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Agreement - University of Iceland, Islensk Erfdagreining ehf. and the City of Reykjavik

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The University of Iceland, Islensk Erfdagreining ehf., and the City of Reykjavik
hereby enter into the following Agreement, with the aim of promoting
co-operation and encouraging the development of vigorous scientific and
professional activities in the field of health science in the University
District for the benefit of all the parties hereto:

1.   The City of Reykjavik undertakes, in co-operation with the University of
     Iceland, to amend the land use plan of the University District so as to
     permit the construction of a building which will house the operations of
     Islensk Erfdagreining ehf., on the site marked with the letter H on the
     design plan of the District. Permission shall be granted for a building of
     approximately of 10,000 square metres.

2.   Provisions of the land use plan regarding the maximum size of buildings
     permitted in the University District shall not change, notwithstanding the
     permission granted for the construction of a larger building on site H than
     the maximum currently allowed by the plan.

3.   Amendment of the land use plan shall be completed as soon as possible, and
     shall be fully completed within three months from the date of signature of
     this Agreement.

4.   The City of Reykjavik will allocate the site in question to Islensk
     erfdagrreining ehf. as soon as the land use plan has been amended. For the
     site and accompanying construction rights, Islensk erfdagreining ehf. shall
     pay to the City of Reykjavik the amount of ISK 104,180,000, based on a
     building of 10,000 square metres in size. The payment shall be divided into
     two equal halves, one half to be used in the interests of the University of
     Iceland. The land use plan shall include provisions stipulating that the
     only activities permitted in the building shall be high-technology,
     research and university-level teaching. The site lease agreement shall
     provide for rights of first refusal of the University regarding the
     purchase of any facilities on the site. Should the University be offered
     first refusal rights at a price which the institution regards as
     unacceptable, the University may then purchase the aforesaid facilities at
     assessed value, i.e. the real estate itself, not including interior
     fixtures and other chattels. Price and terms of payment will be decided by
     two court-appointed appraisers and based on the replacement value of the
     buildings with due consideration to their condition.

5.   All parties to this Agreement agree that the site forms a part of the
     University District. By the allocation of the site to Islensk erfdagreining
     ehf. the University of Iceland will develop closer ties to the Icelandic
     industries, especially to the growing sector involved in the creation of
     knowledge and high technology. Should Islensk erfdagrreining ehf. cease its
     operations on the site, the purchasing rights of the University shall enter
     into effect, as described in item 4 above.

6.   Islensk erfdagreining ehf. undertakes to construct the building on the site
     within two years after the amendments to the land use plan have been made
     and the formal allotment of the site has taken place.

7.   Islensk erfdagreining ehf. shall arrange a closed competition for the
     design of the building, i.e. purchase at least three proposals from as many
     independent architect firms, and select the one it considers of the
     greatest merit after giving the University an opportunity to express its
     opinions of the proposals. Specifications of the project assigned to the
     architects shall include a requirement that it must be possible to connect
     the building by an enclosed walkway to other buildings that the University
     may subsequently

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     construct to the west of the site. The University shall be consulted on
     this part of the project description.

8.   The University of Iceland shall be granted limited use of a lecture hall,
     conference room, and teaching and student facilities in the building of
     Islensk erfdagreining ehf. to the extent permitted by the operations of the
     company. A separate agreement shall be made between the University and
     Islensk erfdagreining ehf. regarding the former party's use of the building
     owned by the Company.

9.   Islensk erfdagreining ehf. shall have the right to assign construction
     rights or buildings on the site to a third party, with the terms,
     obligations and undertakings described in this Agreement. For example,
     Islensk erfdagreining ehf. may arrange for a leasing firm to construct,
     own, or operate a building on the site, provided that this in no way
     diminishes or curtails the rights or interests of the University of
     Iceland. Islensk erfdagreining ehf. may purchase construction rights or
     buildings on the site from a third party without giving rise to a right of
     first refusal by the University as described in item 4 above.

10.  This Agreement is made in three identical copies and signed in the presence
     of witnesses. Each party shall retain one copy of the Agreement.

                           REYKJAVIK, 15 FEBRUARY 2000


       Pall Skulason [sign.]


      Kari Stefansson [sign.]


Ingibjorg Solrun Gisladottir [sign.]

Witnessed by: Kristin A. Arnadottir [sign.]