**SERONO
S.A.**


**company
limited by shares**


**with
registered offices at Coinsins, Vaud, Switzerland**











**ARTICLES
OF ASSOCIATION**


**of**March 9, 2005

















This
      document is a free translation. The original version of the Articles of
      Association of Serono SA is the French version dated March 9, 2005 which
      is being registered with the Commercial register of the State of Vaud,
      Switzerland.







**SERONO
S.A.**





**ARTICLES
OF ASSOCIATION**


__________________________________________________





**SECTION
I**





**NAME
- REGISTERED OFFICE**


**OBJECT
- DURATION**








**Article
1: Name**





There is
hereby formed a company limited by shares named SERONO S.A., which is governed
by the present Articles of Association and by Section XXVI of the Code of
Obligations (also referred to hereinafter as "CO").








**Article
2: Registered Office**





The
registered offices of the company are in Coinsins (Canton of Vaud).








**Article
3: Object**





The
principal object of the company is to act as a holding company (for the
acquisition and management of shareholdings in Switzerland and abroad) in the
pharmaceutical and related fields.





The
company may establish enterprises or companies, carry out any financial,
commercial, industrial and real estate transactions, and conclude any contracts
which further or are directly or indirectly connected with its
object.








**Article
4: Duration**





The
company is established for an indefinite duration.


2


**SECTION
II**





**SHARE
CAPITAL**


**SHARES**








**Article
5: Share Capital**





The share
capital is fixed in the sum of CHF 403,584,775 (four hundred and three
million five hundred and eighty-four thousand seven hundred and seventy-five
Swiss francs), divided into:





a)
    11,013,040
      registered "A" shares with restricted transferability, each with a par
      value of CHF 10 (ten Swiss francs), fully paid up;
and





b)
    11,738,175 bearer
      "B" shares, each with a par value of CHF 25 (twenty-five Swiss francs),
      fully paid up.








**Article
5 bis: conditional capital**





**A. 
Conditional capital for option and/or convertible loans**





The share
capital of the company shall be increased by a maximum of CHF 36,300,000 (thirty
six million three hundred thousand Swiss francs) through the issue of 1,452,000
(one million four hundred and fifty-two thousand) bearer "B" shares with a par
value of CHF 25 (twenty-five Swiss francs) each, to be fully paid up by the
exercise of the option and/or conversion rights granted in connection with loans
issued by companies of the Serono group.





The
amount and conditions of the loans, together with the procedures and conditions
for the exercise of option and/or conversion rights and the issue price shall be
determined by the Board of Directors. The new shares may be purchased or
acquired by holders of convertible bonds or option rights arising from option
bonds.





The Board
of Directors may resort to the issuance of loans to be subscribed by a
consortium, with a subsequent public offering, subject to the provisions
indicated below.





The Board
of Directors shall determine the procedures for the exercise of preferential
subscription rights. Preferential subscription rights which are not exercised
shall revert to the company. The Board of Directors may offer them at market
rates or allow them to expire.




3


The Board
of Directors may remove the shareholders' preferential subscription right if
loans are issued to finance the acquisition of shareholdings or other rights in
companies or with a view to financing research and development projects. Should
the Board of Directors remove the shareholders' preferential subscription right,
the following conditions shall apply:





a)
    conversion
      rights may be exercised for a maximum period of 15 years and option rights
      for a period of 7 years from the date of issue of the related
      loan





b)
    convertible
      loans and/or loans with options shall be issued subject to normal market
      conditions (including the normal market conditions relating to protection
      against dilution for the holders of option and/or conversion rights);
      and





c)
    conversion
      and/or option prices shall correspond at the least to the average rate
      quoted on the Zurich stock exchange for the shares of the company during
      the 5 days preceding the determination of the definitive issue conditions
      for the convertible loan or loan with options loan in
      question.





**B. 
Conditional capital for a stock option plan**





The share
capital of the company shall be increased by a maximum of CHF 18,166,275
(eighteen million one hundred sixty-six thousand two hundred and seventy-five
Swiss francs), namely 726,651 (seven hundred and twenty-six thousand six
hundred and fifty-one) bearer "B" shares, each with a par value of CHF 25
(twenty-five Swiss francs), fully paid up, through the exercise of option rights
which the Board of Directors intends to grant to employees of companies of the
Serono group and to the directors of the company.





The
subscription right of shareholders shall be removed for these new
shares.





The Board
of Directors shall lay down regulations specifying the conditions and procedures
for the granting and exercise of the options.





The
shares may be subscribed at a rate lower than the stock market
rate.




4


**Article
5 ter: Authorised capital**





The Board
of Directors shall be authorised, until 25 May 2006, to increase the share
capital by a maximum of CHF 35,000,000 (thirty-five million Swiss francs)
through the issuance of a maximum of 1,400,000 (one million and four hundred
thousand) bearer shares, each with a par value of CHF 25 (twenty-five Swiss
francs), fully paid up. The Board of Directors may proceed to increase the share
capital either all at once or in instalments. The preferential subscription
rights which have been granted, but not exercised, are at the disposal of the
Board of Directors, which may use them in the interest of the
company.





The Board
of Directors is authorised to withdraw the preferential subscription right of
shareholders in favour of a bank or another institution selected by the Board of
Directors which shall purchase the shares on a firm basis, if the bank or
institution which firmly purchases the shares undertakes to offer the
subscription of the newly issued shares to the shareholders in proportion to
their current participation. The Board of Directors is also authorised to
withdraw the preferential subscription right of shareholders and grant shares or
preferential subscription rights to third parties in the case of the purchase of
a business or part of a business, taking a participation in a business/company,
or similar transactions.





The issue
price of the shares, the manner in which they are paid up and the date as from
which the new shares give right to dividends as well as the conditions for the
exercise of the preferential subscription right shall be determined by the Board
of Directors.








**Article
6: Shares**





6.1.
    The
      shares are registered shares or bearer shares. They are numbered and
      signed by a director, whose signature may be
printed.





Each
share shall be entitled to a proportional part of the profits and of the
proceeds of liquidation.





6.2.
    Instead
      of issuing individual registered or bearer shares, the company may issue
      certificates representing a number of
shares.





6.3.
    **Registered
      Shares**





The
company considers registered shares to be indivisible and recognises only one
holder for each registered share. Shareholders who hold registered shares must
notify the company of any change of domicile. Any communication from the company
to the shareholder shall be deemed valid if sent to the shareholder's last
recorded address.




5


6.4.
    **Register
      of Registered Shares**





The
company shall keep a register, indicating the names and addresses of the owners
and usufructuaries of registered shares. The company shall consider only the
persons entered in this register as owners or usufructuaries of registered
shares.





No entry
shall be made in the share register from the date on which the General Meeting
of Shareholders is convened until the day following the General
Meeting.





6.5.
    **Transfer
      of Registered Shares**





The
transfer of registered shares is subject to approval by the company. The Board
of Directors has the power to grant such approval. It may delegate this power to
the Executive Committee. The request for authorisation shall include a
declaration whereby the person acquiring the shares certifies that they are
being acquired in its own name and for his/her own account. The company shall
inform the applicant whether the transfer has been approved or
rejected.





Registration
shall be rejected if the applicant does not expressly declare that the shares
are being acquired in its own name and for its own account.





Registration
may be rejected for a justifiable cause connected with the object of the company
or its economic independence and, in particular, if the applicant is a
competitor of the company or of a company in which Serono S.A. holds a
participating interest.





The
company may, without giving reasons, refuse to approve a transfer of shares by
offering to the seller to buy back the shares for its own account, for the
account of other shareholders or for the account of third parties, at their real
value at the time the transfer request is received by the company.





In the
case of a transfer by succession, the company must enter the name of the
acquirer in the share register, unless there is a justifiable cause not to do so
in accordance with Paragraph 3 above. In such an eventuality, if the company
intends to refuse to allow the transfer, it must offer to buy back the shares
for its own account, for the account of other shareholders or for the account of
third parties, at their real value at the time the registration request is
received by the company.




6


If the
company offers to buy back the shares for the account of shareholders, it must
abide by the principle of equal treatment of all holders of registered shares.





After
hearing the persons concerned, the Board of Directors, or the Executive
Committee by delegation of the Board of Directors, may cancel, with retroactive
effect, any entries made in the share register on the basis of false
declarations.





The
foregoing provisions shall also apply where the registered shares of the company
are made subject to a usufruct.





The
registered shares may not be used by way of pledge, guarantee or security in any
form whatsoever, save with the express prior authorisation of the Board of
Directors, which is free to give or not to give reasons for its decision. The
Board of Directors may delegate this power to the Executive
Committee.





The
restrictions on the free transfer of registered shares shall be noted on the
documents representing the shares.





The
provisions of Article 6.5 may be amended only by a resolution carried by


the
majority as stipulated in Article 704 Paragraph. 1 CO.





6.6.
    **Conversion
      of Shares**





The
General Meeting may decide at any time to convert some or all of the registered
shares into bearer shares and vice versa.








**Article
7: Increase in share capital**





7.1.
    The
      General Meeting may decide at any time to increase the share capital by
      issuing new registered shares or new bearer shares. Each category of
      shares may be the sole object of a particular
issuance.





7.2.
    Every
      shareholder shall be entitled to a portion of the new share issue
      corresponding to his previous holding. In the event of an increase in
      share capital comprising an increase of registered shares and of bearer
      shares in the same proportion, each shareholder in possession of
      registered shares shall be entitled to subscribe for the new registered
      shares only in proportion to the number of registered shares it holds.
      Similarly, each shareholder in possession of bearer shares shall be
      entitled to subscribe for the new bearer shares only in proportion to the
      number of shares it holds.




7




**SECTION
III**





**ORGANISATION
OF THE COMPANY**





**A.** **The
General Meeting**








**Article
8**





8.1.
    The
      General Meeting is the highest authority of the company. Its resolutions
      are binding on all shareholders.





8.2.
    Resolutions
      of the General Meeting which violate the law or the Articles of
      Association may be contested by the Board of Directors or by any
      shareholder under the conditions stipulated in Article 706 of the Code of
      Obligations.







**Article
9**





The
General Meeting of Shareholders has the inalienable right:





9.1.
    to
      adopt and to amend the Articles of
Association;





9.2.
    to
      appoint and to dismiss the members of the Board of Directors and the
      auditors;





9.3.
    to
      approve the Group's annual report and
accounts;





9.4.
    to
      approve the annual accounts, to determine the distribution of profits and,
      in particular, to fix the dividend;





9.5.
    to
      give discharge to the members of the Board of
Directors;





9.6.
    to
      resolve upon all matters reserved to it by the law and the Memorandum and
      Articles of Association.




8


**Article
10**





10.1.
    No
      resolution may be passed on items which have not been placed on the
      agenda, except for a proposal to convene an Extraordinary General Meeting
      or to have a special audit carried out.





10.2.
    Advance
      notice is not required for proposals falling within the scope of items on
      the agenda or for deliberations which do not have to be followed by a
      vote.








**Article
11**





11.1.
    The
      General Meeting shall be held at the registered offices of the company or
      at a place designated by the Board of
Directors.





11.2.
    The
      Ordinary General Meeting shall be held every year within six months of the
      close of the financial year.





11.3.
    Extraordinary
      General Meetings may be convened as often as necessary, in particular in
      the cases provided for by law, as well as upon a resolution passed by the
      General Meeting itself.







**Article
12**





The
General Meeting shall be convened by the Board of Directors and, where
necessary, by the auditors. Liquidators shall also have the right to convene the
General Meeting.








**Article
13**





13.1.
    The
      General Meeting shall be convened, at least twenty days prior to the date
      on which it is to be held, by registered letter sent to every registered
      shareholder at the address indicated in the share register, as well as by
      an announcement published in the*Feuille
      Officielle Suisse du Commerce*(Swiss
      Official Trade Gazette).





13.2.
    The
      invitation shall state the items on the agenda, together with the
      proposals of the Board of Directors and of the shareholders who requested
      the calling of the Meeting or the entry of an item on the agenda, the
      request having to be submitted in writing to the Board of Directors at
      least 45 days before the date of the Annual General Meeting. The
      invitation must also state the date, place and time of the
      Meeting.




9


13.3.
    Proposals
      to amend the Memorandum and Articles of Association shall be placed at the
      disposal of the shareholders at the registered office of the company.
      Their availability for inspection shall be stated in the
      invitation.





13.4.
    The
      invitation to attend the Ordinary General Meeting must inform the
      shareholder that the annual report, the profit and loss account and the
      balance sheet, as well as the Group accounts and the auditors' report will
      be placed at the disposal of shareholders at the registered office of the
      company at least twenty days prior to the General
  Meeting.








**Article
14**





Provided
that there is no objection, the owners or representatives of all the shares may
hold a General Meeting without following the convening procedure. As long as
they remain present, such a meeting shall have the right to deliberate and duly
pass resolutions on all matters which fall within the competence of the General
Meeting.








**Article
15**





Each
share shall be entitled to one vote.







**Article
16**





Every
holder of registered shares may arrange to have all or any of its shares
represented by another person, who must be in possession of a written proxy
form.








**Article
17**





17.1.
    As
      a rule, the General Meeting has a quorum irrespective of the number of
      shares represented.





17.2.
    Unless
      otherwise required by the law or by the Articles of Association, the
      General Meeting shall proceed to pass resolutions and to conduct elections
      by an absolute majority of the votes attached to the shares
      represented.




10


17.3.
    However,
      at least two-thirds of the votes attached to the shares represented and an
      absolute majority of the par values represented shall be necessary to pass
      any resolution of the General Meeting to amend the object of the company,
      to introduce preferential voting shares, to restrict the transferability
      of registered shares, to increase the share capital, whether the increase
      is authorised or conditional, to increase the share capital from
      shareholders' equity in consideration of a contribution in kind or with a
      view to acquire assets and the granting of special advantages, to limit or
      remove the right of preferential subscription, to transfer the registered
      office of the company, and to dissolve the company without
      liquidation.








**Article
18**





18.1.
    Minutes
      shall be kept of the General Meeting, stating the number, type, par value
      and category of the shares represented by the shareholders, the organs of
      the company, the independent representatives and the trustee
      representatives the resolutions and the results of the elections, the
      requests for information and the replies given as well as the declarations
      which shareholders ask to be recorded. The minutes shall be signed by the
      chairman and the secretary of the General
Meeting.





18.2.
    Extracts
      from the minutes shall be certified by a director or by any other person
      appointed for such purpose by a director.








**Article
19**





19.1.
    The
      General Meeting shall be chaired by the chairman of the Board of Directors
      or by another director designated by the Board. Failing that, the chairman
      shall be designated by the General Meeting.





19.2.
    The
      chairman of the General Meeting shall designate the secretary and the
      person or persons who shall count the
votes.








**B.** **The
Board of Directors**








**Article
20**





20.1.
    The
      Board of Directors shall consist of at least five and at most ten members,
      chosen from among the shareholders and appointed by the General
      Meeting.




11


20.2.
    The
      majority of the members of the Board of Directors must be Swiss nationals
      domiciled in Switzerland, unless the company obtains a derogation from
      this rule in accordance with Article 708 Paragraph 1
CO.








**Article
21**





21.1.
    The
      members of the Board of Directors shall be appointed for a term of one
      year.





21.2.
    There
      is no limit on the number of times they may be
  re-elected.





21.3.
    The
      Board of Directors shall appoint its chairman and secretary by a simple
      majority.








**Article
22**





22.1.
    Meetings
      of the Board of Directors shall be convened , as often as business may
      require, either by the chairman or, upon his order, by the
      secretary.





22.2.
    Minutes
      shall be kept of the discussions and resolutions of the Board of Directors
      and they shall be signed by the chairman and the
  secretary.








**Article
23**





23.1.
    The
      resolutions of the Board of Directors shall be adopted by a majority of
      the members present, provided that they form a majority of the Board of
      Directors and that a majority of the members of the Executive Committee is
      present.





23.2.
    In
      the event of a tie vote, the chairman shall have the casting
      vote.





23.3.
    Unless
      one member insists on oral discussions, resolutions of the Board of
      Directors may also be adopted by written approval of a motion by a
      majority of the directors, all of whom must be informed of the motion.
      Such resolutions must be entered in the
minutes.




12


**Article
24**





The Board
of Directors shall have the widest powers to manage the company. It shall be
authorised to pass all resolutions regarding the company's business which are
not attributed to or reserved for the General Meeting or other organs of the
company.








**Article
25**





25.1.
    The
      Board of Directors may delegate all or any part of the management and the
      representation of the company to one or more board members (managing
      directors) or to third parties who need not necessarily be
      shareholders.





25.2.
    The
      Board of Directors shall appoint the proxies and other attorneys of the
      company.





25.3.
    The
      Board of Directors shall grant individual or joint powers to sign on
      behalf of the company.





25.4.
    At
      least one member of the Board of Directors, domiciled in Switzerland, must
      have authority to represent the company.








**Article
26**





The Board
of Directors shall adopt its own rules of procedure.











**C.** **The
Executive Committee**








**Article
27**





27.1.
    The
      Board of Directors shall appoint from among its members an Executive
      Committee of at least three and at most five
members.





27.2.
    The
      Board shall appoint the members of the Executive Committee at the proposal
      of the chairman. A vice-chairman shall be appointed to replace the
      chairman if it is prevented from acting.





27.3.
    The
      chairman must be a member of the Executive
Committee.




13


27.4.
    The
      powers of the Executive Committee shall be defined in the Rules of
      Procedure of the company.








**D. The
Auditors**








**Article
28**





28.1.
    The
      General Meeting shall elect one or more auditors. It may also designate
      deputy auditors. At least one of the auditors must be domiciled in
      Switzerland and have his registered office or a branch office entered in
      the Commercial Register in Switzerland.





28.2.
    The
      auditors shall be elected for the period up to the next Ordinary General
      Meeting. They shall be immediately eligible for
    re-election.





28.3.
    The
      auditors shall be required to attend the Ordinary General
      Meeting.





28.4.
    The
      auditors must comply with the provisions of Articles 728*et
      seq*.
      of the Code of Obligations.





28.5.
    The
      General Meeting may appoint every year a special auditor, which may be
      re-elected, with the duty to proceed with the special verifications
      (provided in particular by articles 652f, 653f and 653i of the Code of
      Obligations) which are required in relation with capital
      increases.





**SECTION
IV**





**ANNUAL
ACCOUNTS**


**AND
DISTRIBUTION OF PROFITS**








**Article
29**





The
company's financial year shall begin on 1 January and end on 31
December.




**Article
30**





14


30.1.
    The
      annual accounts shall be drawn up in accordance with the provisions of
      Articles 662 to 670 of the Code of
Obligations.





30.2.
    The
      accounts shall be closed on 31 December.








**Article
31**





31.1.
    Each
      year, a sum of one-twentieth of the profit for the financial year shall be
      set aside to constitute a general reserve until the said reserve amounts
      to one-fifth of the paid-up share capital. If any of the reserve is used,
      it shall again be made up from the profits in the same
  way.





31.2.
    The
      balance of the profits shall be distributed in accordance with the
      resolutions of the General Meeting, upon the recommendation of the Board
      of Directors.





31.3.
    The
      mandatory provisions of the law relating to reserves must be
      respected.








**Article
32**





The
payment of the dividend shall take place at the time appointed by the Board of
Directors. Any dividend which is not claimed within five years of the date on
which it becomes due shall automatically revert to the company.











**SECTION
V**





**LIQUIDATION**





**Article
33**





33.1.
    If
      it is decided to wind up the company, the liquidation shall be effected by
      the Board of Directors, unless the General Meeting resolves
      otherwise.





33.2.
    At
      least one of the liquidators must be domiciled in Switzerland and have
      authority to represent the company.





33.3.
    The
      liquidators shall decide among themselves the method by which they will
      sign for the company.




15


**Article
34**





34.1.
    During
      the liquidation, the powers of the organs of the company shall be
      restricted to acts which are necessary for the liquidation process and
      which, by their nature, do not fall within the competence of the
      liquidators.





34.2.
    The
      General Meeting of Shareholders shall retain the right to approve the
      liquidation accounts and to approve the acts of the
      liquidators.





34.3.
    The
      liquidator or liquidators may transfer the assets and liabilities of the
      dissolved company to third parties against payment or other consideration
      only by virtue of a resolution of the General
Meeting.








**SECTION
VI**





**ANNOUNCEMENTS**








**Article
35**





Company
notices shall be published in the *Feuille
Officielle Suisse du Commerce.*




16