Document:

Quality Systems, Inc.
                                    Form 10-K

                                  Exhibit 10.16
        Lease Agreement between Company and Craig Development Corporation
                            dated February 22, 2001.

<PAGE>

                            MEREDITH FINANCIAL CENTRE

                                17th and Prospect
                               Tustin, California

                                      LEASE

THIS LEASE, dated for reference purposes only, is made this 20TH day of FEBRUARY
2001, by and between CRAIG DEVELOPMENT CORPORATION (hereinafter "Landlord") and
QUALITY SYSTEMS, INC. (hereinafter "Tenant").

For and in consideration of the rental of the covenants and agreements
hereinafter set forth to be kept and performed by the Tenant, Landlord hereby
leases to Tenant and Tenant hereby leases from Landlord the Premises herein
described for the term, at the rental and subject to and upon all of the terms,
covenants and agreements hereinafter set forth.

1. PREMISES

      1.1 DESCRIPTION. Landlord hereby leases to Tenant and Tenant hereby rents
from Landlord those certain Premises (hereinafter "Premises") crosshatched on
Exhibit A containing approximately 14524.85 rentable square feet on the FIRST &
SECOND floor of the building commonly known as the CENTRE building, Meredith
Financial Centre, City of Tustin, County of Orange, or 17822 EAST 17TH STREET,
SUITES 101, 102, 103, 104, 201, 203, 210, 211, & 212, TUSTIN, CA 92780.
Hereinafter referred to as the "Building".

14524.85 SQ.FT. approximate Premises rentable area / 171,500.00 SQ. FT.
approximate Office Building Project rentable area = 8.5% Lessee's Share.

      1.2 WORK OF IMPROVEMENTS. The obligation of Landlord and Tenant to perform
the work and supply the necessary materials and labor to prepare the Premises
for occupancy are set forth in attached Exhibit B. Landlord and Tenant shall
expend all funds and do all acts required of them in Exhibit B and shall have
the work performed promptly and diligently in a first class workmanlike manner.

2. TERM

      2.1 TERM. The term of this Lease shall be for TWELVE (12) months
commencing APRIL 1, 2001 and ending on MARCH 31, 2002, unless sooner terminated
pursuant to this Lease.

      2.2 DELAY IN COMMENCEMENT. Tenant agrees that in the event of the
inability of Landlord for any reason to deliver possession of the Premises to
Tenant on the commencement date set forth in Section 2.1, Landlord shall not be
liable for any damage thereby nor shall such inability affect the validity of
this Lease or the obligations of Tenant hereunder, but in such case Tenant shall
not be obligated to pay rent or other monetary sums until possession of the
Premises is tendered to Tenant; provided that if the delay in delivery of
possession exceeds sixty (60) days, then the expiration date of the term of the
Lease shall be extended by the period of time computed from the scheduled
commencement date to the date possession is tendered. In

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the event Landlord shall not have delivered possession of the Premises within
six (6) months from the scheduled commencement date, then Tenant at its option,
to be exercised within thirty (30) days after the end of said six (6) month
period, may terminate this Lease and upon Landlord's return of any monies
previously deposited by Tenant, the parties shall have no further rights or
liabilities toward each other.

      2.3 ACKNOWLEDGMENT OF COMMENCEMENT DATE. In the event the commencement
date of the term of the Lease is other than as provided in Section 2.1, then
Landlord shall execute a written acknowledgment of the date of commencement and
shall attach it to the Lease as Exhibit E.

3. RENT

Tenant shall pay to Landlord as rent for the Premises in advance on the first
day of each calender month of the term of this Lease without deduction, offset,
prior notice or demand, in lawful money of the United States, the sum of TWENTY
THREE THOUSAND TWO HUNDRED THIRTY NINE DOLLARS AND SEVENTY SIX CENTS
($23,239.76), or one dollar and SIXTY CENTS ($1.60) per square foot based on a
Premises rentable area of 14524.85 square feet. If the commencement date is not
the first day of a month, or if the Lease termination date is not the last day
of a month, a prorated monthly installment shall be paid at the then current
rate for the fractional month during which the Lease commences and/or
terminates.

                     Monthly Rental Rate
    Months            Per Square Foot           Total Monthly Rent
    ------           -------------------        ------------------

    1 - 12                $ 1.60                   $ 23,239.76

Concurrently with Tenant's execution of the Lease, Tenant shall deposit with
Landlord the sum of XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXX ($X,XXX.XX) as rent for the month(s) of XXXXXXX 200X.

4. SECURITY DEPOSIT

Concurrently with Tenant's execution of the Lease, Tenant shall deposit with
Landlord the sum of KXXXXXXXXXXXXXXXXXXXXX ($X,XXX.XX). Said sum shall be held
by Landlord as a Security Deposit for the faithful performance by Tenant of all
of the terms, covenants, and conditions of this Lease to be kept and performed
by Tenant during the term hereof. If Tenant defaults with respect to any
provision of this Lease, including but not limited to the provisions relating to
the payment of rent and any of the monetary sums due herewith, Landlord may (but
shall not be required to) use, apply or retain all or any part of this Security
Deposit for the payment of any other amount which Landlord may spend by reason
of Tenant's default or to compensate Landlord for any other loss or damage which
Landlord may suffer by reason of Tenant's default. If any portion of said
Deposit is so used or applied, Tenant shall, within ten (10) days after written
demand therefore, deposit cash with Landlord in an amount sufficient to restore
the Security Deposit to its original amount; Tenant's failure to do so shall be
a material breach of this Lease. Landlord shall not be required to keep this
security Deposit separate from its general funds, and Tenant shall not be
entitled to interest on such deposit. If Tenant shall fully and faithfully
perform every provision of this Lease to be performed by it, the Security

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Deposit or any balance thereof shall be returned to Tenant (or, at Landlord's
option, to the last assignee of Tenant's interests hereunder) at the expiration
of the Lease term and after Tenant has vacated the Premises. In the event of
termination of Landlord's interest in this Lease, Landlord shall transfer said
Deposit to Landlord's successor in interest whereupon Tenant agrees to release
Landlord from liability for the return of such Deposit or the accounting
therefor. SEE SECTION 18.1 SECURITY DEPOSIT RETAINED BY LANDLORD.

5. USE

      5.1 USE. The Premises shall be used and occupied by Tenant for general
office purposes and for no other purpose without the prior written consent of
Landlord.

      5.2 SUITABILITY. Tenant acknowledges that neither Landlord nor any agent
of Landlord has made any representation or warranty with respect to the Premises
or the Building or with respect to the suitability of either for the conduct of
Tenant's business, nor has Landlord agreed to undertake any modification,
alteration or improvement to the Premises except as provided in this Lease. The
taking of possession of the Premises by Tenant shall conclusively establish that
the Premises and the Building were at such time in satisfactory condition unless
within fifteen (15) days after such date Tenant shall give Landlord written
notice specifying in reasonable detail the respects in which the Premises or the
Building were not in satisfactory condition.

      5.3 USES PROHIBITED.

            (a) Tenant shall not do or permit anything to be done in or about
the Premises nor bring or keep anything therein which will in any way increase
the existing rate or affect any fire or other insurance upon the Building or any
of its contents (unless Tenant shall pay any increased premium as a result of
such use or acts), or cause a cancellation of any insurance policy covering said
Building or any part thereof or any of its contents, nor shall Tenant sell or
permit to be kept, used or sold in or about said Premises any articles which may
be prohibited by a standard form policy of fire insurance.

            (b) Tenant shall not do or permit anything to be done in or about
the Premises which will in any way obstruct or interfere with the rights of
other tenants or occupants of the Building or injure or annoy them or use or
allow the Premises to be used for any unlawful or objectionable purpose, nor
shall Tenant cause, maintain or permit any nuisance in or about the Premises.
Tenant shall not commit or suffer to be committed any waste in or about the
Premises.

            (c) Tenant shall not use the Premises or permit anything to be done
in or about the Premises which will in any way conflict with any law, statute,
ordinance or governmental rule or regulation or requirement of duly constituted
public authorities now in force or which may hereafter be enacted or
promulgated. Tenant shall at its sole cost and expense promptly comply with all
laws, statutes, ordinances and governmental rules, regulations or requirements
now in force or which may hereafter be in force and with the requirements of any
board of fire underwriters or other similar body now or hereafter constituted
relating to or affecting the condition, use or occupancy of the Premises,
excluding structural changes not relating to or affecting the condition, use or
occupancy of the Premises, or not related or afforded by Tenant's improvements
or acts. The judgment of any court

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of competent jurisdiction or the admission of Tenant in any action ac~ainst
Tenant, whether Landlord be a party thereof or not, that Tenant violated any
law, statute, ordinance or governmental rule, regulation or requirement, shall
be conclusive of the fact as between Landlord and Tenant.

6. SERVICE AND UTILITIES

      6.1 LANDLORD'S OBLIGATION. Landlord agrees to furnish to the Premises
during reasonable hours of generally recognized business days, to be determined
by Landlord, and subject to the Rules and Regulations of the Building, water,
gas and electricity suitable for the intended use of the Premises, heat and air
conditioning required in Landlord's judgement for the comfortable use and
occupancy of the Premises, ) janitorial and window washing service, and security
customary in similar buildings in the competing geographical area. Landlord
shall also maintain and keep lighted the common stairs, entries and toilet rooms
in the Building.

      6.2 TENANT'S OBLIGATION. Tenant shall pay for, prior to delinquency, all
telephone and all other materials and services, not expressly required to be
paid by Landlord, which may be furnished to or used in, on or about the Premises
during the term of this Lease.

      6.3 TENANT'S ADDITIONAL REQUIREMENTS.

            (a) Tenant will not, without the written consent of Landlord, use
any apparatus or device in the Premises, using current in excess of 110 volts,
which will in any way increase the amount of electricity or water usually
furnished or supplied for use of the Premises as general office space; nor
connect with electric current, except through existing electrical outlets in the
Premises, or water pipes, any apparatus or device, for the purposes of using
electric current or water.

            (b) If Tenant shall require water or electric current in excess of
that usually furnished or supplied for use of the Premises as general office
space, Tenant shall first procure the consent of Landlord for the use thereof,
which consent Landlord may refuse and Landlord may cause a water meter or
electric current meter to be installed in the Premises, so as to measure the
amount of water and electric current consumed for any such other use. The cost
of such meters and installation, maintenance and repair thereof shall be paid
for by Tenant and Tenant agrees to pay Landlord promptly upon demand by Landlord
for all such water and electric current consumed as shown by said meters, at the
rates charged for such services by the City in which the Building is located or
the local public utility, as the case may be, furnishing the same, plus any
additional expense incurred in keeping account of the water and electric current
so consumed.

            (c) Wherever heat generating machines or equipment are used in the
Premises which affect the temperature otherwise maintained by the air
conditioning system, Landlord reserves the right to install supplementary air
conditioning units on the Premises and the cost thereof, including the cost of
installation, operation and maintenance thereof, shall be paid by Tenant to
Landlord upon demand by Landlord.

         6.4 NON-LIABILITY. Landlord shall not be liable for, and Tenant shall
not be entitled to, any of the foregoing when such failure is caused by
accidents, breakage, repairs, strikes, lockouts or other labor disturbances or
labor disputes of any character, or by any other cause similar or dissimilar,
beyond the reasonable control of Landlord.

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Landlord shall not be liable under any circumstances for loss of or injury to
property, however occurring, through or in connection with or incidental to
failure to furnish any of the foregoing.

7. MAINTENANCE/REPAIRS; ALTERATIONS/ADDITIONS

      7.1 MAINTENANCE AND REPAIRS.

            (a) Landlord's Obligations. Landlord shall maintain in good order,
condition and repair the building and all other portions of the premises not the
obligation of Tenant or any other tenant in the Building.

            (b) Tenant's Obligations.

                  (i) Tenant, at Tenant's sole cost and expense, except for
services furnished by Landlord pursuant to Article 6 thereof, shall maintain the
Premises in good order, condition and repair including the interior surfaces of
the ceilings, walls and floors, all doors, interior windows, exterior windows at
or below street level, all plumbing pipes, electrical wiring, switches, fixtures
and special items in excess of building standard furnishings, and equipment
installed by or at the expense of Tenant. Tenant expressly waives the benefits
of any statute now or hereafter in effect which would otherwise afford Tenant
the right to make repairs at Landlord's expense or to terminate this Lease
because of Landlord's failure to keep the Premises in good order, condition and
repair.

                  (ii) Upon the expiration or earlier termination of this Lease,
Tenant shall surrender the Premises in the same condition as received, ordinary
wear and tear excepted, and shall promptly remove or cause to be removed at
Tenant's expense from the Premises and the Building any signs, notices and
displays placed by Tenant.

                  (iii) Tenant agrees to repair a ny damage to the Premises or
the Building caused by or in connection with the removal of any articles of
personal property, business or trade fixtures, machinery, equipment,
cabinetwork, furniture, movable partition or permanent improvements or
additions, including without limitation thereto, repairing the floor and
patching and painting the walls where required by Landlord to Landlord's
reasonable satisfaction, all at Tenant's sole cost and expense. Tenant shall
indemnify the Landlord against any loss or liability resulting from delay by
Tenant in so surrendering the Premises, including without limitation any claims
made by any succeeding tenant founded on such delay.

                  (iv) In the event Tenant fails to maintain the Premises in
good order, condition and repair, Landlord shall give Tenant notice to do such
acts as are reasonably required to so maintain the Premises. In the event Tenant
fails to promptly commence such work and diligently prosecute it to completion,
then Landlord shall have the right to do such acts and expend such funds at the
expense of Tenant as are reasonably required to perform such work. Any amount so
expended by Landlord shall be paid by Tenant promptly after demand with interest
at ten percent (10% per annum from the date of such work. Landlord shall have no
liability to Tenant for any damage, inconvenience or interference with the use
of the Premises by Tenant as a result of performing any such work.

            (c) Compliance with Law. Landlord and Tenant shall each do all acts
required to comply with all applicable laws ordinances, regulations and rules of
any public authority relating to their respective maintenance obligations as set
forth herein.

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      7.2 ALTERATIONS AND ADDITIONS.

            (a) Tenant shall make no alterations, additions or improvements to
the Premises or any part thereof without obtaining the prior written consent of
Landlord.

            (b) Landlord may impose as a condition to the aforesaid consent such
requirements as Landlord may deem necessary in its sole discretion, including
without limitation thereto, the manner in which the work is done, a right of
approval of the contractor by whom the work is to be performed, the times during
which it is to be accomplished, and the requirement that upon written consent of
Landlord prior to the expiration or earlier termination of the Lease, Tenant
will remove any and all permanent improvements or additions to the Premises
installed at Tenant's expense and all movable partitions, counters, personal
property, equipment, fixtures and furniture.

            (c) All such alterations, additions or improvements shall at the
expiration or earlier termination of the Lease become the property of Landlord
and remain upon and surrendered with the Premises, unless specified pursuant to
Section 7.2(b) above.

            (d) All articles of personal property and all business and trade
fixtures, machinery and equipment, cabinetwork, furniture and movable partitions
owned by Tenant or installed by Tenant at its expense in the Premises shall be
and remain the property of Tenant and may be removed by Tenant at any time
during the Lease term when Tenant is not in default hereunder.

8. ENTRY BY LANDLORD

Landlord reserves and shall at any and all times have the right to enter the
Premises to inspect the same, to supply janitor service and any other service to
be provided by Landlord to Tenant hereunder, to submit said Premises to
prospective purchasers or tenants, to post notices of non-responsibility and
"for lease" signs, and to alter, improve or repair the Premises and any portion
of the Building without abatement of rent, and may for that purpose erect
scaffolding and other necessary structures where reasonably required by the
character of the work to be performed, always providing the entrance to the
Premises shall not be blocked thereby, and further providing that the business
of Tenant shall not be interfered with unreasonably. Tenant hereby waives any
claim for damages for any injury or inconvenience to or interference with
Tenant's business, any loss of occupancy or quiet enjoyment of the Premises, and
any other loss occasioned thereby. For each of the aforesaid purposes, Landlord
shall at all times have and retain a key with which to unlock all of the doors
in, upon and about the Premises, excluding Tenant's vaults and safes, and
Landlord shall have the right to use any and all means which Landlord may deem
proper to open said doors in an emergency, in order to obtain entry to the
Premises, and any entry to the Premises obtained by Landlord by any of said
means, or otherwise, shall not under any circumstances be construed or deemed to
be a forcible or unlawful entry into, or a detainer of, the Premises, or an
eviction of Tenant from the Premises, or any portion thereof.

9. LIENS

Tenant shall keep the Premises and any building of which the Premises are a part
free from any liens arising out of work performed, materials furnished, or
obligations incurred by Tenant and shall indemnify, hold harmless and defend
Landlord from any liens and encumbrances arising out of any work performed or
materials furnished by or at the direction

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of Tenant. In the event that Tenant shall not, within twenty (20) days following
the imposition of any such lien, cause such lien to be released of record by
payment or posting of a proper bond, Landlord shall have, in addition to all
other remedies provided herein and by law, the right, but no obligation, to
cause the same to be released by such means as it shall deem proper, including
payment of the claim giving rise to such lien. All such sums paid by Landlord
and all expenses incurred by it in connection therewith including attorney's
fees and costs shall be payable to Landlord by Tenant on demand with interest at
the rate of ten percent (10%) per annum. Landlord shall have the right at all
times to post and keep posted on the Premises any notices permitted or required
by law, or which Landlord shall deem proper, for the protection of Landlord and
the Premises, and any other party having an interest therein, from mechanics'
and materialmen's liens, and Tenant shall give to Landlord at least ten (10)
days prior written notice of the expected date of commencement of any work
relating to alterations or additions to the Premises.

10. INDEMNITY

      10.1 INDEMNITY. Tenant shall indemnify and hold Landlord harmless from and
defend Landlord against any and all claims of liability for any injury or damage
to any person or property whatsoever; (1) occurring in, on or about the Premises
or any part thereof; and (2) occurring in, on or about any facilities
(including, without prejudice to the generality of the term "facilities",
elevators, stairways, passageways, hallways, and parking areas), the use of
which Tenant may have in conjunction with other tenants of the Building, when
such injury or damage is caused in part or in whole by the act, neglect, fault
or omission of any duty with respect to the same by Tenant, its agents,
contractors, employees or invitees. Tenant shall further indemnify and hold
Landlord harmless from and against any and all claims arising from any breach or
default in the performance of any obligation on Tenant's part to be performed
under the terms of this Lease, or arising from any act or negligence of Tenant,
or any of its agents, contractors, employees and from and against all costs,
attorney's fees, expenses and liabilities incurred in the defense of any such
claim or any action or proceeding brought thereof. In case any action or
proceeding be brought against Landlord by reason of any such claim, Tenant, upon
notice from Landlord, shall defend the same at Tenant's expense by counsel
reasonably satisfactory to Landlord, provided, however, that Tenant shall not be
liable for damage or injury occasioned by the negligence or intentional acts of
Landlord and its designated agents or employees unless covered by insurance
Tenant is required to provide.

      Tenant, as a material part of the consideration to Landlord, hereby
assumes all risk of damage to property or injury to persons in, upon or about
the Premises from any cause and Tenant hereby waives all claims in respect
thereof against Landlord.

      10.2 EXEMPTION OF LANDLORD FROM LIABILITY. Landlord shall not be liable
for injury or damage which may be sustained by the person, goods, wares,
merchandise or property of Tenant, its employees, invitees or customers, or any
other person in or about the Premises caused by or resulting from fire, steam,
electricity, gas, water or rain, which may leak or flow from or into any part of
the Premises, or from the breakage, leakage, obstruction or other defects of the
pipes, sprinklers, wires, appliances, plumbing, air conditioning or lighting

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fixtures of the same, whether the damage or injury results from conditions
arising upon the Premises or upon other portions of the Building of which the
Premises are a part, or from other sources. Landlord shall not be liable for any
damages arising from any act or neglect of any other tenant of the Building.

11. INSURANCE

      11.1 COVERAGE. Tenant shall, at all times during the term of Lease, and at
its own cost and expense procure and continue in force the following insurance
coverage:

            (a) Bodily Injury and Property Damage Liability insurance with a
combined single limit for bodily injury and property damage of not less than
$500,000.

            (b) Fire and Extended Coverage Insurance, including vandalism and
malicious mischief coverage, in an amount equal to the full replacement value of
all fixtures, furniture and improvements installed by or at the expense of
Tenant and or Landlord.

      11.2 INSURANCE POLICIES. The aforementioned minimum limits of policies
shall in no event limit the liability of Tenant hereunder. The aforesaid
insurance shall name Landlord as an additional insured. Said insurance shall be
with companies having a rating of not less than B in "Best's Insurance Guide".
Tenant shall furnish from the insurance companies or cause the insurance
companies to furnish certificates of coverage. No such policy shall be
cancelable or subject to reduction of coverage or other modification or
cancellation except after thirty (30) days prior written notice to Landlord by
the insurer. All such policies shall be written as primary policies, not
contributing with and not in excess of the coverage which Landlord may carry.
Tenant shall, at least twenty (20) days prior to the expiration of such
policies, furnish Landlord with renewals or binders. Tenant agrees that if
Tenant does not take out and maintain such insurance, Landlord may (but shall
not be required to) procure said insurance on Tenant's behalf and charge Tenant
the premiums together with a twenty-five percent (25%) handling charge, payable
upon demand. Tenant shall have the right to provide such insurance coverage
pursuant to blanket policies obtained by Tenant provided such blanket policies
expressly afford coverage to the Premises and to Tenant as required by this
Lease.

      11.3 WAIVER OF SUBROGATION. Landlord and Tenant each hereby waive any and
all rights of recovery against the other or against the officers, employees,
agents and representatives of the other, on account of loss or damage occasioned
to such extent that such loss or damage is insured against under any fire and
extended coverage insurance policy which either may have in force at the time of
such loss or damage. Tenant shall, upon obtaining the policies of insurance
required under this Lease, give notice to the insurance carrier or carriers that
the foregoing mutual waiver of subrogation is contained in this Lease.

12. DAMAGE OR DESTRUCTION

      12.1 PARTIAL DAMAGE -- INSURED. In the event the Premises or the Building
are damaged by any casualty which is covered under fire and extended coverage
insurance carried by Landlord, then Landlord shall restore such damage provided
insurance proceeds are available to pay eighty percent (80%) or more of the cost
of restoration and provided

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such restoration can be completed within sixty (60) days after the commencement
of the work in the opinion of a registered architect or engineer appointed by
Landlord. In such event this Lease shall continue in full force and effect,
except that Tenant shall be entitled to proportionate reduction of rent while
such restoration takes place, such proportionate reduction to be based upon the
extent to which the restoration efforts interfere with Tenant's business in the
Premises.

      12.2 PARTIAL DAMAGE -- UNINSURED. In the event the Premises or the
Building are damaged by a risk not covered by Landlord's insurance or the
proceeds of available insurance are less than eighty percent (80%) of the cost
of restoration, or if the restoration cannot be completed within sixty (60) days
after the commencement of work in the opinion of the registered architect or
engineer appointed by Landlord, then Landlord shall have the option either to
(1) repair or restore such damage, this Lease continuing in full force and
effect, but the rent to be proportionately abated as hereinabove provided, or
(2) give notice to Tenant at any time within thirty (30) days after such damage
terminating this Lease as of a date to be specified in such notice, which date
shall be not less than thirty (30) nor more than sixty (60) days after giving
such notice. In the event of the giving of such notice, this Lease shall expire
and all interest of Tenant in the Premises shall terminate on such date so
specified in such notice and the rent, reduced by any proportionate reduction
based upon the extent, if any to which said damage interfered with the use and
occupancy of Tenant, shall be paid to the date of such termination; Landlord
agrees to refund to the Tenant any rent theretofore paid in advance for any
period of time subsequent to such date.

      12.3 TOTAL DESTRUCTION. In the event the Premises are totally destroyed or
the Premises cannot be restored as required herein under applicable laws and
regulations, notwithstanding the availability of insurance proceeds, this Lease
shall be terminated effective the date of the damage.

      12.4 DAMAGE NEAR END OF THE TERM. Notwithstanding anything to the contrary
contained in this Article 12, Landlord shall not have any obligation whatsoever
to repair, reconstruct or restore the Premises when the damage resulting from
any casualty covered under this Article 12 occurs during the last twelve (12)
months of the term of this Lease or any extension thereof.

      12.5 LANDLORD'S OBLIGATIONS. The Landlord shall not be required to repair
any injury or damage by fire or other cause, or to make any restoration or
replacement of any panelings, decorations, partitions, railings, floor covering,
office fixtures or any other improvements or property installed in the Premises
by Tenant or at the direct or indirect expense of Tenant. Tenant shall be
required to restore or replace same in the event of damage. Except for abatement
of rent, if any, Tenant shall have no claim against Landlord for any damage
suffered by reason of any such damage, destruction, repair or restoration; nor
shall Tenant have the right to terminate this Lease as the result of any
statutory provision now or hereafter in effect pertaining to the damage and
destruction of the Premises or the Building, except as expressly provided
herein.

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13. CONDEMNATION

If all or any part of the Premises shall be taken or appropriated for public or
quasi-public use by right of eminent domain with or without litigation or
transferred by agreement in connection with such public or quasi-public use,
either party hereto shall have the right at its option exercisable within thirty
(30) days of receipt of notice of such taking to terminate this Lease as of the
date possession is taken by the condemning authority, provided, however, that
before Tenant may terminate this Lease by reason of taking or appropriation as
provided hereinabove, such taking or appropriation shall be of such an extent
and nature as to substantially handicap, impede or impair Tenant's use of the
Premises. If any part of the Building other than the Premises shall be so taken
or appropriated, Landlord shall have the right at its option to terminate this
Lease. No award for any partial or entire taking shall be apportioned, and
Tenant hereby assigns to Landlord any award which may be made in such taking or
condemnation, together with any and all rights of Tenant now or hereafter
arising in or to the same or any part thereof; provided, however, that nothing
contained herein shall be deemed to give Landlord any interest in or to require
Tenant to assign to Landlord any award made to Tenant for the taking of personal
property and fixtures belonging to Tenant and/or for the interruption of or
damage to Tenant's business and/or for Tenant's unamortized cost of leasehold
improvements. In the event of a partial taking which does not result in a
termination of this Lease, rent shall be abated in the proportion which the part
of the Premises so made unusable bears to the rented area of the Premises
immediately prior to the taking. No temporary taking of the Premises and/or of
Tenant's rights therein or under this Lease shall terminate this Lease or give
Tenant any right to any abatement of rent thereunder; any award made to Tenant
by reason of any such temporary taking shall belong entirely to Tenant and
Landlord shall not be entitled to share therein.

14. ASSIGNMENT AND SUBLETTING

      14.1 LANDLORD'S CONSENT REQUIRED. Tenant shall not assign, transfer,
mortgage, pledge, hypothecate or encumber this Lease or any interest therein,
and shall not sublet the Premises or any part thereof, without the prior written
consent of Landlord and any attempt to do so without such consent being first
had and obtained shall be wholly void and shall constitute a breach of this
Lease.

      14.2 REASONABLE CONSENT. If Tenant complies with the following conditions,
Landlord shall not unreasonably withhold its consent to the subletting of the
Premises or any portion thereof or the assignment of this Lease. Tenant shall
submit in writing to Landlord (a) the name and legal composition of the proposed
subtenant or assignee; (b) the nature of the business proposed to be carried on
in the Premises; (c) the terms and provisions of the proposed sublease; (d) such
reasonable financial information as Landlord may request concerning the proposed
subtenant or assignee, and (e) certificates of insurance coverage as stated in
Article 11.

      14.3 NO RELEASE OF TENANT. No consent by Landlord to any assignment or
subletting by Tenant shall relieve Tenant of any obligation to be performed by
Tenant under this Lease, whether occurring before or after such consent,
assignment or subletting. The consent by Landlord to any assignment or
subletting shall not relieve Tenant from the obligation to obtain Landlord's
express written consent to any other assignment or subletting. The acceptance of
rent by

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Landlord from any other person shall not be deemed to be a waiver by Landlord of
any provision of this Lease or to be a consent to any assignment, subletting or
other transfer. Consent to one assignment, subletting or other transfer shall
not be deemed to constitute consent to any subsequent assignment, subletting or
other transfer.

      14.4 ATTORNEY'S FEES. In the event Landlord shall consent to a sublease or
assignment under this Section 14, Tenant shall reimburse Landlord for Landlord's
reasonable costs and attorneys' fees incurred in connection with the processing
and documentation of any requested transfer. In addition, Tenant shall pay a
transfer fee of five hundred dollars ($500.00) in the event the transfer is
approved.

15. SUBORDINATION

      15.1 SUBORDINATION. This Lease at Landlord's option shall be subject and
subordinate to all ground or underlying leases which now exist or may hereafter
be executed affecting the Premises or the land upon which the Premises are
situated or both, and to the lien of any mortgages or deeds of trust in any
amount or amounts whatsoever now or hereafter placed on or against the land or
improvements or either thereof, of which the Premises are a part, or on or
against Landlord's interest or estate therein, or on or against any ground or
underlying lease without the necessity of the execution and delivery of any
further instruments on the part of Tenant to effectuate such subordination. If
any mortgagee, trustee or ground lessor shall elect to have this Lease prior to
the lien of its mortgage, deed of trust or ground lease, and shall give written
notice thereof to Tenant, this Lease shall be deemed prior to such mortgage,
deed of trust or ground lease, whether this Lease is dated prior or subsequent
to the date of said mortgage, deed of trust, or ground lease or the date of the
recording thereof.

      15.2 SUBORDINATION AGREEMENTS. Tenant covenants and agrees to execute and
deliver upon demand without charge therefore, such further instruments
evidencing such subordination of this Lease to such ground or underlying leases
and to the lien of any such mortgages or deeds of trust as may be required by
Landlord. Tenant hereby appoints Landlord as Tenant's attorney-in-fact,
irrevocably, to execute and deliver any such agreements, instruments, releases
or other documents.

      15.3 QUIET ENJOYMENT. Landlord covenants and agrees with Tenant that upon
Tenant paying rent and other monetary sums due under the Lease, performing its
covenants and conditions under the Lease and upon recognizing purchaser as
Landlord pursuant hereto, Tenant shall and may peaceably and quietly have, hold
and enjoy the Premises for the term, subject, however, to the terms of the Lease
and of any of the aforesaid ground leases, mortgages or deeds of trust described
above.

      15.4 ATTORNMENT. In the event any proceedings are brought for default
under ground or any underlying lease or in the event of foreclosure or the
exercise of the power of sale under any mortgage or deed of trust made by the
Landlord covering the Premises, the Tenant shall attorn to the purchaser upon
any such foreclosure or sale and recognize such purchaser as the Landlord under
this Lease, provided said purchaser expressly agrees in writing to be bound by
the terms of the Lease.

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16. DEFAULT; REMEDIES

      16.1 DEFAULT. The occurrence of any of the following shall constitute a
material default and breach of this Lease by Tenant:

            (a) Any failure by Tenant to pay the rent or any other monetary sums
required to be paid hereunder (where such failure continues for five (5) days
after written notice by Landlord to Tenant);

            (b) The abandonment or vacation of the Premises by Tenant;

            (c) A failure by Tenant to observe and perform any other provision
of this Lease to be observed or performed by Tenant, where such failure
continues for twenty (20) days after written notice thereof by Landlord to
Tenant; provided, however, that if the nature of the default is such that the
same cannot reasonably be cured within said twenty (20) day period, Tenant shall
not be deemed to be in default if Tenant shall within such period commence such
cure and thereafter diligently prosecute the same to completion;

            (d) The making by Tenant of any general assignment or general
arrangement for the benefit of creditors; the filing by or against Tenant of a
petition to have Tenant adjudged a bankrupt or of a petition for reorganization
or arrangement under any law relating to bankruptcy (unless, in the case of a
petition filed against Tenant, the same is dismissed within sixty (60) days);
the appointment of a trustee or receiver to take possession of substantially all
of Tenant's assets located at the Premises or of Tenant's interest in this
Lease, where possession is not restored to Tenant within thirty (30) days; or
the attachment, execution or other judicial seizure of substantially all of
Tenant's assets located at the Premises or of Tenant's interest in this Lease,
where such seizure is not discharged within thirty (30) days.

      16.2 REMEDIES. In the event of any such material default or breach by
Tenant, Landlord may, at any time thereafter without limiting Landlord in the
exercise of any right or remedy at law or in equity which Landlord may have by
reason of such default or breach:

            (a) Maintain this Lease in full force and effect and recover that
rent and other monetary charges as they become due, without terminating Tenant's
right to possession irrespective of whether Tenant shall have abandoned the
Premises. In the event Landlord elects not to terminate the Lease, Landlord
shall have the right to attempt to re-let the Premises as Landlord deems
reasonable and necessary without being deemed to have elected to terminate the
Lease, including removal of all persons and property from the Premises; such
property may be removed and stored in a public warehouse or elsewhere at the
cost of and for the account of Tenant. In the event any such re-letting occurs,
this Lease shall terminate automatically upon the new Tenant taking possession
of the Premises. Notwithstanding that Landlord fails to elect to terminate the
Lease initially, Landlord at any time WHILE SUCH DEFAULT REMAINS UNCURED XXXXXX
XXX XXXX XX XXXX XXXXX may elect to terminate this Lease by virtue of such
XXXXXXXX default of Tenant.

      (b) Terminate Tenant's right to possession by any lawful means, in which
case this Lease shall terminate and Tenant shall immediately surrender
possession of the Premises to Landlord. In such event Landlord shall be entitled
to recover from Tenant all damages incurred by Landlord by reason of Tenant's
default, including without limitation thereto, the following: (i) the worth at
the time of award of any unpaid rent which had been earned at the time of such
termination; plus (ii) the worth at the time of award of the amount by which the
unpaid rent which would have been earned after termination until the time of
award exceeds the amount of such rental loss that is

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proved could have been reasonably avoided; plus (iii) the worth at the time of
award of the amount by which the unpaid rent for the balance of the term after
the time of award exceeds the amount of such rental loss that is proved could be
reasonably avoided; plus (iv) any other amount necessary to compensate Landlord
for all the detriment proximately caused by Tenant's failure to perform his
obligations under this Lease or which in the ordinary course of events would be
likely to result therefrom; plus (v) at Landlord's election, such other amounts
in addition to or in lieu of the foregoing as may be permitted from time to time
by applicable State law. Upon any such re-entry Landlord shall have the right to
make any reasonable repairs, alterations or modifications to the Premises, which
Landlord in its sole discretion deems reasonable and necessary. As used in (i)
above, the "worth at the time of award" is computed by allowing interest at the
rate of ten percent (10%) per annum from the date of default. As used in (ii)
and (iii) the "worth at the time of award" is computed by discounting such
amount at the discount rate of the U.S. Federal Reserve Bank at the time of
award plus one percent (1%). The term "rent", as pursuant to Article 16, shall
be deemed to be and to mean the rent to be paid pursuant to Article 3 and all
other monetary sums required to be paid by Tenant pursuant to the terms of this
Lease.

            (c) Landlord shall be entitled to recover from Tenant any other
amount necessary to compensate Landlord for all the detriment proximately caused
by Tenant's failure to perform its obligations under this Lease or which in the
ordinary course of things would be likely to result from Tenant's default
including, but not limited to, the cost of recovering possession of the
Premises, expenses of reletting, including necessary repair, renovation and
alteration of the Premises, the unamortized portion of any tenant improvements
and brokerage commissions funded by Landlord, reasonable attorneys' fees and
court costs, and any other reasonable costs.

      16.3 LATE CHARGES. Tenant hereby acknowledges that late payment by Tenant
to Landlord of rent and other sums due hereunder will cause Landlord to incur
costs not contemplated by this Lease, the exact amount of which will be
extremely difficult to ascertain. Such costs include, but are not limited to,
processing and accounting charges, and late charges which may be imposed on
Landlord by the terms of any mortgage or trust deed covering the Premises.
Accordingly, if any installment of rent or any other sum due from Tenant shall
not be received by Landlord or Landlord's designee within ten (10) days after
such amount shall be due, Tenant shall pay to Landlord a late charge equal to
ten percent (10%) of such overdue amount. The parties hereby agree that such
late charge represents a fair and reasonable estimate of the costs Landlord will
incur by reason of late payment by Tenant. Acceptance of such late charge by
Landlord shall in no event constitute a waiver of Tenant's default with respect
to such overdue amount nor prevent Landlord from exercising any of the other
rights and remedies granted hereunder.

      16.4 DEFAULT BY LANDLORD. Landlord shall not be in default unless Landlord
fails to perform obligations required of Landlord within a reasonable time, but
in no event later that thirty (30) days after written notice by Tenant to
Landlord and to the holder of any first mortgage or deed of trust covering the
Premises whose name and address shall have theretofore been furnished to Tenant
in writing, specifying wherein Landlord has failed to perform such obligations;
provided, however, that if the nature of Landlord's obligation is such that more
than thirty (30) days are required for performance, then

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Landlord shall not be in default if Landlord commences performance within such
thirty-day period and thereafter diligently prosecutes the same to completion.
In no event shall Tenant have the right to terminate this Lease as a result of
Landlord's default and Tenant's remedies shall be limited to damages and/or an
injunction.

17. MISCELLANEOUS

      17.1 ESTOPPEL CERTIFICATE

            (a) Tenant shall at any time upon not less then ten (10) days prior
written notice from Landlord, execute, acknowledge and deliver to Landlord a
statement in writing (i) certifying that this Lease is unmodified and in full
force and effect (or, if modified, stating the nature of such modification and
certifying that this Lease, as so modified, is in full force and effect) and the
date to which the rent and other charges are paid in advance, if any, and (ii)
acknowledging that there are not, to Tenant's knowledge, any uncured defaults on
the part of Landlord hereunder, or specifying such defaults if any are claimed.
Any such statement may be conclusively relied upon by any prospective purchaser
to encumbrancer of the Premises.

            (b) Tenant's failure to deliver such statement within such time
shall be conclusive upon Tenant (i) that this Lease is in full force and effect,
without modification except as may be represented by Landlord, (ii) that there
are no uncured defaults in Landlord's performance, and (iii) that not more that
one month's rent has been paid in advance.

            (c) If Landlord desired to finance or refinance the Building, or any
part thereof, Tenant hereby agrees to deliver to any lender designated by
Landlord such financial statements of Tenant as may be reasonably required by
such lender. Such statements shall include the past three years' financial
statements of Tenant. All such financial statements shall be received by
Landlord in confidence and shall be used only for the purposes herein set forth.

      17.2 TRANSFER OF LANDLORD'S INTEREST. In the event of a sale or conveyance
by Landlord of Landlord's interest in the Premises or the Building other than a
transfer for security purposes only, Landlord shall be relieved from and after
the date specified in any such notice of transfer of all obligations and
liabilities accruing thereafter on the part of Landlord, provided that any funds
in the hands of Landlord at the time of transfer in which Tenant has an
interest, shall be delivered to the successor of Landlord. This Lease shall not
be affected by any such sale and Tenant agrees to attorn to the purchaser or
assignee provided all Landlord's obligations hereunder are assumed in writing by
the transferee.

      17.3 CAPTIONS; ATTACHMENTS; DEFINED TERMS

            (a) The captions of the paragraphs of this Lease are for convenience
only and shall not be deemed to be relevant in resolving any question of
interpretation or construction of any section of this Lease.

            (b) Exhibits attached hereto, and addenda and schedules initialed by
the parties, are deemed by attachment to constitute part of this Lease and are
incorporated herein.

            (c) The words "Landlord" and "Tenant" as used herein, shall include
the plural as well as the singular. Words used in neuter gender include the
masculine and feminine and words in the masculine or feminine gender include the
neuter. If there be more than one Landlord or Tenant, the obligations hereunder
imposed upon Landlord or Tenant

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shall be joint and several; as to a Tenant which consists of husband and wife,
the obligations shall extend individually to their sole and separate property as
well as community property. The term "Landlord" shall mean only the owner or
owners at the time in question of the fee title or a tenant's interest in a
ground lease of the land underlying the Building. The obligations contained in
this Lease to be performed by Landlord shall be binding on Landlord's successors
and assignees only during their respective periods of ownership.

      17.4 ENTIRE AGREEMENT. This instrument along with any exhibits and
attachments hereto constitutes the entire agreement between Landlord and Tenant
relative to the Premises and this agreement and the exhibits and attachments may
be altered, amended, or revoked only by an instrument in writing signed by both
Landlord and Tenant. Landlord and Tenant agree hereby that all prior or
contemporaneous oral agreements between and among themselves and their agents or
representatives relative to the leasing of the Premises are merged in or revoked
by this Agreement.

      17.5 SEVERABILITY. If any term or provision of this Lease shall, to any
extent, be determined by a court of competent jurisdiction to be invalid or
unenforceable, the remainder of this Lease shall not be affected thereby, and
each term and provision of this Lease shall be valid and be enforceable to the
fullest extent permitted by Law.

      17.6 COSTS OF SUIT

            (a) If Tenant or Landlord shall bring any action for any relief
against the other, declaratory or otherwise, arising out of this Lease,
including any suit by Landlord for the recovery of rent or possession of the
Premises, the prevailing party shall be entitled to recover as a part of the
action its reasonable attorneys' fees, and all other costs whether or not the
action is prosecuted to Judgement.

            (b) Should Landlord, without fault on Landlord's part, be made a
party to any litigation instituted by Tenant or by any third party against
Tenant, or by or against any person holding under or using the Premises by
license of Tenant, or for the foreclosure of any lien for labor or material
furnished to or for Tenant or any such other person or otherwise arising out of
or resulting from any act or transaction of Tenant or of any such other person,
Tenant covenants to save and hold Landlord harmless from any judgment rendered
against Landlord or the Premises or any part thereof, and all costs and
expenses, including reasonable attorneys' fees, incurred by Landlord in or in
connection with such litigation.

      17.7 TIME; JOINT AND SEVERAL LIABILITY. Time is of the essence of this
Lease and each and every provision hereof, except as to the conditions relating
to the delivery of possession of the Premises to Tenant. All the terms,
covenants and conditions contained in the Lease to be performed by either party,
if such party shall consist of more than one person or organization, shall be
deemed to be joint and several, and all rights and remedies of the parties shall
be cumulative and nonexclusive of any other remedy at law or in equity.

      17.8 BINDING EFFECT; CHOICE OF LAW. The parties hereto agree that all
provisions hereof are to be construed as both covenants and conditions as though
the words importing such covenants and conditions were used in each separate
paragraph hereof. Subject to any provisions hereof restricting assignment or
subletting by Tenant and subject to Section 17.2, all of the provisions hereof
shall bind and inure to the

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benefit of the parties hereto and their respective heirs, legal representatives,
successors and assignees. This Lease shall be governed by the laws of the State
of California.

      17.9 WAIVER. No covenant, term or condition or the breach thereof shall be
deemed waived, except by written consent of the party against whom the waiver is
claimed, and any waiver or the breach of any covenant, term or condition shall
not be deemed to be a waiver of any preceding or succeeding breach of the same
or any other covenant, term or condition. Acceptance by Landlord of any
performance by Tenant after the time the same shall have become due shall not
constitute a waiver by Landlord of the breach or default of any covenant, term
or condition unless otherwise expressly agreed to by Landlord in writing.

      17.10 SURRENDER OF PREMISES. The voluntary or other surrender of this
Lease by Tenant, or a mutual cancellation thereof, shall not work a merger, and
shall, at the option of the Landlord, terminate all or any existing subleases or
subtenancies, or may, at the option of Landlord, operate as an assignment to it
of any or all such subleases or subtenancies.

      17.11 HOLDING OVER. If Tenant remains in possession of all or any part of
the Premises after the expiration of the term hereof, with or without the
express or implied consent of Landlord, such tenancy shall be from
month-to-month only, and not a renewal hereof or an extension for any further
term, and in such case, rent and other monetary sums due hereunder shall be
payable in the amount equal to one hundred fifty percent (150%) of the rent in
effect upon the date of such expiration and at the time specified in this Lease.
Such month-to-month tenancy shall be subject to every other term, covenant and
agreement contained herein.

      17.12 SIGNS

            (a) Tenant shall not place or permit to be placed in or upon the
Premises, where visible from outside the Premises, or outside the Premises or
any part of the Building any signs, notices, drapes, shutters, blinds or
displays of any type without the prior written consent of Landlord.

            (b) Landlord reserves the right in Landlord's sole discretion to
place and locate on the roof, exterior of the Building, and in any area of the
Building not leased to Tenant such signs, notices, displays and similar items as
Landlord deems appropriate in the proper operation of the Building.

      17.13 REASONABLE CONSENT. Except as limited elsewhere in this Lease,
wherever in this Lease Landlord or Tenant is required to give its consent or
approval to any action on the part of the other, such consent or approval shall
not be unreasonably withheld. In the event of failure to give any such consent,
the other party shall be entitled to specific performance at law and shall have
such other remedies as are reserved to it under this Lease, but in no event
shall Landlord or Tenant be responsible in monetary damages for failure to give
consent unless said consent is withheld maliciously or in bad faith.

      17.14 INTEREST ON PAST DUE OBLIGATIONS. Except as expressly provided, any
amount due to Landlord not paid when due shall bear interest at ten percent
(10%) per annum from the due date. Payment of such interest shall not excuse or
cure any default by Tenant under this Lease.

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      17.15 RULES AND REGULATIONS; PARKING. Tenant and Tenant's agents,
servants, employees, visitors and licensees shall observe and comply fully and
faithfully with all reasonable and discriminatory rules and regulations adopted
by Landlord for the care, protection, cleanliness and operation of the Building
and its Tenants including those annexed to this Lease as Exhibit C and any
modification or addition thereto adopted by Landlord, provided Landlord shall
give written notice thereof to Tenant. Landlord shall not be responsible to
Tenant for the non-performance by any other tenant or occupant of the Building
of any of said rules and regulations.

      17.16 NOTICES. All Notices or demands of any kind required or desired to
be given by Landlord or Tenant hereunder shall be in writing and shall be deemed
delivered forty-eight (48) hours after depositing the notice or demand in the
United States mail, certified or registered, postage prepaid, addressed to the
Landlord or Tenant respectively at the address set forth after their signatures
at the end of this Lease.

      17.17 BROKER'S COMMISSION. The parties recognize XXXXXXXXXXXXX as the
broker(s) who negotiated this Lease, representing the firm of XXXXXXXXXXXXXXXX
and agree that the party designated here -- QUALITY SYSTEMS, INC. -- shall be
solely responsible for the payment of brokerage commissions to those broker(s),
and that the other party shall have no responsibility for the commissions unless
otherwise provided in this Lease. Tenant warrants that it has no dealings with
any other real estate broker or agent in connection with the negotiation of this
Lease, and Tenant agrees to indemnify and hold Landlord harmless from any cost,
expense or liability (including reasonable attorneys' fees) for any
compensation, commissions or charges claimed by any other real estate broker or
agent employed or claiming to represent or to have been employed by Tenant in
connection with the negotiation of this Lease. The foregoing agreement shall
survive the termination of this Lease. If Tenant fails to take possession of the
premises or if this Lease otherwise terminates prior to the expiration date,
Landlord shall be entitled to recover from Tenant the unamortized portion of any
brokerage commission funded by Landlord in addition to any other damages which
Landlord may be entitled.

      17.18 CORPORATE AUTHORITY. If Tenant is a corporation, each individual
executing this Lease on behalf of said corporation represents and warrants that
he is duly authorized to execute and deliver this Lease on behalf of said
corporation in accordance with a duly adopted resolution of the Board of
Directors of said corporation or in accordance with the By-laws of said
corporation, and that this Lease is binding upon said corporation in accordance
with its terms.

If Tenant is a corporation Tenant shall, within thirty (30) days after execution
of this Lease, deliver to Landlord a certified copy of a resolution of the Board
of Directors of said corporation authorizing or ratifying the execution of this
Lease.

18. OPERATING EXPENSE INCREASE.

      Lessee shall pay to Lessor during the term hereof, in addition to the
Rent, Lessee's Share, as hereinafter defined, of the amount by which all
Operating Expenses, as hereinafter defined, for each Comparison Year exceeds the
amount of all Operating Expenses for the

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Base Year, such excess being hereinafter referred to as the "Operating Expense
Increase," in accordance with the following provisions:

            (a) "Lessee's Share" is defined, for purposes of this Lease, as the
percentage set forth in paragraph 1.1 of this Lease, which percentage has been
determined by dividing the approximate square footage of the Premises by the
total approximate square footage of the rentable area contained in the Office
Building Project. It is understood and agreed that the square footage figures
set forth in the Lease are approximations which Lessor and Lessee agree are
reasonable and shall not be subject to revision except in connection with an
actual change in the size of the Premises or a change in the area available for
lease in the Office Building Project.

            (b) "Base Year" is defined as the calendar year in which the Lease
term commences.

            (c) "Comparison Year" is defined as each calendar year during the
term of this Lease subsequent to the Base Year; provided, however, Lessee shall
have no obligation to pay a share of the Operating Expense Increase applicable
to the first twelve (12) months of the Lease Term (other than such as are
mandated by a governmental authority, as to which government mandated expenses
Lessee shall pay Lessee's Share, notwithstanding they occur during the first
twelve (12) months). Lessee's Share of the Operating Expense Increase for the
first and Last Comparison Years of the Lease Term shall be prorated according to
that portion of such Comparison Year as to which Lessee is responsible for a
share of such increase.

            (d) "Operating Expenses" is defined, for purposes of this Lease, to
include all costs, if any, incurred by Lessor in the exercise of its reasonable
discretion, for:

                  (i) The operation, repair, maintenance, and replacement, in
neat, clean, safe, good order and condition, of the Office Building Project,
including but not limited to, the following:

                    (aa) The Common Areas, including their surfaces, coverings,
decorative items, carpets, drapes and window coverings, and including parking
areas, loading and unloading areas, trash areas, roadways, sidewalks, walkways,
stairways, parkways, driveways, landscaped areas, striping, bumpers, irrigation
systems, Common Area lighting facilities, building exteriors and roofs, fences
and gates;

                    (bb) All heating, air conditioning, plumbing, electrical
systems, life safety equipment, telecommunication and other equipment used in
common by, or for the benefit of, lessees or occupants of the Office Building
Project, including elevators and excalators, tenant directories, fire detection
systems including sprinkler system maintenance and repair.

                  (ii) Trash disposal, janitorial and security services;

                  (iii) Any other service to be provided by Lessor that is
elsewhere in this Lease stated to be an "Operating Expense";

                  (iv) The cost of the premiums for the liability and property
insurance policies to be maintained by Lessor for the Office Building Project;

                  (v) The amount of the real property taxes to be paid by Lessor
for the Office Building Project;

                  (vi) The cost of water, sewer, gas, electricity, and other
publicly mandated services to the Office Building Project;

                  (vii) Labor, salaries and applicable fringe benefits and
costs, materials, supplies and tools, used in maintaining and/or cleaning the
Office Building Project and accounting and a management fee attributable to the
operation of the Office Building Project;

                  (viii) Replacing and/or adding improvements mandated by any
governmental agency and any repairs or removals necessitated

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thereby amortized over its useful life according to Federal income tax
regulations or guidelines for depreciation thereof (including interest on the
unamortized balance as is then reasonable in the judgement of Lessor's
accountants);

                  (ix) Replacements of equipment or improvements that have a
useful life for depreciation purposes according to Federal income tax guidelines
of five (5) years or less, as amortized over such life.

            (e) Operating Expenses shall not include the costs of replacements
of equipment or improvements that have a useful life for Federal income tax
purposes in excess of five (5) years unless it is of the type described in
Paragraph 18(d)(viii), in which case their cost shall be included as above
provided.

            (f) Operating Expenses shall not include any expenses paid by any
lessee directly to third parties, or as to which Lessor is otherwise reimbursed
by any third party, other tenant, or by insurance proceeds.

            (g) Lessee's Share of Operating Expense Increase shall be payable by
Lessee within ten (10) days after a reasonably detailed statement of actual
expenses is presented to Lessee by Lessor. At Lessor's option, however, an
amount may be estimated by Lessor from time to time in advance of Lessee's Share
of the Operating Expense Increase for any Comparison Year, and the same shall be
payable monthly or quarterly, as Lessor shall designate, during each Comparison
Year of the Lease term, on the same day as the Rent is due hereunder. In the
event that Lessee pays Lessor's estimate of Lessee's Share of Operating Expense
Increase as aforesaid, Lessor shall deliver to Lessee within sixty (60) days
after the expiration of each Comparison Year a reasonably detailed statement
showing Lessee's Share of the actual Operating Expense Increase incurred during
such year. If Lessee's payments under this paragraph 18(g) during said
Comparison Year exceed Lessee's Share as indicated on said statement, Lessee
shall be entitled to credit the amount of such overpayment against Lessee's
Share of Operating Expense Increase next falling due. If Lessee's payments under
this paragraph during said Comparison Year were less than Lessee's Share as
indicated on said statement, Lessee shall pay to Lessor the amount of the
deficiency within ten (10) days after dilivery by Lessor to Lessee of said
statement. Lessor and Lessee shall forthwith adjust between them by cash payment
any balance determined to exist with respect to that portion of the last
Comparison Year for which Lessee is responsible as to Operating Expense
Increases, notwithstanding that the Lease term may have terminated before the
end of such Comparison Year.

19. ADDITIONAL PROVISIONS

      19.1 SECURITY DEPOSIT RETAINED BY LANDLORD. Landlord currently holds
Twenty four thousand seven hundred forty six dollars and ninety six cents
($24,746.96) as Security Deposit from Lease dated August 30, 1989 and the
Addenda thereto.

      19.2 TENANT'S AIR CONDITIONING UNIT. It is reaffirmed here that pursuant
to Lease dated August 12, 1982, the Addendum attached thereto, and item #2
therein, between CRAIG DEVELOPMENT CORPORATION, LANDLORD and QUALITY SYSTEMS,
INC., TENANT as follows: " 2. Air conditioner which Tenant installed in C 211
with Landlord's permission is the sole property of the Tenant and shall not
become property of the Landlord as referred to in Paragraph 8.2C."

                                      -19-
                                     CDCL101
                                                                       INITIAL
                                                                     [ILLEGIBLE]
<PAGE>

THIS PAGE INTENETIONALLY LEFT BLANK.

                                      -20-
                                     CDCL101
                                                                       INITIAL
                                                                     [ILLEGIBLE]
<PAGE>

In Witness Whereof, Landlord and Tenant have executed this Lease the date and
year first written.

LANDLORD:                                 TENANT:
CRAIG DEVELOPMENT CORPORATION             QUALITY SYSTEMS, INC.

    /s/ Craig Meredith                        /s/ Paul Holt
-----------------------------             --------------------------------------
By: Craig Meredith, President             By: Paul Holt, Chief Financial Officer

                                          --------------------------------------
                                          By:

Address:                                  Address:

-------------------------------           --------------------------------------
Suite 860                                 Suite 210
-------------------------------           --------------------------------------
1851 East First Street                    17822 East 17th Street
-------------------------------           --------------------------------------
Santa Ana, CA 92705                       Tustin, CA 92780
-------------------------------           --------------------------------------

-------------------------------           --------------------------------------

(If Landlord or Tenant is a corporation, the corporate seal must be affixed and
the authorized officers must sign on behalf of the corporation. The Lease must
be executed by the President or a Vice President and the Secretary or Assistant
Secretary unless the By-laws or a Resolution of the Board of Directors shall
otherwise provide, in which event the By-laws or a certified copy of the
Resolution, as the case may be, must be furnished.)

 LANDLORD                                        TENANT
CORPORATE                                       CORPORATE
  SEAL                                            SEAL

                                      -21-
                                     CDCL1O1
                                                                       INITIAL
                                                                     [ILLEGIBLE]
<PAGE>

                                                                       EXHIBIT A

                  MEREDITH FINANCIAL CENTRE -- CENTRE BUILDING

                    17822 East 17th Street, Tustin, CA 92680

                              [FLOOR PLAN OMITTED]

                                                                       INITIAL
                                                                     [ILLEGIBLE]
<PAGE>
                                                                       EXHIBIT A

                  MEREDITH FINANCIAL CENTRE -- CENTRE BUILDING

                    17822 East 17th Street, Tustin, CA 92680

                              [FLOOR PLAN OMITTED]

                                                                       INITIAL
                                                                     [ILLEGIBLE]
<PAGE>

                                    EXHIBIT B

                              [FLOOR PLAN OMITTED]

          CENTRE BUILDING SUITES 101 & 102 WORK OF IMPROVEMENTS: NONE.
                                                    3340.00 SQUARE FEET USEABLE.

                                                                       INITIAL
                                                                     [ILLEGIBLE]
<PAGE>
                                    EXHIBIT B

          CENTRE BUILDING SUITES 103 & 104 WORK OF IMPROVEMENTS: NONE.
                                   103 = 1745.77 & 104 = 1594.23 SQ. FT. USEABLE

QUALITY SYSTEMS, INC.
MEREDITH FINANCIAL CENTRE
CENTRE BLDG--103/104

                              [FLOOR PLAN OMITTED]

                                                                       INITIAL
                                                                     [ILLEGIBLE]
<PAGE>

                                    EXHIBIT B

                              [FLOOR PLAN OMITTED]

                                    SUITE CENTRE 203 WORK OF IMPROVEMENTS: NONE.
                                                    2164.40 SQUARE FEET USEABLE.

                                                                       INITIAL
                                                                     [ILLEGIBLE]
<PAGE>

                                    EXHIBIT B

                              [FLOOR PLAN OMITTED]

CENTRE BUILDING SUITES
201, 210, 211, & 212
WORK OF IMPROVEMENTS:
NONE.

SUITE 201: 2486.67 SFU
SUITE 210: 1873.33 SFU
SUITE 211: ABOVE
SUITE 212: ABOVE

                                                                       INITIAL
                                                                     [ILLEGIBLE]
<PAGE>

                                    EXHIBIT C

                              RULES AND REGULATIONS

1. No sign, placard, picture, advertisement, name or notice shall be inserted,
displayed or printed or affixed on or to any part of the outside or inside of
the Building without the written consent of Landlord first had and obtained and
Landlord shall have the right to remove any such sign, placard, picture,
advertisement, name or notice without notice to and at the expense of Tenant.

      Door sign and directory listing strips will be supplied by Landlord after
Tenant has forwarded written request to Landlord for same. Any requests for
changes in door sign and directory strips thereafter must be made in writing to
Landlord and will be at Tenant's expense.

      Landlord shall not place anything or allow anything to be placed near the
glass of any window, door, partition or wall which may appear unsightly from
outside the Premises.

2. No Tenant shall obtain for use upon the Premises, ice, drinking or bottled
water, towel or other similar service or accept barbering or bootblacking
services on the Premises, except from persons authorized by the Landlord and at
the hours and under regulations fixed by the Landlord.

3. The directory boards of the Building will be provided exclusively for the
display of the name and location of Tenant only and Landlord reserves the right
to exclude any other names therefrom.

4. The sidewalks, halls, passages, exits, entrances, elevators and stairways
shall not be obstructed by any of the tenants or used by them for any purpose
other than for ingress to and egress from their respective Premises. The halls,
passages, exits, entrances, elevators, stairways, balconies and roof are not for
the use of the general public and the Landlord shall in all cases retain the
right to control and prevent access thereto by all persons whose presence in the
judgment of the Landlord shall be prejudicial to the safety, character,
reputation and interests of the Building and its tenants, provided that nothing
herein contained shall be construed to prevent such access to persons with whom
the Tenants normally deal in the ordinary course of Tenant's business unless
such persons are engaged in illegal activities. No tenant and no employees or
invitees of any tenant shall go upon the roof of the Building.

5. Tenant shall not alter any lock or install any new or additional locks or any
bolts on any door of the Premises without the written consent of Landlord.

6. The toilet rooms, urinals, wash bowls and other apparatus shall not be used
for any purpose other than that for which they were constructed and no foreign
substance of any kind whatsoever shall be thrown therein and the expense of any
breakage, stoppage or damage resulting from the violation of this rule shall be
borne by the Tenant who, or whose employees or invitees shall have caused it.

                              EC198 -- Page 1 of 5
                                                                       INITIAL
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<PAGE>

7. Tenant shall not overload the floor of the Premises or mark, drive nails,
screw or drill into the partitions, woodwork or plaster or in any way deface the
Premises or any part thereof. No boring, cutting or stringing of wires or laying
of linoleum or other similar floor coverings shall be permitted except with the
prior consent of the Landlord and as the Landlord may direct.

8. No furniture, freight or equipment of any kind shall be brought into the
Building without the consent of Landlord and all moving of the same into or out
of the Building shall be done at such time and in such manner as Landlord shall
designate. Landlord shall have the right to prescribe the weight, size and
position of all safes, and other heavy equipment brought into the Building.
Safes or other heavy objects shall, if considered necessary by Landlord, stand
on wood strips of such thickness as is necessary to properly distribute the
weight. Landlord will not be responsible for loss of or damage to any such safe
or property from any cause and all damage done to the Building by moving or
maintaining any such safe or other property shall be repaired at the expense of
Tenant. There shall not be used in any space, or in the public halls of the
Building, either by any tenant or others, any hand trucks except those equipped
with rubber tires and side guards.

9. Tenant shall not employ any person or persons other than the janitor of
Landlord for the purpose of cleaning the Premises unless otherwise agreed to by
Landlord. Except with the written consent of Landlord, no person or persons
other than those approved by Landlord shall be permitted to enter the Building
for the purpose of cleaning the same. Tenant shall not cause any unnecessary
labor by reason of Tenant's carelessness or indifference in the preservation of
good order and cleanliness. Landlord shall in no way be responsible to any
Tenant for any loss of property on the Premises, however occurring, or for any
damage done to the effects of any tenant by the janitor or any other employee or
any other person. Janitor service shall include ordinary dusting and cleaning by
the janitor assigned to such work and shall not include cleaning of carpets or
rugs, except normal vacuuming, or moving of furniture and other special
services. Janitor service will not be furnished on nights when rooms are
occupied after 9:30 pm. Window cleaning shall be done only by Landlord, and only
between 6:00 am and 5:00 pm.

10. Tenant shall not use, keep or permit to be used or kept any noxious gas or
substance in the Premises, or permit or suffer the Premises to be occupied or
used in a manner offensive or objectionable to the Landlord or other occupants
of the Building by reason of noise, odors and /or vibrations, or interfere in
any way with other tenants or those having business therein, nor shall any
animals or birds be brought in or kept in or about the Premises or the Building.
No Tenant shall make or permit to be made any unseemly or disturbing noises or
disturb or interfere with occupants of this or neighboring Buildings or Premises
or those having business with them whether by the use of any musical instrument,
radio, phonograph, unusual noise, or in any other way. No Tenant shall throw
anything out of doors or down the passageways.

11. The Premises shall not be used for manufacturing or for the storage of
merchandise except as such storage may be incidental to the use of the Premises
for general office purposes. No Tenant shall

                              EC198 -- Page 2 of 5
                                                                       INITIAL
                                                                     [ILLEGIBLE]
<PAGE>

occupy or permit any portion of his Premises to be occupied as an office for a
public stenographer or typist, or for the manufacture or sale of liquor,
narcotics, or tobacco in any form, or as a medical office, or as a barber shop
or manicure shop. No Tenant shall advertise for laborers giving an address at
the Premises. The Premises shall not be used for lodging or sleeping or for any
illegal purposes.

12. Tenant shall not use or keep in the Premises or the Building any kerosene,
gasoline or inflammable or combustible fluid or material, or use any method of
heating or air conditioning other than that supplied by Landlord.

13. Landlord will direct electricians as to where and how telephone and computer
wiring are to be introduced. No boring or cutting for wires will be allowed
without the consent of Landlord. The location of telephones, call boxes and
other office equipment affixed to the Premises shall be subject to the approval
of Landlord. Teflon cable is required.

14. All keys to offices, rooms and toilet rooms shall be obtained from
Landlord's Building Superintendent and Tenant shall not from any other source
duplicate, obtain keys or have keys made. The Tenant, upon termination of the
tenancy, shall deliver to the Landlord the keys of the offices, rooms and toilet
rooms which shall have been furnished or shall pay the Landlord the cost of
replacing same or of changing the lock or locks opened by such lost key if
Landlord deems it necessary to make such change.

15. No Tenant shall lay linoleum, tile, carpet or other similar floor covering
so that the same shall be affixed to the floor of the Premises in any manner
except as approved by the Landlord. The expense of repairing any damage
resulting from a violation of this rule or removal of any floor covering shall
be borne by the Tenant by whom, or by whose contractors, employees or invitees,
the damage shall have been caused.

16. No furniture, packages, supplies, equipment or merchandise will be received
in the Building or carried up or down in the elevators, except between such
hours and in such elevators as shall be designated by Landlord.

17. On Sundays, legal holidays and on Saturday commencing at 12:00 noon, and on
other days between the hours of 7:00 pm and 7:00 am the following day, access to
the Building, or to the halls, corridors, elevators or stairways in the
Building, or to the Premises may be refused unless the person seeking access is
properly identified, and Landlord need not furnish heating and air conditioning
at those times, but will make them available upon written request and at an
additional charge to Tenant. The Landlord shall in no case be liable for damages
for any error with regard to the admission to or exclusion from the Building of
any person. In case of invasion, mob, riot, public excitement, or other
commotion, the Landlord reserves the right to prevent access to the Building
during the continuance of the same by closing the doors or otherwise, for the
safety of the tenants and protection of property in the Building and the
Building. Landlord reserves the right to close and keep locked all entrance and
exit doors of the Building on Sundays, legal holidays, and on Saturdays
commencing at 12:00 noon, and on other days between the hours of 7:00 pm and
7:00

                              EC198 -- Page 3 of 5
                                                                       INITIAL
                                                                     [ILLEGIBLE]
<PAGE>

am, and during such further hours as Landlord may deem advisable for the
adequate protection of said Building and the Property of its Tenants. Tenants
will be provided with keys enabling access to Premises at all times.

18. Tenant shall see that the doors of the Premises are closed and securely
locked before leaving the Building and must observe strict care and caution that
all water faucets or water apparatus are entirely shut off before Tenant or
Tenant's employees leave the Building, and that all electricity shall likewise
be carefully shut off, so as to prevent waste or damage, and for any default or
carelessness Tenant shall make good all injuries sustained by other tenants or
occupants of the Building or Tenant.

19. Landlord reserves the right to exclude or expel from the Building any person
who, in the judgment of Landlord, is intoxicated or under the influence of
liquor or drugs, or who shall in any manner do any act in violation of any of
the rules and regulations of the Buildings.

20. The requirements of Tenant will be attended to only upon application at the
Building Superintendent's office. Employees of Landlord shall not perform any
work or do anything outside of their regular duties unless under specific
instruction from the Landlord.

21. No vending machine or machines of any description shall be installed,
maintained or operated upon the Premises without the written consent of the
Landlord.

22. Landlord shall have the right, exercisable without notice and without
liability to Tenant, to change the name and street address of the Building of
which the Premises are a part.

23. Tenant agrees that it shall comply with all fire and security regulations
that may be issued from time to time by Landlord and Tenant also shall provide
Landlord with the name of designated responsible employee to represent Tenant in
all matters pertaining to such fire or security regulations.

24. Landlord reserves the right by written notice to Tenant, to rescind, alter
or waive any rule or regulation at any time prescribed for the Building when, in
Landlord's judgment, it is necessary, desirable or proper for the best interest
of the Building and its tenants.

25. Tenants shall not disturb, solicit, or canvas any occupant of the Building
and shall cooperate to prevent same.

26. Without the written consent of Landlord, Tenant shall not use the name of
the Building in connection with or in promoting or advertising the business of
Tenant except as Tenant's address.

27. Parking allocation is 3.8 automobiles per 1000 square feet of leased
Premises area (based on 100% occupancy of Meredith Financial Centre), and is on
a free, first-come, first-served basis.

                              EC198 -- Page 4 of 5
                                                                       INITIAL
                                                                     [ILLEGIBLE]
<PAGE>

28. HVAC: HVAC system in the building is accessible to Tenant during the
following periods, with the exception of Legal Holidays:

   Monday through Friday:     7am to 7pm.
   Saturday:                  7am to 12pm.

After hour costs for HVAC are fifty dollars ($50.00), subject to change without
notice, per hour with 24 hours advance written notice required.

29. LEGAL HOLIDAYS: The following Legal Holidays are recognized:
    NEW YEARS DAY
    MEMORIAL DAY
    INDEPENDENCE DAY
    LABOR DAY
    THANKSGIVING DAY
    CHRISTMAS DAY

                              EC198 -- Page 5 of 5
                                                                       INITIAL
                                                                     [ILLEGIBLE]<PAGE>

                                                                   EXHIBIT 10.16

                                  CONSULTING
                                  ----------
                           CONFIDENTIALITY AGREEMENT
                           -------------------------

        THIS AGREEMENT is made effective as of January 29, 2001, and between
TVIA, Inc., a Delaware corporation (the "Company") and David Dicioccio (the
"Consultant").

                                   RECITALS

        A.  The Company desires to obtain the continued services of Consultant,
on its own behalf and on behalf of all existing and future Affiliated Companies
(defined as any corporation or other business entity or entities that directly
or indirectly controls, is controlled by, or is under common control with the
Company), and Consultant desires to continue in the hire of the Company, whose
experience, knowledge and abilities are valuable to the Company, upon the
following terms and conditions.

        B.  The Company has spent significant time, effort, and money to
develop certain Proprietary Information (as defined below), which the Company
considers vital to its business and goodwill.

        C.  The Proprietary Information may necessarily be communicated to or
acquired by Consultant in the course of his training by and hiring with the
Company, and the Company desires to obtain the continued services of Consultant,
only if, in doing so, it can protect its Proprietary Information and goodwill.

                                   AGREEMENT

   NOW, THEREFORE, the parties hereto hereby agree as follows:

        1.  Period of Consulting. The Company hereby retains Consultant to
            --------------------
render services to the Company as requested by the Chief Executive Officer of
the Company from time to time in the position and with the duties and
responsibilities described in Exhibit A attached hereto and incorporated by this
reference herein, commencing on the date of this Agreement and ending on date
as noted in Exhibit A or upon delivery of notice from the Chief Executive
Officer of the Company.

        2.  Position, Duties, Responsibilities.
            ----------------------------------

            a.  Duties. Consultant hereby agrees to work for the Company in the
                ------
business planning and development areas. Consultant shall devote his best
efforts and attention to the performance of the services customarily incident to
such position and to such other services as may be reasonably requested by the
Chief Executive Officer of the Company.

            b.  Independent Consultant. It is understood and agreed, and it is
                ----------------------
the intention of the parties hereto, that Consultant is an independent
contractor, and not an employee of the
<PAGE>

Company for any purposes whatsoever. The Company shall have no right to and
shall not control the manner or prescribe the method by which the services are
performed by Consultant hereunder. Consultant shall be entirely and solely
responsible for its acts and the acts of its agents, employees, and
subcontractors while engaged in the performance of services hereunder.
Consultant shall indemnify, defend, and hold the Company harmless from any loss
or liability arising from the performance of Consultant's services hereunder.
Consultant agrees to pay self-employment tax on his own earnings and to either
withhold as employer for any employees he has that assist Consultant in the
performance of his duties hereunder or require that persons assisting Consultant
who are independent contractors pay their own self-employment taxes.

     3. Compensation, Benefits, Expenses.
        --------------------------------

        a. Compensation. In consideration of the services to be rendered
           ------------
hereunder, including, without limitation, services to any Affiliated Company,
Consultant shall be paid the amount as set forth on Exhibit A.

        b. Reimbursement of Expenses. The Company shall promptly reimburse
           -------------------------
Consultant for any reasonable costs and expenses incurred by Consultant in
connection with any services specifically requested by the Company and actually
performed by Consultant pursuant to the terms of this Agreement. Each such
expenditure or cost shall be reimbursed only if: (1) Consultant had received
prior approval for such expenditure or cost, and (ii) Consultant furnishes to
the Company adequate records and other documents evidencing such expenditure or
cost.

     4. Proprietary Information.
        -----------------------

        a. Defined. "Proprietary Information" is all information and any idea in
           -------
whatever form, tangible or intangible, pertaining in any manner to the business
of the Company or any Affiliated Company unless: (i) the information is or
becomes publicly known through lawful means; (ii) the information was rightfully
in Consultant's possession or part of his general knowledge prior to his hiring
by the Company or any Affiliated Company, or (iii) the information is disclosed
to Consultant without confidential or proprietary restriction by a third party
who rightfully possesses the information (without confidential or proprietary
restriction) and did not learn of it, directly or indirectly, from the Company.

        b. General Restrictions on Use/Ownership. Consultant agrees to hold all
           -------------------------------------
Proprietary Information in confidence and not to, directly or indirectly,
disclose, use, copy, publish, summarize, or remove from Company's premises any
Proprietary Information (or remove from the premises any other property of the
Company), except (i) during the consulting relationship to the extent necessary
to carry out Consultant's responsibilities under this Agreement, and (ii) after
termination of the consulting relationship as specifically authorized in
writing by the Company. Consultant hereby sells, transfers and assigns to the
Company without any additional consideration, except for the compensation set
forth in Section 3.a (above), any and all copyrights, patent rights or other
property rights or Proprietary Information he may otherwise be deemed to own as
a result of

                                      -2-
<PAGE>

Consultant's services performed hereunder. Consultant further agrees to take all
reasonable steps and execute all documents as the Company may reasonably request
to transfer or record the Company's ownership in such Proprietary Information.

          c.  Interference with Business Competitive Activities. Consultant
              -------------------------------------------------
acknowledges that the pursuit of the activities forbidden by this Section 4(c)
would necessarily involve the use or disclosure of Proprietary Information in
breach of Section 4(b), but that proof of such breach would be extremely
difficult. To forestall such disclosure, use, and breach, and in consideration
of the hiring under this Agreement, Consultant agrees that for a period of two
(2) years after termination of the consulting relationship, he shall not, for
himself or any third party, directly or indirectly (i) divert or attempt to
divert from the Company (or any Affiliated Company) any business of any kind in
which it is engaged, including, without limitation, the solicitation of or
interference with any of its suppliers or customers, (ii) employ or solicit for
employment any person employed by the Company, or by any Affiliated Company,
during the period of such person's hiring and for a period of one (1) year
thereafter.

          d.  Remedies. Nothing in this Section 4 is intended to limit any
              --------
remedy of the Company under the California Uniform Trade Secrets Act (California
Civil Code, Section 3426), or otherwise available under law.

    5.  Notices.  All notices or other communications required or permitted
        -------
hereunder shall be made in writing and shall be deemed to have been duly given
if delivered by hand, one day courier or mailed, postage prepaid, by certified
or registered mail, return receipt requested, and addressed to the Company at:

                                Tvia, Inc.
                                4100 Burton Drive
                                Santa Clara, CA 95054

                                or to the Consultant at:

                                RDD Associates LLC

Notice of change of address shall be effective only when done in accordance with
this Section.

    6.  Entire Agreement.  The terms of this Agreement are intended by the
        ----------------
parties to be the final expression of their agreement with respect to the hiring
of Consultant by the Company and may not be contradicted by evidence of any
prior or contemporaneous agreement. The parties further intend that this
Agreement shall constitute the complete and exclusive statement of its terms and
that no extrinsic evidence whatsoever may be introduced in any judicial,
administrative, or other legal proceeding involving this Agreement.

                                      -3-
<PAGE>

  7. Amendments, Waivers. This Agreement may not be modified, amended, or
     -------------------
terminated except by an instrument in writing, signed by the Consultant and by a
duly authorized officer of the Company other than Consultant. By an instrument
in writing similarly executed, either party may waive compliance by the other
party with any provision of this Agreement that such other party was or is
obligated to comply with or perform, provided, however, that such waiver shall
not operate as a waiver of, or estoppel with respect to, any other or subsequent
failure. No failure to exercise and no delay in exercising any right, remedy, or
power hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, remedy, or power hereunder preclude any other or
further exercise thereof or the exercise of any other right, remedy, or power
hereunder preclude any other or further exercise thereof or the exercise of any
other right, remedy, or power provided herein or by law or in equity.

  8. Severability, Enforcement. If any provision of this Agreement, or the
     -------------------------
application thereof to any person, place, or circumstance shall be held by a
court of competent jurisdiction to be invalid, unenforceable, or void, the
remainder of this Agreement and such provisions as applied to other persons,
places, and circumstances shall remain in full force and effect.

  9. Governing Law. The validity, interpretation, enforceability, and
     -------------
performance of this Agreement shall be governed by and construed in accordance
with the law of the State of California as if it was entered into by California
residents to be performed entirely within California. Venue shall be in Santa
Clara County, California.

  10. Remedies.
      --------

      a. Injunctive Relief. The parties agree that in the event of any breach
         -----------------
or threatened breach of any of the covenants in Section 4, the damage or
imminent damage to the value and the goodwill of the Company's business will be
irreparable and extremely difficult to estimate, making any remedy at law or in
damages inadequate. Accordingly, the parties agree that the Company shall be
entitled to injunctive relief against Consultant in the event of any breach or
threatened breach of any such provisions by Consultant, in addition to any other
relief (including damages) available to the Company under this Agreement or
under law.

      b. Exclusive. Both parties agree that this Agreement shall provide the
         ---------
exclusive remedies for any breach by the Company of its terms.

      c. Attorneys' Fees. If any legal action or any arbitration or other
         ---------------
proceeding is brought for the enforcement of this Agreement, or because of an
alleged dispute, breach, default, or misrepresentation in connection with any of
the provisions of this Agreement, the successful or prevailing party or parties
shall be entitled to recover reasonable attorneys' fees and other costs incurred
in that action or proceeding, in addition to any other relief to which it or
they may be entitled.

  IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the date first above written.

                                      -4-
<PAGE>

<TABLE>
<S>                                     <C>
RDD Associates, LLC                     CONSULTANT

by    /s/  R. DAVID DICIOCIO                /s/ KENNY LIU
  ------------------------------        ----------------------------------
  (Signature)                           (Signature)

      R. DAVID DICIOCIO                     KENNY LIU
--------------------------------        ----------------------------------
(Print Name and Title)                  (Print Name)

</TABLE>
                                      -5-

<PAGE>

                                   EXHIBIT A

PERIOD OF CONSULTING:

Terms of this consulting agreement are for a period of six (6) months.

DUTIES AND RESPONSIBILITIES:

"Consultant" will provide the following services:
Business activities as they relate to acquisitions, partnerships, and executive
recruitment.

COMPENSATION:

$1,500.00 (One thousand, five hundred dollars) per day, averaging one day per
week, with a total maximum period of two days per week.

25,000 non-qualified stock option shares of Tvia, Inc., to vest over two years
from date of grant.

COMPLETION DATE:

August 1, 2001.

                                      -6-

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