Document:

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                                                                   EXHIBIT 10.33

                            STOCK PURCHASE AGREEMENT

     This Stock Purchase Agreement ("Agreement") is made effective as of June
30, 1999 by and between deCODE genetics, Inc., a Delaware corporation (the
"Company"), and each of the undersigned.

                              PRELIMINARY STATEMENT

     A.   Each of the undersigned wishes to purchase from the Company, and the
Company wishes to sell to each of the undersigned, the number of shares of the
Company's Series B Preferred Stock, par value US$0.001 per share ("Series B
Preferred Stock"), set forth opposite each of the undersigned's signature or
such other number as may be agreed upon by the undersigned and the Company (the
"Shares").

     B.   The parties wish to provide for the terms and conditions of the
purchase and sale of the Shares.

     NOW, THEREFORE, in consideration of the premises and the mutual promises
hereinafter set forth, the parties hereby agree as follows:

     1.   Sale and Purchase of Shares.

          (a) Upon the terms and subject to the conditions set forth in this
Agreement and upon the representations and warranties made herein, the Company
shall sell, grant, convey, assign, transfer and deliver to the undersigned, and
the undersigned shall purchase and acquire from the Company, the Shares. Upon
Closing under this Agreement, all of the Shares shall be fully paid and
nonassessable.

          (b) In exchange for issuance of the Shares, each of the undersigned
agrees to pay to the Company $7.50 per share (the "Purchase Price") on the
Closing Date (as defined below). The Purchase Price shall be payable by
certified or bank check or by wire transfer or other immediately available funds
to the Company to such bank accounts as designated by the Company in writing. It
is understood that such payment may come from the undersigned or its affiliates.

          (c) The closing of the sale to, and purchase by, the undersigned of
the Shares (the "Closing") shall occur at the offices of the Company on or
before July 31, 1999 or such other date as the parties shall mutually agree (the
"Closing Date").

          (d) At the Closing, the Company shall deliver to each of the
undersigned stock certificates representing the Shares, registered in the name
of each of the undersigned, against payment of the amount of the Purchase Price
as set forth above.

     2.   Representations and Warranties of Undersigned. By executing this
Agreement, each of the undersigned:

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          (a) acknowledges that it understands that as a condition to the
Company's sale of the Shares to the undersigned, the undersigned must become a
party to that certain Amended and Restated Investor Rights Agreement by and
among the Company and the other parties thereto (the "Investor Rights
Agreement"), dated as of February 2, 1998, a copy of which has been provided to
the undersigned, that execution of this Agreement shall constitute execution of
the Investor Rights Agreement, and that the Shares and the shares (the
"Conversion Shares") of Common Stock of the Company, par value US$0.001 per
share, issued upon conversion of the Shares may be transferred only in
accordance with the provisions of the Investor Rights Agreement;

          (b) represents and warrants that the undersigned is able to bear the
economic risk of losing the undersigned's entire investment in the Shares and
has such knowledge and experience in business and financial matters and with
respect to investments in securities to enable the undersigned to understand and
evaluate the risks of ownership of the Shares and to form an investment decision
with respect thereto;

          (c) acknowledges that a copy of the Amended and Restated Certificate
of Incorporation of the Company (the "Certificate of Incorporation") which
describes the relative rights and preferences of the Series B Preferred Stock
has been provided to it and that all material documents, records and books
pertaining to this investment have, on request, been made available to the
undersigned's advisors and the undersigned;

          (d) acknowledges that the Company has made available to the
undersigned and the undersigned's representatives the opportunity to ask
questions of, and receive answers from, the Company concerning the Company and
the transaction contemplated hereby;

          (e) represents and warrants that the undersigned received, executed
and deposited for delivery to the Company this Agreement at the address set
forth on the signature page below;

          (f) represents and warrants that the undersigned is not a "U.S.
person," as such term is defined in Regulation S ("Regulation S") promulgated
pursuant to the Securities Act of 1933, as amended (the "Securities Act"), a
copy of which definition has been provided to the undersigned, is not purchasing
the Shares for the account or benefit of a "U.S. person" and if the undersigned
is other than an individual, that the undersigned was not formed by a "U.S.
person" principally for the purpose of investing in securities not registered
under the Securities Act;

          (g) understands that the Shares and the Conversion Shares are subject
to substantial restrictions on transfer in the United States and to "U.S.
persons" and that, except as set forth in the Investor Rights Agreement, the
Company has no obligation to take any action to make such transfers possible;

          (h) agrees that the undersigned will resell the Shares and Conversion
Shares only in accordance with the provisions of Regulation S, or pursuant to
registration under the Securities Act or to an exemption therefrom, and will not
engage in hedging transactions with regard to the Shares and Conversions Shares
unless in compliance with the Securities Act. Furthermore, the

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undersigned agrees that the Company shall refuse to register any transfer of the
Shares or Conversion Shares not made in accordance with the provisions of this
subsection 2(h); and

          (i) acknowledges that, if the undersigned is purchasing the Shares
subscribed for hereby in a fiduciary capacity, the above representations and
warranties in this Section 2 shall be deemed to have been made on behalf of the
person or persons for whom the undersigned is so purchasing.

     3.   Indemnification. The undersigned acknowledges that the undersigned
understands the meaning of the representations made by the undersigned in this
Agreement and that the Company will rely upon the truth and accuracy of such
representations. The undersigned hereby agrees to indemnify and hold harmless
the Company and all persons deemed to be in control of the Company from and
against any and all claims, actions, loss, costs, expenses, damages and
liabilities (including, without limitation, court costs and attorneys' fees)
arising out of or due to a breach by the undersigned of any such
representations. All representations shall survive the delivery of this Stock
Purchase Agreement and the purchase by the undersigned of any Shares.

     4.   Restrictions on Transfer. The undersigned hereby agrees with the
Company as follows:

          (a) In addition to the restrictions on transfer imposed by the
Investor Rights Agreement, the undersigned will not transfer the Shares or the
Conversion Shares, or any of them, in the United States or to a "U.S. person"
unless registered under the Securities Act or unless the Company has received an
opinion of counsel satisfactory to the Company and its counsel that such
registration is not required.

          (b) In addition to the legend set forth in Section 2.1(b) of the
Investor Rights Agreement, the certificates evidencing the Shares that the
undersigned has agreed to purchase and the Conversion Shares, and each
certificate issued in transfer thereof, will bear legends substantially as
follows:

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "1933 ACT") OR THE SECURITIES ACT OF ANY STATE AND
THEY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED
UNLESS AND UNTIL REGISTERED UNDER THE 1933 ACT AND APPLICABLE STATE SECURITIES
ACTS OR, IN THE OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE
ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR
HYPOTHECATION IS PURSUANT TO AN AVAILABLE EXEMPTION FROM SUCH REGISTRATION OR IS
IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S UNDER THE ACT. HEDGING
TRANSACTIONS INVOLVING THESE SECURITIES MAY NOT BE CONDUCTED UNLESS IN
COMPLIANCE WITH THE ACT.

     5.   Pre-Closing Covenants. Prior to the Closing, the Company hereby
covenants and agrees to:

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          (a) Obtain the consent of its Board of Directors to the transactions
contemplated hereby;

          (b) Obtain the consent of its stockholders and all other required
consents or approvals of third parties to the transactions contemplated hereby;

          (c) File an amendment to the Certificate of Incorporation with the
Secretary of State of Delaware which increases the number of authorized shares
of Series B Preferred Stock from 5,000,000 to 1,000,000; and

          (d) Take all other actions which are necessary or proper in connection
with the transactions contemplated hereby.

     6.   Conditions to Closing. The obligation of the undersigned to purchase
the Shares shall be conditioned on the Company's performance of each of the
covenants set forth in Section 5 hereof. If at the Closing any of such covenants
shall not have been fulfilled to the reasonable satisfaction of any the
undersigned, such undersigned, at its election, shall be relieved of all further
obligations under this Agreement.

     7.   Miscellaneous.

          (a) Should any one or more of the provisions of this Agreement be
determined to be illegal or unenforceable, all other provisions of this
Agreement shall be given effect separately from the provision or provisions
determined to be illegal or unenforceable and shall not be affected thereby.

          (b) The internal substantive laws, without regard to the laws of
conflicts, of the State of Delaware shall govern this Agreement. The parties
hereto hereby irrevocably submit to the exclusive jurisdiction of any Delaware
state or federal court sitting in the State of Delaware, for any action or
proceeding arising out of or related to this Agreement, and the parties hereto
hereby irrevocably agree that all claims in respect of any such action or
proceeding may be heard and determined in Delaware state court or, to the extent
permitted by law, in such federal court. The parties hereto hereby irrevocably
waive, to the fullest extent they may effectively do so, the defense of an
inconvenient forum to the maintenance of any such action or proceeding.

          (c) This Agreement constitutes the entire agreement between the
parties hereto pertaining to the subject matter hereof and supersedes any and
all prior or contemporaneous agreements or understandings of the parties
relating to the subject matter hereof. All such agreements shall terminate and
be of no further force or effect.

          (d) This Agreement may be executed in any number of counterparts and
by different parties hereto in separate counterparts, with the same effect as if
all parties had signed the same document. All such counterparts shall be deemed
an original, shall be construed together and shall constitute one and the same
instrument.

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     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed on their behalf.

                                      deCODE genetics, Inc.

                                       By:    /S/ Kari Stefansson
                                             ---------------------------
                                             Kari Stefansson, President

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                                 SIGNATURE PAGE
                                       TO
                            STOCK PURCHASE AGREEMENT
                                       AND
                            INVESTOR RIGHTS AGREEMENT

                                   PURCHASER:

                                   By:    /s/ Yves Schmit   /s/ Carine Bittler
                                        ---------------------------------------

                                   Name:  Biotek Invest S.A.

                                   Title: Director

                                   Date: June 30, 1999

                                   Address: 41 Avenue de La Gare
                                            L-1611 Luxemburg

                                   Number of Shares Being Purchased:   5,000,000

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                              DECODE GENETICS, INC.

                      ADDENDUM TO STOCK PURCHASE AGREEMENT

     This Addendum to Stock Purchase Agreement (this "Addendum"), is made as of
February 24, 2000 (the "Effective Date") by and between deCODE genetics, Inc., a
Delaware corporation (the "Company"), and Biotek Invest, S.A. (the "Purchaser").

                             PRELIMINARY STATEMENTS

     A.   On June 30, 1999 the Company and the Purchaser entered into a Stock
Purchase Agreement pursuant to which the Purchaser agreed to purchase from the
Company 5,000,000 shares (the "Series B Shares") of the Company's Series B
Preferred Stock (the "Series B") at a price (the "Original Purchase Price") of
US$7.50 per share.

     B.   Contemporaneously with the execution of the Stock Purchase Agreement,
the Company and the Purchaser entered into an oral agreement pursuant to which
they agreed that the Original Purchase Price would be increased to $15.00 per
share (the "Adjusted Purchase Price"), with the amount in excess of the Original
Purchase Price (the "Contingent Payment") to be payable only if the Purchaser
were able to sell at least 50% of the Series B Shares at or above the Adjusted
Purchase Price and if the trading price in the Icelandic market, as determined
by agreement of the parties, remained at or above the Adjusted Purchase Price
from the time of such resale to the end of 1999.

     C.   The Company and the Purchaser further agreed that if the Contingent
Payment became payable, the Company would pay the Purchaser a commission of 7%
on the aggregate Adjusted Purchase Price and the Purchaser would pay the Company
interest at the rate of 6% per annum on the Contingent Payment from the date of
closing of the transaction under the Stock Purchase Agreement (the "Closing
Date"), to the date of payment of the Contingent Payment.

     D.   On August 8, 1999, the Closing Date, the Purchaser advised the Company
that it had arranged for the sale of at least 50% of the Series B Shares at a
price of $15.00.

     E.   On December 28, 1999, the Company and the Purchaser agreed that the
trading price in the Icelandic market had remained at or above the Adjusted
Purchase Price from August 8, 1999 through December 28, 1999 and that the
Purchaser would pay the Contingent Payment plus interest but net of commission,
on or before February 25, 2000.

     NOW, THEREFORE, the parties hereto, intending to be legally bound, agree as
follows:

     1.   ADJUSTMENT TO PURCHASE PRICE; PAYMENT OF DEFICIENCY. The parties
hereby confirm that the conditions for the Contingent Payment were satisfied.
The Purchaser has paid the Company the sum of US$ 33,476,712 representing the
Contingent Payment, with interest thereon less the Commission (as defined
herein).

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     2.   COMMISSION. The Purchaser has received a credit against the Contingent
Payment in the amount of US$5,250,000 (the "Commission"), representing 7% of the
total aggregate Adjusted Purchase Price for the Series B Shares.

     3.   MISCELLANEOUS. This Addendum shall be governed by and construed
under the laws of the State of Delaware as applied to agreements among Delaware
residents made and to be performed entirely within the State of Delaware. Except
as otherwise expressly provided herein, the provisions hereof shall inure to the
benefit of, and be binding upon, the successors, assigns, heirs, executors, and
administrators of the parties hereto. This Addendum, together with the Stock
Purchase Agreement, constitutes the full and entire understanding and agreement
among the parties with regard to the subject matter hereof. This Addendum may be
executed in any number of counterparts, each of which shall be deemed an
original and all of which together shall constitute one instrument. Except as
set forth herein, all terms of the Stock Purchase Agreement remain unchanged and
in full force and effect.

                                     *******

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     This Addendum to Stock Purchase Agreement is hereby executed to be
effective as of the date first above written.

                                  deCODE genetics, Inc.

Dated: 24.02.2000                 By:  /s/ Hannes Smarason
                                  Name: Hannes Smarason
                                  Title: Senior Vice President

                                  Biotek Invest, S.A.

Dated: 24.02.2000                 By:  /s/ Yve Schmidt
                                  Name: Yve Schmit
                                  Title: Director<PAGE>   1
                                                                   EXHIBIT 10.34
                              OFFICER'S CERTIFICATE

         I, the undersigned, do hereby certify and represent that:

         1. I am the duly elected Senior Vice President and Chief Business
Officer of deCODE genetics, Inc., a Delaware Corporation.

         2. Pursuant to Rule 306(a) of Regulation S-T, the following exhibit
10.34 to deCODE genetics, Inc.'s Registration Statement on Form S-1 is a fair
and accurate English translation of a document prepared in the Icelandic
language.

         IN WITNESS WHEREOF, I have signed this Officer's Certificate in my
capacity as Senior Vice President and Chief Business Officer of deCODE genetics,
Inc. on this 7th day of March, 2000.

                        By:     /s/  Hannes T. Smarason
                                --------------------------

                        Name:   Hannes T. Smarason
                        Title:  Senior Vice President and Chief Business Officer

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                             CO-OPERATION AGREEMENT
                                     BETWEEN
                            AKUREYRI CENTRAL HOSPITAL
                                       AND
                           ISLENSK ERFDAGREINING EHF.

INTRODUCTION

The Act on Patients' Rights stipulates that medical records shall be preserved
in the health institutions where they are recorded. The Data Protection
Commission, appointed by the Minister of Justice, and the Science Ethics
Committee can, however, grant access to information from medical records,
including biosamples, for purposes of scientific research as defined by law.
Islensk erfdagreining ehf. searches, in co-operation with various scientists,
for genes that contribute to the causes of diseases or symptoms of diseases. The
objective of the Co-operation Agreement between the above parties is to ensure
the swift and efficient execution of research projects and facilitate access to
the information necessary for their completion.

The Akureyri Central Hospital, State Reg. No. 580269-2229, (hereafter referred
to as ACH) and Islensk erfdagreining ehf, State Reg. No. 691295-3549, domiciled
at Lynghals 1, Reykjavik, (hereafter referred to as IE) hereby enter into an
agreement on co-operation in the area of research. This Agreement will provide a
framework for individual research contracts which Islensk Erfdagreining ehf. can
enter into with individual employees or teams employed by ACH regarding further
specified research projects. Such research projects shall always be conducted on
the basis of written contracts, and measures shall be taken to ensure that such
contracts conform in all respects to the provisions of this Co-operation
Agreement.

ACH and IE have therefore entered into the following

                             Co-Operation Agreement

                                    CHAPTER 1
                                   DEFINITIONS

In this Co-operation Agreement, the following concepts shall have the meaning
set out below:

Surveillance Committee: A committee composed of representatives of ACH and IE,
having the task of monitoring the implementation of this Co-operation Agreement.

Executive Committee: A committee composed of representatives of research parties
and IE, having the task of supervising the execution of individual research
projects.

Research Parties:

I) Employees of ACH participating in the conduct of a research project in
co-operation with IE and/or

II) Other parties participating in the conduct of a research project jointly
with the parties specified under I) above.

Neither ACH nor IE are considered research parties in this sense.

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Research Materials: Information on health, including biosamples and all other
clinical information, which has a bearing on the specified research project.
Each research contract shall contain a definition of all relevant research
materials.

Research Contract: A contract between the research parties, on the one hand, and
IE, on the other hand, regarding a particular research project.

Research Project: A research or a part of a research with the participation of
IE, the objective of which is to find genetic factors causing a specific
disease, disease symptoms or a response to treatment.

                                    CHAPTER 2
                                      SCOPE

The provisions of this Co-operation Agreement shall apply to all research
projects for which a specific research contract has been made and relating to a
specified research project in which employees of ACH participate and are granted
access to research materials in the custody of ACH.

A special research contract shall be made in writing between the research
parties and IE for each separate research project. Such contracts shall refer to
the Co-operation Agreement between ACH and IE. Such contracts shall also specify
that no contracts shall take effect, as far as ACH is concerned, until such time
as ACH has confirmed its acceptance by signature. IE undertakes vis-a-vis ACH
not to commence work on a research project until such a contract has been
signed. Under normal circumstances it is understood that ACH will have come to a
decision regarding a contract within four weeks after all necessary documents
have been submitted.

The term of research contracts shall be specified and they shall expire without
express termination at the end of the term. In individual research contracts,
the contracting parties may negotiate a specific mutual period of notice of
termination during the term of the contract.

In the event that the research parties are unable to complete a research project
within the specified time limit or wish to continue work on a research project,
the term of the relevant research contract may be extended by one year at a
time, provided ACH approves such extension.

                                    CHAPTER 3
                                OBTAINING PERMITS

Under this Agreement, access to research materials preserved by ACH shall be
subject to prior approval by the Science Ethics Committee, appointed by the
Minister for Health and Insurance pursuant to State Regulation No. 449/1997 on
scientific research in the health sector, following comments from ACH's Ethics
Committee. Scientific research shall also be subject to the approval of the Data
Protection Commission, appointed by the Minister of Justice.

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                                    CHAPTER 4
                 SUPERVISION, SURVEILLANCE, AND CONFIDENTIALITY

4.1 Supervision of Individual Research Projects:

The supervision of individual research projects shall be jointly in the hands of
the relevant research parties and IE, which will form an Executive Committee.
Further provisions regarding supervision shall be included in the research
contract.

4.2 Surveillance Committee:

ACH and IE shall appoint a Surveillance Committee, composed of four members, to
monitor the execution of this Co-operation Agreement. Two representatives of
each of the parties to the Agreement shall be appointed to the Committee. Each
party shall also appoint two alternate members to replace committee members in
their absence. The Committee shall normally meet once every month, or as often
as the Committee may decide. Should either of the parties to the Agreement think
there is cause for a meeting, such party may instruct his representatives in the
Surveillance Committee to convene such a meeting. Such a meeting shall be
convened with five days' notice.

4.3 Obligation of IE et al. to Inform

IE undertakes to submit to the Surveillance Committee all contracts made between
IE and employees or teams employed by ACH at the time that such a contract is
made or subsequently employed by ACH. The Surveillance Committee shall have full
access to all research materials of any given research project on which a
research contract has been made.

The Surveillance Committee shall have unlimited access to the accounts of IE
relating to research projects covered by a research contract. The accounts of
each research project shall be kept separate from other accounts of IE. IE
further undertakes to submit to the Surveillance Committee complete information
regarding payments under a research contract, such as regards the sale of a
research project, its results or findings to a third party. The access that ACH
has to the accounts of IE under this Article shall have the purpose of enabling
ACH to preserve its financial interests in its dealings with IE.

IE undertakes to submit to ACH all contracts concluded before this Co-operation
Agreement took effect, between IE and individuals or teams employed by ACH at
the time of, or prior to, the conclusion of such contract. Such contracts shall
be subject to the provisions of this Co-operation Agreement.

Where it is stated in this Agreement that the Surveillance Committee may require
information, access to accounts or research data etc., it shall be assumed that
each representative of ACH in the Surveillance Committees shall have such rights
regardless of the view of other committee members.

4.4 Confidentiality

The representatives of ACH on the Surveillance Committee shall be bound by
complete confidentiality regarding all matters of which they may acquire
knowledge in the course of their work. This applies equally to the contents of
contracts, research plans, results from research, business plans and all other
information that should fairly and reasonably remain confidential in the
interest of IE. Under no circumstances may

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the substance of such information be divulged to a third party without the
express permission of IE. The confidentiality obligations of an ACH
representative shall remain effective even if he resigns his employment or this
Agreement is terminated. Directors and employees of ACH who, in the course of
their work, must deal with information of a sensitive nature provided to them by
ACH representatives on the Surveillance Committee, are under the same
obligation.

Confidentiality obligations as defined under this Article apply equally to IE
representatives on the Surveillance Committee with respect to ACH.

                                    CHAPTER 5
                             THE PAYMENT OF EXPENSES

All expenses incurred by each research project shall be paid by IE. IE shall pay
the additional expenses incurred by ACH in connection with the conduct of a
research project after a research contract has taken effect, i.e. material and
wage costs. This does not apply to administrative expenses of ACH. ACH shall
submit to IE a monthly invoice, which IE undertakes to pay within 10 days of
issue. Payments under this Article shall be considered as expense outlay under
Section 7.3 of this Agreement, and be added to fixed payments, variable payments
and other payments under the same Section 7.3.

                                    CHAPTER 6
                         TREATMENT OF RESEARCH MATERIALS

Research parties shall have access to necessary research materials in the
custody of ACH for use in a specified research project for which a research
contract has been made, the materials having been defined therein, subject to
compliance with the provisions of law, regulations, government stipulations and
the provisions of this Co-operation Agreement.

Exempt from access under Paragraph 1 of this Article are biosamples that ACH has
collected for other use than described in this Agreement or individual research
contracts. IE shall only be granted access to such biosamples if permitted by
the Board of Directors/Director of the biosample bank in question and the
Director/Medical Director of ACH, and then only to the extent permitted by them
at each time.

The custody of research materials shall conform to the provisions of law at each
time, currently the provisions of Articles 14 and 15 of Act No. 74/1997 on
Patients' Rights. Furthermore, the provisions of Act No. 121/1989 on the
Recording and Handling of Personal Data shall be observed.

IE may not remove from Iceland any research materials defined in a research
contract and provided by ACH for a specified research project.

On the completion of a research project, IE shall within four weeks return all
research materials to ACH that were obtained from that institution. ACH is
entitled to copies of any research materials to which ACH has granted access in
respect of the research project in question. The provisions of this Paragraph
shall remain in effect regardless of the cause of termination of the research
project, whether this is caused by the

<PAGE>   6

expiration of the term of the research contract, cancellation or termination
thereof or other reasons.

                                    CHAPTER 7
                                RIGHTS OF PARTIES

7.1 Financial Rights to Research Results

Unless otherwise agreed, IE shall become the owner of all financial and
commercial rights over research projects under this Agreement and their results
with due regard, however, to Paragraph 2 of Section 7.3 hereof. IE has the right
to sell results or findings from research projects to a third party, and to
utilise them in any other way consistent with accepted ethical criteria both
before and after the research projects are completed.

7.2 Making of Research Contracts

Employees of ACH intending to enter into co-operation with IE should first
consult with the Medical Director of the hospital.

7.3 Payments to ACH

IE shall pay a fixed proportion and/or a fixed payment out of all funds obtained
on the basis of projects in which the employees of ACH participate according to
research contracts made under this Agreement.

The total amount of payments for research projects shall be negotiated for each
research contract. Each research contract shall provide for fixed annual
payments, reimbursement for expense outlay of ACH from the performance of the
research as stated in Chapter 5 hereof, and a variable payment determined by the
outcome of the research project, results or findings thereof being sold to a
third party. The amount of the variable payment negotiated in each research
contract shall never be lower than 5% of all performance-related payments
rendered by the third party to IE. Individual research contracts may depart from
the above provision on variable payment based on the outcome of the sale of a
research project or results or findings thereof to a third party, provided that
a provision is inserted into the research contract in its place to ensure
payment of amounts which are at least equal to the specified minimum. All
payments under research contracts shall accrue to a special fund in the custody
of ACH.

The total amount of fixed payments, variable payments and other payments as
described in Paragraph 2 of this Section 7.3 shall be used to support scientific
activity within ACH. Payments under Paragraph 2 shall be divided as follows: 25%
shall be allocated to general scientific activity as determined by ACH, and 75%
shall be allocated to scientific activity as decided by the employees who
contributed to the work for which the payments were received. The above manner
of dividing payments shall apply unless otherwise agreed between the employees
in question and ACH.

In the event that individuals or teams employed by ACH enter into a research
contract with IE and a third party not connected with ACH, the manner of
division of payments to each party shall be stipulated in the research contract.
The research contract shall specifically define the grounds on which the
division of payments is decided, and state the arguments behind that division.
Employees of ACH shall not be

<PAGE>   7

considered as third parties not connected with ACH, in the sense defined in this
Co-operation Agreement.

7.4 Treatment Methods based on Research Results

IE undertakes to endeavour in its negotiations with third parties on the
purchase of results or findings of all research projects under this Agreement to
ensure that ACH, for the benefit of its patients, is granted free access to any
methods or pharmaceuticals that the third party may develop on the basis of
results from research projects under this Agreement to prevent, diagnose and
treat disease.

                                    CHAPTER 8
                     TERM OF THIS AGREEMENT AND TERMINATION

This Agreement shall remain in effect for as long as it is not formally
terminated. Either party to the Agreement may terminate the Agreement with one
year's notice. However, termination of the Agreement does not include research
contracts that have already been made regarding specific research projects and
approved by ACH. Such research contracts may be completed even if this Agreement
has been terminated, provided that the term of such contracts does not exceed 5
years. Individual research contracts, however, may be terminated during their
term of effect, provided that the contracts in question contain provisions for
such termination.

In the event that either party to a research contract is of the opinion that the
other party has violated the provisions of the research contract, that party
shall without delay submit his comments. If the other party has not remedied the
fault within four weeks from receiving the comments, the complaining party may
terminate the research contract with three months' notice. This shall apply
whether the research contract contains provisions for termination or not and
irrespective of the length of any notice of termination that may have been
agreed therein, cf. the provisions of Paragraph 3 of Chapter 2.

Payments which IE has already made or have become due prior to termination
pursuant to Paragraphs 1 and 2 shall be non-refundable from ACH.

                                    CHAPTER 9
                         DEFAULT AND DEFAULT PROVISIONS

If either party to this Co-operation Agreement is guilty of substantial default,
the other party may cancel the Agreement. Substantial default can, for instance,
refer to non-payment of the agreed payments, improper or unauthorised use of
research materials and unreasonable restrictions of the access of research
parties to research materials of ACH pursuant to this Agreement. Should the
Agreement be cancelled by ACH on the basis of this provision, all research
contracts are thereby cancelled, including those that have been approved by ACH.
Payments which IE has already made or have become due prior to cancellation of
the Agreement shall be non-refundable from ACH. The provisions of Chapter 8 of
this Agreement do not apply to cancellation of this kind. In the event of any
dispute regarding a party's right to cancel the Agreement, the settlement
procedure for such disputes shall be in accordance with the provisions of
Chapter 12.

Should IE cease research during the term of a research contract, or events or
circumstances cause research under such contract to halt or cease, the research

<PAGE>   8

contract shall be regarded as terminated. Such an event or circumstance may, for
example, consist of the discovery that normal progress and continuous research
under a given research contract is halted for a minimum of 6 months. All
provisions of the research contract, including the provisions regarding
limitations imposed on co-operation between the relevant employees of ACH and
third parties, will then become null and void.

                                   CHAPTER 10
                              LIABILITY FOR DAMAGES

As it is not a commercial enterprise, ACH exempts itself from any kind of
liability for damages that may arise as a result of this Agreement, research
contracts made on the basis of this Agreement or any other event that may arise
as a result of co-operation between the parties to this Agreement. This
exemption covers all events and circumstances that may lead to ACH becoming
liable for damages. The reasons for such liability, e.g. errors, defects,
information leak, improper use of research materials, injuries, actions or
behaviour of employees etc., are irrelevant in this context.

                                   CHAPTER 11
                                   OTHER ITEMS

11.1 This Agreement is non-transferable

This Agreement, or any right thereunder, is non-transferable except by consent
of both parties thereto.

11.2 Scientific and Commercial Responsibility

ACH is in no way responsible for the achievement of any scientific or commercial
objectives of individual research projects.

11.3 Court Decisions - Amendments of Legislation

If any amendments to legislation are made or court decisions are passed that in
any way disrupt the premises or basis on which contracts are made, the parties
thereto shall review the existing contracts for the purpose of bringing them
into conformity as necessary.

11.4 On the Publication of Research Results

Research results shall be published as soon as they comply with academic
requirements and are fit for publication. However, IE may postpone publication
for a maximum of 90 days in order to ensure that there will be enough time to
secure the property rights relating to any inventions that may be produced by
research. In the event that a third party requests that IE does not publish
results when ready as described above, publication may be postponed for a
maximum of 90 days.

11.5 Treatment of Samples etc.

This Agreement in no way limits ACH's right to send samples or other materials,
within Iceland or abroad, for research etc, or to take normal action to diagnose
diseases and provide patients with service as necessary at each time. This shall
apply even if a research contract has been made between IE and certain employees
of ACH regarding the same diseases or comparable disease symptoms, and such
contract has been approved by ACH.

<PAGE>   9

11.6 Limitations on Co-operation under Research Contracts

Provisions in individual research contracts entered into by individuals or teams
employed by ACH that stipulate limitations regarding co-operation with third
parties in searching for the genetic factors of diseases under the relevant
research contracts entail no obligations of any kind for ACH.

Provisions in individual research contracts, entered into by individuals or
teams employed by ACH, that stipulate limitations regarding co-operation with
third parties in circumstances when a contract on the sale of a research project
has been concluded confer no obligations of any kind upon ACH.

The fact that individual research contracts are signed by ACH does not in any
way alter the substance of Paragraphs 1 and 2.

                                   CHAPTER 12
                             SETTLEMENT OF DISPUTES

12.1 Settlement of Disputes

In the event of a dispute between the parties to this Agreement regarding
performance or compliance of the Agreement that cannot be resolved by the
Surveillance Committee, two persons, one from each party, shall endeavour to
reach a settlement. If a settlement is not reached between those two persons
within two weeks of the submission of the dispute, each party to the Agreement
shall appoint one arbitrator and then jointly request the appointment of an
impartial third arbitrator by the District Court of Reykjavik to assist in the
resolution of the dispute, thus forming a tribunal of three arbitrators. The
arbitration tribunal shall reach a decision in the matter within three months
from the full appointment of the tribunal. The tribunal shall determine the cost
of the work of the tribunal at each time. The work, procedure and rulings of the
arbitration tribunal shall otherwise be governed, as appropriate at any time, by
Act No. 53/1989 on Contractual Arbitration.

Notwithstanding the above provisions on arbitration, cases involving the
collection of payments under this Agreement which are not in dispute between the
parties may be submitted to the public courts. The same applies to cases of
financial claims made by one party against the other, based on rulings of the
arbitration tribunal regarding default or breach by the latter of this
Agreement. Such cases shall be submitted to the District Court of Reykjavik.

Interim Provisions

IE undertakes, immediately upon the signing of this Agreement, to initiate a
revision of all research contracts made on individual research projects under
this Agreement for the purpose of bringing their provisions on terms of payment
into conformance with the provisions of Section 7.3 of this Agreement, and in
other ways adapting them to the provisions of this Agreement. This revision
process shall be completed within approximately three months from the signing of
this Agreement. All research contracts shall then be submitted to ACH for
approval pursuant to the provisions of Chapter 2 hereof.

<PAGE>   10

                           REYKJAVIK, 26 OCTOBER 1999

For Akureyri Central Hospital                 For Islensk erfdagreining ehf.

Halldor Jonsson [sign.], Director             Kari Stefansson [sign.], President

Thorvaldur Ingvarsson [sign.],                Kristjan Erlendsson [sign.],
Medical Director                              VP for Clinical and Academic
                                              Collaborations

<PAGE>   11

                                   DECLARATION

The Akureyri Central Hospital and Islensk erfdagreining ehf. hereby confirm the
following understanding of the provision of Clause 3 of Paragraph 2 of Section
7.3. in the Contract between the parties:

The provision of the above Clause on variable payment to the Akureyri Central
Hospital in relation to the sale of a research project, results or findings
thereof to a third party shall be based on performance-related payments from a
project purchaser to Islensk erfdagreining ehf. Performance-related payments
shall be paid when milestones, as further specified in the contract between
Islensk erfdagreining and the project purchaser, are achieved.

                           Reykjavik, 26 October 1999

  HALLDOR JONSSON [SIGN.]                         KARI STEFANSSON [SIGN.]
For Akureyri Central Hospital                  For Islensk erfdagreining ehf.

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