Exhibit
10.1


December 20, 2006


Mr. Irwin Lerner

49 St. James Drive
Palm Beach Gardens, FL 33418


Dear Mr. Lerner:


Medarex, Inc. (“Medarex”)
has previously granted to you the stock options set forth on the attached Exhibit
A (the “Options”) to purchase shares of Medarex’s common stock.  Medarex and you hereby agree to certain
amendments to your Options on the terms and conditions set forth in this letter
agreement.


1.             Determination of the Committee.  Medarex’s Special Investigation Committee
(the “Committee”) has determined that the Options were issued on terms
that did not reflect an exercise price equal to 100% of the fair market value
of Medarex’s common stock on the appropriate measurement date.  Exhibit A hereto sets forth the
determination of Medarex as to the appropriate measurement date (as determined
by Medarex, the “Revised Measurement Date”) and the average of high and
low sales price per share of Medarex’s common stock on the Revised Measurement
Date (such average being 100% of the fair market value of Medarex’s common
stock on that date and herein referred to as the “Corrected Exercise Price”).  Medarex and you acknowledge and agree that
the Revised Measurement Date and the Corrected Exercise Price set forth on Exhibit
A are subject to change and will not be considered final until included in
Medarex’s restated financial statements, which statements have not yet been
filed with the Securities and Exchange Commission (the “SEC”).  Upon such filing, Exhibit A shall be
automatically amended without any action by you or Medarex to reflect any
changes to the Revised Measurement Date, the Corrected Exercise Price and the
Per Share Discount as included in Medarex’s restated financial statements as
filed with the SEC.


2.             Amendment to the Options.   The applicable Corrected Exercise Price for
each Option is greater than the original exercise price per share set forth in
the applicable stock option agreement for each Option (as set forth on Exhibit
A, the “Original Exercise Price”). 
Based on the recommendations of the Committee, and as resolved by
Medarex’s Board of Directors, Medarex and you hereby amend each of your Options
to increase the exercise price of all of the shares subject to each Option that
have not yet been exercised (as set forth on Exhibit A, the “Outstanding
Unexercised Shares”) to the applicable Corrected Exercise Price and to
provide that each Option may not be exercised as to the “409A Shares” (as
defined below), if any, prior to the later of (a) the six (6) month anniversary
of the “Letter Agreement Date” (as defined below) and (b) the date on which
Medarex’s restated financial statements are filed with the SEC (the “Filing
Date”) (the later date of (a) and (b), the “Earliest Exercise Date”).  Notwithstanding the foregoing, you may
exercise the Options as to the 409A Shares prior to the six (6) month
anniversary of the Letter Agreement Date in the event of (i) the termination of
your employment (x) by Medarex without “Cause” (as defined in Medarex’s 2005
Equity Incentive Plan), (y) by you for “good reason” (as such term is defined
in Exhibit A hereto), provided your resignation occurs not later than 30 days
following the event giving rise to good reason, or (z) by either party by
reason of your death or “Disability” (as defined in Medarex’s 2005 Equity
Incentive Plan), or (ii) a “Change in Control” (as defined in the 2005 Equity
Incentive Plan), but in each case only if, by such time, the Filing Date has
occurred.  You acknowledge that you are
agreeing to the repricing of all of the Outstanding Unexercised Shares subject
to your Options, and not just those Outstanding Unexercised Shares that may be
subject to adverse tax consequences under Section 409A of the Internal Revenue
Code of 1986, as amended (“Section 409A”) (such shares subject to Section
409A, as set forth on Exhibit A, the “409A Shares”), as a result
of such Outstanding Unexercised Shares having been granted with an exercise
price that is less 









 



than 100% of the fair market
value of Medarex common stock on the Revised Measurement Date.  In no event may you exercise the Options as
to any shares subject to the Options prior to the Filing Date.


3.             Effect of Option Amendments.  Except as expressly set forth in this letter
agreement, all other terms and conditions of your Options will remain
unchanged.  Nothing in this letter
agreement shall be deemed to extend the date on which your Options would
otherwise expire.  The amendment of your
Options will be effective as of the date you sign this letter agreement as
indicated below (the “Letter Agreement Date”).  Your ability to exercise the Options, as
amended, will remain subject to the terms of the applicable option agreements
(as amended by this letter agreement), your compliance with applicable laws and
requirements (including any legal limitations, requirements or restrictions
arising from Medarex’s legal situation in relation to its equity compensation
practices) and Medarex’s policies on trading in Medarex securities.


4.             Section 409A Consequences.  While we believe that the actions contemplated
by this letter agreement should minimize the potential adverse tax consequences
under Section 409A with respect to your Options, and should not otherwise give
rise to adverse tax consequences under Section 409A in respect of the Options,
such interpretation is not free from doubt. 
You are encouraged to consult with your personal
financial, tax and legal advisors regarding this letter agreement.  No representation or warranty is made by
Medarex with respect to the tax consequences of this letter agreement.


5.             General Terms.  This letter agreement supersedes any or all
prior representations and agreements regarding the subject matter that are
inconsistent with the terms of this letter agreement.  However, this letter agreement does not
modify, amend or supersede written agreements that are consistent with the
enforceable provisions of this letter agreement.  Once effective and enforceable, this letter
agreement can be changed only by another written agreement signed by you and a
duly authorized executive of Medarex. 
Medarex and you acknowledge and agree that nothing in this letter
agreement shall be construed or interpreted as an admission or conclusion of
wrongdoing or liability (or the lack thereof) on the part of either Medarex or
you, and you expressly agree that you shall not use the offer or the acceptance
of this letter agreement as a defense in any proceeding or action that may be
brought or threatened at any time and to which Medarex is a party.  Should any provision of this letter agreement
be determined by any court of competent jurisdiction or arbitrator to be wholly
or partially invalid or unenforceable, the legality, validity and
enforceability of the remaining parts, terms, or provisions are intended to
remain in full force and effect.


Please sign this letter
agreement in the space provided below, and return an original copy to me on or
before December 29, 2006.  If you have
any questions regarding this letter agreement, please contact Brad Middlekauff
at (609) 430-2880.


Best regards,


/s/ Christian S. Schade


Christian S. Schade


Senior Vice President and
Chief Financial Officer


ACKNOWLEDGED
& AGREED:


	
  /s/ Irwin Lerner

  	
   

  
	
  Irwin Lerner

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Date:

  	
  12/21/2006

  	
   

  
			



 









 



 


Exhibit A


List of Options 


	
  A

  	
   

  	
  B

  	
   

  	
  C

  	
   

  	
  D

  	
   

  	
  E

  	
   

  	
  F

  	
   

  	
  G

  	
   

  	
  H

  	
   

  
	
  Stock

  Plan

  	
   

  	
  Original

  Grant

  Date

  	
   

  	
  Revised

  Measurement

  Date

  	
   

  	
  Original

  Exercise

  Price

  	
   

  	
  Corrected 

  Exercise

  Price

  	
   

  	
  Outstanding

  Unexercised

  Shares

  	
   

  	
  409A

  Shares

  	
   

  	
  Per Share

  Discount

  (E-D)

  	
   

  
	
  97

  	
   

  	
  9.5.97

  	
   

  	
  9.30.97

  	
   

  	
  $

  	
  2.25

  	
   

  	
  $

  	
  3.205

  	
   

  	
  72,000

  	
   

  	
  —

  	
   

  	
  $

  	
  0.955

  	
   

  
	
  97

  	
   

  	
  10.14.98

  	
   

  	
  10.30.98

  	
   

  	
  $

  	
  1.468

  	
   

  	
  $

  	
  2.125

  	
   

  	
  40,000

  	
   

  	
  —

  	
   

  	
  $

  	
  0.657

  	
   

  
	
  96

  	
   

  	
  6.2.99

  	
   

  	
  5.20.99

  	
   

  	
  $

  	
  2.00

  	
   

  	
  $

  	
  2.84

  	
   

  	
  14,000

  	
   

  	
  —

  	
   

  	
  $

  	
  0.84

  	
   

  



 


*For accounting purposes
treated as variable.  Revised measurement
date is original grant date (5.20.99), date of annual shareholders’ meeting.


For
purposes of this letter agreement, “good reason” shall mean the
occurrence of one or more of the following actions by Medarex without your
express written consent:  (a) the
assignment to you of any duties or responsibilities that result in a material
diminution in your position or function; provided, however,
that a change in your title or reporting relationships shall not provide the
basis for a termination with good reason; (b) a relocation of your business
office to a location more than fifty (50) miles from the location at which you
perform duties as of the Letter Agreement Date, except for required business
travel to the extent substantially consistent with your Medarex business travel
obligations as of the Letter Agreement Date; or (c) a material breach by Medarex
of any provision of this letter agreement or any other material agreement
between you and Medarex concerning the terms and conditions of your employment
or service with Medarex.