Document:

Exhibit
10.1

May 16, 2007

Mr. Howard H. Pien

6 Carriage House Court

Cherry Hill, New Jersey
08003

Dear Howard:

On behalf of the Board of Directors and all employees
of Medarex, I am very pleased to offer you the position of President and Chief
Executive Officer, reporting to the Board of Directors. Subject to your
agreement, this letter sets forth the terms of your employment by Medarex.

1. Position,
Duties and Responsibilities.

(a) You shall be the
President and CEO of the Company and shall in such capacity report directly to
the Company’s Board of Directors (the “Board”). Your duties and
responsibilities will be determined from time to time by the Board, and will be
consistent with your position as President and Chief Executive Officer. You
will carry out your duties and responsibilities based primarily at the Company’s
headquarters in Princeton, New Jersey.

(b) After commencement of
employment with the Company, you shall be appointed as a Class II member of the
Board of Directors serving until the 2008 Annual Meeting of Shareholders and
shall serve on such committees of the Board as elected or appointed by the
Board. If the Nominating and Corporate Governance Committee, in its sole
discretion, recommends to the Board to change the current governance structure
to permit the Chief Executive Officer to also serve as Chairman of the Board
and the Board adopts such a recommendation, you will receive strong
consideration to be nominated as Chairman of the Board.

(c) You shall devote your
full business time, ability and attention to the business of the Company, and
shall not engage in or perform duties for any other person or entity which
interferes with the performance of your duties hereunder. It is desirable for
you to hold board of director positions on outside civic organizations, and
reasonable time will be made available to fulfill your duties in that regard as
long as those activities do not interfere significantly with the performance of
your duties hereunder. Any outside commercial board of directors’ positions
will be subject to approval by the Board or the Nominating and Corporate
Governance Committee, as the case may be. You agree to abide by the decisions
made by the Nominating and Corporate Governance Committee in this regard.

(d)   You agree to sign the Company’s
standard proprietary information agreement for employees which is included as
Appendix A.

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(e)  During the Term, as defined in Section 7(a)
below, and for twelve (12) months thereafter, or, if employment is terminated
by either party for any reason prior to the end of the Term as defined in
Section 7(a), for twelve (12) months following such termination, without the
consent of the Nominating and Corporate Governance Committee of the Board of
Directors, you may not:

(i)  directly or
indirectly engage in, or have any interest in, any business (whether as
employee, officer, director, agent, a five percent (5%) or greater security
holder, creditor, consultant, or otherwise) that competes directly with the
business of the Company (as such business may exist during the Term); or

(ii)  whether
for yourself or on behalf of any other person or company, directly or
indirectly, solicit orders for the creation of antibodies in transgenic animals
from any person or company, who at any time within the year prior to the end of
the Term was a licensee, collaborator or customer of the Company; or

(iii)  directly
or indirectly induce or solicit any other employee of the Company to terminate
his or her employment with the Company for the purpose of  joining another company in which you have an
interest (whether as an employee, officer, director, agent, a five percent (5%)
or greater security holder, creditor, consultant, or otherwise); provided,
however, that

(iv)  if a
Change in Control of the Company occurs that was not recommended to the Company’s
shareholders for approval by the Incumbent Board and your employment is
terminated without Cause or by you for Good Reason, the restrictions on future
activities described above in Section 1(e)(i), 1(e)(ii) and 1(e)(iii) will
lapse immediately upon your termination.

You acknowledge that
there may be circumstances in which your breach of any covenant set forth in
this Section 1(e) could cause harm to the Company which may not be compensable
by monetary damages alone, and which could potentially entitle the Company to
injunctive relief.  However, by
acknowledging this possibility, you are not agreeing to waive your right to
require the Company to meet its evidentiary burdens as required by law in any
cause of action brought by the Company seeking such injunctive relief.

2. Salary and
Bonus Compensation.

(a) Base Salary. As
compensation for your services hereunder (including your services as a member
of the Board), you shall receive a base salary of $750,000.00 per annum. This base
salary will be reviewed annually by the Compensation and Organization Committee
(the “Compensation Committee”) and the Board of Directors and may be increased,
but not decreased, by the Compensation Committee in its sole discretion,
consistent with your performance and the Company’s policies and procedures
regarding the administration of executive officer compensation established from
time to time by the Compensation Committee or the Board.

(b) Annual Bonus
Compensation. You may, in addition, at the Compensation Committee’s
discretion, be awarded incentive compensation, currently in the form of a cash
bonus for each fiscal year during your employment, under the Company’s
executive officer compensation plans, 

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for each year, based upon
performance. As presently structured, if the targeted level of performance is
satisfied, the bonus amount will be equal to one hundred percent (100%) of your
base salary for the year in which you satisfied the bonus criteria, with a
maximum bonus of one hundred fifty percent (150%) of base salary if your
performance and the Company’s performance substantially exceeds targeted
levels. There is no guaranteed minimum level of bonus compensation, and the
maximum bonus compensation that can be achieved for 2007 will be equal to one
hundred fifty percent (150%) of your base salary. Your bonus for 2007, if any,
will be prorated based upon the fraction of the year that you are employed by
the Company where the numerator will equal the number of days employed in 2007
and the denominator will equal three hundred sixty-five (365). The Compensation
Committee will consider increasing the maximum bonus payable to two hundred
percent (200%) of your base salary for future fiscal years as part of an
overall review of the Medarex performance bonus program if, in its sole
discretion, it deems such an increase is appropriate.

3. Benefits.

(a) Standard
Benefits. You shall be eligible to participate in standard employee
benefit programs (including medical, dental, life and disability insurance, which
shall be effective as of the date of your employment hereunder or as soon
thereafter as permitted by the terms of the applicable program), as the Company
shall maintain from time to time for the benefit of employees and other senior
executives. You may receive such other and additional benefits as the Board may
determine from time to time in its sole discretion.

(b) Vacation. You
shall be entitled to four (4) weeks paid vacation per annum under the Company’s
integrated paid time off program for executives, and with such additional paid
vacation time as the Board may reasonably determine or is consistent with the
Company’s vacation policy as it exists from time to time. Payment upon
termination, if any, for unused vacation will be consistent with the Company’s
vacation policy as it exists from time to time.

4. Expense
Reimbursement.

The Company will
reimburse you in accordance with the Company’s reimbursement policies in effect
from time to time for all reasonable and customary business expenses incurred during
your employment, provided that you furnish to the Company reasonably adequate
records and documentary evidence of such expense.

5. Long-Term
Incentive Compensation.

(a) Inducement
Grant. As an inducement for you to accept our offer of employment and as full
compensation in lieu of any cash sign-on bonus or other inducements, you shall
be granted 50,000 shares of restricted stock. The grant will be made as soon as
practicable in accordance with our Policy and Procedures for the Granting of
Stock Options and Other Equity-Based Incentives (the “Policy”), attached hereto
as Appendix B, after commencement of your employment with the Company. These
shares will vest as to 25,000 shares on the one-year anniversary of the start
date of your employment with the Company and 25,000 shares on the two-year
anniversary of the start date of your employment with the Company, in each case
so 

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long as you remain
employed by the Company. If there is a Change in Control of the Company, as
defined below, any shares not yet vested will immediately vest and be free of
any restriction on their sale or transfer.

(b) Initial
Grant.

(i) Initial Stock Options. As
soon as practicable after commencement of your employment with the Company and
in accordance with our Policy, you shall be granted a stock option for 500,000
shares of the Company’s common stock with an exercise price per share equal to
the fair market value (defined under the Policy) on the date of grant with a
term of ten years. The stock option will vest as to 166,667 shares each on the
one-year and two-year anniversaries of the start date of your employment with
the Company and 166,666 shares on the three-year anniversary of the start date
of your employment with the Company, in each case, so long as you remain employed
by the Company. If there is a Change in Control of the Company or your
employment is terminated by us Without Cause or by you for Good Reason, as the
foregoing terms are defined below, all unvested stock options will immediately
vest, become exercisable and remain exercisable for the remainder of their
original term or 90 days after the termination of your employment with the
Company, whichever is sooner; provided, however, that, in the event of a Change
in Control, if the stock option granted under this Section 5(b)(i) is not
assumed or substituted in connection with the Change in Control, the Company
shall provide that the option shall be canceled in exchange for a cash payment
with respect to each share of common stock subject to such canceled option having
a fair market value equal to the excess of the fair market value of the
consideration to be paid per share of stock in the Change in Control over the
exercise price per share under such option.

(ii) Initial Restricted Shares.
As soon as practicable after commencement of your employment with
the Company and in accordance with our Policy, you shall be granted 175,000
shares of restricted stock. These shares will vest as to 87,500 shares on the
two-year anniversary of the start date of your employment with the Company and
87,500 shares on the three-year anniversary of the start date of your
employment with the Company, in each case, so long as you remain employed by
the Company. If there is a Change in Control of the Company, any shares that
have not yet vested will immediately vest and be free of any restriction on
their sale or transfer. If your employment is terminated by us Without Cause or
by you for Good Reason , any shares that would have vested during the eighteen
(18) months following the date your employment is terminated will immediately
vest and be free of any restriction on their sale or transfer.

(c) Performance
Stock Grant.  As soon as
practicable after commencement of your employment with the Company and in
accordance with our Policy, you shall be granted 75,000 shares of restricted
stock. These shares will vest on the five-year anniversary of the start date of
your employment with the Company so long as you remain employed by the Company;
provided, however,  (i) if the price of
our common stock is equal to or exceeds $26 per share for the 20 consecutive
trading days that immediately precede the three-year anniversary of the start
date of your employment with the Company, then 25,000 shares will vest on such
three-year anniversary date and be free of any restriction on their sale or
transfer so long as you remain employed by the 

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Company at that time; and
(ii) if the price of our common stock is equal to or exceeds $26 per share for
the 20 consecutive trading days that immediately precede the four-year
anniversary of the start date of your employment with the Company, then any
shares not yet vested will immediately vest and be free of any restriction on
their sale or transfer so long as you remain employed by the Company at that
time. If there is a Change in Control of the Company, any shares that have not
yet vested will immediately vest and be free of any restriction on their sale
or transfer.

(d) Annual
Awards. You will be eligible to participate in the Company’s annual
awards to executives of long-term incentive compensation in the form and the
terms as determined by the Compensation Committee. These awards are
discretionary and are subject to review and adjustment based on your and the
Company’s performance, to reflect changes in the Company’s growth and
development and to take into account competitive market conditions. The Award
Agreements for grants made under this Section 5(d) will evidence that if there
is a Change in Control of the Company, all unvested stock options will
immediately vest, become exercisable and remain exercisable for the remainder
of their original term or 90 days after the termination of your employment with
the Company, whichever is sooner and any restricted shares that have not yet
vested will immediately vest and be free of any restriction on their sale or
transfer. If your employment is terminated by us Without Cause or by you for
Good Reason, any stock options or restricted shares that would have vested
during the twenty-four (24) months following the date your employment is
terminated will immediately vest and be exercisable for 90 days or be free of
any restriction on their sale or transfer. 
Notwithstanding anything in this Section 5(d) to the contrary, in the
event of a Change in Control, if any stock option granted under this Section
5(d) is not assumed or substituted in connection with the Change in Control,
the Company shall provide that the option shall be canceled in exchange for a
cash payment with respect to each share of common stock subject to such canceled
option having a fair market value equal to the excess of the fair market value
of the consideration to be paid per share of stock in the Change in Control
over the exercise price per share under such option.

(e)  Grants Pursuant to Plan.  All grants made pursuant to Section 5(a), (b)
and (c) shall be made in accordance with the terms of the Company’s 2005 Equity
Incentive Plan and forms thereunder.

6. Reimbursement
of Relocation Expenses.

(a)          Permanent
Relocation. All customary expenses associated with the cost of your
relocation to the Princeton, New Jersey area shall be reimbursed by the Company
for up to two years, except as noted below. These expenses will include:

(i) Reimbursement for direct route transportation,
packing, moving of household goods and automobiles and temporary storage if
needed

(ii) Up to three (3) roundtrips to the Princeton, New
Jersey area in preparation for the move

(iii) Temporary housing in the Princeton, New Jersey
area for up to two months

(iv) Customary closing costs (e.g.,
real estate commissions, legal, recording fees, etc.), on the sale of either
your (1) San Francisco, CA home or (2) your Cherry Hill, NJ home and coverage
of miscellaneous additional relocation expenses.

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(v)  Closing
costs (excluding points) on the purchase of a new home in the Princeton, New
Jersey area, up to 3% of the purchase price, if purchased within 12 months of
your date of hire. For this purpose, the “Princeton, New Jersey area” shall
mean any location that is closer to the Company’s Princeton, New Jersey
headquarters than your Cherry Hill, New Jersey home.

(vi)  Should you
voluntarily resign other than for Good Reason or be terminated for Cause from
the Company within two years of relocating, you agree to return a prorata
portion of all of the above relocation amounts received by you or paid on your
behalf.

(b) Relocation
Tax Gross Up. To the extent that any payment to or for your account
made by the Company under Section 6(a) above or under any related Company
relocation plan results in the imputation to you of taxable income under U.S.
federal, state or local law, you shall be entitled to receive in cash a payment
from the Company of an amount which, on after-tax basis (including all federal,
state and local income taxes), equals the amount of income taxes payable by you
with respect to such imputed income. Any determination required under this
Section 6(b) shall be made conclusively by a national independent public
accounting firm reasonably acceptable to you as may be designated by the
Company.

7. Term and
Termination.

(a) Term. The
period of your employment with the Company pursuant to the provisions of this
letter shall have an initial term of three (3) years commencing upon your start
date with the Company and will automatically renew for consecutive one-year
terms unless terminated by you or us with 90 days notice prior to the end of
the term. We currently expect your start date with the Company to be not later
than June 14, 2007.

(b) Termination.
You may terminate your employment hereunder at any time, with or
without Good Reason, as defined below, upon written notice to the Company. The
Company may terminate your employment hereunder upon written notice to you,
With or Without Cause as defined below.

1.     As
used herein, “Good Reason” shall mean any of the following events that are not
consented to by you and if not cured by the Company within forty-five (45) days
of written notice:

(i)        A material diminution in your authority,
duties or responsibilities including ceasing to be the Chief Executive Officer
of the Company reporting directly to the Board;

(ii)       In the case of a Change in
Control (as defined below) of the Company, any change in function or title
which results in you ceasing to serve as the Chief Executive Officer of the
surviving entity and all direct and indirect parent organizations and reporting
directly to the surviving entity’s Board of Directors;

(iii)      Not being elected to the
Board of Directors;

(iv)      A reduction in base salary;

(v)        The failure by the
Company to provide you with compensation and benefits at least equal (in terms
of benefit levels and/or reward opportunities) in the aggregate to those
provided for under all compensation or benefit plans, programs, policies and
practices as in effect (or as in effect hereafter, if greater);

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(vi)       A relocation of the your business office
to a location more than fifty (50) miles from the Company’s headquarters in
Princeton, New Jersey;

(vii)     A material breach by the Company of any
provision of this letter agreement or any other material agreement between the
Executive and the Company concerning the terms and conditions of the your
employment; or

(viii)    Non-renewal of the letter agreement by the
Company after the initial three-year term or any subsequent one-year renewal
periods.

To be eligible for any benefits under this letter
agreement pursuant to a termination for Good Reason, you shall be required to
provide notice to the Company of the existence of any of the foregoing events
within forty-five (45) days of the initial occurrence of the event.  Upon such notice, the Company shall have a
period of forty-five (45) days to remedy such event and not be required to
provide benefits to you on account of such event. Your consent to any of the foregoing
events, which may otherwise constitute “Good Reason”, shall be conclusively
presumed if you do not exercise your rights under the first sentence of this
Section 7(b)1 within forty-five (45) days of the initial occurrence of the
event.

2.     As
used herein, “Cause” shall mean any of the following events:

(i)        Any willful misconduct in your
performance of duties to the Company or any willful misconduct independent of
the Company, which in the latter case has a significant adverse impact upon the
operations, business, affairs, reputation or valuation of the Company;

(ii)       Your conviction for, or guilt by a nolo contendere plea to, a felony, or your commission of any
act of fraud against the Company or under federal or state securities laws;

(iii)      Willful material noncompliance by you with
any material written policy of the Company;

(iv)      Any material breach by you of this letter
agreement that is not cured by you within thirty (30) days of written notice;

(v)       Any regulatory or judicial order that results
in a bar or loss of license to your continued performance of all or a
substantial portion of your duties hereunder; or

(vi)      Willful and continued failure by you to
substantially perform your duties as President and CEO (other than any failure
resulting from disability or illness or from termination by you for Good
Reason) as evaluated by a majority of the Board and after written demand by the
Board of Directors for substantial performance is delivered to you, and you
have failed to resume substantial performance of your duties on a continuous
basis within 30 days of such notice.

No action or inaction
shall be deemed to be “willful” unless it is done or omitted to be done by you
directly and not by imputation. Failure to perform your duties with the Company
during any period of disability shall not constitute Cause. A suspension with
pay of your duties by the Board in good faith for a period not exceeding thirty
(30) days, while an investigation is made as to the existence of “Cause” shall
not constitute “Cause” or give rise to “Good Reason”.

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3.  As used herein, “Change in Control” shall
mean any of the following events:

(i)  An acquisition (other than directly from the
Company) of any voting securities of the Company (the “Voting Securities”)
other than in a “Non-Control Acquisition” (as defined below) by any “Person”
(as the term “person” is used for purposes of Section 13(d) or 14(d) of the
Securities Exchange Act of 1934, as amended, (the “1934 Act”)) which results in
such Person first attaining “Beneficial Ownership” (within the meaning of Rule
13d-3 promulgated under the 1934 Act) of fifty-one percent (51%) or more of the
combined voting power of the Company’s then outstanding Voting Securities.  For purposes of the foregoing, a “Non-Control
Acquisition” shall mean an acquisition by (i) an employee benefit plan (or a
trust forming a part thereof) maintained by (x) the Company or (y) any
corporation or other Person of which a majority of its voting power or its
equity securities or equity interest is owned directly or indirectly by the
Company (a “Subsidiary”), or (ii) the Company or any Subsidiary.

(ii)  The individuals who, as of the date of this
letter agreement, were members of the Board (the “Incumbent Board”) cease for
any reason to constitute at least 66 2/3% of the Board; provided,
however, that if the election, or a nomination for election by the
Company’s shareholders, of any new director was approved by a vote of at least
66 2/3% of the Incumbent Board, such new director shall be considered as a
member of the Incumbent Board; provided further, however,
that no individual shall be considered a member of the Incumbent Board if such
individual initially assumed office as a result of either an actual or
threatened “Election Contest” (as described in Rule 14a-11 promulgated under
the 1934 Act) or other actual or threatened solicitation of the proxies or
consents by or on behalf of a Person other than the Board (a “Proxy Contest”)
including by reason of any agreement intended to avoid or settle any Election
Contest or Proxy Contest; or

(iii)  The consummation of a transaction approved by
the Company’s shareholders and involving: 
(1) a merger, consolidation or reorganization in which the Company is a
constituent corporation, unless (i) the shareholders of the Company,
immediately  before such merger,
consolidation or reorganization, own, directly or indirectly immediately
following such merger, consolidation or reorganization, at least sixty-six and
two-thirds percent (66-2/3%) of the combined voting power of the outstanding
voting securities of the corporation resulting from such merger, consolidation
or reorganization (the “Surviving Corporation”) in substantially  the same proportion as their ownership of the
voting securities immediately before such merger, consolidation or
reorganization, (ii) the individuals who were members of the Incumbent Board
immediately prior to the execution of the agreement providing for such merger,
consolidation or reorganization constitute at least 66 2/3% of the members of
the board of directors of the Surviving Corporation, and (iii) no Person other
than (w) the Company, (x) any Subsidiary, (y) any employee benefit plan (or any
trust forming a part thereof) maintained by the Company, the Surviving
Corporation or any Subsidiary, or (z) any Person who, immediately prior to such
merger, consolidation or reorganization had Beneficial Ownership of fifty-one
percent (51%) or more of the then outstanding Voting Securities, has Beneficial
Ownership of fifty-one percent (51%) or more of the combined voting power of
the Surviving Corporation’s then 

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outstanding voting securities (a transaction described
in clauses (i) and (ii) shall herein be referred to as a “Non-Control
Transaction”); (2) a complete liquidation or dissolution of the Company; or (3)
an agreement for the sale or other disposition of all or substantially all of
the assets of the Company to any Person (other than a transfer to a
Subsidiary).

(iv)  Notwithstanding the foregoing, a Change in
Control shall not be deemed to occur solely because the level of Beneficial
Ownership held by any Person (the “Subject Person”) exceeds the designated
percentage threshold of the outstanding Voting Securities as a result of a
repurchase or other acquisition of Voting Securities by the Company reducing
the number of shares outstanding, provided that if a Change in Control would
occur (but for the operation of this sentence) as a result of the acquisition
of Voting Securities by the Company, and after such share acquisition, the Subject
Person becomes the Beneficial Owner of any additional Voting Securities which,
assuming the repurchase or other acquisition had not occurred, increases the
percentage of the then outstanding Voting Securities Beneficially Owned by the
Subject Person over the designated percentage threshold, then a Change in
Control shall occur.

(c) Termination
of Employment due to Death, Disability, For Cause, or Without Good Reason. The
employment relationship created hereunder shall immediately terminate upon your
death or, at the election of you or the Company, upon disability which would
preclude you from performing your usual duties for the Company for a period in
excess of ninety (90) consecutive days or for a period in excess of ninety (90)
days within any consecutive twelve (12) month period. If your employment shall
terminate due to death, disability, For Cause or Without Good Reason, all
compensation and benefits including severance benefits described in Section 8
below, shall immediately cease, except that you will be entitled to payment of
your salary through the date of termination. For the avoidance of doubt, except
as provided in Section 8, you will not receive bonus compensation or other
long-term compensation for the period in which termination occurs, but
compensation earned and/or vested in accordance with the terms of the
applicable plan, such as annual bonus awards with respect to any full year
completed prior to termination, will be paid.

8. Severance
Benefits in Certain Events.

If your employment shall
be involuntarily terminated by the Company other than For Cause, or if you
terminate your employment for Good Reason, you shall be entitled to receive the
following severance benefits:

(a) Continued
Compensation. You shall continue to receive your base salary at the rate in
effect pursuant to Section 2(a) above at the time of your termination of
employment, in periodic installments, consistent with the Company’s payroll
procedures then in effect, for a period of two (2) years following your
termination date; provided, however, that (i) in accordance with Section 409A
of the Internal Revenue Code of 1986, as amended (the “Code”), payments made
under this Section 8(a) shall commence no earlier than the date that is six (6)
months after your termination date, and (ii) the first payment that is made
under this Section 8(a) shall include any 

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amounts that are
required to be delayed pursuant to the foregoing clause (i). provided however
that:

(i)        If your employment with the Company or
its successor is terminated other than for Cause or by you for Good Reason
within one (1) month prior to or twenty-four (24) months following a Change in
Control, the total amount of payments made under this Section 8(a) shall be
paid in a lump sum within thirty (30) days of the first date possible in
accordance with Section 409A of the Code and not in periodic installments over
a two-year period;

(ii)       in accordance with Section 409A of the
Code, payments made under this Section 8(a)(i) shall commence no earlier than
the date that is six (6) months after your termination date.

(b) Bonus. You
shall be entitled to receive in lieu of the bonus provided in Section 2(b) an
amount equal to two (2) times your targeted level bonus for the year during
which your termination occurs, in no case to be less than the target bonus set
forth in Section 2(b), payable in periodic installments, consistent with the
Company’s payroll procedures then in effect, over the salary continuation
period; provided, however, that:

(i)            if your employment with the Company
or its successor is terminated other than for Cause or by you for Good Reason
within one (1) month prior to or twenty-four (24) months following a Change in
Control, the total amount of payments made under this Section 8(b) shall be
equal to:

(A)          two (2) times the greater of (x) your
targeted level bonus for the year during which your termination occurs, in no
case to be less than the target bonus set forth in Section 2(b) or (y) the
bonus paid to you pursuant to Section 2(b) in the year immediately preceding
the year in which your termination occurs, plus

(B)           an amount equal to the greater of (x)
your targeted level bonus for the year during which your termination occurs, in
no case to be less than the target bonus set forth in Section 2(b)  or (y) the bonus paid to you pursuant to
Section 2(b) in the year immediately preceding the year in which your
termination occurs; provided, however,
that such amount shall be prorated based upon the fraction of the year during
which your termination occurs that you are employed by the Company, where the
numerator will equal the number of days so employed and the denominator will
equal three hundred sixty-five (365),

(C)           the total amount of payments made
under this Section 8(b)(i)(A) and 8(b)(i)(C) shall be paid in a lump sum within
thirty (30) days of the first date possible in accordance with Section 409A of
the Code and not in periodic installments over a two-year period;

(ii)           in accordance with Section 409A of
the Code, payments made under this Section 8(b) shall commence no earlier than
the date that is six (6) months after your termination date.

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(c) Health Care
and Life Insurance Coverage. 
If you elect to continue coverage under the Company’s health, dental and
vision plan[s] at the time of your termination of employment pursuant to the
Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), the Company
shall pay, under COBRA or otherwise, the entire amount of insurance premiums
for such continued health care coverage for you and your eligible dependents
until the earlier of (i) two (2) years after your termination date, or (ii) the
first date that you are covered under another employer’s health benefit program
providing substantially the same or better benefit options to you without
exclusion for any pre-existing medical condition. Any applicable insurance
premiums that are paid by the Company under this Section 8(c) shall not include
any amounts that may be payable by you under a Code Section 125 health care
reimbursement plan.  The Company will pay
the premium for continued life insurance coverage, if any, that you may have
elected under the Company’s benefit plans, subject to payment by you of the
portion of such premium not contributed by the Company under such plan, until
the earlier of (i) two (2) years after your termination date or your acceptance
of employment with a successor employer.

(d) Tax Matters.
All compensation described in this Section 8 will be subject to the
Company’s collection of all applicable federal, state and local income and
employment withholding taxes.

(e)  Vesting. The
vesting of certain equity awards that are held by you and are outstanding as of
your termination date shall be accelerated, as described under Sections 5(a),
5(b), 5(c) and 5(d).

(f) Gross-Up
Payment. If any payment, acceleration of stock options, restricted
shares or other equity award or other benefit made or provided to you
(collectively, the “Payment”) is subject to the excise tax imposed by Section
4999 of the Internal Revenue Code or any interest or penalties are incurred by
you with respect to such excise tax (such excise tax, together with any such
interest and penalties, hereinafter collectively referred to as the “Excise Tax”),
you will be entitled to receive an additional payment (a “Gross-Up Payment”) in
an amount such that after payment by you of all taxes (including any interest
or penalties imposed with respect to such taxes), including, without
limitation, any income taxes (and any interest and penalties imposed with
respect thereto) and the Excise Tax imposed upon the Gross-Up Payment, you
retain an amount of the Gross-Up Payment equal to the Excise Tax imposed upon
the Payments. Notwithstanding the foregoing provisions of this Section 8(f), if
it shall be determined that you are entitled to a Gross-Up Payment, but that
the Payment does not exceed 110% of the greatest amount that could be paid to
you without giving rise to any Excise Tax (the “Safe Harbor Amount”), then no
Gross-Up Payment shall be made to you and the amounts payable under this letter
agreement shall be reduced so that the Payment, in the aggregate, is reduced to
the Safe Harbor Amount. Any such reduction shall be applied first to the
payments that you designate for that purpose. 
Any determination required under this Section 8(e) shall be made
conclusively by a national independent public accounting firm reasonably
acceptable to you as may be designated by the Company.

(g) Conditions. The
Company shall not be required to make the payments or provide the benefits
specified in this Section 8 unless you execute and deliver to the Company a
general waiver and release in substantially the form attached hereto as
Appendix C, as appropriate, and such release must become effective in
accordance with its terms.  The Company,
in its sole discretion, may 

 11
 

 

modify the form of the
required release to comply with applicable law and shall determine the form of
the required release..

9. Indemnify
and Hold Harmless.

To the extent consistent
with the Company’s Certificate of Incorporation or bylaws, the Company will
indemnify you and hold you harmless to the fullest extent permitted by law with
respect to your acts of service as an officer and director of the Company. The
Company further agrees that you will be covered by directors’ and officers’
insurance policies with respect to your acts as an officer and director
hereunder to the same extent as all other officers and directors under such
policies, unless the Board determines not to maintain such policies.

10. Miscellaneous.

(a) Taxes. All
compensation paid to you under this letter shall be subject to the Company’s
collection of all applicable federal, state and local income and employment
withholding taxes.

(b) Governing
Law. This letter agreement shall be construed and enforced in
accordance with and be governed by the laws of the State of New Jersey, without
reference to its principles of conflicts of laws.

(c) Entire
Agreement. This letter agreement sets forth the entire agreement and
understanding between you and the Company, and supersedes any other
negotiations, agreements, understandings, oral agreements, representations and
past or future practices whether written or oral.

(d) Notices. All
notices required by this letter agreement shall be given in writing either by
personal delivery or by first class mail, return receipt requested, to the then
most current address of the parties notified to the other. Notice given by mail
shall be deemed given five (5) days following the date of mailing.

(e) Successors. This
letter agreement shall be binding and inure to the benefit of the Company and
its successors.

(f) Modification
or Waiver. This letter agreement may not be amended, modified,
changed or discharged in any respect, except as agreed in writing. No term or
condition of this letter agreement will be deemed to have been waived, nor will
there be any estoppel to enforce any provisions of this Letter agreement,
except by a statement in writing signed by the party against whom enforcement
of the waiver or estoppel is sought. Any written waiver will not be deemed a
continuing waiver unless specifically stated, will operate only as to the
specific term or condition waived and will not constitute a waiver of such term
or condition for the future or as to any act other than that specifically
waived.

(g) Assignment. This
Letter agreement is not assignable, in whole or in part, by any party without
the written consent of the other party.

(h) Severability.
To the extent that any provision of this letter agreement shall be
determined to 

 12
 

 

be invalid or unenforceable,
the invalid or unenforceable portion of such provision will be deleted from
this letter agreement, and the validity and enforceability of the remainder of
such provision and of this letter agreement will be unaffected. In furtherance
of and not in limitation of the foregoing, it is expressly agreed that should
the duration of or geographical extent of, or business activities covered by,
the non-competition covenant contained in Section 1(e) be determined to be in
excess of that which is valid or enforceable under applicable law, then such
provision will be construed to cover only that duration or extent, or those
activities which may validly or enforceably be covered. You acknowledge the
uncertainty of the law in this respect and expressly stipulate that this letter
agreement will be construed in a manner which renders its provisions valid and
enforceable to the maximum extent (not exceeding its express terms) possible
under applicable law.

(i) U.S.
Immigration and Naturalization Act.  Your employment by the Company is subject to
all applicable law, including your ability to be employed in the United States
under the U.S. Immigration and Naturalization Act. The Company will provide
assistance in processing applications for appropriate immigration status.

 13
 

 

We are all very pleased
at the prospect that you will be joining the Company. If the foregoing is
acceptable to you, please sign the enclosed copy of this letter and return it
to me.

Very truly yours,

Medarex, Inc.

	
  By:

  	
  /s/ Irwin Lerner

  	
   

  
	
  Irwin Lerner

  
	
  Chairman of the Board and Interim Chief Executive
  Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  
	
  Agreed:

  	
  /s/ Howard H. Pien

  	
   

  
	
  Howard H. Pien

  
	
  Dated: May 16, 2007

  
					

 

 14

APPENDIX A

MEDAREX, INC.

INVENTION AND CONFIDENTIAL INFORMATION AGREEMENT

NEW JERSEY FORM

In consideration of my employment or continued
employment by MEDAREX, INC. (the “Company”), and the compensation now and hereafter paid to
me, I, {NAME},  hereby
agree as follows:

1.             NONDISCLOSURE.

1.1          Recognition
of Company’s Rights; Nondisclosure.  At all times during my employment and
thereafter, I will hold in strictest confidence and will not disclose, use,
lecture upon or publish any of the Company’s Confidential Information (defined
below), except as such disclosure, use or publication may be required in
connection with my work for the Company, or unless an officer of the Company
expressly authorizes such in writing.  I
will obtain Company’s written approval before publishing or submitting for
publication any material (written, verbal, or otherwise) that relates to my
work at Company and/or incorporates any Confidential Information.  I hereby assign to the Company any rights I
may have or acquire in such Confidential Information and recognize that all
Confidential Information shall be the sole property of the Company and its
assigns.

1.2          Confidential
Information.  The term “Confidential Information” shall mean any and all
confidential and/or proprietary knowledge, data or information of the
Company.  By way of illustration but not
limitation, the term “Confidential Information”
includes (a) data, results, targets, ideas, processes, techniques, formulae,
know-how, improvements, discoveries, developments and designs, tangible and
intangible information relating to biological materials such as cell lines,
antibodies, tissue samples, proteins, nucleic acids and the like, assays and
assay components and media, procedures and formulations for producing any such
assays or assay components, and pre-clinical and clinical data, results,
developments or experiments (hereinafter 
collectively referred to as “Inventions”),
(b) plans for research, development and new products, manufacturing, marketing
and selling information, business plans, budgets and unpublished financial
statements, licenses, prices and costs, suppliers, partners and customers, and
(c) information regarding the skills and compensation of other employees of the
Company.

1.3          Third
Party Information.  I
understand, in addition, that the Company has received and in the future will
receive from third parties confidential or proprietary information (“Third Party Information”) subject to a duty on the Company’s
part to maintain the confidentiality of such information and to use it only for
certain limited purposes.  During the
term of my employment and thereafter, I will hold Third Party Information in
the strictest confidence and will not disclose to anyone (other than Company
personnel who need to know such information in connection with their work for
the Company) or use, except in connection with my work for the Company, Third
Party Information unless expressly authorized by an officer of the Company in
writing.

1.4          No
Improper Use of Information of Prior Employers and Others.  During my employment by the Company I will
not improperly use or disclose any confidential information or trade secrets,
if any, of any former employer or any other person to whom I have an obligation
of confidentiality, and I will not bring onto the premises of the Company any
unpublished documents or any property belonging to any former employer or any
other person to whom I have an obligation of confidentiality unless consented
to in writing by that former employer or person.  I will use in the performance of my duties
only information which is generally known and used by persons with training and
experience comparable to my own, which is common knowledge in the industry or
otherwise legally in the public domain, or which is otherwise provided or
developed by the Company.

2.             ASSIGNMENT OF INVENTIONS.

 15
 

 

2.1          Proprietary
Rights.  The term “Proprietary Rights” shall mean all trade secret, patent,
copyright, mask work and other intellectual property rights throughout the
world.

2.2          Prior
Inventions.  Inventions,
if any, patented or unpatented, which I made prior to the commencement of my
employment with the Company are excluded from the scope of this Agreement.  To preclude any possible uncertainty, I have
set forth on Exhibit A (Previous Inventions) attached
hereto a complete list of all Inventions that I have, alone or jointly with
others, conceived, developed or reduced to practice or caused to be conceived,
developed or reduced to practice prior to the commencement of my employment
with the Company, that I consider to be my property or the property of third
parties and that I wish to have excluded from the scope of this Agreement
(collectively referred to as “Prior Inventions”).  If disclosure of any such Prior Invention
would cause me to violate any prior confidentiality agreement, I understand
that I am not to list such Prior Inventions in Exhibit A
but am only to disclose a cursory name for each such invention, a listing of
the party(ies) to whom it belongs and the fact that full disclosure as to such
inventions has not been made for that reason. A space is provided on Exhibit A for such purpose. 
If no such disclosure is attached, I represent that there are no Prior
Inventions.  If, in the course of my
employment with the Company, I incorporate a Prior Invention into a Company
product, process or machine, the Company is hereby granted and shall have a
nonexclusive, royalty-free, irrevocable, perpetual, worldwide license (with
rights to sublicense through multiple tiers of sublicensees) to make, have
made, modify, use and sell such Prior Invention.  Notwithstanding the foregoing, I agree that I
will not incorporate, or permit to be incorporated, Prior Inventions in any
Company Inventions without the Company’s prior written consent.

2.3          Assignment
of Inventions.  Subject
to Sections 2.4, and 2.6, I hereby assign and agree to assign in the future
(when any such Inventions or Proprietary Rights are first reduced to practice
or first fixed in a tangible medium, as applicable) to the Company all my
right, title and interest in and to any and all Inventions (and all Proprietary
Rights with respect thereto) whether or not patentable or registrable under
copyright or similar statutes, made or conceived or reduced to practice or
learned by me, either alone or jointly with others, during the period of my
employment with the Company.  Inventions
assigned to the Company, or to a third party as directed by the Company
pursuant to this Section 2, are hereinafter referred to as “Company Inventions.”

2.4          Nonassignable
Inventions. I recognize that, in the event of a specifically
applicable state law, regulation, rule, or public policy (“Specific
Inventions Law”), this Agreement will not be deemed to require
assignment of any invention which qualifies fully for protection under a
Specific Inventions Law by virtue of the fact that any such invention was, for
example, developed entirely on my own time without using the Company’s
equipment, supplies, facilities, or trade secrets and neither related to the
Company’s actual or anticipated business, research or development, nor resulted
from work performed by me for the Company. 
In the absence of a Specific Inventions Law, the preceding sentence will
not apply.

2.5          Obligation
to Keep Company Informed. 
During the period of my employment and for six (6) months after
termination of my employment with the Company, I will promptly disclose to the
Company fully and in writing all Inventions authored, conceived or reduced to
practice by me, either alone or jointly with others.  In addition, I will promptly disclose to the
Company all patent applications filed by me or on my behalf within a year after
termination of employment.  At the time
of each such disclosure, I will advise the Company in writing of any Inventions
that I believe fully qualify for protection under the provisions of a Specific
Inventions Law; and I will at that time provide to the Company in writing all
evidence necessary to substantiate that belief. 
The Company will keep in confidence and will not use for any purpose or
disclose to third parties without my consent any confidential information
disclosed in writing to the Company pursuant to this Agreement relating to
Inventions that qualify fully for protection under a Specific Inventions Law.  I will preserve the confidentiality of any
Invention that does not fully qualify for protection under a Specific
Inventions Law.  I agree that it shall be
conclusively presumed as against me that any Invention related to the
Confidential Information described by me in a patent, service mark, trademark,
or copyright application, disclosed by me in any manner to a third person, or
created by me or any person with whom I have any business, financial or
confidential relationship, within one (1) year after termination of my
employment with the Company, was conceived or made by me during the period of
my employment with the Company and that such Invention is the sole property of
the Company.

 16
 

2.6          Government
or Third Party.  I also
agree to assign all my right, title and interest in and to any particular
Company Invention to a third party, including without limitation the United
States, as directed in writing by the Company.

2.7          Works
for Hire.  I
acknowledge that all original works of authorship which are made by me (solely
or jointly with others) within the scope of my employment and which are
protectable by copyright are “works made for hire,” pursuant to United States
Copyright Act (17 U.S.C., Section 101).

2.8          Enforcement
of Proprietary Rights. 
I will assist the Company in every proper way to obtain, and from time
to time enforce, United States and foreign Proprietary Rights relating to
Company Inventions in any and all countries. 
To that end I will execute, verify and deliver such documents and perform
such other acts (including appearances as a witness) as the Company may
reasonably request for use in applying for, obtaining, perfecting, evidencing,
sustaining and enforcing such Proprietary Rights and the assignment
thereof.  In addition, I will execute,
verify and deliver assignments of such Proprietary Rights to the Company or its
designee.  My obligation to assist the
Company with respect to Proprietary Rights relating to such Company Inventions
in any and all countries shall continue beyond the termination of my
employment, but the Company shall compensate me at a reasonable rate after such
termination of my employment for the time actually spent by me at the Company’s
request on such assistance.

In the event the Company is unable for any reason, after reasonable
effort, to secure my signature on any document needed in connection with the
actions specified in the preceding paragraph, I hereby irrevocably designate
and appoint the Company and its duly authorized officers and agents as my agent
and attorney in fact, which appointment is coupled with an interest, to act for
and in my behalf to execute, verify and file any such documents and to do all
other lawfully permitted acts to further the purposes of the preceding
paragraph with the same legal force and effect as if executed by me.  I hereby waive and quitclaim to the Company
any and all claims, of any nature whatsoever, which I now or may hereafter have
for infringement of any Proprietary Rights assigned hereunder to the Company.

3.             RECORDS.  I agree to keep and maintain adequate and
current records (in the form of notes, sketches, drawings and in any other form
that may be required by the Company) of all Confidential Information developed
by me and all Inventions made by me during the period of my employment at the
Company, which records shall be available to and remain the sole property of
the Company at all times.

4.             ADDITIONAL ACTIVITIES.  I agree that during
the period of my employment by the Company I will not, without the Company’s
express written consent, engage in any employment or business activity which is
competitive with, or would otherwise conflict with, my employment by the
Company.  I agree further that for the
period of my employment by the Company and for one (l) year after the date of
termination of my employment by the Company I will not, either directly or
through others, solicit or attempt to solicit any employee, independent
contractor or consultant of the Company to terminate his or her relationship
with the Company in order to become an employee, consultant or independent
contractor to or for any other person or entity.

5.             NO CONFLICTING OBLIGATION.  I represent that my performance of all the
terms of this Agreement and as an employee of the Company does not and will not
breach any agreement to keep in confidence information acquired by me in
confidence or in trust prior to my employment by the Company.  I have not entered into, and I agree I will
not enter into, any agreement either written or oral in conflict with the terms
of this Agreement.

6.             RETURN OF COMPANY DOCUMENTS.  When I leave the employ of the Company and at
the Company’s earlier requests, I will deliver to the Company any and all
drawings, notes, memoranda, specifications, devices, formulas, records and
documents, together with all copies thereof, and any other material containing
or disclosing any Company Inventions, Third Party Information or Confidential
Information of the Company.  I further
agree that any property situated on the Company’s premises and owned by the
Company, including, without limitation, disks, computers, hard drives and other
storage media, filing cabinets, lockers or other work areas, is subject to
inspection by Company personnel at any time with or without notice.  Prior to leaving, I will cooperate with the
Company in completing and signing the Company’s exit interview documentation.

7.             LEGAL AND EQUITABLE REMEDIES.  Because my services
are personal and unique and because I may have access to and become acquainted
with the Confidential Information of the Company, 

 17
 

the Company shall have the right to enforce this
Agreement and any of its provisions by injunction, specific performance or
other equitable relief, without bond and without prejudice to any other rights
and remedies that the Company may have for a breach of this Agreement.

8.             NOTICES.  Any notices required or permitted hereunder
shall be given to the appropriate party at the address specified below or at
such other address as the party shall specify in writing.  Such notice shall be deemed given upon
personal delivery to the appropriate address or if sent by certified or
registered mail, three (3) days after the date of mailing.

9.             NOTIFICATION OF NEW EMPLOYER.  In the event that I leave the employ of the
Company, I hereby consent to the notification of my new employer of my rights
and obligations under this Agreement.

10.          GENERAL PROVISIONS.

10.1        Governing
Law; Consent to Personal Jurisdiction.  This Agreement will be governed by and
construed according to the laws of the State of New Jersey, as such laws are
applied to agreements entered into and to be performed entirely within New
Jersey between New Jersey residents.  I
hereby expressly consent to the personal jurisdiction of the state and federal
courts located in Mercer County, New Jersey for any lawsuit filed there against
me by Company arising from or related to this Agreement.

10.2        Severability.  In case any one or more of the provisions
contained in this Agreement shall, for any reason, be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect the other provisions of this Agreement, and
this Agreement shall be construed as if such invalid, illegal or unenforceable
provision had never been contained herein. 
If moreover, any one or more of the provisions contained in this
Agreement shall for any reason be held by a court to be excessively broad as to
duration, geographical scope, activity or subject, it shall be construed by
limiting and reducing it, so as to be enforceable to the extent compatible with
the applicable law as it shall then appear.

10.3        Successors
and Assigns.  This
Agreement will be binding upon my heirs, executors, administrators and other
legal representatives and will be for the benefit of the Company, its
successors, and its assigns.

10.4        Survival.
The provisions of this Agreement shall survive the termination of my employment
and the assignment of this Agreement by the Company to any successor in
interest or other assignee.

10.5        At-Will
Employment Relationship. 
I agree and understand that nothing in this Agreement shall confer any
right with respect to continuation of employment by the Company, nor shall it
interfere in any way with my right or the Company’s right to terminate my
employment at any time, with or without cause or advance notice.

10.6        Waiver.  No waiver by the Company of any breach of
this Agreement shall be a waiver of any preceding or succeeding breach.  No waiver by the Company of any right under
this Agreement shall be construed as a waiver of any other right.  The Company shall not be required to give
notice to enforce strict adherence to all terms of this Agreement.

10.7        Entire
Agreement.  The
obligations pursuant to Sections 1 and 2 of this Agreement (with the exception
of Section 2.7) shall apply to any time during which I was previously employed,
or am in the future employed, by the Company as an employee or as a consultant
if no other agreement governs nondisclosure and assignment of inventions during
such period.  This Agreement is the
final, complete and exclusive agreement of the parties with respect to the
subject matter hereof and supersedes and merges all prior discussions or
written or oral agreements, commitments or understandings between us.  No modification of or amendment to this
Agreement, nor any waiver of any rights under this Agreement, will be effective
unless in writing and signed by the party to be charged.  Any subsequent change or changes in my
duties, salary or compensation will not affect the validity or scope of this
Agreement.

This Agreement shall be
effective as of the first day of my employment with the Company, namely:  _____ , 2006.

I HAVE
READ THIS AGREEMENT CAREFULLY AND UNDERSTAND ITS TERMS.  I HAVE COMPLETELY FILLED OUT EXHIBIT A TO
THIS AGREEMENT.

 18
 

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (Signature)

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (Printed Name)

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Accepted And Agreed To:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Medarex, Inc.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  707 State Road

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Princeton, NJ 08540

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  
	
  Exhibit A

  	
   

  
	
   

  	
   

  	
   

  
	
  PREVIOUS INVENTIONS

  	
   

  
	
   

  
	
  TO:

  	
  Medarex, Inc.

  	
   

  
	
   

  
	
  FROM:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  DATE:

  	
   

  	
   

  	
   

  
								

 

SUBJECT:

                Previous
Inventions

1.             Except as
listed in Section 2 below, the following is a complete list of all inventions
or improvements relevant to the subject matter of my employment by MEDAREX, INC. (the “Company”)
that have been made or conceived or first reduced to practice by me alone or
jointly with others prior to my engagement by the Company:

o   No
inventions or improvements.

o   See
below:

o   Additional
sheets attached.

2.             Due to a
prior confidentiality agreement, I cannot complete the disclosure under Section
1 above with respect to inventions or improvements generally listed below, the
proprietary rights and duty of confidentiality with respect to which I owe to
the following party(ies):

	
  Invention or Improvement  Party(ies)

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1.

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
   

  	
   

  	
   

  

 

o   Additional
sheets attached.

 

 19

APPENDIX B

MEDAREX,
INC.

POLICY
AND PROCEDURES FOR THE GRANTING OF STOCK OPTIONS AND OTHER EQUITY-BASED
INCENTIVES

PURPOSE

The
purpose of this Policy and Procedures for the Granting of Stock Options and
Other Equity-Based Incentives (the “Policy”) is to present a framework for a
consistent process for the granting of stock options and other equity-based
incentives (“Awards”).  The Board of
Directors of Medarex, Inc. (“Medarex”) has adopted this Policy to assure the
integrity of Medarex’s equity award process and has delegated the
administration thereof to the Compensation and Organization Committee (the “Committee”)
of the Board of Directors of Medarex (the “Board”).

GENERAL PRINCIPLES

In
furtherance of this purpose, Committee members and management shall follow
consistent procedures for the granting of Awards to officers, employees and
members of the Board, as further set forth herein (the “Equity Grant Procedures”).  The Equity Grant Procedures, and Medarex’s
implementation of the practices thereunder, shall comply with applicable law,
the Committee charter and Medarex’s equity compensation plans.  Medarex shall make full disclosure of the
Equity Grant Procedures in accordance with applicable securities laws and
regulations.

It
is the intent of this policy that proposed Awards to current employees,
officers or Board members will not be presented to, or approved by, the
Committee when any executive officer or member of the Board is in possession of
any material, non-public information (as defined in Medarex’s Policy
Prohibiting Insider Trading).

EQUITY GRANT PROCEDURES

Grants to
New Officers, Employees and Board Members

Approval
Process:  At monthly
meetings of the Committee, which meetings may be held either by video,
telephone or in-person, the Committee shall approve Awards to officers,
employees and Board members who commenced service at Medarex during that month
or, pursuant to the last sentence of this paragraph, the preceding month. The
dates of the meetings will be determined at the start of the calendar year,
however the meetings must take place no more then seven (7) business days prior
to the last trading day of each month. 
In advance of each meeting, management shall provide to the Committee a
list of all officers and employees hired during that month and Board members
who commenced their service during that month for whom management (or, in the
case of new Board members, the Board) recommends an Award.  Management shall also provide the Committee
with the name of each individual, the number and nature of recommended equity
awards for each individual, and the individual’s start date.  The Award shall be deemed approved on the
date of the Committee meeting.  In each
month, any Officer, employee or Board member who commences his or her service
at Medarex on or after the date management provides the Committee with a list
of recommended Award recipients shall be considered for a new-hire Award at the
next Committee meeting in the next month.

Grant
Date:  The grant date
of all Awards to new officers, employees and Board members shall be last
trading day of the month in which 

 

 20
 

the Award was
approved by the Committee.  Unless
otherwise provided, the exercise price of all new officer, employee and Board
member Awards shall be the average of the high and the low price of Medarex’s
common stock on the grant date.

Off-Cycle
Grants to Current Officers, Employees and Board Members

Approval
Process: All other Awards granted to current officers,
employees, Board members and non-employee consultants throughout the year,
except annual grants (“Off-Cycle Awards”), shall be approved at the Committee’s
monthly meetings, which shall take place as explained above.  In advance of each meeting, management shall
provide to the Committee a list of all officers, employees and Board members
for whom management (or, in the case of Board members, the Board) recommends an
Off-Cycle Award.  Management shall also
provide the Committee with the name of each individual, the number and nature
of recommended equity awards for each individual, and the reason for the
Off-Cycle Grant.  The Award shall be
deemed approved on the date of the Committee meeting.  

Grant
Date:  The grant date
of all Off-Cycle Awards shall be last trading day of the month in which the
Award was approved by the Committee. 
Unless otherwise provided, the exercise price of all Off-Cycle Awards
shall be the average of the high and the low price of Medarex’s common stock on
the grant date.

Annual
Grants to Current Officers, Employees and Board Members

Approval
Process: The Committee shall approve annual Awards to current
officers, employees and members of the Board at a meeting held (i) in the
period between (a) the date that is two (2) days after Medarex files
its annual report on Form 10-K and (b) the date of the annual meeting of
shareholders (the “Annual Equity Grant Window”); and (ii) when no
executive officer or member of the Board is in possession of any material,
non-public information.  At the meeting,
the Committee shall determine the exact recipients of the Awards and the exact
number and nature of shares to underlie the Awards granted to the
recipients.  The annual Awards shall be
deemed approved on the date of the Committee meeting.

Grant
Date:  The grant date
of all annual Awards shall be the date of the annual shareholders meeting.  Unless otherwise provided, the exercise price
of all annual Awards shall be the average of the high and the low price of
Medarex’s common stock on the grant date.

Special
Circumstance: In the event that any executive officer or
member of the Board has material, non-public information during the entirety of
the Annual Equity Grant Window in a given year, management and the Board will
work with outside legal counsel to implement an alternative approach for such
year that is consistent with applicable law, the Committee charter, this Policy
and the applicable Medarex equity compensation plans.

COMMUNICATION, DOCUMENTATION  AND
IMPLEMENTATION OF EQUITY-BASED INCENTIVES

To
ensure the accurate communication, documentation and implementation of Awards,
upon the Committee’s approval of such Award at a meeting as described above,
the chairperson of the Committee shall timely communicate the Award to the
Chief Financial Officer (the “CFO”), or his or her designee, who in turn shall
timely communicate the Award to the Stock Option Administrator.  Once approved by the Committee, there shall
be no changes in any individual’s stock option grant without further action by
the Committee.

 

 21
 

The
Stock Option Administrator shall (i) provide documentation of equity-based
incentives to the recipients in a timely manner following the Committee’s
approval; (ii) maintain records of all equity-based compensation grants
and exercises, including (a) the type of each Award, (b) the exact
recipient of each Award, (c) the exact number of shares (or other units)
that will underlie each Award, (d) the grant date for the Award, and
(e) the exercise price of each Award; (iii) on an annual basis,
review Medarex’s system of documenting equity-based compensation grants and
exercises with the CFO, and if requested, with the chairperson of the
Committee; and (iv) on an annual basis, provide a detailed report to each
member of the Board that describes his or her stock option and other equity
holdings for that year.

SPECIAL SITUATIONS

In the event it is not feasible to follow the
Equity Grant Procedures set forth above, the Committee may waive such
procedures.  Before electing to do so,
however, the Committee shall consult with the CFO and the General Counsel and
make a determination that it is in Medarex’s best interest to waive the Equity
Grant Procedures.  It is expected that
such a waiver will occur only under exceptional circumstances.

For any Award subject to a waiver of the
Equity Grant Procedures, the reasons for such waiver shall be fully documented
by the Committee, and the methodology for establishing the exercise price of
the Award shall be described in the accompanying documentation.  For any special situation, the Committee
shall determine the exact recipients of the Awards and the exact number and
nature of shares to underlie the Awards granted to the recipients.  Furthermore, the chairperson of the Committee
and Stock Option Administrator shall timely communicate the Award as set forth
above, and the Stock Option Administrator shall maintain records of the Award
as set forth above.

REVIEW OF EQUITY GRANT PROCEDURE

On
an annual basis, the CFO and the General Counsel shall undertake a review of
Medarex’s procedures for the granting and exercise of Awards.  The review shall include an assessment of the
Committee’s performance in accordance with this Policy.  The CFO and the General Counsel shall involve
Medarex’s outside corporate/securities counsel and accountants in such
review.  Prior to undertaking the review,
the CFO and the General Counsel shall consult with the chairs of the Committee
and the Audit Committee to ascertain whether the committees have any particular
areas of concern regarding Medarex’s equity grant procedures.  Upon completion of the review, the CFO and
the General Counsel shall (i) share the results of the review with the Chief
Executive Officer, the Committee and the Audit Committee, and (ii) report to
the Board regarding any significant issues which arose during the review.

The
Committee shall review this Policy at least annually and recommend any
modifications to the Board.  The Board
will determine any changes to be made to this Policy based upon the Committee’s
recommendations.

Failure
to comply with this Policy may result in disciplinary actions in accordance
with Medarex’s employment procedures.

TRAINING

The
CFO and the General Counsel shall supervise an annual training program and/or
distribute update/refresher materials for officers, employees, members of the
Board and consultants in connection with the administration, implementation,
and/or review of 

 

 22
 

Medarex’s equity
grant procedures.  The CFO and the
General Counsel may engage external advisors and consultants, to the extent
determined appropriate by the CFO and the General Counsel, to facilitate the
performance of any training functions.

 23

APPENDIX C

FORM OF RELEASE

RELEASE AGREEMENT

I understand and agree completely to the terms set
forth in the [Client Name] Severance Benefit Plan (the “Plan”).

I understand that this Release constitutes the
complete, final and exclusive embodiment of the entire agreement between [Client Name] (the “Company”) [or an
affiliate of the Company] and me with regard to the subject matter
hereof.  I am not relying on any promise
or representation by the Company [or an affiliate of the
Company] that is not expressly stated therein.  Certain capitalized terms used in this
Release are defined in the Plan.

I hereby confirm my obligations under my [Employee Proprietary Information and Inventions Agreement]
with the Company [or an affiliate of the Company].

I hereby represent that I have been paid all
compensation owed and for all hours worked, have received all the leave and
leave benefits and protections for which I am eligible, pursuant to the Family
and Medical Leave Act or otherwise, and have not suffered any on-the-job injury
for which I have not already filed a claim.

In exchange for the consideration provided to me by
this Release that I am not otherwise entitled to receive, I hereby generally
and completely release the Company [or an affiliate of the
Company] and its current and former directors, officers, employees,
shareholders, partners, agents, attorneys, predecessors, successors, parent and
subsidiary entities, insurers, affiliates, and assigns from any and all claims,
liabilities and obligations, both known and unknown, that arise out of or are
in any way related to events, acts, conduct, or omissions occurring prior to my
signing this Release.  This general
release includes, but is not limited to: (a) all claims arising out of or in
any way related to my employment with the Company [or an
affiliate of the Company] or the termination of that employment; (b)
all claims related to my compensation or benefits from the Company [or an affiliate of the Company], including salary, bonuses,
commissions, vacation pay, expense reimbursements, severance pay, fringe
benefits, stock, stock options, or any other ownership interests in the Company
[or an affiliate of the Company]; (c)
all claims for breach of contract, wrongful termination, and breach of the
implied covenant of good faith and fair dealing; (d) all tort claims, including
claims for fraud, defamation, emotional distress, and discharge in violation of
public policy; and (e) all federal, state, and local statutory claims,
including claims for discrimination, harassment, retaliation, attorneys’ fees,
or other claims arising under the federal Civil Rights Act of 1964 (as
amended), the federal Americans with Disabilities Act of 1990, and the federal
Age Discrimination in Employment Act of 1967 (as amended) (“ADEA”).   Nothing in this Release shall prevent me
from challenging this Release by filing, cooperating with, or participating in
any proceeding before the Equal Employment Opportunity Commission, the
Department of Labor, or any local fair employment practices agency, except that
I hereby acknowledge and agree that I shall not recover any monetary benefits
in connection with any challenge to my Release.

I acknowledge that I am knowingly and voluntarily
waiving and releasing any rights I may have under the ADEA (“ADEA Waiver”).  I also acknowledge that the consideration
given for the ADEA Waiver is in addition to anything of value to which I was
already entitled.  I further acknowledge
that I have been advised by this writing, as required by the ADEA, that: (a) my
ADEA Waiver does not apply to any rights or claims that arise after the date I
sign this Release; (b) I should consult with an attorney prior to

 24
 

signing this Release; (c) I have twenty-one (21) days
to consider this Release (although I may choose to voluntarily sign it sooner);
(d) I have seven (7) days following the date I sign this Release to revoke the
ADEA Waiver; and (e) the ADEA Waiver will not be effective until the date upon
which the revocation period has expired unexercised, which will be the eighth day
after I sign this Release.

I acknowledge that I have read and understand Section
1542 of the California Civil Code which reads as follows: “A general
release does not extend to claims which the creditor does not know or suspect
to exist in his or her favor at the time of executing the release, which if
known by him or her must have materially affected his or her settlement with
the debtor.”   I hereby expressly waive and relinquish all
rights and benefits under that section and any law of any jurisdiction of
similar effect with respect to my release of any claims hereunder.

I acknowledge that to become effective, I must sign
and return this Release to the Company [or an affiliate of the
Company] so that it is received not later than twenty-one (21) days
following the date it is provided to me.

	
  

  	
  Employee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
   

  	
   

  

 

 25Exhibit 4.2

AMENDED
AND RESTATED

BYE-LAWS

of

AXIS
CAPITAL HOLDINGS LIMITED

Effective May 11, 2007

 

 

	
  INTERPRETATION

  	
   

  	
   

  
	
  1.

  	
  Interpretation

  	
   

  	
  1

  
	
  BOARD OF DIRECTORS

  	
   

  	
   

  
	
  2.

  	
  Board of Directors

  	
   

  	
  2

  
	
  3.

  	
  Management of Company

  	
   

  	
  2

  
	
  4.

  	
  Power to appoint managing director or chief
  executive officer

  	
   

  	
  3

  
	
  5.

  	
  Power to appoint manager

  	
   

  	
  3

  
	
  6.

  	
  Power to authorise specific actions

  	
   

  	
  3

  
	
  7.

  	
  Power to appoint attorney

  	
   

  	
  3

  
	
  8.

  	
  Power to delegate to a committee

  	
   

  	
  3

  
	
  9.

  	
  Power to appoint and dismiss employees

  	
   

  	
  4

  
	
  10.

  	
  Power to borrow and charge property

  	
   

  	
  4

  
	
  11.

  	
  Exercise of power to purchase shares of or
  discontinue the Company

  	
   

  	
  4

  
	
  12.

  	
  Composition of Board of Directors

  	
   

  	
  4

  
	
  13.

  	
  Defects in appointment of Directors

  	
   

  	
  5

  
	
  14.

  	
  Alternate Directors/Observers

  	
   

  	
  5

  
	
  15.

  	
  Removal of Directors

  	
   

  	
  5

  
	
  16.

  	
  Other vacancies on the Board

  	
   

  	
  5

  
	
  17.

  	
  Notice of meetings of the Board

  	
   

  	
  6

  
	
  18.

  	
  Quorum at meetings of the Board

  	
   

  	
  6

  
	
  19.

  	
  Meetings of the Board

  	
   

  	
  6

  
	
  20.

  	
  Unanimous written resolutions

  	
   

  	
  6

  
	
  21.

  	
  Contracts and disclosure of Directors’ interests

  	
   

  	
  7

  
	
  22.

  	
  Remuneration of Directors

  	
   

  	
  7

  
	
  OFFICERS

  	
   

  	
   

  
	
  23.

  	
  Officers of the Company

  	
   

  	
  7

  
	
  24.

  	
  Appointment of Officers

  	
   

  	
  7

  
	
  25.

  	
  Remuneration of Officers

  	
   

  	
  7

  
	
  26.

  	
  Duties of Officers

  	
   

  	
  8

  
	
  27.

  	
  Chairman of meetings

  	
   

  	
  8

  
	
  28

  	
  Register of Directors and Officers

  	
   

  	
  8

  
	
  MINUTES

  	
   

  	
   

  
	
  29.

  	
  Obligations of Board to keep minutes

  	
   

  	
  8

  
	
  INDEMNITY

  	
   

  	
   

  
	
  30.

  	
  Indemnification of Directors and Officers of the
  Company

  	
   

  	
  8

  
	
  31.

  	
  Waiver of claim by Member

  	
   

  	
  9

  
	
  MEETINGS

  	
   

  	
   

  
	
  32.

  	
  Notice of annual general meeting

  	
   

  	
  9

  
	
  33.

  	
  Notice of special general meeting

  	
   

  	
  9

  
	
  34.

  	
  Accidental omission of notice of general meeting

  	
   

  	
  9

  
	
  35.

  	
  Meeting called on requisition of Members

  	
   

  	
  10

  
	
  36.

  	
  Short notice

  	
   

  	
  10

  
	
  37.

  	
  Postponement of meetings

  	
   

  	
  10

  
	
  38.

  	
  Quorum for general meeting

  	
   

  	
  10

  
	
  39.

  	
  Adjournment of meetings

  	
   

  	
  10

  
	
  40.

  	
  Attendance at meetings

  	
   

  	
  10

  

 

	
  41.

  	
  Written resolutions

  	
   

  	
  11

  
	
  42.

  	
  Attendance of Directors

  	
   

  	
  11

  
	
  43.

  	
  Voting at meetings

  	
   

  	
  11

  
	
  44.

  	
  Voting on show of hands

  	
   

  	
  12

  
	
  45.

  	
  Decision of chairman

  	
   

  	
  12

  
	
  46.

  	
  Demand for a poll

  	
   

  	
  12

  
	
  47.

  	
  Seniority of joint holders voting

  	
   

  	
  13

  
	
  48.

  	
  Instrument of proxy

  	
   

  	
  13

  
	
  49.

  	
  Representation of corporations at meetings

  	
   

  	
  13

  
	
  VOTES OF MEMBERS

  	
   

  	
   

  
	
  50.

  	
  General

  	
   

  	
  14

  
	
  51.

  	
  Adjustment of voting power

  	
   

  	
  14

  
	
  52.

  	
  Other adjustments of voting power

  	
   

  	
  15

  
	
  53.

  	
  Notice

  	
   

  	
  16

  
	
  54.

  	
  Requirement to provide information and notice

  	
   

  	
  16

  
	
  SHARE CAPITAL AND SHARES

  	
   

  	
   

  
	
  55.

  	
  Rights of shares

  	
   

  	
  16

  
	
  56.

  	
  Power to issue shares

  	
   

  	
  17

  
	
  57.

  	
  Variation of rights, alteration of share capital and
  purchase of shares of the Company

  	
   

  	
  18

  
	
  58.

  	
  Registered holder of shares

  	
   

  	
  18

  
	
  59.

  	
  Death of a joint holder

  	
   

  	
  18

  
	
  60.

  	
  Share certificates

  	
   

  	
  19

  
	
  61.

  	
  Calls on shares

  	
   

  	
  19

  
	
  62.

  	
  Forfeiture of shares

  	
   

  	
  19

  
	
  63.

  	
  Repurchase of shares

  	
   

  	
  19

  
	
  REGISTER OF MEMBERS

  	
   

  	
   

  
	
  64.

  	
  Contents of Register of Members

  	
   

  	
  20

  
	
  65.

  	
  Inspection of Register of Members

  	
   

  	
  20

  
	
  66.

  	
  Determination of record dates

  	
   

  	
  20

  
	
  TRANSFER OF SHARES

  	
   

  	
   

  
	
  67.

  	
  Instrument of transfer

  	
   

  	
  20

  
	
  68.

  	
  Restrictions on transfer

  	
   

  	
  21

  
	
  69.

  	
  Transfers by joint holders

  	
   

  	
  21

  
	
  TRANSMISSION OF SHARES

  	
   

  	
   

  
	
  70.

  	
  Representative of deceased Member

  	
   

  	
  22

  
	
  71.

  	
  Registration on death or bankruptcy

  	
   

  	
  22

  
	
  DIVIDENDS AND OTHER DISTRIBUTIONS

  	
   

  	
   

  
	
  72.

  	
  Declaration of dividends by the Board

  	
   

  	
  22

  
	
  73.

  	
  Other distributions

  	
   

  	
  22

  
	
  74.

  	
  Reserve fund

  	
   

  	
  22

  
	
  75.

  	
  Deduction of Amounts due to the Company

  	
   

  	
  23

  
	
  CERTAIN SUBSIDIARIES

  	
   

  	
   

  
	
  76.

  	
  Voting of subsidiary shares

  	
   

  	
  23

  
	
  77.

  	
  Bye-laws or articles of association of certain
  subsidiaries

  	
   

  	
  23

  

 

	
  CAPITALISATION

  	
   

  	
   

  
	
  78.

  	
  Issue of bonus shares

  	
   

  	
  23

  
	
  ACCOUNTS AND FINANCIAL STATEMENTS

  	
   

  	
   

  
	
  79.

  	
  Records of account

  	
   

  	
  23

  
	
  80.

  	
  Financial year end

  	
   

  	
  24

  
	
  81.

  	
  Financial statements

  	
   

  	
  24

  
	
  AUDIT

  	
   

  	
   

  
	
  82.

  	
  Appointment of Auditor

  	
   

  	
  24

  
	
  83.

  	
  Remuneration of Auditor

  	
   

  	
  24

  
	
  84.

  	
  Vacation of office of Auditor

  	
   

  	
  24

  
	
  85.

  	
  Access to books of the Company

  	
   

  	
  24

  
	
  86.

  	
  Report of the Auditor

  	
   

  	
  24

  
	
  NOTICES

  	
   

  	
   

  
	
  87.

  	
  Notices to Members of the Company

  	
   

  	
  25

  
	
  88.

  	
  Notices to joint Members

  	
   

  	
  25

  
	
  89.

  	
  Service and delivery of notice

  	
   

  	
  25

  
	
  SEAL OF THE COMPANY

  	
   

  	
   

  
	
  90.

  	
  The seal

  	
   

  	
  25

  
	
  91.

  	
  Manner in which seal is to be affixed

  	
   

  	
  25

  
	
  WINDING-UP

  	
   

  	
   

  
	
  92.

  	
  Winding-up/distribution by liquidator

  	
   

  	
  26

  
	
  ALERATION OF THE BYE-LAWS

  	
   

  	
   

  
	
  93.

  	
  Alteration of Bye-laws

  	
   

  	
  26

  

 

 

Adopted and
Effective: May 11, 2007

AMENDED AND RESTATED B Y E -
L A W S

OF

AXIS CAPITAL HOLDINGS LIMITED

INTERPRETATION

1.               Interpretation

(1)           In these Bye-laws the following words and expressions
shall, where not inconsistent with the context, have the following meanings
respectively:

(a)           “Act” means the Companies Act 1981 as amended from time to
time;

(b)           “Affiliate” means, with respect to any person, any person
directly or indirectly controlling, controlled by or under common control with
such person, provided that no Member of the Company shall be deemed an
Affiliate of another Member solely by the reason of an investment in the
Company. For the purposes of this definition, the term “control” shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such person, whether through the
ownership of voting securities, by contract or otherwise.

(c)           “Audit Committee” means the audit committee appointed by
the Board in accordance with these Bye-laws, provided that in the event that
the Board shall not have appointed an Audit Committee, the Board shall
constitute the Audit Committee;

(d)           “Auditor” means any individual or partnership appointed to
audit the accounts of the Company;

(e)           “Board” means the Board of Directors appointed or elected
pursuant to these Bye-laws and acting by resolution in accordance with the Act
and these Bye-laws or the Directors present at a meeting of Directors at which
there is a quorum;

(f)            “Cause” means willful misconduct, fraud, gross
negligence, embezzlement or any criminal conduct;

(g)           “Code” means the Internal Revenue Code of 1986, as
amended, of the United States of America;

(h)           “Company” means the company for which these Bye-laws are
approved and confirmed;

(i)            “Director” means a director of the Company;

(j)            “Member” means the person registered in the Register of
Members as the holder of shares in the Company and, when two or more persons
are so registered as joint holders of shares, means the person whose name
stands first in the Register of Members as one of such joint holders or all of
such persons as the context so requires;

 1
 

 

(k)           “notice” means written notice as further defined in these
Bye-laws unless otherwise specifically stated;

(l)            “Officer” means any person appointed by the Board to hold
an office in the Company;

(m)          “Register of Directors and Officers” means the Register of
Directors and Officers referred to in these Bye-laws;

(n)           “Register of Members” means the Register of Members
referred to in these Bye-laws;

(o)           “Resident Representative” means any person appointed to
act as resident representative and includes any deputy or assistant resident
representative;

(p)           “Secretary” means the person appointed to perform any or
all the duties of secretary of the Company and includes any deputy or assistant
secretary; and

(q)           “Treasury Share” means a share of the Company that was or
is treated as having been acquired and held by the Company and has been held
continuously by the Company since it was so acquired and has not been
cancelled.

(2)           In these Bye-laws, where not inconsistent with the
context:

(a)           words denoting the plural number include the singular
number and vice versa;

(b)           words denoting the masculine gender include the feminine
gender;

(c)           words importing persons include companies, associations or
bodies of persons whether corporate or not;

(d)           the word:

(i)                                     “may” shall be construed as permissive;

(ii)                                  “shall” shall be construed as imperative; and

(e)                                  unless otherwise provided herein words or
expressions defined in the Act shall bear the same meaning in these Bye-laws.

(3)           Expressions referring to writing or written shall, unless
the contrary intention appears, include facsimile, printing, lithography,
photography and other modes of representing words in a visible form.

(4)           Headings used in these Bye-laws are for convenience only
and are not to be used or relied upon in the construction hereof.

BOARD OF DIRECTORS

2.               Board
of Directors

The business of the Company
shall be managed and conducted by the Board.

3.                 
Management of Company

(1)           In managing the business of the Company, the Board may
exercise all such powers of the Company as are not, by statute or by these
Bye-laws, required to be 

 2
 

exercised
by the Company in general meeting subject, nevertheless, to the provisions of
any statute, to these Bye-laws and to such directions as may be prescribed by
the Company in general meeting.

(2)           No regulation or alteration to these Bye-laws made by the
Company in general meeting shall invalidate any prior act of the Board which
would have been valid if that regulation or alteration had not been made.

(3)           The Board may procure that the Company pays all expenses
incurred in promoting and incorporating the Company.

4.               Power
to appoint managing director or chief executive officer

The Board may from time to
time appoint one or more Directors to the office of managing director or chief
executive officer of the Company who shall, subject to the control of the
Board, supervise and administer all of the general business and affairs of the
Company.

5.                 
Power  to appoint manager

The Board may appoint a
person to act as manager of the Company’s day to day business and may entrust
to and confer upon such manager such powers and duties as it deems appropriate
for the transaction or conduct of such business.

6.                 
Power to authorise specific actions

The Board may from time to
time and at any time authorise any company, firm, person or body of persons to
act on behalf of the Company for any specific purpose and in connection therewith
to execute any agreement, document or instrument on behalf of the Company.

7.                 
Power to appoint attorney

The Board may from time to
time and at any time by power of attorney appoint any company, firm, person or
body of persons, whether nominated directly or indirectly by the Board, to be
an attorney of the Company for such purposes and with such powers, authorities
and discretions (not exceeding those vested in or exercisable by the Board) and
for such period and subject to such conditions as it may think fit and any such
power of attorney may contain such provisions for the protection and
convenience of persons dealing with any such attorney as the Board may think
fit and may also authorise any such attorney to sub-delegate all or any of the
powers, authorities and discretions so vested in the attorney. Such attorney
may, if so authorised under the seal of the Company, execute any deed or
instrument under such attorney’s personal seal with the same effect as the
affixation of the seal of the Company.

8.                 
Power to delegate to a committee

The Board may delegate any
of its powers to a committee appointed by the Board that may consist partly or
entirely of non-Directors and every such committee shall conform to such
directions as the Board shall impose on them. The meetings and proceedings of
any such committee shall be governed by the provisions of these Bye-

 3
 

laws
regulating the meetings and proceedings of the Board, so far as the same are
applicable and are not superseded by directions imposed by the Board.

9.               Power
to appoint and dismiss employees

The Board may appoint,
suspend or remove any officer, manager, secretary, clerk, agent or employee of
the Company and may fix their remuneration and determine their duties.

10.        Power to
borrow and charge property

The Board may exercise all
the powers of the Company to borrow money and to mortgage or charge its
undertaking, property and uncalled capital, or any part thereof, and may issue
debentures, debenture stock and other securities whether outright or as security
for any debt, liability or obligation of the Company or any third party.

11.        Exercise
of power to purchase shares of or discontinue the Company

(1)           The Board may exercise all the powers of the Company to
purchase and acquire all or any part of its own shares in accordance with the
Act.

(2)           The Board may exercise all the powers of the Company to
discontinue the Company to a named country or jurisdiction outside Bermuda
pursuant to Section 132G of the Act.

12.          
Composition of Board of Directors

(1)           The Board shall consist of not less than nine (9) and
not more than sixteen (16) Directors (as determined by resolution of the Board
of Directors) or such number as the Members may from time to time determine.

(2)           The Directors shall be elected by the Members, except in
the case of casual vacancy, at the annual general meeting or a any special
general meeting called for that purpose and shall be divided by the Board of
Directors into three classes, designated Class I, Class II and
Class III as follows. Each class shall consist, as nearly as may be
possible, of one-third of the total number of Directors constituting the entire
Board of Directors. Each Director shall serve for a term ending on the date of
the third annual general meeting of shareholders next following the annual
general meeting at which such Director was elected, PROVIDED, that Directors
initially designated by the Board of Directors as Class III Directors
shall serve for an initial term ending on the date of the first annual general
meeting of Members next following the effectiveness of their designation as
Class III Directors, Directors initially designated by the Board of
Directors as Class II Directors shall serve for an initial term ending on
the date of the second annual general meeting of Members next following the
effectiveness of their designation as Class II Directors and Directors
initially designated by the Board of Directors as Class I Directors shall
serve for an initial term ending on the date of the third annual general meeting
of Members next following the effectiveness of their designation as
Class I Directors. Notwithstanding the foregoing, each Director shall hold
office until such Director’s successor shall have been duly elected and
qualified or until they are removed from office by the Members pursuant to
Bye-law 15 or their office is otherwise 

 4
 

vacated.
In the event of any change in the number of Directors, the Board of Directors
shall apportion any newly created directorships among, or reduce the number of
directorships in, such class or classes as shall equalize, as nearly as
possible, the number of directors in each class. In no event will a decrease in
the number of Directors shorten the term of any incumbent Director.

13.        Defects
in appointment of Directors

All acts done bona fide by
any meeting of the Board or by a committee of the Board or by any person acting
as a Director shall, notwithstanding that it be afterwards discovered that
there was some defect in the appointment of any Director or person acting as
aforesaid, or that they or any of them were disqualified, be as valid as if
every such person had been duly appointed and was qualified to be a Director.

14.          
Alternate Directors/Observers

There shall be no alternate
Directors and no Member or Director shall have a right to designate any person
to attend meetings of the Board or Board committees as a non-voting observer.

15.          
Removal of Directors

(1)           The Members may, at any annual general meeting convened
and held in accordance with these Bye-laws, remove a Director only for Cause by
the affirmative vote of Members holding at least a majority of the total
combined voting power of all of the issued and outstanding shares of the
Company after giving effect to any reduction in voting power required under
Bye-laws 51 and 52; PROVIDED, that the notice of any such meeting convened for
the purpose of removing a Director shall contain a statement of the intention
so to do and be served upon such Director not less than 14 days before the
meeting and at such meeting such Director shall be entitled to be heard on the
motion for such Director’s removal.

(2)           A vacancy on the Board created by the removal of a
Director under the provisions of Subparagraph (1) of this Bye-law may be
filled by the Members at the meeting at which such Director is removed and, in
the absence of such election or appointment, the Board may fill the vacancy. A
Director so elected shall hold office until the next annual general meeting or
until such Director’s office is otherwise vacated.

16.          
Other vacancies on the Board

(1)           The Board shall have the power from time to time and at
any time to appoint any person as a Director to fill a vacancy on the Board
occurring as the result of the death, disability, disqualification or
resignation of any Director or from an increase in the size of the Board of
Directors pursuant to subparagraph (1) of Bye-law 12(1). The Board shall
also have the power from time to time to fill any vacancy left unfilled at a
general meeting.

(2)           The Board may act notwithstanding any vacancy in its
number but, if and so long as its number is reduced below the number fixed by
these Bye-laws as the quorum necessary for the transaction of business at
meetings of the Board, the continuing 

 5
 

Directors
or Director may act for the purpose of summoning a general meeting of the
Company or preserving the assets of the Company.

(3)           The office of Director shall be vacated if the Director:

(a)           is removed from office pursuant to these Bye-laws or is
prohibited from being a Director by law;

(b)           is or becomes bankrupt or makes any arrangement or
composition with his creditors generally;

(c)           is or becomes disqualified, of unsound mind or dies;

(d)           resigns his or her office by notice in writing to the
Company.

17.        Notice
of meetings of the Board

(1)           The Chairman may, and the Chairman on the requisition of a
majority of the Directors then in office shall, at any time, summon a meeting
of the Board.

(2)           Notice of a meeting of the Board shall be deemed to be
duly given to a Director if it is given to such Director verbally in person or
by telephone or otherwise communicated or sent to such Director by post,
telecopier, facsimile, email or other mode of representing words in a legible
and non-transitory form at such Director’s last known address or any other
address given by such Director to the Company for this purpose.

18.          
Quorum at meetings of the Board

The quorum necessary for the
transaction of business at a meeting of the Board shall be a majority of the
Directors then in office present in person or represented by a duly authorized
representative appointed in accordance with the Act, provided that at least two
Directors are present in person.

19.          
Meetings of the Board

(1)           The Board may meet for the transaction of business,
adjourn and otherwise regulate its meetings as it sees fit.

(2)           Directors may participate in any meeting of the Board by
means of such telephone, electronic or other communication facilities as permit
all persons participating in the meeting to communicate with each other
simultaneously and instantaneously, and participation in such a meeting shall
constitute presence in person at such meeting.

(3)           A resolution put to the vote at a meeting of the Board
shall be carried by the affirmative votes of a majority of the votes cast and
in the case of an equality of votes the resolution shall fail.

20.          
Unanimous written resolutions

A resolution in writing
signed by all the Directors, which may be in counterparts, shall be as valid as
if it had been passed at a meeting of the Board duly called and constituted,
such resolution to be effective on the date on which the last Director signs
the resolution.

 6
 

 

21.          
Contracts and disclosure of Directors’ interests

(1)           Any Director, or any Director’s firm, partner or any
company with whom any Director is associated, may act in a professional
capacity for the Company and such Director or such Director’s firm, partner or
such company shall be entitled to remuneration for professional services as if
such Director were not a Director, PROVIDED, that nothing herein contained
shall authorise a Director or Director’s firm, partner or such company to act
as Auditor of the Company.

(2)           A Director who is directly or indirectly interested in a
contract or proposed contract or arrangement with the Company shall declare the
nature of such interest as required by the Act.

(3)           Following a declaration being made pursuant to this
Bye-law, and unless disqualified by the chairman of the relevant Board meeting,
a Director may vote in respect of any contract or proposed contract or arrangement
in which such Director is interested and may be counted in the quorum at such
meeting.

22.        Remuneration
of Directors

The remuneration (if any) of
the Directors shall be determined by the Board and shall be deemed to accrue
from day to day. The Directors may also be paid all travel, hotel and other
expenses properly incurred by them in attending and returning from meetings of
the Board, any committee appointed by the Board, general meetings of the
Company or in connection with the business of the Company or their duties as
Directors generally.

OFFICERS

23.          
Officers of the Company

The Officers of the Company
may consist of any of the following officers: a Chairman, a Deputy Chairman, a
President, one or more Vice Presidents, a Secretary and such additional
Officers as the Board may from time to time determine, all of whom shall be
deemed to be Officers for the purposes of these Bye-laws.

24.        Appointment
of Officers

(1)           The Board shall, as soon as possible after each annual
general meeting, appoint a President and a Vice President or a Chairman and a
Deputy Chairman who shall be Directors.

(2)           The Secretary and additional Officers, if any, shall be
appointed by the Board from time to time.

25.        Remuneration
of Officers

The Officers shall receive
such remuneration as the Board may from time to time determine.

 7
 

 

26.          Duties
of Officers

The Officers shall have such
powers and perform such duties in the management, business and affairs of the
Company as may be delegated to them by the Board from time to time.

27.          Chairman
of meetings

Unless otherwise agreed by a
majority of those attending and entitled to attend and vote thereat, the
Chairman, if there be one, and if not the President shall act as chairman at
all meetings of the Members and of the Board at which such person is present.
In their absence, the Deputy Chairman or Vice President, if present, shall act
as chairman and in the absence of all of them a chairman shall be appointed or
elected by those present at the meeting and entitled to vote.

28             Register
of Directors and Officers

The Board shall cause to be
kept in one or more books at the registered office of the Company a Register of
Directors and Officers and shall enter therein the particulars required by the
Act.

MINUTES

29.          Obligations
of Board to keep minutes

(1)           The Board shall cause minutes to be duly entered in books
provided for the purpose:

(a)           of all elections and appointments of Officers;

(b)           of the names of the Directors present at each meeting of
the Board and of any committee appointed by the Board; and

(c)           of all resolutions and proceedings of general meetings of
the Members, meetings of the Board, meetings of managers and meetings of
committees appointed by the Board.

(2)           Minutes prepared in accordance with the Act and these
Bye-laws shall be kept by the Secretary at the registered office of the
Company.

INDEMNITY

30.          Indemnification
of Directors and Officers of the Company

(1)           The Directors, Secretary and other Officers (such term to
include, for the purposes of Bye-laws 30 and 31, any person appointed to any
committee by the Board) for the time being acting in relation to any of the
affairs of the Company and the liquidator or trustees (if any) for the time
being acting in relation to any of the affairs of the Company and every one of them,
and their heirs, executors and administrators (the “Indemnitees”), shall be
indemnified and secured harmless out of the assets of the Company from and
against all actions, costs, charges, losses, damages and expenses which they or
any of them, their heirs, executors or administrators, shall or may incur or
sustain by or by reason of any act done, concurred in or omitted in or about
the execution of their duty, or supposed duty, or in their respective offices
or trusts, and none of them shall be 

 8
 

answerable
for the acts, receipts, neglects or defaults of the others of them or for
joining in any receipts for the sake of conformity, or for any bankers or other
persons with whom any moneys or effects belonging to the Company shall or may
be lodged or deposited for safe custody, or for insufficiency or deficiency of
any security upon which any moneys of or belonging to the Company shall be
placed out on or invested, or for any other loss, misfortune or damage which
may happen in the execution of their respective offices or trusts, or in
relation thereto, PROVIDED, that this indemnity shall not extend to any matter
in which any of said persons is found, in a final judgment or decree not
subject to appeal, to have committed fraud or dishonesty.

(2)           The Company may advance moneys to the Indemnitees or any
of them for the costs, charges and expenses incurred by them in defending any
civil or criminal proceedings against them, on condition that any person to
whom such moneys are advanced shall repay the advance if any allegation of
fraud or dishonesty is proved against such person.

31.          Waiver
of claim by Member

Each Member agrees to waive
any claim or right of action such Member might have, whether individually or by
or in the right of the Company, against any Director or Officer on account of
any action taken by such Director or Officer, or the failure of such Director
or Officer to take any action, in the performance of his duties with or for the
Company, PROVIDED, that such waiver shall not extend to any matter in respect
of any fraud or dishonesty which may attach to such Director or Officer.

MEETINGS

32.          Notice
of annual general meeting

The annual general meeting
of the Company shall be held in each year at such time and place as the
President or the Chairman, or any two Directors or any Director and the
Secretary or the Board shall appoint. At least 20-days’ notice of such
meeting shall be given to each Member stating the date, place and time at which
the meeting is to be held, that the election of Directors will take place
thereat, and as far as practicable, the other business to be conducted at the
meeting.

33.          Notice
of special general meeting

The Chairman or the
President may convene a special general meeting of the Company whenever in
their judgment such a meeting is necessary, upon not less than five-days’
notice which shall state the date, time, place and the general nature of the
business to be considered at the meeting.

34.          Accidental
omission of notice of general meeting

The accidental omission to
give notice of a general meeting to, or the non-receipt of notice of a general
meeting by, any person entitled to receive notice shall not invalidate the
proceedings at that meeting.

 9
 

 

35.          Meeting
called on requisition of Members

Notwithstanding anything herein, the Board shall, on the requisition of
Members holding at the date of the deposit of the requisition shares
representing ten percent (10%) or more of the aggregate voting power of the
Company, forthwith proceed to convene a special general meeting of the Company
and the provisions of Section 74 of the Act shall apply.

36.          Short notice

A general meeting of the
Company shall, notwithstanding that it is called by shorter notice than that
specified in these Bye-laws, be deemed to have been properly called if it is so
agreed by (a) all the Members entitled to attend and vote thereat in the
case of an annual general meeting; and (b) by a majority in number of the
Members, which majority must hold 95% or more of the aggregate voting power of
the Company and having the right to attend and vote thereat, in the case of a
special general meeting.

37.          Postponement of meetings

The Secretary may postpone
any general meeting called in accordance with the provisions of these Bye-laws
(other than a meeting requisitioned under these Bye-laws) provided that notice
of postponement is given to each Member before the time for such meeting. Fresh
notice of the date, time and place for the postponed meeting shall be given to
each Member in accordance with the provisions of these Bye-laws.

38.          Quorum for general meeting

At the commencement of any
general meeting of the Company two or more persons present in person and
representing in person or by proxy shares representing more than fifty percent
(50%) of the aggregate voting power of the Company shall form a quorum for the
transaction of business, PROVIDED, that if the Company shall at any time have
only one Member, one Member present in person or by proxy shall form a quorum
for the transaction of business at any general meeting of the Company held
during such time. If within a reasonable period from the time appointed for the
meeting a quorum is not present, the meeting shall stand adjourned to the same
day one week later, at the same time and place or to such other day, time or
place as the Secretary may determine.

39.          Adjournment
of meetings

The chairman of a general
meeting may, with the consent of the Members at any general meeting at which a
quorum is present (and shall if so directed), adjourn the meeting. Unless the
meeting is adjourned to a specific date and time, fresh notice of the date,
time and place for the resumption of the adjourned meeting shall be given to
each Member in accordance with the provisions of these Bye-laws.

40.          Attendance
at meetings

Members may participate in
any general meeting by means of such telephone, electronic or other
communication facilities as permit all persons participating in the meeting to
communicate with each other simultaneously and instantaneously, and
participation in such a meeting shall constitute presence in person at such
meeting.

 10

 

41.          Written
resolutions

(1)  Subject to subparagraph (6) of this
Bye-law, anything which may be done by resolution of the Company in general
meeting or by resolution of a meeting of any class of the Members of the
Company, may, without a meeting and without any previous notice being required,
be done by resolution in writing signed by, or, in the case of a Member that is
a corporation whether or not a company within the meaning of the Act, on behalf
of, all the Members who at the date of the resolution would be entitled to
attend the meeting and vote on the resolution.

(2)  A resolution in writing may be signed by, or,
in the case of a Member that is a corporation whether or not a company within
the meaning of the Act, on behalf of, all the Members, or any class thereof, in
as many counterparts as may be necessary.

(3)  For the purposes of this Bye-law, the date of
the resolution is the date when the resolution is signed by, or, in the case of
a Member that is a corporation whether or not a company within the meaning of
the Act, on behalf of, the last Member to sign and any reference in any Bye-law
to the date of passing of a resolution is, in relation to a resolution made in
accordance with this Bye-law, a reference to such date.

(4)  A resolution in writing made in accordance
with this Bye-law is as valid as if it had been passed by the Company in
general meeting or by a meeting of the relevant class of Members, as the case
may be, and any reference in any Bye-law to a meeting at which a resolution is
passed or to Members voting in favor of a resolution shall be construed
accordingly.

(5)  A resolution in writing made in accordance
with this Bye-law shall constitute minutes for the purposes of Sections 81 and
82 of the Act.

(6)  This Bye-law shall not apply to:

(a)      a resolution passed
pursuant to Section 89(5) of the Act; or

(b)      a resolution passed for
the purpose of removing a Director before the expiration of his term of office
under these Bye-laws.

42.          Attendance
of Directors

The
Directors of the Company shall be entitled to receive notice of and to attend
and be heard at any general meeting.

43.          Voting
at meetings

(1)  Subject to the provisions of the Act and these
Bye-laws, any question proposed for the consideration of the Members at any
general meeting shall be decided by the affirmative votes of a majority of the
votes, in all cases as determined pursuant to Bye-laws 50-54, cast in
accordance with the provisions of these Bye-laws and in the case of an equality
of votes the resolution shall fail.

(2)  No Member shall be entitled to vote at any
general meeting unless such Member has paid all the calls on all shares held by
such Member.

 11
 

 

44.          Voting
on show of hands

At
any general meeting a resolution put to the vote of the meeting shall, in the
first instance, be voted upon by a show of hands, subject to any rights or
restrictions for the time being lawfully attached to any class of shares,
including the provisions of Bye-laws 50-54.

45.          Decision
of chairman

At
any general meeting a declaration by the chairman of the meeting that a
question proposed for consideration has, on a show of hands, been carried, or
carried unanimously, or by a particular majority, or lost, and an entry to that
effect in a book containing the minutes of the proceedings of the Company shall,
subject to the provisions of these Bye-laws, be conclusive evidence of that
fact.

46.          Demand
for a poll

(1)  Notwithstanding the provisions of the
immediately preceding two Bye-laws, at any general meeting of the Company, in
respect of any question proposed for the consideration of the Members (whether
before or on the declaration of the result of a show of hands as provided for
in these Bye-laws), a poll may be demanded by any of the following persons:

(a)      the chairman of such
meeting; or

(b)      at least three Members
present in person or represented by proxy; or

(c)      any Member or Members
present in person or represented by proxy and holding between them not less
than one-tenth of the total voting rights of all the Members having the right
to vote at such meeting; or

(d)      any Member or Members
present in person or represented by proxy holding shares in the Company
conferring the right to vote at such meeting, being shares on which an
aggregate sum has been paid up equal to not less than one-tenth of the total
sum paid up on all such shares conferring such right.

(2)  Where, in accordance with the provisions of
subparagraph (1) of this Bye-law, a poll is demanded, subject to any
rights or restrictions for the time being lawfully attached to any class of
shares, every person present at such meeting shall have for each voting share
of which such person is the holder or for which such person holds a proxy, the
number of votes determined pursuant to Bye-laws 50-54 and such votes
shall be counted in the manner set out in subparagraph (4) of this Bye-law
or in the case of a general meeting at which one or more Members are present by
telephone in such manner as the chairman of the meeting may direct. The result
of such poll shall be deemed to be the resolution of the meeting at which the
poll was demanded and shall replace any previous resolution upon the same
matter which has been the subject of a show of hands.

(3)  A poll demanded in accordance with the
provisions of subparagraph (1) of this Bye-law, for the purpose of electing
a chairman of the meeting or on a question of adjournment, shall be taken
forthwith and a poll demanded on any other question shall be taken in such
manner and at such time and place as the chairman of the meeting may

 12
 

 

direct
and any business other than that upon which a poll has been demanded may be
proceeded with pending the taking of the poll.

(4)  Where a vote is taken by poll, each person
present and entitled to vote shall be furnished with a ballot paper on which
such person shall record his or her vote in such manner as shall be determined
at the meeting having regard to the nature of the question on which the vote is
taken, and each ballot paper shall be signed or initialed or otherwise marked
so as to identify the voter and the registered holder in the case of a proxy.
At the conclusion of the poll, the ballot papers shall be examined and counted
by a committee of not less than two Members or proxy holders appointed by the
chairman for the purpose and the result of the poll shall be declared by the
chairman.

47.          Seniority
of joint holders voting

In
the case of joint holders the vote of the senior who tenders a vote, whether in
person or by proxy, shall be accepted to the exclusion of the votes of the
other joint holders, and for this purpose seniority shall be determined by the
order in which the names stand in the Register of Members.

48.          Instrument
of proxy

(1)  Every Member entitled to vote has the right to
do so either in person or by one or more persons authorised by a proxy executed
and delivered in accordance with these Bye-laws.

(2)  A person so authorised as a proxy shall be
entitled to exercise the same power on behalf of the grantor of the proxy as
the grantor could exercise at a general meeting of the Company.

(3)  The instrument appointing a proxy together
with such other evidence as to its due execution as the Board may from time to
time require shall be delivered at the registered office of the Company (or at
such place or places as may be specified in the notice convening the meeting or
in any notice of any postponement or adjournment or, in either case in any
document sent therewith), prior to the holding of the relevant meeting or
postponed or adjourned meeting at which the individual named in the instrument
proposes to vote and in default the instrument of proxy shall not be treated as
valid.

(4)  Instruments of proxy shall be in such form as
the Board may approve (including written or electronic form) and the Board may,
if it thinks fit, send out with the notice of any meeting forms of instruments
of proxy for use at the meeting. The instrument of proxy shall be deemed to
confer authority to demand or join in demanding a poll and to vote on any
amendment of a resolution put to the meeting for which it is given as the proxy
thinks fit. The instrument of proxy shall unless the contrary is stated therein
be valid as well for any postponement or adjournment of the meeting as for the
meeting to which it relates.

(5)  A vote given in accordance with the terms of
an instrument of proxy shall be valid notwithstanding the previous death or
unsoundness of mind of the principal, or revocation of the instrument of proxy
or of the authority under which it was executed.

 13
 

 

49.          Representation of corporations at
meetings

A
corporation which is a Member may, by written instrument, authorise such person
as it thinks fit to act as its representative at any meeting of the Members and
the person so authorised shall be entitled to exercise the same powers on
behalf of the corporation which such person represents as that corporation
could exercise if it were an individual Member. Notwithstanding the foregoing,
the chairman of the meeting may accept such assurances as he or she thinks fit
as to the right of any person to attend and vote at general meetings on behalf
of a corporation which is a Member.

VOTES OF MEMBERS

50.          General

Subject
to the provisions of Bye-laws 51-54 below, and subject to any rights and
restrictions for the time being attached to any class or classes of shares,
every Member shall have one vote for each share carrying the right to vote on
the matter in question of which he is the holder. Notwithstanding any other
provisions of these Bye-laws, all determinations in these Bye-laws that are
made by or subject to a vote or approval of Members shall be based upon the
voting power of such Members’ shares as determined pursuant to Bye-laws 51-54.

51.          Adjustment of voting power

The
voting power of all shares is hereby adjusted (and shall be automatically
adjusted in the future) to the extent necessary so that there is no 9.5% U.S.
Shareholder or 9.5% Direct Foreign Shareholder Group. The Board of Directors
shall implement the foregoing in the manner provided herein; PROVIDED, that the
foregoing provision and the remainder of this Bye-law 51 shall not apply in the
event that one Member of the Company owns greater than 75% of the issued and
outstanding shares of the Company.

(1)  The Board shall from time to time, including
prior to any time at which a vote of Members is taken, take all reasonable
steps, including those specified in Bye-law 54, necessary to ascertain, through
communications with Members or otherwise, whether there exists, or will exist
at the time any vote of Members is taken, a Tentative 9.5% U.S. Shareholder or
a Tentative 9.5% Direct Foreign Shareholder Group.

(a)    In the event that a
Tentative 9.5% U.S. Shareholder exists, the aggregate votes conferred by shares
held by a Member and treated as Controlled Shares of that Tentative 9.5% U.S.
Shareholder shall be reduced to the extent necessary such that the Controlled
Shares of the Tentative 9.5% U.S. Shareholder will constitute less than 9.5% of
the voting power of all shares. In applying the previous sentence where shares
held by more than one Member are treated as Controlled Shares of such Tentative
9.5% U.S. Shareholder, the reduction in votes shall apply to such Members in
descending order according to their respective Attribution Percentages,
PROVIDED, that in the event of a tie, the reduction shall apply first to the
Member whose shares are Controlled Shares of the Tentative 9.5% U.S.
Shareholder by virtue of the Tentative 9.5% U.S. Shareholder’s economic
interest in (as opposed to voting control with respect to) such shares. The
adjustments of voting power described in this Bye-law shall apply repeatedly
until there is no 9.5% U.S. Shareholder. The Board of Directors may deviate
from any of the principles described in this Bye-law

 14
 

 

and determine that shares held by a Member shall carry different voting
rights as it determines appropriate (1) to avoid the existence of any 9.5%
U.S. Shareholder or (2) to avoid adverse tax, legal or regulatory
consequences to the Company, any subsidiary of the Company, or any other Member
or its affiliates. For the avoidance of doubt, in applying the provisions of
Bye-laws 51-54, a share may carry a fraction of a vote.

“Attribution
Percentage” shall mean, with respect to a Member, the percentage of the Member’s
shares that are treated as Controlled Shares of a Tentative 9.5% Shareholder.

“Controlled
Shares” in reference to any person means all shares of the Company directly,
indirectly or constructively owned by such person as determined pursuant to
Section 958 of the Code.

“9.5%
U.S. Shareholder” means a “United States person” as defined in the Code (a “U.S.
Person”) whose Controlled Shares constitute nine and one-half percent (9.5%) or
more of the voting power of all shares of the Company and who would be
generally required to recognize income with respect to the Company under
Section 951(a)(1) of the Code, if the Company were a controlled
foreign corporation as defined in Section 957 of the Code and if the
ownership threshold under Section 951(b) of the Code were 9.5%.

“Tentative
9.5% U.S. Shareholder” means a U.S. Person that, but for adjustments to the
voting rights of shares pursuant to Bye-laws 51-52, would be a 9.5% U.S.
Shareholder.

(b)  Immediately after completing the adjustment of
voting power provided for in Bye-law 51(1)(a), in the event that a Tentative
9.5% Direct Foreign Shareholder Group exists, the aggregate votes conferred by
shares held by the Tentative 9.5% Direct Foreign Shareholder Group shall be
reduced to less than 9.5% of the voting power of all shares.

(c)  “9.5% Direct Foreign Shareholder Group” means
a shareholder that is not a U.S. Person or a group of commonly controlled
shareholders that are not U.S. Persons, in either case whose shares constitute
nine and one-half percent (9.5%) or more of the voting power of all shares of
the Company.

“Tentative
9.5% Direct Foreign Shareholder Group” means a shareholder that is not a U.S.
Person or a group of commonly controlled shareholders that are not U.S. Persons
that, but for adjustments to the voting rights of shares pursuant to Bye-laws
51-52, would be a 9.5% Direct Foreign Shareholder Group.

52.          Other adjustments of voting power

In
addition to the provisions of Bye-law 51, any shares shall not carry any right
to vote to the extent that the Board of Directors determines, in its sole
discretion, that it is necessary that such shares should not carry the right to
vote in order to avoid adverse tax, legal or regulatory consequences to the
Company, any subsidiary of the Company, or any other Member or its affiliates,
PROVIDED, that no adjustment pursuant to this sentence shall cause any person
to become a 9.5% U.S. Shareholder or a 9.5% Direct Foreign Shareholder Group.

 15
 

 

53.          Notice

Prior
to any date on which Members shall vote on any matter, the Board of Directors
shall (a) retain the services of an internationally recognized accounting
firm or organization with comparable professional capabilities in order to
assist the Company in applying the principles of Bye-laws 51-54,
(b) obtain from such firm or organization a statement describing the
information obtained and procedures followed and setting forth the
determinations made with respect to Bye-laws 51-54 and (c) notify
each Member of the voting power conferred by its shares determined in
accordance with Bye-laws 51-54.

54.          Requirement to provide
information and notice

(1)  The Directors shall have the authority to
request from any holder of shares, and such holder of shares shall provide,
such information as the Directors may reasonably request for the purpose of
determining whether any holder’s voting rights are to be adjusted. If such
holder fails to respond to such a request, or submits incomplete or inaccurate
information in response to such a request, the Directors may in their sole
discretion determine that such holder’s shares shall carry no voting rights in
which case such shares shall not carry any voting rights until otherwise
determined by the Directors in their absolute discretion.

(2)  Any holder of shares shall give notice to the
Company within ten days following the date that such holder acquires actual
knowledge that it is the owner of Controlled Shares that constitute 9.5% or
more of the voting power of all shares.

(3)  Notwithstanding the foregoing, no Member shall
be liable to any other Member or the Company for any losses or damages
resulting from such Member’s failure to respond to, or submission of incomplete
or inaccurate information in response to, a request under subparagraph
(1) of this Bye-law or from such Member’s failure to give notice under
subparagraph (2) of this Bye-law.

SHARE CAPITAL AND SHARES

55.          Rights of shares

(1)  Subject to any resolution of the Members to
the contrary and without prejudice to any special rights previously conferred
on the holders of any existing shares or class of shares, the share capital of
the Company shall consist of one class of common shares that carry voting
rights. The holders of shares shall, subject to the provisions of these
Bye-laws:

(a)      be entitled to such dividends as the Board
may from time to time declare;

(b)      in the event of a winding-up or
dissolution of the Company, whether voluntary or involuntary or for the purpose
of a reorganization or otherwise or upon any distribution of capital, be
entitled to the surplus assets of the Company; and

(c)      generally be entitled to enjoy all of the
rights attaching to shares.

(2)  All the rights attaching to a Treasury Share
shall be suspended and shall not be exercised by the Company while it holds
such Treasury Share and, except where required

 16
 

 

by
the Act, all Treasury Shares shall be excluded from the calculation of any
percentage or fraction of the share capital, or shares, of the Company.

56.          Power to issue shares

(1)  Subject to any restrictions that are provided
for in these Bye-laws from time to time and without prejudice to any special
rights previously conferred on the holders of any existing shares or class or
series of shares, the Board shall have power to issue any unissued shares of
the Company on such terms and conditions as it may determine and any shares or
class or series of shares may be issued with such preferred, deferred or other
special rights or such restrictions, whether in regard to dividend, voting,
return of capital or otherwise as the Board may determine. Further, the Board
may create and issue shares of a new class or series or of any existing class
or series of shares and the Board may generally exercise the powers of the
Company set out in sections 45(1)(b), (c), (d) and (e) of the Act,
without the need of any approval of the Members as might otherwise be required
by such sections of the Act. The Board may also issue options, warrants or
other rights to purchase or acquire shares or, subject to Section 43 of
the Act, securities convertible into or exchangeable for shares (including any
employee benefit plan providing for the issue of shares or options or rights in
respect thereof), at such times, for such consideration and on such terms and
conditions as it may determine.

(2)  The Board shall, in connection with the issue
of any share, have the power to authorise the Company to pay such commission
and brokerage as may be permitted by law.

(3)  Except as authorised by the Board and
permitted by applicable law, the Company shall not give, whether directly or
indirectly, whether by means of loan, guarantee, provision of security or
otherwise, any financial assistance for the purpose of a purchase or
subscription made or to be made by any person of or for any shares in the
Company, but nothing in this Bye-law shall prohibit transactions mentioned in
Sections 39A, 39B and 39C of the Act.

(4)  The Company may from time to time do any one or
more of the following things:

(a)  make arrangements on the issue of shares for a
difference between the Members in the amounts and times of payments of calls on
their shares;

(b)  accept from any Member the whole or a part of
the amount remaining unpaid on any shares held by him, although no part of that
amount has been called up;

(c)  pay dividends in proportion to the amount paid
up on each share where a larger amount is paid up on some shares than on
others; and

(d)  issue its shares in fractional denominations
and deal with such fractions to the same extent as its whole shares and shares
in fractional denominations shall have in proportion to the respective
fractions represented thereby all of the rights of whole shares including (but
without limiting the generality of the foregoing) the right to vote, to receive
dividends and distributions and to participate in a winding up.

 17
 

 

57.          Variation of rights, alteration
of share capital and purchase of shares of the Company

(1)    Subject to the provisions of Sections 42 and
43 of the Act any preference shares may be issued or converted into shares
that, at a determinable date or at the option of the Company, are liable to be
redeemed on such terms and in such manner as the Company before the issue or
conversion may by resolution of the Members determine.

(2)    If at any time the share capital is divided
into different classes of shares, the rights attached to any class (unless
otherwise provided by the terms of issue of the shares of that class) may,
whether or not the Company is being wound-up, be varied with the consent in
writing of the holders of three-fourths of the issued shares of that class or
with the sanction of a resolution passed by a majority of the votes cast at a
separate general meeting of the holders of the shares of the class in
accordance with Section 47 (7) of the Act. The rights conferred upon
the holders of the shares of any class issued with preferred or other rights
shall not, unless otherwise expressly provided by the terms of issue of the
shares of that class, be deemed to be varied by the creation or issue of
further shares ranking pari passu therewith.

(3)    The Company may from time to time by
resolution of the Members change the currency denomination of, increase, alter
or reduce its share capital in accordance with the provisions of Sections 45
and 46 of the Act. Where, on any alteration of share capital, fractions of
shares or some other difficulty would arise, the Board may deal with or resolve
the same in such manner as it thinks fit including, without limiting the
generality of the foregoing, the issue to Members, as appropriate, of fractions
of shares and/or arranging for the sale or transfer of the fractions of shares
of Members.

(4)    The Company may from time to time purchase
its own shares for cancellation or acquire them as Treasury Shares in
accordance with the Act on such terms as the Board shall think fit.

58.          Registered holder of shares

(1)    The Company shall be entitled to treat the
registered holder of any share as the absolute owner thereof and accordingly
shall not be bound to recognize any equitable or other claim to, or interest
in, such share on the part of any other person.

(2)    Any dividend, interest or other moneys
payable in cash in respect of shares may be paid by cheque or draft sent
through the post directed to the Member at such Member’s address in the
Register of Members or, in the case of joint holders, to such address of the
holder first named in the Register of Members, or to such person and to such
address as the holder or joint holders may in writing direct. If two or more
persons are registered as joint holders of any shares any one can give an
effectual receipt for any dividend paid in respect of such shares.

59.          Death of a joint holder

Where
two or more persons are registered as joint holders of a share or shares then
in the event of the death of any joint holder or holders the remaining joint
holder or holders shall be absolutely entitled to the said share or shares and
the Company shall recognize no claim in respect of the estate of any joint
holder except in the case of the last survivor of such joint holders.

 18
 

 

60.          Share certificates

(1)    Every Member shall be entitled to a
certificate under the seal of the Company (or a facsimile thereof) specifying
the number and, where appropriate, the class of shares held by such Member and
whether the same are fully paid up and, if not, how much has been paid thereon.
The Board may by resolution determine, either generally or in a particular
case, that any or all signatures on certificates may be printed thereon or
affixed by mechanical means.

(2)    The Company shall be under no obligation to
complete and deliver a share certificate unless specifically called upon to do
so by the person to whom such shares have been allotted.

(3)    If any such certificate shall be proved to
the satisfaction of any Officer to have been worn out, lost, mislaid or
destroyed the Officer may cause a new certificate to be issued and request an
indemnity for the lost certificate if it sees fit.

61.          Calls on shares

(1)    The Board may from time to time make such
calls as it thinks fit upon the Members in respect of any monies unpaid on the
shares allotted to or held by such Members and, if a call is not paid on or
before the day appointed for payment thereof, the Member may at the discretion
of the Board be liable to pay the Company interest on the amount of such call
at such rate as the Board may determine, from the date when such call was
payable up to the actual date of payment. The joint holders of a share shall be
jointly and severally liable to pay all calls in respect thereof.

(2)    The Board may, on the issue of shares,
differentiate between the holders as to the amount of calls to be paid and the
times of payment of such calls.

62.          Forfeiture of shares

(1)    If any Member fails to pay, on the day
appointed for payment thereof, any call in respect of any share allotted to or
held by such Member, the Board may, at any time thereafter during such time as
the call remains unpaid, direct the Secretary to forward to such Member a
notice in the form, or as near thereto as circumstances admit, of Form “A”
in the Schedule hereto.

(2)    If the requirements of such notice are not
complied with, any such share may at any time thereafter before the payment of
such call and the interest due in respect thereof be forfeited by a resolution
of the Board to that effect, and such share shall thereupon become the property
of the Company and may be disposed of as the Board shall determine.

(3)    A Member whose share or shares have been
forfeited as aforesaid shall, notwithstanding such forfeiture, be liable to pay
to the Company all calls owing on such share or shares at the time of the
forfeiture and all interest due thereon.

63.          Repurchase of shares

If
the Directors in their sole discretion determine that share ownership by any
person may result in a non-de minimis adverse tax, legal or regulatory
consequence to the Company, any subsidiary of the Company, or any other holder
of shares or its Affiliates (including if such consequence arises as a result
of any such U.S. Person owning

 19
 

 

Controlled
Shares that constitute 9.5% or more of the value of the Company or the voting
shares of the Company (but subject to the provisions of Bye-laws 50 - 54)), the
Company will have the option but not the obligation to repurchase or assign to
a third party the right to purchase the minimum number of shares held by such
person which is necessary to eliminate such non-de minimis adverse tax, legal
or regulatory consequence at a price determined in the good faith discretion of
the Directors to represent such shares’ fair market value; PROVIDED, that
(a) if the shares are not traded on a securities exchange in or outside
the United States, the fair market value per share shall be determined by the
Directors without a minority discount but with an appropriate liquidity
discount, such value and liquidity discount, if any, as determined by the Board
of Directors, or (b) if the shares are traded on a securities exchange in
or outside the United States, the fair market value per share shall be
determined by the Directors based on the average of the last sales price per
share or if there is none, the average of the bid and asked price per share,
without a minority discount or a liquidity discount, in each case for the eight
business days prior to the repurchase date. If a Member disagrees with the
price so determined by the Board of Directors, the fair market value per share
and the liquidity discount, if any, will be determined by an independent
appraiser retained by the Company at its expense and reasonably acceptable to
such Member.

REGISTER OF MEMBERS

64.          Contents of Register of Members

The
Board shall cause to be kept in one or more books a Register of Members and
shall enter therein the particulars required by the Act.

65.          Inspection of Register of Members

The
Register of Members shall be open to inspection at the registered office of the
Company on every business day, subject to such reasonable restrictions as the
Board may impose, so that not less than two hours in each business day be
allowed for inspection. The Register of Members may, after notice has been
given by advertisement in an appointed newspaper to that effect, be closed for
any time or times not exceeding in the whole thirty days in each year.

66.          Determination of record dates

Notwithstanding
any other provision of these Bye-laws, the Board may fix any date as the record
date for:

(a)    determining the Members entitled to receive
any dividend; and

(b)    determining the Members entitled to receive
notice of and to vote at any general meeting of the Company.

TRANSFER OF SHARES

67.          Instrument of transfer

(1)    An instrument of transfer shall be in the
form or as near thereto as circumstances admit of Form “B” in the Schedule
hereto or in such other common form as the Board may accept. Such instrument of
transfer shall be signed by or on behalf of the transferor

 20

 

and
transferee provided that, in the case of a fully paid share, the Board may
accept the instrument signed by or on behalf of the transferor alone. The
transferor shall be deemed to remain the holder of such share until the same
has been transferred to the transferee in the Register of Members.

(2)    The Board may refuse to recognize any
instrument of transfer unless it is accompanied by the certificate in respect
of the shares to which it relates and by such other evidence as the Board may
reasonably require to show the right of the transferor to make the transfer.

68.          Restrictions on transfer

(1)    The Directors may decline to approve or
register any transfer of shares if it appears to the Directors, in their sole
and reasonable discretion, after taking into account, among other things, the
limitation on voting rights contained in these Bye-laws, that any non-de
minimis adverse tax, regulatory or legal consequence to the Company, any
subsidiary of the Company, or any other holder of shares or its Affiliates would
result from such transfer (including if such consequence arises as a result of
any such U.S. Person owning Controlled Shares that constitute 9.5% or more of
the value of the Company or the voting shares of the Company (but subject to
the provisions of Bye-laws 50 through 54)). The Directors shall have the
authority to request from any holder of shares, and such holder of shares shall
provide, such information as the Directors may reasonably request for the
purpose of determining whether any transfer should be permitted.

(2)    Subject to any applicable requirements of
the New York Stock Exchange, the Directors (a) may decline to approve or
to register any transfer of any share if a written opinion from counsel
acceptable to the Company shall not have been obtained to the effect that
registration of such shares under the U.S. Securities Act of 1933, as amended,
is not required and (b) shall decline to approve or to register any
transfer of any share if the transferee shall not have been approved by applicable
governmental authorities if such approval is required.

(3)    If the Board refuses to register a transfer
of any share the Secretary shall, within one month after the date on which the
transfer was lodged with the Company, send to the transferor and transferee
notice of the refusal.

(4)    The registration of transfers may be
suspended at such times and for such periods as the Directors may, in their
absolute discretion, from time to time determine, provided always that such
registration shall not be suspended for more than 45 days in any year.

69.          Transfers by joint holders

The
joint holders of any share or shares may transfer such share or shares to one
or more of such joint holders, and the surviving holder or holders of any share
or shares previously held by them jointly with a deceased Member may transfer
any such share to the executors or administrators of such deceased Member.

 21
 

 

TRANSMISSION
OF SHARES

70.          Representative of deceased Member

In
the case of the death of a Member, the survivor or survivors where the deceased
Member was a joint holder, and the legal personal representatives of the
deceased Member where the deceased Member was a sole holder, shall be the only
persons recognized by the Company as having any title to the deceased Member’s
interest in the shares. Nothing herein contained shall release the estate of a
deceased joint holder from any liability in respect of any share which had been
jointly held by such deceased Member with other persons. Subject to the
provisions of Section 52 of the Act, for the purpose of this Bye-law,
legal personal representative means the executor or administrator of a deceased
Member or such other person as the Board may in its absolute discretion decide
as being properly authorised to deal with the shares of a deceased Member.

71.          Registration on death or
bankruptcy

Any
person becoming entitled to a share in consequence of the death or bankruptcy
of any Member may be registered as a Member upon such evidence as the Board may
deem sufficient or may elect to nominate some person to be registered as a
transferee of such share, and in such case the person becoming entitled shall
execute in favor of such nominee an instrument of transfer in the form, or as
near thereto as circumstances admit, of Form ”C” in the Schedule hereto.
On the presentation thereof to the Board, accompanied by such evidence as the
Board may require to prove the title of the transferor, the transferee shall be
registered as a Member but the Board shall, in either case, have the same right
to decline or suspend registration as it would have had in the case of a
transfer of the share by that Member before such Member’s death or bankruptcy,
as the case may be.

DIVIDENDS
AND OTHER DISTRIBUTIONS

72.          Declaration of dividends by the
Board

The
Board may, subject to these Bye-laws and in accordance with Section 54 of
the Act, declare a dividend to be paid to the Members, in proportion to the
number of shares held by them, and such dividend may be paid in cash or wholly
or partly in specie in which case the Board may fix the value for distribution
in specie of any assets.

73.          Other distributions

The
Board may declare and make such other distributions (in cash or in specie) to
the Members as may be lawfully made out of the assets of the Company.

74.          Reserve fund

The
Board may from time to time before declaring a dividend set aside, out of the
surplus or profits of the Company, such sum as it thinks proper as a reserve to
be used to meet contingencies or for equalizing dividends or for any other
special purpose.

 22
 

 

75.          Deduction of Amounts due to the
Company

The
Board may deduct from the dividends or distributions payable to any Member all
monies due from such Member to the Company on account of calls or otherwise.

CERTAIN
SUBSIDIARIES

76.          Voting of subsidiary shares

Notwithstanding any other provision of these Bye-laws to
the contrary, if the Company is required or entitled to vote at a general
meeting of any direct subsidiary of the Company, the Directors shall refer the
subject matter of the vote, other than the appointment, removal and
remuneration of auditors, the approval of financial statements and any reports
thereon and the remuneration of directors, to the Members of the Company on a
poll (subject to Bye-laws 50-54) and seek authority from the Members for
the Company’s corporate representative or proxy to vote in favor of the
resolution proposed by the subsidiary. The Directors shall cause the Company’s
corporate representative or proxy to vote the Company’s shares in the
subsidiary pro rata to the votes received at the general meeting of the
Company, with votes for or against the directing resolution being taken,
respectively, as an instruction for the Company’s corporate representative or
proxy to vote the appropriate proportion of its shares for and the appropriate
proportion of its shares against the resolution proposed by the subsidiary.

77.          Bye-laws or articles of
association of certain subsidiaries

The Board in its discretion shall require that the Bye-laws
or Articles of Association of each subsidiary of the Company, organized under
the laws of a jurisdiction outside the United States of America, shall contain
provisions substantially similar to Bye-law 76. The Company shall enter into
agreements with each such subsidiary, as reasonably necessary, to effectuate or
implement this Bye-law.

CAPITALISATION

78.          Issue of bonus shares

(1)  The Board may
resolve to capitalize any part of the amount for the time being standing to the
credit of any of the Company’s share premium or other reserve accounts or to
the credit of the profit and loss account or otherwise available for
distribution by applying such sum in paying up unissued shares to be allotted
as fully paid bonus shares pro rata to the Members.

(2)  The Company may
capitalize any sum standing to the credit of a reserve account or sums
otherwise available for dividend or distribution by applying such amounts in
paying up in full partly paid shares of those Members who would have been
entitled to such sums if they were distributed by way of dividend or distribution.

ACCOUNTS
AND FINANCIAL STATEMENTS

79.          Records of account

The Board shall cause to be kept proper records of account
with respect to all transactions of the Company and in particular with respect
to:

(a)  all sums of money
received and expended by the Company and the matters in respect of which the
receipt and expenditure relates;

 23
 

 

(b)    all sales and purchases of goods by the
Company; and

(c)    the assets and liabilities of the Company.

Such
records of account shall be kept at the registered office of the Company or,
subject to Section 83 (2) of the Act, at such other place as the
Board thinks fit and shall be available for inspection by the Directors during
normal business hours.

80.          Financial year end

The
financial year end of the Company may be determined by resolution of the Board
and failing such resolution shall be 31st December in each year.

81.          Financial statements

Subject
to any rights to waive laying of accounts pursuant to Section 88 of the
Act, financial statements as required by the Act shall be laid before the
Members in general meeting.

AUDIT

82.          Appointment of Auditor

Subject
to Section 88 of the Act, at the annual general meeting or at a subsequent
special general meeting in each year, an independent representative of the
Members shall be appointed by them as Auditor. Any Auditor appointed by the
Members shall, prior to such appointment, have been appointed by the Audit
Committee. Such Auditor may not be a Member and no Director, Officer or
employee of the Company shall, during his or her continuance in office, be
eligible to act as an Auditor of the Company.

83.          Remuneration of Auditor

The
remuneration of the Auditor shall be fixed by the Audit Committee or in such
manner as the Members may determine.

84.          Vacation of office of Auditor

If
the office of Auditor becomes vacant by the resignation or death of the
Auditor, or by the Auditor becoming incapable of acting by reason of
disqualification, illness or other disability at a time when the Auditor’s
services are required, the Board shall, as soon as practicable, fill the
vacancy thereby created.

85.          Access to books of the Company

The
Auditor shall at all reasonable times have access to all books kept by the
Company and to all accounts and vouchers relating thereto, and the Auditor may
call on the Directors or Officers of the Company for any information in their
possession relating to the books or affairs of the Company.

86.          Report of the Auditor

(1)    Subject to any rights to waive laying of
accounts or appointment of an Auditor pursuant to Section 88 of the Act,
the accounts of the Company shall be audited at least once in every year.

 24
 

 

(2)    The financial statements provided for by
these Bye-laws shall be audited by the Auditor in accordance with generally
accepted auditing standards. The Auditor shall make a written report thereon in
accordance with generally accepted auditing standards and the report of the
Auditor shall be submitted to the Members in general meeting.

(3)    The generally accepted auditing standards
referred to in subparagraph (2) of this Bye-law may be those of a country
or jurisdiction other than Bermuda. If so, the financial statements and the
report of the Auditor must disclose this fact and name such country or
jurisdiction.

NOTICES

87.          Notices to Members of the Company

A
notice may be given by the Company to any Member either by delivering it to
such Member in person or by sending it to such Member’s address in the Register
of Members or to such other address given for the purpose. For the purposes of
this Bye-law, a notice may be sent by mail, courier service, cable, telex,
telecopier, facsimile, email or other mode of representing words in a legible
and non-transitory form.

88.          Notices to joint Members

Any
notice required to be given to a Member shall, with respect to any shares held
jointly by two or more persons, be given to whichever of such persons is named
first in the Register of Members and notice so given shall be sufficient notice
to all the holders of such shares.

89.          Service and delivery of notice

Any
notice shall be deemed to have been served at the time when the same would be
delivered in the ordinary course of transmission and, in proving such service,
it shall be sufficient to prove that the notice was properly addressed and
prepaid, if posted, and the time when it was posted, delivered to the courier
or to the cable company or transmitted by telex, facsimile or other method as
the case may be.

SEAL
OF THE COMPANY

90.          The seal

The
seal of the Company shall be in such form as the Board may from time to time
determine. The Board may adopt one or more duplicate seals for use in or
outside Bermuda.

91.          Manner in which seal is to be
affixed

The
seal of the Company shall not be affixed to any instrument except attested by
the signature of a Director and the Secretary or any two Directors, or any
person appointed by the Board for the purpose, PROVIDED, that any Director,
Officer or Resident Representative may affix the seal of the Company attested
by such Director, Officer or Resident Representative’s signature to any
authenticated copies of these Bye-laws, the incorporating documents of the
Company, the minutes of any meetings or any other documents required to be
authenticated by such Director, Officer or Resident Representative.

 25
 

 

WINDING-UP

92.          Winding-up/distribution by liquidator

If
the Company shall be wound up the liquidator may, with the sanction of a
resolution of the Members, divide amongst the Members in specie or in kind the
whole or any part of the assets of the Company (whether they shall consist of
property of the same kind or not) and may, for such purpose, set such value as
he or she deems fair upon any property to be divided as aforesaid and may
determine how such division shall be carried out as between the Members or
different classes of Members; PROVIDED THAT, each Member holding common shares
of the Company shall receive at least the pro rata portion (based on its
ownership of such shares) of any cash so distributed. The liquidator may, with
the like sanction, vest the whole or any part of such assets in trustees upon
such trusts for the benefit of the Members as the liquidator shall think fit,
but so that no Member shall be compelled to accept any shares or other
securities or assets whereon there is any liability.

ALTERATION
OF BYE-LAWS

93.          Alteration of Bye-laws

No
Bye-law shall be rescinded, altered or amended and no new Bye-law shall be made
until the same has been approved by a resolution of the Board and by a
resolution of the Members.

 26

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