Exhibit 10.2

July 14, 2006

deCODE genetics, Inc.
Sturlugata 8,
IS-101 Reykjavik
Iceland

Ladies and Gentlemen:

The undersigned entity sets forth on Schedule I hereto (the “Investor”) hereby
confirms and agrees with you as follows:

1.             This Purchase Agreement (this “Agreement”) is made as of the date
hereof between deCODE genetics, Inc., a Delaware corporation (the “Company”),
and the Investor that is a signatory to this Agreement.

2.             The Company has authorized the sale and issuance of up to
10,000,000 shares of common stock (the “Shares”) of the Company, par value
$0.001 per share (the “Common Stock”), to certain investors (the “Offering”), as
more fully described in that certain Placement Agency Agreement (the “Placement
Agency Agreement”) dated the date hereof by and between the Company and Lehman
Brothers Inc. and Thomas Weisel Partners, LLC (the “Placement Agents”), a copy
of which has been furnished to the Investor. All defined terms used herein and
not otherwise defined shall have the same meanings ascribed to such terms in the
Placement Agency Agreement.

3.             Subject to execution by the Company and the Placement Agents of
the Placement Agency Agreement, the Company and the Investor agree that the
Investor will purchase from the Company and the Company will issue and sell to
the Investor the number of shares of Common Stock set forth opposite the
Investor’s name on Schedule I hereto, at a purchase price of $5.00 per share,
pursuant to the Terms and Conditions for Purchase of Shares attached hereto as
Annex I and incorporated herein by reference as if fully set forth herein. The
Investor acknowledges that the Offering is not being underwritten by the
Placement Agents and that there is no minimum offering amount. Shares will be
credited to the Investor using customary book-entry procedures.

4.             The Investor confirms that it has received the Registration
Statement and the Prospectus, and has reviewed the Registration Statement and
the Prospectus before making its decision to purchase and invest in the Shares
pursuant to this Agreement. The Investor further confirms that it has had full
access to all other filings made by the Company with the Securities and Exchange
Commission, and that it was able to read, review, download and print each such
filing.

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Please confirm that the foregoing correctly sets forth the agreement between us
by signing in the space provided below for that purpose.

AGREED AND ACCEPTED:

 

 

 

 

Name of Investor:

 

 

 

 

By

 

 

 

Name:

 

 

Title:

 

DECODE GENETICS, INC.

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

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SCHEDULE I

INVESTOR SCHEDULE

Investor Name, Address
and Telephone Number

 

Number of Shares to 
be Purchased

 

Price Per Share

 

Aggregate Price

 

 

 

 

 

$

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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ANNEX I

TERMS AND CONDITIONS FOR PURCHASE OF SHARES

1.             Agreement to Sell and Purchase the Shares; Subscription Date.

1.1           Upon the terms and subject to the conditions hereinafter set
forth, at the Closing (as defined in Section 2 below), the Company will sell to
the Investor, and the Investor will purchase from the Company, the number of
shares of Common Stock set forth on Schedule I of this Agreement at the purchase
price set forth therein.

1.2           The Company may enter into agreements similar to this Agreement
with certain other investors (the “Other Investors”) and complete sales of
Shares to them. (Each Investor and the Other Investors hereinafter collectively
are referred to as the “Investors,” and this Agreement and the agreements
executed by the Other Investors are hereinafter collectively referred to as the
“Agreements”). The Company may accept or reject any one or more Agreements in
its sole discretion.

2.             Delivery of the Shares at Closing. The completion of the purchase
and sale of the Shares (the “Closing”) shall take place as provided in Section 3
of the Placement Agency Agreement and the Escrow Agreement.

The Company’s obligation to issue and sell the Shares to the Investor shall be
subject to the accuracy of the representations and warranties made by the
Investor and the fulfillment of those undertakings of the Investor to be
fulfilled prior to the Closing, including, but not limited to, delivery of
immediately available funds in an amount equal to the Purchase Price.

The Investor’s obligation to purchase the Shares shall be subject to the
condition that the Placement Agent shall not have (a) terminated the Placement
Agency Agreement pursuant to the terms thereof or (b) determined that the
conditions to closing in the Placement Agency Agreement have not been satisfied.

3.             Representations, Warranties and Covenants of the Company.

3.1           The Company hereby represents and warrants to the Investor that
this Agreement constitutes a valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors’ and contracting
parties’ rights generally and except as enforceability may be subject to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).

3.2  The representations, warranties and covenants of the Company set forth in
Section 1 of the Placement Agency Agreement may be relied upon by the Investor,
which shall be a third party beneficiary thereof.

3.3  The Company hereby covenants with the Investors that the Company shall,
prior to market open on the day following the date hereof, issue a press release
disclosing the material terms of the Offering.

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4.             Representations, Warranties and Covenants of the Investor.

4.1           The Investor represents and warrants that it has received the
Registration Statement and the Prospectus.

4.2           The Investor further represents and warrants to, and covenants
with, the Company that (i) the Investor has full right, power, authority and
capacity to enter into this Agreement and to consummate the transactions
contemplated hereby and has taken all necessary action to authorize the
execution, delivery and performance of this Agreement, and (ii) this Agreement
constitutes a valid and binding obligation of the Investor enforceable against
the Investor in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors’ and contracting parties’ rights generally and
except as enforceability may be subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).

4.3           The Investor represents and warrants to, and covenants with, the
Company that: (i) the Investor is knowledgeable, sophisticated and experienced
in making, and is qualified to make, decisions with respect to investments in
shares representing an investment decision like that involved in the purchase of
the Shares; and (ii) the Investor has, in connection with its decision to
purchase the number of Shares set forth on Schedule I to the Agreement, relied
solely upon the Registration Statement, the Prospectus, and any amendments or
supplements thereto and has not relied upon any information provided by the
Placement Agents in their capacity as Placement Agents for the Company.

4.4           The Investor understands that nothing in the Prospectus and any
supplement thereto, this Agreement or any other materials presented to the
Investor in connection with the purchase and sale of the Shares constitutes
legal, tax or investment advice. The Investor has consulted such legal, tax and
investment advisors as it, in its sole discretion, has deemed necessary or
appropriate in connection with its purchase of Shares.

4.5           From and after obtaining knowledge of the sale of the Shares
contemplated hereby, the Investor has not taken, and prior to the public
announcement of the transaction the Investor shall not take, any action that has
caused or will cause the Investor to have, directly or indirectly, sold or
agreed to sell any Common Stock, effected any short sale, whether or not against
the box, established any “put equivalent position” (as defined in
Rule 16a-1(h) under the Securities Exchange Act of 1934, as amended) with
respect to the Common Stock, granted any other right (including, without
limitation, any put or call option) with respect to the Common Stock or with
respect to any security that includes, relates to or derives any significant
part of its value from the Common Stock, whether or not, directly or indirectly,
in order to hedge its position in the Shares.

5.             Survival of Representations, Warranties and Agreements.
Notwithstanding any investigation made by any party to this Agreement, all
covenants, agreements, representations and warranties made by the Company and
the Investor herein shall survive the execution of this Agreement, the delivery
to the Investor of the Shares being purchased and the payment therefor.

6.             Notices. All notices, requests, consents and other communications
hereunder shall be in writing, shall be mailed (A) if within domestic United
States by first-class registered or certified airmail, or nationally recognized
overnight express courier, postage prepaid, or by facsimile, or (B) if delivered
from outside the United States, by International Federal Express or facsimile,
and shall be deemed given (i) if delivered by first-class registered or
certified mail domestic, three business days after so mailed, (ii) if delivered
by a nationally recognized overnight carrier, one business day after so mailed,
(iii) if

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delivered by International Federal Express, two business days after so mailed,
(iv) if delivered by facsimile, upon electronic confirmation of receipt and
shall be delivered as addressed as follows: (a) if to the Company, then as
provided in Section 11 of the Placement Agency Agreement; and (b) if to the
Investor, at its address on Schedule I hereto, or at such other address or
addresses as may have been furnished to the Company in writing.

7.             Changes. This Agreement may not be modified or amended except
pursuant to an instrument in writing signed by the Company and the Investor.

8.             Headings. The headings of the various sections of this Agreement
have been inserted for convenience or reference only and shall not be deemed to
be part of this Agreement.

9.             Severability. In case any provision contained in this Agreement
should be invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby.

10.           Governing Law. This Agreement shall be governed by, and construed
in accordance with, the internal laws of the State of New York, without giving
effect to the principles of conflicts of law.

11.           Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute one instrument, and shall become effective when
one or more counterparts have been signed by each party hereto and delivered to
the other parties.

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