions.

 

2 Liquidation is carried out by the Board of Directors, unless the general meeting appoints other liquidators. The liquidation of the Company shall be in accordance with the law. The liquidators may sell assets (including immovable property) at its discretion.

 

3 After the clearance of debts, the assets will be distributed among the shareholders in proportion to their respective shares, determined according to par value.

 

VI. Notices, announcements and convening of meetings

Article 24

1 The Company’s organ of publication is the Swiss Commercial Gazette.

The Board is authorized to designate other publications.

 

2 Communications of the Company to shareholders shall be by ordinary mail to the last address entered in the shareholder register or by publication in the Swiss Commercial Gazette.

 

VII. Investments in kind

 

Article 25

1 The Company takes over, with the foundation of BIOPHARMAinvest AG under the investment in kind agreement of 28 February 2007, 19,211,838 registered shares of mondoBIOTECH AG, Basel, with a total nominal value of CHF 192,118 .38 at the price of CHF 170,204.00, for which 3,404,080 fully paid-up bearer shares of the Company with a par value of CHF 0.05 each will be issued to BIOPHARMAinvest AG. The company accepts in accordance with the investment in kind agreement of 28 February 2007 also from BIOPHARMAinvest AG 9,999,995 registered shares of mondoGEN AG of Zug, Switzerland, with a total par value of CHF 99,999.95 and a price of CHF 119,979.15, for which 2,399,583 fully paid up bearer shares of the Company with a par value of CHF 0.05 each are issued to BIOPHARMAinvest AG. The Company takes over, on the foundation of CTB Holding AG, in accordance with the investment in kind agreement of 28 February 2007, 7,885,438 registered shares of mondoBIOTECH AG in Basel, with a total par value of CHF 78,854.38, at the price of CHF 69,859.95, for which 1,397,199 fully paid up bearer shares in the Company with a par value of 0.05 each will be issued to CTB Holding AG.

 

2 The company accepts, in accordance with the investment in kind agreement of 17.9./20.11.2007, 16.9./20.11.2007, 12.9./20.11.2007, 20.11.2007, 20.11.2007, 18.9./20.11.2007, 13.9./20.11.2007, 14.9./20.11.2007, 12.9./20.11.2007, 12.9./20.11.2007, 13.9./20.11.2007, 10.9./20.11.2007, 10.9./20.11.2007, 2.10./20.11.2007, 13.9./20.11.2007, 24.9./20.11.2007, 24.9./20.11.2007, 13.9./20.11.2007, 14.9./20.11.2007, 10.9./20.11.2007, 14.9./20.11.2007, 14.9./20.11.2007, 14.9./20.11.2007, 12.9./20.11.2007, 14.9./20.11.2007, 12.9./20.11.2007, 12.9./20.11.2007, 11:10./20.11.2007, 4:10./20.11.2007, 7.9./20.11.2007, 14.9./20.11.2007, 21.9./20.11.2007, 10.9./20.11.2007, 13.9./20.11.2007, 14.9./20.11.2007, 15:10./20.11.2007, 14.9./11/20/2007 from the following investors in kind 6,739,133 registered shares of mondoBIOTECH AG in Basel, with a par value of CHF 67,391.33  to a value of CHF 42,666.25 for which 853,325 fully paid up bearer shares in the company with a par value of CHF 0.05 each will be issued at par.