The Charter

THE Ri.MED FOUNDATION CHARTER

SECTION 1

NAME – REGISTERED OFFICE – TERM – PURPOSE

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Art. 1) Incorporation

1.1. The Foundation named “Ri.MED” is constituted as per art. 1, para. 341 of Law 266 of December 23, 2005. The Foundation and its operations are regulated by this Charter, by articles 14 and following of the Italian Civil Code, and by the other relevant Italian regulations in force.

 

Art. 2) Registered office

2.1 The Foundation’s registered office is in the city or in the province of Palermo and may also operate through office branches and premises in Italy and abroad.

Art. 3) Term

3.1 The Foundation has an unlimited term.

Art. 4) Purpose and Activity

4.1 The purpose of the Ri.MED Foundation is to directly or indirectly promote, support, and conduct research projects and programs in the field of biotechnologies, particularly transferring outcomes in the biomedical area.

4.2 This purpose is pursued:

4.2.1 disseminating scientific culture with reference to the role of biotechnologies in the progress of humanity;

4.2.2 training scientific, technical, and administrative staff with specific skills in the field of biotechnologies;

4.2.3 creating and directly and/or jointly managing biotechnology research laboratories.

4.3 The Foundation’s activities focus on promoting and supporting biotechnology development in Sicily and Southern Italy in order to place this part of the Country in the forefront of research.

4.4 The Foundation is committed to promote the prompt transfer of research outcomes to their application and use while supporting, also by means of its know-how, public and private institutions and organizations working in the field of biotechnologies.

Art. 5) Means and related activities

5.1 In order to pursue the purpose described in article 4, the Foundation will:

5.1.1 manage and enhance its share capital including goods rented, received in loan, owned or in custody;

5.1.2 draw up deeds, contracts, and agreements with public and private subjects;

5.1.3 participate to associations, consortia, corporations, and other bodies and institutions, public and private, that pursue purposes similar to, or compatible with, those specified in article 4;

5.1.4 undertake cultural relations and exchanges with universities, research centers, and other public and private subjects with purposes similar to those specified in article 4;

5.1.5 fund scientific activities promoted and managed by other public or private bodies or institutions, and receive funds for activities directly promoted and managed;

5.1.6 promote, fund, and manage publications focusing on research, and studies related to its institutional activities;

5.1.7 safeguard the intellectual property of research outcomes and their financial enhancement promoting their application in the industry;

5.1.8 promote and organize conferences, workshops, seminars, conventions, congresses, specialization and refresher/training courses, and other events also for purpose of raising funds to pursue the goals specified in article 4;

5.1.9 use funds, contributions or fellowships to be used in Italy or abroad, to support studies in areas and topics related to its institutional activities;

5.1.10 organize training events for staff involved with research, and grant fellowships and contributions to the most worthy trainees.

SECTION 2

MEMBERS AND SHARE CAPITAL

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Art. 6) Founding members

6.1 As per art. 1, para. 341 of Law 266 of December 23, 2005, and as per enacting Decree of the Presidency of the Italian Council of Ministers (hereinafter “DPCM”), the founder is the Presidency of the Council of Ministers. The founding members also include:

6.1.1 the Presidency of the Region of Sicily;

6.1.2 the University of Pittsburgh;

6.1.3 the Italian National Research Center (CNR);

6.1.4 the University of Pittsburgh Medical Center (UPMC),

provided they have joined the Foundation by means of a written statement submitted to the Presidency of the Council of Ministers within 30 (thirty) days from the publication of the DPCM referred to under art. 6.1.

6.2 The founding members are vested with the following powers:

6.2.1 appoint, revoke, and replace the members of the Board of Directors;

6.2.2 appoint the members of the Scientific Committee and of the Board of Auditors within the terms indicated by this Charter;

6.2.3 submit opinions on modifications to the Charter and on the termination of the Foundation.

6.3 If, for any reason, one of the founding members no longer intends to continue pursuing the initiative undertaken at the time of incorporation of the Foundation, it must notify the other founding members and the president of the Foundation. Following this notification, all powers of the outgoing member cease and are appointed to the Presidency of the Council of Ministers.

6.4 The founding member not intending to pursue the initiative undertaken with the incorporation of the Foundation is not entitled, at any time or for any reason, to claim sums disbursed at the time of establishment or subsequently, nor is entitled to any claim of the Foundation’s share capital or results directly or indirectly achieved.

6.5 Founding members University of Pittsburgh and UPMC will promote the Foundation’s research programs in the U.S.A. and in Europe supporting joint research programs with the University of Pittsburgh, attracting private investors to market research results as a tool for local social and economic progress.

Art. 7) Share capital

7.1 The Foundation draws the means for its operations from the share capital and financial resources realized every year, in particular from:

7.1.1 the sum of €30 million for year 2006, €60 million for 2007 and 2008 respectively, and €180 million for 2009, allocated pursuant to art. 1, para. 341 of Law 266 of December 23, 2005;

7.1.2 the contributions, movable and immovable assets and properties, and other profits transferred upon, or following, the incorporation by the founding members and by any other public or private institution, as a contribution to the Foundation’s activities;

7.1.3 the proceeds resulting from institutional activities;

7.1.4 income and revenues generated by assets not directly utilized to pursue institutional goals.

7.2 Anyone contributing to the Foundation’s activity may request for his/her contribution to be used for the sole purpose of research. In these cases, the Board of Directors may not utilize these contributions for purposes other than those to which they were originally assigned.

7.3 The share capital is necessarily bound to the execution of the institutional activities carried out by the Foundation to directly and indirectly pursue the purpose indicated in art. 4 of this Charter.

7.4 In the event of termination, the Foundation’s share capital is devolved as per art. 24 of this Charter.

SECTION 3

FOUNDATION BODIES

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Art. 8) Institutional framework

8.1 The Foundation’s bodies are:

8.1.1 The Board of Directors;

8.1.2 The president of the Foundation;

8.1.3 The Scientific Committee;

8.1.4 The Scientific Director;

8.1.5 The Board of Auditors.

8.2 No member of the Board of Directors, of the Scientific Committee, or of the Board of Auditors can be a member of another of the Foundation’s bodies. In case of acceptance of a second appointing, the member will automatically lose his/her first appointment.

8.3 The president of the Foundation, the members of the Board of Directors, the scientific director, and the members of the Board of Auditors cannot hold office or assignments in other subjects of any nature that may create situations of even only potential incompatibility with the goals pursued by the Foundation. 

Art. 9) Board of Directors

9.1 The Board of Directors includes the president of the Foundation appointed by the Presidency of the Council of Ministers and 4 (four) board members appointed by the other founding members. In order to support the synergy between the Foundation, the Comitato Nazionale per la Biosicurezza, le Biotecnologie e le Scienze della Vita, and the Istituto Mediterraneo per i Trapianti e Terapie ad Alta Specializzazione (ISMETT), the president of the aforementioned committee and the director of ISMETT, or subjects appointed by them, are entitled to attend to meetings of the Board of Directors, although not in the capacity of members, with no compensation, and with no right or authority other than to express their opinions on issues of primary importance for the activity of the Foundation and for the pursuit of its statutory activities.

9.2 The members of the Board of Directors must have appropriate documented professional and honorable requisites, and certified legal, administrative, and corporate finance experience, or experience in biomedical and biotechnology research and in the management of scientific research centers.

9.3 The members of the Board of Directors remain in office for 5 (five) years, barring resignation or revocation by the founding member responsible for their appointment, and can be reconfirmed.

9.4 If during the period of office, a member of the Board of Directors or the president leaves office for any reason, the founding member with power of appointment is accountable for his/her replacement for the residual time of office of the other members of the Board.

9.5 All Board of Directors members receive an attendance fee and a reimbursement of the expenses borne to attend the Board of Directors meetings.

Art. 10) Powers of the Board of Directors

10.1 The Board of Directors is accountable for the financial and administrative management of the Foundation and, for this purpose, exercises all the necessary powers of ordinary and extraordinary administration, with the exclusion of those assigned to the other bodies under this Charter.

10.2 The Board of Directors resolves on:

10.2.1 the enforcement of scientific and research protocols submitted by the Scientific Committee as per articles 14 and 20;

10.2.2 the appointing of the vice president;

10.2.3 the organizational chart, the internal organization of the offices, and the management of the staff;

10.2.4 the enforcement of appropriate policies and procedures for the organization and operations of the Foundation and for its institutional activities;

10.2.5 the strategies of investment of the Foundation’s share capital;

10.2.6 the approval of the Foundation’s budget, financial statement, and annual reports as per art. 21;

10.2.7 the acceptance of inheritances, legacies, donations, and gifts;

10.2.8 the adoption of tools and implementation of activities indicated in art. 5;

10.2.9 the adoption of modifications to the Charter as per art. 23;

10.2.10 the ratification of urgent measures adopted by the Foundation’s president as per art. 12.3;

10.2.11 the termination of the Foundation’s activities as per art. 24;

10.2.12 all other ordinary or extraordinary deed not entrusted to other bodies.

10.3 For specific deeds or categories of deeds the Board of Directors may delegate its powers, also on a permanent basis, to senior positions of the Foundation’s or to positions bound to the Foundation by fiduciary professional or consulting relations, establishing the limitations of the proxy. The Foundation’s legal representation is assigned in the scope of the powers entrusted with the proxy.

Art. 11) Board of Directors

11.1 The Board of Directors is summoned at least 4 (four) times a year. The Board also meets if at least 2 (two) of its members request it, or at the initiative of the president.

11.2 The Board of Directors is summoned at the Foundation’s registered office or in any other premises indicated in the notice of meeting.

11.3 The Board of Directors is summoned by the president of the Foundation using all appropriate means to make sure the notice of meeting is delivered at least 8 (eight) days prior to the meeting. In the event of an emergency the notice of meeting may be sent 3 (three) days before the meeting.

11.4 The notice must indicate the meeting’s date, time, place, the agenda, and the reason of the emergency, if any.

11.5 Should the aforementioned formalities not be complied with, the Board of Directors can in any case deliberate if all its members, at least one member of the Board of Auditors, and the scientific director are present.

11.6 Meetings may be attended in audio and/or video conference provided all participants are identified by the president and by all those in attendance, that they can follow the discussion and intervene in real time on the topics discussed, exchange documents relevant to these topics, and that all of the above is documented in the minutes.

11.7 Notwithstanding the various majorities required under the Charter, the Board of Directors meetings are valid if at least 3 (three) members are present, and if it resolves with the absolute majority of the members in attendance.

11.8 As per articles 23 and 24, the approval of at least 4 (four) members of the Board of Directors is required to adopt resolutions concerning modifications to the Charter or the termination of the Foundation.

11.9 The meetings are chaired by the president or, in his/her absence or impediment, by the vice president.

11.10 Minutes are drafted for all Board meetings and signed by the president (or, in his/her absence or impediment, by the vice president) and by the secretary appointed for each meeting.

11.11 The Board meetings may be attended, with no voting rights, by the scientific director and by the members of the Board of Auditors, previously notified.

 

Art. 12) President and Vice President

12.1 The president of the Foundation is appointed by the Presidency of the Council of Ministers and remains in office 5 (five) years. The office may only be renewed once.

12.2 The president is the legal representative of the Foundation in front of third parties and in court.

12.3 The president of the Foundation has the following tasks that may not be delegated, except for the one indicated in art. 12.3.8:

12.3.1 summon and chair the Board of Directors;

12.3.2 request the scientific director to summon the Scientific Committee and attend the Committee’s meetings any time he/she deems appropriate;

12.3.3 supervise the overall activity of the Foundation and the compliance with the provisions of the Charter;

12.3.4 guarantee, together with the scientific director, that the management and administrative resolutions of the Board of Directors are in line with the scientific tasks for which the Scientific Committee is accountable;

12.3.5 draft with the scientific director the Foundation’s annual report as per art. 21;

12.3.6 implement measures that, due to their urgency, cannot be deliberated by the Board of Directors, and submit them to the Board for ratification.

12.3.7 designate a member in the ISMETT Board of Directors as identified by the founding member Presidency of the Council of Ministers.

12.3.8 represent the Foundation in the ISMETT Shareholders’ Meeting, either in person or through a delegate.

12.4 The vice president is appointed by the Board of Directors among its members and remains in office 5 (five) years.

12.5 The vice president performs the president’s duties in the latter’s absence or impediment.

12.6 The compensation of the president and of the vice president is established by the Board of Directors.

 

Art. 13) Scientific Committee

13.1 The Scientific Committee is responsible for planning the scientific activity and managing the Foundation’s research protocols.

13.2 The Scientific Committee hosts 5 (five) members selected among individuals who have excelled in the Foundation’s fields of activity, and a scientific director who manages and coordinates its operations.

13.3 The members of the Scientific Committee are appointed, granted the approval of the scientific director, as follows:

13.3.1 two members by the University of Pittsburgh;

13.3.2 one member by the CNR;

13.3.3 two members by the Board of Directors.

 

Art. 14) Powers of the Scientific Committee

14.1 In order to pursue the goals indicated in art. 4, the Scientific Committee:

14.1.1 drafts the scientific and research protocols to be submitted to the Board of Directors for the enforcement and the appointing of the necessary funds;

14.1.2 adopts the three-year scientific and research program whose protocols have been selected as per item 14.1.1;

14.1.3 identifies the persons in charge of the scientific and research protocols included in the three-year program, assigns a budget, and supervises its use;

14.1.4 monitors that the scientific and research protocols are enforced by the persons in charge and by their respective staff.

 

Art. 15) Scientific Committee

15.1 The Scientific Committee is summoned at least 4 (four) times a year. The Scientific Committee also meets if at least 2 (two) of its members and the president of the Foundation request it, or at the initiative of the scientific director.

15.2 The Scientific Committee is summoned at the Foundation’s registered office or in any other premises indicated in the notice of meeting.

15.3 The Scientific Committee is summoned by the scientific director using all appropriate means to make sure the notice of meeting is delivered at least 8 (eight) days prior to the meeting. In the event of an emergency the notice of meeting may be sent 3 (three) days before the meeting.

15.4 The notice must indicate the meeting’s date, time, place, the agenda, and the reason of the emergency, if any.

15.5 Should the aforementioned formalities not be complied with, the Scientific Committee can in any case deliberate if all its members, at least one member of the Board of Auditors, and the president of the Foundation are present.

15.6 Meetings may be attended in audio and/or video conference provided all participants are identified by the scientific director and by all those in attendance, that they can follow the discussion and intervene in real time on the topics discussed, exchange documents relevant to these topics, and that all of the above is documented in the minutes.

15.7 The Scientific Committee meetings are valid if at least 3 (three) members are present, and if it resolves with the absolute majority of the members in attendance. In the event of a tie, the resolution will comply with the vote of the scientific director.

15.8 Minutes are drafted for all Scientific Committee meetings and they are signed by all the members attending.

15.9 The Scientific Committee meetings can be attended, without voting rights, by the president of the Foundation and by the members of the Board of Auditors, previously notified.

15.10 The compensation of the members of the Scientific Committee is established by the Board of Directors.

 

Art. 16) Scientific director

16.1 The scientific director is accountable for scientific and research activities, coordinates and manages the Committee’s activities, and chairs the Committee’s meetings.

16.2 The scientific director is appointed, upon consultation with the Board of Directors, by founding member UPMC among individuals who have excelled in scientific, biomedical, or biotechnological research, and with a documented academic or professional curriculum.

16.3 The scientific director has the following tasks that may not be delegated:

16.3.1 attend the Board of Directors meetings every time he/she deems appropriate;

16.3.2 guarantee, together with the president of the Foundation, that the management and administrative resolutions of the Board of Directors are in line with the scientific tasks for which the Scientific Committee is accountable;

16.3.3 draft with the president of the Foundation, the Foundation’s annual report as per art. 21.

16.4 The scientific director is also responsible for ensuring that the research activity promoted by the Foundation is state-of-the-art and performed according to principles of effective management. The scientific director also ensures that all the necessary measures are taken in order for the Foundation and for its

research activities to be known by the scientific community, by the financing bodies or by the private investors.

16.5 The compensation of the scientific director is established by the Board of Directors.

 

Art. 17) Board of Auditors

17.1 The Board of Auditors monitors the compliance with the regulations and with the provisions of the Charter, the enforcement of good management practices, and ensures an appropriate administrative and accounting setting for Foundation’s purposes. The Board of Auditors also reviews the Foundation’s regular administrative, economic, and accounting management.

17.2 The Board of Auditors consists of 3 (three) members, one of whom acts as president, appointed as follows:

17.2.1 one by the Presidency of the Council of Ministers;

17.2.2 one jointly by the University of Pittsburgh and by UPMC;

17.2.3 one by CNR.

17.3 At least two members of the Board of Auditors must be enrolled in the Register of Auditors, they hold office for 3 (three) years and can be confirmed.

17.4 The president of the Board of Auditors is appointed by the auditors during the first meeting and is responsible for managing and coordinating the Board’s activities.

17.5 In particular, the Board of Auditors:

17.5.1 assesses the appropriate bookkeeping and the compliance of the balance sheet with the account books, as well as the congruity of the FY results with the budget;

17.5.2 performs periodic audits of cash movements;

17.5.3 performs any other obligations envisaged by current legislation.

17.6 The members of the Board of Auditors can attend the Board of Directors and Scientific Committee meetings, but with no right to vote.

17.7 The compensation of the members of the Board of Auditors is established by the Board of Directors based on professional fees of auditors.

 

Art. 18) Board of Auditors

18.1 The Board of Auditors is summoned, at the request of any of its members, at the Foundation’s registered office or in any other premises indicated in the notice of meeting.

18.2 The Board of Auditors is summoned by the president using all appropriate means to make sure the notice of meeting is delivered at least 8 (eight) days prior to the meeting. In the event of an emergency the notice of meeting may be sent 3 (three) days before the meeting.

18.3 The notice must indicate the meeting’s date, time, place, the agenda, and the reason of the emergency, if any.

18.4 Should the aforementioned formalities not be complied with, the Board of Auditors can in any case deliberate if all its members are present.

18.5 Meetings may be attended in audio and/or video conference provided all participants are identified by the president and by all those in attendance, that they can follow the discussion and intervene in real time on the topics discussed, exchange documents relevant to these topics, and that all of the above is documented in the minutes.

18.6 The Board of Auditors resolves with the absolute majority of its members.

18.7 Minutes are drafted for all Board of Auditors meetings and they are signed by all the members attending.

SECTION 4

ORGANIZATIONAL RULES

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Art. 19) Financial Year

19.1 The financial year coincides with the calendar year, namely it starts on January 1 and ends on December 31 every year.

19.2 By December 31, the Board of Directors approves the budget of the following year and by April 30 it approves the financial statement of the previous year.

19.3 The president of the Foundation drafts the budget, the final statement, and the relevant accompanying reports, and submits them to the Board of Auditors at least 30 (thirty) days before the meeting of the Board of Directors summoned for their approval.

19.4 The budget and the final statement are drafted to provide a clear picture of the Foundation’s economic, financial, and patrimonial situation. In the profit and loss statement, the items directly related to research are entered separately from those related to the Foundation’s other activities.

19.5 The Foundation’s bodies, each within its own field of competence, may undertake commitments and obligations within the limitations of the approved budget.

 

Art. 20) Planning

20.1 The Foundation carries out its scientific activity based on the three-year scientific and research program. The program consists of scientific and research protocols drafted by the Scientific Committee and approved by the Board of Directors.

20.2 The planning and definition of the protocols is performed consistently with the relevant national programs.

20.3 The relevant regulations drawn up by the Scientific Committee and approved by the Board of Directors govern the Scientific Committee’s planning activity.

 

Art. 21) Annual Report

21.1 Every year by April 30 the Board of Directors approves the Foundation’s annual report.

21.2 The annual report is drawn up jointly by the president of the Foundation and by the scientific director, and illustrates the management and scientific results achieved during the previous fiscal year.

 

Art. 22) Staff

22.1 The Foundation avails itself of employees hired in compliance with private law employment contracts entered into according to the relevant legislation in force.

22.2 The organizational chart, the internal organization, and the management of staff are established by the Board of Directors with relevant regulations that also govern the activity of external consultants.

 

Art. 23) Modifications to the Charter

23.1 The Board of Directors, with 4 (four) favorable votes and subject to the favorable opinion of the founding members, is entitled to enforce modifications to the Charter.

23.2 The purposes specified in art. 4 may not be modified in any case whatsoever.

 

Art. 24) Termination of the Foundation and destination of assets

24.1 The Foundation is terminated owing to the impossibility to pursue its purpose or in case of the blatant inadequacy of its share capital to pursue its institutional goals.

24.2 The occurrence of the aforementioned causes of termination must be ascertained by the Board of Directors which, for said purpose, resolves the termination with the approval of 4 (four) members.

24.3 In case of termination, the residual share capital is donated to the Italian Government with a resolution of the Board of Directors, and allocated to other entities with purposes similar to those of the Foundation.

24.4 The choice of the subject entitled to receive the residual share capital is made by the Board of Directors in the resolution declaring the termination.