Document:

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                                                                   EXHIBIT 10.13

                           COMMERCIAL LEASE AGREEMENT

Lessor:           DePfa Deutsche Pfandbriefbank AG Paulinenstra(beta)e 15, 65189
                  WiesbADEN

represented by:   DePfa Bau-, Verwaltungs- und Controlling GmbH
                  Poppenbutteler Bogen 17, 22399 Hamburg

Lessee:           DOMILENS GmbH
                  Holsteiner Chaussee 303 a, 22457 Hamburg

enter into the following Lease Agreement:

Leased Premises:  Office and Business Premises
                  Holsteiner Chaussee 303 a + b, 22457 Hamburg
                  Area Entrance 303 a, approx. 1'454.15 m2
                  Entrance 303 b, 3rd floor, approx. 118.83 m2
                  Entrance 303 b, 4th floor, approx. 148.85 m2

        Parts of the Lease Agreement

                Preamble

        1.      Leased Premises

        2.      Purpose of Lease

        3.      Term and Termination of Lease

        4.      Handing over of Premises

        5.      Rent, Utilities, Heating Costs, Value Guarantee Payment and
                Accounting

        6.      Security Deposit

        7.      Joint Advertising

        8.      Advertising Equipment

        9.      Safeguarding Collective Interests

        10.     Electricity, Heating (Gas), and Water

        11.     Maintenance and Repair of Leased Premises

        12.     Structural Alterations by Lessee

        13.     Lessee's Liability

        14.     Improvements and Structural Alterations by Lessor

        15.     Yielding of Leased Premises

        16.     Lessor's Access to the Leased Premises

        17.     Assignability of Use of Leased Premises

        18.     Reconstruction Clause, Business Interruptions

        19.     Lessor's Liability, Insurance

        20.     House Rules

        21.     Miscellaneous

        22.     Final Provisions

                                       1
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                Preamble

                Due to the fact that Lessee has decided to lease additional
                space beyond the already existing Lease involving Holsteiner
                Chaussee 303 a and b, 22457 Hamburg, the parties agree to the
                following:

                Through the signing of this Lease Agreement, the Lease Agreement
                dated July 07.07./14.1993 as well as the Supplement to the Lease
                Agreement dated 04.27./ 05.05.98, and the Lease Agreement of
                08.20./25.1999 as well as the Supplement to the Lease Agreement
                dated 08.12./16.99 are void as of 12.31.2000..

                The Lease of the entire space of approx. 1,721.83 m2 is subject
                to the following provisions:

        1.      Leased Premises

                1.1     The Leased Premises consist of an area measuring approx.
                        1,721.83 m2. Unless otherwise agreed upon hereinafter,
                        the office space leased by Lessee is referred to as
                        Leased Space.

                1.2     The space measurements in 1.1 of the Lease Agreement are
                        axis measurements based on building plans. Provided that
                        the deviation from the actual Leased Space is less than
                        5 percent, Lessee states already today that it is in
                        agreement with such a deviation.

                1.3     Lessee shall be responsible for obtaining, at its own
                        expense, all official permits and licenses which may be
                        required in connection with conducting business. In this
                        effort, Lessor shall lend technical support to Lessee
                        upon Lessee's request.

                1.4     The Leased Premises may only be used for legally,
                        officially and contractually permitted purposes. Lessee
                        is required to comply, at its own expense, with the
                        legal, governmental and technical regulations (e.g.
                        DIN(1), VDS(2), VDE(3)) which apply to its business and
                        keep Lessor free of any impositions which may be issued
                        against it. Upon request, Lessee must provide Lessor
                        with relevant inspection certificates issued by an
                        accredited expert. Lessor may set a reasonable time
                        limit within which Lessee must meet above obligations.
                        If it is not met or Lessee's whereabouts are unknown,
                        Lessor may have necessary measures taken at Lessee's
                        expense.

        2.      Purpose of Lease

                2.1     Maintaining an Office

----------

(1)     Deutsche Industrie-Normen (German industrial standards)

(2)     Vertrauen durch Sicherheit, an independent, international, accredited
        testing and certification institution

(3)     Assn. for Electrical, Electronic and Information Technologies, an
        independent testing and certification institute

                                       2
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        3.      Term and Termination of Lease

                3.01    Commencement of Lease:                  01.01.2001

                3.02    Not applicable

                3.03    Term of Lease:                          10 years fixed

                3.04    Special rights of termination:          as of 12.31.2004
                                                                as of 08.30.2007

                Notice of special termination must be given by Lessee in writing
                and received by Lessor at least 6 months before the agreed upon
                date.

                3.05    Tenancy shall end with the expiration of the term agreed
                        upon under this contract according to 3.03 if the rights
                        to special termination are not exercised.

                3.06    Not applicable

                3.07    As far as the right of termination without notice is
                        concerned, in particular termination due to non-payment
                        of rent, the legal provisions apply. In this context,
                        the prepaid fees for utilities as well as heating shall
                        be treated as part of the rent. Moreover, it shall be
                        considered an important reason for termination without
                        notice by Lessor if Lessee, although it has received a
                        reminder in writing, does not meet essential obligations
                        within a reasonable period (e.g. use that constitutes a
                        breach of contract, considerable harassment or
                        interference with Lessor or other tenants, permitting
                        unauthorized use by third parties).

                3.08    Lessor is further entitled to terminate the lease
                        without notice if Lessee's assets are subject to the
                        initiation of judicial court-supervised reorganization
                        or bankruptcy proceedings or an application for
                        reorganization has been denied due to insufficient
                        assets. The same applies filed for reorganization or
                        bankruptcy, stops payments or enters into a settlement
                        out of court.

                3.09    In case of a premature termination of the Lease for
                        which Lessee is responsible, Lessee is liable for lost
                        rent, utilities and other payments for the term of the
                        Lease under the Lease Agreement as well as for all
                        additional damages suffered by Lessor due to the
                        premature termination of the lease.

                3.10    Any notice of termination must be given in writing.

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                3.11    If the term of the Lease expires, Section of the BGB(4)
                        shall not apply.

        4.      Handing-over of Leased Premises

                4.1     Lessor shall hand over the Leased Premises in the
                        presently existing condition which Lessee observed when
                        viewing the premises, unless other terms have been
                        agreed upon which are explicitly set forth in this Lease
                        Agreement. Lessor reserves the right to make
                        insignificant changes as well as alterations required to
                        comply with governmental regulations. Any structural or
                        other work requested by Lessee or necessary for its
                        intended use, particularly if it goes beyond or
                        otherwise differs from the condition at the time the
                        Leased Premises was handed over, shall be at the expense
                        of Lessee. The same applies to technical equipment whose
                        installation is required either by the authorities or
                        under this Lease Agreement or which becomes necessary
                        for the operation or furnishing of the Leased Premises.

                4.2     Not applicable

                4.3     Lessee's right to occupy Leased Space Nr. 5, 3rd floor,
                        approx. size 118,83 m2, takes effect only after payment
                        of the security deposit under section 6. Handing over is
                        scheduled for January 2001, but may be delayed until
                        02.01.2001 due to remodeling. For this reason, the owner
                        grants Lessee a rent reduction of DM 1'000.00 per month
                        for November and December of 2000.

                4.4     At the time of the hand-over, a hand-over protocol shall
                        be created which shall document, in particular, which
                        defects, if any, are pointed out by Lessee. Lessor shall
                        have any noted defects which it has acknowledged
                        repaired before the office is opened if possible. Lessee
                        shall give Lessor the opportunity to carry out the
                        repairs. The provisions in section 14.2 shall apply
                        hereto.

                4.5     Not applicable

                4.6     Not applicable

        5.      Rent, Utilities, Heating Expenses, Payment and Accounting

                5.1     Rent

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(4)     Bundesgesetzbuch (Swiss federal law)

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                 For the space measuring 1,721.83 m2,
                 Lessee shall pay Lessor a monthly net rent
                 excluding  heating of                     DM 34'800.00 plus VAT
                 plus advance payments:

                 1. for operating expenses per Exhibit 3 to
                    Section 27 II. Assessment
                    Regulations (II. AR)                   DM 3'281.00 plus VAT

                 2. for heating costs per Exhibit 3 to
                    Section 27 II AR                       DM 880.00 plus VAT

                 3. rent for reserved parking space        DM 2'220.00 plus VAT
                                                           ---------------------

                 Total rent:                               DM 41'181.00 plus VAT
                                                           ---------------------

                 Lessor's bank account information:

                 Name of account DePfa-BVC wg Host.Chausee
                 Account number: 8626000001

                 Bank/Savings bank DePfa Bank AG BauBoden
                 Bank code: 200 104 24

                 Lessee's bank account information:

                 Name of account: __________________________Account number:

                 Bank/Savings bank _____________________________Bank code:

                5.1.1   Graduated Lease agreement

                The net rent excluding heating agreed upon in 5.1 shall increase
                after a year at the earliest as follows:

<TABLE>
<CAPTION>
                                Level            m2             DM/m2     monthly rent in DM
                                -----            --             ------    ------------------
<S>                                              <C>            <C>       <C>
                Area                             1,721.83
                at the end of the 1st rental year 2002           20.57    DM 35,426.40
                at the end of the 2nd rental year 2003           20.95    DM 36,064.08
                at the end of the 3rd rental year 2004           21.32    DM 36,713.23
</TABLE>

                        Rent increases during the term of the graduated lease
                        agreement are not allowed, except for increases in
                        advance payments for utilities.

                5.1.2.  All aforementioned amounts are net amounts and Lessee
                        must pay additional VAT at the official rate applicable
                        at the respective times, at this time 15 percent.

                5.2     Rent adjustment at the end of the 4th year of lease:

                        New negotiations regarding rent will be initiated as of
                        01.01.2005

                5.3     not applicable

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                5.4     not applicable

                5.5     Utilities

                        5.5.1   Utilities for the office and business premises,
                                in particular operational expenses, the cost for
                                care, maintenance, upkeep and repairs as well as
                                for the cleaning of shared facilities and
                                equipment, shall be distributed evenly among all
                                tenants according to the ratio of the area of
                                their leased space to the total area of leased
                                space within the office and business premises.
                                These utilities consist of:

                                a)      reserved parking for cars (parking
                                        spaces, underground parking garages),
                                        traffic lanes, landscaping and other
                                        external improvements as well as
                                        exterior lighting;

                                b)      other shared facilities and equipment of
                                        a structural or technical nature, such
                                        as, if applicable, entrances, all
                                        toilets and sanitation, elevators,
                                        sprinkler systems, etc. which are not
                                        located within the Leased Premises;

                                c)      property taxes;

                                d)      building insurance, such as fire,
                                        liability and tap water insurance;

                                e)      fees for public street sweeping and
                                        expenses for snow and ice removal;

                                f)      electrical power supply for shared
                                        facilities and equipment, garbage
                                        collection, water supply and sewage
                                        disposal incl. public fees, insofar as
                                        these expenses are not the
                                        responsibility of the individual
                                        tenants. Included is, in particular,
                                        water usage connected with shared
                                        installations and facilities (e.g.
                                        heating systems, sprinkler systems,
                                        etc.);

                                g)      security, janitorial and consultation
                                        services for the office and business
                                        facilities, including the hiring of
                                        required personnel, especially the
                                        expenses for building personnel
                                        (building inspector, building
                                        technician, etc.);

                                h)      alterations to the existing shared
                                        facilities and installations needed due
                                        to official requirements established
                                        after construction of the Leased
                                        Premises;

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                                i)      neon signs, collective sign
                                        installations, interior and exterior
                                        building signage, including signs in
                                        public traffic areas, flag poles, flags
                                        and the like, which are not related to
                                        individual tenants, but to the Leased
                                        Premises; furthermore, the installation
                                        of such equipment as well as the rental
                                        of space required for their
                                        installation;

                                j)      expenses for cleaning the area of
                                        Entrance 303 b;

                                k)      expenses for local building management,
                                        as well as all utilities according to
                                        Exhibit 3, Section 27 II AR.

                                Lessor has the right to establish a new scale
                                for the distribution of utilities (as a whole or
                                as individual types of expenses) at any time -
                                whereby the new scale may also be applied to the
                                running accounting period - as long as it is
                                appropriate.

                        5.5.2   not applicable

                        5.5.3   Lessor has the right to allocate the cost for
                                further services, which may be allocated under
                                section 5.5.1., to third parties.

                        5.5.4   Lessor has the right to also include those costs
                                for utilities which have not yet been incurred
                                at the commencement of the Lease Agreement in
                                the utilities statement and bill the tenants
                                proportionally.

                5.6     Heating expenses

                        5.6.1   The costs attributable to the leased areas, such
                                as the costs for operation (including control),
                                care, maintenance, upkeep and repairs as well as
                                for cleaning the heating system, shall be
                                distributed evenly among all tenants according
                                to the provisions regarding heating expenses at
                                a rate determined to 50 percent by usage and to
                                50 percent by the size of the used space.

                        5.6.2   The heating expenses attributable to the shared
                                facilities and installations of the office and
                                business facilities shall be paid for by all
                                tenants evenly according to each tenant's total
                                leased space in relation to the total leased
                                area of the commercial building. Insofar as the
                                usage is not determined by measurements, the
                                calculation of these costs shall be based upon
                                the ratio between shared areas to be heated and
                                total areas to be heated within the Leased
                                Premises.

                        5.6.3   not applicable

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                        5.6.4   Section 5.5.1, last sentence (establishment of a
                                new scale of distribution) applies to the
                                expensed mentioned in sections 5.6.1 and 5.6.2
                                accordingly.

                        5.6.5   The heating period lasts from October 1st of any
                                given year until May 31st of the following year.
                                Furthermore, Lessee is only entitled to heating
                                during normal business hours. Lessor reserves
                                the right to make changes hereto.

                5.7     Sales tax

                        See section 5.1.2

                5.8     not applicable

                5.9     Rent Payments and Accounting and Cost Allocation

                        5.9.1   Rent is payable monthly in advance, no later
                                than on the third business day of each month.
                                Determination whether a payments is on time
                                shall be based upon the day on which it is
                                received by Lessor or credited to Lessor's
                                account.

                        5.9.2   All payments must be made to Lessor or to the
                                person or agency authorized by Lessor to receive
                                them. Upon request by Lessor, Lessee shall make
                                payments by method of direct debit transfer
                                using the attached form.

                        5.9.3   not applicable

                        5.9.4   not applicable

                        5.9.5   Lessee shall make monthly prepayments towards
                                the expenses described in sections 5.5.1
                                (utilities for the office and business
                                facilities), 5.6.1 and 5.6.2 (heating expenses)
                                together with the minimum rent, initially in the
                                amount stated in 5.1. Section 5.6.1 is applied
                                accordingly. Unless explicitly agreed upon
                                otherwise, an annual statement regarding the
                                prepayments will be issued to Lessee. Any
                                differences between the final billed amount and
                                the prepaid amount shall be either paid by
                                Lessee within four weeks from receipt of the
                                statement or reimbursed by Lessor, whichever may
                                apply. Upon Lessee's request, Lessor shall grant
                                Lessee the opportunity to review the accounting
                                records at the administrative offices of
                                Lessee/manager at a scheduled time within the
                                above mentioned four week period.

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                                The statement is considered approved if Lessee
                                has not contested it in writing by stating his
                                reasons within another period of four weeks.

                                Lessor may reassess prepayments if it is obvious
                                that the prepayments do not cover the projected
                                costs, and he can do so during an accounting
                                period or at the time the tenancy commences.

                        5.9.6   According to section 5.5, all expenses
                                pertaining to a particular billing period for
                                which Lessor has been billed shall be invoiced.
                                Invoices pertaining to past billing periods
                                which are received after the period has ended
                                are included in the next statement. If tenancy
                                commences within a billing period, Lessee shall
                                be billed on a pro- rated basis.

                        5.9.7.  If a payment is overdue, Lessor shall have the
                                right to charge an administrative fee of DM
                                10.00 per reminder to pay, plus interest for
                                default which shall be 5 percent higher than the
                                base interest rate of the Bundesbank [German
                                central bank], which is 4,26 percent at this
                                time, unless the sustained damage is verifiably
                                less.

                                Furthermore, in case of delinquency Lessor may
                                demand the surrender of the property placed as a
                                lien and dispose of such property by means of
                                unrestricted sale.

                        5.9.8   If a payment made by Lessee is not sufficient to
                                cover all of its accrued debts, Lessor shall
                                have the right, regardless of any dissenting
                                statement made by Lessee, to apply the payment
                                first to the not legally enforceable and not
                                legally pending and finally to the legally
                                enforceable debt, first to the older and then to
                                the newer one.

                        5.9.9   In regards to rent or other charges made by
                                Lessor based upon this Lease Agreement, Lessee
                                may neither exercise a right to withhold payment
                                (right to withhold performance) nor offset the
                                charges against a contested counterclaim or a
                                counterclaim that has been determined to be not
                                legally valid. A right to mitigate only exists
                                if it is explicitly provided for under the Lease
                                Agreement.

                        5.9.10  Lessor shall not owe interest on overpaid rent,
                                prepayments and other billed amounts.

                5.10    The disposal of packaging materials etc. shall be the
                        duty of Lessee. All expenses connected with the disposal
                        shall be paid by Lessee. If Lessor arranges the
                        disposal, the resulting expenses shall be distributed
                        among the tenants under utilities according to section
                        5.5.

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                5.11    Should there be an increase in official charges (taxes,
                        fees, assessments), insurance premiums and the like
                        applicable to the property after the Lease Agreement is
                        entered into, or an introduction of new charges levied
                        upon the property, Lessor shall have the right to
                        distribute the extra costs incurred during the period
                        following the commencement of the Lease Agreement among
                        the tenants, based upon the their area of leased space
                        in relation to the total leased space within the office
                        and business facilities, unless another method of
                        allocation is mandated by law or decree.

                5.12.   Any increases in premiums for property insurance which
                        my arise due to the specific commercial use by Lessee
                        shall be paid by Lessee to Lessor. Any changes on the
                        part of Lessee which could lead to an increase in those
                        insurance premiums during the tenancy must be reported
                        to Lessor.

        6.      Security Deposit

                Upon entering into this Lease Agreement, Lessee shall pay Lessor
                a security deposit in the amount of DM 5,000.00. This security
                deposit must be in the form of a performance bond through a
                large German bank or financial institution governed by public
                law. Lessor shall be authorized to use this bond to satisfy his
                claims based upon this Leases Agreement if Lessee dose not
                fulfill his obligations or does not do so completely or in a
                timely manner. The bond serves as a means to cover all claims by
                Lessor existing in connections with or arising due to the
                termination of the tenancy. The bond must be surrendered after
                termination of the tenancy as soon as and if it has been
                determined that Lessor has no further claims against Lessee.
                Furthermore, should the bond be used by Lessor during the term
                of the lease, it must be replenished immediately by Lessee until
                it is restored to its original amount.

        7.      Joint Advertising

                not applicable

        8.      Advertising Equipment

                8.1     In the interest of advertising in keeping with the
                        common character of the office and business facilities,
                        the installation and design of equipment serving the
                        purpose of advertising or sales promotion located
                        outside the Leased Premises shall require prior approval
                        in writing by the Lessor.

                8.2     It shall be the responsibility of Lessee to obtain all
                        the necessary permits which may be hereto required by
                        law and to fulfill any imposed administrative
                        conditions, whereby all expenses shall be the
                        responsibility of Lessee.

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                8.3     Lessee shall be liable for all damage arising from the
                        installation of such equipment and must hold Lessor
                        harmless of all claims by third parties.

        9.      Safeguarding Collective Interests

                Assuming that in the interest of all tenants a positive general
                impression of the Leased Premises must be maintained, Lessee
                shall promise to comply with the following provisions:

                9.1     not applicable

                9.2     Lessee shall be required to use the Leased Premises
                        during the entire term of the lease without interruption
                        according to the stated purpose; Lessee shall not leave
                        the Leased Premises unused or empty, either as a whole
                        or in part.

                9.3     not applicable

                9.4     not applicable

                9.5     Lessee shall use the Leased Premises in keeping with the
                        character of the office and business premises. It shall
                        abstain from any actions of a nature which could be
                        detrimental to the legitimate interests of other tenants
                        or have a negative effect on the office building.

                9.6     not applicable

                9.7     not applicable

        10.     Electricity, Heat (Gas) and Water

                10.1    The existing lines for electricity, heat (gas) and water
                        (supply media) may be used - if available - by Lessee
                        only to the extent that its use does not exceed their
                        capacity. Lessee may meet excess needs by having supply
                        lines enlarged at its own expense after obtaining
                        Lessor's prior written consent hereto.

                10.2    For its gas and/or electrical needs, Lessee shall have a
                        meter/meters installed by firms authorized to do so at
                        its own expense; payment for gas or electricity shall be
                        Lessee's responsibility.

                10.3    Water meters are installed for the purpose of
                        determining water use. The cost for water supply and
                        sewage disposal shall be carried by Lessee based on use
                        and shall be distributed among the tenants and billed
                        under utilities.

                10.4    Meters are to be kept accessible and easily readable.

                                       11
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                10.5    In case of disruptions or damage to the supply lines,
                        Lessee shall be responsible for immediate shut-off. If
                        it is unable to do so or if the disruption or damage
                        affects other tenants, Lessee or his agent shall be
                        require to notify Lessor immediately.

                10.6    In case of changes to or interruptions in the supply of
                        electricity, heating or water or the disposal of sewage
                        due to circumstances not caused by Lessee, or if
                        flooding or other events of a catastrophic nature should
                        occur, Lessee shall have no right to withhold rent or
                        seek damages from Lessor.

        11.     Maintenance and Repair of Leased Premises

                11.1    Lessee shall be responsible for the care, maintenance,
                        cosmetic repair, upkeep and repair of the leased space
                        and/or the interior of the leased rooms as well as the
                        doors and windows of the exterior facade at its own
                        expense. This shall also apply to technical equipment
                        (such as electrical and sanitary installations, etc.) to
                        the extent that this equipment is located within the
                        Leased Premises and is used exclusively by Lessee.
                        Cosmetic repairs in particular shall be carried out by
                        Lessee in a professional manner at regular intervals -
                        sanitary installations and kitchen areas every 3 years -
                        the remaining office spaces every 4 years.

                        Work on technical installations may only be done by
                        professional companies.

                11.2    If Lessee does not fulfill any of the above obligations
                        within a reasonable grace period set by Lessor in spite
                        of a written request by the Lessor, Lessor shall have
                        the right to have the required work done at Lessee's
                        expense. A warning of dismissal by Lessor shall not be
                        required. Should a delay pose a danger, not grace period
                        shall be necessary.

        12.     Structural Alterations by Lessee

                12.1    Structural alterations by Lessee, especially remodeling
                        and incorporation of fixtures and fittings,
                        installations, as well as putting bars on windows, may
                        only be carried out with prior written approval by
                        Lessor. If approval is granted by Lessor, Lessee shall
                        be responsible for obtaining all necessary permits. All
                        expenses for structural alterations (including any
                        official fees) shall be paid for by Lessee.

                12.2    Installation of transmission devices (e.g. exterior
                        antennae, access cables, etc.) shall require prior
                        approval in writing by Lessor.

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        12.3    Lessee shall be liable for any damage arising from any
                construction measures taken by Lessee.

        13.     Lessee's Liability

                13.1    Lessee shall be liable to Lessor for any damage caused
                        to the Leased Premises by Lessee, members of its family
                        and its employees, as well as hired craftsmen, their
                        workers and assistants, delivery personnel, clients and
                        other related persons. Lessee shall be liable, in
                        particular, for any damage due to improper use of
                        high-voltage and low-voltage power lines, bathroom and
                        sanitary installations, sprinkler and heating systems,
                        or failure to close doors or carry out other duties
                        (e.g. lighting, etc.). In such cases it shall not matter
                        whether the party causing the damage is at fault.

                13.2    Lessee shall also be liable to Lessor for any damage to
                        any and all buildings, gates, parking facilities and
                        traffic lanes caused by delivery and pickup of
                        merchandise, in particular by its own or other vehicles
                        and not due to normal wear and tear. Section 13.1
                        sentence 3 shall apply accordingly.

                13.3    Lessee shall repair any damage for which it is liable
                        under sections 13.1 and 13.2 immediately. If it does not
                        meet this obligation within the deadline set by Lessor
                        even after receiving written notice, Lessor may have the
                        necessary work done at Lessee's expense. A warning of
                        dismissal by Lessor shall not be required. Should the
                        damage pose a danger or the whereabouts of Lessee be
                        unknown, a written warning and setting of a deadline
                        shall not be required.

                13.4    If Lessor is responsible for repairing damage on or in
                        the building or Leased Premises, such damage must be
                        reported to Lessor immediately. If Lessee fails to do
                        so, it shall be liable for any damage due to the delay.

        14.     Improvements and Structural Alterations by Lessor

                14.1    Lessor may carry out improvements and structural
                        alterations for the purpose of expansion and extension
                        of the office and business facilities, of preservation
                        of the building or Leased Premises, of protection from
                        impending damage or of repair of defects or damage
                        without Lessee's consent. This shall also apply to work
                        which, although not necessary, is useful, such as the
                        modernization of the building and Leased Premises.
                        Lessee shall keep the affected sections of the Leased
                        Premises accessible; it may not impede such work being
                        carried out; it shall be required to tolerate the
                        inconveniences, in particular odors, dirt, and noise,
                        caused by the above mentioned measures.

                                       13
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                14.2    As far as Lessee's tolerance of the work is concerned,
                        Lessee shall only be entitled to reduce the rent if the
                        work results in substantial interference with its use of
                        the Leased Premises.

        15.     Yielding of Leased Premises

                15.1    The conversions, incorporation of fixtures and fittings
                        and installations carried out by Lessee are only for
                        temporary purposes. Therefore, they do not become part
                        of the building (Section 95 BGB).

                15.2    At the termination of the Lease, Lessee shall be
                        required to yield the Leased Premises - subject to
                        regulations to the contrary and irrespective of their
                        condition at the commencement of the Lease - as follows:

                        a)      All removable equipment as well as all fittings
                                installed by Lessee shall be removed;

                        b)      all exterior advertising shall be removed;

                        c)      the leased space is to be turned over in clean
                                and tidy condition;

                        d)      any and all keys in Lessee's possession - even
                                those for lockable fixtures installed by Lessee,
                                shall be turned over to Lessor.

        16.     Lessor's Access to the Leased Premises

                16.1    Lessor or its agents shall have the right to access the
                        Leased Premises any time within Lessee's normal business
                        hours.

                16.2    Lessee shall ensure that rooms can also be entered in
                        its absence. If it does not fulfill this obligation, it
                        shall be liable for any and all damage due to undue
                        delay, such as when entry was not possible in case of
                        impending danger.

        17.     Assignability of Use of Leased Premises

                17.1    Subletting or any other assignment of use to third
                        parties by Lessee shall only be permitted with Lessor's
                        prior consent in writing. Lessor's consent must also be
                        obtained regarding the provisions for
                        subletting/assignment of use proposed by Lessee. Section
                        549 paragraph 1, clause 2 BGB shall not be applied. In
                        case of subletting/assignment of use, Lessee assigns, in
                        advance, the rent it is entitled to receive from the
                        third party, including the security deposit, up to the
                        amount which Lessor is entitled to, as a precaution to
                        Lessor.

                17.2    For companies, a change of principal or of a general
                        partner or a change in legal form shall constitute an
                        assignment of use to a third party. Lessee

                                       14
<PAGE>

                        must immediately report such developments as well as
                        changes in regards to business permits or other
                        important matters affecting the Lease to Lessor in
                        writing.

                17.3    In case of the sale of Lessee's entire business or a
                        portion of the business, this Lease Agreement shall be
                        transferred to Lessee's legal successor, if Lessor
                        consents to it in writing.

        18.     Reconstruction Clause, Business Interruptions

                18.1    Should the Leased Premises or shared facilities be
                        totally or vastly destroyed or damaged due to
                        construction errors, fire, explosion, lightning, a
                        storm, an act of God, the effects of war or other
                        circumstances, this Lease Agreement shall only expire
                        after Lessor has declared that it will not rebuild.
                        Insofar as the use of the damaged or destroyed Leased
                        Premises under the Lease Agreement is no longer
                        possible, Lessee's obligation to pay rent rests
                        commencing on the day following the event causing the
                        damage. In case of partial destruction or damage, the
                        obligation to pay rent shall lapse pro rata. After
                        reconstruction has been completed, the provisions
                        regarding handing over and payment of rent shall apply
                        correspondingly.

                18.2    Business interruptions within the office and business
                        facilities - for whatever reason - which are beyond
                        Lessor's control shall not affect Lessee's obligation to
                        pay rent as long as those interruptions can be remedied
                        within a reasonable amount of time. Lessor shall have
                        the right to have the office and business facilities
                        vacated during daily business hours for safety reasons
                        and to have access to the site of the office and
                        business facilities cordoned off.

                18.3    In cases described in sections 18.1 and 18.2 above,
                        Lessee shall only be entitled to compensation for
                        damages under the provisions set forth in section 19.1.
                        Lessee may only exercise other rights if Lessor is
                        responsible for the business interruption.

        19.     Lessor's Liability, Insurance

                19.1    Lessee shall only be entitled to compensation for
                        damages in case of gross negligence by Lessor or its
                        vicarious agents; such entitlements in cases of gross
                        negligence shall be limited to the type and extent of
                        coverage provided by an adequate liability insurance
                        contract entered into by Lessor.

                19.2    Furthermore, in case of a defect in the Leased Property,
                        Lessee may only make a claim for damages if the damage
                        or curtailment of use is substantial. The same shall
                        apply to a reduction in rent, which, in addition,

                                       15
<PAGE>

                        shall only be permissible if it is announced in writing
                        one month prior to the due date of the affected rent.

                19.3    Lessee shall be obligated to purchase the following
                        insurance policies at its expense and to furnish proof
                        of such a purchase upon Lessor's request:

                        a)      fire as well as tap water insurance including
                                coverage for waste water damage to personal
                                property, such as fixtures and materials;

                        b)      liability insurance for personal injury,
                                property and asset damage up to the limits of
                                coverage customary for the line of business
                                Lessee is conducting.

        20.     House Rules

                20.1    In the interest of peaceful coexistence, any
                        interference with the other tenants must be avoided.
                        This shall apply in particular to noise and odors.
                        Lessee shall be liable for any and all damages due to
                        its non-compliance with these rules and must take
                        immediate remedial action in case of a complaint. This
                        shall apply even if Lessee is engaged in a line of
                        business usually associated with noise and odor
                        emissions.

                        Lessee shall take, at its own expense, all necessary
                        structural and business measures (especially those
                        required by law) to prevent unacceptable emissions,
                        especially emissions of noise and odor, from Lessee's
                        business premises to neighboring areas of the Leased
                        Property. This shall also apply for other areas outside
                        the business premises. If necessary, Lessee shall, upon
                        request by Lessor, install its own exhaust system.
                        Lessee shall be required to keep this system in good
                        working order at all times, to make sure that it
                        complies meets official requirements and regulations and
                        is operating continuously.

                20.2    Lessee shall be responsible for the adequate cleaning of
                        its leased space, including, in particular, the facades
                        and/or store window areas, and must ensure adequate
                        ventilation, heating and lighting in its rooms, to the
                        extent that Lessee has control over these matters. It
                        shall be Lessee's duty to clean areas even if they are
                        outside the Leased Property at any time if the dirt has
                        been caused by its business.

                        If Lessee does not meet these responsibilities in
                        accordance with regulations, Lessor shall have the right
                        to have the dirt removed at Lessee's expense.

                20.3    Unauthorized persons shall be prohibited from accessing
                        the roof and the technical rooms.

                                       16
<PAGE>

                20.4    Lessee must use the main traffic routes and necessary
                        emergency exits - if need be, according to Lessor's
                        instructions - and keep those as well as the entrances
                        to the buildings, traffic areas, courtyards, passages,
                        stairways, entrances to basements, etc. free of objects
                        of any kind. Sales, presentations of merchandise and the
                        placement of advertising media outside the Leased
                        Property shall only be permitted after Lessor's written
                        consent, which may be revoked at any time, has been
                        obtained in advance.

                20.5    Lessee may only park its vehicles in the spaces
                        allocated for this purpose by Lessor. The same shall
                        apply to the vehicles of employees, visitors, and
                        delivery personnel. Lessee must instruct these persons
                        to comply with these provisions. Lessee shall not be
                        entitled to the allotment of such parking spaces; their
                        allocation may be revoked or changed by Lessor at any
                        time. The washing of vehicles on the property shall not
                        be permitted.

                20.6    In case of the existence of shared major equipment
                        systems and facilities, such as central heating,
                        elevators, other technical systems, etc., provisions
                        regarding their usage must be complied with and the
                        instructions of the manager or building inspectors must
                        be followed.

                20.7    Lessee may make useful changes and amendments to these
                        house rules; it is required to notify Lessor of such
                        changes and amendments in writing.

        21.     Miscellaneous

                21.1    The Owner, DePfa Deutsche Pfandbriefbank AG, assumes the
                        cost for the interior fittings of the leased space Nr.
                        6, 3rd Floor, approx. 118.83 m2. Owner also awards the
                        contracts for the interior fittings of the leased space.

                21.2    not applicable

                21.3    Lessee is aware that not all contracts of the tenants
                        located in the office and business facilities have the
                        same term. Lessee may not infer any rights based upon
                        the termination of other leases or the amount of rent
                        payable under such leases.

                21.4    Lessor reserves the right to carry out structural
                        alterations outside the Leased Property and make changes
                        regarding the occupancy of the leased spaces. Lessor
                        does not guarantee that certain tenants or trades are
                        represented in the office and business facilities.

                21.5    If Lessee changes its mailing address, a statement by
                        Lessor sent to the address last given in writing by
                        Lessee shall be considered received on the day it is
                        posted in the mail (date postmarked).

                                       17
<PAGE>

                21.6    If Lessor consists of several persons, they assume joint
                        liability for all debts arising from the Lease
                        Agreement. For a statement by Lessor to be legally
                        valid, it is sufficient if made towards one of the
                        tenants. Statements of intent by one tenant are also
                        binding for the other tenants. Facts leading to a change
                        in tenancy for one tenant have to be accepted by the
                        other tenants as having the same kind of effect on them.

                21.7    Lessor shall have the right to transfer its rights and
                        duties under this contract to another company, unless
                        such a transfer jeopardizes the continued proper
                        performance of the contract. Upon Lessor's announcement
                        of such legal succession to Lessee, Lessor ceases, with
                        all its rights and duties, to be a party in the Lease
                        Agreement with Lessee.

                21.8    Any protection of Lessee from competition is excluded.

                21.9    not applicable

                21.10   Lessee consents to data regarding the Lease in
                        connection with the administration of the property being
                        stored on electronic data carriers. When processing such
                        data, Lessor shall comply with the provisions of the
                        German Federal Data Protection Act.

        22.     Final Provisions

                22.1    The validity of this contract shall not be affected by
                        the invalidity of individual provisions or by gaps in
                        the provisions of the Agreement. An invalid provision or
                        gap in the provision is to be replaced or closed,
                        respectively, by a valid provision which conforms in its
                        meaning and purpose with the deleted or not provided
                        provision as closely as possible.

                22.2    Agreements or assurances of any kind which affect the
                        Lease or the Leased Premises shall only be effective if
                        made in writing and if they bare the legally valid
                        signatures of Lessor and Lessee, unless a different wish
                        by the parties to the contract has been clearly
                        expressed. The same applies to changes and amendments as
                        well as the annulment of the contract or the clause
                        mandating that the agreements or assurances be in
                        writing.

Hamburg, dated: 11.30.2000                   Hamburg, dated: 11.29.2000

            DePfa
            Verwaltungs- und
            Controlling GmbH
            Poppenbutteler Bogen 17,
            22399 Hamburg

[signature]                                  [signature]
-------------------------------------        -----------------------------------
           (Lessor)                                   (Lessee)

                                                      DOMILENS GmbH
                                                      Holsteiner Chaussee 303 a,
                                                      22457 Hamburg
                                                      Phone: 040/55 98 80-0
                                                      Fax: 040/56 98 80-80

                                       18<PAGE>

                                                                   Exhibit 10.20

After Recording Return To:

Staar Surgical Company
1911 Walker Avenue
Monrovia, California 91016
Attn: John Bily

__________________ [Space Above This Line for Recording Data] __________________

                                    MORTGAGE

DEFINITIONS

Words used in multiple sections of this document are defined below and other
words are defined in Sections 3, 11, 13, 18, 20 and 21. Certain rules regarding
the usage of words used in this document are also provided in Section 16.

(A) "SECURITY INSTRUMENT" means this document, which is dated July 16, 2004,
together with all Riders to this document.

(B) "BORROWER" is PETER J. UTRATA, an individual. Borrower is the mortgagor
under this Security Instrument.

(C) "LENDER" is STAAR SURGICAL COMPANY, a Delaware corporation. Lender's address
is 1911 Walker Avenue, Monrovia, California 91016. Lender is the mortgagee under
this Security Instrument.

(D) "NOTE" means, collectively and individually (i) the promissory note ("Note
A") signed by Borrower and dated June 16, 1999, in the face principal amount of
$1,258,000.00, and (ii) the promissory note ("Note B") signed by Borrower and
dated June 2, 2000, in the face principal amount of $272,500.00. Note A states
that Borrower owes Lender One Million Two Hundred Fifty-Eight Thousand Dollars
(U.S. $1,258,000.00) plus interest. Borrower has promised to pay the debt
evidenced by Note A in full not later than June 15, 2004. (By a Forbearance
Agreement dated June 16, 2004 (the "Forbearance Agreement") between Borrower and
Lender, Lender agreed to forebear on the exercise of its rights and remedies
under the Note and the Pledge Agreement (as defined in the Forbearance
Agreement) until March 15, 2005. Note B states the Borrower owes Lender Two
Hundred Seventy-Two Thousand Five Hundred Dollars (U.S. $272,500.00) plus
interest. Borrower has promised to pay the debt evidenced by Note B in full no
later than June 1, 2005.

(E) "PROPERTY" means the property that is described below under the heading
"Transfer of Rights in the Property."

(F) "LOAN" means the debt evidenced by the Note, plus interest, any prepayment
charges and late charges due under the Note, and all sums due under this
Security Instrument, plus interest.

                                      -1-
<PAGE>

(G) [Intentionally omitted.]

(H) "APPLICABLE LAW" means all controlling applicable federal, state and local
statutes, regulations, ordinances and administrative rules and orders (that have
the effect of law) as well as all applicable final, non-appealable judicial
opinions.

(I) "COMMUNITY ASSOCIATION DUES, FEES, AND ASSESSMENTS" means all dues, fees,
assessments and other charges that are imposed on Borrower or the Property by a
condominium association, homeowners association or similar organization.

(J) "ELECTRONIC FUNDS TRANSFER" means any transfer of funds, other than a
transaction originated by check, draft, or similar paper instrument, which is
initiated through an electronic terminal, telephonic instrument, computer, or
magnetic tape so as to order, instruct, or authorize a financial institution to
debit or credit an account. Such term includes, but is not limited to,
point-of-sale transfers, automated teller machine transactions, transfers
initiated by telephone, wire transfers, and automated clearinghouse transfers.

(K) [Intentionally omitted.]

(L) "MISCELLANEOUS PROCEEDS" means any compensation, settlement, award of
damages, or proceeds paid by any third party (other than insurance proceeds paid
under the coverages described in Section 5) for: (i) damage to, or destruction
of, the Property; (ii) condemnation or other taking of all or any part of the
Property; (iii) conveyance in. lieu of condemnation; or (iv) misrepresentations
of, or omissions as to, the value and/or condition of the Property.

(M) "MORTGAGE INSURANCE" means insurance protecting Lender against the
nonpayment of, or default on, the Loan.

(N) "PERIODIC PAYMENT" means the regularly scheduled amount due for (i)
principal and interest under the Note, plus (ii) any amounts under Section 3 of
this Security Instrument.

(O) [Intentionally omitted.]

(P) "SUCCESSOR IN INTEREST OF BORROWER" means any party that has taken title to
the Property, whether or not that party has assumed Borrower's obligations under
the Note and/or this Security Instrument.

TRANSFER OF RIGHTS IN THE PROPERTY

This Security Instrument secures to Lender: (i) the repayment of the Loan, and
all renewals, extensions and modifications of the Note; and (ii) the performance
of Borrower's covenants and agreements under this Security Instrument and the
Note. For this purpose, Borrower does hereby mortgage, grant and convey to
Lender, the following described property, which currently has the address of 117
NE Sewalls Road, Stuart, Florida 34995 ("Property Address"):

      See Exhibit "A" attached hereto and incorporated herein by this reference.

      TOGETHER WITH all the improvements now or hereafter erected on the
property, and all easements, appurtenances, and fixtures now or hereafter a part
of the property. All replacements and additions shall also be covered by this
Security Instrument. All of the foregoing is referred to in this Security
Instrument as the "Property."

      BORROWER COVENANTS that Borrower is lawfully seized of the estate hereby
conveyed and has the right to mortgage, grant and convey the Property and that
the Property

                                      -2-
<PAGE>

is unencumbered, except for encumbrances of record. Borrower warrants and will
defend generally the title to the Property against all claims and demands,
subject to any encumbrances of record.

      THIS SECURITY INSTRUMENT combines uniform covenants for national use and
non-uniform covenants with limited variations by jurisdiction to constitute a
uniform security instrument covering real property.

      UNIFORM COVENANTS. Borrower and Lender covenant and agree as follows:

      1. PAYMENT OF PRINCIPAL, INTEREST, ESCROW ITEMS, PREPAYMENT CHARGES, AND
LATE CHARGES. Borrower shall pay when due the principal of, and interest on, the
debt evidenced by the Note and any prepayment charges and late charges due under
the Note. Borrower shall also pay funds for Escrow Items pursuant to Section 3.
Payments due under the Note and this Security Instrument shall be made in U.S.
currency. However, if any check or other instrument received by Lender as
payment under the Note or this Security Instrument is returned to Lender unpaid,
Lender may require that any or all subsequent payments due under the Note and
this Security Instrument be made in one or more of the following forms, as
selected by Lender: (a) cash; (b) money order; (c) certified check, bank check,
treasurer's check or cashier's check, provided any such check is drawn upon an
institution whose deposits are insured by a federal agency, instrumentality, or
entity; or (d) Electronic Funds Transfer.

      Payments are deemed received by Lender when received at the location
designated in the Note or at such other location as may be designated by Lender
in accordance with the notice provisions in Section 15. Lender may return any
payment or partial payment if the payment or partial payments are insufficient
to bring the Loan current. Lender may accept any payment or partial payment
insufficient to bring the Loan current, without waiver of any rights hereunder
or prejudice to its rights to refuse such payment or partial payments in the
future, but Lender is not obligated to apply such payments at the time such
payments are accepted. If each Periodic Payment is applied as of its scheduled
due date, then Lender need not pay interest on unapplied funds. Lender may hold
such unapplied funds until Borrower makes payment to bring the Loan current. If
Borrower does not do so within a reasonable period of time, Lender shall either
apply such funds or return them to Borrower. If not applied earlier, such funds
will be applied to the outstanding principal balance under the Note immediately
prior to foreclosure. No offset or claim which Borrower might have now or in the
future against Lender shall relieve Borrower from making payments due under the
Note and this Security Instrument or performing the covenants and agreements
secured by this Security Instrument.

      2. APPLICATION OF PAYMENTS OR PROCEEDS. Except as otherwise described in
this Section 2, all payments accepted and applied by Lender shall be applied in
the following order of priority:

(a) interest due under the Note; (b) principal due under the Note; (c) amounts
due under Section 3. Such payments shall be applied to each Periodic Payment in
the order in which it became due. Any remaining amounts shall be applied first
to late charges, second to any other amounts due under this Security Instrument,
and then to reduce the principal balance of the Note.

      If Lender receives a payment from Borrower for a delinquent Periodic
Payment which includes a sufficient amount to pay any late charge due, the
payment may be applied

                                      -3-
<PAGE>

to the delinquent payment and the late charge. If more than one Periodic Payment
is outstanding, Lender may apply any payment received from Borrower to the
repayment of the Periodic Payments if, and to the extent that, each payment can
be paid in full. To the extent that any excess exists after the payment is
applied to the full payment of one or more Periodic Payments, such excess may be
applied to any late charges due. Voluntary prepayments shall be applied first to
any prepayment charges and then as described in the Note.

      Any application of payments, insurance proceeds, or Miscellaneous Proceeds
to principal due under the Note shall not extend or postpone the due date, or
change the amount, of the Periodic Payments.

      3. FIRST MORTGAGE. This Security Instrument is subordinate to a mortgage
in favor of Virtual Bank, a Division of Lydian Private Bank, securing a note in
the amount of $1,500,000.00 (the "First Mortgage"). Borrower hereby agrees that
the current outstanding principal balance of the indebtedness secured by the
First Mortgage does not exceed $1,500,000.00. Borrower further agrees that
Borrower shall pay all amounts secured by the First Mortgage when due and
perform all of its obligations under the First Mortgage. Any default under the
First Mortgage shall constitute a default under this Security Instrument.

      4. CHARGES; LIENS. Borrower shall pay all taxes, assessments, charges,
fines, and impositions attributable to the Property which can attain priority
over this Security Instrument, leasehold payments or ground rents on the
Property, if any, and Community Association Dues, Fees, and Assessments, if any.
To the extent that these items are Escrow Items, Borrower shall pay them in the
manner provided in Section 3.

      Borrower shall promptly discharge any lien which has priority over this
Security Instrument unless Borrower: (a) agrees in writing to the payment of the
obligation secured by the lien in a manner acceptable to Lender, but only so
long as Borrower is performing such agreement; (b) contests the lien in good
faith by, or defends against enforcement of the lien in, legal proceedings which
in Lender's opinion operate to prevent the enforcement of the lien while those
proceedings are pending, but only until such proceedings are concluded; or (c)
secures from the holder of the lien an agreement satisfactory to Lender
subordinating the lien to this Security Instrument. If Lender determines that
any part of the Property is subject to a lien which can attain priority over
this Security Instrument, Lender may give Borrower a notice identifying the
lien. Within 10 days of the date on which that notice is given, Borrower shall
satisfy the lien or take one or more of the actions set forth above in this
Section 4.

      Lender may require Borrower to pay a one-time charge for a real estate tax
verification and/or reporting service used by Lender in connection with this
Loan.

      5. PROPERTY INSURANCE. Borrower shall keep the improvements now existing
or hereafter erected on the Property insured against loss by fire, hazards
included within the term "extended coverage," and any other hazards including,
but not limited to, earthquakes and floods, for which Lender requires insurance.
This insurance shall be maintained in the amounts (including deductible levels)
and for the periods that Lender requires. What Lender requires pursuant to the
preceding sentences can change during the term of the Loan. The insurance
carrier providing the insurance shall be chosen by Borrower subject to Lender's
right to disapprove Borrower's choice, which right shall not be exercised
unreasonably. Lender may require Borrower to pay, in connection with this Loan,
either: (a) a one-time

                                      -4-
<PAGE>

charge for flood zone determination, certification and tracking services; or (b)
a one-time charge for flood zone determination and certification services and
subsequent charges each time remappings or similar changes occur which
reasonably might affect such determination or certification. Borrower shall also
be responsible for the payment of any fees imposed by the Federal Emergency
Management Agency in connection with the review of any flood zone determination
resulting from an objection by Borrower.

      If Borrower fails to maintain any of the coverages described above, Lender
may obtain insurance coverage, at Lender's option and Borrower's expense. Lender
is under no obligation to purchase any particular type or amount of coverage.
Therefore, such coverage shall cover Lender, but might or might not protect
Borrower, Borrower's equity in the Property, or the contents of the Property,
against any risk, hazard or liability and might provide greater or lesser
coverage than was previously in effect. Borrower acknowledges that the cost of
the insurance coverage so obtained might significantly exceed the cost of
insurance that Borrower could have obtained. Any amounts disbursed by Lender
under this Section 5 shall become additional debt of Borrower secured by this
Security Instrument. These amounts shall bear interest at the Note rate from the
date of disbursement and shall be payable, with such interest, upon notice from
Lender to Borrower requesting payment.

      All insurance policies required by Lender and renewals of such policies
shall be subject to Lender's right to disapprove such policies, shall include a
standard mortgage clause, and shall name Lender as mortgagee and/or as an
additional loss payee. Lender shall have the right to hold the policies and
renewal certificates. If Lender requires, Borrower shall promptly give to Lender
all receipts of paid premiums and renewal notices. If Borrower obtains any form
of insurance coverage, not otherwise required by Lender, for damage to, or
destruction of, the Property, such policy shall include a standard mortgage
clause and shall name Lender as mortgagee and/or as an additional loss payee.

      In the event of loss, Borrower shall give prompt notice to the insurance
carrier and Lender. Lender may make proof of loss if not made promptly by
Borrower. Unless Lender and Borrower otherwise agree in writing, any insurance
proceeds, whether or not the underlying insurance was required by Lender, shall
be applied to restoration or repair of the Property, if the restoration or
repair is economically feasible and Lender's security is not lessened. During
such repair and restoration period, Lender shall have the right to hold such
insurance proceeds until Lender has had an opportunity to inspect such Property
to ensure the work has been completed to Lender's satisfaction, provided that
such inspection shall be undertaken promptly. Lender may disburse proceeds for
the repairs and restoration in a single payment or in a series of progress
payments as the work is completed. Unless an agreement is made in writing or
Applicable Law requires interest to be paid on such insurance proceeds, Lender
shall not be required to pay Borrower any interest or earnings on such proceeds.
Fees for public adjusters, or other third parties, retained by Borrower shall
not be paid out of the insurance proceeds and shall be the sole obligation of
Borrower. If the restoration or repair is not economically feasible or Lender's
security would be lessened, the insurance proceeds shall be applied to the sums
secured by this Security Instrument, whether or not then due, with the excess,
if any, paid to Borrower. Such insurance proceeds shall be applied in the order
provided for in Section 2.

      If Borrower abandons the Property, Lender may file, negotiate and settle
any available insurance claim and related matters. If Borrower does not respond
within 30 days

                                      -5-
<PAGE>

to a notice from Lender that the insurance carrier has offered to settle a
claim, then Lender may negotiate and settle the claim. The 30-day period will
begin when the notice is given. In either event, or if Lender acquires the
Property under Section 22 or otherwise, Borrower hereby assigns to Lender (a)
Borrower's rights to any insurance proceeds in an amount not to exceed the
amounts unpaid under the Note or this Security Instrument, and (b) any other of
Borrower's rights (other than the right to any refund of unearned premiums paid
by Borrower) under all insurance policies covering the Property, insofar as such
rights are applicable to the coverage of the Property. Lender may use the
insurance proceeds either to repair or restore the Property or to pay amounts
unpaid under the Note or this Security Instrument, whether or not then due.

      6. [Intentionally omitted.]

      7. PRESERVATION, MAINTENANCE AND PROTECTION OF THE PROPERTY; INSPECTIONS.
Borrower shall not destroy, damage or impair the Property, allow the Property to
deteriorate or commit waste on the Property. Whether or not Borrower is residing
in the Property, Borrower shall maintain the Property in order to prevent the
Property from deteriorating or decreasing in value due to its condition. Unless
it is determined pursuant to Section 5 that repair or restoration is not
economically feasible, Borrower shall promptly repair the Property if damaged to
avoid further deterioration or damage. If insurance or condemnation proceeds are
paid in connection with damage to, or the taking of, the Property, Borrower
shall be responsible for repairing or restoring the Property only if Lender has
released proceeds for such purposes. Lender may disburse proceeds for the
repairs and restoration in a single payment or in a series of progress payments
as the work is completed. If the insurance or condemnation proceeds are not
sufficient to repair or restore the Property, Borrower is not relieved of
Borrower's obligation for the completion of such repair or restoration.

      Lender or its agent may make reasonable entries upon and inspections of
the Property. If it has reasonable cause, Lender may inspect the interior of the
improvements on the Property. Lender shall give Borrower notice at the time of
or prior to such an interior inspection specifying such reasonable cause.

      8. [Intentionally omitted.]

      9. PROTECTION OF LENDER'S INTEREST IN THE PROPERTY AND RIGHTS UNDER THIS
SECURITY INSTRUMENT. If (a) Borrower fails to perform the covenants and
agreements contained in this Security Instrument, (b) there is a legal
proceeding that might significantly affect Lender's interest in the Property
and/or rights under this Security Instrument (such as a proceeding in
bankruptcy, probate, for condemnation or forfeiture, for enforcement of a lien
which may attain priority over this Security Instrument or to enforce laws or
regulations), or (c) Borrower has abandoned the Property, then Lender may do and
pay for whatever is reasonable or appropriate to protect Lender's interest in
the Property and rights under this Security Instrument, including protecting
and/or assessing the value of the Property, and securing and/or repairing the
Property. Lender's actions can include, but are not limited to: (a) paying any
sums secured by a lien which has priority over this Security Instrument; (b)
appearing in court; and (c) paying reasonable attorneys' fees to protect its
interest in the Property and/or rights under this Security Instrument, including
its secured position in a bankruptcy proceeding. Securing the Property includes,
but is not limited to, entering the Property to make repairs, change locks,
replace or board up doors and windows, drain water from pipes, eliminate
building or other code violations or dangerous conditions, and have

                                      -6-
<PAGE>

utilities turned on or off. Although Lender may take action under this Section
9, Lender does not have to do so and is not under any duty or obligation to do
so. It is agreed that Lender incurs no liability for not taking any or all
actions authorized under this Section 9.

      Any amounts disbursed by Lender under this Section 9 shall become
additional debt of Borrower secured by this Security Instrument. These amounts
shall bear interest at the Note rate from the date of disbursement and shall be
payable, with such interest, upon notice from Lender to Borrower requesting
payment.

      If this Security Instrument is on a leasehold, Borrower shall comply with
all the provisions of the lease. If Borrower acquires fee title to the Property,
the leasehold and the fee title shall not merge unless Lender agrees to the
merger in writing.

      10. [Intentionally omitted.]

      11. ASSIGNMENT OF MISCELLANEOUS PROCEEDS; FORFEITURE. All Miscellaneous
Proceeds are hereby assigned to and shall be paid to Lender.

      If the Property is damaged, such Miscellaneous Proceeds shall be applied
to restoration or repair of the Property, if the restoration or repair is
economically feasible and Lender's security is not lessened. During such repair
and restoration period, Lender shall have the right to hold such Miscellaneous
Proceeds until Lender has had an opportunity to inspect such Property to ensure
the work has been completed to Lender's satisfaction, provided that such
inspection shall be undertaken promptly. Lender may pay for the repairs and
restoration in a single disbursement or in a series of progress payments as the
work is completed. Unless an agreement is made in writing or Applicable Law
requires interest to be paid on such Miscellaneous Proceeds, Lender shall not be
required to pay Borrower any interest or earnings on such Miscellaneous
Proceeds. If the restoration or repair is not economically feasible or Lender's
security would be lessened, the Miscellaneous Proceeds shall be applied to the
sums secured by this Security Instrument, whether or not then due, with the
excess, if any, paid to Borrower. Such Miscellaneous Proceeds shall be applied
in the order provided for in Section 2.

      In the event of a total taking, destruction, or loss in value of the
Property, the Miscellaneous Proceeds shall be applied to the sums secured by
this Security Instrument, whether or not then due, with the excess, if any, paid
to Borrower.

      In the event of a partial taking, destruction, or loss in value of the
Property in which the fair market value of the Property immediately before the
partial taking, destruction, or loss in value is equal to or greater than the
amount of the sums secured by this Security Instrument immediately before the
partial taking, destruction, or loss in value, unless Borrower and Lender
otherwise agree in writing, the sums secured by this Security Instrument shall
be reduced by the amount of the Miscellaneous Proceeds multiplied by the
following fraction: (a) the total amount of the sums secured immediately before
the partial taking, destruction, or loss in value divided by (b) the fair market
value of the Property immediately before the partial taking, destruction, or
loss in value. Any balance shall be paid to Borrower.

      In the event of a partial taking, destruction, or loss in value of the
Property in which the fair market value of the Property immediately before the
partial taking, destruction, or loss in value is less than the amount of the
sums secured immediately before the partial taking, destruction, or loss in
value, unless Borrower and Lender otherwise agree in writing,

                                      -7-
<PAGE>

the Miscellaneous Proceeds shall be applied to the sums secured by this Security
Instrument whether or not the sums are then due.

      If the Property is abandoned by Borrower, or if, after notice by Lender to
Borrower that the Opposing Party (as defined in the next sentence) offers to
make an award to settle a claim for damages, Borrower fails to respond to Lender
within 30 days after the date the notice is given, Lender is authorized to
collect and apply the Miscellaneous Proceeds either to restoration or repair of
the Property or to the sums secured by this Security Instrument, whether or not
then due. "Opposing Party" means the third party that owes Borrower
Miscellaneous Proceeds or the party against whom Borrower has a right of action
in regard to Miscellaneous Proceeds.

      Borrower shall be in default if any action or proceeding, whether civil or
criminal, is begun that, in Lender's judgment, could result in forfeiture of the
Property or other material impairment of Lender's interest in the Property or
rights under this Security Instrument. Borrower can cure such a default and, if
acceleration has occurred, reinstate as provided in Section 19, by causing the
action or proceeding to be dismissed with a ruling that, in Lender's judgment,
precludes forfeiture of the Property or other material impairment of Lender's
interest in the Property or rights under this Security Instrument. The proceeds
of any award or claim for damages that are attributable to the impairment of
Lender's interest in the Property are hereby assigned and shall be paid to
Lender.

      All Miscellaneous Proceeds that are not applied to restoration or repair
of the Property shall be applied in the order provided for in Section 2.

      12. BORROWER NOT RELEASED; FORBEARANCE BY LENDER NOT A WAIVER. Extension
of the time for payment or modification of amortization of the sums secured by
this Security Instrument granted by Lender to Borrower or any Successor in
Interest of Borrower shall not operate to release the liability of Borrower or
any Successors in Interest of Borrower. Lender shall not be required to commence
proceedings against any Successor in Interest of Borrower or to refuse to extend
time for payment or otherwise modify amortization of the sums secured by this
Security Instrument by reason of any demand made by the original Borrower or any
Successors in Interest of Borrower. Any forbearance by Lender in exercising any
right or remedy including, without limitation, Lender's acceptance of payments
from third persons, entities or Successors in Interest of Borrower or in amounts
less than the amount then due, shall not be a waiver of or preclude the exercise
of any right or remedy.

      13. JOINT AND SEVERAL LIABILITY; CO-SIGNERS; SUCCESSORS AND ASSIGNS BOUND.
Borrower covenants and agrees that Borrower's obligations and liability shall be
joint and several. However, any Borrower who co-signs this Security Instrument
but does not execute the Note (a "co-signer"):

(a) is co-signing this Security Instrument only to mortgage, grant and convey
the co-signer's interest in the Property under the terms of this Security
Instrument; (b) is not personally obligated to pay the sums secured by this
Security Instrument; and (c) agrees that Lender and any other Borrower can agree
to extend, modify, forbear or make any accommodations with regard to the terms
of this Security Instrument or the Note without the co-signer's consent.

      Subject to the provisions of Section 18, any Successor in Interest of
Borrower who assumes Borrower's obligations under this Security Instrument in
writing, and is approved by Lender, shall obtain all of Borrower's rights and
benefits under this Security Instrument. Borrower shall not be released from
Borrower's obligations and liability under this Security

                                      -8-
<PAGE>

Instrument unless Lender agrees to such release in writing. The covenants and
agreements of this Security Instrument shall bind (except as provided in Section
20) and benefit the successors and assigns of Lender.

      14. LOAN CHARGES. Lender may charge Borrower fees for services performed
in connection with Borrower's default, for the purpose of protecting Lender's
interest in the Property and rights under this Security Instrument, including,
but not limited to, attorneys' fees, property inspection and valuation fees. In
regard to any other fees, the absence of express authority in this Security
Instrument to charge a specific fee to Borrower shall not be construed as a
prohibition on the charging of such fee. Lender may not charge fees that are
expressly prohibited by this Security Instrument or by Applicable Law.

      If the Loan is subject to a law which sets maximum loan charges, and that
law is finally interpreted so that the interest or other loan charges collected
or to be collected in connection with the Loan exceed the permitted limits,
then: (a) any such loan charge shall be reduced by the amount necessary to
reduce the charge to the permitted limit; and (b) any sums already collected
from Borrower which exceeded permitted limits will be refunded to Borrower.
Lender may choose to make this refund by reducing the principal owed under the
Note or by making a direct payment to Borrower. If a refund reduces principal,
the reduction will be treated as a partial prepayment without any prepayment
charge (whether or not a prepayment charge is provided for under the Note).
Borrower's acceptance of any such refund made by direct payment to Borrower will
constitute a waiver of any right of action Borrower might have arising out of
such overcharge.

      15. NOTICES. All notices given by Borrower or Lender in connection with
this Security Instrument must be in writing. Any notice to Borrower in
connection with this Security Instrument shall be deemed to have been given to
Borrower when mailed by first class mail or when actually delivered to
Borrower's notice address if sent by other means. Notice to any one Borrower
shall constitute notice to all Borrowers unless Applicable Law expressly
requires otherwise. The notice address shall be the Property Address unless
Borrower has designated a substitute notice address by notice to Lender.
Borrower shall promptly notify Lender of Borrower's change of address. If Lender
specifies a procedure for reporting Borrower's change of address, then Borrower
shall only report a change of address through that specified procedure. There
may be only one designated notice address under this Security Instrument at any
one time. Any notice to Lender shall be given by delivering it or by mailing it
by first class mail to Lender's address stated herein unless Lender has
designated another address by notice to Borrower. Any notice in connection with
this Security Instrument shall not be deemed to have been given to Lender until
actually received by Lender. If any notice required by this Security Instrument
is also required under Applicable Law, the Applicable Law requirement will
satisfy the corresponding requirement under this Security Instrument.

      16. GOVERNING LAW; SEVERABILITY; RULES OF CONSTRUCTION. This Security
Instrument shall be governed by federal law and the law of the jurisdiction in
which the Property is located. All rights and obligations contained in this
Security Instrument are subject to any requirements and limitations of
Applicable Law. Applicable Law might explicitly or implicitly allow the parties
to agree by contract or it might be silent, but such silence shall not be
construed as a prohibition against agreement by contract. In the event that any
provision or clause of this Security Instrument or the Note conflicts with
Applicable

                                      -9-
<PAGE>

Law, such conflict shall not affect other provisions of this Security Instrument
or the Note which can be given effect without the conflicting provision.

      As used in this Security Instrument: (a) words of the masculine gender
shall mean and include corresponding neuter words or words of the feminine
gender; (b) words in the singular shall mean and include the plural and vice
versa; and (c) the word "may" gives sole discretion without any obligation to
take any action.

      17. BORROWER'S COPY. Borrower shall be given one copy of the Note and of
this Security Instrument.

      18. TRANSFER OF THE PROPERTY OR A BENEFICIAL INTEREST IN BORROWER. As used
in this Section 18, "Interest in the Property" means any legal or beneficial
interest in the Property, including, but not limited to, those beneficial
interests transferred in a bond for deed, contract for deed, installment sales
contract or escrow agreement, the intent of which is the transfer of title by
Borrower at a future date to a purchaser.

      If all or any part of the Property or any Interest in the Property is sold
or transferred (or if Borrower is not a natural person and a beneficial interest
in Borrower is sold or transferred) without Lender's prior written consent,
Lender may require immediate payment in full of all sums secured by this
Security Instrument. However, this option shall not be exercised by Lender if
such exercise is prohibited by Applicable Law.

      If Lender exercises this option, Lender shall give Borrower notice of
acceleration. The notice shall provide a period of not less than 30 days from
the date the notice is given in accordance with Section 15 within which Borrower
must pay all sums secured by this Security Instrument. If Borrower fails to pay
these sums prior to the expiration of this period, Lender may invoke any
remedies permitted by this Security Instrument without further notice or demand
on Borrower.

      19. BORROWER'S RIGHT TO REINSTATE AFTER ACCELERATION. If Borrower meets
certain conditions, Borrower shall have the right to have enforcement of this
Security Instrument discontinued at any time prior to the earliest of: (a) five
days before sale of the Property pursuant to any power of sale contained in this
Security Instrument; (b) such other period as Applicable Law might specify for
the termination of Borrower's right to reinstate; or (c) entry of a judgment
enforcing this Security Instrument. Those conditions are that Borrower: (a) pays
Lender all sums which then would be due under this Security Instrument and the
Note as if no acceleration had occurred; (b) cures any default of any other
covenants or agreements; (c) pays all expenses incurred in enforcing this
Security Instrument, including, but not limited to, reasonable attorneys' fees,
property inspection and valuation fees, and other fees incurred for the purpose
of protecting Lender's interest in the Property and rights under this Security
Instrument; and (d) takes such action as Lender may reasonably require to assure
that Lender's interest in the Property and rights under this Security
Instrument, and Borrower's obligation to pay the sums secured by this Security
Instrument, shall continue unchanged. Lender may require that Borrower pay such
reinstatement sums and expenses in one or more of the following forms, as
selected by Lender: (a) cash; (b) money order; (c) certified check, bank check,
treasurer's check or cashier's check, provided any such check is drawn upon an
institution whose deposits are insured by a federal agency, instrumentality or
entity; or (d) Electronic Funds Transfer. Upon reinstatement by Borrower, this
Security Instrument and obligations secured hereby shall

                                      -10-
<PAGE>

remain fully effective as if no acceleration had occurred. However, this right
to reinstate shall not apply in the case of acceleration under Section 18.

      20. SALE OF NOTE; NOTICE OF GRIEVANCE. The Note or a partial interest in
the Note (together with this Security Instrument) can be sold one or more times
without prior notice to Borrower.

      Neither Borrower nor Lender may commence, join, or be joined to any
judicial action (as either an individual litigant or the member of a class) that
arises from the other party's actions pursuant to this Security Instrument or
that alleges that the other party has breached any provision of, or any duty
owed by reason of, this Security Instrument, until such Borrower or Lender has
notified the other party (with such notice given in compliance with the
requirements of Section 15) of such alleged breach and afforded the other party
hereto a reasonable period after the giving of such notice to take corrective
action. If Applicable Law provides a time period which must elapse before
certain action can be taken, that time period will be deemed to be reasonable
for purposes of this paragraph. The notice of acceleration and opportunity to
cure given to Borrower pursuant to Section 22 and the notice of acceleration
given to Borrower pursuant to Section 18 shall be deemed to satisfy the notice
and opportunity to take corrective action provisions of this Section 20.

      21. HAZARDOUS SUBSTANCES. As used in this Section 21: (a) "Hazardous
Substances" are those substances defined as toxic or hazardous substances,
pollutants, or wastes by Environmental Law and the following substances:
gasoline, kerosene, other flammable or toxic petroleum products, toxic
pesticides and herbicides, volatile solvents, materials containing asbestos or
formaldehyde, and radioactive materials; (b) "Environmental Law" means federal
laws and laws of the jurisdiction where the Property is located that relate to
health, safety or environmental protection; (c) "Environmental Cleanup" includes
any response action, remedial action, or removal action, as defined in
Environmental Law; and (d) an "Environmental Condition" means a condition that
can cause, contribute to, or otherwise trigger an Environmental Cleanup.

      Borrower shall not cause or permit the presence, use, disposal, storage,
or release of any Hazardous Substances, or threaten to release any Hazardous
Substances, on or in the Property. Borrower shall not do, nor allow anyone else
to do, anything affecting the Property (a) that is in violation of any
Environmental Law, (b) which creates an Environmental Condition, or (c) which,
due to the presence, use, or release of a Hazardous Substance, creates a
condition that adversely affects the value of the Property. The preceding two
sentences shall not apply to the presence, use, or storage on the Property of
small quantities of Hazardous Substances that are generally recognized to be
appropriate to normal residential uses and to maintenance of the Property
(including, but not limited to, hazardous substances in consumer products).

      Borrower shall promptly give Lender written notice of(a) any
investigation, claim, demand, lawsuit or other action by any governmental or
regulatory agency or private party involving the Property and any Hazardous
Substance or Environmental Law of which Borrower has actual knowledge, (b) any
Environmental Condition, including but not limited to, any spilling, leaking,
discharge, release or threat of release of any Hazardous Substance, and (c) any
condition caused by the presence, use or release of a Hazardous Substance which
adversely affects the value of the Property. If Borrower learns, or is notified
by any governmental or regulatory authority, or any private party, that any
removal or other

                                      -11-
<PAGE>

remediation of any Hazardous Substance affecting the Property is necessary,
Borrower shall promptly take all necessary remedial actions in accordance with
Environmental Law. Nothing herein shall create any obligation on Lender for an
Environmental Cleanup.

      NON-UNIFORM COVENANTS. Borrower and Lender further covenant and agree as
follows: 22. ACCELERATION; REMEDIES. LENDER SHALL GIVE NOTICE TO BORROWER PRIOR
TO ACCELERATION FOLLOWING BORROWER'S BREACH OF ANY COVENANT OR AGREEMENT IN THIS
SECURITY INSTRUMENT (BUT NOT PRIOR TO ACCELERATION UNDER SECTION 18 UNLESS
APPLICABLE LAW PROVIDES OTHERWISE). THE NOTICE SHALL SPECIFY: (a) THE DEFAULT;
(b) THE ACTION REQUIRED TO CURE THE DEFAULT; (c) A DATE, NOT LESS THAN 30 DAYS
FROM THE DATE THE NOTICE IS GIVEN TO BORROWER, BY WHICH THE DEFAULT MUST BE
CURED; AND (d) THAT FAILURE TO CURE THE DEFAULT ON OR BEFORE THE DATE SPECIFIED
IN THE NOTICE MAY RESULT IN ACCELERATION OF THE SUMS SECURED BY THIS SECURITY
INSTRUMENT, FORECLOSURE BY JUDICIAL PROCEEDING AND SALE OF THE PROPERTY. THE
NOTICE SHALL FURTHER INFORM BORROWER OF THE RIGHT TO REINSTATE AFTER
ACCELERATION AND THE RIGHT TO ASSERT IN THE FORECLOSURE PROCEEDING THE
NONEXISTENCE OF A DEFAULT OR ANY OTHER DEFENSE OF BORROWER TO ACCELERATION AND
FORECLOSURE. IF THE DEFAULT IS NOT CURED ON OR BEFORE THE DATE SPECIFIED IN THE
NOTICE, LENDER AT ITS OPTION MAY REQUIRE IMMEDIATE PAYMENT IN FULL OF ALL SUMS
SECURED BY THIS SECURITY INSTRUMENT WITHOUT FURTHER DEMAND AND MAY FORECLOSE
THIS SECURITY INSTRUMENT BY JUDICIAL PROCEEDING. LENDER SHALL BE ENTITLED TO
COLLECT ALL EXPENSES INCURRED IN PURSUING THE REMEDIES PROVIDED IN THIS SECTION
22, INCLUDING, BUT NOT LIMITED TO, REASONABLE ATTORNEYS' FEES AND COSTS OF TITLE
EVIDENCE.

      23. RELEASE. Upon payment of all sums secured by this Security Instrument,
Lender shall release this Security Instrument. Borrower shall pay any
recordation costs. Lender may charge Borrower a fee for releasing this Security
Instrument, but only if the fee is paid to a third party for services rendered
and the charging of the fee is permitted under Applicable Law.

      24. ATTORNEYS' FEES. As used in this Security Instrument and the Note,
attorneys' fees shall include those awarded by an appellate court and any
attorneys' fees incurred in a bankruptcy proceeding.

      25. JURY TRIAL WAIVER. The Borrower hereby waives any right to a trial by
jury in any action, proceeding, claim, or counterclaim, whether in contract or
tort, at law or in equity, arising out of or in any way related to this Security
Instrument or the Note.

                                      -12-
<PAGE>

      BY SIGNING BELOW, Borrower accepts and agrees to the terms and covenants
contained in this Security Instrument and in any Rider executed by Borrower and
recorded with it.

Signed, sealed and delivered in the presence of:

                                                 Borrower:

Witness:

/s/ Christi Murphy                                /s/ Peter J. Utrata
------------------                                ------------------------------
                                                  Peter J. Utrata, an individual

__________________ [SPACE BELOW THIS LINE FOR ACKNOWLEDGMENT] __________________

STATE OF CALIFORNIA       )
                          )   ss.
COUNTY OF _____________   )

      On 7/21/04, before me, Lisa Reynolds, a Notary Public in and for said
County and State, personally appeared Peter J. Utrata, personally known to me
(or proved to me on the basis of satisfactory evidence) to be the person whose
name is subscribed to the within instrument, and acknowledged to me that he
executed the same in his authorized capacity, and that by his signature on the
instrument the person, or the entity upon behalf of which the person acted,
executed the instrument. WITNESS my hand and official seal.

                                                  /s/ Lisa M. Reynolds
                                                  ------------------------------
                                                  Signature of Notary Public

[SEAL]

                                      -13-
<PAGE>

                                    EXHIBIT A

                          LEGAL DESCRIPTION OF PROPERTY

      All that real property in the City of Stuart, Martin County, Florida
described as follows:

            Lot 6 Twin Rivers (less easterly 2" right of way per
            D/R1096/1064) PB 2, Page 62.

      Assessor's Parcel No.: 36-37-41-007-000-00060-2.

                                      -1-

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