Document:

Exhibit 10.1

10,000,000
shares

DECODE
GENETICS, INC.

Common
Stock, $0.001 par value

PLACEMENT AGENCY
AGREEMENT

July 13, 2006

LEHMAN BROTHERS INC.

THOMAS WEISEL PARTNERS LLC

c/o Lehman Brothers, Inc.

745 Seventh Avenue

New York, New York 10019

Ladies and Gentlemen:

deCODE genetics, Inc.,
a Delaware corporation (the “Company”),
proposes, subject to the terms and conditions stated herein, to issue and sell up
to 10,000,000 shares (the “Shares”) of the
Company’s common stock, par value $0.001 per share (the “Common Stock”)
to certain investors (collectively, the “Investors”).
The Company desires to engage Lehman Brothers Inc. and Thomas Weisel Partners
LLC (each, a “Placement Agent” and collectively,
the “Placement Agents”)
in connection with such issuance and sale. The Shares are more fully described
in the Registration Statement (as herein defined). As used in this Agreement:

(i)            “Applicable Time” means 4:30 p.m. (New
York City time) on the date of this Agreement;

(ii)           “Effective Date” means the date and time as
of which such registration statement, or the most recent post-effective
amendment thereto, if any, was declared effective by the Commission;

(iii)          “Issuer Free Writing Prospectus” means each “free
writing prospectus” (as defined in Rule 405 of the Rules and
Regulations) prepared by or on behalf of the Company or used or referred to by
the Company in connection with the offering of the Shares;

(iv)          “Preliminary Prospectus” means any
preliminary prospectus or prospectus subject to completion included in the
Registration Statement or filed with the Commission pursuant to Rule 424(b),
including any prospectus supplement included therein, under the Securities Act;

(v)           “Time of Sale Prospectus” means, as of the
Applicable Time, the most recent Preliminary Prospectus, together with each
Issuer Free Writing Prospectus filed or used by the Company on or before the
Applicable Time, other 

 

than a road show that is
an Issuer Free Writing Prospectus but is not required to be filed under Rule 433
of the Rules and Regulations.

(vi)          “Prospectus” means the final prospectus
relating to the Shares filed with the Commission pursuant to Rule 424(b) of
the Rules and Regulations including any prospectus supplement included
therein; and

(vii)         “Registration Statement” means such registration
statement (Registration No. 333-130128), as amended as of the
Effective Date, including any Preliminary Prospectus and all exhibits and
information deemed to be part of the registration statement.

Any reference to
any Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include any documents incorporated by reference therein pursuant to Form S-3
under the Securities Act as of the date of such Preliminary Prospectus or the
Prospectus, as the case may be. Any reference to the “most recent
Preliminary Prospectus” shall be deemed to refer to the latest
Preliminary Prospectus included in the Registration Statement or filed pursuant
to Rule 424(b) prior to or on the date hereof. Any reference to any
amendment or supplement to any Preliminary Prospectus or the Prospectus shall
be deemed to refer to and include any document filed under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”),
after the date of such Preliminary Prospectus or the Prospectus, as the case
may be, and before the date of such amendment or supplement and incorporated by
reference in such Preliminary Prospectus or the Prospectus, as the case may be;
and any reference to any amendment to the Registration Statement shall be
deemed to include any annual report of the Company on Form 10-K
filed with the Commission pursuant to Section 13(a) or 15(d) of
the Exchange Act after the Effective Date and before the date of such amendment
that is incorporated by reference in the Registration Statement.

1.        Representations, Warranties and Agreements of the Company.
The Company represents, warrants and agrees that:

(a)           A registration
statement on Form S-3 (Registration No. 333-130128)
relating to the Shares has (i) been prepared by the Company in conformity
with the requirements of the Securities Act of 1933, as amended (the “Securities Act”), and the rules and
regulations (the “Rules and Regulations”)
of the Securities and Exchange Commission (the “Commission”) thereunder; (ii) been filed with the
Commission under the Securities Act; and (iii) become effective under the
Securities Act. Copies of such registration statement and any amendment thereto
have been delivered by the Company to you.

(b)           The Commission has
not issued any order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus or suspending the effectiveness of the
Registration Statement, and no proceeding or examination for such purpose has
been instituted or threatened by the Commission.

(c)           (i) Each
document, if any, filed or to be filed pursuant to the Exchange Act and
incorporated by reference in the Time of Sale Prospectus or the Prospectus
complied 

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or will comply
when so filed in all material respects with the Exchange Act and the applicable
rules and regulations of the Commission thereunder, (ii) each part of
the Registration Statement, when such part became effective, did not contain,
and each such part, as amended or supplemented, if applicable, will not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, (iii) the Registration Statement as of the date hereof does
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading, (iv) the Registration Statement and the Prospectus comply,
and as amended or supplemented, if applicable, will comply in all material
respects with the Securities Act and the applicable rules and regulations
of the Commission thereunder, (v) the Time of Sale Prospectus does not,
and at the time of each sale of the Shares in connection with the offering when
the Prospectus is not yet available to prospective purchasers and at the
Closing Date (as defined in Section 3), the Time of Sale Prospectus, as
then amended or supplemented by the Company, if applicable, will not, contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, (vi) each broadly available
road show, if any, when considered together with the Time of Sale Prospectus,
does not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, (vii) the
Prospectus does not contain and, as amended or supplemented, if applicable,
will not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading and (viii) the
Prospectus does not contain and, as amended or supplemented, if applicable,
will not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that the
representations and warranties set forth in this paragraph do not apply to
statements or omissions in the Registration Statement, the Time of Sale
Prospectus or the Prospectus in the paragraph relating to the Placement Agents’
fees and reimbursement of expenses appearing under the caption “Plan of
Distribution”, which constitutes the only information concerning such Placement
Agents furnished to the Company in writing by or on behalf of the Placement
Agents expressly for use therein (the “Placement Agents’ Information”).

(d)           The Company is not
an “ineligible issuer” in connection with the offering pursuant to Rules 164,
405 and 433 under the Securities Act. Any free writing prospectus that the
Company is required to file pursuant to Rule 433(d) under the
Securities Act has been, or will be, filed with the Commission in accordance
with the requirements of the Securities Act and the applicable rules and
regulations of the Commission thereunder. Each free writing prospectus that the
Company has filed, or is required to file, pursuant to Rule 433(d) under
the Securities Act or that was prepared by or behalf of or used or referred to
by the Company complies or will comply in all material respects with the
requirements of the Securities Act and the applicable rules and regulations
of the Commission thereunder. Except for the electronic road shows each
furnished to you before first use, the Company has not prepared, used or
referred to, and will not, without your prior consent, prepare, use or refer
to, any free writing prospectus.

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(e)           The Company has been
duly incorporated, is validly existing as a corporation in good standing under
the laws of the jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as described in, the
Time of Sale Prospectus and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing would not
have a material adverse effect on the Company and its subsidiaries, taken as a
whole.

(f)            Each subsidiary of
the Company has been duly incorporated, is validly existing as a corporation in
good standing under the laws of the jurisdiction of its incorporation, has the
corporate power and authority to own its property and to conduct its business
as described in the Time of Sale Prospectus and is duly qualified to transact
business and is in good standing in each jurisdiction in which the conduct of
its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be
in good standing would not have a material adverse effect on the Company and
its subsidiaries, taken as a whole; all of the issued shares of capital stock
of each subsidiary of the Company have been duly and validly authorized and
issued, are fully paid and non-assessable and, except as disclosed in the Time of
Sale Prospectus, are owned directly by the Company, free and clear of all
liens, encumbrances, equities or claims.

(g)           This Agreement has
been duly authorized, executed and delivered by the Company.

(h)           The authorized
capital stock of the Company conforms as to legal matters to the description
thereof contained in the Time of Sale Prospectus and the Prospectus.

(i)            The shares of
Common Stock outstanding prior to the issuance of the Shares have been duly
authorized and are validly issued, fully paid and non-assessable.

(j)            The Shares have
been duly authorized and, upon payment and delivery, will be validly issued,
fully paid and non-assessable, and the issuance of such Shares will not be
subject to any preemptive or similar rights.

(k)           The execution and delivery
by the Company of, and the performance by the Company of its obligations under,
this Agreement will not contravene any provision of applicable law or the
certificate of incorporation or by-laws of the Company or any agreement or
other instrument binding upon the Company or any of its subsidiaries that is
material to the Company and its subsidiaries, taken as a whole, or any
judgment, order or decree of any governmental body, agency or court having
jurisdiction over the Company or any subsidiary, and no consent, approval,
authorization or order of, or qualification with, any governmental body or
agency is required for the performance by the Company of its obligations under
this Agreement or the offering of Shares as contemplated by the Prospectus, except
such as may be required by the securities or Blue Sky laws of the various
states of the United States of America or by the securities laws of other
applicable jurisdictions in connection with the offer and sale of the Shares.

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(l)            There has not
occurred any material adverse change, or any development involving a
prospective material adverse change, in the condition, financial or otherwise,
or in the earnings, business or operations of the Company and its subsidiaries,
taken as a whole, from that set forth in the Time of Sale Prospectus.

(m)          There are no legal or
governmental proceedings pending or threatened to which the Company or any of
its subsidiaries is a party or to which any of the properties of the Company or
any of its subsidiaries is subject (i) other than proceedings accurately
described in all material respects in the Time of Sale Prospectus and
proceedings that would not have a material adverse effect on the Company and
its subsidiaries, taken as a whole, or on the power or ability of the Company
to perform its obligations under this Agreement or to consummate the
transactions contemplated by the Time of Sale Prospectus or (ii) that are
required to be described in the Registration Statement or the Prospectus and
are not so described; and there are no statutes, regulations, contracts or
other documents that are required to be described in the Registration Statement
or the Prospectus or to be filed as exhibits to the Registration Statement that
are not described or filed as required.

(n)           Each preliminary
prospectus filed as part of the registration statement as originally filed or
as part of any amendment thereto, or filed pursuant to Rule 424 under the
Securities Act, complied when so filed in all material respects with the
Securities Act and the applicable rules and regulations of the Commission
thereunder.

(o)           The Company is not,
and after giving effect to the offering and sale of the Shares and the
application of the proceeds thereof as described in the Prospectus will not be,
required to register as an “investment company” as such term is defined in the
Investment Company Act of 1940, as amended.

(p)           The Company and its
subsidiaries (i) are in compliance with any and all applicable Icelandic
and United States federal, state and local laws and regulations relating to the
protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants (“Environmental Laws”), (ii) have received all permits,
licenses or other approvals required of them under applicable Environmental
Laws to conduct their respective businesses and (iii) are in compliance
with all terms and conditions of any such permit, license or approval, except
where such noncompliance with Environmental Laws, failure to receive required
permits, licenses or other approvals or failure to comply with the terms and
conditions of such permits, licenses or approvals would not, singly or in the
aggregate, have a material adverse effect on the Company and its subsidiaries,
taken as a whole.

(q)           There are no costs
or liabilities associated with Environmental Laws (including, without
limitation, any capital or operating expenditures required for clean-up,
closure of properties or compliance with Environmental Laws or any permit,
license or approval, any related constraints on operating activities and any
potential liabilities to third parties) which would, singly or in the
aggregate, have a material adverse effect on the Company and its subsidiaries,
taken as a whole.

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(r)            The Company and its
subsidiaries have good and marketable title in fee simple to all real property
and good and marketable title to all personal property owned by them which is
material to the business of the Company and its subsidiaries, in each case free
and clear of all liens, encumbrances and defects except such as are described
in the Time of Sale Prospectus or such as do not materially affect the value of
such property and do not interfere with the use made and proposed to be made of
such property by the Company and its subsidiaries; and any real property and
buildings held under lease by the Company and its subsidiaries are held by them
under valid, subsisting and enforceable leases with such exceptions as are not
material and do not interfere with the use made and proposed to be made of such
property and buildings by the Company and its subsidiaries, in each case except
as described in or contemplated by the Time of Sale Prospectus.

(s)           The Company and its
subsidiaries own or possess, or can acquire on reasonable terms, all material
patents, patent rights, licenses, inventions, copyrights, know-how (including
trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), trademarks, service marks and
trade names currently employed by them in connection with the business now
operated by them, and, except as disclosed in the Time of Sale Prospectus,
neither the Company nor any of its subsidiaries has received any notice of
infringement of or conflict with asserted rights of others with respect to any
of the foregoing which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in any material adverse
change in the condition, financial or otherwise, or in the earnings, business
or operations of the Company and its subsidiaries, taken as a whole. All
patents, patent rights, licenses, inventions, copyrights, know how (including
trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), trademarks, service marks and
trade names owned or possessed and currently employed by (i) the
subsidiaries of Islensk erfdagreining ehf. (including Encode ehf.), and (ii) MediChem
Life Sciences, Inc. (and its subsidiaries, (including Emerald
BioStructures, Inc.) are not material to the Company and its subsidiaries,
taken as a whole.

(t)            The Company and
each of its subsidiaries are insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are prudent
and customary in the businesses in which they are engaged; neither the Company
nor any such subsidiary has been refused any insurance coverage sought or
applied for; and neither the Company nor any such subsidiary has any reason to
believe that it will not be able to renew its existing insurance coverage as
and when such coverage expires or to obtain similar coverage from similar
insurers as may be necessary to continue its business at a cost that would not
materially and adversely affect the condition, financial or otherwise, or the
earnings, business or operations of the Company and its subsidiaries, taken as
a whole, except as described in or contemplated by the Time of Sale Prospectus.

(u)           The Company and its
subsidiaries possess all certificates, authorizations and permits issued by the
appropriate federal, state or foreign regulatory authorities necessary to
conduct their respective businesses, and neither the Company nor any such
subsidiary has received any notice of proceedings relating to the revocation or

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modification
of any such certificate, authorization or permit which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, would
result in a material adverse change in the condition, financial or otherwise,
or in the earnings, business or operations of the Company and its subsidiaries,
taken as a whole, except as described in or contemplated by the Time of Sale
Prospectus.

(v)           The Company and each
of its subsidiaries maintain a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management’s general or specific authorizations; (ii) transactions
are recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain asset
accountability; (iii) access to assets is permitted only in accordance
with management’s general or specific authorization; and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.

(w)          The Company and each
of its subsidiaries is in compliance with the Foreign Corrupt Practices Act of
1977 (the “FCPA”) and the Company
has no reason to believe that any of its officers, directors, employees or
agents have violated the provisions of the FCPA.

(x)            The operations of
the Company are and have been conducted at all times in compliance with
applicable financial recordkeeping and reporting requirements of the Currency
and Foreign Transactions Reporting Act of 1970, as amended, the money
laundering statutes of all jurisdictions, the rules and regulations
thereunder and any related or similar rules, regulations or guidelines, issued,
administered or enforced by any governmental agency (collectively, the “Money Laundering Laws”) and no action, suit
or proceeding by or before any court or governmental agency, authority or body
or any arbitrator involving the Company with respect to the Money Laundering
Laws is pending or, to the knowledge of the Company, threatened, except, in
each case, as would not reasonably be expected to materially and adversely
affect the condition, financial or otherwise, or the earnings, business or
operations of the Company and its subsidiaries, taken as a whole.

(y)           Neither the Company
nor, to the knowledge of the Company, any director, officer, agent, employee or
affiliate of the Company is currently subject to any U.S. sanctions
administered by the Office of Foreign Assets Control of the U.S. Treasury
Department (“OFAC”); and the
Company will not directly or indirectly use the proceeds of the offering, or
lend, contribute or otherwise make available such proceeds to any joint venture
partner or other person or entity, for the purpose of financing the activities
of any person currently subject to any U.S. sanctions administered by OFAC.

(z)            The Company has not
distributed and, prior to the later to occur of the Closing Date and completion
of the distribution of the Shares, will not distribute any offering material in
connection with the offering and sale of the Shares other than any Preliminary
Prospectus, the Prospectus, or any Issuer Free Writing Prospectus to which the
Placement Agent have consented in accordance with Section 1(c) or Section 4(a)(vi).

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(aa)         The Company has not
taken and will not take, directly or indirectly, any action designed to or that
has constituted or that could reasonably be expected to cause or result in the
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the shares of the Shares.

(bb)         Except as described
in the Time of Sale Prospectus, the Company has not sold, issued or distributed
any shares of Common Stock since January 18, 2006, including any sales
pursuant to Rule 144A under, or Regulation D or S of, the Securities Act,
other than shares issued pursuant to employee benefit plans, qualified stock
option plans or other employee compensation plans or pursuant to outstanding
options, rights or warrants.

(cc)         Deloitte and Touche
LLP, PricewaterhouseCoopers LLP and PricewaterhouseCoopers ehf, who have
certified certain financial statements of the Company and its subsidiaries, are
each independent public accountants with respect to the Company and its
subsidiaries as required by the Securities Act.

(dd)         No person has the
right to require the Company or any of its subsidiaries to register any
securities for sale under the Securities Act by reason of the filing of the
Registration Statement with the Commission or the issuance and sale of the
Shares.

Any certificate signed by any officer of the Company and delivered to
the Placement Agent or counsel for the Placement Agent in connection with the
offering of the Shares shall be deemed a representation and warranty by the
Company, as to matters covered thereby, to the Placement Agent.

2.        Placement of the Shares by the Placement Agents.  On the basis of the representations and
warranties and agreements of the Company contained in, and subject to the terms
and conditions of, this Agreement, the Placement Agents agree to act as the
Company’s exclusive placement agents in connection with the issuance and sale,
on a best efforts basis, by the Company of the Shares to the Investors. Upon the
occurrence of the Closing (as hereinafter defined), the Company shall pay to
the Placement Agents 6.0% of the proceeds received by the Company from the sale
of the Shares to all Investors.

3.        Delivery of and Payment for the Shares.  Concurrently with the execution and delivery
of this Agreement, the Company, the Placement Agents, and JPMorgan Chase Bank,
as escrow agent (the “Escrow Agent”),
shall enter into an Escrow Agreement substantially in the form of Exhibit A
attached hereto (the “Escrow Agreement”),
pursuant to which an escrow account will be established, at the Company’s
expense, for the benefit of the Company and the Investors (the “Escrow Account”). Prior to the Closing Date (as hereinafter
defined), each of the Investors will deposit in the Escrow Account an amount
equal to the price per Share as shown on the cover page of the Prospectus
multiplied by the number of Shares to be purchased by such Investor (such
amounts in the aggregate are herein referred to as the “Escrow Funds”).
At 9:00 a.m., New York City time, on July 18, 2006 or at such other
time on such other date as may be agreed upon by the Company and the Placement
Agent (such date is hereinafter referred to as the “Closing Date”),
the Escrow Agent will disburse the Escrow Funds from the Escrow Account to the
Company, the Placement Agent and the Escrow Agent as provided in the Escrow 

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Agreement, and the
Company shall deliver the Shares to the Investors, which delivery may be made
through the facilities of The Depository Trust Company. The closing of the sale
of the Shares to the Investors (the “Closing”) shall
take place at the offices of Davis Polk & Wardwell. All actions taken
at the Closing shall be deemed to have occurred simultaneously.

The Company shall register the shares in electronic
form and shall deliver the Shares to the Investors on the Closing Date, which
delivery may be made through the facilities of the Depository Trust Company.

4.        Further Agreements of the Company and the Placement Agents.
(a) The Company agrees:

(i)            To
prepare the Prospectus in a form approved by the Placement Agents and to file
such Prospectus pursuant to Rule 424(b) under the Securities Act not
later than the Commission’s close of business on the second business day
following the execution and delivery of this Agreement; to make no further
amendment or any supplement to the Registration Statement or the Prospectus
prior to the Closing Date except as provided herein; to advise the Placement
Agents, promptly after it receives notice thereof, of the time when any
amendment or supplement to the Registration Statement or the Prospectus has
been filed and to furnish the Placement Agents with copies thereof; to advise
the Placement Agents, promptly after it receives notice thereof, of the
issuance by the Commission of any stop order or of any order preventing or
suspending the use of the Prospectus or any Issuer Free Writing Prospectus, of
the suspension of the qualification of the Shares for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding or examination
for any such purpose or of any request by the Commission for the amending or
supplementing of the Registration Statement, the Prospectus or any Issuer Free
Writing Prospectus or for additional information; and, in the event of the
issuance of any stop order or of any order preventing or suspending the use of
the Prospectus or any Issuer Free Writing Prospectus or suspending any such
qualification, to use promptly its best efforts to obtain its withdrawal;

(ii)           To
furnish promptly to the Placement Agents and to counsel for the Placement
Agents a signed copy of the Registration Statement as originally filed with the
Commission, and each amendment thereto filed with the Commission, including all
consents and exhibits filed therewith;

(iii)          To
deliver promptly to the Placement Agents such number of the following documents
as the Placement Agents shall reasonably request:  (A) conformed copies of the Registration
Statement as originally filed with the Commission and each amendment thereto
(in each case excluding exhibits other than this Agreement and the computation
of per share earnings), (B) each Preliminary Prospectus, the Prospectus
and any amended or supplemented Prospectus, (C) each Issuer Free Writing
Prospectus and (D) any document incorporated by reference in any
Preliminary Prospectus or the Prospectus; and, if the delivery of a prospectus
is required at any time after the date hereof in connection with the offering
or sale of the Shares or any other securities relating thereto and if at such
time any events shall have occurred as a result of which the Prospectus as then
amended or supplemented would include an untrue statement of a 

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material fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made when such Prospectus is delivered, not misleading, or, if for any
other reason it shall be necessary to amend or supplement the Prospectus in
order to comply with the Securities Act, to notify the Placement Agents and, to
file such document and to prepare and furnish without charge to the Placement
Agents as many copies as the Placement Agents may from time to time reasonably
request of an amended or supplemented Prospectus that will correct such
statement or omission or effect such compliance;

(iv)          To
file promptly with the Commission any amendment or supplement to the
Registration Statement or the Prospectus that may, in the judgment of the
Company or the Placement Agents, be required by the Securities Act or requested
by the Commission;

(v)           Prior
to filing with the Commission on or before the Closing Date any amendment or
supplement to the Registration Statement or the Prospectus, any document
incorporated by reference in the Prospectus or any amendment to any document
incorporated by reference in the Prospectus, to furnish a copy thereof to the
Placement Agents and counsel for the Placement Agents and to not file any
amendment or supplement to which the Placement Agents reasonably object.

(vi)          Not
to make any offer relating to the Shares that would constitute an Issuer Free
Writing Prospectus without the prior written consent of the Placement Agents.

(vii)         To
retain in accordance with the Rules and Regulations all Issuer Free
Writing Prospectuses not required to be filed pursuant to the Rules and
Regulations; and if at any time after the date hereof any events shall have
occurred as a result of which any Issuer Free Writing Prospectus, as then
amended or supplemented, would conflict with the information in the
Registration Statement, the most recent Preliminary Prospectus or the
Prospectus or would include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading, or,
if for any other reason it shall be necessary to amend or supplement any Issuer
Free Writing Prospectus, to notify the Placement Agents and, upon their
request, to file such document and to prepare and furnish without charge to the
Placement Agents as many copies as the Placement Agents may from time to time
reasonably request of an amended or supplemented Issuer Free Writing Prospectus
that will correct such conflict, statement or omission or effect such
compliance;

(viii)        To
make generally available to the Company’s security holders and to you as soon
as practicable an earning statement of the Company and its subsidiaries
covering the twelve-month period ending September 30, 2007 that satisfies
the provisions of Section 11(a) of the Securities Act and the rules and
regulations of the Commission thereunder;

(ix)           Promptly
from time to time to take such action as the Placement Agents may reasonably
request to qualify the Shares for offering and sale under the securities 

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laws of such jurisdictions as the Placement Agents may request and to
comply with such laws so as to permit the continuance of sales and dealings
therein in such jurisdictions for as long as may be necessary to complete the
distribution of the Shares; provided that
in connection therewith the Company shall not be required to (i) qualify
as a foreign corporation in any jurisdiction in which it would not otherwise be
required to so qualify, (ii) file a general consent to service of process
in any such jurisdiction or (iii) subject itself to taxation in any
jurisdiction in which it would not otherwise be subject;

(x)            During
the period ending 90 days after the date of the Time of Sale Prospectus, not
to, without the prior written consent of Lehman Brothers Inc. on behalf of the
Placement Agents, (i) offer, pledge, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant to purchase, lend, or otherwise transfer or
dispose of, directly or indirectly, any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock or (ii) enter
into any swap or other arrangement that transfers to another, in whole or in part,
any of the economic consequences of ownership of the Common Stock, whether any
such transaction described in clause (i) or (ii) above is to be
settled by delivery of Common Stock or such other securities, in cash or
otherwise. The foregoing sentence shall not apply to (1) the Shares to be
sold hereunder or (2) transactions relating to shares of Common Stock or
other securities acquired in open market transactions after the completion of
the sale of Shares sold hereunder or (3) the issuance by the Company of
shares of Common Stock to be used in the context of strategic investments or
acquisitions or (4) (i) the issuance by the Company of shares of
Common Stock upon the exercise of an option or a warrant or the conversion of a
security outstanding on the date hereof; and (ii) the issuance by the
Company of shares or options to purchase shares of Common Stock, and the
issuance of shares upon the exercise of such options, that are eligible for
issuance under the Company’s 1996, 2002 and 2006 Equity Incentive Plans, as
amended, on the Closing Date (as defined in Section 3 hereof). Nothing
contained in this agreement shall be construed to prevent the Company from
filing with the Commission a universal shelf registration statement on Form S-3
from the 30th day after the date of the Time of Sale Prospectus; and

(xi)           To
apply the net proceeds from the sale of the Shares being sold by the Company as
set forth in the Prospectus.

(b)           Each
Placement Agent agrees that it shall not include any “issuer information” (as
defined in Rule 433) in any “free writing prospectus” (as defined in Rule 405)
used or referred to by such Placement Agent without the prior written consent
of the Company (any such issuer information with respect to whose use the
Company has given its written consent, “Permitted
Issuer Information”); provided
that (i) no such consent shall be required with respect to any such issuer
information contained in any document filed by the Company with the Commission
prior to the use of such free writing prospectus and (ii) “issuer
information,” as used in this Section 4(b), shall not be deemed to include
information prepared by or on behalf of a Placement Agent on the basis of or
derived from issuer information.

 11

5.        Expenses. The
Company agrees, whether or not the transactions contemplated in this Agreement
are consummated or this Agreement is terminated, to pay or cause to be paid all
expenses incident to the performance of its obligations under this Agreement,
including: (i) the fees, disbursements and expenses of the Company’s
counsel and the Company’s accountants in connection with the registration and
delivery of the Shares under the Securities Act and all other fees or expenses
in connection with the preparation and filing of the Registration Statement,
any preliminary prospectus, the Time of Sale Prospectus, the Prospectus, any
free writing prospectus prepared by or on behalf of, used by, or referred to by
the Company and amendments and supplements to any of the foregoing, including
the filing fees payable to the Commission relating to the Securities (within
the time required by Rule 456 (b)(1), if applicable), including all
printing costs associated therewith, and the mailing and delivering of copies
thereof to the Placement Agents, (ii) all costs and expenses related to
the transfer and delivery of the Shares to the Investors, including any
transfer or other taxes payable thereon, (iii) the cost of printing or
producing any Blue Sky or legal investment memorandum in connection with the
offer and sale of the Shares under state securities laws and all expenses in
connection with the qualification of the Shares for offer and sale under state
securities laws, including filing fees and the reasonable fees and disbursements
of counsel to the Placement Agents incurred in connection with such
qualification and in connection with the Blue Sky or legal investment
memorandum, (iv) all costs and expenses incident to listing the Shares on
the Nasdaq National Market, (v) the costs and charges of any transfer
agent, registrar or depositary, (vi) the costs and expenses of the Company
relating to investor presentations on any “road show” undertaken in connection
with the marketing of the offering of the Shares, including, without
limitation, expenses associated with the preparation or dissemination of any
electronic road show, expenses associated with the production of road show
slides and graphics, fees and expenses of any consultants engaged in connection
with the road show presentations with the prior approval of the Company, travel
and lodging expenses of the representatives and officers of the Company and any
such consultants, and the cost of any aircraft chartered in connection with the
road show, (vii) the reasonable costs and expenses of the Placement Agents
(including reasonable fees and expenses of counsel to the Placement Agents) in
connection with the transactions contemplated hereby, and (viii) all other
costs and expenses incident to the performance of the obligations of the
Company hereunder for which provision is not otherwise made in this Section.

6.        Conditions of Placement Agents’ Obligations. The respective
obligations of the Placement Agents hereunder are subject to the accuracy, when
made and on the Closing Date, of the representations and warranties of the
Company contained herein, to the performance by the Company of its obligations
hereunder, and to each of the following additional terms and conditions.

(a)   Subsequent to the execution and delivery of
this Agreement and prior to the Closing Date:

(i)    there shall not have occurred any
downgrading, nor shall any notice have been given of any intended or potential
downgrading or of any review for a possible change that does not indicate the
direction of the possible change, in the rating accorded to any of the Company’s
securities by any “nationally recognized statistical rating organization,” as
such term is defined for purposes of Rule 436(g)(2) under the
Securities Act; and

 12
 

 

(ii)   there shall not have occurred any change, or
any development involving a prospective change, in the condition, financial or
otherwise, or in the earnings, business or operations of the Company and its
subsidiaries, taken as a whole, from that set forth in the Time of Sale Prospectus
that, in your judgment, is material and adverse and that makes it, in your
judgment, impracticable to proceed with the completion of the sale of and
payment for the Shares on the terms and in the manner contemplated in the Time
of Sale Prospectus or the Prospectus.

(b)   The Placement Agents shall have received on
the Closing Date a certificate, dated the Closing Date, and signed by an
executive officer of the Company, to the effect set forth in Section 6(a)(i) above
and to the effect that the representations and warranties of the Company
contained in this Agreement are true and correct as of the Closing Date and
that the Company has complied with all of the agreements and satisfied all of
the conditions on its part to be performed or satisfied hereunder on or before
the Closing Date.

The
officer signing and delivering such certificate may rely upon the best of his
or her knowledge as to proceedings threatened.

(c)   The Placement Agents shall not have
discovered and disclosed to the Company on or prior to the Closing Date that
the Registration Statement, the Prospectus or the Time of Sale Prospectus, or
any amendment or supplement thereto, contains an untrue statement of a fact
which, in the opinion of Davis Polk & Wardwell, counsel for the Placement
Agents, is material or omits to state a fact which, in the opinion of such
counsel, is material and is required to be stated therein or is necessary to
make the statements therein not misleading.

(d)   All corporate proceedings and other legal matters
incident to the authorization, form and validity of this Agreement, the Shares,
the Registration Statement, the Prospectus and any Issuer Free Writing
Prospectus, and all other legal matters relating to this Agreement and the
transactions contemplated hereby shall be reasonably satisfactory in all
material respects to counsel for the Placement Agents, and the Company shall
have furnished to such counsel all documents and information that they may
reasonably request to enable them to pass upon such matters.

(e)   The Placement Agents shall have received on
the Closing Date an opinion of Stevens & Lee, P.C., U.S. counsel for
the Company, dated the Closing Date, to the effect set forth in Exhibit B
hereto.

(f)    The Placement Agents shall have received on
the Closing Date an opinion of Lögmenn Skolavordustig 12, Icelandic counsel for
the Company, dated the Closing Date to the effect set forth in Exhibit C
hereto.

(g)   The Placement Agents shall have received on
the Closing Date an opinion of Hamilton Brook Smith & Reynolds, P.C.,
U.S. Intellectual Property counsel for the Company, dated the Closing Date to
the effect set forth in Exhibit D hereto.

 13
 

 

(h)   The Placement Agents shall have received on
the Closing Date an opinion of Davis Polk & Wardwell, U.S. counsel for
the Placement Agents, dated the Closing Date to the effect set forth in Exhibit E
hereto.

(i)    The Placement Agents shall have received, on
each of the date hereof and the Closing Date, a letter dated the date hereof or
the Closing Date, as the case may be, in form and substance satisfactory to the
Placement Agents, from Deloitte & Touche LLP, PricewaterhouseCoopers
LLP and PricewaterhouseCoopers ehf, independent public accountants, containing
statements and information of the type ordinarily included in accountants’ “comfort
letters” to Placement Agents in connection with registered public offering with
respect to the financial statements and certain financial information contained
in the Registration Statement and the Prospectus; provided
that the letter delivered on the Closing Date shall use a “cut-off date” not
earlier than the date hereof.

(j)    The “lock-up” agreements, each substantially
in the form of Exhibit F hereto, between the Placement Agents and the
directors and executive officers of the Company listed in Schedule I, in
each case relating to sales and certain other dispositions of shares of Common
Stock or certain other securities of the Company, delivered to you on or before
the date hereof, shall be in full force and effect on the Closing Date.

(k)   The Shares shall have been approved for
quotation, subject to official notice of issuance, on the Nasdaq National
Market.

(l)    The
Placement Agents shall have received on the Closing Date an opinion of,
Marshall, Gerstein & Borun LLP. Intellectual Property counsel for the
Company, dated the Closing Date to the effect set forth in Exhibit G
hereto.

(m)  The Placement Agents shall have received on
the Closing Date an opinion of Heslin Rothenberg Farley & Mesiti, P.C.,
Intellectual Property counsel for the Company, dated the Closing Date to the
effect set forth in Exhibit H hereto.

All opinions,
letters, evidence and certificates mentioned above or elsewhere in this
Agreement shall be deemed to be in compliance with the provisions hereof only
if they are in form and substance 
reasonably satisfactory to counsel for the Placement Agents.

7.        Indemnity and
Contribution. (a) The Company agrees to indemnify and hold
harmless each Placement Agent and each person, if any, who controls any
Placement Agent within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or any amendment thereof, any preliminary prospectus, the Time of
Sale Prospectus, any issuer free writing prospectus as defined in Rule 433(h) under
the Securities Act (including, for avoidance of doubt, any broadly available
road show), any Company information that the Company has filed, or is required
to file, pursuant to Rule 433(d) of the Securities Act, or the
Prospectus or any amendment or supplement thereto, or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except insofar as
such losses, claims, damages or liabilities are caused by any such untrue
statement or omission or alleged untrue statement or omission based upon the
Placement Agents’ Information.

 14
 

 

(b)   Each Placement Agent agrees, severally and
not jointly, to indemnify and hold harmless the Company, its directors, its
officers who sign the Registration Statement and each person, if any, who
controls the Company within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act to the same extent as the
foregoing indemnity from the Company to such Placement Agent, but only with
reference to the Placement Agents’ Information.

(c)   In case any proceeding (including any
governmental investigation) shall be instituted involving any person in respect
of which indemnity may be sought pursuant to Section 7(a) or 7(b),
such person (the “indemnified party”)
shall promptly notify the person against whom such indemnity may be sought (the
“indemnifying party”) in writing. The
indemnifying party will be entitled to participate in such proceeding, and to
the extent that it may elect by written notice delivered to the indemnified
party promptly after receiving the aforesaid notice from such indemnified
party, to assume the defense thereof with counsel satisfactory to such
indemnified party. Whether or not the indemnifying party elects to participate
in such proceeding, it shall, upon request of the indemnified party, retain
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying party may designate in such
proceeding and shall pay the fees and disbursements of such counsel related to
such proceeding. In any such proceeding, any indemnified party shall have the
right to retain its own counsel, but the fees and expenses of such counsel
shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to the
retention of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them.
It is understood that the indemnifying party shall not, in respect of the legal
expenses of any indemnified party in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the fees and expenses of
more than one separate firm (in addition to any local counsel) for all such
indemnified parties and that all such fees and expenses shall be reimbursed as
they are incurred. Such firm shall be designated in writing by Lehman Brothers
Inc., in the case of parties indemnified pursuant to Section 7(a), and by
the Company, in the case of parties indemnified pursuant to Section 7(b).
The indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by
reason of such settlement or judgment. Notwithstanding the foregoing sentence,
if at any time an indemnified party shall have requested an indemnifying party
to reimburse the indemnified party for fees and expenses of counsel as
contemplated by the second and third sentences of this paragraph, the
indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying party shall not have
reimbursed the indemnified party in accordance with such request prior to the
date of such settlement. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could 

 15
 

have been sought
hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.

(d)   To the extent the indemnification provided
for in Section 7(a) or 7(b) is unavailable to an indemnified
party or insufficient in respect of any losses, claims, damages or liabilities referred
to therein, then each indemnifying party under such paragraph, in lieu of
indemnifying such indemnified party thereunder, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to reflect
the relative benefits received by the Company on the one hand and the Placement
Agents on the other hand from the offering of the Shares or (ii) if the
allocation provided by clause 7(d)(i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause 7(d)(ii) above but also the relative fault
of the Company on the one hand and of the Placement Agents on the other hand in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Placement Agents on the other hand in connection with the offering of
the Shares shall be deemed to be in the same respective proportions as the net
proceeds from the offering of the Shares (before deducting expenses) received
by the Company and the placement agency fees received by the Placement Agents,
in each case as set forth in the table on the cover of the Prospectus, bear to
the aggregate offering price of the Shares. The relative fault of the Company
on the one hand and the Placement Agents on the other hand shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company or by the
Placement Agents and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Placement Agents’ respective obligations to contribute pursuant to this Section 7
are several in proportion to the number of shares placed by it and not joint.

(e)   The Company and the Placement Agents agree
that it would not be just or equitable if contribution pursuant to this Section 7
were determined by pro rata allocation (even if the Placement Agents were
treated as one entity for such purpose) or by any other method of allocation
that does not take account of the equitable considerations referred to in Section 7(d).
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, no Placement Agent shall
be required to contribute any amount in excess of the amount by which the total
price at which the Shares placed by it and distributed to the public were
offered to the public exceeds the amount of any damages that such Placement
Agent has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) 

 16
 

shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 7 are not
exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.

(e)           The indemnity and contribution
provisions contained in this Section 7 and the representations, warranties
and other statements of the Company contained in this Agreement shall remain
operative and in full force and effect regardless of (i) any termination
of this Agreement, (ii) any investigation made by or on behalf of any
Placement Agent or any person controlling any Placement Agent or by or on
behalf of the Company, its officers or directors or any person controlling the
Company and (iii) delivery of and payment for any of the Shares.

8.          Termination. This
Agreement shall be subject to termination by notice given by you to the
Company, if (a) after the execution and delivery of this Agreement and
prior to the Closing Date (i) trading generally shall have been suspended
or materially limited on or by, as the case may be, any of the New York Stock
Exchange, the American Stock Exchange, the Nasdaq National Market, (ii) trading
of any securities of the Company shall have been suspended on any exchange or
in any over-the-counter market, (iii) a general moratorium on commercial
banking activities in New York or Iceland shall have been declared by
governmental authorities or (iv) there shall have occurred any outbreak or
escalation of hostilities or any change in financial markets or any calamity or
crisis that, in your judgment, is material and adverse and (b) in the case
of any of the events specified in clauses 8(a)(i) through 8(a)(iv), such
event, singly or together with any other such event, makes it, in your
judgment, impracticable to proceed with the completion of the sale of and
payment for the Shares on the terms and in the manner contemplated in the Time
of Sale Prospectus or the Prospectus.

9.          Research Analyst Independence. The Company acknowledges that
the Placement Agents’ research analysts and research departments are required
to be independent from their respective investment banking divisions and are
subject to certain regulations and internal policies, and that such Placement
Agent’s research analysts may hold views and make statements or investment
recommendations and/or publish research reports with respect to the Company
and/or the offering that differ from the views of their respective investment
banking divisions. The Company hereby waives and releases, to the fullest
extent permitted by law, any claims that the Company may have against the
Placement Agent with respect to any conflict of interest that may arise from the
fact that the views expressed by their independent research analysts and
research departments may be different from or inconsistent with the views or
advice communicated to the Company by such Placement Agent’s investment banking
divisions. The Company acknowledges that each of the Placement Agents is a full
service securities firm and as such from time to time, subject to applicable
securities laws, rules and regulations, may effect transactions for its
own account or the account of its customers and hold long or short positions in
debt or equity securities of the Company; provided,
however, that nothing in this Section 9 shall relieve the
Placement Agent of any responsibility or liability they may otherwise bear in
connection with activities in violation of applicable securities laws, rules and
regulations.

10.        No Fiduciary Duty. The Company acknowledges and agrees that
in connection with this offering, sale of the Shares or any other services the
Placement Agents may be deemed to be providing hereunder, notwithstanding any
preexisting relationship, advisory or otherwise, 

 17
 

between the
parties or any oral representations or assurances previously or subsequently
made by the Placement Agents: (i) no fiduciary or agency relationship
between the Company and any other person, on the one hand, and the Placement
Agents, on the other, exists; (ii) the Placement Agents are not acting as
advisors, expert or otherwise, to the Company, including, without limitation,
with respect to the determination of the public offering price of the Shares,
and such relationship between the Company, on the one hand, and the Placement
Agents, on the other, is entirely and solely commercial, based on arms-length
negotiations; any duties and obligations that the Placement Agents may have to
the Company shall be limited to those duties and obligations specifically
stated herein; and (iv) the Placement Agents and their respective
affiliates may have interests that differ from those of the Company. The
Company hereby waives any claims that the Company may have against the
Placement Agents with respect to any breach of fiduciary duty in connection
with the sale of the Shares.

11.        Notices, Etc. All
statements, requests, notices and agreements hereunder shall be in writing,
and:

(a)   if to the Placement Agents,
shall be delivered or sent by mail or facsimile transmission to Lehman Brothers
Inc., 745 Seventh Avenue, New York, New York 10019, Attention:  Keith Canton (Fax: 212-520-9328);
and

(b)   if to the Company, shall be
delivered or sent by mail or facsimile transmission to the address of the
Company set forth in the Registration Statement, Attention: Lance Thibault
(Fax: 781-466-8686).

Any such statements,
requests, notices or agreements shall take effect at the time of receipt
thereof. The Company shall be entitled to act and rely upon any request,
consent, notice or agreement given or made on behalf of the Placement Agent by
Lehman Brothers Inc.

12.      Persons Entitled to Benefit of Agreement.  This Agreement shall inure to the benefit of
and be binding upon the Placement Agents, the Company and their respective
successors. This Agreement and the terms and provisions hereof are for the sole
benefit of only those persons, except that (A) the representations,
warranties, indemnities and agreements of the Company contained in this
Agreement shall also be deemed to be for the benefit of the directors, officers
and employees of the Placement Agents and each person or persons, if any, who
control the Placement Agents within the meaning of Section 15 of the
Securities Act and (B) the indemnity agreement of the Placement Agents
contained in Section 7(b) of this Agreement shall be deemed to be for
the benefit of the directors of the Company, the officers of the Company who
have signed the Registration Statement and any person controlling the Company
within the meaning of Section 15 of the Securities Act. Nothing in this
Agreement is intended or shall be construed to give any person, other than the
persons referred to in this Section 12, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision
contained herein. The term “successors” as used in this Section 12 shall
not include any of the Investors.

13.      Survival. The
respective indemnities, representations, warranties and agreements of the
Company and the Placement Agents contained in this Agreement or made by or on
behalf of them, respectively, pursuant to this Agreement, shall survive the
delivery of and payment for the 

 18
 

Shares and shall
remain in full force and effect, regardless of any investigation made by or on
behalf of any of them or any person controlling any of them.

14.      Definition of the Term “Business Day”. For purposes of this
Agreement, “business day” means
each Monday, Tuesday, Wednesday, Thursday or Friday that is not a day on which
banking institutions in New York are generally authorized or obligated by law
or executive order to close.

15.      Governing Law. This
Agreement shall be governed by and construed in accordance with the laws of the
State of New York.

16.      Counterparts.  This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.

17.      Headings.  The headings herein are inserted for
convenience of reference only and are not intended to be part of, or to affect
the meaning or interpretation of, this Agreement.

 19
 

 

If the foregoing
correctly sets forth the agreement between the Company and the Placement
Agents, please indicate your acceptance in the space provided for that purpose
below.

	
  

  	
   

  	
   

  	
  Very truly yours,

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  DECODE GENETICS, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ KARI STEFANSSON

  
	
   

  	
   

  	
   

  	
   

  	
  Name: Kari Stefansson

  
	
   

  	
   

  	
   

  	
   

  	
  Title:
  President & CEO

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Accepted:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  LEHMAN BROTHERS INC.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ SEAN
  FITZGERALD

  	
   

  	
   

  	
   

  
	
   

  	
  Authorized Representative

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  THOMAS WEISEL PARTNERS LLC

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ BLAKE
  JORGENSEN

  	
   

  	
   

  	
   

  
	
   

  	
  Authorized Representative

  	
   

  	
   

  	
   

  
						

 

 20Exhibit 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.

 

 

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:

  	
   

  

 

 

 

SCHEDULE I

INVESTOR SCHEDULE

	
  Investor Name, Address

  and Telephone Number

  	
   

  	
  Number of Shares to 

  be Purchased

  	
   

  	
  Price Per Share

  	
   

  	
  Aggregate Price

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
										

 

 

 

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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