By-Laws - Karo Bio

§ 3 Business activity
The business activity of the Company shall be to develop, acquire and sell pharmaceutical products, to carry on research and to carry on other activities related thereto.

§ 4 Share capital and number of shares
The share capital shall be no less than SEK thirty five million (35,000,000) and no more than SEK one hundred forty million (140,000,000). The number of shares shall be no less than seventy million (70,000,000) and no more than two hundred and eighty million (280,000,000).

§ 5 Board of Directors
The Board shall consist of no less than five (5) members and no more than nine (9) members with up to three (3) deputies.

§ 6 Auditors
The company shall as Auditor have one registered public accounting firm.The Board is authorized to appoint one or several special auditors to audit such statements or plans prepared by the Board in accordance with the Swedish Companies Act in relation to an issue of shares, warrants or convertibles with provisions on non-cash consideration or that subscription shall be made against payment through set-off of claims or other provisions, transfer of own shares against non-cash consideration, reduction of the share capital or the statutory reserve, merger or division of limited companies. An authorized accountant or a registered public accounting firm shall be appointed as such special auditor.

§ 7 Notice convening shareholders’ meetings
Notice shall be made by announcement in Post- och Inrikes Tidningar and in Svenska Dagbladet. Notice of annual general meeting or extraordinary general meeting when change of By-Laws is due, shall be made no earlier than six (6) weeks and no later than four (4) weeks before the meeting. Notice convening other extraordinary meetings shall be made no earlier than six weeks and no later than two weeks before the meeting.
The general meeting shall be held in Stockholm.

§ 8 Pre-notification to attend shareholders’ meetings
To be entitled to attend a shareholders’ meeting, a shareholder shall be registered in the transcription or other form of display of the complete share register with reference to the status five days, excluding Sundays, before the meeting. Shareholders must also notify the Company no later than 4 pm the day stated in the notice for the meeting. This day must not be Sunday, other general holiday, Saturday, Midsummer’s Eve, Christmas Eve or New Year’s Eve and must not be earlier than the fifth day, excluding Sundays, before the meeting. A shareholder may be accompanied by one or two assistants at the shareholders' meeting, but only if the shareholder has notified the Company of the number of assistants in the manner prescribed in the paragraph above.

§ 9 Annual general meeting with the shareholders
At the annual general meeting resolutions shall be passed with respect to the following matters:
1. Election of chairman at the meeting;
2. Drawing up and approval of the voting list;
3. Decision of the agenda;
4. Election of one or two persons to approve the minutes together with the Chairman;
5. Decision whether the meeting has been duly convened;
6. Presentation of the annual report and the audit report and, if the company is a parent company, the consolidated annual report and the consolidated audit report;
7. Resolution in respect of adoption of the profit and loss account and the balance sheet and, if the Company is a parent company, of the consolidated profit and loss account and the consolidated balance sheet;
8. Resolution in respect of appropriation of the Company’s profit or loss according to the adopted balance sheet;
9. Resolution in respect of discharge of liability towards the Company for the Board Members and the President;
10. Resolution in respect of the number of Board Members, deputy board members and, when applicable, auditors;
11. Resolution in respect of fees for the Board Members and, when applicable, the auditors;
12. Election of Board Members and deputy board members and, when applicable, auditors;
13. Other matters to be resolved at the annual general meeting under the Companies Act or the By-laws.

§ 10 Fiscal year
The fiscal year of the Company shall be January 1 - December 31.

§ 11 Record day provision
The Company’s shares shall be registered in a central securities depository register pursuant to the Financial Instruments Accounts Act (1998:1479)
_____________

By-laws adopted at annual general meeting of the shareholders May 3, 2006