Exhibit 10.2


 


[English Translation of
Original Icelandic Language Document]


 


LEASE AGREEMENT


 


The undersigned parties, Festing
ehf., State Reg. No. 550903-4150, of Austurstraeti 17, Reykjavík,
(hereinafter referred to as the “Lessor”) and Íslensk erfðagreining ehf., State
Reg. No. 691295-3549, of Sturlugata 8, Reykjavik, (hereinafter referred to
as the “Lessee”) enter into the following Lease Agreement:


 


1.0.                            The leased property


 


1.1                                 The leased property is Sturlugata 8, Reykjavík with all
appurtenances.  More specifically, the
leased property is a research and office building with a total area of 15,228.6
square meters including two parking facilities situated on the site.


 


1.2                                 The leased property, on the
execution of this Lease Agreement, is owned by a subsidiary of the Lessee,
Vetrargardurinn ehf., State Reg. No. 581201-2490. Concurrently with the
execution of this Lease Agreement, Festing ehf. will buy the leased property
from Vetrargardurinn ehf. pursuant to a separate Purchase Agreement which
constitutes an integral part hereof.


 


1.3                                 The leased property is described in
further detail as follows in the Public Land Record System:


 


	
  Fixed
  No.

  	
   

  	
  Marking

  	
   

  	
  Use

  	
   

  	
  Constr. yr.

  	
   

  	
  Floor plan

  	
   

  
	
  225-6085

  	
   

  	
  01 0101

  	
   

  	
  Research and office

  	
   

  	
  2001

  	
   

  	
  15,228.6m2

  	
   

  
	
   

  	
   

  	
  02 0101

  	
   

  	
  Parking

  	
   

  	
  2001

  	
   

  	
  158.2m2

  	
   

  
	
   

  	
   

  	
  03 0101

  	
   

  	
  Parking

  	
   

  	
  2001

  	
   

  	
  0.0m2

  	
   

  
	
   

  	
   

  	
  04 0101

  	
   

  	
  Gas storage

  	
   

  	
   

  	
   

  	
  0.0m2

  	
   

  



 


	
  Land
  No.

  	
   

  	
  Use

  	
   

  	
  Size

  	
   

  	
  Geocode

  	
   

  
	
  189552

  	
   

  	
  Commerce and service site

  	
   

  	
  18,271.0 m2

  	
   

  	
  0000-01- 1633501

  	
   

  



 


2.0.                            Term of lease and
delivery of property


 


2.1.                              The term of the lease begins on 1 April 2005.
The Lease Agreement has a term of 15 years. In the event that the term of the
lease ends and the Lessee has not notified the Lessor that he does not intend
to renew the lease and no renegotiation has taken place in respect of the
property six months earlier, the Agreement of the parties will be automatically
extended on unchanged terms for successive periods of 5 years.


 


2.2.                              The leased property will be
delivered in its physical state as it is on the date of this Lease Agreement.


 


2.3.                              This Lease Agreement cannot be
terminated during the term of the lease.


 





















 


3.0.                            Condition, delivery
and alteration and maintenance of the leased property


 


3.1.                              The leased property is ready for use
as industrial premises, specially designed for the Lessee. The Lessee is
thoroughly familiar with the condition of the lease and has no comments.
Fixtures will become the property of the Lessor at the end of the term of the
lease, regardless of whether their cost is borne by the Lessor or Lessee.


 


3.2.                              All major alterations that the
Lessee intends to make in the premises during the term of the lease or its
equipment, apart from changes in the layout of rooms by means of light
partitions shall be made with the full consent of and in consultation with the
Lessor. All partitions and fixed interior fittings that the Lessee may install
will become the property of the Lessor without reimbursement. The premises
shall be returned with appurtenances, on the close of the lease period, washed
and cleaned and in a condition not worse than at the beginning of the lease
term, excluding normal wear and tear.


 


3.3.                              The Lessee undertakes to treat the
leased property well and to ensure that maintenance of the leased property
inside and outside is in good order. Failure to meet these obligations will
constitute default on the part of the Lessee.


 


3.4.                              The Lessee will assume
responsibility for all maintenance of the leased property, both the inner and
outer surface. The Lessee undertakes to deliver to the Lessor the leased
property in no worse condition at the end of the term of the lease, taking into
account, however, the normal use of the real estate and its increasing age.


 


4.0.                            Lease amount and
payment of rent together with operating cost


 


4.1.                              The agreed rent is ISK 21,420,000 –
twenty-one million four hundred and twenty thousand – per month, adjusted in
accordance with changes in the consumer price index from the base index of April 2005,
which is 241.5 points. The calculation of the rent is based on the capital
structure described in Section 4.3.


 


4.2                                 Rent shall be paid in advance for
three months each time. The due date of rent shall be the first business day of
each quarter, first on 1 April 2005. The place of payment of the rent is a
bank account specified by the Lessor. Penalty interest will accrue to unpaid
rent from the due date, with no specified final due date. The rent carries
value-added tax, which is added to the said amount.


 


4.3                                 The Lessee may submit the request
that rent falling due after 30 June 2007 should be paid in full or in part
in foreign currencies and/or unindexed Icelandic krónur. The Lessee shall
notify the Lessor of such wishes in writing no later than 15 May 2007 and
specify the wishes for the changed currency structure. The Lessee shall pay to
the Lessor all cost outlays of the change in currency structure of the rent,
where cost outlays refers to the cost incurred by the Lessor from changing the
currency of the capital used to fund the leased property. In the event that the
Lessor is unable to procure the currencies requested by the Lessee, the Lessor
and Lessee shall enter into a separate agreement on the details of the relative
proportions of the foreign currencies. In the event that the Lessee requests a
change in currency, the amount of


 


2





















 


the rent shall be based on the
financing costs of the Lessor based on the following capital structure,
regardless of the actual capital structure of the Lessor.


 


•                  80% loans


•                  20% equity ratio


 


Based on the above capital
structure, the following financing cost of the Lessor shall be assumed:


 


•                  One-month LIBOR/EURIBOR/REIBOR interest plus 1.85% margin to bank or
5.7% fixed index-linked interest in Icelandic krónur, indexed to the consumer
price index in April of 2005.


•                  15% discount rate for equity


 


Taking into account the above
criteria, rent shall be determined based on the interest rate two business days
prior to the due date of the rent pursuant to the above and based on the
exchange rate of currencies on the first business day of each quarter.


 


In the event of changes being
made in the criteria for the calculation of rent, such changes shall be laid
down in a separate annex to the Lease Agreement, specifying their proportional
division at each time and stating the time frame for which capital structure is
determined.


 


Rent shall be paid in the
currencies of which the rent is composed at any time.


 


4.4                                 The amount of the rent shall be
reviewed as of the due date 1 July 2010. No later than 10 June 2010
the Lessor shall notify the Lessee of the adjusted amount of the rent. The
adjustment in the amount of the rent shall reflect the cost of financing the
rented premises based on the credit terms current in the financial market and
the required rate of return on equity, taking into account the financial
position and results of the Lessee.


 


4.6                                 The Lessee will pay all the
operating costs and all taxes relating to the rented premises. Thus, the Lessee
shall pay for the use of water, electricity and heating costs in the rented
premises. The Lessee will also pay property tax and all other taxes relating to
the ownership of the leased property.


 


5.0.                            Sub-lease, right of
first refusal to lease or buy


 


5.1.                              The Lessee is permitted to sub-lease
the rented property in part to a third party without the consent of the Lessor,
provided that the sub-leasing does not in any way prejudice the obligations of
the Lessee under this Agreement.


 


5.2.                              The Lessee and companies within the
consolidation of the Lessee shall have the right of first refusal to the
leasing of the leased property following the end of the term of the lease.


 


5.3.                              The Lessee has the right of first
refusal to buy the leased property if the Lessor sells it during the term of
the lease. The Lessor shall invite the Lessee to exercise his right of first
refusal to buy if the Lessor has received an offer which he intends to accept.
The invitation to exercise the right of first refusal shall be submitted by
means of a written notice accompanied by an agreement containing all terms. The
Lessee then has 15 days from the time of delivery of the invitation to exercise
the right of first refusal to decide whether to exercise the right. If the
Lessee decides to exercise the right of first refusal, the Lessee shall have 30
days to finalise a purchase


 


3





















 


agreement and pay the purchase
price on the terms of the invitation to exercise the right of first refusal.


 


6.0.                            Insurance,
guarantees and special termination provisions


 


6.1.                              The Lessee undertakes to purchase
insurance from a recognised insurance company, which will cover glass in
windows, appurtenances and interior fittings against water damage, fire etc.
The Lessee will also purchase property owner’s insurance for the property
itself, as well as statutory fire insurance. The Lessor is not liable for any
damage to the property of the Lessee in the leased property resulting from
accidents such as water damage, fire, smoke, etc., unless and only if the
Lessor, or parties for which the Lessor is responsible, have caused the damage
in a culpable manner. The Lessee shall exercise care as regards fire in the
building and ensure that no risk is posed by electrical installations, motors
or other articles which are kept and used in the leased property. The Lessor
does not guarantee delivery of the leased property in a state which meets
regulatory fire prevention requirements in light of the activities conducted in
the building, except in the case of new constructions. The Lessee shall, at his
own cost, undertake all necessary fire prevention measures in the leased
property which the fire protection authorities may require as a result of any
alterations that the Lessee makes in the leased property following delivery.
The liability of the Lessor for any potential damage suffered by the Lessee is
in other respects subject to the general rules of tort.


 


7.0. General
provisions


 


7.1.                              This Lease Agreement is subject to
the provisions of the Rental Act No. 36/1994, with subsequent amendments,
as applicable, to the extent that the obligations and rights of the parties are
not otherwise laid down herein.


 


7.2.                              This Lease Agreement is made in two
identical copies, one copy to be held by each party.


 


7.3.                              In witness whereof, the Lessor and
the Lessee attach their signatures hereto in the presence of two witnesses.


 


7.4.                              This Agreement is effective as of 1.
April 2005.


 


Reykjavík, 29 March 2005


 


	
   

  	
  For Festing
  ehf.

  	
   

  	
  For Íslensk erfðagreining ehf.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Jóhann
  Halldórsson [sign]

  	
   

  	
   

  	
  Tómas Sigurðsson
  [sign.]

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Witnesses:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Ingvi Hrafn Oskarsson [sign]

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
								



 


4





















 


By its signature of this
Agreement, Íslandsbanki hf., as the holder of all mortgages secured by the
rented premises, confirms that the bank has reviewed the substance of the
Agreement and for its part consents that the rights of the Lessee pursuant to
this Lease Agreement precede the mortgages of Íslandsbanki in the order of
precedence of  secured rights, cf. Item
11 in Article 28 of Act No. 90/1991.


 


 


Reykjavík, 31 March 2005


 


5