Document:

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                                                                   EXHIBIT 10.15
                            PRAEDIUM II VALHALLA LLC
                           c/o Broadway Management Co.
                                 80 Broad Street
                               New York, NY 10004

                                 August 22, 2002

Del Global Technologies, Corp.
115 Wall Street
Valhalla, NY

Re:      Lease dated April 7, 1992, as amended, between Praedium II Valhalla
         LLC, Landlord
         and Del Global Technologies, Corp., Tenant
         Premises: 115 Wall Street, Valhalla, New York
         -----------------------------------------------------------------------

Gentlemen:

         Reference is made to that certain Extension and Modification Agreement
dated as of July 30, 2002 (the "Agreement"), which Agreement modified and
extended the term of the referenced Lease with respect to certain space (the
"Premises") in the building known as 115 Wall Street, Valhalla, New York (the
"Building"). Insofar as the Agreement is concerned, the following shall
constitute our agreement:

         1. All capitalized terms contained herein shall have the meaning
            ascribed to them in the Agreement

         2. The first sentence of Paragraph 4(a) of the Agreement is hereby
            modified by deleting from the word "Tenant" until the word
            "Improvements" and the following shall be substituted in its stead:

                           "the Added Space (as hereinafter defined) is
                           available for Tenant's possession".

         3. In the event that the Commencement Date occurs prior to February 1,
            2003, Tenant shall pay to Landlord, as additional rent, in addition
            to Fixed Rent and Additional Rent due under the Agreement, the sum
            of $125.00 per month, payable on the first day of each month,
            commencing on the Commencement Date through and including
            January 31, 2003. If the Commencement Date is not the first day of a
            month, such amount shall be prorated on a per diem basis for the
            partial month following the Commencement Date based upon the total
            number of days in such month.

         4. Notwithstanding anything to the contrary contained in the Agreement,
            Tenant acknowledges and agrees that the New York Power Authority
            intends to leave furniture, equipment and other items of personal
            property (collectively, the "Personal Property") in the Added Space
            and Tenant acknowledges and agrees that Landlord has no obligation
            to remove the Personal Property from the Added Space and that
            Tenant shall accept the Added Space with such Personal
            Property.

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         5. As modified herein, the Agreement is hereby ratified and confirmed
            and in full force and effect.

         If the foregoing accurately sets forth our understanding, kindly
execute this Agreement in the space provided below.

                                        Very truly yours,

                                        PRAEDIUM II VALHALLA LLC
                                          By: VALHALLA II ASSOCIATES LLC,
                                            its managing member
                                            By: Praedium Opportunity Fund II,
                                                 L.P., its managing member
                                            By: Praedium Partners LLC
                                                 its Investment General Partner

                                            By: /s/ A. Floyd Lattin
                                                --------------------
                                                 Name: A/ Floyd Lattin
                                                 Title: Senior Vice President

                                            By: Praedium Advisors, Inc.
                                                 its Investment General Partner

                                            By: /s/ A. Floyd Lattin
                                               --------------------
                                                 Name: A. Floyd Lattin
                                                 Title: Vice President

ACCEPTED AND AGREED TO:

DEL GLOBAL TECHNOLOGIES, CORP.

By: /s/ Thomas V. Gilboy
    --------------------
     Thomas V. Gilboy
     Chief Financial Officer

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                      EXTENSION AND MODIFICATION AGREEMENT

         EXTENSION AND MODIFICATION AGREEMENT dated as of the 30th day of July,
2002 between PRAEDIUM II VALHALLA LLC, having an office at c/o Broadway
Management Co., Inc., 80 Broad Street, New York, New York (hereinafter called
"Landlord") and DEL GLOBAL TECHNOLOGIES, CORP. (formerly known as Del
Electronics Corp.) a New York corporation, having an office at 115 Wall Street,
Valhalla, New York (hereinafter called "Tenant").

                              W I T N E S S E T H:

         WHEREAS:

         A. Landlord's predecessor in interest and Tenant entered into a certain
lease dated April 7, 1992 (the "Original Lease"), which Original Lease was
amended by (i) that certain Agreement dated April 23, 1992, (ii) that certain
Agreement dated March 26, 1993, and (iii) that certain Agreement dated April 1,
2000 (the Original Lease, as so amended is hereinafter called the "Lease") with
respect to certain space in the building known as 115 Wall Street, Valhalla, New
York, as more particularly described in the Lease.

         B. The term of the Lease is scheduled to expire on July 31, 2002.

         C. Landlord and Tenant, subject to and upon the terms and provisions
contained herein, desire to amend the Lease (i) to extend the term thereof, (ii)
to provide for the inclusion therein of additional space to the Premises, and
(ii) to modify various provisions of the Lease.

         NOW, THEREFORE, in consideration of the premises and mutual covenants
hereinafter contained, the parties hereto modify said Lease as follows:

         1. All capitalized terms contained in this Extension and Modification
Agreement but not defined herein shall, for the purposes hereof, have the same
meanings ascribed to them in the Lease.

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         2. The date set forth in the Lease for the expiration of the term
thereof is hereby modified so that the Lease shall expire on September 30, 2006
(the "Expiration Date").

         3. The extension of the term of the Lease shall be on the same terms
and conditions as set forth in the Lease except that effective during the period
commencing August 1, 2002 (or, effective immediately in the case of clauses (j),
(k), (l), (m), (n), (o), (p), (q), (r), (s), (t), (u), (v), (w), (x), (y), (z)
and (aa) hereof) and ending on September 30, 2006 (hereinafter called the
"Extended Term"):

                  (a) The Fixed Rent payable under the Lease shall be at the
rate of THREE HUNDRED TWENTY THOUSAND EIGHT HUNDRED SEVENTY-FIVE AND 00/100
($320,875.00) DOLLARS per annum ($26,739.58 per month).

                  (b) The term "Base Tax" as defined in Section 6.01(a) of the
Lease shall mean the sum of (i) all Real Estate Taxes payable without exception
(other than county and town taxes) for the period commencing July 1, 2002 and
ending on June 30, 2003, and (ii) the county and town taxes levied, assessed or
imposed at any time against the Real Property or any part thereof (the "County
and Town Taxes") for the period commencing January 1, 2002 and ending on
December 31, 2002.

                  (c) The term "Tax Year" as defined in Section 6.01(a)(iii) of
the Lease shall mean (i) a period beginning July 1, 2002 and ending on June 30,
2003 for all Real Estate Taxes (other than the County and Town Taxes), and (ii)
calendar year 2002 with respect to the County and Town Taxes.

                  (d) The term "Expense Base" as defined in Section 7.02(a) of
the Lease shall mean an amount equal to the sum of (i) fifty (50%) percent of
the Expenses for the calendar year 2002, and (ii) fifty (50%) percent of the
Expenses for the calendar year 2003. The second sentence of Section 7.02(a)(i)
shall be deemed to be deleted in its entirety.

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                  (e) The following sentence is added at the end of Section
6.02: "If the Base Tax is reduced as a result of a certiorari proceeding or
otherwise, Landlord shall adjust the amount of each of Tenant's payments of
Additional Rent under Article 6 of the Lease previously made, and Tenant shall
pay the amount of said adjustment within thirty (30) days after demand setting
forth the amount of said adjustment."

                  (f) In the event that there are any changes in the Base Tax,
Expense Base, Tenant's Share or Tenant's Percentage, during any Tax Year or
Expense Year, as the case may be, then Tenant's payments of Additional Rent
previously made which are affected by such change and to be made thereafter
under the Lease on account of Tax Escalation and Building Expense Escalation
shall be subject to adjustment by Landlord effective as of the date of such
change. If as a result of any such change, any amounts previously owed to
Landlord would be increased, such additional amount shall be payable to Landlord
hereunder within twenty (20) days of demand therefor. The provisions of this
Paragraph shall survive the expiration or termination of the Lease.

                  (g) The term "Expenses" as defined in Section 7.02(a) is
hereby amended to increase the annual fee for management of the Building to
$36,000.00, and the increases thereto for each Expense Year shall be determined
by multiplying $36,000.00 by the percentage of increase in Expenses for each
Expense Year over the Expense Base, exclusive of such management fees.

                  (h) The last three (3) sentences of Section 7.02(c)(i) which
provides a limitation on the amount of the Expense Payment are hereby deleted in
their entirety.

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                  (i) The aggregate amount of expenditures described in Section
7.02(a)(iv)(4)(c) with respect to capital expenditures required by law shall not
as applied to Tenant (i.e. after being multiplied by Tenant's Share) exceed ten
(10%) percent of Fixed Rent payable in any Expense Year. Landlord may, at its
option, bill and calculate such expenditures separately from other Expenses
instead of including same as part of Expenses. In such event, the Expense Base
shall, if necessary, be adjusted appropriately to reflect that such expenditures
(and increases in such expenses) are being calculated and billed to Tenant
separately.

                  (j) The following sub-sections (9) and (10) are added at the
end of Section 7.02(a)(iv):

                  "(9)     costs incurred with respect to the removal of
environmentally hazardous materials or hazardous waste in or around the
Building, except to the extent the same have been introduced by or the
requirement to remove the same shall be due to the act or omission of Tenant,
Tenant's agents, employees, invitees or licensees; and

                  (10)     mortgage recording taxes payable by Landlord in
connection with any financing or refinancing of the Property." .

                  (k) The Tenant's obligation under the last sentence of Section
9.01 shall be deemed modified so as to delete 57.14% and to insert in its place
the phrase " Tenant's Percentage," and to delete clause (b) therefrom.

                  (l) In lieu of a performance bond and a labor and materials
payment bond required by Section 10.01(j) of the Lease, with respect to Tenant
Improvements estimated to cost more than $50,000, (as estimated by Landlord's
architect, engineer or contractor), Tenant shall deliver to Landlord and, shall,
except as otherwise provided herein, maintain in effect at all times until
completion of Tenant's Improvements and payment of all contractors and suppliers
in connection therewith, an irrevocable letter of credit, in form and substance
satisfactory to Landlord in the amount of the security required by Landlord
pursuant to Section 10.01(j), issued by a banking corporation satisfactory to
Landlord and having its principal place of business or its duly licensed branch
or agency in the City and State of New York. Such letter of credit shall have an
expiration date no earlier than the first anniversary of the date of issuance
thereof. No bond or letter of credit shall be required for Improvements
estimated to cost less than $50,000.00.

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                  (m) The fourth (4th) sentence of Section 13.01 shall be deemed
modified so as to change 57.14% to Tenant's Percentage.

                  (n) The first (1st) sentence of Section 13.02 shall be deemed
modified so as to change five (5) business days to fifteen (15) business days.

                  (o) Landlord and Tenant acknowledge and agree that for all
purposes of the Lease, the phrase "Tenant's Percentage" shall have the meaning
ascribed thereto in Section 7.01(b)(ii) (i.e. sixty (60%) percent), subject to
increase pursuant to Section 4(c)(iv) of this Extension and Modification
Agreement.

                  (p) The last sentence of Section 13.03 shall be deemed
modified so as to change 57.14% to Tenant's Percentage.

                  (q) In lieu of the surety bond to be furnished pursuant to
Section 13.06 of the Lease, Tenant shall deliver to Landlord and, shall, except
as otherwise provided herein, maintain in effect at all times until completion
of the work described therein and payment of all contractors and suppliers in
connection therewith, an irrevocable letter of credit, in form and amount
satisfactory to Landlord, issued by a banking corporation satisfactory to
Landlord and having its principal place of business or its duly licensed branch
or agency in the City and State of New York, to assure the payment for such work
by Tenant. Such letter of credit shall have an expiration date no earlier than
the first anniversary of the date of issuance thereof. The penultimate sentence
of Section 13.06 shall be deemed modified so as to change the word "bond" to
"letter of credit", and to change "$25,000.00" to "$50,000.00".

                                       7
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                  (r) The last two (2) sentences of Section 15.03 shall be
deemed to be deleted in their entirety, and all references to Tenant's right to
cancel as set forth in such Section 15.03 shall be deemed to be deleted from the
Lease.
                  (s) The following sub-section (g) is added at the end of
Section 18.03:
                  "(g)     Notwithstanding anything to the contrary contained
         in the Lease, Tenant hereby expressly waives any and all rights of
         redemption granted by or under any present or future laws in the event
         of Tenant being evicted or dispossessed for any cause, or in the event
         of Landlord obtaining possession of the Premises, by reason of the
         violation by Tenant of any of the covenants and conditions of this
         Lease or otherwise."

                  (t) Section 22.03(a) shall be deemed modified so as to read as
follows: "Landlord's consent shall not be required in connection with
transactions with a corporation into or with which Tenant is merged or
consolidated or with an entity to which substantially all of Tenant's assets are
transferred, provided such merger, consolidation or transfer of assets is for a
good business purpose and not principally for the purpose of transferring the
leasehold estate created hereby, and provided, further, that the assignee, after
giving effect to such merger, consolidation or sale of assets, has a net worth
at least equal to or in excess of the greater of (x) the net worth of Tenant
immediately prior to such merger or transfer or (y) the net worth of Tenant as
of the date hereof) or, if Tenant is a partnership, with a successor
partnership. Notwithstanding anything to the contrary contained herein, Tenant
shall not be required to obtain Landlord's consent if Tenant desires to assign
this Lease or sublease all or a portion of the Premises to an affiliate of
Tenant. As used in this Article 22, the term "affiliate" shall mean an
individual, partnership, corporation, unincorporated association or other entity
controlling, controlled by or under common control with Tenant and for the
purposes of the foregoing, "control" shall mean ownership of a majority of the
legal and beneficial interest in such corporation, together with the ability to
direct the management, affairs and operations thereof. Any transfer or cessation
of control over any affiliate or subsidiary to which this Lease is assigned
shall constitute an assignment of this Lease to which all of the provisions of
this Article 22 shall apply. In the event that Tenant assigns this Lease in
accordance with this paragraph, the assignee of this Lease shall execute an
agreement, in form and substance reasonably satisfactory to Landlord, whereby
the assignee shall assume the obligations and performance of this Lease and
agree to be personally bound by and upon all of the covenants, agreements,
terms, provisions and conditions hereof on the part of Tenant to be performed or
observed, and whereby the assignee shall agree that the provisions of Section 22
shall, notwithstanding such an assignment or transfer, continue to be binding
upon it in the future."

                                       8
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                  (u) The following sentence shall be deemed added at the end of
Section 22.01: "For purposes of this Article 22, Landlord's consent to any
assignment, sublet or other transfer shall not be unreasonably withheld,
conditioned or delayed, subject to Landlord's right to terminate the Lease as
provided in Section 22.03(b)(ii)."

                  (v) Section 22.04 shall be deemed modified so as to read as
follows: "Tenant may permit one or more of its affiliates to occupy a portion of
the Premises without same constituting a sublet hereunder, provided that there
shall be no material change in the use of the Premises or any increase in the
demand for Building services as a result thereof." In the event that Tenant
sublets this Lease in accordance with this paragraph, Landlord shall have all of
the rights provided under this Article 22 with respect to sublets."

                                       9
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                  (w) Notwithstanding anything to the contrary contained in
Article 23 of the Lease, Landlord shall have no obligation to secure a
non-disturbance agreement from any mortgagee for Tenant.

                  (x) The first sentence of Section 37.01 shall be deemed to be
modified to insert the words "for damages" immediately after the phrase "which
it may have".

                  (y) Section 38.01 shall be deemed modified so as to read as
follows:

                      "38.01.A. Any notice or demand, consent, approval or
disapproval, or statement required to be given by the terms and provisions of
this Lease, or pursuant to any Legal Requirement, either by Landlord to Tenant
or by Tenant to Landlord, shall be in writing. Unless otherwise required by such
Legal Requirement, such notice or demand shall be given, and shall be deemed to
have been served and given when such notice or demand is delivered personally to
such party, or mailed by registered or certified mail deposited enclosed in a
securely closed postpaid wrapper, in a United States Government general or
branch post office, or official depository within the exclusive care and custody
thereof, addressed to either party, at its address set forth on page 1 of this
Lease. A copy of any notice to Tenant shall be sent simultaneously in the same
manner to Tenant's attorneys: Dellbello Donnellan, One North Lexington Avenue,
White Plains, New York 10601, Attn.: Peter J. Wise, Esq. A copy of any notice to
Landlord shall be sent simultaneously in the same manner to Landlord's
attorneys: Morrison Cohen Singer & Weinstein, LLP, 750 Lexington Avenue, New
York, New York 10022, Attn.: Charles B. Salfeld, Esq. Either party may, by
notice as aforesaid, designate a different address or addresses for notices,
demands, consents, approvals or disapprovals.

                             B. In addition to the foregoing, either Landlord or
Tenant may, from time to time, request in writing that the other party serve a
copy of any notice or demand, consent, approval or disapproval, or statement, on
one other person or entity designated in such request, such service to be
effected as provided in this Section 38 hereof."

                  (z) Article 43 of the Lease, Right of First Refusal, shall be
deemed to be deleted in its entirety, and all references to Tenant's right of
first refusal as set forth in such Article 43 shall be deemed to be deleted from
the Lease.

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                  (aa) Article 45 of the Lease, Right to Purchase, shall be
deemed to be deleted in its entirety, and all references to Tenant's right to
purchase as set forth in such Article 45 shall be deemed to be deleted from the
Lease.

         4.       (a) Effective as of the earlier to occur of February 1, 2003
or the date that Tenant takes possession of the Added Space for either the
conduct of its business or the performance of Improvements (such earlier date is
hereinafter called the "Adjustment Date"), and for the remainder of the term of
the Lease, there shall be added to and included in the Premises the following
additional space in the Building, to wit:

         The portion of the first (1st) floor currently occupied by the New York
         Power Authority, substantially as shown hatched on the floor plan
         annexed hereto as Exhibit A (hereinafter called the "Added Space").

Landlord does hereby lease to Tenant and Tenant does hereby hire from Landlord
the Added Space subject and subordinate to all superior leases and superior
mortgages as provided in the Lease and upon and subject to all the covenants,
agreements, terms and conditions of the Lease as modified or supplemented by
this Agreement. Tenant acknowledges that the Added Space is currently occupied
by another tenant. Landlord represents that the lease with the existing tenant
(hereinafter called the "Existing Tenant") in the Added Space (i) expires on
January 31, 2003, and (ii) does not contain an option to renew or extend the
term thereof.

                  (b) If Landlord is unable to give possession of the Added
Space because of the holding over or retention of possession of any tenant,
undertenant or occupants or for any other reason, Landlord shall not be subject
to any liability for failure to give possession on said date and the validity of
this Agreement shall not be impaired under such circumstances, nor shall the
same be construed in any wise to extend the term of the Lease, but the
Adjustment Date shall be delayed until after Landlord shall have given Tenant
written notice that the Added Space is available for possession or Tenant
commences occupancy thereof, whichever occurs first. The foregoing shall be
deemed to be an express agreement to the contrary as contemplated by Section
223(a) of the Real Property Law. Subject to the foregoing, in the event that the
Existing Tenant does not vacate the Added Space on or before January 31, 2003,
Landlord shall use commercially reasonable efforts to obtain possession of the
Added Space from the Existing Tenant which may include the commencement of
summary dispossess proceedings.

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                  (c) Effective as of the Adjustment Date, as same may be
delayed pursuant to Section 4(b) above:

                           (i)      the Fixed Rent payable under the Lease shall
be increased by FIFTY-ONE THOUSAND AND 00/100 DOLLARS ($51,000.00) per annum;

                           (ii)     Notwithstanding the provisions of the
foregoing clause (i), the increase in the Fixed Rent required thereby (but not
the balance of the Fixed Rent) shall be abated for the 60-day period commencing
on the Adjustment Date and ending 59 days thereafter.

                           (iii)    The term "Tenant's Share", as defined in
Section 6.01(a)(v) of the Lease shall be increased by 9.6%; and

                           (iv)     The term "Tenant's Percentage", as defined
in Section 7.01(b)(ii) of the Lease and Paragraph 3(n) hereof shall be increased
by 9.6%;

                           (v)      Exhibit "A" attached to and made a part of
the Lease shall be deemed modified so as to change 37,750 square feet to 43,750
square feet.

                           (vi)     Exhibit "B" attached to and made a part of
the Lease shall be modified to read as follows: "The Premises consists of 41,393
square feet described on the annexed floor plans, as well as Tenant's portion of
the common area of the Building which is deemed to be 2,357 square feet for a
total of 43,750 square feet."

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                           (vii)    Clause (i) in the first sentence of Section
13.03 shall be deemed modified so as to change twenty (20%) percent to ten (10%)
percent.

                           (viii)   Tenant shall have the right to access the
Added Space through the common area and vestibule adjacent to the Added Space as
shown on Exhibit A hereto, on a non-exclusive basis, together with other tenants
and Landlord.

                  (d) Tenant agrees to accept the Added Space on the Adjustment
Date in the condition in which it exists on the Adjustment Date and understands
and agrees that no work is to be performed or materials supplied by Landlord in
connection with preparing the Added Space for Tenant's occupancy. Tenant, at its
sole cost and expense, shall combine the Premises and the Added Space and make
all Improvements necessary or desirable for Tenant's occupancy thereof, all in
accordance with all applicable provisions of the Lease affecting Improvements.
Tenant shall also be responsible for the installation of any electrical
equipment needed for electrical service to the Added Space.

                  (e) With respect to the Added Space, the following shall
apply:

                           (i)      Landlord shall allow Tenant an allowance in
the amount of up to Twenty-Five Thousand and 00/100 ($25,000.00) Dollars
(hereinafter called the "Server Room Work Credit"), which Server Room Work
Credit shall be applied solely against the cost and expense of the actual
construction work (specifically excluding so-called "soft costs" such as legal,
engineering, architectural and design services) performed by Tenant in
connection with the construction of a special purpose server room and rewiring
of the Premises with at least CAT-5 wiring in the Premises, subject to the
provisions of the Lease regarding Tenant's Improvements. In the event that the
cost and expense of such actual construction work shall exceed the amount of the
Server Room Work Credit, Tenant shall be entirely responsible for such excess.
If Tenant does not use all or any part of the Server Room Work Credit for
Tenant's Work, then the Server Room Work Credit shall be reduced accordingly.

                                       13
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                           (ii)     In addition to the Server Room Work Credit,
Landlord shall allow Tenant an allowance in the amount of up to Fifteen Thousand
and 00/100 ($15,000.00) Dollars (hereinafter called the "Alterations Work
Credit"), which Alterations Work Credit shall be applied solely against the cost
and expense of the actual construction work (specifically excluding so-called
"soft costs" such as legal, engineering, architectural and design services)
performed by Tenant in connection with the Tenant's Improvements to the Demises
Premises (but excluding therefrom any construction in connection with the
special purpose server room to be built by Tenant, and rewiring of the Premises
in connection therewith), subject to the provisions of the Lease regarding
Tenant's Improvements. In the event that the cost and expense of such actual
construction work shall exceed the amount of the Alterations Work Credit, Tenant
shall be entirely responsible for such excess. If Tenant does not use all or any
part of the Alterations Work Credit for Tenant's Work, then the Alterations Work
Credit shall be reduced accordingly.

                           (iii)    Landlord shall have the right to withhold
all or any portion of the Server Room Work Credit or Alterations Work Credit as
shall equal the cost of correcting any portions of Tenant's Improvements which
shall not have been performed substantially in accordance with plans and
specifications submitted to Landlord pursuant to Section 10.01(h) of the Lease.

                                       14
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                           (iv)     The Server Room Work Credit and Alterations
Work Credit shall be payable to Tenant upon the completion of all of Tenant's
Improvements and upon delivery by Tenant to Landlord of (i) paid invoices from
contractors, (ii) a certificate signed by Tenant's architect and Tenant
certifying that Tenant's Improvements have been satisfactorily completed in
accordance with the final plan, (iii) all Building Department sign-offs,
inspection certificates and any permits required to be issued by any
governmental entities having jurisdiction thereover, and (iv) lien waivers and a
general release from all contractors and subcontractors performing Tenant's
Improvements releasing Landlord and Tenant from all liability for any Tenant's
Improvements.

         5. Article 44 of the Lease, Option to Extend, is deleted in its
entirety, and replaced with the following option to extend:

                  (a) Subject to the provisions of Section 44(l) hereof, Tenant
shall have the right to extend the term of this Lease for an additional term of
two (2) years commencing on the day following the Expiration Date (hereinafter
referred to as the "Commencement Date of the Extension Term") and ending on the
second (2nd) anniversary of the Expiration Date (such additional term is
hereinafter called the "Extension Term") provided that:

                           (i)      Tenant shall give Landlord notice
(hereinafter called the "Extension Notice") of its election to extend the term
of this Lease not less than nine (9) months prior to the Expiration Date. Time
shall be of the essence with respect to the giving of the Extension Notice;

                           (ii)     Tenant is not in default under this Lease as
of the time of the giving of the Extension Notice and as of the Commencement
Date of the Extension Term; and

                                       15
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                           (iii)    As of the time of the giving of the
Extension Notice and as of the Commencement Date of the Extension Term, Tenant
is in actual occupancy of the entire Premises (including any additional space in
the Building hereafter leased by Tenant).

                  (b) The Fixed Rent payable by Tenant to Landlord during the
Extension Term shall be the higher of:

                           (i)      the fair market rent for the Premises,
taking into account the Additional Rent then payable, determined as of the date
occurring six (6) months prior to the Commencement Date of the Extension Term
(such date is hereinafter called the "Determination Date") and which
determination shall be made within a reasonable period of time after the
occurrence of the Determination Date pursuant to the provisions of Section 44(d)
hereof, or

                           (ii)     the Fixed Rent and Additional Rent payable
under the Lease during the last year of the Extended Term.

                  (c) During the Extension Term, the Base Tax and the Expense
Base shall be the same as are in effect on the expiration of the Extended Term.

                  (d) Landlord and Tenant shall endeavor to agree as to the
amount of the fair market rent for the demised premises pursuant to the
provisions of clause (i) of Section44(b) hereof, during the thirty (30) day
period following the Determination Date. In the event that Landlord and Tenant
cannot agree as to the amount of the fair market rent within such thirty (30)
day period following the Determination Date, then Landlord or Tenant may
initiate the arbitration process provided for herein by giving notice to that
effect to the other, and the party so initiating the appraisal process (such
party hereinafter referred to as the "Initiating Party") shall specify in such
notice the name and address of the person designated to act as an arbitrator on
its behalf. Within thirty (30) days after the designation of such arbitrator,
the other party (hereinafter referred to as the "Other Party") shall give notice
to the Initiating Party specifying the name and address of the person designated
to act as an arbitrator on its behalf. If the Other Party fails to notify the
Initiating Party of the appointment of its arbitrator within the time above
specified, then the appointment of the second arbitrator shall be made in the
same manner as hereinafter provided for the appointment of a third arbitrator in
a case where the two arbitrators appointed hereunder and the parties are unable
to agree upon such appointment. The two arbitrators so chosen shall meet within
ten (10) days after the second arbitrator is appointed and if, within sixty (60)
days after the second arbitrator is appointed, the two arbitrators shall not
agree, they shall together appoint a third arbitrator. In the event of their
being unable to agree upon such appointment within eighty (80) days after the
appointment of the second arbitrator, the third arbitrator shall be selected by
the parties themselves if they can agree thereon within a further period of
fifteen (15) days. If the parties do not so agree, then either party, on behalf
of both and on notice to the other, may request such appointment by the American
Arbitration Association (or organization successor thereto) in accordance with
its rules then prevailing or if the American Arbitration Association (or such
successor organization) shall fail to appoint said third arbitrator within
fifteen (15) days after such request is made, then either party may apply on
notice to the other, to the Supreme Court, Westchester County, New York (or any
other court having jurisdiction and exercising functions similar to those now
exercised by said Court) for the appointment of such third arbitrator.

                                       16
<PAGE>

                  (e) Each party shall pay the fees and expenses of the one of
the two original arbitrators appointed by or for such party, and the fees and
expenses of the third arbitrator and all other expenses (not including the
attorneys fees, witness fees and similar expenses of the parties which shall be
borne separately by each of the parties) of the arbitration shall be borne by
the parties equally.

                                       17
<PAGE>

                  (f) The majority of the arbitrators shall determine the fair
market rent of the Premises and render a written certified report of their
determination to both Landlord and Tenant within sixty (60) days of the
appointment of the first two arbitrators or sixty (60) days from the appointment
of the third arbitrator if such third arbitrator is appointed pursuant to
subsection (d), and the fair market rent, so determined, shall be applied to
determine as above provided, whether the Fixed Rent shall be increased pursuant
to clause (i) of Section 44(b) hereof for the Extension Term.

                  (g) Each of the arbitrators selected as herein provided shall
have at least ten (10) years experience in the leasing and renting of office
space on behalf of landlords in first class office buildings in Westchester.

                  (h) In determining the fair market rent under this Section 44,
the arbitrators shall take into account all relevant factors based on the
following assumptions, (A) that a standard work letter or work credit is then
being offered to Tenant even though it is not actually offered, (B) that other
concessions and allowances then being given by landlords of comparable buildings
to tenants entering into new leases in Westchester are being given to Tenant
even though same is not actually given, (C) that brokerage commissions payable
in connection with such new leases are being incurred by Landlord even though
same are not actually incurred, (D) the fact that for the purposes of
determining fair market rent, the demised premises shall be deemed to have been
improved to building standard only and (E) the Extension Term (whether or not
the same is the case) is for a term length for which Landlord would, under the
then market conditions, be able to obtain the maximum rental amount.

                                       18
<PAGE>

                  (i) If Landlord notifies Tenant that the fixed annual rent for
the Extension Term shall be equal to the amount set forth in clause (ii) of
Section 44(b) hereof, then the provisions of Section 44(d) hereof shall be
inapplicable and have no force or effect.

                  (j) In the event Landlord or Tenant initiates the appraisal
process pursuant to Section 44(d) hereof and as of the Commencement Date of the
Extension Term the amount of the fair market rent has not been determined,
Tenant shall pay the amount set forth in clause (ii) of Section 44(b) hereof and
when such determination has been made, an appropriate retroactive adjustment
shall be made as of the Commencement Date of the Extension Term.

                  (k) Except as provided in Section 44(b) hereof, Tenant's
occupancy of the Premises during the Extension Term shall be on the same terms
and conditions as are in effect immediately prior to the expiration of the
initial term of this Lease, provided, however, this Section 44 shall be deemed
deleted from this Lease and (ii) Tenant shall have no further right to extend
the term of this Lease.

                  (l) If Tenant does not send the Extension Notice pursuant to
provisions of subsection (a) hereof, this Article shall have no force or effect
and shall be deemed deleted from the Lease, except that Article 44 of the Lease
shall be deemed deleted therefrom.

                  (m) If this Lease is renewed for the Extension Term, then
Landlord or Tenant can request the other party hereto to execute an instrument
in form for recording setting forth the exercise of Tenant's right to extend the
term of the Lease and the last day of the Extension Term.

                  (n) If Tenant exercises its right to extend the term of this
Lease for the Extension Term pursuant to this Article, the phrases "the term of
this Lease" or "the term hereof" as used in this Lease, shall be construed to
include, when practicable, the Extension Term.

                                       19
<PAGE>

         6. Landlord acknowledges and agrees that Tenant intends to petition
certain benefits from the Westchester County Office of Economic Development.
Tenant acknowledges and agrees that Landlord has not made and is not making any
representations to Tenant regarding the availability of such benefits and
Tenant's inability to procure same shall in no way affect this Lease, the rent
due hereunder or any of Tenant's obligations hereunder. Landlord agrees to
cooperate with Tenant, at Tenant's sole cost and expense, in a timely manner, in
Tenant's application for such benefits.

         7. Tenant covenants, represents and warrants that Tenant has had no
dealings or communications with any broker, or agent other than Insignia/ ESG,
Inc. and Newmark Real Estate Inc. (which is representing Landlord) in connection
with the consummation of this Extension and Modification Agreement, and Tenant
covenants and agrees to pay, hold harmless and indemnify Landlord from and
against any and all cost, expense (including reasonable attorneys' fees) or
liability for any commission or other compensation claimed by any other broker
or agent with respect to this Extension and Modification Agreement.

         8. Except as modified by this Extension and Modification Agreement, the
Lease and all covenants, agreements, terms and conditions thereof shall remain
in full force and effect and are hereby in all respects ratified and confirmed.

         9. The covenants, agreements, terms and conditions contained in this
Extension and Modification Agreement shall bind and inure to the benefit of the
parties hereto and their respective successors, and, except as otherwise
provided in the Lease as hereby supplemented, their respective assigns.

                                       20
<PAGE>

         10. This Extension and Modification Agreement may not be changed
orally, but only by a writing signed by the party against whom enforcement
thereof is sought.

         IN WITNESS WHEREOF, the parties hereto have executed this Extension and
Modification Agreement as of the day and year first above written.

                       LANDLORD: PRAEDIUM II VALHALLA LLC

                                       By: VALHALLA II ASSOCIATES LLC,
                                              its managing member
                                       By:  Praedium Opportunity Fund II, L.P.,
                                              its managing member
ATTEST:                                By: Praedium Partners LLC
                                              its Investment General
Partner

  /s/ Illegible                        By: /s/ A. Floyd Lattin
----------------------                    -----------------------------------
                                       Name: A. Floyd Lattin
                                       Title: Senior Vice President

ATTEST:                                By: Praedium Advisors, Inc.
                                              its Investment General Partner

  /s/ Illegible                        By: /s/ A. Floyd Lattin
----------------------                    ----------------------------------
                                       Name: A. Floyd Lattin
                                       Title: Vice President

                               TENANT: DEL GLOBAL TECHNOLOGIES, CORP.
ATTEST:

/s/ Edith Williams                     By: /s/ Thomas V. Gilboy
----------------------                    ---------------------
                                       Name: Thomas V. Gilboy
                                       Title: Chief Financial Officer

                                       21
<PAGE>

                                    EXHIBIT A

                                 THE ADDED SPACE

                                       22<PAGE>
1

                                                                   Exhibit 10.16
                   MINISTRY OF INDUSTRY, TRADE AND HANDICRAFTS

                    GENERAL MANAGEMENT INDUSTRIAL PRODUCTION

                        Law No. 46 of 17th February 1982
              "Special Rotating Fund for Technological Innovation"

                       GRANT DECREE No. 0213 of 6/09/1995

IN ACCORDANCE WITH art. 14, sub-section one of law No. 46 of 17th February 1982,
that sets up, at the Ministry of Industry, Trade and Handicrafts the "Special
Rotating Fund for Technological Innovation";

IN ACCORDANCE WITH law No. 910 of 22.12.1986, law No. 67 of 11.3.88, law No. 541
of 24.12.88, law No. 405 of 29.12.90, law No. 415 of 31.12.90, law No. 500 of
23.12.92 and law No. 538 of 24.12.93 that have resulted in the financial
authorizations for the above-mentioned Fund in the last fiscal years;

HAVING TAKEN INTO ACCOUNT the sums that have already been paid into the
Technological Innovation Fund as a result of the reimbursement of loans granted
by the Fund set up by art. 14 of law 46/82 that contribute to establishing the
endowment of the Fund itself;

IN ACCORDANCE with CIPI resolution dated 30.3.1982 and subsequent amendments and
additions, concerning the conditions of admissibility to the operations of the
Fund, indications of priority and the criteria for the preliminary procedures;

IN ACCORDANCE WITH its own decree on 20.10.1986, concerning the procedures
relating to the granting of special facilities envisaged by law No. 46 of
17.2.1982 for technological innovation programs;

IN ACCORDANCE WITH, in particular, the CIPI resolution of 24th March 1988 No.
144, in amendment and addition to that of 30.3.1983 which allocates a percentage
of 35% and 55% respectively to programs judged "INNOVATIVE" or "HIGHLY
INNOVATIVE";

IN ACCORDANCE WITH subsections one and two of article 15 of law 17.2.1982 No.
46, as amended and inserted by art. 37 of law 317/91, as well as article 12
subsection 10 of law 1.3.86 No. 64 that establish the rates of interest to be
applied to the special facilities granted by the Fund for the pre-amortization
and amortization period;

HAVING TAKEN INTO ACCOUNT the agreements reached with the EEC, on the basis of
which the maximum contribution of the Fund cannot, as a rule, exceed 55% of the
allowed costs, 70% of the costs allowed for programs involving areas of the
South, 80% of costs allowed for EUREKA programs as long as the Fund contribution
does not exceed, in each case of application, the facility extent of 25% ESL
compared to the actual cost of the program;

IN ACCORDANCE with the CIPI resolution CIPI of 30 NOVEMBER 1983, integrated by
the subsequent resolution adopted on 12 March 1991, and by the resolution of
23/12/1992 concerning the definition of a "prospective financial compatibility
index" that must satisfy the Enterprises requesting the special facilities of
the Special Rotating Fund for Technological Innovation;

<PAGE>
2

IN ACCORDANCE WITH, in particular, art. 16, subsections two and three, of law
17.2.1982, No. 46 whose provision establishes that actions by the Fund are
deliberated by the Ministry of Industry, Trade and Handicrafts, subject to the
opinion of a Technical Committee and that the CIPI defines the extent,
conditions and procedures of the action;

IN ACCORDANCE WITH art. 37 sub-section 1 letter b of law 5 October 1991 No. 317
that establishes that the provisions of subsections 2 and 3 of art. 16 law 46/82
will not be applied to innovation programs involving a maximum expenditure of 10
billion lire and that the special facilities are granted with Decree of the
Ministry of Industry, Trade and Handicrafts subject to the opinion of the
Technical Committee;

IN ACCORDANCE WITH the CIPI resolution of 23/12/1992 and in particular point 3
that defines the criteria for identifying the above-mentioned programs;

IN ACCORDANCE WITH art. 16 of legislative decree 3 February 1993 No. 29
concerning the "Rationalization of the organization of public administrations
and review of the discipline concerning public employment, according to art. 2
of law 23 October 1992 No. 421";

IN ACCORDANCE WITH its own decree of 12/04/1995 with which - subject to the
opinion of the Technical Committee - the program indicated below was accepted by
the Fund;

HAVING ASCERTAINED that the program governed by this Decree will be carried out
in the North and that the Enterprise falls within the category of small and
medium-size Enterprises;

                                   ARTICLE ONE

The "Program of Technological Innovation" presented on 27/11/1991 by the Company
VILLA SISTEMI MEDICALI S.p.A., with registered offices in Buccinasco (MI) Via
delle Azalee, 3, Postal Code 20090, Fiscal Code 10022080153 hereafter called
Enterprise is admitted to the action of the Fund.

The program concerning the "New low-invasion permanent nuclear magnetic
resonance diagnostic system, with high performance in image treatment" with the
admitted costs of Lire 5,806,839,000 (five billion eight hundred and six
million, eight hundred and thirty-nine thousand) will be carried out during 54
(fifty-four) months starting from 01/10/1991 and ending on 31/03/1996.

The Fund contribution is equal to 35% of the above-mentioned cost and will be
made in the form of:

a) a loan up to the maximum capital amount of Lire 2,032,393,000 (two billion
thirty-two million three hundred and ninety-three thousand) equal to 35% of the
cost documented by the Enterprise admitted to the special facilities, with a
duration of 15 years, 10 of which of amortization at the annual rate of 6.6250%
and 5 of utilization and pre-amortization at the annual rate of 1.9875%.

                                   ARTICLE TWO

The Enterprise is directly responsible for the program and for fulfillment of
all the other commitments and responsibilities stipulated in this Decree and in
the "Technical Specifications". Distribution of the special facilities is
governed not only by the specific clauses under the following articles but also
by the conditions of the "Technical Specification" that the Enterprise declares
to be aware of and that are appended to this Decree, forming an integral and
essential part of it, under letter "A".

<PAGE>
3

                                  ARTICLE THREE

The total amount of the disbursements made during the implementation period of
the program, may not exceed 80% of the amount of the subsidized loan under
article 1 above.

The remaining 20% will be disbursed after the Enterprise has presented
documentation proving that the program has been completed.

The sums indicated in art. 1 above will be disbursed in a maximum of 6
installments, plus the last one in settlement, depending on the program progress
reports.

On the basis of the reports and statements stipulated in articles 10 and 11
below, a loan will be disbursed amounting to 28% of the relative cost of each
progress report admitted to the special facilities according to the criteria
under letter a) of art. 1.

The last disbursement in settlement amounting to a maximum of 7% equal to Lire
406,478,000 (four hundred and six million four hundred and seventy-eight
thousand) of the cost documented and admitted to the special facilities, will
take place, in any case, after the Enterprise has fulfilled its commitment under
sub-section two of this article and has signed the declaration of final
obligation.

Pre-amortization interest at the annual rate of 1.9875% will be calculated from
the date on which the Section of the State Treasury has paid the disbursed
amount to the bank indicated by the Enterprise and on the amount of each
individual utilization.

The Enterprise will reimburse all the quotas utilized in the form of financing
in annual installments of equal amounts, including principal and interest, the
first deadline of which falls six years from the date of signature of this
Decree, as in the reimbursement plan appended under letter "B".

Interest relating to the pre-amortization period will be paid every year, with
the first deadline falling twelve months from signature of this Decree.

Both interest on the pre-amortization and the reimbursement installments will be
paid into the Income forecast status, Section XVIII - Chapter 4721 "Sums
deriving from the reimbursement of loans granted by the Fund", under article 14
of Law 17.2.1982 No. 46, to be paid into the "Fund" itself.

In the event of a delay in payment or in reimbursement covered by the
possibility of revocation of this Decree and early redemption, overdue interest
at the official discount rate in force at the time plus six points, with an
annual minimum of 25%, will come into force in full right in favor of the
Ministry, on the respective sums.

Overdue interest will be applied without the need of any injunction or to
establish arrears procedures, but only as a result of expiration of deadline.

Except for the provisions of the sub-sections above, the Enterprise Ministry
will pay the above-mentioned loan quotas after it has received the
above-mentioned accounting documentation under article 11, and the technical
documentation under article 10. The Ministry will not pay the disbursement in
settlement until the Enterprise has fulfilled the obligations under sub-section
two of article 3.
<PAGE>
4

For each individual disbursement, the Enterprise must issue a special
declaration of partial obligation in the forms established by the Ministry and
must sign the declaration of final obligation for the disbursement in
settlement.

If, in the opinion of the Ministry, the examination of the above-mentioned
accounting documentation and the checks carried out under article 14, do not
give a positive result, the Ministry will be entitled to suspend the
disbursement totally or partially notifying the reasons for this action to the
Enterprise, which must regularize its position within a maximum of 30 days from
the date of the Ministry communication.

It is explicitly understood, however, that if, after the disbursements mentioned
above have been made, the Ministry should discover that such disbursements were
made, totally or partially, to cover costs that are incongruous, not pertinent
or in any case not eligible for the loan, the Ministry will be entitled to
enforce an adjustment on the quotas that may be outstanding, or if these should
be insufficient or if the disbursements have been fully made, the Enterprise
must return the surplus amount in one single installment plus interest paid at
the official discount rate in force at the time plus six point with a minimum of
25%, starting from the crediting date within 15 days of the written request from
the Ministry, by payment to Section XVIII - Chapter 4721 of the income forecast
status mentioned above.

It is explicitly established that the disbursements of the loan are subject, as
far as times are concerned, to the actual availability of the sums necessary.

<PAGE>
5

                                  ARTICLE FOUR

Within 60 days from the signing date of the Grant Decree, the Enterprise shall
provide proof that, up until the tenth day following the above-mentioned signing
date, it had full and unhindered enjoyment of its rights; that there were no
application for or procedures of bankruptcy, composition with creditors,
temporary receivership or extraordinary administration pending against it and
that no resolution concerning its being put into liquidation existed.

It is explicitly agreed that, in the event of a breach of the obligation
indicated above, the Ministry will be entitled to pronounce forfeiture of the
granted benefits.

The Enterprise shall also provide any further technical, legal and
administrative documentation that the Ministry may request.

                                  ARTICLE FIVE

The Enterprise shall carry out the program according to the procedures and terms
indicated in the Decree and Technical Specifications.

The Enterprise must notify the Ministry of any changes to the program
implementation procedures and terms, with respect to those referred to in the
previous sub-section, within a tacit deadline of 30 days from the time the
changes themselves are made.

The communication stating that changes have been made must be accompanied by a
documented illustrative report so as to provide the Ministry with suitable
evaluation elements.

If the Technical Committee envisaged in sub-section two of article 16 of law
17.2.1982 No. 46 should consider the changes relevant for the purposes of the
validity and objectives of the program and of the commitments undertaken by the
Enterprise with signature of this Decree, the same are deliberated with the same
procedures and methods as stipulated in article 3 of the D.M. 20.10.1986.

The signatory Enterprise is directly responsible for carrying out the program
and for fulfilling all the other commitments and responsibilities stipulated in
the Decree and in the Technical Specifications, also for the program quotas
carried out by the Enterprises indicated in the above-mentioned Technical
Specifications.

The special facilities envisaged by the Grant Decree will not be granted for
costs relating to the program quotas carried out by foreign residents.

                                   ARTICLE SIX

The loan disbursements under article 1 above will be paid via payment orders
issued by the Ministry on the Provincial State Treasury Section of Rome. On the
same date, the Ministry will send the Enterprise a payment notice informing that
the relative amount of the disbursements in question has been made available, in
its favor.

                                  ARTICLE SEVEN

Until the changes under article 5 above have been considered irrelevant or,
contrarily, until they have been approved, the Ministry will suspend payment of
the facilities.

<PAGE>
6

In the event of a delay in notifying the changes made, after hearing the opinion
of the Committee under sub-section two of article 16 of law 17.2.1982 No. 46,
the Ministry will be entitled to apply the reference rate instead of the agreed
rate on the disbursements made and, for the duration of the delay, still holding
good that provided in sub-sections three and four of article 5 and sub-section
one of this article.

In the event of failure to notify the changes made, when the Ministry becomes
aware of them, in addition to that provided in the previous sub-section, it may
also repeal the measure granting the facilities with the consequences envisaged
in the following sub-section.

In the event of failure to carry out the program, the Ministry will not start
the disbursement in favor of the Enterprise of the remaining 20% under art. 3
above relating to the program phases already completed, and for which the
stipulated facilities have already been partially disbursed. Within a deadline
of 30 days, allocated by the Ministry, the Enterprise must indicate the reasons
why the program was not completed. After carrying out the procedure under
article 4 of D.M. 20.10.1986, the Ministry may repeal the measure granting the
loan and the Enterprise will be obliged to return, in one single installment,
the part of the remaining capital debt. The Ministry will have the option, as an
alternative, of canceling 50% of the remaining credit.

                                  ARTICLE EIGHT

The Enterprise declares that the program in question will be carried out at the
factories indicated in article 5 of the Technical Specifications and will be
directed by the person indicated therein.

The Ministry must be notified of any changes, in a registered letter with return
receipt, with a maximum period of 30 days from the time the change is made, with
the explicit injunction that, in default of said notifications or if the
Ministry does not agree with such changes, the Ministry will be entitled to
repeal the grant decree.

The Enterprise shall ensure that the agreements and conditions of this Decree
concerning the criteria for establishing the costs relating to the innovation
program and the right of inspection under the enclosed "Technical
Specifications" are observed by any Enterprises requested to supply services
within the sphere of the program under the same Decree.

                                  ARTICLE NINE

The Ministry may repeal this Decree even if only one of the following
circumstances should occur:

a)   failure to pay, totally or partially, even only one of the matured
     installments to reimburse the financed sum and/or interest;

b)   failure to carry out the program following the procedures and within the
     deadlines stipulated by the Ministerial Decree granting the loan, except
     for what provided in article 7, sub-section IV above;

c)   any change in the actual legal, administrative, technical and economic
     status that may have occurred at the beginning or at a later date, with
     respect to that resulting from the documentation produced and from the
     written communications issued to the Ministry.

d)   failure to observe the obligations deriving from law 46/82 and subsequent
     provisions, from the rules concerning the application of the law itself and
     the hypotheses envisaged by this Decree.

<PAGE>
7

In the event of repeal, the Enterprise will not be entitled to further
disbursements, if they are still outstanding, and will be obliged to pay not
only an indemnity, from this time agreed at 2% of the remaining capital debt but
also an amount equal, at the time of the repeal, to the current value of the
total remaining debt utilizing the same rates applied for the Enterprise's
payment plan.

                                   ARTICLE TEN

The Enterprise must present the Ministry with technical reports on the progress
of the program drafted according to the layout under appendix 1.

The Enterprise must prepare and keep available for the Ministry documents
describing the progress status of the program.

                                 ARTICLE ELEVEN

The Enterprise must present the Ministry with accounting statements, produced
according to the layout under appendix 2, containing a statement - split up into
the cost chapters agreed in detail between the parties and contained in the
Technical Specification - of accrued personnel costs and expenses actually
incurred for carrying out the program in question during the period to which the
statement refers.

The Enterprise must set up a certified and stamped book on which the costs and
expenses under the previous sub-section must be registered, according to the
procedures that will be indicated by the Ministry; this book must be entitled
"Costs relating to the technological innovation program" under Decree No. 0213
of 06/09/1995 to be enforced on the Special Rotating Fund for Technological
Innovation under law 17.2.1982 No. 46.

The Enterprise must prepare and make available to the Ministry all the relative
supporting documentation, required by law or by the accounting policy or by the
specific agreements of the parties.

                                 ARTICLE TWELVE

The Enterprise must also present to the Ministry annual forecasts, relating to
the implementation of the program, drafted and signed according to the layout
under appendix 3. The first of the annual periods to which the individual
reports must refer must start from the date on which this Decree is signed.
These reports must be presented to the Ministry within 60 days from the start of
each period.

                                ARTICLE THIRTEEN

Within 60 days from expiry of the end of the duration of the program as provided
in art. 1 of the Grant Decree or of the conclusion, if this should occur at an
earlier date, of the program in question, the Enterprise must present the
Ministry with:

a - a technical report indicating all the activities carried out and the even
partial results obtained, including an opinion about the results achieved, and
to some extent, the aims of the program;

b - a summarized accounting statement - drafted according to the procedures
stipulated in art. 11 of this Decree for partial statements envisaged therein -
of all accrued personnel costs and all expenses actually incurred in carrying
out the program and considered admissible according to the above-mentioned
agreements.

<PAGE>
8

                                ARTICLE FOURTEEN

The Ministry may check the progress of the activities and their compliance with
the program, and also the pertinence, actual amount and suitability of the costs
and expenses incurred, according to the criteria and procedures that it will
consider most appropriate, making use also of the figures contained in the
reports under the previous articles and the inspections stipulated in the
Technical Specification.

                                 ARTICLE FIFTEEN

For a period of ten years from the date of the Decree, the Enterprise pledges
that it shall not release the results and know-how deriving from the facilitated
innovation program, except upon payment.

The conditions of the cession must be notified to the Ministry of Industry,
Trade and Handicrafts beforehand for the necessary evaluation of its
suitability. The Enterprise pledges that it shall implement the results of the
innovation program stipulated in this Decree industrially at places located
within Italian territory.

Any exceptions to the provisions of the previous sub-section must be authorized
before hand by the Ministry of Industry, Trade and Handicrafts.

                                 ARTICLE SIXTEEN

The Enterprise may totally or partially pay off the debt deriving from the loan
granted with this document at an early date. The amount for which early
reimbursement has been requested will be understood as matured and payable at
the date established for the reimbursement itself.

The amount due for each maturity will be payable to the Ministry, for its actual
value, on the date mentioned in the sub-section above. To this end, the same
rates as those applied for the Enterprise's payments plan will be used.

In the event of partial reimbursement, all the payment will go towards reducing
the reimbursement rates in reverse order to that of their maturity.

All the early payments made by the Enterprise will not in any case reinstate the
availability of the loan existing before the payment.

                                ARTICLE SEVENTEEN

No dispute that may arise between the parties may suspend the Enterprise's
obligation to pay that due for the loan service punctually at the respective
maturity dates.

                                ARTICLE EIGHTEEN

The Enterprise confirms that any actions to recover credits will be promoted and
carried out by the Ministry according to the forms and procedures stipulated for
the recovery of State credits. The parties elect their domiciles as follows: the
Ministry of Industry, Trade and Handicrafts in Rome and the Enterprise, at its
registered offices indicated in art. 1 of the Decree.

<PAGE>
9

                                ARTICLE NINETEEN

All the obligations deriving from the Decree and the Technical Specification are
understood as undertaken by the Enterprise jointly and indivisible for itself,
its successors and assignees in any capacity.

                                 ARTICLE TWENTY

The Enterprise shall take part in any action, even if for modification purposes,
considered useful or necessary by the Ministry for carrying out the established
relationship.

                               ARTICLE TWENTY-ONE

All the costs, including Notary costs, associated to and resulting from this
Decree and any fiscal charges are at the exclusive charge of the Enterprise.

<PAGE>
10

                               ARTICLE TWENTY-TWO

The cost for the intervention of the Fund in favor of the program governed by
this Decree equal to a total of Lire 2,032,393,000 (two billion thirty-two
million three hundred and ninety-three thousand) is charged to the available
funds of the Special Rotating Fund for Technological Innovation.

Rome, 6/09/1995

                                             /s/ G. Ammassari
                                             THE GENERAL MANAGER
                                               (G. Ammassari)

The undersigned Ms. Mariacristina VILLA born in Milan on 26.11.1949 representing
the company VILLA SISTEMI MEDICALI S.p.A., by virtue of the powers granted by
the enclosed resolution of the Board of Directors dated 15.05.1995, signs this
Decree in acceptance of the obligations and responsibilities indicated in the
same Decree and in the appendix "Technical Specifications".

Rome, 6/09/1995

                                             /s/ Mariacristina Villa
                                             VILLA SISTEMI MEDICALI SpA

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