Property Lien - Vetrargarourinn ehf. and Islandsbanki-FBA hf.
GENERAL BOND WITH CONSUMER PRICE INDEX PROPERTY LIEN Vetrargarourinn ehf. State Reg. No. 581201-2490 Sturlugata 8, Reykjavik MAKES KNOWN: AS SURETY for the prompt and full payment of all debts and financial commitments according to 1). The Loan Agreement with Islandsbanki-FBA, amounting to a total of USD 6,620,000.- and 2) Bonds issued by Vetrargarourinn ehf. on 28 February 2002, class 2, 2002, amounting to a total of ISK 730,000,000.- whether the amount at stake is the principal, price-level adjustments, translation difference, penalty interest, collection costs or costs, of whatever kind, in aggregate ISK 800,000,000.- EIGHT HUNDRED MILLION ICELANDIC KRONUR AND USD 7,280,000.- SEVEN MILLION TWO HUNDRED AND EIGHTY THOUSAND US DOLLARS ON THE DATE OF ISSUE, ISLANDSBANKI-FBA IS HEREBY PLEDGED, FOR OUR OWN PART AND ON BEHALF OF THE OWNERS OF THE ABOVE BONDS, AS CURRENT AT ANY TIME, BY THIRD-RANK MORTGAGE WITH PROMOTION RIGHTS, THE PROPERTY: STURLUGATA 8 IN REYKJAVIK, WITH PROMOTION RIGHTS BEHIND THE FOLLOWING MORTGAGE DEBTS: <TABLE> <S> <C> <C> <C> <C> FIRST RANK USD 4,000,000.- AND ISK 1,400,000,000.- ISLANDSBANKI FBA HF. AND BOND BEARERS 21 DECEMBER 2001 INDEXED SECOND RANK USD 400,000.- AND ISK 140,000,000.- ISLANDSBANKI FBA HF. AND BOND BEARERS 21 DECEMBER 2001 INDEXED </TABLE> The amount in Icelandic kronur is linked to the consumer price index, based on the base index 220.9 points, and changes in the same ratio as the index; it is, however, never based on a lower index than the base index of this bond, in addition to penalty interest and all costs resulting from collection measures. The issuer/mortgagor is not aware of any other registered liens or encumbrances on the property. The lien extends to the insurance amount of the mortgaged property and the lien holder is entitled, should any insurance be paid out, to request that the insurance company pay to him directly as much of the insurance amount as would cover the debt secured by this lien together with all interest, penalty interest and collecting costs. In such an event the lien holder is fully authorised to take delivery of the insurance money and dispose of it as payment for the debts. The mortgagor is under obligation to insure the mortgaged property and provide the lien holder with documented evidence that the secured property is properly insured; failing this the lien holder may, without any obligation to do so, insure the property at the mortgagor's expense and shall thereby hold a lien on the property for the total amount of paid-out costs for insurance as well as for the debt itself. The property is mortgaged with all appurtenances, including subsequent additions, cf. Articles 16-18 of Act No 75/1997 on Contractual Liens. The mortgagor is under obligation to ensure that all necessary safety measures required by applicable laws and regulations, as current at any time, are observed with respect to the mortgaged property. The mortgagor shall also take responsibility for the maintenance of the pledged property and ensure, to the extent possible, that it maintains its value so that the mortgage rights are not curtailed. In the event of any default on the payment of instalments or interest of the debt(s) covered by this lien or any other breach of the obligations of the issuer/mortgagor to the lien holder, the total amount of the debt(s) may be called in immediately and without notice and this mortgage may then be foreclosed. The same applies if the value of the secured property is substantially reduced, there is a change in ownership of the property without the mortgagee's consent or if the issuer's/mortgagor's other creditors enforce any claims against the property, or if the issuer's/mortgagor's or his guarantor's estate securing the debt, one or more, enter into receivership or seek composition. The issuer shall pay the stamp duty and registration tax on this lien. <PAGE> In the event of any dispute in respect of this lien or the debt that it covers such dispute shall be referred to the District Court of Reykjavik. In witness whereof, the signatures of the issuer, the mortgagor and the spouse of the registered owner (issuer/mortgagor) are attached hereto in the presence of witnesses. Reykjavik, 28 February 2002 For the Board of Vetrargarourinn ehf. Tomas Sigurdsson Witnesses to the correct date and signature: financial competence of the issuer, the mortgagor and spouse of the registered owner: Hereby in agreement with the above For Islandsbanki-FBA hf. Adalsteinn E Jonasson ---------------------------------- Name Id. No. Erlendur Magnusson Alexander Gudmundsson ---------------------------------- Name Id. No.