<SUBMISSION>
<ACCESSION-NUMBER>0001092306-04-000587
<TYPE>10QSB
<PUBLIC-DOCUMENT-COUNT>6
<PERIOD>20040630
<FILING-DATE>20040813
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>ACCUIMAGE DIAGNOSTICS CORP
<CIK>0001089799
<ASSIGNED-SIC>7371
<IRS-NUMBER>330713615
<STATE-OF-INCORPORATION>NV
<FISCAL-YEAR-END>0930
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>10QSB
<ACT>34
<FILE-NUMBER>000-26555
<FILM-NUMBER>04973335
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>501 GRANDVIEW DRIVE
<STREET2>STE 100
<CITY>SOUTH SAN FRANCISCO
<STATE>CA
<ZIP>94080
<PHONE>6508750192
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>501 GRANDVIEW DRIVE
<STREET2>STE 100
<CITY>SOUTH SAN FRANCISCO
<STATE>CA
<ZIP>94080
</MAIL-ADDRESS>
</FILER>
<DOCUMENT>
<TYPE>10QSB
<SEQUENCE>1
<FILENAME>form10qsb.txt
<DESCRIPTION>FORM 10-QSB - (06/30/04)
<TEXT>



================================================================================

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                       __________________________________

                                   FORM 10-QSB

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934

                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2004

                                       OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934

             For the transition period from _________ to __________

                        Commission file number: 000-26555

                       __________________________________

                           ACCUIMAGE DIAGNOSTICS CORP.
        (EXACT NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER)


            NEVADA                                              33-0713615
(STATE OR OTHER JURISDICTION OF                              (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION)                            IDENTIFICATION NUMBER)


                      400 OYSTER POINT BOULEVARD, SUITE 201
                           SO. SAN FRANCISCO, CA 94080
                    (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

                                 (650) 875-0192
                (ISSUER'S TELEPHONE NUMBER, INCLUDING AREA CODE)

                       __________________________________

Check whether the issuer:  (1) filed all reports required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days.

                               YES [X]     NO [ ]

As of June 30, 2004 there were  48,336,295  shares of the Issuer's  Common Stock
outstanding,  with a par  value of  $0.001.  No shares  of  Preferred  Stock are
outstanding.

        Transitional Small Business Disclosure Format: YES [ ]     NO [ ]

================================================================================


<PAGE>


________________________________________________________________________________

                           ACCUIMAGE DIAGNOSTICS CORP.
                         QUARTERLY REPORT ON FORM 10-QSB
                       FOR THE PERIOD ENDED JUNE 30, 2004
                                TABLE OF CONTENTS
________________________________________________________________________________


                                                                           PAGE
PART I            FINANCIAL INFORMATION                                   NUMBER

ITEM 1.           Financial Statements:

                  Condensed Balance Sheets as of June 30, 2004 (unaudited)
                      and September 30, 2003 (audited)                       3

                  Condensed Statements of Operations (unaudited) for
                      the three and nine months ended June, 2004 and 2003    4

                  Condensed Statements of Cash Flows (unaudited) for
                      the nine months ended June, 2004 and 2003              5

                  Notes to Financial Statements                              6

ITEM 2.           Management's Discussion and Analysis of Financial
                      Condition and Results of Operations                   12

ITEM 3.           Controls and Procedures                                   18

PART II           OTHER INFORMATION

ITEM 1.           Legal Proceedings                                         18

ITEM 2.           Changes in Securities and Use of Proceeds                 18

ITEM 3.           Defaults Upon Senior Securities                           18

ITEM 4.           Submission of Matters to a Vote of Security Holders       18

ITEM 5.           Other Information                                         18

ITEM 6.           Exhibits and Reports on Form 8-K                          18

                  Signatures                                                19


<PAGE>


________________________________________________________________________________

PART I:  FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS
________________________________________________________________________________

<TABLE>
<CAPTION>

                           ACCUIMAGE DIAGNOSTICS CORP.
                            CONDENSED BALANCE SHEETS

                                                                         JUNE 30,         SEPTEMBER 30,
                                                                           2004               2003
                                                                        ___________        ____________
                                                                        (UNAUDITED)         (AUDITED)
<S>                                                                     <C>                <C>

ASSETS
Current assets:
    Cash and cash equivalents                                           $   673,007        $        --
    Accounts receivable, net of allowance of $13,607 and                     59,378            112,170
       $50,000, respectively
    Other receivable, net                                                    25,000             50,000
    Inventory                                                                42,114             49,193
    Prepaid expenses and other current assets                                21,092              9,091
                                                                        ___________        ___________
       Total current assets                                                 820,591            220,454
                                                                        ___________        ___________
Property and equipment, net of accumulated depreciation and
    amortization                                                             38,712             45,412
                                                                        ___________        ___________
Other assets
    Deposits                                                                 27,004              9,993
    Goodwill                                                                309,063            309,063
    Other intangible assets, net                                              3,295              4,393
                                                                        ___________        ___________
       Total other assets                                                   339,362            323,449
                                                                        ___________        ___________
                                                                        $ 1,198,665        $   589,315
                                                                        ===========        ===========
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities:
    Accounts payable                                                    $   186,700        $   250,730
    Accrued liabilities                                                     114,750            299,010
    Product warranty reserve                                                 25,000             25,000
    Deferred revenue                                                        140,473             37,000
    Notes payable to related parties                                      1,033,150            762,600
                                                                        ___________        ___________
       Total current liabilities                                          1,500,073          1,374,340
                                                                        ___________        ___________
Shareholders' equity (deficit):
    Preferred shares - $0.001 par value; 10,000,000 shares                       --                 --
       authorized; none issued or outstanding
    Common shares - $0.001 par value; 50,000,000 authorized;                 48,337             22,887
       48,336,295 and 22,886,295 shares issued and outstanding on
       June 30, 2004 and September 30, 2003, respectively
    Paid-in-capital                                                       4,927,802          3,488,348
    Accumulated deficit                                                  (5,277,547)        (4,296,260)
                                                                        ___________        ___________
       Total shareholders' deficit                                         (301,408)          (785,025)
                                                                        ___________        ___________
                                                                        $ 1,198,665        $   589,315
                                                                        ===========        ===========


   The accompanying notes are an integral part of these financial statements.


                                       3


</TABLE>


<PAGE>

<TABLE>
<CAPTION>


                           ACCUIMAGE DIAGNOSTICS CORP.
                        CONDENSED STATEMENT OF OPERATIONS
                                   (UNAUDITED)


                                                   THREE MONTHS ENDED JUNE 30,     NINE MONTHS ENDED JUNE 30,
                                                   ___________________________     ___________________________
                                                      2004            2003            2004            2003
                                                   ___________     ___________     ___________     ___________
<S>                                                 <C>             <C>             <C>             <C>

Sales                                              $   115,953     $    70,403     $   418,194     $ 1,220,884

Cost of sales                                           10,580           5,102          32,047         216,525
                                                   ___________     ___________     ___________     ___________
Gross profit                                           105,373          65,301         386,147       1,004,359
                                                   ___________     ___________     ___________     ___________
Operating expenses:
   Research and development (includes non-
      cash stock compensation of $14,636
      and $20,636 for the three and nine
      month periods ending June 30, 2004,
      respectively)                                    157,453          78,824         411,941         484,128

   Sales and marketing (includes non-cash
      stock  compensation of $0 and $2,000
      for the three and nine month periods
      ending June 30, 2004, respectively)              101,382          61,847         200,403         514,927


   General and administrative (includes non-
      cash stock compensation of $221,018
      and $416,268 for the three and nine
      month periods ending June 30, 2004,
      respectively)                                    330,737         224,933         771,599       1,045,424
                                                   ___________     ___________     ___________     ___________

       Total operating expenses                        589,572         365,604       1,383,943       2,044,479
                                                   ___________     ___________     ___________     ___________
Operating loss                                        (484,199)       (300,303)       (997,796)     (1,040,120)

Net interest income (expense) and other                 12,390          (7,337)         16,509         (26,042)
                                                   ___________     ___________     ___________     ___________
Net loss before income taxes                       $  (471,809)    $  (307,640)    $  (981,287)    $(1,066,162)

Provision for income taxes                                  --              --              --             800
                                                   ___________     ___________     ___________     ___________
Net loss                                           $  (471,809)    $  (307,640)    $  (981,287)    $ 1,066,962)

                                                   ===========     ===========     ===========     ===========
Basic and diluted net loss per share               $     (0.01)    $     (0.01)    $     (0.02)    $     (0.05)

                                                   ===========     ===========     ===========     ===========
Weighted average shares outstanding
    Basic and diluted                               48,336,295      22,886,295      41,277,171      22,886,295
                                                   ===========     ===========     ===========     ===========


   The accompanying notes are an integral part of these financial statements.


                                       4


</TABLE>


<PAGE>

<TABLE>
<CAPTION>

                           ACCUIMAGE DIAGNOSTICS CORP.
                        CONDENSED STATEMENT OF CASH FLOWS
                                   (UNAUDITED)
                                                                         NINE MONTHS ENDED JUNE,
                                                                      _____________________________
                                                                         2004              2003
                                                                      __________        ___________
<S>                                                                   <C>               <C>

CASH FLOWS FROM OPERATING ACTIVITIES
      Net loss                                                        $ (981,287)       $(1,066,962)

      Adjustment to reconcile net loss to net cash used for
      operating activities:

           Depreciation and amortization                                  10,647             26,792

           Product warranty reserve                                           --             (2,607)

           Stock based compensation                                      438,904                 --

           Change in accounts receivable allowance                        14,622             31,662

           Change in operating assets and liabilities:

              Accounts receivable, net                                    38,170            216,630

              Employee receivable                                             --             (3,082)

              Other receivable                                            25,000                 --

              Inventory                                                    7,079              5,530

              Prepaid assets and other assets                            (29,012)           (19,628)

              Accounts payable                                           (64,030)            58,653

              Accrued expenses                                          (160,260)            (3,975)

              Deferred revenue                                           103,473                 --
                                                                      __________        ___________

          Net cash used in operating activities                       $ (596,694)       $  (756,987)
                                                                      __________        ___________
CASH FLOWS FROM INVESTING ACTIVITIES

      Investment in property and equipment                            $   (2,849)       $    (6,134)
                                                                      __________        ___________
          Net cash used in investing activities                       $   (2,849)       $    (6,134)
                                                                      __________        ___________
CASH FLOWS FROM FINANCING ACTIVITIES:
         Short-term borrowings from shareholders and                  $       --        $   559,000
              related parties
         Proceeds from issuance of common stock to an officer          1,002,000                  -
              of the company
         Proceeds from short-term borrowings from an officer of
              the company                                              1,033,150                  -
         Payments on long-term borrowings from shareholders             (762,600)                 -
                                                                      __________        ___________

           Net cash provided by financing activities                   1,272,550        $   559,000
                                                                      __________        ___________

Net increase (decrease) in cash and cash equivalents                     673,007           (204,121)

Cash and cash equivalents at beginning of period                               -            231,843
                                                                      __________        ___________
Cash and cash equivalents at end of period                            $  673,007        $    27,722

                                                                      ==========        ===========
SUPPLEMENTAL DISCLOSURE

    Cash paid during the period for interest                          $   32,448        $        --

    Cash paid during the period for taxes                             $      338        $       800


   The accompanying notes are an integral part of these financial statements.


                                       5


</TABLE>


<PAGE>


                           ACCUIMAGE DIAGNOSTICS CORP.
                          NOTES TO FINANCIAL STATEMENTS


1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION AND OPERATIONS

The  Company  was  organized  on February 2, 1990 under the laws of the state of
Nevada as Black Pointe Holdings,  Inc. On June 26, 1996, the Company changed its
name to AccuImage Diagnostics Corp. (the "Company").

On  September  30, 1997,  pursuant to a Stock  Exchange  Agreement,  the Company
acquired all of the outstanding shares of AccuImage, Inc., a Nevada corporation,
which owned the exclusive  rights to certain  computer  software and technology,
which the Company had been  licensing.  Subsequent to the  exchange,  AccuImage,
Inc. was dissolved.

The Company is based in South San Francisco  and is engaged in the  development,
marketing  and sale of software  used for medical data and  interactive  medical
image visualization. The software, which runs on a personal computer, interprets
images  obtained from leading  equipment  manufacturers  and imaging  modalities
(e.g., CT, MRI, and Ultrasound).

The Company provides its software to three different markets. First, the Company
offers  hospitals,  clinics and medical  professionals  a scalable  solution for
transmitting  data on the Internet and  enhancing the  diagnostic  value of data
already obtained.  Second, the Company sells to Original Equipment Manufacturers
("OEMs") of medical acquisition  devices a customizable  version that adds value
to their core products.  Third,  the Company offers vendors who sell Picture and
Archiving  Communication  Systems ("PACs") a medical diagnostic software package
that complements and enhances their existing product line.

BASIS OF PRESENTATION

In the opinion of management,  the accompanying financial statements contain all
adjustments  (consisting of only normal recurring accruals) necessary to present
fairly the financial  position at June 30, 2004 and September 30, 2003,  and the
results of its  operations for the three and nine months ended June 30, 2004 and
2003 and cash  flows for the nine  months  ended  June,  2004 and 2003.  Certain
information and footnote  disclosures  normally included in financial statements
that would have been prepared in accordance with generally  accepted  accounting
principles have been condensed or omitted  pursuant to the rules and regulations
of the Securities and Exchange  Commission,  although  management of the Company
believes that the disclosures in these financial statements are adequate to make
the  information  presented  herein not  misleading.  It is suggested that these
financial statements and notes thereto be read in conjunction with the financial
statements  and the notes thereto  included in the Company's  September 30, 2003
Form 10-KSB filed December 31, 2003. The results of operations for the three and
nine months ended June 30, 2004 are not necessarily indicative of the results of
operations to be expected for the full fiscal year ending September 30, 2004.

GOING CONCERN

These  financial  statements  have been prepared on a going concern  basis.  The
Company has reported net  operating  losses for the three and nine months ending
June 30, 2004 and for the past three fiscal years.  Management  plans to achieve
profitability  in the next fiscal year ending  September  30, 2005 by generating
higher revenue  through an expansion of the Company's sales force and control of
costs and expenses.

The Company's expectations as to its cash flows, and as to future cash balances,
are  subject  to  a  number  of  assumptions,  including  assumptions  regarding
anticipated revenues, customer purchasing and payment patterns, and improvements
in general economic conditions,  many of which are beyond the Company's control.
If  revenues  do not  match  projections  and if  losses  exceed  the  Company's
expectations,  the Company will implement  additional cost saving initiatives in
order to preserve  cash.  If the  Company  experiences  a continued


                                       6


<PAGE>


decrease in demand for its products  from the level  experienced  during  fiscal
year 2003,  then it would need to reduce  expenditures  to a greater degree than
anticipated, or raise additional funds if possible.

Certain  shareholders have agreed to provide additional  financing if necessary.
During the first quarter of fiscal 2004 the Company borrowed  $1,000,000 from an
officer of the Company (see Note 2).

USE OF ESTIMATES

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial  statements and accompanying notes.
Actual results could differ materially from those estimates.

The actual  results with regard to warranty  expenditures  could have a material
impact on the  financial  statements  of the  Company if the actual rate of unit
failure is greater than what was estimated by the Company in the  calculation of
its warranty reserve.

Other  significant  estimates  include  the  estimated  cash  flows  to  measure
long-lived  assets,  including  goodwill  and other  intangible  assets  and the
recoverability of the Company's investment.

REVENUE RECOGNITION

The  Company's  revenue is derived  primarily  from two  sources:  (i)  software
license  revenue,  derived  primarily from product sales to distributors and end
users,  and (ii)  maintenance  and  services  revenue,  derived  primarily  from
support,  education and consulting  services provided to end-users.  The Company
typically  requires  deposits upon the receipt of a signed  purchase and license
agreement.  Deposits received on these agreements represent unearned revenue and
are classified as customer deposit liabilities on the Company's balance sheet.

The Company  accounts for sales of software and  maintenance  revenue  under the
provisions  of  Statement  of  Position  97-2 ("SOP  97-2"),  "Software  Revenue
Recognition," as amended. SOP 97-2 generally requires revenue earned on software
arrangements  involving  multiple elements to be allocated to each element based
on  vendor-specific  objective  evidence.  For  hardware  transactions  where no
software is involved,  the Company  applies the  provisions of Staff  Accounting
Bulletin 104, "Revenue Recognition."

The fee for  multiple-element  arrangements  is allocated to each element of the
arrangement,  such as maintenance  and support  services,  based on the relative
fair  values of the  elements.  The  Company  determines  the fair value of each
element  in  multi-element   arrangements  based  on  vendor-specific  objective
evidence  for each  element,  which is based on the price  charged when the same
element  is sold  separately.  If  evidence  of fair  value  of all  undelivered
elements exists but evidence does not exist for one or more delivered  elements,
then revenue is recognized using the residual method. Under the residual method,
the fair value of the undelivered elements is deferred and the remaining portion
is recognized as revenue.

The  Company  recognizes  revenue  from  the  sale  of  software  licenses  when
persuasive evidence of an arrangement exists, the product has been accepted, the
fee is fixed or  determinable,  and  collection of the  resulting  receivable is
probable.  Acceptance  generally  occurs when the  product  has been  installed,
training has occurred and the product is in clinical use at the customer site.

Fair values of the ongoing maintenance,  which includes updates and support, are
based upon a percentage of the current list price of the software. Fair value of
services,  such as training or  consulting,  is based upon separate sales by the
Company of these services to other customers.  Payments received for maintenance
and services are deferred and  recognized  as revenue  ratably over the contract
term. Training and consulting services are billed based on hourly rates, and are
generally  recognized  as  revenue  as these  services  are  performed.  Amounts
deferred  for  maintenance  services,   term  software  license  agreements  and
warranties comprise the main components of deferred revenue.

PRODUCT WARRANTY RESERVE

Based upon historical costs and its sales  agreements,  the Company  maintains a
product  warranty reserve based on product sales to cover  anticipated  warranty
costs  related  to  software  sold.  The  Company  typically  provides


                                       7


<PAGE>


one-year  warranties on its software and hardware products sold. The majority of
the hardware warranty is covered by the hardware vendor. The Company continually
compares its reserves to actual costs as determined by  management,  and adjusts
its  reserves  as  necessary.  There were no changes in the  Company's  warranty
reserve during the nine months ended June 30, 2004.


                                             NINE MONTHS ENDED JUNE 30,
                                             __________________________
                                               2004              2003
                                             ________          ________

Balance at the beginning of the period        $ 25,000        $ 50,000

   Provision for warranty liability for              -           1,000
      sales made during the  period
   Settlements made during the period                -          (4,000)

                                              ________        ________
Balance at the end of the period              $ 25,000        $ 47,000
                                              ========        ========

INVENTORIES AND COST OF SALES

Inventory  consisting of personal computer components are stated at the lower of
cost or market.  Cost is determined by the first-in,  first-out ("FIFO") method.
Interim period cost of goods sales is calculated  using the perpetual  inventory
record.  The  Company  reports  any  significant  adjustments  that  result from
reconciling the perpetual  inventory  record to the periodic and annual physical
inventory observations.

ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS

The Company  performs  ongoing credit  evaluations  of its customers'  financial
conditions and generally requires no collateral from its customers.  The Company
maintains  allowances for doubtful  accounts for estimated losses resulting from
the  inability of its  customers to make  required  payments.  If the  financial
condition  of  the  Company's  customers  should  deteriorate,  resulting  in an
impairment  of their  ability to make  payments,  additional  allowances  may be
required.  Trade  accounts  receivable  are  presented  net of an allowance  for
doubtful  accounts of $13,607 and  $50,000 at June 30,  2004 and  September  30,
2003, respectively.

RECOVERABILITY OF LONG LIVED ASSETS

The Company evaluates the  recoverability of its long-lived assets  periodically
by analyzing its operating results and considering significant events or changes
in the business environment.

LOSS PER SHARE

Basic net loss per share is  computed by dividing  net loss  (numerator)  by the
weighted-average  number of common shares outstanding  (denominator)  during the
period. Diluted net loss per share gives effect to all dilutive potential common
shares outstanding during the period including stock options, using the treasury
stock method.  In computing  diluted net loss per share, the average stock price
for the  period  is used in  determining  the  number of  shares  assumed  to be
purchased  from the  exercise  of stock  options.  For the three and nine months
ended June 30, 2004,  options and warrants  outstanding  were  excluded from the
calculation since their effect was antidilutive.  The total options and warrants
outstanding at June 30, 2004 were 375,000.

STOCK BASED COMPENSATION

The Company accounts for its stock-based  compensation plans using the intrinsic
value  method  prescribed  in  Accounting   Principles  Board  Opinion  No.  25,
"Accounting for Stock Issued to Employees." Compensation cost for stock options,
if any, is measured by the excess of the quoted  market  price of the  Company's
stock at the date of grant over the amount an  employee  must pay to acquire the
stock. SFAS No. 123 established  accounting and disclosure  requirements using a
fair-value  based method of accounting  for  stock-based  employee  compensation
plans.  Had  compensation  expense  for the  Company's  Stock  Option  Plan been
determined to be consistent  with SFAS No. 123, the Company's net loss and basic
and diluted net loss per share would have  increased to the  following pro forma
amounts:


                                       8


<PAGE>

<TABLE>
<CAPTION>

                                                    THREE MONTHS ENDED               NINE MONTHS ENDED
                                                         JUNE 30,                        JUNE 30,
                                                ___________________________     ___________________________
                                                   2004            2003            2004            2003
                                                ___________     ___________     ___________     ___________
<S>                                             <C>             <C>              <C>          <C>

Net loss, as reported                           $  (471,809)    $  (307,640)    $  (981,287)    $(1,066,962)
   Add: Non-cash stock compensation expense
     determined under the intrinsic value                --              --          13,750              --
     method as reported in net loss (*)
   Less: Employee stock-based compensation
     expense determined under fair value            (30,453)         (3,000)       (105,110)        (11,000)
                                                ___________     ___________     ___________     ___________
   Pro forma net loss                           $  (502,262)    $  (310,640)    $(1,072,647)    $(1,077,962)
                                                ===========     ===========     ===========     ===========
   Weighted average shares outstanding           48,336,295      22,886,295      41,277,171      22,886,295
Shares used to compute basic and diluted
   net loss per share                            48,336,295      22,886,295      41,277,171      22,886,295
                                                ===========     ===========     ===========     ===========
Loss per share:
   Basic and diluted - as reported              $     (0.01)    $     (0.01)    $     (0.02)    $     (0.05)
                                                ===========     ===========     ===========     ===========
   Basic and diluted - pro forma                $     (0.01)    $     (0.01)    $     (0.03)    $     (0.05)
                                                ===========     ===========     ===========     ===========

<FN>
__________________
(*) This amount excludes non-cash stock compensation on restricted stock awards.

</FN>
</TABLE>


RECENT ACCOUNTING PRONOUNCEMENTS

In December  2003, the  Securities  and Exchange  Commission  (the "SEC") issued
Staff  Accounting  Bulletin No. 104 ("SAB 104"),  Revenue  Recognition.  SAB 104
supersedes SAB 101,  Revenue  Recognition in Financial  Statements.  The primary
purpose  of SAB  104 is to  rescind  accounting  guidance  contained  in SAB 101
related to multiple element revenue arrangements,  superseded as a result of the
issuance  of EITF  00-21.  Additionally,  SAB 104  rescinds  the  SEC's  Revenue
Recognition in Financial Statements  Frequently Asked Questions and Answers (the
"FAQ")  issued  with SAB 101 that had been  codified  in SEC Topic  13,  Revenue
Recognition.  Selected  portions of the FAQ have been incorporated into SAB 104.
While the wording of SAB 104 has changed to reflect the  issuance of EITF 00-21,
the revenue  recognition  principles of SAB 101 remain largely  unchanged by the
issuance of SAB 104. The  issuance of SAB 104 did not have a material  impact on
the Company's financial position, results of operations or cash flows.


In  November  2003,  the  Emerging  Issues  Task  Force (the  "EITF")  reached a
consensus on Issue No. 03-10,  Application of EITF Issue No. 02-16,  "Accounting
by a Customer (Including a Reseller) for Certain  Consideration  Received from a
Vendor, by Resellers to Sales Incentives Offered to Consumers by Manufacturers".
This issue clarifies whether consideration  received by a reseller from a vendor
that is  reimbursement  by the vendor for honoring the vendor's sales incentives
offered  directly to consumers  should be recorded as a reduction of the cost of
the reseller's  cost of sales.  The provisions of EITF Issue No. 03-10 should be
applied  prospectively in fiscal years beginning after December 15, 2003 with no
early adoption or retroactive  reclassification  permitted. The adoption of this
standard did not have a material  impact on the  Company's  financial  position,
results of operations or cash flows.


In January 2003, the Financial  Accounting  Standards  Board (the "FASB") issued
FASB  Interpretation  No. 46 ("FIN 46"),  "Consolidation  of  Variable  Interest
Entities,  an  Interpretation  of ARB No. 51." Fin 46 requires  certain variable
interest entities to be consolidated by the primary beneficiary of the entity if
the  equity  investors  in  the  entity  do  not  have  the  characteristics  of
controlling  financial interest or do not have sufficient equity at risk for the
entity to  finance  it  activities  without  additional  subordinated  financial
support from other parties. FIN 46 is effective immediately for all new variable
interest  entities  created or acquired  after  January 31,  2003.  For variable
interest  entities  created or acquired prior to February 1, 2003, the provision
of FIN 46 were to be applied for the first  interim or annual  period  beginning
after June 15, 2003. In December 2003, the FASB released a revision of FIN 46 to
address various implementation issues and modify


                                       9


<PAGE>


the  effective  date for applying the provision of FIN 46. A public entity shall
apply the  provisions  of the Fin 46 revision no later than the end of the first
reporting period that ends after March 15, 2004.  However, a public entity shall
apply FIN 46 to entities considered to be special-purpose entities no later than
as of the end of the first  reporting  period that ends after December 31, 2003.
The issuance of FIN 46 and its  revision  did not have a material  impact on the
Company's financial position, results of operations or cash flows.


2.   RELATED PARTY TRANSACTIONS

The following  transactions  took place between the Company and related  parties
during the nine months ended June 30, 2004:

In fiscal year 2001,  the Company  received and approved  executed note purchase
agreements and subscription  agreements for a total of $500,000. As of September
30,  2003,  the  unpaid  balance  on  the  notes  amounted  to  $250,000,  which
represented the secured long-term portion of the notes due on June 30, 2005. All
of the notes plus accrued interest of $31,250 was repaid in October 2003.

In fiscal year 2003,  the  Company  borrowed an  additional  $512,600  from four
shareholders at 10% interest.  All of the notes were  short-term  notes and were
repaid in October  2003 from  proceeds  received  through  the  issuance  of two
Promissory Notes to an Officer of the Company.

In October 2003 and November 2003, the Company entered into two Promissory Notes
with an Officer of the Company for $500,000 each, totaling $1,000,000. The notes
bear  interest at 5% per annum and mature in October 2004 and in November  2004,
respectively.  In addition,  the Company  entered  into a Common Stock  Purchase
Agreement  with the same  Officer of the Company  pursuant to which the Company,
subject to the terms and conditions set forth therein, raised $1,002,000 in cash
through a private  equity  offering of 25,050,000  shares of  restricted  common
stock. See Note 3 for equity transaction details.

3.   EQUITY TRANSACTIONS

In October 2003, the Company entered into a Common Stock Purchase Agreement with
an Officer of the Company  pursuant to which the  Company,  subject to the terms
and conditions set forth  therein,  raised  $1,002,000 in cash through a private
equity offering of 25,050,000 shares of restricted common stock. The shares were
issued at a price of $0.04 per share, which was a discount from the market price
and as a result, the intrinsic value as of the date of the agreement of $500,000
is being expensed to operations  ratably over the one-year term of the Officer's
Employment Agreement. See Note 4 for Employment Agreement details.  Accordingly,
the Company  recorded a charge to  operations  of $125,250  and $250,500 for the
three and nine  months  ended  June 30,  2004,  respectively.  The sale of these
securities was not  registered  under the Securities Act of 1933, as amended and
was exempt from the registration  requirements  thereunder pursuant to Section 4
(2) thereof.  The proceeds from this offering are being used to fund operations.
This  purchase  of the  Company's  common  stock  resulted in the Officer of the
Company owning a majority interest in the Company totaling 52% at June 30, 2004.

In December 2003,  the Company issued 400,000 shares of restricted  common stock
to employees for prior services rendered as consultants during fiscal year 2003.
The shares were valued at the market  price on the date of issuance at $0.08 per
share and as a result,  the Company  recorded  charges to  operations  of $8,000
during the quarter ended December 31, 2003 and $24,000 in the prior fiscal year.
The issuance of these  securities was not registered under the Securities Act of
1933, as amended and was exempt from the registration requirements thereunder.

In December  2003, the Company  issued  incentive  stock options to its Board of
Directors  allowing  them to  purchase up to 1 million  shares of the  Company's
common stock.  The options were issued at an exercise  price of $0.10 per share,
which was  greater  than the  market  price on the date of grant.  The  exercise
period for the options is 10 years and the options  were 100% vested on the date
of grant. Total options outstanding at June 30, 2004 were 3,512,500.

In February 2004, the Company's Board of Directors  resolved that in recognition
of their past  service,  the Company  grant  immediate  and full  vesting of all
unvested  stock options held by each director as of that date.


                                       10


<PAGE>


The grants expire the sooner of 10 years after the vesting  commencement date or
90 days after  termination of their  three-year  Consulting  Agreements with the
Company.  As a result,  the intrinsic value of the unvested  options,  which was
$13,750,  was expensed to operations  during the second  quarter of fiscal 2004.
The intrinsic  value was measured  using the exercise price and the market price
on the date the options were fully vested.

In March 2004, the Company's  Board of Directors  approved and in April 2004 the
Company granted 750,000 shares of Common Stock to an Officer as compensation for
performing  duties  as its  Chief  Executive  Officer  ("CEO").  See  Note 4 for
Employment Agreement details. The following shares of common stock were granted:
600,000  shares for the  three-month  period  ended  March 31,  2004 and 150,000
shares for the three-month period ended June 30, 2004. The shares were valued at
the market  price on the date of grant and as a result,  the Company  recorded a
compensation  charge to operations of $56,250 and $112,500  during the three and
nine months ended June 30, 2004, respectively.

In April 2004, the Company issued incentive stock options to its Chief Operating
Officer,  allowing him to purchase up to 600,000 shares of the Company's  common
stock. The options were issued at an exercise price that was equal to the market
price on the date of grant,  and as a result the Company recorded a compensation
charge to operations of $39,518 during the three months ended June 30, 2004. The
exercise  period for the  options is five  years and the  options  vest over six
quarters. See Note 4 for Consulting Agreement.

In  April  2004,  the  Company  issued  incentive  stock  options  to one if its
consultants,  who was the Company's  former  President and CEO,  allowing him to
purchase up to 100,000  shares of the Company's  common stock.  The options were
issued at an  exercise  price that was equal to the market  price on the date of
grant, and as a result the Company recorded a compensation  charge to operations
of $14,636 during the three months ended June 30, 2004. The exercise  period for
the options is five years and the options were 100% vested on the date of grant.
See Note 4 for Consulting Agreement.

4.   SIGNIFICANT AGREEMENTS

In January  2004,  the  Company  and Aviel  Faliks  entered  into an  Employment
Agreement, effective January 1, 2004, which employs Mr. Faliks as the CEO of the
Company for a one-year term. See Note 3 for equity details.

In  January  2004,  the  Company  and  Ray  Vallejo  entered  into a  Consulting
Agreement,  effective  January 1, 2004,  pursuant to which Mr. Vallejo serves as
the Company's Chief Operating  Officer ("COO").  The Consulting  Agreement has a
two-year term.

In January 2004, the Company and Leon Kaufman,  former  President and CEO of the
Company,  entered  into a  Consulting  Agreement,  effective  January  1,  2004,
pursuant to which Mr.  Kaufman  serves as the Company's  Head of Research  until
October 2004.

In  February  2004,  the  Company  and SMAART  Medical  Systems  entered  into a
five-year  agreement (the "Software License Agreement") with respect to purchase
and distribution of AccuImage's medical imaging software.

In June 2004, the Company  entered into a three-year  operating  lease agreement
for  its  new  headquarters/operating  facility  located  at  400  Oyster  Point
Boulevard in South San Francisco, California. The commencement date of the lease
was August 1, 2004 and the monthly lease payments are  $3,959.55,  $4,106.20 and
$4,252.85 for years one, two and three, respectively.

5.   SUBSEQUENT EVENTS

In March 2004,  the Company's  Board of Directors  approved and in July 2004 the
Company granted 375,000 shares of Common Stock to an Officer as compensation for
performing duties as its CEO. See Note 4 for Employee Agreement details.


                                       11


<PAGE>


________________________________________________________________________________

ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS
________________________________________________________________________________


FORWARD LOOKING STATEMENTS

The discussion  contained in this  Management  Discussion & Analysis is "forward
looking" as that term is  contemplated  by Section 27A of the  Securities Act of
1933 and Section 12E of the Securities  Exchange Act of 1934  ("Exchange  Act"),
including, without limitation,  statements regarding the Company's expectations,
beliefs,  intentions or strategies  regarding  future  business  operations  and
projected  earnings  from its products and  services,  which are subject to many
risks. All forward-looking  statements included in this Form 10-QSB are based on
information available to the Company on the date hereof, and the Company assumes
no  obligation  to update any such  forward-looking  statements.  The  Company's
actual results may differ  materially as a result of certain factors,  including
those set forth  hereafter and elsewhere in this Form 10-QSB and as disclosed in
the Company's other filings with the Security and Exchange Commission. Potential
investors should consider  carefully the previously  stated factors,  as well as
the more detailed  information  contained elsewhere in this Form 10-QSB,  before
making a decision to invest in the common stock of the Company.

OVERVIEW

The following  discussion and analysis  should be read in  conjunction  with the
Company's  financial  statements and related notes thereto  contained  elsewhere
with this Form  10-QSB.  Operating  results for the three and nine months  ended
June 30, 2004 are not necessarily indicative of the results that may be expected
for any future periods, including the full fiscal year. Reference should also be
made  to the  Annual  Financial  Statements,  Notes  thereto,  and  Management's
Discussion  and  Analysis  of  Financial  Condition  and  Results of  Operations
contained in the Company's September 30, 2003 Form 10-KSB, filed on December 31,
2003.

AccuImage is engaged in the  development,  marketing and support of software for
the  visualization,  analysis  and  management  of  medical  imaging  data.  The
software's  primary function is to enhance  physicians'  interpretation  of data
from medical imaging modalities such as computed tomography, magnetic resonance,
and ultrasound  through the application of  three-dimensional  computer graphics
and image processing technologies. This enhanced analysis can support physicians
in clinical diagnosis, surgical planning and medical research. Three-dimensional
visualization  allows  communication of findings in a form readily understood by
physicians and others without the specialized  training  otherwise  required for
interpreting the images generated by the medical imaging modalities.  Efficiency
gains and cost savings may be realized  through  automated  reporting  tools and
provision  for  electronic   distribution   of  the  medical  imaging  data  and
post-processed results via internal networks and the Internet.

The AccuImage software was conceived and developed on the same hardware platform
that it is now distributed  on:  standard,  high-performance,  low cost personal
computer  ("PC")   workstations   running  the  Windows  operating  system  from
Microsoft.  The software  interfaces with various medical imaging modalities via
the standard  medical  imaging DICOM protocol and uses the Internet and standard
PC networks for subsequent  distribution of images and  post-processed  results.
Through  this  combination  of  standard   underlying  products  and  protocols,
AccuImage  is  able to  offer  to  physicians  cost-effective,  easy-to-use  yet
powerful visualization, analysis and laborsaving tools for everyday use.

The Company markets its products to radiology  departments,  imaging centers and
original equipment  manufacturers of diagnostic imaging systems through a direct
sales force,  non-exclusive  distributors  in the United States and  independent
distributors in international markets.

RESULTS OF OPERATIONS

REVENUES

Net sales were  $115,953  for the quarter  ended June 30,  2004,  as compared to
$70,403 for the same period in fiscal 2003, an increase of $45,550 or 64.7%. For
the nine  months  ended  June 30,  2004 and 2003,  revenues


                                       12


<PAGE>


were $418,194 and $1,220,884, respectively, a decrease of $802,690 or 65.7%. The
increase in revenue  during the third  quarter of fiscal year 2004 when compared
to the same  period in the prior year is  primarily  due to several  new license
agreements  entered into during  fiscal 2004.  Overall  fiscal year 2004 to date
revenue is lower when  compared to the same period in prior year due to the poor
economy, especially in the medical imaging and healthcare industries.  Sales for
the three and nine months ended June 30, 2004 were primarily  sales of software,
hardware and monthly maintenance contracts.

GROSS PROFIT

Gross profit  increased by $40,072 or 61.4%,  to $105,373 or 90.9% of net sales,
for the quarter ended June 30, 2004,  from $65,301,  or 92.8% of net sales,  for
the  comparable  period in the prior  year.  For the first nine months of fiscal
year 2004,  gross profit decreased by $618,212 or 61.6%, to $386,147 or 92.3% of
net sales,  from $1,004,359 or 82.3% of net sales, for the comparable  period in
fiscal year 2003. The increase in absolute dollars during the three months ended
June 30, 2004 and the decrease in absolute  dollars during the nine months ended
June  30,  2004  was  primarily  due  to  higher  and  lower  quarterly   sales,
respectively, and a change in product mix. Sales during the first three and nine
months of fiscal year 2004 represented revenue from sales of software,  hardware
and monthly maintenance contracts.

RESEARCH & DEVELOPMENT

Research  and  development   expenses   consist   principally  of  research  and
engineering personnel costs, equipment  depreciation,  consulting fees, supplies
and  allocation  of overhead.  Research and  development  expenses for the third
quarter of 2004  increased  by $78,629 or 99.8%,  to  $157,453  or 135.8% of net
sales,  from  $78,824 or 112.0% of net sales,  in the  comparable  period of the
prior  year.  Research  and  Development  expenses  for the first nine months of
fiscal  year 2004  decreased  by $72,187 or 14.9%,  to  $411,941 or 98.5% of net
sales,  from  $484,128 or 39.7% of net sales,  in the  comparable  period of the
prior year. The decrease in absolute dollars for the three months ended June 30,
2004 is primarily due to an increase in outside consultants used and an increase
in personnel  costs when compared to the same period in prior year. The decrease
in absolute  dollars for the nine months ended June 30, 2004 is primarily due to
reductions in personnel and other cost saving  measures.  The Company intends to
continue  its  research  and  development  efforts to maintain  its  competitive
position in the  marketplace  since the Company's  operations  require  constant
improvement and high-level development of the Company's software products.

SALES AND MARKETING

Sales  and  marketing  expenses  consist  principally  of  sales  and  marketing
personnel  costs,  agency and  consulting  fees,  commissions,  promotional  and
advertising  expenses and allocation of overhead.  Sales and marketing  expenses
for the third quarter of fiscal 2004 increased by $39,535 or 63.9%,  to $101,382
or 87.4% of net sales,  from  $61,847 or 87.8% of net sales,  in the  comparable
period of the prior  year.  For the first nine  months of fiscal year 2004 sales
and marketing  expenses  decreased by $314,542 or 61.1%, to $200,403 or 47.9% of
net sales,  from $514,927 or 42.2% of net sales, in the comparable period of the
prior year. The increase in absolute dollars for the three months ended June 30,
2004 was  primarily  due to an increase in outside  consultant  fees,  partially
offset by a decrease in personnel  costs.  The decrease in absolute  dollars for
the nine  months  ended June 30,  2004 was  primarily  due to a decrease  in the
Company's  sales force,  a change in the  compensation  structure to commissions
only and a decrease in travel and entertainment expense.

GENERAL AND ADMINISTRATIVE

General and  administrative  expenses consist  principally of administrative and
executive   personnel  costs,   provision  for  doubtful   accounts,   fees  for
professional  services and  allocation of overhead.  General and  administrative
expenses  for the third  quarter of fiscal  year 2004  increased  by $105,804 or
47.0%, to $330,737 or 285.2% of net sales, from $224,933 or 319.5% of net sales,
in the comparable period in the prior year. General and administrative  expenses
for the first nine months of fiscal year 2004 increased by $273,825 or 26.2%, to
$771,599 or 184.5% of net sales,  from $1,045,424 or 85.6% of net sales, for the
comparable  period of the prior year. The increase in absolute  dollars for both
periods is primarily  due to the non-cash  charges  associated  with stock based
compensation  incurred  during the three and nine  months  ended June 30,  2004,
partially offset by a reduction in office staff.


                                       13


<PAGE>


RESULTS OF OPERATIONS

Sales  increased by $45,550 to $115,953,  and decreased by $802,690 to $418,194,
for the  three and nine  months  ended  June 30,  2004,  respectively,  from the
comparable  periods in fiscal year 2003. The sales increase in the third quarter
of fiscal  2004 and the  decline  in fiscal  year to date  sales  resulted  in a
corresponding  increase  and  decrease  in  gross  profit.   Operating  expenses
increased by $223,968 or 61.3%, to $589,572,  and decreased by $660,536 or 32.3%
to $1,383,943,  for the three and nine months ended June 30, 2004, respectively,
from the same  comparable  periods in fiscal year 2003.  The fiscal year to date
decrease in sales is due to the poor economy,  especially in the medical imaging
and the health care  industries.  The fiscal year to date  decrease in operating
expenses is primarily due to cost saving  measures  implemented  by the Company,
including a reduction in salaries and  headcount,  partially  offset by non-cash
stock based compensation expenses incurred during the nine months ended June 30,
2004.  This resulted in an operating  loss of ($471,809)  and ($981,287) for the
three and nine months ended June 30, 2004,  respectively,  or $164,169  more and
$85,675 less than the operating  loss of  ($307,640)  and  ($1,066,962)  for the
comparable periods in fiscal year 2003.

OFF BALANCE SHEET ARRANGEMENTS

The Company did not engage in an off balance sheet  arrangement  during the nine
months ended June 30, 2004.

LIQUIDITY AND CAPITAL RESOURCES

During  the  nine  months  ended  June 30,  2004,  net  cash  used by  operating
activities was $596,694.  At June 30, 2004, the Company had $673,007 in cash and
cash  equivalents.  Working  capital  at June 30,  2004  equaled  a  deficit  of
($679,482) compared with a deficit of ($1,153,886) at September 30, 2003.

On June 30, 2004,  the Company held  accounts  receivable  (net of allowance for
doubtful  accounts) of $59,378.  Accounts  receivable are generally kept current
through punctual collections efforts.

During  the nine  months  ended  June 30,  2004,  the  Company  did not have any
significant investing activities.

During the nine months ended June 30, 2004,  the Company  raised  $2,002,000  in
cash by issuing 25,050,000 shares of the Company's common stock to an officer of
the Company in a private  financing for  $1,002,000,  and entered into two notes
for $500,000  each with the same  Officer of the  Company.  This was offset by a
payment of approximately $762,600 to Board Members for outstanding notes entered
into during previous years.

The Company  anticipates that current capital  resources and operational  income
from increasing  revenues will meet cash  requirements  for the remainder of the
fiscal year. However,  the Company's revenues for the foreseeable future may not
be  sufficient  to  obtain  profitability,  and  the  Company  may  continue  to
experience  losses.  The Company's  expectations as to its cash flows, and as to
future  cash  balances,  are  subject  to a  number  of  assumptions,  including
assumptions  regarding  anticipated  revenue,  customer  purchasing  and payment
patterns,  and  improvements in general economic  conditions,  many of which are
beyond the  Company's  control.  If  revenues do not match  projections,  and if
losses exceed the Company's expectations,  the Company will implement additional
cost saving initiatives in order to preserve cash. If the Company  experiences a
continued decline in demand for its products,  from the level experienced during
fiscal  2003,  it will need to reduce  expenditures  to a  greater  degree  than
anticipated, or raise additional funds, if possible.

The Company  operates in a highly  competitive  market  characterized by rapidly
changing  technology,  together  with  competitors  and  distributors  that have
significantly  greater financial resources than the Company. The Company intends
to incur  significant  expenses to develop  and promote new  products as well as
support existing products.  Failure to generate sufficient revenues from new and
existing products,  or reduce  discretionary  expenditures would have a material
adverse  effect  on  a  Company's  ability  to  achieve  its  intended  business
objectives.


                                       14


<PAGE>


FOREIGN CURRENCY TRANSACTIONS

All of the  Company's  transactions  are  negotiated,  invoiced and paid in U.S.
dollars.  International  sales for the three and nine months ended June 30, 2004
were $27,300 and $120,100, respectively.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The discussion and analysis of the financial condition and results of operations
are based on the  financial  statements,  which have been prepared in accordance
with generally accepted accounting principles. Note 1 of the Notes describes the
significant  accounting  policies  essential to the  financial  statements.  The
preparation of these financial  statements requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ materially from those estimates.

We believe the following to be critical accounting policies and estimates.  That
is,  they  are  both  important  to the  portrayal  of the  Company's  financial
condition  and results,  and they require  significant  management  judgment and
estimates about matters that are inherently  uncertain.  As a result of inherent
uncertainty,  there is a likelihood that materially  different  amounts would be
reported under different conditions or using different assumptions.  Although we
believe  that our  judgments  and  estimates  are  reasonable,  appropriate  and
correct, actual future results may differ materially from our estimates.

REVENUE  RECOGNITION.  The  Company's  revenue  is  derived  primarily  from two
sources:  (i) software license revenue,  derived primarily from product sales to
distributors and end users, and (ii) maintenance and services  revenue,  derived
primarily from support, education and consulting services provided to end-users.
The Company  typically  requires  deposits upon the receipt of a signed purchase
and license agreement.  Deposits received on these agreements represent unearned
revenue and are  classified  as customer  deposit  liabilities  on the Company's
balance sheet.

The Company  accounts for sales of software and  maintenance  revenue  under the
provisions  of  Statement  of  Position  97-2 ("SOP  97-2"),  "Software  Revenue
Recognition," as amended. SOP 97-2 generally requires revenue earned on software
arrangements  involving  multiple elements to be allocated to each element based
on  vendor-specific  objective  evidence.  For  hardware  transactions  where no
software is involved,  the Company  applies the  provisions of Staff  Accounting
Bulletin 104, "Revenue Recognition."

The fee for  multiple-element  arrangements  is allocated to each element of the
arrangement,  such as maintenance  and support  services,  based on the relative
fair  values of the  elements.  The  Company  determines  the fair value of each
element  in  multi-element   arrangements  based  on  vendor-specific  objective
evidence  for each  element,  which is based on the price  charged when the same
element  is sold  separately.  If  evidence  of fair  value  of all  undelivered
elements exists but evidence does not exist for one or more delivered  elements,
then revenue is recognized using the residual method. Under the residual method,
the fair value of the undelivered elements is deferred and the remaining portion
is recognized as revenue.

The  Company  recognizes  revenue  from  the  sale  of  software  licenses  when
persuasive evidence of an arrangement exists, the product has been accepted, the
fee is fixed or  determinable,  and  collection of the  resulting  receivable is
probable.  Acceptance  generally  occurs when the  product  has been  installed,
training has occurred and the product is in clinical use at the customer site.

Fair values for ongoing  maintenance,  which includes  updates and support,  are
based upon a percentage of the current list price of the software. Fair value of
services,  such as training or  consulting,  is based upon separate sales by the
Company of these services to other customers.  Payments received for maintenance
and services are deferred and  recognized  as revenue  ratably over the contract
term. Training and consulting services are billed based on hourly rates, and are
generally  recognized  as  revenue  as these  services  are  performed.  Amounts
deferred  for  maintenance  services,   term  software  license  agreements  and
warranties comprise the main components of deferred revenue.


                                       15


<PAGE>


PRODUCT WARRANTY RESERVE.  Based upon historical costs and its sales agreements,
the Company maintains a product warranty reserve based on product sales to cover
anticipated  warranty  costs  related to software  sold.  The Company  typically
provides  one-year  warranties on its software and hardware  products  sold. The
majority of the hardware warranty is covered by the hardware vendor. The Company
continually  compares its reserves to actual costs as determined by  management,
and adjusts its reserves as necessary.

The actual  results with regard to warranty  expenditures  could have a material
impact on the  financial  statements  of the  Company if the actual rate of unit
failure is greater than what was estimated by the Company in the  calculation of
its warranty  reserve.  The product  warranty  reserve balance was $25,000 as of
June 30, 2004 and September 30, 2003.

INVENTORY VALUATION METHODOLOGY.  Inventories are valued at the lower of cost or
market using the first-in,  first-out  ("FIFO") method.  Inventories are written
down for estimated obsolescence and unmarketable inventory in an amount equal to
the  difference  between the cost of inventory  and the  estimated  market value
based upon  assumptions  about future  demand and market  conditions.  Inventory
impairment  charges  create a new cost basis for  inventory.  In  addition,  the
Company reports any  significant  adjustments  that result from  reconciling the
perpetual  inventory  record  to the  periodic  and  annual  physical  inventory
observations. The inventory balance was $42,114 and $49,193, as of June 30, 2004
and September 30, 2003, respectively.

ACCOUNTS  RECEIVABLE AND ALLOWANCE FOR DOUBTFUL  ACCOUNTS.  The Company performs
ongoing credit evaluations of its customers'  financial conditions and generally
requires no collateral from its customers.  The Company maintains allowances for
doubtful  accounts for  estimated  losses  resulting  from the  inability of its
customers to make required payments. If the financial condition of the Company's
customers  should  deteriorate,  resulting in an  impairment of their ability to
make  payments,   additional   allowances   may  be  required.   Trade  accounts
receivables,  net of an  allowance  for  doubtful  accounts,  were  $13,607  and
$112,170 at June 30, 2004 and September 30, 2003, respectively.

VALUATION OF OTHER INTANGIBLE ASSETS AND GOODWILL.  Other significant  estimates
include  the  estimated  cash  flows to  measure  long-lived  assets,  including
goodwill and other  intangible  assets and the  recoverability  of the Company's
investment.  The Company  evaluates the  recoverability of its long-lived assets
periodically  by analyzing its  operating  results and  considering  significant
events or changes in the business environment. Goodwill was $309,063 on June 30,
2004 and  September  30,  2003.  Other  intangible  assets,  net of  accumulated
amortization,  were $3,295 and $4,393 on June 30, 2004 and  September  31, 2003,
respectively.

RECENT ACCOUNTING PRONOUNCEMENTS

In December  2003, the  Securities  and Exchange  Commission  (the "SEC") issued
Staff  Accounting  Bulletin No. 104 ("SAB 104"),  Revenue  Recognition.  SAB 104
supersedes SAB 101,  Revenue  Recognition in Financial  Statements.  The primary
purpose  of SAB  104 is to  rescind  accounting  guidance  contained  in SAB 101
related to multiple element revenue arrangements,  superseded as a result of the
issuance  of EITF  00-21.  Additionally,  SAB 104  rescinds  the  SEC's  Revenue
Recognition in Financial Statements  Frequently Asked Questions and Answers (the
"FAQ")  issued  with SAB 101 that had been  codified  in SEC Topic  13,  Revenue
Recognition.  Selected  portions of the FAQ have been incorporated into SAB 104.
While the wording of SAB 104 has changed to reflect the  issuance of EITF 00-21,
the revenue  recognition  principles of SAB 101 remain largely  unchanged by the
issuance of SAB 104. The  issuance of SAB 104 did not have a material  impact on
the Company's financial position, results of operations or cash flows.


In  November  2003,  the  Emerging  Issues  Task  Force (the  "EITF")  reached a
consensus on Issue No. 03-10,  Application of EITF Issue No. 02-16,  "Accounting
by a Customer (Including a Reseller) for Certain  Consideration  Received from a
Vendor, by Resellers to Sales Incentives Offered to Consumers by Manufacturers".
This issue clarifies whether consideration  received by a reseller from a vendor
that is  reimbursement  by the vendor for honoring the vendor's sales incentives
offered  directly to consumers  should be recorded as a reduction of the cost of
the reseller's  cost of sales.  The provisions of EITF Issue No. 03-10 should be
applied  prospectively in fiscal years beginning after December 15, 2003 with no
early adoption or retroactive  reclassification  permitted. The adoption of this
standard did not have a material  impact on the  Company's  financial  position,
results of operations or cash flows.


In January 2003, the Financial  Accounting  Standards  Board (the "FASB") issued
FASB  Interpretation  No. 46 ("FIN 46"),  "Consolidation  of  Variable  Interest
Entities,  an  Interpretation  of ARB No. 51." Fin 46 requires


                                       16


<PAGE>


certain variable interest entities to be consolidated by the primary beneficiary
of  the  entity  if  the  equity  investors  in  the  entity  do  not  have  the
characteristics  of  controlling  financial  interest or do not have  sufficient
equity at risk for the  entity  to  finance  it  activities  without  additional
subordinated   financial  support  from  other  parties.  FIN  46  is  effective
immediately  for all new variable  interest  entities  created or acquired after
January 31, 2003. For variable  interest  entities  created or acquired prior to
February  1, 2003,  the  provision  of FIN 46 were to be  applied  for the first
interim or annual period  beginning  after June 15, 2003. In December  2003, the
FASB released a revision of FIN 46 to address various  implementation issues and
modify the effective  date for applying the provision of FIN 46. A public entity
shall apply the  provisions  of the Fin 46 revision no later than the end of the
first reporting period that ends after March 15, 2004.  However, a public entity
shall  apply FIN 46 to entities  considered  to be  special-purpose  entities no
later than as of the end of the first reporting  period that ends after December
31, 2003. The issuance of FIN 46 and its revision did not have a material impact
on the Company's financial position, results of operations or cash flows.


FACTORS AFFECTING FUTURE OPERATING RESULTS

The  development  and  marketing  of products  requires  significant  amounts of
capital.  Failure to  increase  future  orders and  revenues  might  require the
Company to seek  additional  capital to meet its working capital needs during or
beyond the next twelve months if the Company is unable to reduce expenses to the
degree  necessary to avoid  incurring  losses.  If the Company needs  additional
capital  resources,  it may be required to raise additional  equity or sell debt
securities,  secure lines of credit or obtain other third party  financing.  The
timing and amount of such capital requirements cannot be determined at this time
and will depend on a number of factors,  including  demand for our  existing and
new products and changes in technology in the medical  imaging  industry.  There
can be no assurance that additional  financing will be available on satisfactory
terms when needed,  if at all.  Failure to raise such additional  financing,  if
needed, may result in the Company's  inability to achieve its long-term business
objectives.  To the extent that additional capital is raised through the sale of
additional  equity  or  convertible  debt  securities,  the  issuance  of  these
securities would result in additional dilution to the Company's shareholders.

The Company operates in a rapidly changing  industry,  which is characterized by
intense competition from both established companies and start-up companies.  The
market for the Company's products is extremely  competitive both as to price and
capabilities.  The Company's  success  depends in part on its ability to enhance
existing  products and  introduce  new  technology  products.  This requires the
Company to accurately  predict future  technology  trends and  preferences.  The
Company  must also bring its  products to market at  competitive  price  levels.
Unexpected  changes in technological  standards,  customer demand and pricing of
competitive  products could adversely affect the Company's  operating results if
the Company is unable to respond effectively and timely to such changes.

The industry is also  dependent to a large  extent on  proprietary  intellectual
property rights.  From time to time, the Company is subject to legal proceedings
and  claims in the  ordinary  course of  business,  including  claims of alleged
infringement  of patents,  trademarks and other  intellectual  property  rights.
Consequently,  from time to time,  the Company  will be required to prosecute or
defend against alleged infringements of such rights.


                                       17


<PAGE>


________________________________________________________________________________

ITEM 3. CONTROLS AND PROCEDURES

________________________________________________________________________________


Within  90 days  prior to the date of this  Form  10-QSB,  the  Company  made an
evaluation,  under  the  supervision  and with  participation  of the  Company's
management,   including  the  Company's   Chief   Executive   Officer,   of  the
effectiveness of the design and operation of the Company's  disclosure  controls
and procedures pursuant to Exchange Act Rule 13a-14. Based upon that evaluation,
the Company's Chief Executive  Officer  concluded that the Company's  disclosure
controls  and  procedures  are  effective  in timely  alerting  them to material
information relating to the Company required to be included in this Form 10-QSB.

There has been no significant  change in the Company's  internal  controls or in
other factors, which could significantly affect the internal controls subsequent
to the date the Company carried out its evaluation.


________________________________________________________________________________

PART II. OTHER INFORMATION
________________________________________________________________________________


ITEM 1. LEGAL PROCEEDINGS

The Company may from time to time be  involved  in various  claims and  lawsuits
incidental  to the  operation  of its  business.  The  Company is not  currently
involved in any litigation that it believes could have a material adverse effect
on its financial condition or the results of its operations.


ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

None.


ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.


ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matter was submitted to the vote of security holders during the quarter ended
June 30, 2004.


ITEM 5. OTHER INFORMATION


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

     (a) Exhibits.

         The Exhibits listed in the accompanying Exhibit Index are filed as part
         of this report.


     (b) The  following  reports on Form 8-K were filed during the quarter ended
         June 30, 2004:

         On May 20, 2004,  the Company filed a Form 8-K under Item 5 to disclose
         that the Company's Board of Directors accepted the resignations of five
         of its currently sitting Board of Directors,  increased the size of the
         Board to seven  directors and appointed six new directors to fill Board
         vacancies.


                                       18


<PAGE>


________________________________________________________________________________

                                   SIGNATURES
________________________________________________________________________________


     In accordance with the requirements of the Securities Exchange Act of 1934,
the Registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

                                   ACCUIMAGE DIAGNOSTIC CORP.




Date:  August 13, 2004             By: /s/ AVIEL FALIKS
                                   _____________________________________________
                                           Aviel Faliks
                                           President and Chief Executive Officer



                                   By: /s/ KATHLEEN M. RYAN
                                   _____________________________________________
                                           Kathleen M. Ryan
                                           Chief Financial Officer


                                       19


<PAGE>


                                  EXHIBIT INDEX

EXHIBIT NO.                                  DESCRIPTION

   10.06         Lease Agreement between AccuImage Diagnostics Corp. and Kashiwa
                 Fudosan America, Inc., dated June 15, 2004.

    31.1         Certification of Chief Executive  Officer,  pursuant to 18
                 U.S.C. Section 1350, as adopted pursuant to Section 302 of
                 the Sarbanes-Oxley Act of 2002.

    31.2         Certification of Chief Financial  Officer,  pursuant to 18
                 U.S.C. Section 1350, as adopted pursuant to Section 302 of
                 the Sarbanes-Oxley Act of 2002.

    32.1         Certification of Chief Executive  Officer,  pursuant to 18
                 U.S.C. Section 1350, as adopted pursuant to Section 906 of
                 the Sarbanes-Oxley Act of 2002.

    32.2         Certification of Chief Financial  Officer,  pursuant to 18
                 U.S.C. Section 1350, as adopted pursuant to Section 906 of
                 the Sarbanes-Oxley Act of 2002.


                                       20







</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>2
<FILENAME>exhibit10-06.txt
<DESCRIPTION>EXHIBIT 10.06
<TEXT>



                                                                   EXHIBIT 10.06


               O Y S T E R   P O I N T   M A R I N A   P L A Z A





                                  OFFICE LEASE

                                       OF







                                    SUITE 201



                                       TO



                       ACCUIMAGE DIAGNOSTICS CORPORATION,

                              A NEVADA CORPORATION









                           400 Oyster Point Boulevard
                          South San Francisco, CA 94080


<PAGE>


                            OYSTER POINT MARINA PLAZA

                                  OFFICE LEASE

THIS OFFICE  LEASE (the  "Lease") is entered  into as of June 15,  2004,  by and
between KASHIWA FUDOSAN AMERICA, INC., a California corporation ("Landlord") and
ACCUIMAGE DIAGNOSTIS CORPORATION, a Nevada Corporation ("Tenant").

                              1 BASIC LEASE TERMS

1.1 LEASE OF  PREMISES.  Landlord  leases to Tenant,  and Tenant rents and hires
from Landlord, the premises described in ss. 1.3 below, in the building known by
the street address 400 Oyster Point  Boulevard  (the  "Building") in the City of
South San Francisco,  County of San Mateo, State of California,  on the property
described in ss. 1.6 below,  in the business park commonly known as Oyster Point
Marina  Plaza (the  "Complex"),  for the term  stated in ss. 1.4 below,  for the
rents  hereinafter  reserved,  and upon and  subject  to the  terms,  conditions
(including   limitations,   restrictions,   and  reservations),   and  covenants
hereinafter  provided.  The  Building  and the  Complex  are  more  particularly
described and depicted in Exhibit A which is attached hereto.  Each party hereby
expressly  covenants and agrees to observe and perform all of the conditions and
covenants herein contained on its part to be observed and performed.

1.2 SUMMARY TABLE. The parties agree that the following table (the "Table") sets
forth in summary  form the basic terms of this  Lease,  including  the  specific
space  comprising the Premises and, with respect to such space,  the Term of the
Lease,  the usable and rentable  square  footage,  the Base Rent, Base Year, and
Tenant's Share, as all of such terms are defined below:

<TABLE>
<CAPTION>

==================================================================================================
     PERIOD           SUITE      RSF       USF       MONTHLY      T'S SHARE     T'S SHARE     BASE
                       NO.                          BASE RENT       BLDG         COMPLEX      YEAR
__________________________________________________________________________________________________
<C>                    <C>      <C>       <C>       <C>            <C>           <C>          <C>

8-1-04 to 7-31-05      201      2,933     2,550     $3,959.55      1.266%        0.631%       2004
__________________________________________________________________________________________________

8-1-05 to 7-31-06      201      2,933     2,550     $4,106.20      1.266%        0.631%       2004
__________________________________________________________________________________________________

8-1-06 to 7-31-07      201      2,933     2,550     $4,252.85      1.266%        0.631%       2004
==================================================================================================

</TABLE>

In the event of any  conflict  between the terms  contained in the Table and the
terms  contained  in  subsequent  sections of the Lease,  the terms of the Table
shall  control,  except  that any  dates  stated in the  Table  are  subject  to
adjustment  as  appropriate  to the  extent  any other  provisions  of the Lease
provide for adjustments to the Commencement Date and/or the Expiration Date.

1.3 PREMISES.  The premises  leased to Tenant (the  "Premises") are a portion of
the second (2nd) floor of the  Building and are commonly  known as SUITE 201, as
shown on the floor plan annexed  hereto as EXHIBIT B. The Premises  also include
all fixtures and equipment which are attached  thereto,  except items not deemed
to be included  therein and which are removable by Tenant as provided in Article
10 below.  Landlord and Tenant  agree that the usable and  rentable  area of the
Premises,  and the respective  rentable areas of the Property (as defined in ss.
1.6 below) and Complex, for all purposes under this Lease, are as follows and as
specified in the Table:

                 Property's Rentable Area:  231,769 rsf
                 Complex's Rentable Area:   464,502 rsf.


                     Oyster Point Marina Plaza Office Lease
              Kashiwa Fudosan America, Inc.::AccuImage Diagnostics
                                  page 1 of 53
exhibit 10.06 leas                              [Suite 201 (400 OPB); 2,933 rsf]


<PAGE>


Tenant  acknowledges  that it has caused  its  architect  to verify the  numbers
stated in the Table and herein relating to the measurements of such spaces prior
to the Commencement Date of this Lease or has had an opportunity to do so.

1.4 TERM.  The term (the "Term") for which the Premises are hereby  leased shall
commence on the "Commencement  Date," which shall be the earlier to occur of (i)
the day on which the Premises are ready for  occupancy (as defined in Article 3)
or (ii) the day on which Tenant or anyone claiming under or through Tenant first
occupies  the Premises for  business,  and shall end at noon on the  "Expiration
Date," which shall be the last day of the calendar month in which occurs the day
preceding the third (3rd)  anniversary of the  Commencement  Date or any earlier
date upon which the Term may expire or be  cancelled or  terminated  pursuant to
any of the  conditions  or covenants of this Lease or pursuant to law.  Promptly
following  the  Commencement  Date the  parties  hereto  shall,  if  required by
Landlord,  enter  into  a  supplementary  agreement  fixing  the  dates  of  the
Commencement  Date and the Expiration  Date in the form which is attached hereto
as EXHIBIT E and incorporated herein by reference.

1.5 RENT.  The "Rent"  reserved  under this Lease,  for the Term thereof,  shall
consist of the following:

          (a)  "Base Rent" as set forth in the Table for the various  spaces and
               periods  described  therein per month,  which shall be payable in
               advance on the first day of each and every  calendar month during
               the Term of this Lease,  except  that Tenant  shall pay the first
               month's  Base Rent due under the  Lease  upon the  execution  and
               delivery of this Lease by Tenant; and

          (b)  "Additional  Rent"  consisting of any and all other sums of money
               as shall  become  payable by Tenant to  Landlord  hereunder;  and
               Landlord  shall have the same remedies for default in the payment
               of Additional Rent as for a default in payment of Base Rent).

     1.5.1 PAYMENT OF RENT.  Tenant shall pay the Base Rent and Additional  Rent
     promptly  when due,  without  demand  therefor  and without any  abatement,
     deduction,  or setoff  whatsoever,  except as may be expressly  provided in
     this Lease.  Tenant shall pay the Rent to Landlord,  in lawful money of the
     United States of America,  at  Landlord's  office at the Complex or at such
     other place,  or to such agent and at such place, as Landlord may designate
     by notice to Tenant.  If the  Commencement  Date occurs on a day other than
     the first day of a calendar  month,  the Base Rent for such calendar  month
     shall be  prorated  based on a 30-day  month,  and the balance of the first
     month's  Base Rent  theretofore  paid shall be  credited  against  the next
     monthly installment of Base Rent.

     1.5.2 INTEREST AND LATE CHARGES.  Tenant shall receive one (1) grace period
     during any consecutive twelve (12) month period whereby they shall not have
     to pay a penalty so long as the unpaid  amount does not  continue  for more
     than thirty (30) days.  If Tenant  fails to pay any Rent within  three days
     from being due when due, the unpaid  amounts  shall bear  interest from the
     due date until  paid at a rate per annum  equal to the Prime Rate plus five
     percent  (5%) or, if less,  at the highest  rate of interest  permitted  by
     applicable law. As used herein, "Prime Rate" means the prime rate published
     in the Money Rates section of the WALL STREET JOURNAL (Western  edition) as
     the same may change  from time to time or in a similar  publication  if the
     WALL STREET JOURNAL ceases  publication or ceases  publication of its Money
     Rates section during the Term. Tenant acknowledges that the late payment of
     any  monthly  Rent will  cause  Landlord  to lose the use of that money and
     incur costs and  expenses  not  contemplated  under this  Lease,  including
     administrative  and collection  costs and processing and account  expenses,
     the exact  amount of which it is  difficult  to  ascertain.  Therefore,  in
     addition to interest,  if any such  installment is not received by Landlord
     within five (5) days from the date it is


                     Oyster Point Marina Plaza Office Lease
              Kashiwa Fudosan America, Inc.::AccuImage Diagnostics
                                  page 2 of 53
exhibit 10.06 leas                              [Suite 201 (400 OPB); 2,933 rsf]


<PAGE>


     due,  Tenant shall pay Landlord a late charge equal to ten percent (10%) of
     such  installment.   Landlord  and  Tenant  agree  that  this  late  charge
     represents  a  reasonable  estimate of such costs and  expenses and is fair
     compensation  to Landlord for the loss  suffered  from such  nonpayment  by
     Tenant. In addition,  any check returned by the bank for any reason will be
     considered  late and will be subject to all late charges plus an additional
     returned  check fee of Twenty  Dollars  ($20.00).  After two such occasions
     upon which checks have been returned in any twelve-month  period,  Landlord
     will have the right to require payment by a cashier's check or money order.
     Acceptance of any interest or late charge shall not  constitute a waiver of
     Tenant's  default  with  respect to such  nonpayment  by Tenant nor prevent
     Landlord from exercising any other rights or remedies available to Landlord
     under  this  Lease  or at law or in  equity,  unless  the  payment  of such
     interest and late charges is accompanied by all rentals then due and owning
     (notwithstanding anything to the contrary in ss. 20.2.1 below).

1.6  PROPERTY.  For the purposes of this Lease,  the  "Property"  shall mean the
Building and any common or public  areas or  facilities,  easements,  corridors,
lobbies, sidewalks, loading areas, driveways, landscaped areas, skywalk, parking
garages and lots,  and any and all other  structures or  facilities  operated or
maintained  in  connection  with or for the  benefit  of the  Building,  and all
parcels or tracts of land on which all or any portion of the  Building or any of
the other foregoing items are located, and any fixtures,  machinery,  equipment,
apparatus,  Systems and Equipment (as defined in ss. 1.6.5 below), furniture and
other  personal  property  located  thereon  or therein  and used in  connection
therewith,  whether  title is held by Landlord or its  affiliates.  The Property
shall  also be  deemed to  include  such  other of the  Complex's  buildings  or
structures (and related facilities and parcels on which the same are located) as
Landlord shall have incorporated by reference to the total square footage of the
Building stated in ss. 1.3 above.

     1.6.1 COMMON AREAS.  Tenant and its agents,  employees,  and invitees shall
     have the non-exclusive right with others designated by Landlord to the free
     use of the common  areas in the  Property  and the  Complex  for the common
     areas'  intended  and normal  purpose.  The term  COMMON  AREAS  shall mean
     elevators, sidewalks, parking areas, driveways, hallways, stairways, public
     restrooms,  common entrances,  lobbies,  and other similar public areas and
     access ways.

     1.6.2 ATHLETIC FACILITY. Notwithstanding the foregoing, the common areas do
     not include the Building's  athletic  facility (the  "Athletic  Facility"),
     which is an unsupervised and unattended weight and exercise room and shower
     facility.  Tenant acknowledges that Landlord presently makes available (but
     is not obligated under this Lease to make available) the Athletic  Facility
     for the  general  use of all  tenants  and their  officers  and  employees,
     subject to such rules and  regulations  as Landlord may impose from time to
     time in its sole and absolute discretion regarding the use thereof.  Tenant
     shall cause each of its officers and employees using the Athletic  Facility
     to sign and deliver to Landlord an "Athletic Facility Use Agreement" in the
     form attached  hereto as EXHIBIT D, as such form may be revised by Landlord
     from time to time in its sole and absolute  discretion.  Tenant understands
     and agrees that no  individual  shall be permitted  use of or access to the
     Athletic  Facility unless and until such individual shall have first signed
     and  delivered the Athletic  Facility Use  Agreement to Landlord.  Landlord
     shall  have the  right to limit  the use of the  Athletic  Facility  in any
     manner it may deem  necessary,  or to  discontinue  the  Athletic  Facility
     altogether,  at any time, in its sole and absolute discretion,  and neither
     Tenant nor its officers or employees shall be entitled to any compensation,
     credit,  allowance,  or offset of  expenses or Rent as a result of any such
     limitation or discontinuance.

     1.6.3  RESERVATION  TO LANDLORD.  Notwithstanding  anything to the contrary
     herein, possession of areas necessary for utilities,  services, safety, and
     operation of the Property, including the Systems and


                     Oyster Point Marina Plaza Office Lease
              Kashiwa Fudosan America, Inc.::AccuImage Diagnostics
                                  page 3 of 53
exhibit 10.06 leas                              [Suite 201 (400 OPB); 2,933 rsf]


<PAGE>


     Equipment, telephone closets (whether located in the common areas or in the
     Premises),  fire exits and stairways,  perimeter  walls,  space between the
     finished  ceiling of the  Premises and the slab of the floor or roof of the
     Property  thereabove,  and the use  thereof,  together  with  the  right to
     install, maintain, operate, repair, and replace any part of the Systems and
     Equipment in, through,  under, or above the Premises in locations that will
     not  materially  interfere  with Tenant's use of the  Premises,  are hereby
     excepted  from both the  Premises  and the common areas and are reserved by
     Landlord  and not  demised  to  Tenant.  Tenant's  access to the  telephone
     closets  on each  floor and the  Building's  main  telephone  room shall be
     subject to the Rules (as defined in ss. 13.1 below) and shall be  permitted
     only  with  Landlord's   written  consent  and  under  the  supervision  of
     Landlord's Building Engineer on each occasion that such access is sought.

     1.6.4 CHANGES AND ALTERATIONS OF THE PROPERTY.  Landlord reserves the right
     to make repairs,  alterations,  additions,  or improvements,  structural or
     otherwise,  in or to  the  Property  or  Complex  as  deemed  necessary  or
     desirable  in  Landlord's  sole and  absolute  discretion,  so long as such
     repairs or alterations do not  materially and  unreasonably  interfere with
     Tenant's  access to or  beneficial  use of the Premises for their  intended
     purposes.  Landlord  reserves the right hereunder to do the following:  (i)
     install, use, maintain,  repair, and replace pipes, ducts, conduits, wires,
     and  appurtenant  meters and  equipment for service to the various parts of
     the Property above the ceiling surfaces,  below the floor surfaces,  within
     the walls,  and in the  central  core areas;  (ii) to  relocate  any pipes,
     ducts,  conduits,  wires,  and  appurtenant  meters and equipment which are
     located in the Premises or located  elsewhere  outside the Premises;  (iii)
     expand the  Building or the  Complex;  (iv) make changes to the Property or
     the Complex, including changes, expansions, and reductions in the location,
     size,  shape,  and number of  driveways,  entrances,  loading and unloading
     areas, ingress, egress,  direction of traffic,  landscaped areas, walkways,
     parking  spaces,  and parking areas;  (v) close any of the common areas, so
     long as reasonable access to the Premises remains  available;  (vi) use the
     common areas while engaged in making additional  improvements,  repairs, or
     alterations to the Property,  Complex, or any portion thereof; and (vii) do
     and  perform  such other acts and make such other  changes  in, to, or with
     respect to the Property,  Complex,  common areas,  and Building as Landlord
     may deem appropriate. The exercise of any of the foregoing rights shall not
     subject  Landlord to claims for constructive  eviction,  abatement of Rent,
     damages,  or other  claims  of any  kind,  except  as  otherwise  expressly
     provided in this Lease.  If Landlord enters the Premises to exercise any of
     the foregoing rights,  Landlord shall provide reasonable advance written or
     oral notice to Tenant's on-site manager.

     1.6.5 SYSTEMS AND EQUIPMENT. As used in this Lease, "Systems and Equipment"
     means collectively any existing plant, machinery,  transformers, duct work,
     intrabuilding network cables and wires that transmit voice, data, and other
     telecommunications  signals ("INC"), and other equipment,  facilities,  and
     systems designed to supply water, heat,  ventilation,  air conditioning and
     humidity or any other  services or  utilities,  or comprising or serving as
     any  component  or  portion  of  the  electrical,   gas,  steam,  plumbing,
     sprinkler, communications,  alarm, security, or fire/life/safety systems or
     equipment,  or any other mechanical,  electrical,  electronic,  computer or
     other systems or equipment for the Property.

1.7 OPTION TO EXTEND.  Tenant is hereby  granted an option to extend the Term of
this Lease (the "Extension  Option") for a single additional period of three (3)
years (the "Extension  Period") at Ninety-Five  Percent (95%) of the Fair Market
Value. Any Fair Market Value  Arbitration as specified below will be subject the
minimum Base Rent in the last year of the Initial  Term.  The  Extension  Period
term shall  commence on the first day  following the  Expiration  Date and shall
take  effect  on the same  terms  and  conditions  in  effect  under  the  Lease
immediately prior to the Extension Period,  except that (i) Tenant shall have no
further right to extend and (ii) monthly Base Rent shall be the  effective  rent
being charged for comparable space.


                     Oyster Point Marina Plaza Office Lease
              Kashiwa Fudosan America, Inc.::AccuImage Diagnostics
                                  page 4 of 53
exhibit 10.06 leas                              [Suite 201 (400 OPB); 2,933 rsf]


<PAGE>


     1.7.1  EXERCISE OF OPTION.  The Extension  Option may be exercised  only by
     giving Landlord written notice of Tenant's irrevocable election to exercise
     no earlier  than nine (9) months and no later than six (6) months  prior to
     the commencement of the Extension  Period. If Tenant shall fail validly and
     timely to exercise the option herein  granted,  said option shall terminate
     and shall be null and void and of no further force and effect.

     1.7.2.  FAIR MARKET  VALUE.  Not less than one hundred and fifty (150) days
     prior to the  commencement  of the Extension  Term,  Landlord shall provide
     written  notice to Tenant of its  determination  of the Fair Market  Value.
     Within ten (10) days after receiving such  determination  ("Tenant's Review
     Period"),  Tenant shall  irrevocably  elect,  in writing,  to do one of the
     following:  (i)  accept  landlord's   determination;   or  (ii)  object  to
     Landlord's  determination  and with such  objection  set  forth in  writing
     Tenant's determination of Fair Market Value. If Tenant so objects, Landlord
     and Tenant shall attempt in good faith to agree upon such Fair Market Value
     using  their good  faith  efforts.  If  Landlord  and Tenant  fail to reach
     agreement  within fifteen (15) days following  Tenant's  Review Period (the
     "Outside  Agreement  Date"),  then  each  party's  determination  shall  be
     submitted to arbitration in accordance  with  subsections  1.7.2.1  through
     1.7.2.5 below. If Tenant objects to Landlord's determination of Fair Market
     Value,  Tenant  shall  pay  Rent at the Fair  Market  Value  determined  by
     Landlord  until the matter is resolved by binding  arbitration  as provided
     below subject to retroactive adjustment after the matter is so resolved. If
     Tenant  fails so to accept or object to  Landlord's  determination  of Fair
     Market  Value in  writing  within  Tenant's  Review  Period,  Tenant  shall
     conclusively  be  deemed  to have  approved  of the  Fair  Market  Value as
     determined by Landlord.

          1.7.2.1  APPOINTMENT OF ARBITRATORS.  Not later than fifteen (15) days
          following the Outside  Agreement Date,  Landlord and Tenant shall each
          appoint one arbitrator who shall by profession be a real estate broker
          who shall have been active over the ten-year period ending on the date
          of such appointment in the leasing of commercial properties within San
          Mateo County.

          1.7.2.2  APPOINTMENT OF THIRD  ARBITRATOR.  The two (2) arbitrators so
          appointed   shall  within  fifteen  (15)  days  of  the  date  of  the
          appointment of the last-appointed  arbitrator agree upon and appoint a
          third  arbitrator,  who shall be qualified  under the same criteria as
          set forth hereinabove for qualification of the initial two arbitrators
          under Article 7.1.2.1 above.

          1.7.2.3 ARBITRATORS' DECISION. The three (3) arbitrators shall, within
          thirty (30) days of the appointment of the third  arbitrator,  reach a
          decision as to whether the parties  shall use  Landlord's  or Tenant's
          submitted  Fair Market  Value,  and shall  notify  Landlord and Tenant
          thereof.  The determination of the arbitrators shall be limited solely
          to the issue of whether  Landlord's or Tenant's  submitted Fair Market
          Value for the  Premises  is the more  accurate  as  determined  by the
          arbitrators, taking into account the requirements of this Article. The
          decision  of the  majority  of the  three  (3)  arbitrators  shall  be
          non-reviewable, non-appealable, and binding upon Landlord and Tenant.

          1.7.2.4  FAILURE TO APPOINT.  If either  Landlord  or Tenant  fails to
          appoint an  arbitrator  within  fifteen  (15) days  after the  Outside
          Agreement Date, the arbitrator  timely appointed by one of the parties
          shall reach a decision,  notify Landlord and Tenant thereof,  and such
          arbitrator's  decision shall be  non-reviewable,  non-appealable,  and
          binding upon Landlord and Tenant.  If the two (2) arbitrators  fail to
          agree upon and appoint a third  arbitrator,  both arbitrators shall be
          dismissed and the matter to be decided shall be forthwith submitted to
          arbitration  under the  Commercial  Arbitration  Rules of the American
          Arbitration   Association   then  in  effect,   but   subject  to  the
          instructions set forth in this Article.


                     Oyster Point Marina Plaza Office Lease
              Kashiwa Fudosan America, Inc.::AccuImage Diagnostics
                                  page 5 of 53
exhibit 10.06 leas                              [Suite 201 (400 OPB); 2,933 rsf]


<PAGE>


          1.7.2.5 COST OF ARBITRATION.  The cost of arbitration shall be paid by
          Landlord and Tenant equally.

     1.7.3 DEFAULT. The Extension Option shall, at Landlord's election,  be null
     and void if Tenant is in  Default  of the date  Tenant  gives the  required
     notice under Article 7 above or at any other time  thereafter  and prior to
     commencement of the Extension  Period.  Tenant's  exercise of the Extension
     Option shall not operate to cure any Default by Tenant nor to extinguish or
     impair  any  rights  or  remedies  of  Landlord  arising  by virtue of such
     Default. If the Lease or Tenant's right to possession of the Premises shall
     terminate  before Tenant shall have  exercised the Extension  Option,  then
     immediately upon such termination the Extension Option shall simultaneously
     terminate and become null and void.

     1.7.4 TIME. Time is of the essence of this Extension Option.



                                     2 USE

2.1 USE AND ENJOYMENT OF PREMISES.  Tenant shall use and occupy the Premises for
executive and general offices and for no other purpose. Notwithstanding anything
contained herein to the contrary, Tenant may use portions of the Premises not to
exceed one  hundred  fifty (150)  usable  square  feet for the  preparation  and
reheating of food and beverages, including the use of refrigerators, ice makers,
coffee  machines,  hot plates,  microwave ovens, or similar heating devices (but
not for the actual  cooking of food) for service only to Tenant's  employees and
business invitees.

     2.1.1 SUITABILITY.  Tenant acknowledges that neither Landlord nor any agent
     of Landlord  has made any  representation  or warranty  with respect to the
     Premises,  the Property, or the Complex, or with respect to the suitability
     of same for the conduct of Tenant's business,  except as expressly provided
     in this Lease.  Tenant's  acceptance of  possession  of the Premises  shall
     conclusively establish that the foregoing were at such time in satisfactory
     condition.  Landlord  makes  no  representation  to  Tenant  regarding  the
     installation,  ownership, location, or suitability for Tenant's purposes of
     the INC in the Building.

     2.1.2 INSURANCE RATES. Tenant shall not do or suffer anything to be done in
     or about the  Premises,  nor shall  Tenant  bring or allow  anything  to be
     brought into the  Premises,  which will in any way increase the rate of any
     fire insurance or other insurance upon the Property or its contents,  cause
     a cancellation of said insurance, or otherwise affect said insurance in any
     manner.

     2.1.3 USE TO COMPLY WITH LAWS.  Tenant shall use the Premises in conformity
     with all applicable Laws, as specified in Article 6 below.

     2.1.4 FLOOR  LOADING.  Tenant shall not place or permit to be placed on any
     floor a load  exceeding  eighty  (80)  pounds per square foot or such lower
     floor load as such floor was designed to carry.

2.2 NUISANCE AND WASTE.  Tenant also shall not do or suffer  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  Property or injure or annoy said
tenants or occupants, nor shall Tenant use or suffer the Premises to be used for
any unlawful purposes.  In no event shall Tenant cause or permit any nuisance in
or about the  Premises,  and no  loudspeakers  or similar  devices shall be used
without the prior written  approval of Landlord,  which approval may be withheld
in Landlord's sole and absolute discretion. Tenant shall not


                     Oyster Point Marina Plaza Office Lease
              Kashiwa Fudosan America, Inc.::AccuImage Diagnostics
                                  page 6 of 53
exhibit 10.06 leas                              [Suite 201 (400 OPB); 2,933 rsf]


<PAGE>


commit  or  suffer  to be  committed  any  waste  in or upon the  Premises.  The
provisions of this section are for the benefit of Landlord only and shall not be
construed  to be for the benefit of any tenant or occupant of the  Building.  If
any governmental license or permit, other than a Certificate of Occupancy, shall
be  required  for the proper and lawful  conduct  of  Tenant's  business  in the
Premises,  or any part thereof,  and if failure to secure such license or permit
would in any way affect Landlord, Tenant, at its sole expense, shall procure and
thereafter maintain such license or permit and submit the same for inspection by
Landlord. Tenant shall at all times comply with the terms and conditions of each
such license or permit.

2.3 COMPLIANCE WITH CERTIFICATE OF OCCUPANCY Tenant shall not at any time use or
occupy the Premises,  or suffer or permit anyone to use or occupy, the Premises,
or do or  permit  anything  to be  done in the  Premises,  in  violation  of the
Certificate of Occupancy for the Premises or for the Building.

                         3 PREPARATION OF THE PREMISES

3.1  CONDITION OF PREMISES.  Except as otherwise  expressly  provided in ss. 3.2
below and any "Work  Letter  Agreement"  which may be executed  by Landlord  and
Tenant  concurrently with their execution of this Lease, Tenant shall accept the
Premises,  any  existing  Improvements  in the  Premises (as defined in ss. 10.1
below),  and the Systems and Equipment  serving the same in an "as is" condition
on the date  the Term  commences,  and  Landlord  shall  have no  obligation  to
improve,  alter,  remodel,  or otherwise  modify the Premises  prior to Tenant's
occupancy.

3.2 LANDLORD'S PREPARATION. Landlord, at Landlord's sole cost and expense, shall
construct improvements to the Premises and furnish facilities, material and work
pursuant to Landlord's  building  standard  materials prior to the  Commencement
Date ("Work"). All mechanical,  electrical and building systems shall be in good
working order. The Work is as follows:

          (1)  Demises the Premises;

          (2)  Install new carpet and apply new paint;

          (3)  Demolish  various  walls and office per the  attached  floor plan
               (Exhibit B);

          (4)  Fill in the window in the private office.

          (5)  All systems and components shall be in good working condition.

          (6)  Such  other  installations,  materials,  and  work  which  may be
               undertaken  by or for the  account of Tenant to  prepare,  equip,
               decorate,  and furnish the Premises for Tenant's  occupancy shall
               be at Tenant's sole cost and expense. Tenant shall be responsible
               for all data and  telephone  wiring  for the  Premises  including
               connecting  the phone  and data  system  in the  Premises  to the
               Building's ground floor IMPOE room.

     6.1.1  READINESS  FOR  OCCUPANCY.  The  Premises  shall be deemed ready for
     occupancy on the  earliest  date on which all of the  following  conditions
     (the "Occupancy Conditions") have first been met:

          (a)  SUBSTANTIAL  COMPLETION OF WORK. The Work has been  substantially
               completed;  and it shall be so  deemed  notwithstanding  the fact
               that minor or insubstantial  details of construction,  mechanical
               adjustment,   or   decoration   remain  to  be   performed,   the
               noncompletion  of  which  does  not  materially   interfere  with
               Tenant's  beneficial  use  of the  Premises  for  their  intended
               purposes;

          (b)  ACCESS AND SERVICES.  Reasonable  means of access and  facilities
               necessary  to  Tenant's  use  and   occupancy  of  the  Premises,
               including corridors,  elevators, stairways, heating,


                     Oyster Point Marina Plaza Office Lease
              Kashiwa Fudosan America, Inc.::AccuImage Diagnostics
                                  page 7 of 53
exhibit 10.06 leas                              [Suite 201 (400 OPB); 2,933 rsf]


<PAGE>

               ventilating,  air-conditioning,  sanitary,  water, and electrical
               facilities  (but  exclusive  of  parking  facilities)  have  been
               installed  and  are  in  reasonably   good  operating  order  and
               available to Tenant; and

          (c)  CERTIFICATE  OF  OCCUPANCY  OR   COMPLETION.   A  certificate  of
               occupancy,  certificate of completion,  final inspection card, or
               similar required  governmental  approval (temporary or final) has
               been issued by the City of South San Francisco  permitting use of
               the Premises for office purposes.

     6.1.2 TENANT DELAYS.  If the occurrence of any of the Occupancy  Conditions
     and Landlord's  preparation of the Premises for occupancy  shall be delayed
     owing to either (a) any act,  omission,  or failure of Tenant or any of its
     employees, agents, or contractors which shall continue after Landlord shall
     have given Tenant  reasonable  notice that such act,  omission,  or failure
     would  result in delay,  and such  delay  shall  have been  unavoidable  by
     Landlord in the exercise of reasonable  diligence and prudence;  or (b) the
     nature  of any items of  additional  work or change  orders  that  Landlord
     undertakes  to  perform  for the  account of Tenant  (including  any delays
     incurred by Landlord,  after making  reasonable  efforts,  in procuring any
     materials,  equipment, or fixtures of a kind or nature not used by Landlord
     as part of its standard construction)  (collectively "Tenant Delays"), then
     the  Premises  shall be deemed  ready for  occupancy  on the date when they
     would have been ready but for such Tenant Delays.

6.2 EARLY  ENTRY.  During any period that Tenant shall be permitted to enter the
Premises prior to the Commencement  Date other than to occupy the same (E.G., to
perform  alterations  or  improvements),  Tenant shall comply with all terms and
provisions of this Lease, except those provisions requiring the payment of Rent.
If Tenant shall be permitted  to enter the  Premises  prior to the  Commencement
Date for the purpose of occupying the same,  Rent shall commence on such date at
the rate  specified  in the Table  for the first  period  during  which  Rent is
payable after the Commencement Date; and if Tenant shall commence occupying only
a portion of the Premises prior to the Commencement Date, Rent shall be prorated
based on the number of rentable  square feet occupied by Tenant.  Landlord shall
permit early entry, provided the Premises are legally available and Landlord has
completed any Work required  under this Lease.  In no event shall Tenant's early
entry extend or shorten the Term of the Lease set forth in ss. 1.2 above.

6.3 NOTICE OF DEFECTS.  It shall be  conclusively  presumed upon Tenant's taking
actual  possession of the Premises that the same were in satisfactory  condition
(except for latent defects) as of the date of such taking of possession,  unless
within thirty (30) days after the  Commencement  Date Tenant shall give Landlord
notice in writing  specifying  the  respects in which the  Premises  were not in
satisfactory condition.

                            (7) ADJUSTMENTS OF RENT

7.1 TAXES,  UTILITIES,  AND OPERATING EXPENSES. In addition to the Base Rent and
all other  payments due under this Lease,  Tenant shall pay to Landlord,  in the
manner set forth in this Article 4, as Additional Rent, the following amounts:

          (a)  INCREASED  OPERATING  EXPENSES.  An amount  equal to Tenant's Pro
               Rata Share of that portion of Operating Expenses paid by Landlord
               during each  Adjustment  Period which  exceeds the amount of Base
               Operating  Expenses  (as all of such terms are defined in ss. 4.2
               below).


                     Oyster Point Marina Plaza Office Lease
              Kashiwa Fudosan America, Inc.::AccuImage Diagnostics
                                  page 8 of 53
exhibit 10.06 leas                              [Suite 201 (400 OPB); 2,933 rsf]


<PAGE>


          (b)  INCREASED  UTILITIES.  An amount equal to Tenant's Pro Rata Share
               of that  portion  of  Utilities  paid  by  Landlord  during  each
               Adjustment  Period which exceeds the amount of Base Utilities (as
               all of such terms are defined in ss. 4.2 below).

          (c)  INCREASED  TAXES.  An amount  equal to Tenant's Pro Rata Share of
               that  portion of Real Estate  Taxes paid by Landlord  during each
               Adjustment  Period  which  exceeds the amount of Base Real Estate
               Taxes (as all of such terms are defined in ss. 4.2 below).

Tenant's Pro Rata Share of (i) such increase in Operating Expenses over the Base
Operating  Expenses,  (ii) such increase in Utilities over Base  Utilities,  and
(iii) such  increase  in Real Estate  Taxes over the Base Real  Estate  Taxes is
sometimes referred to collectively herein as the "Rental Adjustment."

7.2 DEFINITIONS. For the purposes of this Lease, the following definitions shall
apply:

          (a)  BASE OPERATING  EXPENSES.  "Base  Operating  Expenses"  means the
               total of Operating Expenses paid by Landlord during CALENDAR YEAR
               2004 (the "Base Expense Year"), as adjusted under ss. 4.6 below.

          (b)  BASE  UTILITIES.  "Base  Utilities"  means the total of Utilities
               paid by Landlord  during  CALENDAR YEAR 2004 (the "Base Utilities
               Year"), as adjusted under ss. 4.6 below.

          (c)  BASE REAL ESTATE TAXES.  "Base Real Estate Taxes" means the total
               of Real Estate Taxes paid by Landlord  during  CALENDAR YEAR 2004
               (the "Base Tax Year").

          (d)  TENANT'S  PRO RATA  SHARE.  "Tenant's  Pro Rata  Share" as to the
               Building is the percentage labeled as such in the Table inss. 1.2
               and is  calculated  by dividing the agreed  rentable  area of the
               Premises  (numerator) by the agreed rentable area of the Property
               (denominator)   and  expressing  the  resulting   quotient  as  a
               percentage.  "Tenant's  Pro Rata  Share" as to the Complex is the
               percentage  labeled  as  such  in  the  Table  inss.  1.2  as  is
               calculated  by dividing the agreed  rentable area of the Premises
               (numerator)   by  the  agreed   rentable   area  of  the  Complex
               (denominator)   and  expressing  the  resulting   quotient  as  a
               percentage. Tenant's Pro Rata Share shall be increased during the
               Term in proportion to any increase in the area of the Premises in
               accordance with the formula stated herein.

          (e)  ADJUSTMENT PERIOD.  "Adjustment Period" as to Operating Expenses,
               Utilities,  and Real  Estate  Taxes means each  calendar  year of
               which any portion occurs during the Term, excluding the Base Year
               and beginning with the first calendar year immediately  following
               the Base Year.

          (f)  REAL ESTATE TAXES. "Real Estate Taxes" means all of the following
               charges,  whether or not now customary or in the contemplation of
               the  parties  hereto,  and  whether  or  not  general,   special,
               ordinary,  or extraordinary,  which Landlord shall pay during any
               Adjustment Period because of or in connection with the ownership,
               leasing, or operation of the Property:

               (1)  AD VALOREM real property taxes;

               (2)  any form of assessment,  license fee, license tax,  business
                    license fee,  commercial rental tax, levy, charge, fee, tax,
                    or other imposition imposed by any authority,  including any
                    city, county,  state, or federal governmental


                     Oyster Point Marina Plaza Office Lease
              Kashiwa Fudosan America, Inc.::AccuImage Diagnostics
                                  page 9 of 53
exhibit 10.06 leas                              [Suite 201 (400 OPB); 2,933 rsf]


<PAGE>


                    agency,    or   any    school,    agricultural,    lighting,
                    transportation,  housing,  drainage, or other improvement or
                    special assessment district thereof;

               (3)  any tax on  Landlord's  `right'  to rent or `right' to other
                    income from the Building or as against  Landlord's  business
                    of leasing the Building;

               (4)  any assessment,  tax, fee, levy, or charge in  substitution,
                    partially or totally,  of any  assessment  tax, fee, levy or
                    charge  previously  included  within the  definition of Real
                    Estate Taxes,  it being  acknowledged by Tenant and Landlord
                    that  Proposition  13 was adopted by the voters of the State
                    of  California  in the  Election  of  June,  1978,  and that
                    assessments, taxes, fees, levies, and charges may be imposed
                    by   governmental   agencies  for  such   services  as  fire
                    protection,  street, sidewalk, and road maintenance,  refuse
                    removal,  and  for  other  governmental   services  formerly
                    provided without charge to property owners or occupants, and
                    it being the  intention of Tenant and Landlord that all such
                    new and increased  assessments,  taxes,  fees,  levies,  and
                    charges be  included  within the  definition  of Real Estate
                    Taxes for the purposes of this Lease;

               (5)  any  assessment,  tax, fee, levy, or charge  allocable to or
                    measured by the area of the Building or Property or the Rent
                    payable hereunder,  including any gross income tax or excise
                    tax  levied  by  any  city,   county,   state,   or  federal
                    governmental  agency or any  political  subdivision  thereof
                    with  respect to the  receipt of such Rent,  or upon or with
                    respect to the possession,  leasing, operating,  management,
                    maintenance, alteration, repair, use, or occupancy by Tenant
                    of the Property or any portion thereof;

               (6)  any  assessment,   tax,  fee,  levy,  or  charge  upon  this
                    transaction  or any  document  to which  Tenant  is a party,
                    creating  or  transferring  an  interest or an estate in the
                    Building or Property;

               (7)  any   assessment,   tax,   fee,   levy,  or  charge  by  any
                    governmental  agency  related  to any  transportation  plan,
                    fund, or system  instituted  within the  geographic  area of
                    which the Building is a part; or

               8)   reasonable  legal and  other  professional  fees,  costs and
                    disbursements  incurred in connection  with  proceedings  to
                    contest, determine or reduce Real Estate Taxes.

                    EXCLUSIONS. Notwithstanding the foregoing, Real Estate Taxes
                    shall not include (A) federal, state, or local income taxes;
                    (B)  franchise,   gift,  transfer,  excise,  capital  stock,
                    estate,  succession,  or inheritance taxes; or (C) penalties
                    or interest for late payment of Real Estate Taxes.

          (g)  OPERATING  EXPENSES.  "Operating  Expenses"  means all  expenses,
               costs,  and amounts  (other than Real Estate Taxes and Utilities)
               of every  kind and  nature  which  Landlord  shall pay during any
               Adjustment  Period of which any portion  occurs  during the Term,
               because  of or in  connection  with  the  ownership,  management,
               repair,  maintenance,   restoration,   and/or  operation  of  the
               Property, including costs of the following:


                     Oyster Point Marina Plaza Office Lease
              Kashiwa Fudosan America, Inc.::AccuImage Diagnostics
                                  page 10 of 53
exhibit 10.06 leas                              [Suite 201 (400 OPB); 2,933 rsf]


<PAGE>


               (1)  permits,  licenses,  and certificates  necessary to operate,
                    manage, and lease the Property;

               (2)  supplies,  tools,  equipment,  and  materials  used  in  the
                    operation, repair, and maintenance of the Property;

               (3)  all  insurance  premiums for any insurance  policies  deemed
                    necessary  or  desirable  by  Landlord  (including  workers'
                    compensation,   health,   accident,   group   life,   public
                    liability,   property  damage,   earthquake,  and  fire  and
                    extended coverage insurance for the full replacement cost of
                    the  Property as required by Landlord or its lenders for the
                    Property);

               (4)  the deductible portion of any claim paid under any insurance
                    policy   maintained  by  Landlord  in  connection  with  its
                    management and operation of the Property;

               (5)  accounting,  legal, inspection,  consulting,  concierge, and
                    other services;

               (6)  services of independent contractors;

               (7)  compensation   (including   employment   taxes  and   fringe
                    benefits)  of all persons who perform  duties in  connection
                    with the operation,  maintenance, repair, or overhaul of the
                    Building  or  Property,  and  equipment,  improvements,  and
                    facilities located within the Property, including engineers,
                    janitors,  painters, floor waxers, window washers, security,
                    parking personnel, and gardeners;

               (8)  operation  and  maintenance  of  a  room  for  delivery  and
                    distribution  of mail to tenants of the Building as required
                    by the U.S. Postal Service (including an amount equal to the
                    fair market rental value of the mail room premises);

               (9)  management of the Building or Property,  whether  managed by
                    Landlord or an independent  contractor  (including an amount
                    equal to the fair  market  value  of any  on-site  manager's
                    office);

               (10) rental expenses for (or a reasonable  depreciation allowance
                    on) personal  property used in  maintenance,  operation,  or
                    repair of the Property and installment equipment purchase or
                    equipment financing agreements for such personal property;

               (11) costs, expenditures, or charges (whether capitalized or not)
                    required by any governmental or quasi-governmental authority
                    after the Commencement Date;

               (12) payments   under   any   easement,    operating   agreement,
                    declaration,  restrictive covenant, or instrument pertaining
                    to the sharing of costs in any planned development;

               (13) amortization of capital expenses (including financing costs)
                    incurred by Landlord after the Commencement Date in order to
                    (A) comply with Laws, (B) reduce Property Operating Expenses
                    or  Utilities,  or (C) upgrade the utility,  efficiency,  or
                    capacity of any utility or telecommunication systems serving
                    tenants of the Property;


                     Oyster Point Marina Plaza Office Lease
              Kashiwa Fudosan America, Inc.::AccuImage Diagnostics
                                  page 11 of 53
exhibit 10.06 leas                              [Suite 201 (400 OPB); 2,933 rsf]


<PAGE>


               (14) operation,  repair,  and  maintenance  of  all  Systems  and
                    Equipment and components thereof  (including  replacement of
                    components); janitorial service; alarm and security service;
                    window  cleaning;   trash  removal;   elevator  maintenance;
                    cleaning of walks,  parking facilities,  and building walls;
                    removal  of ice and  snow;  replacement  of wall  and  floor
                    coverings,   ceiling   tiles,   and   fixtures  in  lobbies,
                    corridors,  restrooms  and other  common or public  areas or
                    facilities;  maintenance and repair of the roof and exterior
                    fabric of the Building,  including replacement of glazing as
                    needed; maintenance and replacement of shrubs, trees, grass,
                    sod,  and  other  landscaped  items,   irrigation   systems,
                    drainage facilities,  fences, curbs, and walkways;  repaving
                    and restriping parking facilities; and roof repairs;

               (15) the  operation  of any on-site  maintenance  shop(s) and the
                    operation  and  maintenance  of the Athletic  Facility,  any
                    other fitness center, conference rooms, and all other common
                    areas and amenities in the Property;

               (16) provision of shuttle busses,  shuttle services,  and drivers
                    between the Complex and BART and SFO airport, as required by
                    the Bay Area Regional  Transportation Act and deed covenants
                    and restrictions applicable to the Complex; and

               (17) any other costs or expenses  incurred by Landlord  which are
                    reasonably  necessary  to  operate,   repair,   manage,  and
                    maintain the Building and Property in a  first-class  manner
                    and  condition  and which are not  otherwise  reimbursed  by
                    tenants of the Building.

                    EXCLUSIONS.   Notwithstanding   the   foregoing,   Operating
                    Expenses shall not include (A) depreciation,  interest,  and
                    amortization  on Superior  Mortgages (as defined in ss. 18.1
                    below),  and other debt costs or ground lease  payments,  if
                    any;  (B) legal  fees in  connection  with  leasing,  tenant
                    disputes, or enforcement of leases; (C) real estate brokers'
                    leasing  commissions;  (D)  improvements  or  alterations to
                    tenant  spaces;  (E)  the  cost  of  providing  any  service
                    directly to, and reimbursed or paid directly by, any tenant;
                    (F) any costs  expressly  excluded from  Operating  Expenses
                    elsewhere  in this  Lease;  (G)  costs  of any  items to the
                    extent  Landlord  receives   reimbursement   from  insurance
                    proceeds or from a third party (such proceeds to be deducted
                    from Operating Expenses in the year in which received);  (H)
                    capital  expenditures,   except  those  expressly  permitted
                    above;  provided,  all such permitted  capital  expenditures
                    (together  with  reasonable   financing  charges)  shall  be
                    amortized for purposes of this Lease over the shorter of (x)
                    their  useful  lives,   (y)  the  period  during  which  the
                    reasonably  estimated  savings in Operating  Expenses equals
                    the expenditures, or (z) three (3) years.

          (h)  UTILITIES.  "Utilities" means all expenses, costs, and amounts of
               every  kind and  nature  which  Landlord  shall  pay  during  any
               Adjustment  Period of which any portion  occurs  during the Term,
               because of or in connection  with the  electricity,  power,  gas,
               steam, oil or other fuel, water, sewer,  lighting,  heating,  air
               conditioning, and ventilating delivered to or consumed or used in
               or on the Property.

7.3 MANNER OF PAYMENT. To provide for current payments of the Rental Adjustment,
Tenant  shall pay as  Additional  Rent during each  Adjustment  Period an amount
equal to Landlord's  estimate of the Rental  Adjustment which will be payable by
Tenant  for such  Adjustment  Period.  Such  payments  shall be made


                     Oyster Point Marina Plaza Office Lease
              Kashiwa Fudosan America, Inc.::AccuImage Diagnostics
                                  page 12 of 53
exhibit 10.06 leas                              [Suite 201 (400 OPB); 2,933 rsf]


<PAGE>


in monthly installments,  commencing on the first day of the month following the
month in which Landlord notifies Tenant of the amount it is to pay hereunder and
continuing  until  the  first  day of the  month  following  the  month in which
Landlord gives Tenant a new notice of the estimated Rental Adjustment. It is the
intention  hereunder to estimate from time to time the amount of Tenant's Rental
Adjustment for each Adjustment Period and then to effect a reconciliation in the
following  year  based  on  the  actual  expenses  incurred  for  the  preceding
Adjustment Period, as provided in 4.4 below.

7.4  RECONCILIATION.  On or before the first day of April of each year after the
first Adjustment Period (or as soon thereafter as is practical),  Landlord shall
deliver  to Tenant a  statement  (the  "Statement")  setting  forth  the  Rental
Adjustment  for the  preceding  year. If the actual  Rental  Adjustment  for the
preceding  Adjustment Period exceeds the total of the estimated monthly payments
made by Tenant for such Adjustment Period,  Tenant shall pay Landlord the amount
of the deficiency within ten (10) days of the receipt of the Statement.  If such
total of estimated  payments made exceeds the actual Rental  Adjustment for such
Adjustment Period, then Tenant shall receive a credit for the difference against
payments of Rent next due. If the credit is due from Landlord on the  Expiration
Date,  Landlord  shall pay Tenant the amount of the  credit,  less any Rent then
due. The obligations of Tenant and Landlord to make payments required under this
ss. 4.3 shall survive the expiration or earlier  termination of the Term of this
Lease.

     7.4.1CHANGES IN METHOD. So long as Tenant's  obligations  hereunder are not
          materially  adversely  affected  thereby,  Landlord reserves the right
          reasonably  to change  from  time to time the  manner or timing of the
          foregoing  payments.  In lieu of providing one Statement covering Real
          Estate Taxes, Utilities, and Operating Expenses,  Landlord may provide
          separate  statements,  at the  same or  different  times.  No delay by
          Landlord in providing the Statement (or separate  statements) shall be
          deemed a  default  by  Landlord  or a waiver  of  Landlord's  right to
          require  payment of Tenant's  obligations for actual or estimated Real
          Estate Taxes,  Utilities,  or Operating Expenses.  In no event shall a
          decrease in Real Estate Taxes,  Utilities, or Operating Expenses below
          the Base Operating Expenses, Base Utilities, or Base Real Estate Taxes
          ever  decrease the monthly Base Rent or give rise to a credit in favor
          of Tenant.

     7.4.2PRORATION  OF  RENTAL  ADJUSTMENT.  If the Term does not  commence  on
          January 1 or does not end on December 31, Tenant's  obligations to pay
          estimated and actual amounts towards Real Estate Taxes, Utilities, and
          Operating  Expenses  for such  first or final  calendar  year shall be
          prorated to reflect the portion of such year(s)  included in the Term.
          Such  proration  shall be made by multiplying  the total  estimated or
          actual  (as the  case  may  be)  Real  Estate  Taxes,  Utilities,  and
          Operating Expenses for such calendar year(s), as well as the Base Real
          Estate  Taxes,  Base  Utilities,  and Base  Operating  Expenses,  by a
          fraction,  the  numerator  of which shall be the number of days of the
          Term during such calendar year, and the  denominator of which shall be
          three hundred sixty-five (365).

7.5 GROSS-UP.  If the Building is less than  ninety-five  percent (95%) occupied
during any Adjustment  Period,  then  Operating  Expenses,  Utilities,  and Real
Estate Taxes for such Adjustment  Period shall be "grossed up" to that amount of
Operating  Expenses,  Utilities,  and Real Estate Taxes that,  using  reasonable
projections,  would normally have been incurred during such Adjustment Period if
the Building had been  ninety-five  percent (95%) occupied during the Adjustment
Period,  as  determined  in  accordance  with sound  accounting  and  management
practices,  consistently  applied.  Only those  component  elements  or items of
expense  of  Operating  Expenses,  Utilities,  and Real  Estate  Taxes  that are
affected by variations in occupancy levels shall be grossed up.


                     Oyster Point Marina Plaza Office Lease
              Kashiwa Fudosan America, Inc.::AccuImage Diagnostics
                                  page 13 of 53
exhibit 10.06 leas                              [Suite 201 (400 OPB); 2,933 rsf]


<PAGE>


7.6  ADJUSTMENT  OF BASE  OPERATING  EXPENSES.  Notwithstanding  anything to the
contrary  contained in the Lease, the parties agree that Base Operating Expenses
and Operating  Expenses for any  subsequent  Adjustment  Period  (herein  called
"Subsequent  Operating  Expenses")  shall be subject to  further  adjustment  by
Landlord as follows:

          (a)  EXCLUSION OF CAPITAL EXPENDITURES. Landlord may exclude from Base
               Operating  Expenses  capital  expenditures  otherwise  permitted,
               provided  Landlord  shall also exclude any  amortization  of such
               expenditures from Subsequent Operating Expenses.

          (b)  ELIMINATION OF RECURRING  EXPENSES.  If Landlord  eliminates from
               any  Subsequent   Operating  Expenses  a  category  of  recurring
               expenses previously included in Base Operating Expenses, Landlord
               may  subtract  such  category   from  Base   Operating   Expenses
               commencing with such subsequent Adjustment Period.

          (c)  NEW RECURRING  EXPENSES.  If Landlord  includes a new category of
               recurring  Subsequent  Operating Expenses not previously included
               in Base Operating Expenses, Landlord shall also include an amount
               (the "Assumed  Base Amount") for such category in Base  Operating
               Expenses commencing in such subsequent Adjustment Period.

          (d)  ASSUMED BASE AMOUNT.  The "Assumed  Base Amount" under ss. 4.6(c)
               above shall be the  annualized  amount of  expenses  for such new
               category in the first Adjustment  Period it is included,  reduced
               by an amount  determined in Landlord's sole good faith discretion
               (but in no event by an amount  less than five  percent  (5%)) for
               each full or partial  Adjustment  Period that has elapsed  during
               the Term of the Lease before such Adjustment Period.

7.7  ADJUSTMENT OF REAL ESTATE  TAXES.  If Base Real Estate Taxes are reduced as
the  result  of  protest,  by  means  of  agreement,  as  the  result  of  legal
proceedings,  or otherwise,  Landlord may adjust  Tenant's  obligations for Real
Estate Taxes in all years affected by any refund of taxes following the Base Tax
Year;  and Tenant shall pay Landlord  within  thirty  (30)days  after notice any
additional  amount required by such  adjustment for any Adjustment  Periods that
have  theretofore  occurred.  Tenant shall be entitled to receive a share of any
refund or abatement  of Real Estate Taxes  received by Landlord to the extent of
and in proportion to Tenant's  actual  contribution to the amount of Real Estate
Taxes paid by  Landlord  during the  period to which  such  refund or  abatement
relates,  but in no event shall Tenant be entitled to any refund with respect to
Real Estate Taxes paid by Landlord during Tenant's Base Tax Year. If Real Estate
Taxes for any Adjustment  Period during the Term or any extension  thereof shall
be increased after payment  thereof by Landlord for any reason,  including error
or  reassessment  by  applicable  governmental  authorities,  Tenant  shall  pay
Landlord  upon  demand  Tenant's  Pro Rata Share of such  increased  Real Estate
Taxes.  Tenant shall pay  increased  Real Estate Taxes whether Real Estate Taxes
are  increased as a result of increases  in the  assessment  or valuation of the
Property  (whether  based on a sale,  change in  ownership,  refinancing  of the
Property, or otherwise), increases in the tax rates, reduction or elimination of
any  rollbacks  or other  deductions  available  under  current  law,  scheduled
reductions of any tax abatement, as a result of the elimination,  invalidity, or
withdrawal  of  any  tax   abatement,   or  for  any  other  cause   whatsoever.
Notwithstanding  the foregoing,  if any Real Estate Taxes shall be paid based on
assessments or bills by a governmental  authority using a fiscal year other than
a calendar year,  Landlord may elect to average the assessments or bills for the
subject  calendar  year,  based on the  number of months of such  calendar  year
included in each such assessment or bill.


                     Oyster Point Marina Plaza Office Lease
              Kashiwa Fudosan America, Inc.::AccuImage Diagnostics
                                  page 14 of 53
exhibit 10.06 leas                              [Suite 201 (400 OPB); 2,933 rsf]


<PAGE>


7.8  ALLOCATION  WITHIN  COMPLEX.  So long as the Property  shall be part of the
Complex  collectively  owned  or  managed  by  Landlord  or  its  affiliates  or
collectively  managed by Landlord's  managing agent,  Landlord may allocate Real
Estate Taxes,  Utilities,  and Operating Expenses within the Complex and between
the buildings  and  structures  comprising  the Complex and the parcels on which
they are located, in accordance with sound accounting and management principles.
In the  alternative,  Landlord shall have the right to determine,  in accordance
with sound accounting and management principles, Tenant's Pro Rata Share of Real
Estate Taxes, Utilities, and Operating Expenses based upon the totals of each of
the same for all such buildings and structures, the land constituting parcels on
which the same are located,  and all related facilities,  including common areas
and easements,  corridors, lobbies, sidewalks, elevators, loading areas, parking
facilities,  driveways, and other appurtenances and public areas, in which event
Tenant's Pro Rata Share shall be based on the ratio of the rentable  area of the
Premises to the rentable area of all buildings in the Complex.

7.9 LANDLORD'S  RECORDS.  Landlord  shall maintain  records with respect to Real
Estate  Taxes,  Utilities,  and  Operating  Expenses and  determine  the same in
accordance with sound accounting and management practices, consistently applied.
Although  this  Lease   contemplates  the  computation  of  Real  Estate  Taxes,
Utilities,  and  Operating  Expenses  on  a  cash  basis,  Landlord  shall  make
reasonable and  appropriate  accrual  adjustments to ensure that each Adjustment
Period includes  substantially  the same recurring items.  Landlord reserves the
right to change to a full accrual  system of  accounting  so long as the same is
consistently  applied and  Tenant's  obligations  are not  materially  adversely
affected.  Tenant or its  representative  shall have the right to  examine  such
records,  upon  reasonable  prior written notice  specifying such records Tenant
desires to examine,  during normal  business  hours at the place or places where
such records are normally kept, by sending such notice no later than  forty-five
(45) days following the furnishing of the Statement.

7.10 OTHER TAXES  PAYABLE BY TENANT.  In addition to the Base Rent and any other
charges to be paid by Tenant  hereunder,  Tenant  shall,  as an element of Rent,
reimburse  Landlord upon demand for any and all taxes payable by Landlord (other
than net income  taxes) which are not otherwise  reimbursable  under this Lease,
whether or not now customary or within the  contemplation of the parties,  where
such taxes are upon, measured by, or reasonably  attributable to (A) the cost or
value of Tenant's equipment,  furniture,  fixtures,  and other personal property
located at the Premises,  or the cost or value of any improvements made in or to
the Premises by or for Tenant,  regardless of whether title to such improvements
is held by Tenant or  Landlord;  (B) the gross or net Rent  payable  under  this
Lease, including any rental or gross receipts tax levied by any taxing authority
with respect to the receipt of the Rent hereunder; (C) the possession,  leasing,
operation,  management,  maintenance,  alteration,  repair, use, or occupancy by
Tenant of the Premises or any portion  thereof;  or (D) this  transaction or any
document to which Tenant is a party creating or  transferring  an interest or an
estate in the Premises.  Tenant shall pay any rent tax, sales tax,  service tax,
transfer  tax,  value-added  tax,  or any  other  applicable  tax on the Rent or
services herein or otherwise respecting this Lease.

7.11 RENT  CONTROL.  If the amount of Rent or any other  payment  due under this
Lease  violates  the  terms of any  governmental  restrictions  on such  Rent or
payment,  then the Rent or payment  due  during the period of such  restrictions
shall be the maximum amount allowable under those restrictions. Upon termination
of the  restrictions,  Landlord  shall,  to the extent it is legally  permitted,
recover  from Tenant the  difference  between the  amounts  received  during the
period of the  restrictions  and the amounts  Landlord  would have  received had
there been no restrictions.


                     Oyster Point Marina Plaza Office Lease
              Kashiwa Fudosan America, Inc.::AccuImage Diagnostics
                                  page 15 of 53
exhibit 10.06 leas                              [Suite 201 (400 OPB); 2,933 rsf]


<PAGE>


                              (8) SECURITY DEPOSIT

8.1 DEPOSIT FOR  SECURITY.  Tenant  shall  deposit  with  Landlord the amount of
SEVENTEEN  THOUSAND ELEVEN DOLLARS AND FORTY CENTS  ($17,011.40)  (the "Security
Deposit")  upon Tenant's  execution and  submission of this Lease.  The Security
Deposit shall serve as security for the prompt,  full, and faithful  performance
by Tenant  of the terms and  provisions  of this  Lease.  Landlord  shall not be
required to keep the Security Deposit separate from Landlord's  general funds or
pay interest on the Security Deposit.

     8.1.1  APPLICATION  OF  DEPOSIT.  In the event  that  Tenant is in  Default
     hereunder and fails to cure within any applicable time permitted under this
     Lease,  or in the event that Tenant  owes any amounts to Landlord  upon the
     expiration  of this Lease,  Landlord may use or apply the whole or any part
     of the Security Deposit for the payment of Tenant's obligations  hereunder.
     The use or application of the Security Deposit or any portion thereof shall
     not prevent  Landlord from  exercising  any other right or remedy  provided
     hereunder  or  under  any Law and  shall  not be  construed  as  liquidated
     damages.

     8.1.2  RESTORATION  OF FULL DEPOSIT.  In the event the Security  Deposit is
     reduced by such use or  application,  Tenant shall  deposit with  Landlord,
     within ten (10) days after written notice,  an amount sufficient to restore
     the full amount of the Security Deposit.  If the Premises shall be expanded
     at any time,  or if the Term shall be  extended  at any  increased  rate of
     Rent, the Security Deposit shall thereupon be proportionately increased.

     8.1.3  DISPOSITION OF SECURITY  DEPOSIT.  After the Expiration  Date or any
     earlier  termination  of the Lease,  any remaining  portion of the Security
     Deposit  shall be returned to Tenant in accordance  with the  provisions of
     ss. 1950.7 of the California Civil Code.

                            (9) COMPLIANCE WITH LAWS

9.1 TENANT'S  COMPLIANCE WITH LAWS.  Tenant shall use the Premises in compliance
with all applicable federal, state, county, and local governmental and municipal
laws, statutes,  ordinances,  rules,  regulations,  codes, decrees,  orders, and
other such  requirements,  and decisions by courts in cases where such decisions
are considered binding precedents in the State of California (the "State"),  and
decisions  of  federal  courts  applying  the  laws of the  State  (collectively
"Laws").  Tenant shall, at its sole cost and expense,  promptly comply with each
and all of such  Laws,  and also  with  the  requirements  of any  board of fire
underwriters or other similar body now or hereafter constituted to deal with the
condition,  use, or  occupancy of the  Premises,  except in the case of required
structural  changes not  triggered by Tenant's  change in use of the Premises or
Tenant's alterations,  additions,  or improvements therein.  Tenant shall comply
with all applicable Laws regarding the physical  condition of the Premises,  but
only to the extent that the applicable Laws pertain to the particular  manner in
which  Tenant uses the Premises or the  particular  use to which Tenant puts the
Premises, if different from that permitted under Article 2 of this Lease. Tenant
shall also comply with all  applicable  Laws which do not relate to the physical
condition of the  Premises and with which only the occupant can comply,  such as
laws governing  maximum  occupancy,  workplace  smoking,  VDT  regulations,  and
illegal  business  operations,  such as gambling.  The judgement of any court of
competent  jurisdiction  or the  admission  of  Tenant in any  judicial  action,
regardless of whether Landlord is a party thereto,  that Tenant has violated any
of such Laws shall be conclusive of that fact as between Landlord and Tenant.

     9.1.1 CODE COSTS.  Notwithstanding anything to the contrary in this Article
     6, if the requirement of any public authority  obligates either Landlord or
     Tenant to expend  money in order to bring the  Premises  and/or any area of
     the  Property  into  compliance  with  Laws  as a  result  of (a)  Tenant's


                     Oyster Point Marina Plaza Office Lease
              Kashiwa Fudosan America, Inc.::AccuImage Diagnostics
                                  page 16 of 53
exhibit 10.06 leas                              [Suite 201 (400 OPB); 2,933 rsf]


<PAGE>


     particular  use or alteration of the Premises;  (b) Tenant's  change in the
     use of the  Premises;  (c) the manner of conduct of  Tenant's  business  or
     operation of its installations,  equipment,  or other property therein; (d)
     any cause or condition created by or at the instance of Tenant,  other than
     by Landlord's  performance  of any work for or on behalf of Tenant;  or (e)
     breach of any of Tenant's obligations hereunder, then Tenant shall bear all
     costs  ("Code  Costs")  of  bringing  the  Premises  and/or  Property  into
     compliance with Laws,  whether such Code Costs are related to structural or
     nonstructural elements of the Premises or Property.

9.2  LANDLORD'S   COMPLIANCE  WITH  LAWS.   Landlord   represents  that  on  the
Commencement  Date  Landlord  has no actual  knowledge  of any  violation of any
applicable Laws  respecting the Premises.  During the Term Landlord shall comply
with all  applicable  Laws  regarding the Premises and  Property,  except to the
extent Tenant must comply under ss. 6.1 above.

                            (10) HAZARDOUS MATERIALS

10.1 REGULATION OF HAZARDOUS MATERIALS.  Tenant shall not transport, use, store,
maintain,  generate,  manufacture,  handle,  dispose,  release, or discharge any
"Hazardous  Material" (as defined below) upon or about the Property,  nor permit
Tenant's employees,  agents, contractors, and other occupants of the Premises to
engage in such  activities  upon or about the Property.  However,  the foregoing
provisions shall not prohibit the  transportation to and from, and use, storage,
maintenance, and handling within, the Premises of substances customarily used in
offices, provided all of the following conditions are met:

          (a)  such  substances  shall  be  used  and  maintained  only  in such
               quantities as are reasonably  necessary for such permitted use of
               the Premises, strictly in accordance with applicable Laws and the
               manufacturers' instructions therefor;

          (b)  such substances shall not be disposed of, released, or discharged
               on the Property and shall be transported to and from the Premises
               in compliance  with all  applicable  Laws,  and as Landlord shall
               reasonably require;

          (c)  if any  applicable  Laws or Landlord's  trash removal  contractor
               requires that any such  substances be disposed of separately from
               ordinary  trash,  Tenant  shall  make  arrangements  at  Tenant's
               expense for such disposal  directly with a qualified and licensed
               disposal company at a lawful disposal site (subject to scheduling
               and approval by Landlord),  and shall ensure that disposal occurs
               frequently  enough  to  prevent   unnecessary   storage  of  such
               substances in the Premises; and

          (d)  any remaining such substances shall be completely,  properly, and
               lawfully  removed from the Property  upon  expiration  or earlier
               termination of this Lease.

     10.1.1DEFINITION OF HAZARDOUS MATERIAL.  The term "Hazardous  Material" for
     purposes hereof shall mean any chemical,  substance,  material, or waste or
     component thereof which is now or hereafter listed,  defined,  or regulated
     as a  hazardous  or  toxic  chemical,  substance,  material,  or  waste  or
     component  thereof by any federal,  state, or local governing or regulatory
     body having jurisdiction,  or which would trigger any employee or community
     "right-to-know"  requirements  adopted by any such  body,  or for which any
     such body has adopted any  requirements for the preparation or distribution
     of an MSDS.

10.2 NOTIFICATION OF LANDLORD.  Tenant shall promptly notify Landlord of (A) any
enforcement,  cleanup,  or other  regulatory  action taken or  threatened by any
governmental  or  regulatory  authority  with  respect  to the  presence  of any
Hazardous  Material on the  Premises or the  migration  thereof from or to


                     Oyster Point Marina Plaza Office Lease
              Kashiwa Fudosan America, Inc.::AccuImage Diagnostics
                                  page 17 of 53
exhibit 10.06 leas                              [Suite 201 (400 OPB); 2,933 rsf]


<PAGE>


other  property;  (B) any  demands  or claims  made or  threatened  by any party
against Tenant or the Premises relating to any loss or injury resulting from any
Hazardous Material on or from the Premises;  and (C) any matters where Tenant is
required by law to give a notice to any  governmental  or  regulatory  authority
respecting any Hazardous Material on the Premises. Landlord shall have the right
(but not the  obligation)  to join and  participate,  as a party,  in any  legal
proceedings or actions  affecting the Premises  initiated in connection with any
environmental, health, or safety law.

10.3 LIST OF  HAZARDOUS  MATERIALS.  At such times as  Landlord  may  reasonably
request,  Tenant shall  provide  Landlord  with a written list  identifying  any
Hazardous Material then used,  stored, or maintained upon the Premises,  the use
and  approximate  quantity of each such material,  a copy of any material safety
data sheet ("MSDS")  issued by the  manufacturer  thereof,  written  information
concerning the removal, transportation, and disposal of the same, and such other
information as Landlord may reasonably require or as may be required by law.

10.4 CLEANUP.  If any Hazardous Material is released,  discharged or disposed of
by Tenant or any other occupant of the Premises, or their employees,  agents, or
contractors,  on or about the Property in violation of the foregoing provisions,
Tenant shall immediately, properly, and in compliance with applicable Laws clean
up and remove the Hazardous  Material  from the Property and any other  affected
property and clean or replace any  affected  personal  property  (whether or not
owned by Landlord), at Tenant's expense. Such clean up and removal work shall be
subject to Landlord's prior written approval (except in emergencies),  and shall
include any testing,  investigation,  and the preparation and  implementation of
any remedial action plan required by any governmental  body having  jurisdiction
or  reasonably  required by  Landlord.  If Tenant  shall fail to comply with the
provisions  of this ss.  7.2  within  five  (5) days  after  written  notice  by
Landlord,  or such  shorter  time as may be  required  by  Laws or in  order  to
minimize  any  hazard to  persons or  property,  Landlord  may (but shall not be
obligated to) arrange for such compliance  directly or as Tenant's agent through
contractors or other parties selected by Landlord,  at Tenant's expense (without
limiting Landlord's other remedies under this Lease or applicable Laws).

10.5 CASUALTY  DAMAGE.  If any Hazardous  Material is released,  discharged,  or
disposed of on or about the Property and such release, discharge, or disposal is
not caused by Tenant or other  occupants of the  Premises,  or their  employees,
agents,  or contractors,  such release,  discharge,  or disposal shall be deemed
casualty damage under Article 15 to the extent that the Premises or common areas
serving the  Premises are affected  thereby;  in such case,  Landlord and Tenant
shall have the obligations  and rights  respecting such casualty damage provided
under Article 15 of this Lease.

10.6 REFRIGERANT. Tenant shall not install any refrigerant-containing systems or
equipment,  including  refrigerators,  freezers,  supplemental  HVAC  systems or
self-contained  air  conditioners,  without  Landlord's  prior  approval,  which
Landlord may withhold in its sole discretion.  Unless Tenant shall have obtained
Landlord's  prior  written  approval  to  install  existing  equipment  after an
inspection,  at Tenant's  sole cost and  expense,  by  Landlord's  engineer  for
defects   and   proper   proposed    installation    in   the   Premises,    all
refrigerant-containing  equipment  and/or  systems which Tenant  installs in the
Premises  shall be new.  Whether  Tenant's  refrigerant-containing  equipment or
systems are defective and are properly installed shall be determined at the sole
discretion   of   Landlord's   engineer.   If  Tenant   wishes  to  install  any
refrigerant-containing  equipment  or systems,  Tenant  shall obtain and provide
Landlord with copies of all required  permits  associated with such equipment or
systems.

     10.6.1REMOVAL OF REFRIGERANT.  Notwithstanding  anything to the contrary in
     this Lease, Tenant shall remove all refrigerant and  refrigerant-containing
     equipment  and/or  systems  installed  in the  Premises  by or on behalf of
     Tenant prior to the Expiration Date of this Lease.  Prior to the removal of
     any such  refrigerant or  refrigerant-containing  equipment and/or systems,
     Tenant  shall  submit to


                     Oyster Point Marina Plaza Office Lease
              Kashiwa Fudosan America, Inc.::AccuImage Diagnostics
                                  page 18 of 53
exhibit 10.06 leas                              [Suite 201 (400 OPB); 2,933 rsf]


<PAGE>


     Landlord for Landlord's approval, the names of Tenant's contractors and all
     plans and specifications for such removal.  Tenant and Tenant's contractors
     shall  comply with all legal  requirements,  industry  practices  and rules
     established  by Landlord in  performing  such  removal  work.  Tenant shall
     repair any damage to the Property or the Systems and  Equipment  associated
     with such removal, and Tenant shall be responsible for the costs associated
     with  restoring  the Property to the condition  which  existed  immediately
     prior to any  modification  undertaken by Landlord in order to  accommodate
     Tenant's refrigerant-containing equipment or systems.

                          (11) SERVICES AND UTILITIES

11.1  LANDLORD'S  SERVICES.  Landlord  agrees  to  provide,  on  the  terms  and
conditions  specified herein,  the following services and utilities for Tenant's
use and  consumption  in the  Premises,  the cost of which  shall be included in
Operation  Expenses  and/or  Utilities and  reimbursed to Landlord in accordance
with ss. 4.1 above:

          (a)  ELECTRICITY.  Electricity for standard  office lighting  fixtures
               and for equipment and accessories customary for offices, provided
               (i) the connected electrical load of all the same does not exceed
               an  average  of four (4)  watts  per  usable  square  foot of the
               Premises (or such lesser amount as may be available, based on the
               safe and lawful  capacity of the existing  electrical  circuit(s)
               and facilities  serving the Premises);  (ii) the electricity will
               be at nominal 120 volts, single phase (or 110 volts, depending on
               available service in the Building); and (iii) the safe and lawful
               capacity  of  the  existing  electrical  circuit(s)  serving  the
               Premises  is not  exceeded.  Landlord  will  permit its  electric
               feeders,  risers, and wiring servicing the Premises to be used by
               Tenant to the extent  available and safely  capable of being used
               for such purpose.

          (b)  TELECOMMUNICATIONS   INTERFACE.   Interface  with  the  telephone
               network  at the  demarcation  point  or  minimum  point  of entry
               ("MPOE")  supplied by the local regulated public utility by means
               of  Landlord's  INC  consisting  of cable  pairs  with a capacity
               consistent with the  engineering  standards to which the Building
               was designed.

          (c)  HVAC. Heat, ventilation, and air-conditioning ("HVAC") to provide
               a temperature  required,  in Landlord's reasonable opinion and in
               accordance with applicable Laws, for the comfortable occupancy of
               the  Premises  during  business  hours (as  defined in ss.  8.1.1
               below).   Landlord  shall  not  be  responsible   for  inadequate
               air-conditioning  or  ventilation  to the extent the same  occurs
               because Tenant uses any item of equipment consuming more than 500
               watts   at   rated   capacity    without    providing    adequate
               air-conditioning and ventilation therefor.

          (d)  WATER. Water for drinking,  lavatory and toilet purposes at those
               points of supply provided for  nonexclusive  general use of other
               tenants at the Property.

          (e)  JANITORIAL SERVICES.  Customary office cleaning and trash removal
               service Monday  through Friday or Sunday through  Thursday in and
               about the Premises.

          (f)  ELEVATOR  SERVICES.  Operatorless  passenger elevator service and
               freight  elevator  service (if the  Property  has such  equipment
               serving the  Premises,  and subject to scheduling by Landlord) in
               common with  Landlord  and other  tenants and their  contractors,
               agents, and visitors.


                     Oyster Point Marina Plaza Office Lease
              Kashiwa Fudosan America, Inc.::AccuImage Diagnostics
                                  page 19 of 53
exhibit 10.06 leas                              [Suite 201 (400 OPB); 2,933 rsf]


<PAGE>


     11.1.1BUSINESS  HOURS. The term BUSINESS HOURS in this Lease shall mean the
     hours from 8:00 a.m. until 6:00 p.m. on Monday through Friday and from 9:00
     a.m. until 1:00 p.m. on Saturday throughout the year, except for New Year's
     Day,   Presidents'  Day,   Memorial  Day,   Independence  Day,  Labor  Day,
     Thanksgiving Day, Christmas Day, and any other  federally-observed  holiday
     which may be created during the Term ("Holidays").

11.2 ADDITIONAL  ELECTRICAL CAPACITY.  Any additional risers,  feeders, or other
equipment  or  service  proper  or  necessary  to  supply  Tenant's   electrical
requirements  will be installed by Landlord,  upon written request of Tenant, at
the sole cost and expense of Tenant, if, in Landlord's sole judgement,  the same
are necessary and will not cause permanent damage or injury to the Property, the
Premises,  or the  Systems  and  Equipment  or cause or  create a  dangerous  or
hazardous condition or entail excessive or unreasonable alterations, repairs, or
expense or interfere  with or disturb other tenants or occupants.  Rigid conduit
only will be allowed.

     11.2.1APPROVED ELECTRICAL LOAD. Tenant agrees not to connect any additional
     electrical  equipment  of any type to the  building  electric  distribution
     system, beyond that on Tenant's approved plans for initial occupancy, other
     than lamps, typewriters, and other office machines which consume comparable
     amounts of electricity or other electrical equipment which in the aggregate
     consumes  the same  amount of  electricity  as those  approved  for initial
     occupancy  and will not  result in any  overload  of  electrical  circuits,
     lines, or wiring,  without  Landlord's prior written  consent.  In no event
     shall Tenant use or install any fixtures, equipment, or machines the use of
     which in conjunction  with other fixtures,  equipment,  and machines in the
     Premises would result in an overload or the electrical  circuits  servicing
     the  Premises.  Tenant  covenants  and agrees  that at all times its use of
     electric  current  shall  never  exceed the  capacity of the feeders to the
     Building  or the  risers or  wiring  installation  existing  at the time in
     question.

11.3   ADDITIONAL   TELECOMMUNICATIONS   CAPACITY.   If   Tenant   desires   any
telecommunications  capacity in excess of that available as of the  Commencement
Date in the form of the INC between the MPOE and the  telephone  closet  nearest
the Premises and provided pursuant to ss. 8.1 above,  Tenant shall bear the cost
of  installing  additional  risers or INC or replacing  existing INC serving the
Premises pursuant to Article 9 below.

11.4 REPLACEMENT BULBS AND TUBES. Tenant shall furnish, install, and replace, as
required, all non-Building-standard lighting tubes, lamps, and bulbs required in
the Premises,  at Tenant's sole cost and expense. All lighting tubes, lamps, and
bulbs so installed  become  Landlord's  property  upon the  expiration or sooner
termination of this Lease.

11.5 TWENTY-FOUR HOURS ACCESS. Subject to the provisions of ss. 8.8, Tenant, its
employees,  agents,  and invitees shall have access to the Premises  twenty-four
(24) hours a day, seven (7) days a week. Landlord may restrict access outside of
business  hours by  requiring  persons  to show a badge or  identification  card
issued by Landlord. Landlord shall not be liable for denying entry to any person
unable  to show  the  proper  identification.  Landlord  may  without  liability
temporarily  close the  Building if required  because of a  life-threatening  or
Building-threatening situation.

11.6 EXTRA  SERVICES.  Landlord shall,  subject to all applicable  Laws, seek to
provide such  utilities  or services in excess of those  Landlord is required to
provide under ss. 8.1 above as Tenant may from time to time request, if the same
are  reasonable  and  feasible  for  Landlord  to  provide  and do  not  involve
modifications  or additions to the Property or the Systems and  Equipment and if
Landlord shall receive Tenant's request within a reasonable  period prior to the
time such extra  utilities  or services are  required.


                     Oyster Point Marina Plaza Office Lease
              Kashiwa Fudosan America, Inc.::AccuImage Diagnostics
                                  page 20 of 53
exhibit 10.06 leas                              [Suite 201 (400 OPB); 2,933 rsf]


<PAGE>


Landlord may comply with written or oral  requests by any officer or employee of
Tenant,  unless Tenant shall notify Landlord of, or Landlord shall request,  the
names of  authorized  individuals  (up to three (3) for each  floor on which the
Premises are located) and procedures  for written  requests.  Tenant shall,  for
such extra  utilities or services,  pay such charges as Landlord shall from time
to time establish.

     11.6.1EXTRAORDINARY   SERVICE  USAGE.  If  Tenant  shall  utilize  Building
     services  for the  Premises at any time other than during  business  hours,
     Landlord   shall   furnish   such   extraordinary    services    (excluding
     air-conditioning,  except as  provided  below) at  Landlord's  then-current
     prevailing rate for such services.  In addition to the foregoing  services,
     if Tenant shall  require  air-conditioning  service for the Premises at any
     time other than during  business  hours,  Landlord  shall,  upon reasonable
     advance  notice from  Tenant,  furnish  such  after-hours  air-conditioning
     service at Landlord's  then-current  prevailing rate for such services as a
     separate  charge;  provided,  however,  in the event Tenant  requests  such
     after-hours air-conditioning service at a time not immediately preceding or
     immediately   succeeding  times  when  "regular  hours"  service  is  being
     furnished hereunder,  then Tenant must request not less than five (5) hours
     of after-hours air-conditioning service. Notwithstanding anything contained
     herein to the contrary,  Landlord's  prevailing rate for the  extraordinary
     services described herein shall be subject to increase from time to time as
     Landlord may reasonably determine.

     11.6.2PAYMENT FOR EXCESS USAGE. All charges for extra utilities or services
     or those requested  outside business hours shall be due at the same time as
     the  installment of Base Rent with which the same are billed,  or if billed
     separately, shall be due within twenty (20) days after such billing.

     11.6.3CHANGES IN HVAC SYSTEM. Use of the Premises,  or any part thereof, in
     a manner exceeding the design conditions (including occupancy and connected
     electrical  load) for the  heating or  cooling  units in the  Premises,  or
     rearrangement of partitioning which interferes with normal operation of the
     HVAC  system  in the  Premises,  may  require  changes  in the HVAC  system
     servicing  the  Premises.  Such  changes  shall be made by  Tenant,  at its
     expense, as Tenant's Changes pursuant to Article 9. Tenant shall not change
     or adjust  any  closed or sealed  thermostat  or other  element of the HVAC
     system without Landlord's express prior written consent.

     11.6.4SEPARATE  METERING.  Landlord  may install and operate  meters or any
     other  reasonable  system for  monitoring  or  estimating  any  services or
     utilities  used by Tenant in excess of those  required  to be  provided  by
     Landlord under this Article 8 (including a system for  Landlord's  engineer
     reasonably  to estimate any such excess  usage).  If such system  indicates
     such excess services or utilities,  Tenant shall pay Landlord's  reasonable
     charges for  installing  and  operating  such system and any  supplementary
     air-conditioning,  ventilation,  heat,  electrical,  or  other  systems  or
     equipment (or  adjustments  or  modifications  to the existing  Systems and
     Equipment),  and  Landlord's  reasonable  charges for such amount of excess
     services or utilities used by Tenant. If Tenant's use of extra utilities or
     services causes  Landlord's  regulated  baseline  quantities of water, gas,
     electricity,  or any other utility or service to be exceeded,  Tenant shall
     pay for such excess  quantities  of such  utilities or services at the rate
     which is imposed upon  Landlord for  quantities  in excess of the regulated
     baseline.  In addition,  Tenant shall pay prior to delinquency  any fine or
     penalty  which may be imposed  upon or  assessed  against  Landlord  or the
     Building or the Property by virtue of Tenant's excess usage of any services
     or utilities, including water, gas, and electricity.

11.7  INTERRUPTION  OF SERVICES.  Landlord does not warrant that any services or
utilities  provided hereunder for Tenant's use in the Premises will be free from
shortages,   failures,   variations,   or   interruptions   caused  by  repairs,
maintenance,  replacements,   improvements,  alterations,  changes  of  service,
strikes, lockouts, labor controversies, accidents, inability to obtain services,
fuel, steam, water or


                     Oyster Point Marina Plaza Office Lease
              Kashiwa Fudosan America, Inc.::AccuImage Diagnostics
                                  page 21 of 53
exhibit 10.06 leas                              [Suite 201 (400 OPB); 2,933 rsf]


<PAGE>


supplies,   governmental  requirements  or  requests,  or  other  causes  beyond
Landlord's  reasonable  control,  including  interference  with  light  or other
incorporeal  hereditaments  and any  interruption  in services or any failure to
provide services to Landlord by a designated  utility company at the demarcation
point at which Landlord accepts  responsibility for such service or at any point
prior thereto, which interference impedes Landlord in furnishing plumbing, HVAC,
electrical,  sanitary,  life  safety,  elevator,  telecommunications,  or  other
Building  services,  utilities,  or the Systems and Equipment.  None of the same
shall be deemed an eviction or disturbance of Tenant's use and possession of the
Premises  or any part  thereof,  shall  render  Landlord  liable to  Tenant  for
abatement  of  Rent,  or shall  relieve  Tenant  from  performance  of  Tenant's
obligations  under this Lease.  Landlord in no event shall be liable for damages
by reason of loss of profits,  business  interruption,  or other compensatory or
consequential damages.

11.8  SAFETY  AND  SECURITY  DEVICES,   SERVICES,   AND  PROGRAMS.  The  parties
acknowledge that safety and security devices, services, and programs provided by
Landlord,  if any, while  intended to deter crime and ensure safety,  may not in
given instances prevent theft or other criminal acts or ensure safety of persons
or  property,  and such  devices,  services  and  programs  shall  not under any
circumstances  be  deemed  to be a  guaranty,  representation,  or  warranty  by
Landlord to Tenant or any third parties as to the safety or protection of person
or property.  The risk that any safety or security device,  service,  or program
may not be effective,  or may malfunction,  or be circumvented by a criminal, is
assumed by Tenant with respect to Tenant's  property and  interests;  and Tenant
shall obtain insurance  coverage to the extent Tenant desires protection against
such criminal acts and other losses,  as further described in Article 14. Tenant
agrees to cooperate in any reasonable  safety or security  program  developed by
Landlord or required by Law.

                             (12) TENANT'S CHANGES

12.1 TENANT'S REQUESTED CHANGES. Tenant may, subject to ss. 9.2 below, from time
to time during the Term of this Lease,  at its expense,  make such  alterations,
additions,   installations,   substitutions,   improvements,   and   decorations
(collectively  "Tenant's  Changes")  in  and  to  the  Premises  as  Tenant  may
reasonably  consider  necessary  for the conduct of its business in the Premises
(except for changes which would require modification of the Property outside the
Premises), on the following conditions:

          (a)  the outside  appearance or the strength of the Building or of any
               of its structural  parts shall not be affected,  and Tenant shall
               cause no  penetration  of the roof or the exterior  fabric of the
               Building;

          (b)  no  part  of the  Building  outside  of  the  Premises  shall  be
               physically affected;

          (c)  the proper  functioning of any of the Systems and Equipment shall
               not be  adversely  affected,  and the  usage of such  systems  by
               Tenant shall not be increased;

          (d)  no such change shall  require the addition of new INC riser cable
               or expand the number of telephone pairs dedicated to the Premises
               by the Buildings' telecommunications engineering design;

          (e)  in performing  the work  involved in making such changes,  Tenant
               shall be bound by and observe all of the conditions and covenants
               contained in the following sections of this Article 9; and

          (f)  with  respect  to  Tenant's   Changes,   Tenant  shall  make  all
               arrangements  for,  and pay all expenses  incurred in  connection
               with, use of the freight elevators servicing the Premises.


                     Oyster Point Marina Plaza Office Lease
              Kashiwa Fudosan America, Inc.::AccuImage Diagnostics
                                  page 22 of 53
exhibit 10.06 leas                              [Suite 201 (400 OPB); 2,933 rsf]


<PAGE>


12.2 PLANS AND APPROVAL.  Before  proceeding with any Tenant's  Changes,  Tenant
shall advise Landlord  thereof and arrange a meeting with the Building  Manager,
the Building Architect,  and/or the Building Contractor, as required by Landlord
in  relation  to the scope of the  proposed  Changes.  Except  in  extraordinary
circumstances  which  would  reasonably  require  an  exception,  all work to be
performed in the Building  shall be performed by the Building  Contractor on the
basis of plans and  drawings  prepared by the  Building  Architect.  If Landlord
grants permission for Tenant to utilize another  contractor and/or architect for
its Changes, before proceeding with any Tenant's Changes, Tenant shall submit to
Landlord plans and  specifications and all changes and revisions thereto for the
work to be done for  Landlord's  reasonable  approval;  and Tenant  shall,  upon
demand of Landlord,  pay to Landlord the  reasonable  costs incurred and paid to
third  parties by Landlord for the review of such plans and  specifications  and
all  changes  and  revisions  thereto  by its  architect,  engineer,  and  other
consultants.  Landlord may as a condition of its approval require Tenant to make
reasonable  revisions  in and to the  plans  and  specifications.  Landlord  may
require  Tenant  to post a bond or other  security  reasonably  satisfactory  to
Landlord to insure the  completion of such change.  If Landlord  consents to any
Tenant's  Changes or supervises the work of constructing  any Tenant's  Changes,
such consent or supervision shall not be deemed a warranty as to the adequacy of
the design,  workmanship, or quality of materials, and Landlord hereby expressly
disclaims any responsibility or liability for the same.  Landlord shall under no
circumstances have any obligation to repair, maintain, or replace any portion of
such work.

     12.2.1AS-BUILT  PLANS. Within thirty (30) days after completion of Tenant's
     Changes requiring the submission of plans to Landlord, Tenant shall furnish
     to Landlord a complete set of "as-built" plans and specifications.

12.3 PERMITS AND PERFORMANCE. Tenant, at its expense, shall obtain all necessary
governmental  permits and  certificates  for the commencement and prosecution of
Tenant's  Changes  and for final  approval  thereof  upon  completion  and shall
furnish  copies thereof to Landlord.  Tenant shall cause Tenant's  Changes to be
performed in compliance  therewith and with all applicable Laws and requirements
of public authorities and with all applicable  requirements of insurance bodies,
and in good and workmanlike  manner,  using new materials and equipment at least
equal in  quality  and  class to the  original  installations  in the  Property.
Tenant's  Changes  shall be  performed  in such  manner as not  unreasonably  to
interfere  with,  delay,  or impose any additional  expense upon Landlord in the
renovation,  maintenance,  or operation of the Property or any portion  thereof,
unless  Tenant shall  indemnify  Landlord  therefor to the  latter's  reasonable
satisfaction.

12.4 CONTRACTORS.  All electrical,  mechanical,  and plumbing work in connection
with Tenant's  Changes shall be performed by Landlord's  contractors at Tenant's
expense. If Tenant shall request any electrical, mechanical, or plumbing work in
connection with Tenant's Changes,  Landlord shall request Landlord's contractors
to furnish Tenant with prices to perform the same prior to prosecuting  same. In
addition to the foregoing,  and notwithstanding anything to the contrary in this
Article  9,  Landlord  may,  at  Landlord's  option,  require  that  the work of
constructing  any Tenant's  Changes be performed by  Landlord's  contractor,  in
which case the cost of such work shall be paid for  before  commencement  of the
work.

12.5  SUPERVISION  AND FEE.  Landlord may require that all work of  constructing
Tenant's Changes be performed under Landlord's supervision. If Landlord does not
elect to require that Tenant use Landlord's contractor, and if Tenant chooses to
use its own contractor for the work of  constructing  Tenant's  Changes,  Tenant
shall pay to Landlord upon completion of any such work by Tenant's contractor an
administrative  fee of fifteen  percent  (15%) of the cost of the work, to cover
Landlord's   overhead  in  reviewing   Tenant's  plans  and  specifications  and
performing any supervision of the work of


                     Oyster Point Marina Plaza Office Lease
              Kashiwa Fudosan America, Inc.::AccuImage Diagnostics
                                  page 23 of 53
exhibit 10.06 leas                              [Suite 201 (400 OPB); 2,933 rsf]


<PAGE>


Tenant's Changes. If Tenant chooses to use Landlord's  contractor for such work,
Tenant shall pay to Landlord upon completion an administrative fee equal to five
percent (5%) of the cost of the work.

12.6  RESTORATION  OF FIXTURES.  If any of Tenant's  Changes  shall  involve the
removal of any fixtures,  equipment, or other property in the Premises which are
not Tenant's Property (as defined in Article 10), such fixtures,  equipment,  or
other  property  shall be  promptly  replaced,  at  Tenant's  expense,  with new
fixtures,  equipment, or other property (as the case may be) of like utility and
at least equal value,  unless  Landlord  shall  otherwise  expressly  consent in
writing;  and Tenant shall,  upon  Landlord's  request,  store and preserve,  at
Tenant's  sole cost and  expense,  any such  fixtures,  equipment or property so
removed  and  shall  return  same to  Landlord  upon the  expiration  or  sooner
termination of this Lease.

12.7 MECHANIC'S LIENS. Tenant shall keep the Property and Premises free from any
mechanic's,   materialman's,  or  similar  liens  or  other  such  encumbrances,
including  the  liens of any  security  interest  in,  conditional  sales of, or
chattel mortgages upon, any materials, fixtures, or articles so installed in and
constituting part of the Premises, in connection with any Tenant's Changes on or
respecting the Premises not performed by or at the request of Landlord and shall
indemnify,  defend,  protect,  and hold  Landlord  harmless from and against any
claims,  liabilities,  judgements,  or costs (including attorneys' fees) arising
out of the  same  or in  connection  with  any  such  lien,  security  interest,
conditional  sale or  chattel  mortgage  or any  action  or  proceeding  brought
thereon.  Tenant shall give  Landlord  written  notice at least twenty (20) days
prior to the  commencement  of work on any  Tenant's  Change in the Premises (or
such  additional time as may be necessary  under  applicable  Laws), in order to
afford Landlord the opportunity of posting and recording  appropriate notices of
nonresponsibility.  Tenant shall remove any such lien or  encumbrance by bond or
otherwise  within  thirty (30) days after  written  notice by  Landlord;  and if
Tenant shall fail to do so, Landlord may pay the amount necessary to remove such
lien or encumbrance,  without being  responsible for  investigating the validity
thereof.  The  amount so paid shall be deemed  Additional  Rent under this Lease
payable  upon  demand,  without  limitation  as to other  remedies  available to
Landlord  under this Lease.  Nothing  contained  in this Lease  shall  authorize
Tenant to do any act which shall  subject  Landlord's  title to the  Property or
Premises to any liens or  encumbrances,  whether  claimed by operation of law or
express  or  implied  contract.  Any  claim  to a lien or  encumbrance  upon the
Property or Premises  arising in connection  with any Work on or respecting  the
Premises not performed by or at the request of Landlord  shall be null and void,
or, at Landlord's  option,  shall attach only against  Tenant's  interest in the
Premises and shall in all respects be  subordinate  to  Landlord's  title to the
Property and Premises.

12.8 NOTICES OF  VIOLATION.  Tenant,  at its  expense,  and with  diligence  and
dispatch,  shall  procure  the  cancellation  or  discharge  of all  notices  of
violation arising from or otherwise  connected with Tenant's Changes which shall
be issued by any  governmental,  public,  or  quasi-public  authority  having or
asserting jurisdiction.  However,  nothing herein contained shall prevent Tenant
from  contesting,  in good  faith  and at its own  expense,  any such  notice of
violation,  provided that Landlord's  rights hereunder are in no way compromised
or diminished thereby.

12.9  INDUSTRIAL  RELATIONS.  Tenant  agrees  that the  exercise  of its  rights
pursuant to the  provisions  of this  Article 9 or any other  provision  of this
Lease  shall  not be done in a manner  which  would  create  any work  stoppage,
picketing,  labor disruption,  or dispute or violate  Landlord's union contracts
affecting the Property and/or Complex or interfere with the business of Landlord
or any Tenant or occupant of the Building. Tenant shall, immediately upon notice
from  Landlord,  cease any  activity,  whether or not  permitted  by this Lease,
giving rise to such condition.  If Tenant fails to do so, Landlord,  in addition
to any rights  available to it under this Lease and pursuant to Law,  shall have
the right to an EX PARTE injunction without notice.


                     Oyster Point Marina Plaza Office Lease
              Kashiwa Fudosan America, Inc.::AccuImage Diagnostics
                                  page 24 of 53
exhibit 10.06 leas                              [Suite 201 (400 OPB); 2,933 rsf]


<PAGE>


                             (13) TENANT'S PROPERTY

13.1  FIXTURES  AND  IMPROVEMENTS.   All  fixtures,   equipment,   improvements,
alterations,  and  appurtenances  attached to or built into the  Premises at the
commencement  of or during the Term of this Lease,  including  cabinets,  sinks,
faucets,  appliances,  hot water heaters,  etc.  (collectively  "Improvements"),
whether or not by or at the expense of Tenant, shall be and remain a part of the
Premises,  shall be deemed the property of Landlord, and shall not be removed by
Tenant, except as expressly provided in Article 11 below.

13.2  TENANT'S  PROPERTY  AND TRADE  FIXTURES.  All  movable  partitions,  trade
fixtures, office machinery and equipment, communications equipment, and computer
equipment  (whether  or not  attached to or built into the  Premises)  which are
installed  in the Premises by or for the account of Tenant,  without  expense to
Landlord and which can be removed without structural damage to the Property, and
all  furniture,  furnishings,  and other articles of movable  personal  property
owned by Tenant and located in the Premises  (collectively  "Tenant's Property")
shall be and shall remain the property of Tenant and may be removed by it at any
time during the Term of this Lease; provided that if any of Tenant's Property is
removed,  Tenant or any party or person  entitled to remove same shall repair or
pay the  cost  of  repairing  any  damage  to the  Premises  or to the  Property
resulting from such removal.  Any equipment or other property for which Landlord
shall have granted any  allowance or credit to Tenant or which has replaced such
items originally  provided by Landlord at Landlord's expense shall not be deemed
to have been  installed  by or for the  account  of Tenant,  without  expense to
Landlord, and shall not be considered Tenant's Property.

                         (14) CONDITION UPON SURRENDER

14.1 CONDITION AND RESTORATION.  At or before the Expiration Date or the date of
any earlier  termination  of this Lease,  or as  promptly as  practicable  using
Tenant's best efforts after such an earlier  termination  date,  Tenant,  at its
expense, shall do all of the following:

          (a)  surrender  possession of the Premises in the  condition  required
               underss. 12.1 below, ordinary wear and tear excepted;

          (b)  surrender all keys,  any key cards,  and any parking  stickers or
               cards to Landlord and give  Landlord in writing the  combinations
               of any locks or vaults then remaining in the Premises;

          (c)  remove from the  Premises all of Tenant's  Property,  except such
               items  thereof as Tenant shall have  expressly  agreed in writing
               with  Landlord  were to remain  and to  become  the  property  of
               Landlord; and

          (d)  remove  from  the  Premises  all  data and  phone  wiring  unless
               Landlord at Landlord sole discretion, shall have expressly agreed
               in writing for the data and phone  wiring to remain and to become
               the property of Landlord; and

          (e)  fully repair any damage to the Premises or the Property resulting
               from such removal.

Tenant's  obligations herein shall survive the expiration or earlier termination
of the Lease, unless expressly provided to the contrary herein. All Improvements
and other items in or upon the  Premises  (except  Tenant's  Property),  whether
installed by Tenant or Landlord,  shall be Landlord's  property and shall remain
upon the Premises,  all without compensation,  setoff,  allowance,  or credit to
Tenant;


                     Oyster Point Marina Plaza Office Lease
              Kashiwa Fudosan America, Inc.::AccuImage Diagnostics
                                  page 25 of 53
exhibit 10.06 leas                              [Suite 201 (400 OPB); 2,933 rsf]


<PAGE>


provided,  however,  that if prior to such  expiration  or  earlier  termination
Landlord  so  directs  by  notice,  Tenant  shall  promptly  remove  such of the
Improvements  in the Premises as are designated in such notice and shall restore
the Premises to their condition prior to the installation of such  Improvements.
Notwithstanding  the foregoing,  Landlord shall not require removal of customary
office  improvements  installed  pursuant to the Work Letter  Agreement,  if any
(except as expressly provided to the contrary  therein),  or installed by Tenant
with Landlord's  written approval  (except as expressly  required by Landlord in
connection with granting such approval).

14.2 TENANT'S FAILURE TO REMOVE OR RESTORE. After written notice by Landlord, if
Tenant  shall fail to perform any repairs or  restoration  or fail to remove any
items from the Premises as required  under this Article 11,  Landlord may do so,
and Tenant shall pay Landlord the cost thereof upon demand. All property removed
from the Premises by Landlord  pursuant to any  provisions  of this Lease or any
Law may be handled or stored by Landlord at Tenant's expense, and Landlord shall
in no event be responsible for the value, preservation,  or safekeeping thereof.
All  property  not removed  from the  Premises or retaken from storage by Tenant
within thirty (30) days after expiration or earlier termination of this Lease or
Tenant's right to possession shall at Landlord's  option be conclusively  deemed
to have  been  conveyed  by  Tenant to  Landlord  as if by bill of sale  without
payment by Landlord. Unless prohibited by applicable Laws, Landlord shall have a
lien  against such  property for the costs  incurred in removing and storing the
same.

                          (15) REPAIRS AND MAINTENANCE

15.1 TENANT'S CARE OF PREMISES.  Except for customary cleaning and trash removal
provided by Landlord  under ss. 8.1 above and damage  covered  under Article 15,
Tenant shall keep the Premises in good and sanitary  condition,  working  order,
and repair, including carpet,  wall-covering,  doors pertinent to and within the
Premises,  plumbing,  all  telecommunications  cables and wiring within Tenant's
Premises  ("IW") from the interface of such IW with the INC, and other fixtures,
equipment,  alterations,  and  improvements,  whether  installed  by Landlord or
Tenant. In addition,  Tenant,  at its expense,  shall promptly make all repairs,
ordinary or extraordinary, interior or exterior, structural or otherwise, in and
about the Premises and the  Property,  as shall be required by reason of (a) the
performance  or  existence  of  Tenant's  Work  or  Tenant's  Changes;  (b)  the
installation,  use, or operation of Tenant's  Property in the Premises;  (c) the
moving of  Tenant's  Property  in or out of the  Building;  or (d) the misuse or
neglect of Tenant or any of its employees,  agents,  or contractors.  Tenant, at
its expense,  shall  replace all  scratched,  damaged,  or broken doors or other
glass (other than exterior  glass unless damage is caused by Tenant) in or about
the  Premises  and  shall  be  responsible  for all  repairs,  maintenance,  and
replacement  of wall and floor  coverings in the Premises and for the repair and
maintenance of all lighting fixtures  therein.  All repairs except for emergency
repairs made by Tenant as provided  herein shall be performed by  contractors or
subcontractors  approved in writing by Landlord  prior to  commencement  of such
repairs, which approval shall not be unreasonably withheld or delayed. If Tenant
does not promptly make such arrangements,  Landlord may, but need not, make such
repairs,  maintenance,  and  replacements,  and the costs  paid or  incurred  by
Landlord  therefor  shall be  reimbursed  by Tenant  promptly  after  request by
Landlord.

15.2  LANDLORD'S  CARE OF PROPERTY.  Landlord,  at its  expense,  shall keep and
maintain the common areas of the Property and the Systems and Equipment  serving
the Premises in good  working  order,  condition,  and repair and shall make all
repairs, structural and otherwise,  interior and exterior, as and when needed in
or about the Premises,  except for those repairs for which Tenant is responsible
pursuant to ss. 12.1 above or any other provisions of this Lease. Landlord shall
maintain and repair all INC in the  Building,  and Tenant shall have no right to
make repairs to INC. The cost of Landlord's  maintenance and


                     Oyster Point Marina Plaza Office Lease
              Kashiwa Fudosan America, Inc.::AccuImage Diagnostics
                                  page 26 of 53
exhibit 10.06 leas                              [Suite 201 (400 OPB); 2,933 rsf]


<PAGE>


repairs  pursuant  to this  Article 12 shall be  reimbursed  to  Landlord to the
extent provided in Article 4 above.

15.3  WAIVER BY  TENANT.  Tenant  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.

                           (16) RULES AND REGULATIONS

16.1  OBSERVANCE  AND  MODIFICATION.  Tenant and its  employees and agents shall
faithfully observe and comply with the Rules and Regulations  attached hereto as
EXHIBIT  C (the  "Rules")  and  such  reasonable  changes  therein  (whether  by
modification,  elimination,  or  addition)  as  Landlord  at any  time or  times
hereafter may make and communicate in writing to Tenant, so long as such changes
do not  unreasonably  affect the conduct of Tenant's  business in the  Premises,
except as required by any applicable Law; provided, however, that in case of any
conflict or  inconsistency  between the  provisions of this Lease and any of the
Rules as  originally  promulgated  or as changed,  the  provisions of this Lease
shall control.

16.2  APPLICATION TO TENANT.  Nothing in this Lease shall be construed to impose
upon  Landlord  any  obligation  to Tenant to  enforce  the Rules or the  terms,
covenants,  or conditions in any other lease,  as against any other tenant,  and
Landlord  shall not be liable to Tenant for  violation  of the same by any other
tenant or its employees, agents, or visitors.

                       (17) INSURANCE AND INDEMNIFICATION

17.1 TENANT'S INSURANCE. Tenant shall obtain and maintain in effect at all times
during Tenant's possession of the Premises the following insurance coverages and
policies:

     17.1.1LIABILITY  INSURANCE.  Tenant shall  maintain a policy of  commercial
     general liability insurance, which shall include coverages for (a) personal
     injury; (b) broad-form contractual liability;  (c) owner's (I.E., Tenant's)
     & contractor's  protective;  (d) automobile  liability;  and (e) broad-form
     property  damage  liability.  The minimum  limits of  liability  shall be a
     combined  single limit with respect to each occurrence of not less than One
     Million  Dollars  ($1,000,000)  and an aggregate limit of not less than Two
     Million Dollars  ($2,000,000).  The policy shall contain a  cross-liability
     endorsement  and a severability of interest  clause.  Tenant shall increase
     the insurance  coverage as required by  Landlord's  lender or if Landlord's
     insurance consultant believes that the coverage is not adequate.

     17.1.2TENANT'S BUSINESS PERSONAL PROPERTY INSURANCE.  Tenant shall maintain
     on all of its  business  personal  property,  including  valuable  business
     papers  and  accounts  receivable;   operating  supplies;   inventory;  and
     furniture,  fixtures,  and equipment  (whether  owned,  leased,  or rented)
     (collectively  "Business Personal  Property") an "all risk" property damage
     insurance  policy including  coverages for earthquake  damage and sprinkler
     leakage and containing an agreed amount  endorsement (or, if applicable,  a
     business owner's policy with a  no-coinsurance  provision) in an amount not
     less than one hundred percent (100%) of the full replacement cost valuation
     of such Business Personal Property. The proceeds from any such policy shall
     be used by Tenant for the replacement of such Business Personal property.

     17.1.3BUSINESS  INTERRUPTION/EXTRA EXPENSE INSURANCE. Tenant shall maintain
     business  interruption or (if applicable)  contingent business interruption
     and extra expense  insurance in such amounts as will  reimburse  Tenant for
     direct or indirect loss of earnings and incurred costs  attributable to the
     perils commonly  covered by Tenant's  property  insurance  described in ss.
     14.1.2


                     Oyster Point Marina Plaza Office Lease
              Kashiwa Fudosan America, Inc.::AccuImage Diagnostics
                                  page 27 of 53
exhibit 10.06 leas                              [Suite 201 (400 OPB); 2,933 rsf]


<PAGE>


     above but in no event  less than Five  Hundred  Thousand  ($500,00.00)  per
     annum. Such insurance will be carried with the same insurer that issues the
     insurance for Tenant's  Business  Personal  Property pursuant to ss. 14.1.2
     above.

     17.1.4OTHER  COVERAGE.  Tenant,  at its cost,  shall  maintain  such  other
     insurance as Landlord may  reasonably  require from time to time, but in no
     event may Landlord  require any other insurance which is not then available
     at commercially reasonable rates.

17.2 TENANT'S  INSURANCE  CRITERIA.  All insurance  required to be maintained by
Tenant under this Lease shall conform to the following criteria:

               (i) Tenant's  insurance  shall be issued by  insurance  companies
               authorized  to do  business  in the  State of  California  with a
               financial  rating of at least A:XIII for any  property  insurance
               and at least A-:IX for any liability  insurance,  as rated in the
               most recent edition of BEST'S INSURANCE REPORTS;

               (ii)   Tenant's   insurance   shall  be  issued  as  primary  and
               noncontributory;

               (iii) Tenant's  liability and property  insurance  policies shall
               name Tenant as the insured and Landlord,  Landlord's  agents, and
               any  Lessors  and  Holders (as such terms are defined in ss. 18.1
               below)  whose  names  shall  have  been  furnished  to  Tenant as
               additional insureds;

               (iv) Tenant's insurance shall contain an endorsement requiring at
               least thirty (30) days' written notice from the insurance company
               to each insured and additional insured before cancellation or any
               material change in the coverage,  scope, or amount of any policy;
               and

               (v)  with  respect  to  damage  to or loss of  Tenant's  Business
               Personal Property,  a waiver of subrogation must be obtained,  as
               required under ss. 14.4 below.

     17.2.1BLANKET  COVERAGE. All of the insurance requirements set forth herein
     on the part of  Tenant to be  observed  shall be  deemed  satisfied  if the
     Premises  are  covered by a blanket  insurance  policy  complying  with the
     limits,  requirements,  and criteria  contained in this Article 14 insuring
     all or most of Tenant's facilities in California.

     17.2.2EVIDENCE OF COVERAGE. A duplicate original policy or a certificate of
     insurance shall be deposited with Landlord at the  commencement of the Term
     or, if earlier,  upon Tenant's  taking  possession of the Premises;  and on
     renewal of the policy a  certificate  of  insurance  listing the  insurance
     coverages required hereunder and naming the appropriate additional insureds
     shall be  deposited  with  Landlord  not less than  seven  (7) days  before
     expiration of the policy.

17.3  LANDLORD'S  INSURANCE.  Landlord shall maintain "all risk" property damage
insurance  containing  an agreed amount  endorsement  covering not less than one
hundred percent (100%) of the full insurable  replacement  cost valuation of (y)
the  Building  and the tenant  improvements,  betterments,  and the  alterations
thereto;  and (z) Landlord's  personal  property,  business  papers,  furniture,
fixtures, and equipment (collectively  "Landlord's Property"),  exclusive of the
costs of excavation,  foundations and footings, and risks required to be covered
by Tenant's  insurance,  and  subject to  commercially  reasonable  deductibles.
Landlord  shall also  obtain and keep in full force the  following  policies  of
insurance:  (a)  commercial  general  liability  insurance;  (b)  loss  of  rent
insurance (also known as rent continuation insurance); (c) workers' compensation
insurance,  if required  by  applicable  Law;  and (d) such other  insurance  as
Landlord deems appropriate or as may be required by any Holder or Lessor.


                     Oyster Point Marina Plaza Office Lease
              Kashiwa Fudosan America, Inc.::AccuImage Diagnostics
                                  page 28 of 53
exhibit 10.06 leas                              [Suite 201 (400 OPB); 2,933 rsf]


<PAGE>


17.4 RELEASES AND WAIVERS OF  SUBROGATION.  The purpose of this  provision is to
allow  Landlord and Tenant to allocate and assume certain risks to coincide with
insurance  coverages  required  to be  maintained  pursuant to the terms to this
Lease. Landlord and Tenant recognize the benefit that each will receive from the
waivers of subrogation  each is required to obtain pursuant to this ss. 14.4 and
that there are  significant  advantages  to each in connection  with  minimizing
duplication of insurance  coverages.  Accordingly,  Landlord and Tenant agree to
accept  and place  the  limitations  which  follow  on each  other's  respective
liabilities  and  responsibility  for damages in order to coincide with required
insurance coverages.

     17.4.1TENANT'S PROPERTY AGREEMENT. In light of Tenant's agreement to insure
     Tenant's  Business  Personal  Property in accordance with ss. 14.1.2 above,
     Tenant  agrees that  Landlord will have no liability to Tenant in the event
     Landlord damages or destroys,  negligently or otherwise, all or any part of
     Tenant's Business Personal Property.  Tenant will cause to be placed in its
     insurance policies covering Tenant's Business Personal Property a waiver of
     subrogation  so that its  insurance  company will not become  subrogated to
     Tenant's  rights  and  will  not be able to  proceed  against  Landlord  in
     connection with any such damage or destruction.

     17.4.2LANDLORD'S  PROPERTY AGREEMENT.  In light of Landlord's  agreement to
     insure  Landlord's  Property in  accordance  with ss. 14.3 above,  Landlord
     agrees  that Tenant  will have no  liability  to Landlord in the event that
     Tenant damages or destroys,  negligently  or otherwise,  all or any part of
     Landlord's  Property.  Landlord  will  cause to be placed in its  insurance
     policies covering  Landlord's  Property a waiver of subrogation so that its
     insurance  company will not become subrogated to Landlord's rights and will
     not be able to proceed against Tenant in connection with any such damage or
     destruction.

     17.4.3TENANT'S  RELEASE.  Landlord  shall not be  responsible  or liable to
     Tenant  for any  damages  or  destruction  to  Tenant's  Business  Personal
     Property  caused  by  Landlord's  employees,  agents,  visitors,  invitees,
     guests, or independent contractors  (collectively "Landlord's Associates"),
     and Tenant hereby releases Landlord from any claims, liabilities,  demands,
     losses, damages,  consequential damages, and the like, including reasonable
     attorneys'  fees and court costs  (collectively  "Claims")  resulting  from
     damage  or  destruction  to  Tenant's  Business  Personal  Property  caused
     directly or indirectly by Landlord and/or Landlord's Associates;  provided,
     however,  that  nothing  herein  shall  be  deemed  to  release  Landlord's
     independent  contractors  from  any such  Claims  Tenant  may have  against
     Landlord's independent contractors.

     17.4.4LANDLORD'S  RELEASE.  Tenant  shall not be  responsible  or liable to
     Landlord for any damages or  destruction to Landlord's  Property  caused by
     Tenant's  employees,  agents,  visitors,  invitees,  guests, or independent
     contractors  (collectively  "Tenant's  Associates"),  and  Landlord  hereby
     releases  Tenant from any Claims  resulting  from damage or  destruction to
     Landlord's Property caused directly or indirectly by Tenant and/or Tenant's
     Associates;  provided,  however,  that  nothing  herein  shall be deemed to
     release Tenant's independent  contractors from any such Claims Landlord may
     have against Tenant's independent contractors.

     17.4.5DAMAGE  TO  BUSINESS  AND  LOSS OF  RENTS.  In  light  of  Landlord's
     agreement  to carry  continuation  of rent  insurance  pursuant to ss. 14.3
     above and  Tenant's  agreement  to carry  business  interruption  insurance
     (extra expense insurance) in accordance with ss. 14.1.4 above, in the event
     that  Landlord's  Property  is damaged or  destroyed  because of any act or
     conduct,  negligent or otherwise,  by Tenant and/or by Tenant's Associates,
     Landlord  shall have no rights  against  Tenant by virtue of such damage or
     destruction, and Landlord hereby releases Tenant from all Claims, including
     claims for loss of rent, by Landlord directly or indirectly  resulting from
     the damage or destruction of


                     Oyster Point Marina Plaza Office Lease
              Kashiwa Fudosan America, Inc.::AccuImage Diagnostics
                                  page 29 of 53
exhibit 10.06 leas                              [Suite 201 (400 OPB); 2,933 rsf]


<PAGE>


     Landlord's  Property by conduct by Tenant  and/or by  Tenant's  Associates.
     Likewise,  in the event that Tenant's Business Personal Property is damaged
     or  destroyed  because of any act or conduct,  negligent or  otherwise,  by
     Landlord  and/or by  Landlord's  Associates,  Tenant  shall  have no rights
     against Landlord by virtue of such damage or destruction, and Tenant hereby
     releases  Landlord  from  all  Claims  by  Tenant  directly  or  indirectly
     resulting  from the damage or  destruction  to Tenant's  Business  Personal
     Property by the conduct of Landlord and/or Landlord's Associates, including
     Claims  for  loss  of  business  or loss of  profits.  Notwithstanding  the
     foregoing, nothing herein shall be deemed to release Tenant's or Landlord's
     independent contractors from any liability to Tenant and/or Landlord.

     17.4.6INJURY AND DEATH TO INDIVIDUALS.  Landlord and Tenant understand that
     waivers of subrogation do not apply to injury to and death of  individuals.
     Landlord and Tenant shall each carry insurance, as provided by this Article
     14, in connection  with injury and death to  individuals.  Landlord  hereby
     agrees to indemnify  and hold Tenant  harmless from any Claims which Tenant
     may otherwise have with respect to injury or death to individuals occurring
     within the  Property  but outside the  Premises,  except to the extent that
     such  injury  or death is  caused by  Tenant  and/or  Tenant's  Associates,
     through  negligence  or  otherwise,  and is not  covered  by the  insurance
     Landlord is required to carry under this Lease. Likewise,  Tenant agrees to
     indemnify,  defend, protect, and hold Landlord harmless from any Claims for
     injury  or death to  persons  occurring  within  the  Premises  or  caused,
     directly  or  indirectly,  by Tenant or  Tenant's  Associates  outside  the
     Premises,  except  to the  extent  such  injuries  or death  are  caused by
     Landlord and/or Landlord's Associates, through negligence or otherwise, and
     are not  covered by the  insurance  Tenant is  required to carry under this
     Lease.

     17.4.7ABATEMENT  OF RENT. Except as may be expressly  provided elsewhere in
     this Lease,  Tenant shall not be entitled to Rent  abatement  and shall not
     otherwise  have, and hereby  releases  Landlord from, any Claims  resulting
     from Tenant's inability to utilize all or any part of the Premises,  except
     to the extent that Tenant is unable to use all or any part of the  Premises
     and does not use all or any part of the Premises as a result of  Landlord's
     intentional decision to refuse to provide access to the Building and/or the
     Premises and/or to provide  services and/or utilities to Tenant as required
     to be provided by  Landlord  to Tenant  pursuant to this Lease,  where such
     refusal is not caused by a Force Majeure occurrence.

     17.4.8AVAILABILITY OF WAIVER OF SUBROGATION.  If an insurance policy cannot
     be  obtained  with a waiver of  subrogation  or is  obtainable  only by the
     payment of an  additional  premium  charge  above that charged by insurance
     companies  issuing  policies  without  waiver  of  subrogation,  the  party
     undertaking  to obtain the  insurance  shall notify the other party of this
     fact. The other party shall have a period of ten (10) days after  receiving
     the notice either to place the insurance  with a company that is reasonably
     satisfactory  to the other party and that will carry the  insurance  with a
     waiver  of  subrogation  at no  additional  cost  or to  agree  to pay  the
     additional  premium if such a policy is obtainable  at additional  cost. If
     the  insurance  cannot be  obtained or the party in whose favor a waiver of
     subrogation is desired refuses to pay the additional  premium charged,  the
     other party is relieved of the obligation to obtain a waiver of subrogation
     with respect to the particular insurance involved.

17.5 OTHER CASES OF DAMAGE OR INJURY.  In all cases not covered by the foregoing
provisions  of this  Article  14,  Tenant  hereby  assumes all risk of damage to
property or injury to persons in,  upon,  or about the  Premises  from any cause
other than the active  negligence or intentional  misconduct of Landlord and its
agent or employees.  Without limiting the generality of the foregoing,  Landlord
shall not be liable for injury or damage  which may be  sustained by the person,
goods, wares,  merchandise,  or property of


                     Oyster Point Marina Plaza Office Lease
              Kashiwa Fudosan America, Inc.::AccuImage Diagnostics
                                  page 30 of 53
exhibit 10.06 leas                              [Suite 201 (400 OPB); 2,933 rsf]


<PAGE>


     Tenant or Tenant's  Associates 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  Systems  and
     Equipment,  pipes, sprinklers,  wires, INC, appliances,  plumbing, heating,
     air-conditioning,  or lighting fixtures of the same,  whether the damage or
     injury  results  from  conditions  arising  upon the Premises or upon other
     portions of the  Property,  the Complex,  or from other  sources.  Landlord
     shall not be liable for any damages arising from any act or omission of any
     other  tenant or  occupant of the  Property  or  Complex.  In all cases not
     covered by the  foregoing  provisions  of this  Article  14,  Tenant  shall
     indemnify,  defend, protect, and hold Landlord harmless against (a) any and
     all Claims  arising from any death or injury to any person or damage to any
     property  whatsoever  occurring  in, on, or about the  Premises or any part
     thereof,  and (b) any and all Claims  occurring  in, on or about any of the
     Common Areas, the Property,  or the Complex,  when such injury or damage is
     caused in whole or in part by the act,  negligence,  fault,  or omission of
     any duty with respect to the same by Tenant or Tenant's Associates.  In all
     cases not covered by the  foregoing  provisions  of this Article 14, Tenant
     shall further indemnify,  defend,  protect, 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 this
     Lease,  or  arising  from  any act or  negligence  of  Tenant  or  Tenant's
     Associates,  and from and against all costs, attorneys' fees, expenses, and
     liabilities  incurred  in  connection  with any such Claim or any action or
     proceeding  brought  thereon.  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 in any case for damage to property  or death or injury to  person(s)
     occasioned by the active  negligence or intentional  misconduct of Landlord
     or Landlord's Associates, unless covered by insurance Tenant is required to
     provide.

                           (18) DAMAGE OR DESTRUCTION

18.1 LOSS  COVERED  BY  INSURANCE.  If at any time  prior to the  expiration  or
termination  of this Lease the  Premises or the  Property is wholly or partially
damaged or  destroyed  by any  casualty  which  results in a loss to Landlord is
fully covered by insurance  maintained by Landlord or for Landlord's benefit (or
required to be  maintained  by  Landlord  pursuant  to ss.  14.3  above),  which
casualty renders the Premises  totally or partially  inaccessible or unusable by
Tenant in the ordinary conduct of Tenant's business,  the parties agree that the
following  provisions shall modify their obligations under this Lease after such
damage or destruction.

     18.1.1REPAIRS  WHICH CAN BE COMPLETED WITHIN SIX (6) MONTHS.  Within thirty
     (30) days after  Tenant's  written  notice to  Landlord  of such  damage or
     destruction, Landlord shall provide Tenant with notice of its determination
     of whether the damage or destruction  can be repaired within six (6) months
     after the  commencement of the work of repairing such damage or destruction
     without  the  payment of  overtime  or other  premiums.  If all  repairs to
     Premises or Property can, in Landlord's judgement,  be completed within six
     (6) months  following the date of the commencement of the work of repairing
     such  damage or  destruction  without  the  payment  of  overtime  or other
     premiums,  Landlord shall, at Landlord's expense, repair the same; and this
     Lease shall  remain in full force and effect,  except that a  proportionate
     reduction  of the Base Rent shall be allowed  Tenant to the extent that the
     Premises shall be rendered  inaccessible  or unusable by Tenant and are not
     used by Tenant  during the period of time that such  portion is unusable or
     inaccessible and not used by Tenant.

     18.1.2REPAIRS  WHICH CANNOT BE COMPLETED WITHIN SIX (6) MONTHS. If all such
     repairs to the Property and Premises cannot,  in Landlord's  judgement,  be
     completed  within six (6) months  following the commencement of the work of
     repairing  such  damage or  destruction  without the payment of overtime or
     other premiums, Landlord shall notify Tenant of such determination;  and in


                     Oyster Point Marina Plaza Office Lease
              Kashiwa Fudosan America, Inc.::AccuImage Diagnostics
                                  page 31 of 53
exhibit 10.06 leas                              [Suite 201 (400 OPB); 2,933 rsf]


<PAGE>


     such an event,  either Landlord or Tenant may, at its option,  upon written
     notice to the other party given within sixty (60) days after the occurrence
     of such damage or destruction, elect to terminate this Lease as of the date
     of the occurrence of such damage or destruction.  In the event that neither
     Landlord nor Tenant elects to terminate  the Lease in  accordance  with the
     foregoing  provisions,  then Landlord shall, at Landlord's expense,  repair
     such damage or destruction; and in such event, this Lease shall continue in
     full force and effect,  except that the Base Rent shall be  proportionately
     reduced as provided in ss. 15.1.1  above;  provided,  however,  that if any
     such repair is not commenced by Landlord  within ninety (90) days after the
     occurrence of such damage or destruction or is not substantially  completed
     by Landlord  within nine (9) months after the  occurrence of such damage or
     destruction,  then in either such event  Tenant  may,  at its option,  upon
     written notice to Landlord, elect to terminate this Lease as of the date of
     Landlord's receipt of such notice.  Notwithstanding  the foregoing,  Tenant
     shall have no right to terminate this Lease in the situation just described
     if all of the  following  conditions  are  met:  (x)  Landlord  shall  have
     informed  Tenant in its  notice of  determination  that the  repair of such
     damage or  destruction  could not be  substantially  completed  by Landlord
     within nine (9) months after the occurrence of such damage or  destruction;
     (y) Tenant shall not have elected to terminate the Lease by written  notice
     delivered to Landlord  within sixty (60) days after the  occurrence of such
     damage or  destruction;  and (z) Landlord  shall have commenced the work of
     repairing such damage or destruction.

18.2 LOSS NOT COVERED BY  INSURANCE.  If at any time prior to the  expiration or
earlier  termination  of this Lease the  Premises or the  Property is totally or
partially  damaged or destroyed  in  connection  with a casualty,  which loss to
Landlord  is not fully  covered  by  insurance  maintained  by  Landlord  or for
Landlord's  benefit (or required to be  maintained  by Landlord  pursuant to ss.
14.3 above); and if such damage renders the Premises inaccessible or unusable to
Tenant  for their  intended  purpose  in the  ordinary  course of its  business,
Landlord  may, at its option,  upon written  notice given to Tenant within sixty
(60) days after  Tenant's  written  notice to Landlord of the occurrence of such
damage or  destruction,  either (a) elect to repair or to restore such damage or
destruction or (b) elect to terminate this Lease.  If Landlord  elects to repair
or restore such damage or  destruction,  this Lease shall continue in full force
and  effect,  except  that the Base Rent  shall be  proportionately  reduced  as
provided in ss. 15.1.1 above.  If Landlord does not elect by notice to Tenant to
repair such damage, the Lease shall terminate as of the date of Tenant's receipt
of Landlord's notice of election to terminate. Notwithstanding the foregoing, if
all repairs to the Premises or the Building  cannot,  in  Landlord's  reasonable
judgement,  be  completed  within  six  (6)  months  following  the  date of the
commencement  of the work of repairing  such damage or  destruction  without the
payment of overtime or other premiums, then either Landlord or Tenant may at the
option of either, upon written notice to the other party given within sixty (60)
days after the occurrence of such damage or destruction, elect to terminate this
Lease as of the date of such notice.

18.3  DESTRUCTION  DURING FINAL YEAR.  Notwithstanding  anything to the contrary
contained in ss.ss. 15.1 and15.2,  if the Premises or the Building are wholly or
partially  damaged or destroyed  within the final twelve (12) months of the Term
of this Lease or, if an applicable renewal option has been exercised, during the
last year of any renewal term, in such a way that Tenant shall be prevented from
using the Premises for at least thirty (30) consecutive days as a result of such
damage or  destruction,  then  either  Landlord  or Tenant may, at the option of
either,  by written notice to the other party  delivered  within sixty (60) days
after the occurrence of such damage or destruction, elect to terminate the Lease
as of the date of such notice.

18.4 DESTRUCTION OF TENANT'S PROPERTY.  Under no circumstances shall Landlord be
required  to  repair  any  injury  or  damage  to,  or make  any  repairs  to or
replacements  of, Tenant's  Property.  However,  as part of Operating  Expenses,
Landlord shall cause to be insured the Improvements in the Premises which do


                     Oyster Point Marina Plaza Office Lease
              Kashiwa Fudosan America, Inc.::AccuImage Diagnostics
                                  page 32 of 53
exhibit 10.06 leas                              [Suite 201 (400 OPB); 2,933 rsf]


<PAGE>


not  consist  of  Tenant's  Property  and shall  cause such  Improvements  to be
repaired and restored at Landlord's  sole expense,  except that Tenant shall pay
any  applicable  deductible.  Landlord  shall  have  no  responsibility  for any
contents  placed  or kept in or on the  Premises  or the  Property  by Tenant or
Tenant's employees or invitees or any other person claiming through Tenant.

18.5 EXCLUSIVE  REMEDY.  Landlord and Tenant agree that their respective  rights
and  obligations  in the event of any  damage or  destruction  of the  Premises,
Property,  or Complex shall be governed  exclusively by this Lease. Tenant, as a
material inducement to Landlord entering into this Lease, irrevocably waives and
releases  Tenant's rights under California Civil Code ss.ss.  1932(2),  1933(4),
and  1942,  as the same may be  modified  or  replaced  hereafter.  No  damages,
compensation,  setoff,  allowance, or claim shall be payable by Landlord for any
inconvenience,  interruption, or cessation of Tenant's business or any annoyance
arising from any damage to or destruction of all or any portion of the Premises,
Property, or Complex.

                              (19) EMINENT DOMAIN

19.1 CONDEMNATION. If the whole or any material part of the Premises or Property
shall be  taken  by  power of  eminent  domain  or  condemned  by any  competent
authority  for any public or  quasi-public  use or purpose;  or if any  adjacent
property or street  shall be so taken,  condemned,  reconfigured,  or vacated by
such  authority  in such  manner  as to  require  the  use,  reconstruction,  or
remodeling of any part of the Premises or Property; or if Landlord shall grant a
deed  or  other  instrument  in  lieu  of  such  taking  by  eminent  domain  or
condemnation  (collectively  "Takings"),  Landlord  shall  have  the  option  to
terminate  this Lease upon ninety  (90) days'  notice,  provided  such notice is
given no later than one  hundred  and  eighty  (180) days after the date of such
Taking.  Tenant shall have reciprocal  termination rights, on the same terms and
conditions  and to be  exercised  in the same manner as the  foregoing  sentence
provides,  if the whole or any  material  part of the  Premises  is  permanently
taken, or if access to the Premises is permanently materially impaired.

19.2 RENTAL APPORTIONMENT.  All Rent shall be apportioned as of the date of such
termination or the date of such Taking, whichever shall first occur. If any part
of the Premises shall be taken,  and this Lease shall not be so terminated,  the
Rent shall be proportionately abated.

19.3 AWARDS AND DAMAGES.  Landlord shall be entitled to receive the entire award
or payment in  connection  with any Taking,  except  that Tenant  shall have the
right to file any separate claim  available to Tenant for any taking of Tenant's
personal property and fixtures  belonging to Tenant and removable by Tenant upon
expiration of the Term, and for moving expenses,  so long as such claim does not
diminish the award available to Landlord and such claim is payable separately to
Tenant.

19.4 TEMPORARY CONDEMNATION.  If part or all of the Premises are condemned for a
limited period of time  ("Temporary  Condemnation"),  this Lease shall remain in
effect.  The Rent and Tenant's  obligations  for the part of the Premises  taken
shall abate during the Temporary  Condemnation  in proportion to the part of the
Premises that Tenant is unable to use in its business  operations as a result of
the  Temporary  Condemnation.  Landlord  shall  receive the entire award for any
Temporary Condemnation.

                         (20) ASSIGNMENT AND SUBLETTING

20.1 CONSENT  REQUIRED  FOR  TRANSFER.  Tenant  agrees that it shall not assign,
sublet, mortgage,  hypothecate,  or encumber this Lease, nor permit or allow the
Premises or any part thereof to be used or occupied by others, without the prior
written  consent of Landlord in each  instance.  The  actions  described  in the
foregoing  sentence  are  referred to  collectively  herein as  "Transfers"  and
individually  as a


                     Oyster Point Marina Plaza Office Lease
              Kashiwa Fudosan America, Inc.::AccuImage Diagnostics
                                  page 33 of 53
exhibit 10.06 leas                              [Suite 201 (400 OPB); 2,933 rsf]


<PAGE>


"Transfer." If the Premises or any part thereof be sublet or occupied by anybody
other than Tenant,  Landlord may, after default by Tenant, collect rent from the
subtenant  or  occupant  and apply the net amount  collected  to the Rent herein
reserved; but no Transfer,  occupancy, or collection shall be deemed a waiver of
the provisions hereof, the acceptance of the subtenant or occupant as tenant, or
a release of Tenant  from the  further  performance  hereunder  by  Tenant.  The
consent by Landlord to a Transfer  shall not relieve  Tenant from  obtaining the
Landlord's  express written consent to any further  Transfer.  In no event shall
any permitted sublessee assign or encumber its sublease or further sublet all or
any portion of its sublet space, or otherwise  suffer or permit the sublet space
or any part thereof to be used or occupied by others,  without  Landlord's prior
written consent in each instance.

     20.1.1CORPORATE  TRANSFEROR. If Tenant is a corporation,  the provisions of
     ss. 17.1 shall apply to a transfer (by one or more transfers) of a majority
     of the stock of Tenant as if such  transfer  of a majority  of the stock of
     Tenant were an assignment of this Lease.

20.2 NOTICE OF INTENT TO  TRANSFER.  If Tenant shall at any time or times during
the Term of this Lease  desire to assign this Lease or sublet all or part of the
Premises,  Tenant shall give notice thereof (the "Transfer Notice") to Landlord,
which notice shall set forth all of the following:

          (a)  the proposed terms of the assignment or subletting, including (i)
               the effective or  commencement  date thereof,  which shall be not
               less than thirty (30) nor more than one hundred eighty (180) days
               after the giving of such  notice;  (ii) in the case of a proposed
               assignment,  the consideration therefor; and (iii) in the case of
               a proposed subletting, the rental rate to be paid by the proposed
               subtenant  (including any escalation or Additional Rent payable),
               the  term  of  the  proposed  sublease   (including  any  renewal
               options),  any work to be  performed  or paid for by Tenant,  the
               amount  of any  security  deposit,  the  cost and  extent  of any
               so-called  "take-over"  obligations  to be  assumed  by Tenant on
               behalf of such subtenant,  the amount of any rent  concessions to
               be  granted  by  Tenant,  and any other  additional  monetary  or
               so-called "business" terms or conditions;

          (b)  a statement  setting forth in  reasonable  detail the identity of
               the proposed  assignee or subtenant,  the nature of its business,
               and its proposed use of the Premises; and

          (c)  current  financial  information  with  respect  to  the  proposed
               assignee  or  subtenant,  including  its  most  recent  financial
               report,  and  any  other  information  which  may  reasonably  be
               required by Landlord.

20.3 LANDLORD'S  RECAPTURE  RIGHT.  The Transfer Notice shall be deemed an offer
from Tenant to Landlord  whereby  Landlord (or Landlord's  designee) may, at its
option,  terminate this Lease as to all or the affected  portion of the Premises
(as the case may be) as of the effective date of the proposed Transfer. Landlord
may exercise its  recapture  right by notice to Tenant at any time within thirty
(30) days after Landlord's  receipt of Tenant's Transfer Notice; and during such
thirty-day  period  Tenant  shall not assign this Lease nor sublet such space to
any person.

     20.3.1DATE OF  TERMINATION.  If Landlord  exercises its option to terminate
     this Lease as provided  in ss. 17.3 above,  this Lease shall end and expire
     on the date that such Transfer was to be effective or commence, as the case
     may be, and the Base Rent and Additional Rent shall be paid and apportioned
     to such date.

20.4  CONDITIONS OF CONSENT.  If Landlord does not exercise its recapture  right
pursuant to ss. 17.3 above,  and providing  that Tenant is not in default of any
of Tenant's  obligations under this Lease after notice


                     Oyster Point Marina Plaza Office Lease
              Kashiwa Fudosan America, Inc.::AccuImage Diagnostics
                                  page 34 of 53
exhibit 10.06 leas                              [Suite 201 (400 OPB); 2,933 rsf]


<PAGE>


and the expiration of any  applicable  grace period,  Landlord's  consent (which
must be in writing  and in form  reasonably  satisfactory  to  Landlord)  to the
proposed  assignment or sublease shall not be unreasonably  withheld or delayed,
provided the following conditions are met:

          (a)  Tenant shall have complied with the provisions of ss. 17.2 above,
               and  Landlord  shall  not  have  exercised  its  recapture  right
               pursuant to ss. 17.3 above within the time permitted therefor;

          (b)  In  Landlord's  reasonable  judgement  the  proposed  assignee or
               subtenant is engaged in a business  which would use the Premises,
               or the  relevant  part  thereof,  in a manner which is in keeping
               with the  then-current  standards of the Building,  is limited to
               the use  expressly  permitted  under  this  Lease,  and  will not
               violate any negative  covenant or other  restriction or agreement
               as to use contained in any other lease of space in the Complex;

          (c)  The  proposed  assignee or  subtenant  is a  reputable  entity or
               person of good character and with reasonably sufficient financial
               worth considering the responsibility involved (and in no event of
               less financial standing than Tenant), is not subject to any toxic
               or hazardous  materials  cleanup  order with respect to any other
               property,  and Landlord has been furnished with reasonable  proof
               thereof;

          (d)  Neither the proposed  assignee or sublessee nor any person which,
               directly or indirectly,  controls,  is controlled by, or is under
               common  control with,  the proposed  assignee or sublessee or any
               person who controls the proposed  assignee or sublessee,  is then
               an occupant of any part of the Complex,  provided  Landlord  then
               has suitable  space in the Complex  available  for  leasing.  For
               purposes of this Lease CONTROL shall be deemed to mean  ownership
               of more than fifty  percent  (50%) of all the  voting  stock of a
               corporation or more than fifty percent (50%) of all the legal and
               equitable interest in any other business entity;

          (e)  The proposed assignee or sublessee is not a person or entity with
               whom Landlord is then negotiating to lease space in the Building;

          (f)  The  form of the  proposed  lease  shall  be in  form  reasonably
               satisfactory  to Landlord  and shall  comply with the  applicable
               provisions of this Article 17;

          (g)  There shall not be more than two (2)  subtenants  (not  including
               the  Permitted  Occupant  (as defined in ss.  17.14 below) of the
               Premises);

          (h)  The  amount  of the  aggregate  rent to be  paid by the  proposed
               subtenant  is not less  than  the  then-current  market  rent per
               rentable  square foot for  comparable  space in the  Complex,  as
               though the Premises  were vacant,  and the rental and other terms
               and conditions of the sublease are the same as those contained in
               the  proposed  sublease  furnished  to Landlord  in the  Transfer
               Notice pursuant to ss. 17.2 above;

          (i)  Tenant  shall  reimburse  Landlord  on demand for any  reasonable
               costs that may be incurred  or paid by Landlord to third  persons
               in connection with said  assignment or sublease,  including costs
               of making  investigations as to the acceptability of the proposed
               assignee or subtenant and legal costs incurred in connection with
               the granting of any requested consent; and

          (j)  Tenant shall not have  advertised  or  publicized  in any way the
               availability of the Premises without prior notice to and approval
               by  Landlord,  nor  shall  any


                     Oyster Point Marina Plaza Office Lease
              Kashiwa Fudosan America, Inc.::AccuImage Diagnostics
                                  page 35 of 53
exhibit 10.06 leas                              [Suite 201 (400 OPB); 2,933 rsf]


<PAGE>


               advertisement  state the name (as distinguished from the address)
               of the Complex or the rental rate;

          (k)  Tenant  shall not have  listed the  Premises  for  subletting  or
               assignment at a rental rate less than the greater of (i) the Base
               Rent and Additional Rent then payable hereunder for such space or
               (ii) the Base Rent and Additional  Rent at which Landlord is then
               offering to lease other comparable space in the Building; and

          (l)  The sublease  shall not allow the use of the Premises or any part
               thereof  for  (i)  the  sale  of  food  for  on  or  off-premises
               consumption  or (ii) use by a foreign  or  domestic  governmental
               agency.

20.5  CONTINUATION OF LEASE TERMS.  Each subletting  pursuant to this Article 17
shall be subject to all of the covenants,  agreements,  terms,  provisions,  and
conditions  contained in this Lease.  Notwithstanding any such subletting to any
other subtenant and/or acceptance of Rent by Landlord from any subtenant, Tenant
shall remain liable for the payment of the Base Rent and Additional Rent due and
to  become  due  hereunder  and  for  the  performance  of  all  the  covenants,
agreements,  terms,  provisions,  and conditions  contained in this Lease on the
part of Tenant to be  performed  and all acts and  omissions  of any licensee or
subtenant or anyone  claiming  under or through any subtenant  which shall be in
violation of any of the obligations of this Lease;  and any such violation shall
be  deemed  to  be  a  violation   by  Tenant.   Tenant   further   agrees  that
notwithstanding  any such  subletting,  no other and further  subletting  of the
Premises  by Tenant or any person or entity  claiming  through  or under  Tenant
shall or will be made except upon  compliance with and subject to the provisions
of this  Article  17. If  Landlord  shall  decline  to give its  consent  to any
proposed  assignment or sublease,  or if Landlord  shall  exercise its recapture
right under ss. 17.3 above, Tenant shall indemnify,  defend,  protect,  and hold
Landlord  harmless against and from any and all Claims resulting from any Claims
that may be made against  Landlord by the  proposed  assignee or sublessee or by
any brokers or other persons  claiming a commission or similar  compensation  in
connection with the proposed assignment or sublease.

20.6  LAPSE OF  CONSENT.  In the event  that  Landlord  consents  to a  proposed
Transfer  described  in the  Transfer  Notice  and Tenant  fails to execute  and
deliver the  assignment  or sublease  described in the Transfer  Notice to which
Landlord consented within one hundred twenty (120) days after the giving of such
consent,  then  Tenant  shall  again  comply  with  all  of the  provisions  and
conditions of ss. 17.2 above before  assigning  this Lease or subletting  all or
part of the Premises.

20.7 TRANSFER DOCUMENTATION.  With respect to each and every Transfer authorized
by Landlord under the provisions of this Lease, it is further agreed as follows:

          (a)  no subletting shall be for a term ending later than one day prior
               to the Expiration Date of this Lease;

          (b)  no  sublease  shall  be  valid,   and  no  subtenant  shall  take
               possession of the Premises or any part thereof, until an executed
               counterpart of such sublease has been delivered to Landlord;

          (c)  each sublease shall provide that it is subject and subordinate to
               this Lease and to the  matters to which this Lease is or shall be
               subordinate,  and that in the event of  termination  (whether  by
               voluntary surrender or otherwise),  re-entry, or dispossession by
               Landlord under this Lease, Landlord may, at its option, take over
               all of the right,  title,  and interest of Tenant,  as sublessor,
               under such  sublease,  and such  subtenant  shall,  at Landlord's
               option,   attorn  to  Landlord  pursuant  to  the


                     Oyster Point Marina Plaza Office Lease
              Kashiwa Fudosan America, Inc.::AccuImage Diagnostics
                                  page 36 of 53
exhibit 10.06 leas                              [Suite 201 (400 OPB); 2,933 rsf]


<PAGE>


               then-executory  provisions of such sublease, except that Landlord
               shall not be (i)  liable  for any  previous  act or  omission  of
               Tenant under such sublease;  (ii) subject to any offset,  credit,
               or  allowance  not  expressly  provided  in such  sublease  which
               theretofore  accrued to such  subtenant  against  Tenant or (iii)
               bound by any  previous  modification  of such  sublease or by any
               previous prepayment of more than one month's rentals; and

          (d)  each  assignment  or  sublease  document  must  provide  that the
               assignee or subtenant  expressly  assumes all  obligations of the
               Tenant under the Lease as joint and several  obligations  without
               any release of Tenant.

20.8 TRANSFER  PREMIUM.  If Landlord shall give its consent to any assignment of
this Lease or to any  sublease,  Tenant shall in  consideration  therefor pay to
Landlord,  as Additional Rent, the following amounts (collectively the "Transfer
Premium"):

          (a)  in the case of an  assignment,  an amount equal to fifty  percent
               (50%) of all sums and other  considerations paid to Tenant by the
               assignee for or by reason of such assignment, including sums paid
               for the sale of Tenant's  Property,  but excluding the following:
               (i) in the case of a sale of Tenant's Property,  the then-current
               net unamortized or undepreciated  cost thereof  determined on the
               basis of Tenant's federal income tax returns; (ii) then-customary
               brokerage commissions being paid by Landlord for leasing of space
               in the Building or, if less,  the  brokerage  commission  paid by
               Tenant in connection with the assignment;  (iii) reasonable legal
               fees and  disbursements;  and  (iv)  reasonable  amounts  paid by
               Tenant for tenant improvements constructed for the assignee; and

          (b)  in the case of a  sublease,  fifty  percent  (50%) of any  rents,
               additional  charge,  or other  consideration  payable  under  the
               sublease  to  Tenant by the  subtenant  which is in excess of the
               Base Rent and  Additional  Rent  accruing  during the term of the
               sublease  in  respect  of the  subleased  space  (at the rate per
               square foot  payable by Tenant  hereunder)  pursuant to the terms
               hereof,  including  sums paid for the sale or rental of  Tenant's
               Property,  but  excluding the  following:  (i) in the case of the
               sale  or  lease  of  Tenant's  Property,   the  then-current  net
               unamortized or undepreciated cost thereof determined on the basis
               of  Tenant's  federal  income tax  returns;  (ii)  then-customary
               brokerage commissions being paid by Landlord for leasing of space
               in the Building or, if less,  the  brokerage  commission  paid by
               Tenant in connection with the sublease;  (iii)  reasonable  legal
               fees and  disbursements;  and  (iv)  reasonable  amounts  paid by
               Tenant for tenant improvements constructed for the subtenant.

The sums  payable as the Transfer  Premium  under this ss. 17.8 shall be paid to
Landlord as and when payable by the subtenant or assignee to Tenant.

20.9 ASSUMPTION BY TRANSFEREE Any Transfer, whether made with Landlord's consent
pursuant to ss. 17.1 or without Landlord's consent pursuant to ss. 17.1.1, shall
be made only if, and shall not be  effective  until,  the  assignee or subtenant
shall  execute,  acknowledge,  and deliver to Landlord an  agreement in form and
substance  satisfactory to Landlord under which the assignee or transferee shall
assume the  obligations  of this Lease on the part of Tenant to be  performed or
observed,  from and after the date of  Transfer,  and  whereby  the  assignee or
transferee  shall agree that the  provisions in ss. 17.1 shall,  notwithstanding
such  Transfer,  continue  to be  binding  upon  it in  respect  of  all  future
Transfers.  The  original  named  Tenant  covenants  that,  notwithstanding  any
Transfer,  whether or not in  violation  of the


                     Oyster Point Marina Plaza Office Lease
              Kashiwa Fudosan America, Inc.::AccuImage Diagnostics
                                  page 37 of 53
exhibit 10.06 leas                              [Suite 201 (400 OPB); 2,933 rsf]


<PAGE>


provisions of this Lease, and notwithstanding the acceptance of Base Rent and/or
Additional  Rent by Landlord from an assignee,  transferee,  or any other party,
the original  named Tenant shall remain fully liable for the payment of the Base
Rent and Additional Rent and for the other obligations of this Lease on the part
of Tenant to be performed or observed.

20.10 NO WAIVER OR DISCHARGE.  The joint and several liability of Tenant and any
immediate or remote  successor in interest of Tenant and the due  performance of
the obligations of this Lease on Tenant's part to be performed or observed shall
not be  discharged,  released,  or impaired in any respect by any  agreement  or
stipulation  made by Landlord  extending  the time of, or  modifying  any of the
obligations  of, this Lease,  or by any waiver or failure of Landlord to enforce
any of the obligations of this Lease.

20.11  LISTING  OF NAME.  The  listing  of any name  other  than that of Tenant,
whether on the doors of the Premises or the Building  directory,  or  otherwise,
shall  not  operate  to vest  any  right  or  interest  in this  Lease or in the
Premises,  nor shall it be deemed to be the consent of Landlord to any  Transfer
of this Lease or to any  sublease of the  Premises or to the use or occupancy of
the Premises by others.

20.12 NET PROFITS AGREEMENT.  Anything contained in the foregoing  provisions of
this Article 17 to the contrary  notwithstanding,  neither  Tenant nor any other
person or entity  having an  interest  in the  possession,  use,  occupancy,  or
utilization  of the  Premises  shall  enter into any lease,  sublease,  license,
concession,  or other agreement for use,  occupancy,  or utilization of space in
the Premises which provides for rental or other payment for such use, occupancy,
or utilization  based, in whole or in part, on the net income or profits derived
by any person from the premises leased, used, occupied,  or utilized (other than
an amount based on a fixed percentage or percentages of receipts or sales);  and
any such purported  lease,  sublease,  license,  concession,  or other agreement
shall be  absolutely  void  and  ineffective  as a  conveyance  of any  right or
interest in the possession,  use,  occupancy,  or utilization of any part of the
Premises.

20.13 AFFILIATES.  Notwithstanding  anything to the contrary in this Article 17,
Landlord's  consent shall not be required in the event Tenant  desires to assign
this Lease or sublet the Premises or any portion  thereof to any  corporation or
entity which controls, is controlled by, or is under common control with Tenant,
provided and subject to the following conditions:

          (a)  Tenant shall not be in default of any of the terms, covenants, or
               conditions on Tenant's part to observe or perform hereunder;

          (b)  such sublet or  assignment  shall be subject to all of the terms,
               covenants, and conditions of this Lease;

          (c)  Tenant  shall  notify  Landlord of such sublet or  assignment  in
               accordance  with  ss.  17.2  hereof  and  furnish  Landlord  with
               reasonably  satisfactory evidence that such sublessee or assignee
               controls,  is  controlled  by, or is under  common  control  with
               Tenant; and

          (d)  in the  event  of such  merger,  consolidation,  or  transfer  of
               substantially all of Tenant's assets, the successor to Tenant has
               a net  worth,  computed  in  accordance  with  generally-accepted
               accounting  principles,  at least equal to the greater of (i) the
               net  worth  of   Tenant   immediately   prior  to  such   merger,
               consolidation, or transfer or (ii) the net worth of Tenant herein
               named  on the  date of this  Lease;  and  proof  satisfactory  to
               Landlord of such net worth shall have been  delivered to Landlord
               at least ten (10) days  prior to the  effective  date of any such
               transaction.


                     Oyster Point Marina Plaza Office Lease
              Kashiwa Fudosan America, Inc.::AccuImage Diagnostics
                                  page 38 of 53
exhibit 10.06 leas                              [Suite 201 (400 OPB); 2,933 rsf]


<PAGE>


As used herein,  the terms  CONTROL and COMMON  CONTROL  shall be deemed to mean
that the  ownership  of fifty  percent  (50%) or more of all of the  issued  and
outstanding voting shares of such corporation, or fifty percent (50%) or more of
all the legal and equitable interest in any such business entities.

20.14  PERMITTED  OCCUPANTS.  Landlord hereby agrees that the provisions of this
Article 17 shall not apply to the shared occupancy of individual  offices in the
Premises  with Tenant by  individuals  renting not more than one (1) such office
(the  "Permitted  Occupant"),  provided that the space occupied by the Permitted
Occupant  shall  not  be  separately  demised  or  contain  separate  entrances,
demarcations,  or reception  areas and the occupancy by the  Permitted  Occupant
shall be upon and subject to all of the terms and conditions of this Lease.

                       (21) SUBORDINATION AND ATTORNMENT

21.1  SUBORDINATION OF LEASE.  This Lease and all rights of Tenant hereunder are
and shall be subject and  subordinate  in all respects to (a) all ground leases,
overriding leases, and underlying leases of the Building,  Property,  and/or the
Complex now or hereafter existing;  (b) all mortgages which may now or hereafter
affect the Building, Property, or Complex and any of such leases, whether or not
such mortgages shall also cover other lands and/or buildings; (c) each and every
advance  made or  hereafter  to be made  under  such  mortgages;  and (d) to all
renewals,  modifications,  replacements,  and extensions of such leases and such
mortgages and  spreaders and  consolidations  of such  mortgages.  This ss. 18.1
shall be  self-operative,  and no further  instrument of subordination  shall be
required.  In confirmation of such subordination,  Tenant shall promptly execute
and deliver any instrument  that  Landlord,  the lessor of any such lease or the
holder ("Holder") of any such mortgage or any of their respective  successors in
interest may reasonably  request to evidence such  subordination.  The leases to
which this Lease is, at the time referred to, subject and  subordinate  pursuant
to this Article 18 are hereinafter  sometimes  referred to as "Superior Leases";
the  mortgages  to which this Lease is, at the time  referred  to,  subject  and
subordinate are hereinafter sometimes referred to as "Superior  Mortgages";  and
the lessor of a superior lease or its successor in interest at the time referred
to is  sometimes  hereinafter  referred  to as a "Lessor."  Notwithstanding  the
foregoing,  Tenant agrees,  upon written  request from Landlord or any Holder or
Lessor,  to reorder  the  relative  priority  of the Lease  with  respect to any
particular  Superior Mortgage or Superior Lease so as to subordinate the lien of
any such  Superior  Mortgage or Superior  Lease to the Lease.  Tenant  agrees to
execute  any  instrument  which  Landlord or any Holder or Lessor may present in
order to effect such prioritization of the Lease,  provided that such instrument
does not modify any material term of the Lease or increase Tenant's  obligations
thereunder.

21.2 NOTICE AND CURE  RIGHT.  In the event of any action or omission of Landlord
which  would give  Tenant the right,  immediately  or after lapse of a period of
time,  to  cancel  or  terminate  this  Lease,  or to claim a  partial  or total
eviction, Tenant shall not exercise such right unless and until (i) Tenant shall
have given written notice of such act or omission to the Holder of each Superior
Mortgage  and the Lessor of each  Superior  Lease whose name and  address  shall
previously have been furnished to Tenant in writing; and (ii) unless such act or
omission shall be one which is not capable of being remedied by Landlord or such
mortgage  Holder or Lessor  within a  reasonable  period of time,  a  reasonable
period for  remedying  such act or omission  shall have  elapsed  following  the
giving of such notice and  following  the time when such Holder or Lessor  shall
have become entitled under such Superior Mortgage or Superior Lease, as the case
may be, to remedy the same (which  reasonable  period  shall in no event be less
than the  period  to  which  Landlord  would be  entitled  under  this  Lease or
otherwise, after similar notice, to effect such remedy), provided such Holder or
Lessor  shall with due  diligence  give Tenant  written  notice of  intention to
remedy such act or omission and shall  thereafter  diligently  and  continuously
prosecute such cure to completion.


                     Oyster Point Marina Plaza Office Lease
              Kashiwa Fudosan America, Inc.::AccuImage Diagnostics
                                  page 39 of 53
exhibit 10.06 leas                              [Suite 201 (400 OPB); 2,933 rsf]


<PAGE>


21.3  ATTORNMENT.  If the Lessor of a Superior Lease or the Holder of a Superior
Mortgage  shall  succeed to the rights of  Landlord  under this  Lease,  whether
through  possession  or  foreclosure  action or delivery of a new lease or deed,
then at the request of such party so succeeding  to  Landlord's  rights or other
person having or acquiring  title by virtue of such  foreclosure  or termination
(herein sometimes  referred to as "Successor  Landlord") and upon such Successor
Landlord's written agreement to accept Tenant's attornment,  Tenant shall attorn
to and recognize such Successor  Landlord as Tenant's  landlord under this Lease
and shall  promptly  execute  and  deliver any  instrument  that such  Successor
Landlord  may  reasonably  request  to  evidence  such  attornment.   Upon  such
attornment  this Lease shall continue in full force and effect as a direct lease
between the Successor Landlord and Tenant upon all of the terms, conditions, and
covenants in this Lease, except as follows:

          (a)  the Successor  Landlord  shall not be liable for any previous act
               or omission of Landlord under this Lease;

          (b)  the Successor Landlord shall not be subject to any offset (unless
               expressly   provided   for  in  this  Lease)   which  shall  have
               theretofore accrued to Tenant against Landlord;

          (c)  the  Successor  Landlord  shall  not be  bound  by  any  previous
               modification of this Lease, unless expressly provided for in this
               Lease,  or by any  previous  prepayment  of more than one month's
               Base Rent, unless such modification or prepayment shall have been
               expressly approved in writing by the Lessor of the Superior Lease
               or the Holder of the  Superior  Mortgage  through or by reason of
               which the Successor  Landlord  shall have succeeded to the rights
               of Landlord under this Lease.

                          (22) FINANCING REQUIREMENTS

22.1 LENDER-REQUESTED MODIFICATIONS.  If, in connection with obtaining financing
or  refinancing  for the Property or Complex a prospective  lender shall request
reasonable  modifications  to this Lease as a  condition  to such  financing  or
refinancing,  Tenant shall not withhold,  delay, or  unreasonably  condition its
consent  thereto.  It is agreed  that,  among the  modifications  which shall be
deemed  reasonable,  are  modifications  to  the  subordination  and  attornment
provisions of this Lease,  modifications to the notice provisions of this Lease,
modifications  to the  provisions  of this Lease which permit the lender to cure
any  defaults by  Landlord,  and  modifications  to the  provisions  which grant
additional time to cure as may be reasonably required by the lender.

22.2  FAILURE TO COMPLY.  If Tenant  fails or refuses to execute  and deliver to
Landlord,  within  fifteen  (15)  days  after  written  notice  to  do  so,  the
amendment(s)  to  this  Lease  accomplishing  such  reasonable  modification(s),
Landlord,  at its sole option, shall have the right either (a) to terminate this
Lease or (b) to  execute  the  amendment  for and on  behalf  of  Tenant  as its
attorney-in-fact.   Tenant   hereby   irrevocably   appoints   Landlord  as  its
attorney-in-fact  solely to  execute  any  documents  required  to carry out the
intent of ss. 19.1 above on behalf of Tenant.

                                  (23) DEFAULT

23.1 TENANT'S DEFAULT.  Tenant's failure to perform any of its obligations under
this Lease  when due and in the  manner  required  shall  constitute  a material
breach and default ("Event of Default") of this Lease by Tenant,  subject to any
cure period(s)  permitted or available  under  applicable  laws or statutes.  In
addition, the following shall also be deemed Events of Default hereunder:


                     Oyster Point Marina Plaza Office Lease
              Kashiwa Fudosan America, Inc.::AccuImage Diagnostics
                                  page 40 of 53
exhibit 10.06 leas                              [Suite 201 (400 OPB); 2,933 rsf]


<PAGE>


          (a)  Tenant's  failure to take possession of the Premises for a period
               of sixty (60) days or longer after the Commencement Date;

          (b)  Tenant's abandonment or vacation of the Premises;

          (c)  any  material  misrepresentation  or  omission  herein  or in any
               financial statements or other materials provided by Tenant or any
               Guarantor in connection  with  negotiating or entering this Lease
               or in connection with any Transfer under Article 17;

          (d)  cancellation of any guaranty of this Lease by any Guarantor;

          (e)  failure by Tenant to cure within any applicable  times  permitted
               thereunder  any  default  under any other  lease for space in the
               Complex or any other  buildings  owned or managed by  Landlord or
               its  affiliates  now or  hereafter  entered  by  Tenant;  and any
               Default  hereunder not cured within the times  permitted for cure
               herein shall, at Landlord's election,  constitute a default under
               any other such lease or leases;

          (f)  The levy of a writ of attachment or execution on this Lease or on
               any of Tenant's property;

          (g)  Tenant's or any Guarantor's general assignment for the benefit of
               creditors or arrangement,  composition,  extension, or adjustment
               with its creditors;

          (h)  Tenant's or any  Guarantor's  filing of a voluntary  petition for
               relief,  or  the  filing  of a  petition  against  Tenant  or any
               Guarantor in a proceeding  under the Federal  Bankruptcy  laws or
               other  insolvency laws which is not withdrawn or dismissed within
               forty-five (45) days thereafter;  or, under the provisions of any
               law providing for  reorganization  or winding up of corporations,
               the  assumption  by  any  court  of  competent   jurisdiction  of
               jurisdiction,  custody,  or control of Tenant or any  substantial
               part  of  its  property,   or  of  any   Guarantor,   where  such
               jurisdiction,    custody,    or   control    remains   in   force
               unrelinquished,  unstayed,  or unterminated for a period of forty
               five (45) days;

          (i)  In any  proceeding  or  action in which  Tenant  is a party,  the
               appointment of a trustee,  receiver,  agent, or custodian to take
               charge of the  Premises or Tenant's  Property  for the purpose of
               enforcing a lien against the Premises or Tenant's Property; or

          (j)  If Tenant or any Guarantor is a  partnership  or consists of more
               than one (1) person or entity,  the involvement of any partner of
               the  partnership  or other person or entity in any of the acts or
               events described in subsections (i) through (l) above.

23.2 LANDLORD'S REMEDIES.  Upon the occurrence of an Event of Default hereunder,
Landlord  shall have the right,  in  addition  to any other  rights or  remedies
Landlord may have under Laws, at Landlord's  option,  without  further notice or
demand of any kind, to elect to do one of the following alternatives:

               (i)  Terminate this Lease and Tenant's right to possession of the
                    Premises,   re-enter  the  Premises,   and  take  possession
                    thereof;  and  Tenant  shall  have no  further  claim to the
                    Premises or under this Lease; or


                     Oyster Point Marina Plaza Office Lease
              Kashiwa Fudosan America, Inc.::AccuImage Diagnostics
                                  page 41 of 53
exhibit 10.06 leas                              [Suite 201 (400 OPB); 2,933 rsf]


<PAGE>


               (ii) Continue this Lease in effect and collect any unpaid Rent or
                    other  charges  which  have  theretofore  accrued  or  which
                    thereafter become due and payable.  It is intended hereunder
                    that Landlord have the remedy  described in California Civil
                    Code ss. 1951.4, which provides that a landlord may continue
                    a lease in effect  after a tenant's  breach and  abandonment
                    and recover  rent as it becomes due, if tenant has the right
                    to  sublease   or  assign,   subject   only  to   reasonable
                    limitations.

In the event of any re-entry or retaking of  possession  by  Landlord,  Landlord
shall  have the  right,  but not the  obligation,  to remove  all or any part of
Tenant's  Property  from the Premises and to place such property in storage at a
public warehouse at the expense and risk of Tenant.

23.2.1NO WAIVER OF  DEFAULT.  The waiver by  Landlord of any Event of Default or
      of any other  breach of any term,  covenant,  or  condition  of this Lease
      shall not be deemed a waiver of such term,  covenant,  or  condition or of
      any  subsequent  breach  of the  same  or any  other  term,  covenant,  or
      condition.  Acceptance  of Rent by  Landlord  subsequent  to any  Event of
      Default  or breach  hereof  shall not be deemed a waiver of any  preceding
      Event of Default or breach  other than the  failure to pay the  particular
      Rent so accepted,  regardless of Landlord's knowledge of any breach at the
      time of such  acceptance  of Rent.  Landlord  shall  not be deemed to have
      waived any term,  covenant,  or condition of this Lease,  unless  Landlord
      gives Tenant  written  notice of such waiver.  Tenant should not rely upon
      Landlord's failure or delay in enforcing any right or remedy hereunder.

     23.2.2LANDLORD'S  RIGHT TO CURE. If Tenant  defaults in the  performance of
     any of its  obligations  under this Lease,  Landlord  may (but shall not be
     obligated  to),  without  waiving  such  default,  perform the same for the
     account and at the expense of Tenant.  Tenant  shall pay Landlord all costs
     of such performance promptly upon receipt of a bill therefor.

23.3 DAMAGES. Should Landlord elect to terminate this Lease under the provisions
of ss.  20.2 (i)  above,  Landlord  may  recover  as  damages  from  Tenant  the
following:

     (a)  PAST RENT: The worth at the time of the award of any unpaid Rent which
          had been earned at the time of termination; plus

     (b)  RENT PRIOR TO AWARD:  The worth at the time of the 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 Tenant proves could have been reasonably avoided; plus

     (c)  RENT AFTER AWARD:  The worth at the time of the award of the amount by
          which the  unpaid  Rent for the  balance of the Term after the time of
          award  exceeds the amount of the rental loss that Tenant  proves could
          have been reasonably avoided; plus

     (d)  PROXIMATELY  CAUSED DAMAGES:  Any other amount necessary to compensate
          Landlord for all 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 therefrom,  including,  but
          not  limited to, any costs or expenses  (including  attorneys'  fees),
          incurred by Landlord in (i) retaking possession of the Premises;  (ii)
          maintaining the Premises after Tenant's  default;  (iii) preparing the
          Premises  for  reletting  to a new  tenant,  including  any repairs or
          alterations;  and (iv)  reletting  the  Premises,  including  brokers'
          commissions.

"The worth at the time of the award" as used in subsections (a) and (b) above is
to be computed by allowing  interest at the rate of ten percent  (10%) per annum
or, if different,  the legal rate then  applicable


                     Oyster Point Marina Plaza Office Lease
              Kashiwa Fudosan America, Inc.::AccuImage Diagnostics
                                  page 42 of 53
exhibit 10.06 leas                              [Suite 201 (400 OPB); 2,933 rsf]


<PAGE>


in  California.  "The worth at the time of the award" as used in subsection  (c)
above is to be computed by  discounting  the amount at the discount  rate of the
Federal  Reserve Bank situated  nearest to the Premises at the time of the award
plus one percent (1%).

23.4 LANDLORD'S DEFAULT.  If Landlord fails to perform any covenant,  condition,
or agreement  contained in this Lease within  thirty (30) days after  receipt of
written  notice  from  Tenant  specifying  a  default  and  the  relevant  Lease
provision,  or if Landlord fails within that  thirty-day  period after notice to
commence to cure any such default which cannot reasonably be cured within thirty
(30) days, then,  subject to ss. 21.1 below,  Landlord shall be liable to Tenant
for any damages  sustained by Tenant as a result of  Landlord's  breach.  Tenant
shall not have the right to  terminate  this Lease or to  withhold,  reduce,  or
offset any amount  against  any  payments  of Rent or any other  charges due and
payable under this Lease,  except to the extent that a specific Lease  provision
permits such termination or withholding, reduction, or offset of Rent.

23.5 HOLDER'S RIGHT TO CURE.  Tenant shall give any Holder a copy, by registered
mail,  of any notice of default  served  upon  Landlord,  provided  that  Tenant
previously  has been  notified  in writing of the  address  of such  Holder.  If
Landlord fails to cure such default within the time provided in this Lease,  any
such Holder shall have an additional  forty-five  (45) days within which to cure
such default by Landlord or, if such default  cannot  reasonably be cured within
that time, such  additional time as may be necessary,  provided that within such
forty-five (45) day period the Holder has commenced and is pursuing the remedies
necessary  to  cure  such  default   (including   commencement   of  foreclosure
proceedings,  if necessary to effect such cure), in which event this Lease shall
not be terminated while such remedies are being so pursued.

23.6  SURVIVAL OF REMEDIES.  The remedies  permitted  under this Article 20, the
parties' indemnities under ss.ss. 14.4.3, 14.4.4,  and14.4.5, and ss. 29.5 below
shall survive the termination of this Lease.

                    (24) LIMITATIONS ON LANDLORD'S LIABILITY

24.1 PERSONAL LIABILITY.  The liability of Landlord to Tenant for any default by
Landlord under this Lease or arising in connection  herewith or with  Landlord's
operation,  management,  leasing, repair,  renovation,  alteration, or any other
matter relating to the Property or the Premises shall be limited to the interest
of  Landlord  in the  Property  (and  the  rental  proceeds  thereof).  Under no
circumstances  shall  Landlord  ever be liable  for  consequential  or  punitive
damages, including damages for lost profits or for business interruption. Tenant
agrees to look solely to  Landlord's  interest in the  Property  (and the rental
proceeds  thereof)  for the  recovery of any  judgement  against  Landlord,  and
Landlord  shall not be  personally  liable for any such  judgement or deficiency
after execution thereon.  The limitations of liability contained in this Article
21 shall apply equally and inure to the benefit of Landlord's present and future
partners,  beneficiaries,  officers, directors, trustees, shareholders,  agents,
and employees, and their respective partners,  heirs,  successors,  and assigns.
Under no circumstances shall any present or future general or limited partner of
Landlord (if Landlord is a partnership),  or trustee or beneficiary (if Landlord
or any  partner of  Landlord  is a trust) or  corporate  officer,  director,  or
shareholder (if Landlord or any partner of Landlord is a corporation or company)
or member (if Landlord is a limited  liability  company)  have any liability for
the performance of Landlord's obligations under this Lease.

24.2 LIABILITY UPON TRANSFER. The term LANDLORD as used in this Lease, so far as
covenants or  obligations  on the part of the Landlord are  concerned,  shall be
limited to mean and include  only the owner or owners,  at the time in question,
of the fee title to, or a lessee's interest in a ground lease or master lease of
the Property. In the event of any transfer,  assignment,  or other conveyance or
transfer of


                     Oyster Point Marina Plaza Office Lease
              Kashiwa Fudosan America, Inc.::AccuImage Diagnostics
                                  page 43 of 53
exhibit 10.06 leas                              [Suite 201 (400 OPB); 2,933 rsf]


<PAGE>


any such title or interest,  Landlord  herein  named (and in case of  subsequent
transfers or conveyances,  the current grantor) shall be automatically freed and
relieved from and after the date of such transfer,  assignment, or conveyance of
all liability with respect to the performance of any covenants or obligations on
the part of Landlord  contained in this Lease  thereafter to be performed;  and,
without  further  agreement,  the  transferee of such title or interest shall be
deemed to have assumed and agreed to observe and perform any and all obligations
of Landlord  hereunder,  during its  ownership  of the  Premises.  Landlord  may
transfer its interest in the  Premises  without the consent of Tenant,  and such
transfer or  subsequent  transfer  shall not be deemed a violation on Landlord's
part of any of the terms and conditions of this Lease.

                           (25) ESTOPPEL CERTIFICATES

25.1 REQUEST AND DELIVERY.  Within ten (10) days  following any written  request
Landlord may make from time to time,  Tenant without any charge therefor,  shall
execute,  acknowledge, and deliver a statement certifying the following: (a) the
Commencement  Date of this Lease; (b) the fact that this Lease is unmodified and
in full force and effect or, if there have been modifications  hereto, that this
Lease is in full force and effect, as modified,  and stating the date and nature
of such  modifications;  (c) the date to which the Rent and other  sums  payable
under this Lease have been paid; (d) the fact that there are no current defaults
under  this  Lease by either  Landlord  or Tenant  except  as  specified  in the
statement;  and  (e)  such  other  matters  as may be  reasonably  requested  by
Landlord.  Landlord and Tenant intend that any statement  delivered  pursuant to
this  Article  22  may  be  relied  upon  by any  Holder,  Lessor,  beneficiary,
purchaser,  or  prospective  purchaser  of the  Building,  the  Complex,  or any
interest  therein.  Tenant's  failure to deliver any such  statement  within the
specified  ten-day period shall  constitute a material  default  hereunder,  and
Tenant shall indemnify,  defend,  protect,  and hold Landlord  harmless from and
against any and all Claims which Landlord may sustain or incur as a result of or
in connection with Tenant's failure or delay in delivering such statement.

25.2 ELECTION TO SELL  BUILDING.  If Landlord  elects to sell the Building or to
obtain loans secured by a lien on the Building,  Tenant,  promptly after demand,
shall  include  with the  estoppel  certificate(s)  provided to any  prospective
purchaser or lender as required  under this Article 22 any financial  statements
of  Tenant  reasonably  required  by the  purchaser  or  lender.  The  financial
statements so provided shall be kept  confidential  as to any parties other than
the purchaser or lender.

                                  (26) NOTICES

26.1 MANNER OF DELIVERY. Any notice required or permitted under this Lease shall
be in writing and shall be delivered in at least one of the following  ways: (a)
personally or by private hand-delivery  messenger service; (b) by depositing the
same in the United States mail, postage prepaid, registered or certified, return
receipt  requested;  or (c) by depositing  such notice,  postage  prepaid,  with
Federal  Express or another  nationally-recognized  private  overnight  delivery
service.  Each such notice shall be addressed to the intended  recipient at such
party's address set forth as follows, or at such other address as such party has
theretofore  specified by written notice  delivered in accordance  with this ss.
23.1:

                                 IF TO LANDLORD:

                          KASHIWA FUDOSAN AMERICA, INC.
                   c/o Cushman & Wakefield of California, Inc.
                             Attn: Property Manager
                      400 Oyster Point Boulevard, Suite 117
                          South San Francisco, CA 94080


                     Oyster Point Marina Plaza Office Lease
              Kashiwa Fudosan America, Inc.::AccuImage Diagnostics
                                  page 44 of 53
exhibit 10.06 leas                              [Suite 201 (400 OPB); 2,933 rsf]


<PAGE>


                                    COPY TO:

                 CHARLES DUNN REAL ESTATE SERVICES, INC., AGENT
                        Attn: Oyster Point Asset Manager
                                5190 Campus Drive
                             Newport Beach, CA 92260

                                  IF TO TENANT:

                        ACCUIMAGE DIAGNOSTICS CORPORATION
                              Attn: General Manager
                      400 Oyster Point Boulevard, Suite 222
                          South San Francisco, CA 94080

26.2 REQUIRED  CONTENTS.  Every notice (other than the giving or  withholding of
consent or approval  under the  provisions  of the Lease) given to a party shall
state the section of the Lease pursuant to which the notice is given; the period
of time  within  which the  recipient  of the notice  must  respond  (or,  if no
response is required, a statement to that effect);  and if applicable,  that the
failure to object to the notice  within the stated time period will be deemed to
be the equivalent of the recipient's approval,  consent to, or satisfaction with
the subject matter of the notice.

26.3  PRESUMPTION  OF RECEIPT.  Any notice  delivered  personally  or by private
messenger  service  shall be  deemed  delivered  on the next day  following  the
deposit of such  notice at the  recipient's  address.  Any notice  delivered  by
Federal  Express or another  nationally-recognized  private  overnight  delivery
service shall be deemed delivered on the earlier of (y) the second day following
deposit thereof with the carrier or (z) the delivery date shown on the carrier's
record of delivery.  Any notice delivered by mail in the manner specified in ss.
23.1 shall be deemed  delivered  on the  earlier of (a) the third day  following
deposit  thereof in the United States Mail or (b) the delivery date shown on the
return receipt prepared in connection  therewith.  Refusal by Tenant or Landlord
to accept either  certified or registered mail shall constitute a waiver of such
notice by the respective party.

                                  (27) BROKERS

27.1 TENANT'S  REPRESENTATION.  Tenant  represents and warrants to Landlord that
Tenant has dealt with no broker in connection with this Lease other than GRUBB &
ELLIS  COMPANY and CUSHMAN &  WAKEFIELD  OF  CALIFORNIA,  INC.  Tenant  shall be
responsible for all foreseeable  consequences of damages  (including  attorneys'
fees and costs)  resulting from any claims that may be asserted against Landlord
by any other broker, finder, or other person with whom Tenant has or purportedly
has dealt in connection with this Lease, and Tenant agrees to indemnify, defend,
protect, and hold Landlord harmless in connection with any such Claims which may
be asserted.

                        (28) RIGHTS RESERVED TO LANDLORD

28.1 ACCESS TO PROPERTY.  All of the Property  except the inside surfaces of all
walls,  windows,  and doors bounding the Premises  (including  exterior Building
walls,  core corridor walls and doors,  and any core corridor  entrance) and any
space in or adjacent to the Premises used for shafts,  stacks, pipes,  conduits,
fan  rooms,  ducts,  electric,  or other  utilities,  sinks  or  other  Building
facilities,  and the use thereof, as well as access thereto through the Premises
for the purpose of operation, maintenance,  decoration, and repair, are reserved
to Landlord. Tenant shall permit Landlord to install, use, replace, and maintain
pipes,  ducts,  and conduits within the demising  walls,  bearing  columns,  and
ceilings of the Premises.


                     Oyster Point Marina Plaza Office Lease
              Kashiwa Fudosan America, Inc.::AccuImage Diagnostics
                                  page 45 of 53
exhibit 10.06 leas                              [Suite 201 (400 OPB); 2,933 rsf]


<PAGE>


28.2  CONTROL  OF  PROPERTY.  Except to the  extent  expressly  limited  herein,
Landlord  reserves  full rights to control  the  Property  (which  rights may be
exercised  without  subjecting  Landlord  to claims for  constructive  eviction,
abatement  of Rent,  damages,  or other  claims  of any  kind),  including  more
particularly the following rights:

          (a)  NAME,  ADDRESS,  ACCESS.  To change the name or street address of
               the  Property;  install and  maintain  signs on the  exterior and
               interior  of the  Property;  retain  at  all  times,  and  use in
               appropriate  instances,  keys to all  doors  within  and into the
               Premises;  grant to any Person the right to conduct any  business
               or render any service at the  Property,  whether or not it is the
               same or similar to the use  permitted  Tenant by this Lease;  and
               have access for Landlord and other tenants of the Property to any
               mail chutes located on the Premises according to the rules of the
               United States Postal Service.

          (b)  ENTRY INTO  PREMISES.  To enter the Premises at reasonable  hours
               for  reasonable  purposes,  including  inspection  and  supplying
               cleaning   service  or  other  services  to  be  provided  Tenant
               hereunder,  to show  the  Premises  to  current  and  prospective
               lenders,  ground lessors,  insurers, and prospective  purchasers,
               tenants and brokers,  at  reasonable  hours;  and if Tenant shall
               abandon the Premises at any time, or shall vacate the same during
               the last  three (3)  months of the Term,  to  decorate,  remodel,
               repair, or alter the Premises.

          (c)  SAFETY MEASURES. To limit or prevent access to the Property, shut
               down elevator service,  activate elevator emergency controls,  or
               otherwise  take  such  action  or  preventative  measures  deemed
               necessary  by  Landlord  for  the  safety  of  tenants  or  other
               occupants of the Property or the  protection  of the Property and
               other  property  located  thereon  or  therein,  in case of fire,
               invasion,  insurrection,  riot, civil disorder, public excitement
               or other dangerous condition, or threat thereof.

          (d)  IMPROVEMENTS. To decorate and to make alterations,  additions and
               improvements,  structural or otherwise,  in or to the Property or
               any part thereof, and any adjacent building,  structure,  parking
               facility, land, street or alley (including changes and reductions
               in corridors,  lobbies, parking facilities and other public areas
               and the installation of kiosks, planters,  sculptures,  displays,
               escalators,   mezzanines,   and  other  structures,   facilities,
               amenities  and features  therein,  and changes for the purpose of
               connection  with  or  entrance  into  or use of the  Property  in
               conjunction with any adjoining or adjacent building or buildings,
               now existing or hereafter  constructed).  In connection with such
               matters, or with any other repairs, maintenance,  improvements or
               alterations,  in  or  about  the  Property,  Landlord  may  erect
               scaffolding and other structures reasonably required,  and during
               such  operations  may enter upon the  Premises  and take into and
               upon or through the Premises, all materials required to make such
               repairs, maintenance,  alterations or improvements, and may close
               public entry ways,  other public areas,  restrooms,  stairways or
               corridors.

28.3 LANDLORD'S  RIGHT TO MAINTAIN.  Except as expressly  otherwise  provided in
this  Lease,  Landlord  shall  have no  liability  to  Tenant  by  reason of any
inconvenience,  annoyance,  interruption,  or injury to  business  arising  from
Landlord's making any repairs or changes which Landlord is required or permitted
to make by this Lease,  by any other lease or agreement  affecting the Property,
or by Law,  in or to any  portion of the  Property,  Complex,  or the  Premises,
including  the Systems and Equipment  and  appurtenances  of the Property or the
Premises,  provided that Landlord shall use due diligence  with


                     Oyster Point Marina Plaza Office Lease
              Kashiwa Fudosan America, Inc.::AccuImage Diagnostics
                                  page 46 of 53
exhibit 10.06 leas                              [Suite 201 (400 OPB); 2,933 rsf]


<PAGE>


respect  thereto and shall perform such work,  except in case of  emergency,  at
times  reasonably  convenient to Tenant and otherwise in such manner as will not
materially  diminish  Tenant's  beneficial  enjoyment  of the Premises for their
intended use.

28.4 REASONABLE NOTICE. In connection with entering the Premises to exercise any
of the foregoing rights,  Landlord shall: (a) provide reasonable advance written
or oral notice to Tenant's on-site manager or other  appropriate  person (except
in emergencies,  or for routine cleaning or other routine matters), and (b) take
reasonable steps to avoid any unreasonable interference with Tenant's business.

                             (29) BUILDING PLANNING

29.1 RELOCATION  RIGHT.  In the event Landlord  requires the Premises for use in
conjunction  with another suite or for other reasons  connected with  Landlord's
planning program for the Building,  upon notifying  Tenant in writing,  Landlord
shall have the right to move  Tenant to other  space in the  Building  or in the
Complex,  provided such space is not more than ten percent (10%) larger than the
Premises.  If Landlord elects to move Tenant to such other space, Landlord shall
pay for (a) all direct,  out-of-pocket,  reasonable expenses of Tenant in moving
from the Premises to the new space and (b) the cost of  improving  the new space
so that the level of improvements in the new space is comparable to the level of
improvements in the Premises. All the terms and conditions of the original Lease
shall remain in full force and effect, except that (i) a revised EXHIBIT B shall
become a part of this Lease and shall reflect the location of the new space; and
(ii) Tenant agrees to execute promptly upon notice from Landlord an amendment to
this Lease amending the Table and  corresponding  sections of the Lease in order
to reflect all correct data for the new space.

                               (30) HOLDING OVER

30.1 HOLDOVER.  Unless Landlord  expressly agrees  otherwise in writing,  Tenant
shall  pay  Landlord  TWO  HUNDRED  PERCENT  (200%)  of the  amount of Rent then
applicable  prorated  on per  diem  basis  for  each  day  Tenant  shall  retain
possession of the Premises or any part thereof  after  expiration of the Term or
earlier  termination  of this  Lease,  together  with all damages  sustained  by
Landlord  on  account  thereof.  The  foregoing  provisions  shall  not serve as
permission  for  Tenant to hold  over,  nor serve to extend  the Term,  although
Tenant  shall  remain  bound to comply with all  provisions  of this Lease until
Tenant  vacates the Premises and shall be subject to the  provisions of ss. 11.1
above.

30.2 PERMISSIVE  MONTH-TO-MONTH  TENANCY.  Notwithstanding  the foregoing to the
contrary,  at any time before or after expiration or earlier  termination of the
Term of the Lease,  Landlord may serve notice  advising  Tenant of the amount of
Rent and other terms  required,  should Tenant desire to enter a  month-to-month
tenancy.  If Tenant shall hold over more than one full calendar month after such
notice, Tenant shall thereafter be deemed a month-to-month  tenant, on the terms
and provisions of this Lease then in effect,  as modified by Landlord's  notice,
except that Tenant  shall not be  entitled  to any renewal or  expansion  rights
contained in this Lease or any amendments hereto.

                                  (31) PARKING

31.1 AVAILABLE  PARKING.  Subject to the terms and  conditions  contained in the
balance of this Article 28,  Landlord  agrees to make available to Tenant during
the Term of this  Lease  and any  renewal  term up to a maximum  of ELEVEN  (11)
parking spaces on a  non-exclusive  basis in the area(s)  designated by Landlord
for  parking in the  Building's  parking  lots  and/or  facility  (the  "Parking
Facility").  Said parking  spaces shall be in locations  designated by Landlord,
and  parking  shall  be on a  first-come-first-served,


                     Oyster Point Marina Plaza Office Lease
              Kashiwa Fudosan America, Inc.::AccuImage Diagnostics
                                  page 47 of 53
exhibit 10.06 leas                              [Suite 201 (400 OPB); 2,933 rsf]


<PAGE>


unassigned,   nonreserved  basis.  Landlord  reserves  the  right  to  designate
different  locations  or  different  parking  areas for Tenant's use without any
liability to Tenant and Tenant agrees that any change shall not give rise to any
claims or offset against Landlord  hereunder.  Tenant shall abide by any and all
parking  regulations  and rules  established  from time to time by  Landlord  or
Landlord's  parking  operator.  Landlord  reserves  the  right  in its  sole and
absolute  discretion to restrict or prohibit the use of the Parking Facility for
any  vehicles  other than  passenger  automobiles,  such as  full-sized  vans or
trucks.  Tenant  shall not permit any  vehicles  belonging to Tenant or Tenant's
employees,  agents, customers,  contractors, or invitees to be loaded, unloaded,
or parked in areas other than those  designated by Landlord for such activities.
A failure to comply with the  foregoing  provisions  shall  afford  Landlord the
right without  notice to remove any vehicles  involved and to charge the cost to
Tenant, which cost shall be immediately due and payable upon demand by Landlord.

31.2 USE AT TENANT'S OWN RISK.  Landlord shall have no obligation to monitor the
use of the Parking  Facility.  Tenant's  and its  employees'  use of the Parking
Facility shall be at the sole risk of Tenant and its employees. Unless caused by
the willful harmful act of Landlord,  Landlord shall have no  responsibility  or
liability  for any injury or damage to any person or  property by or as a result
of the use of the Parking  Facility  (or  substitute  parking) by Tenant and its
employees,  whether by theft,  collision,  criminal activity, or otherwise,  and
Tenant hereby assumes,  for itself and its employees,  all risks associated with
any such occurrences in or about the Parking Facility.

                         (32) MISCELLANEOUS PROVISIONS.

32.1 GENERAL DEFINITIONS.  The definitions which follow shall apply generally to
the provisions of this Lease.

          (a)  The term BUSINESS  DAYS means Monday  through  Friday  inclusive,
               excluding Holidays as defined in ss. 8.1.1 above. Throughout this
               Lease,  wherever  DAYS is used the term shall  refer to  calendar
               days.  Wherever  the term  BUSINESS  DAYS is used the term  shall
               refer to business days as defined hereunder.

          (b)  The term  MORTGAGE  shall  include any mortgage or deed of trust,
               and the term MORTGAGEE shall include a trustee.

          (c)  The terms INCLUDE, INCLUDING, and SUCH AS shall each be construed
               as if followed by the phrase  "without  limitation."  The rule of
               EIUSDEM  GENERIS  shall  not be  applicable  to  limit a  general
               statement  following or referrable to an  enumeration of specific
               matters to matters similar to the matters specifically mentioned.

          (d)  The term  OBLIGATIONS  UNDER THIS LEASE and words of like  import
               shall mean the  covenants to pay Rent and  Additional  Rent under
               this  Lease  and  all  of  the  other  covenants  and  conditions
               contained  in this Lease.  Any  provision  in this Lease that one
               party or the other or both  shall do or not do or shall  cause or
               permit or not cause or permit a  particular  act,  condition,  or
               circumstance shall be deemed to mean that such party so covenants
               or both parties so covenant, as the case may be.

          (e)  The term TENANT'S OBLIGATIONS  HEREUNDER and words of like import
               and the term LANDLORD'S  OBLIGATIONS  HEREUNDER and words of like
               import shall mean the  obligations  under this Lease which are to
               be performed or observed by Tenant,  or by Landlord,  as the case
               may be.  Reference to PERFORMANCE  of either party's  obligations
               under  this  Lease  shall  be  construed  as   "performance   and
               observance."


                     Oyster Point Marina Plaza Office Lease
              Kashiwa Fudosan America, Inc.::AccuImage Diagnostics
                                  page 48 of 53
exhibit 10.06 leas                              [Suite 201 (400 OPB); 2,933 rsf]


<PAGE>


          (f)  Reference  to Tenant  being or not being IN DEFAULT  HEREUNDER or
               words like  import  shall  mean that  Tenant is in default in the
               performance of one or more of Tenant's obligations hereunder,  or
               that  Tenant  is not in  default  in  the  performance  of any of
               Tenant's  obligations  hereunder,  or  that  a  condition  of the
               character  described in ss. 20.1 above has occurred and continues
               or has not occurred or does not continue, as the case may be.

          (g)  References  to Landlord as having NO LIABILITY TO TENANT or being
               WITHOUT  LIABILITY  TO  TENANT  shall  mean  that  Tenant  is not
               entitled  to   terminate   this  Lease  or  to  claim  actual  or
               constructive  eviction,  partial  or  total,  or to  receive  any
               credit,  allowance,  setoff, abatement, or diminution of Rent, or
               to be  relieved  in any  manner of any of its  other  obligations
               hereunder, or to be compensated for loss or injury suffered or to
               enforce any other kind of liability  whatsoever  against Landlord
               under or with  respect to this Lease or with  respect to Tenant's
               use or occupancy of the Premises.

          (h)  The term  REQUIREMENTS  OF  INSURANCE  BODIES  and  words of like
               import  shall  mean  rules,   regulations,   orders,   and  other
               requirements of the California Board of Fire Underwriters  and/or
               the California  Fire  Insurance  Rating  Organization  and/or any
               other similar body  performing the same or similar  functions and
               having  jurisdiction  or  cognizance  of the Property  and/or the
               Premises.

          (i)  The term  REPAIR  shall be  deemed  to  include  restoration  and
               replacement as may be necessary to achieve  and/or  maintain good
               working order and condition.

          (j)  Reference to  TERMINATION  OF THIS LEASE  includes  expiration or
               earlier  termination of the Term of this Lease or cancellation of
               this Lease  pursuant to any of the provisions of this Lease or to
               Law.  Upon a  termination  of this  Lease,  the Term  and  estate
               granted  by  this  Lease  shall  end  at  noon  of  the  date  of
               termination  as if such date were the date of  expiration  of the
               Term of this  Lease,  and  neither  party  shall have any further
               obligation  or  liability  to the other  after such  termination,
               except  as shall be  expressly  provided  for in this  Lease  and
               except  for any such  obligation  as by its  nature  or under the
               circumstances can only be, or by the provisions of this Lease may
               be, performed after such  termination;  and in any event,  unless
               expressly  provided to the contrary in this Lease,  any liability
               for a payment or  obligation  which shall have accrued to or with
               respect to any  period  ending at the time of  termination  shall
               survive the termination of this Lease.

          (k)  The term IN FULL FORCE AND EFFECT when  herein used in  reference
               to this Lease as a condition  to the  existence  or exercise of a
               right on the part of Tenant shall be  construed in each  instance
               as including the further  condition  that at the time in question
               no  default  on the  part of  Tenant  exists,  and no  event  has
               occurred  which has  continued  to exist for such  period of time
               (after the  notice,  if any,  required by this  Lease),  as would
               entitle Landlord to terminate this Lease or to dispossess Tenant.

          (l)  The term TENANT shall mean Tenant  herein named or any  assignee,
               heir, distributee, executor, administrator, legal representative,
               or other  successor in interest  (immediate  or remote) of Tenant
               herein  named,  while  such  Tenant  or such  assignee  or  other
               successor in interest,  as the case may be, is in  possession  of
               the Premises as owner of the Tenant's estate and interest granted
               by this Lease and also, if Tenant is


                     Oyster Point Marina Plaza Office Lease
              Kashiwa Fudosan America, Inc.::AccuImage Diagnostics
                                  page 49 of 53
exhibit 10.06 leas                              [Suite 201 (400 OPB); 2,933 rsf]


<PAGE>


               not a single  individual  or a  corporation,  all of the persons,
               firms,  and  corporations  then  comprising   Tenant;  and  their
               liability hereunder shall be joint and several.

32.2 LIGHT AND AIR. No diminution of light,  air or view by any structure  which
may hereafter be erected  (whether or not by Landlord)  shall entitle  Tenant to
any  reduction of Rent under this Lease,  result in any liability of Landlord to
Tenant, or in any other way affect this Lease.

32.3 WAIVER OF TERMS. If either Landlord or Tenant waives the performance of any
term,  covenant,  or condition contained in this Lease, such waiver shall not be
deemed to be a waiver of the term, covenant,  or condition itself or a waiver of
any  subsequent  breach of the same or any other term,  covenant,  or  condition
contained  herein.  Furthermore,  the  acceptance of Rent by Landlord  shall not
constitute a waiver of any preceding breach by Tenant of any term, covenant,  or
condition of this Lease,  regardless of Landlord's  knowledge of such  preceding
breach at the time  Landlord  accepts such Rent.  Failure by Landlord to enforce
any of the terms,  covenants, or conditions of this Lease for any length of time
shall not be  deemed to waive or to  decrease  the right of  Landlord  to insist
thereafter  upon strict  performance by Tenant.  Waiver by Landlord of any term,
covenant,  or  condition  contained  in this Lease may only be made by a written
document signed by Landlord.

32.4 FAILURE TO DELIVER  STATEMENTS.  Landlord's failure during the Term of this
Lease to prepare and deliver any of the Statements, estimates, notices, or bills
contemplated  or required  under this  Lease,  or  Landlord's  failure to make a
demand,  shall not in any way cause  Landlord to forfeit or surrender its rights
to collect any of the  foregoing  items of Rent which may have become due during
the Term of this Lease.

32.5  ATTORNEY'S  FEES.  In the event that any action or  proceeding  (including
arbitration) is brought to enforce or interpret any term, covenant, or condition
of this Lease on the part of Landlord or Tenant,  the  prevailing  party in such
action or proceeding  (whether  after trial or upon appeal) shall be entitled to
recover from the party not prevailing its expenses therein, including reasonable
attorneys' fees and all allowable costs as fixed by the court.

32.6 JURY TRIAL.  Tenant and Landlord each hereby waive their respective  rights
to a trial by jury  under  applicable  Laws in the  event of any  litigation  or
dispute  between  Landlord and Tenant arising out of or in connection  with this
Lease and the parties' performance thereunder.

32.7 MERGER.  Notwithstanding the acquisition (if same should occur) by the same
party of the title and  interests of both  Landlord and Tenant under this Lease,
there shall never be a merger of the estates of Landlord  and Tenant  under this
Lease,  but instead the separate  estates,  rights,  duties,  and obligations of
Landlord and Tenant,  as existing  hereunder,  shall remain  unextinguished  and
continue,  separately,  in full  force and effect  until  this Lease  expires or
otherwise terminates in accordance with the express provisions herein contained.

32.8 NO MERGER ON VOLUNTARY  SURRENDER.  A voluntary or other  surrender of this
Lease by Tenant or the mutual cancellation of this Lease shall not work a merger
and shall, at the option of 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.

32.9 CONSENT.  Notwithstanding anything contained in this Lease to the contrary,
Tenant  shall  have no claim and hereby  waives  the right to any claim  against
Landlord for money damages by reason of any refusal, withholding, or delaying by
Landlord of any  consent,  approval,  statement,  or  satisfaction;  and in


                     Oyster Point Marina Plaza Office Lease
              Kashiwa Fudosan America, Inc.::AccuImage Diagnostics
                                  page 50 of 53
exhibit 10.06 leas                              [Suite 201 (400 OPB); 2,933 rsf]


<PAGE>


such event,  Tenant's  only  remedies  therefor  shall be an action for specific
performance,  injunction,  or declaratory judgement to enforce any right to such
consent, approval, statement, or satisfaction.

32.10 COUNTERPARTS. This Lease may be executed in multiple counterparts, each of
which shall be deemed an original and all of which together shall constitute one
and the same instrument.

32.11  FINANCIAL  STATEMENTS.  In order to induce  Landlord  to enter  into this
Lease, Tenant agrees that it shall promptly furnish Landlord, from time to time,
upon Landlord's written request,  with financial statements  reflecting Tenant's
current financial  condition.  Tenant represents and warrants that all financial
statements,  records,  and  information  furnished  by  Tenant  to  Landlord  in
connection with this Lease are and shall be true,  correct,  and complete in all
respects.

32.12 GENDER AND NUMBER.  Words used in neuter  gender  include the feminine and
masculine,  where  applicable,  and words used in the  singular or plural  shall
include the opposite number if appropriate.

32.13 JOINT AND SEVERAL OBLIGATION.  If more than one person executes this Lease
as  Tenant,  each of them is  jointly  and  severally  liable  for the  keeping,
observing,   and  performing  of  all  of  the  terms,  covenants,   conditions,
provisions,  and agreements of this Lease to be kept, observed, and performed by
Tenant.  The term TENANT as used in this Lease  shall mean and  include  each of
such signatories jointly and severally.  The act of or notice from, or notice or
refund to, or the signature of, any one or more of such signatories with respect
to the tenancy or this Lease,  including  any  renewal,  extension,  expiration,
termination,  or modification of this Lease,  shall be binding upon each and all
of the persons  executing this Lease as Tenant with the same force and effect as
if each and all of them had so acted or so  given or  received  such  notice  or
refund or so signed.

32.14 HEADINGS AND SECTION NUMBERS.  The headings and titles of the articles and
sections  of this Lease are used for  convenience  only and shall have no effect
upon the construction or interpretation  of this Lease.  Wherever a reference is
made in this Lease to a particular  article or section,  such reference shall be
deemed to include all subsections  following such section reference,  unless the
contrary is expressly provided in connection with such reference. All references
in this Lease to numbered articles, numbered sections, and lettered exhibits are
references  to articles and sections of this Lease and exhibits  annexed to (and
thereby made part of) this Lease, as the case may be, unless expressly otherwise
designated in the context.

32.15 TIME.  Time is of the essence of this Lease and all of its provisions.

32.16  APPLICABLE  LAW.  This Lease  shall in all  respects  be  governed by and
interpreted in accordance with the laws of the State of California.

32.17 SEVERABILITY. If any provision of this Lease or the application thereof to
any person or circumstance  shall be invalid or unenforceable to any extent, the
remainder of this Lease and the  application  of such provision to other persons
or  circumstances  shall not be  affected  thereby  and shall be enforced to the
greatest extent permitted by law.

32.18  SIGNS.  Tenant  shall  not  place or  permit  to be placed in or upon the
Premises  where  visible from outside the Premises or any part of the  Building,
any signs, notices, drapes, shutters,  blinds or window coatings, or displays of
any type without the prior written  consent of Landlord.  Landlord shall consent
to the location at the cost of Tenant of a building standard sign on or near the
entrance of the


                     Oyster Point Marina Plaza Office Lease
              Kashiwa Fudosan America, Inc.::AccuImage Diagnostics
                                  page 51 of 53
exhibit 10.06 leas                              [Suite 201 (400 OPB); 2,933 rsf]


<PAGE>


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

32.19 EXECUTION BY LANDLORD. The submission of this document for examination and
negotiation  does not  constitute  an offer to lease,  or a  reservation  of, or
option for, the Premises.  This document becomes effective and binding only upon
execution and delivery  hereof by Tenant and by Landlord.  No act or omission of
any employee or agent of Landlord or of Landlord's broker shall alter, change or
modify any of the provisions hereof.

32.20 USE OF NAME.  Tenant shall not use the name of the Building or Complex for
any purpose  other than the address of the business to be conducted by Tenant in
the Premises. Tenant shall not use any picture of the Building or Complex in its
advertising,  stationery  or in any other  manner so as to imply that the entire
Building or Complex is leased by Tenant.  Landlord  expressly reserves the right
at any time to change the name or street address of the Building  and/or Complex
without in any manner being liable to Tenant therefor.

32.21 NONRECORDABILITY OF LEASE. Tenant agrees that in no event shall this Lease
or a memorandum  hereof be recorded  without  Landlord's  express  prior written
consent, which consent Landlord may withhold in its sole discretion.

32.22  CONSTRUCTION.  All provisions  hereof,  whether  covenants or conditions,
shall be deemed to be both covenants and conditions.  The definitions  contained
in this Lease,  shall be used to interpret the Lease. All rights and remedies of
Landlord and Tenant shall, except as otherwise expressly provided, be cumulative
and non-exclusive of any other remedy at law or in equity.

32.23 FORCE MAJEURE DELAYS.  This Lease and the obligations of Tenant  hereunder
shall not be affected or impaired  because  Landlord is unable to fulfill any of
its obligations  hereunder or is delayed in doing so, if such inability or delay
is caused by reason of force majeure,  strike, labor troubles, acts of God, acts
of government,  unavailability  of materials or labor, or any other cause beyond
the reasonable control of Landlord (collectively "Force Majeure Delays").

32.24  AUTHORITY.  If Tenant is a corporation,  each  individual  executing this
Lease on behalf of Tenant represents and warrants that Tenant is qualified to do
business in  California  and that he is duly  authorized  to execute and deliver
this Lease on behalf of Tenant and shall deliver  appropriate  certification  to
that effect if requested. If Tenant is a limited liability company, partnership,
joint venture, or other  unincorporated  association,  each individual executing
this  Lease  on  behalf  of  Tenant  represents  and  warrants  that  he is duly
authorized  to execute and deliver  this Lease on behalf of Tenant and that this
Lease is binding on Tenant. Furthermore, Tenant agrees that the execution of any
written consent  hereunder,  or any written  modification or termination of this
Lease, by any general partner or member of Tenant or any other  authorized agent
of Tenant, shall be binding on Tenant.

32.25 NONDISCLOSURE. Tenant agrees that it shall not disclose any of the matters
set forth in this Lease or disseminate or distribute any information  concerning
the terms,  covenants,  or  conditions  thereof to any person,  firm, or entity,
other than a prospective  assignee or subtenant of the  Premises,  without first
obtaining the express  written  approval of Landlord;  provided,  however,  that
Tenant may  disclose  the contents of this Lease to any  director,  officer,  or
employee  of Tenant,  to  Tenant's  lawyers,  accountants,  or


                     Oyster Point Marina Plaza Office Lease
              Kashiwa Fudosan America, Inc.::AccuImage Diagnostics
                                  page 52 of 53
exhibit 10.06 leas                              [Suite 201 (400 OPB); 2,933 rsf]


<PAGE>


other third party consultants or professionals,  to any lenders,  investors,  or
others to whom  Tenant  provides  financial  statements,  or in  response to any
legally  effective  demand for  disclosure  pursuant  to court order or from any
other properly constituted legal authority.

32.26  QUIET  ENJOYMENT.  So long as Tenant is not in default  under this Lease,
Tenant shall have quiet  enjoyment of the Premises for the Term,  subject to all
the terms and conditions of this Lease and all liens and  encumbrances  prior to
this Lease.

32.27 EXHIBITS AND ATTACHMENTS.  All exhibits and attachments referred to in the
body of this  Lease  are  deemed  attached  hereto  and  incorporated  herein by
reference.  The parties have attached the following  exhibits to the Lease prior
to execution:

                        EXHIBIT A           SITE PLAN
                        EXHIBIT B           FLOOR PLAN OF PREMISES
                        EXHIBIT C           RULES AND REGULATIONS
                        EXHIBIT D           ATHLETIC FACILITY USE AGREEMENT
                        EXHIBIT E           COMMENCEMENT DATE AGREEMENT

32.28 ENTIRE AGREEMENT. This Lease, together with its exhibits, contains all the
agreements of the parties hereto and supersedes any previous negotiations. There
have been no representations made by the Landlord or understandings made between
the  parties  other than those set forth in this  Lease and its  exhibits.  This
Lease may not be modified  except by a written  instrument  duly executed by the
parties hereto.

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

          LANDLORD:     KASHIWA FUDOSAN AMERICA, INC., a California corporation





                        By: /s/ HARU TAKEHANA
                            ___________________________
                                Haru Takehana, Director

                        Its:
                            ___________________________


          TENANT:       ACCUIMAGE DIAGNOSTICS CORPORATION, a Nevada corporation





                        By: /s/ RAY VALLEJO
                            ___________________________
                                Ray Vallejo

                        Its:    Chief Operating Officer
                            ___________________________


                     Oyster Point Marina Plaza Office Lease
              Kashiwa Fudosan America, Inc.::AccuImage Diagnostics
                                  page 53 of 53
exhibit 10.06 leas                              [Suite 201 (400 OPB); 2,933 rsf]


<PAGE>


                                TABLE OF CONTENTS


1     BASIC LEASE TERMS........................................................1

2     USE......................................................................5

3     PREPARATION OF THE PREMISES..............................................6

4     ADJUSTMENTS OF RENT......................................................7

5     SECURITY DEPOSIT........................................................14

6     COMPLIANCE WITH LAWS....................................................15

7     HAZARDOUS MATERIALS.....................................................15

8     SERVICES AND UTILITIES..................................................17

9     TENANT'S CHANGES........................................................21

10    TENANT'S PROPERTY.......................................................23

11    CONDITION UPON SURRENDER................................................24

12    REPAIRS AND MAINTENANCE.................................................24

13    RULES AND REGULATIONS...................................................25

14    INSURANCE AND INDEMNIFICATION...........................................25

15    DAMAGE OR DESTRUCTION...................................................30

16    EMINENT DOMAIN..........................................................31

17    ASSIGNMENT AND SUBLETTING...............................................32

18    SUBORDINATION AND ATTORNMENT............................................37

19    FINANCING REQUIREMENTS..................................................39

20    DEFAULT.................................................................39

21    LIMITATIONS ON LANDLORD'S LIABILITY.....................................42

22    ESTOPPEL CERTIFICATES...................................................42

23    NOTICES.................................................................43

24    BROKERS.................................................................44

25    RIGHTS RESERVED TO LANDLORD.............................................44

26    BUILDING PLANNING.......................................................45

27    HOLDING OVER............................................................46

28    PARKING.................................................................46

29    MISCELLANEOUS PROVISIONS................................................47


               Oyster Point Marina Plaza Lease Table of Contents
                                 page T-1 of 1

<PAGE>



             OYSTER POINT MARINA PLAZA LEASE TABLE OF DEFINED TERMS
                                 PAGE I-III OF 2
                             INDEX OF DEFINED TERMS



<PAGE>



A

Additional Rent.............................2, 7, 11, 23, 32, 33, 34, 35, 36, 47
Adjustment Period............................................7, 8, 9, 11, 12, 13
Assumed Base Amount...........................................................12
Athletic Facility......................................................3, 10, 52

B

Base Expense Year..............................................................7
Base Operating Expenses....................................................7, 12
Base Parking Fee..............................................................47
Base Real Estate Taxes..............................................7, 8, 12, 13
Base Rent............................1, 2, 7, 12, 14, 19, 30, 31, 33, 34, 36, 38
Base Tax Year..............................................................8, 13
Base Utilities.............................................................7, 12
Building...1, 3, 4, 5, 8, 9, 10, 12, 17, 18, 19, 20, 21, 23, 25, 27, 29, 31, 33,
...............................................34, 35, 36, 37, 43, 44, 45, 46, 51
Business Hours................................................................18
Business Personal Property............................................26, 27, 28

C

Claims........................................................28, 29, 35, 43, 44
Code Costs....................................................................15
Commencement Date............................1, 2, 7, 10, 15, 19, 39, 42, 46, 52
Complex.........1, 2, 3, 4, 5, 8, 10, 13, 23, 29, 31, 33, 34, 37, 39, 43, 45, 51

E

Event of Default..........................................................39, 40
Expiration Date.........................................1, 2, 11, 15, 17, 24, 35

F

Force Majeure Delays..........................................................51

H

Hazardous Material....................................................15, 16, 17
Holder........................................................27, 38, 39, 41, 43
Holidays..................................................................18, 47
HVAC..............................................................17, 18, 19, 20

I

Improvements...................................................6, 23, 24, 31, 45
INC..........................................1, 4, 5, 18, 19, 21, 24, 25, 29, 53
IW 24

L

Landlord....1,  2, 3, 4, 5, 6, 7, 8, 9, 10,  11, 12, 13, 14, 15, 16, 17, 18, 19,
............20, 21,  22,  23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36,
...............37, 38, 39, 40, 41, 42, 43, 44, 45, 46, 47, 48, 49, 50, 51, 52, 53

Laws...............................................5, 10, 15, 16, 18, 19, 22, 24

Lease...........................i,  2, 3, 4, 5, 6, 7, 8, 11, 12, 13, 14, 15, 16,
17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34,  35,
36, 37, 38, 39, 40, 41, 42, 43, 44, 45, 46, 47, 48, 49, 50, 51, 52, 53

Lessor................................................................27, 38, 43


             Oyster Point Marina Plaza Lease Table of Defined Terms
                                 Page I-ii of 1


<PAGE>


M

MPOE......................................................................18, 19
MSDS..........................................................................16

O

Occupancy Conditions...........................................................6
Operating Expenses...............................7, 8, 9, 10, 11, 12, 13, 17, 31

P

Parking Facility..........................................................46, 47
Permitted Occupant........................................................34, 37
Premises1, 2, 4, 5, 6, 7, 8, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25,
27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 39, 40, 41, 42, 44, 45, 46, 48, 49,
...........................................................................51, 52
Prime
Rate...........................................................................2
Property....2,  3, 4, 5, 8, 9, 10,  11,  13, 15, 16, 17, 18, 19, 20, 21, 22, 23,
...........24, 25, 26, 27, 28, 29, 30, 31, 35, 36, 37, 39, 40, 42, 43, 44, 45, 48

R

Real Estate Taxes................................................7, 8, 9, 12, 13
Rent......1, 2, 4, 7, 8, 11, 12, 14, 19, 20, 23, 28, 30, 31, 32, 33, 34, 35, 36,
...............................................38, 40, 41, 42, 44, 46, 47, 48, 49
Rental Adjustment......................................................7, 11, 12
Rules..................................................................4, 25, 52

S

Security Deposit..........................................................14, 15
State...........................................................1, 8, 15, 26, 50
Statement.................................................................11, 14
Subsequent Operating Expenses.................................................12
Successor Landlord............................................................38
Superior Leases...............................................................38
Superior Mortgages........................................................11, 38
Systems and Equipment................3, 4, 6, 10, 17, 18, 19, 20, 21, 25, 29, 45

T

Table.............................................................1, 2, 7, 8, 46
Takings.......................................................................31
Temporary Condemnation........................................................32
Tenant....1, 2, 3, 4, 5, 6, 7, 8, 9, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21,
....22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34,  35,  36, 37, 38, 39, 40,
...............................41, 42, 43, 44, 45, 46, 47, 48, 49, 50, 51, 52, 53
Tenant Delays..................................................................6
Term....................1, 2, 3, 6, 7, 8, 9, 11, 12, 13, 14, 15, 18, 21, 23, 27,
...............................................31, 32, 41, 45, 46, 47, 48, 49, 52
Transfer..............................................32, 33, 34, 35, 36, 39, 42
Transfer Notice...................................................32, 33, 34, 35
Transfer Premium..........................................................35, 36

U

Utilities................................................7, 8, 9, 11, 12, 13, 17

W

Work........................................................6, 7, 23, 24, 25, 52


             Oyster Point Marina Plaza Lease Table of Defined Terms
                                 Page I-ii of 2



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31
<SEQUENCE>3
<FILENAME>ex31-1.txt
<DESCRIPTION>EXHIBIT 31.1
<TEXT>



                                                                    EXHIBIT 31.1


ACCUIMAGE DIAGNOSTICS CORP.


                                 CERTIFICATIONS


I, Aviel Faliks, certify that:

     1.   I have reviewed this Form 10-QSB of AccuImage Diagnostics Corp.

     2.   Based on my  knowledge,  this  report  does  not  contain  any  untrue
          statement  of a  material  fact  or  omit to  state  a  material  fact
          necessary to make the statements  made, in light of the  circumstances
          under which such  statements were made, not misleading with respect to
          the period covered by this report;

     3.   Based on my knowledge,  the financial statements,  and other financial
          information  included in this report,  fairly  present in all material
          respects the financial condition, results of operations and cash flows
          of the  registrant  as of,  and for,  the  periods  presented  in this
          report;

     4.   The registrant's other certifying officer(s) and I are responsible for
          establishing  and maintaining  disclosure  controls and procedures (as
          defined  in  Exchange  Act Rules  13a-15(e)  and  15d-15-(e))  for the
          registrant and have:

          a)   Designed such disclosure controls and procedures,  or caused such
               disclosure  controls  and  procedures  to be  designed  under our
               supervision,  to ensure that material information relating to the
               registrant,  including  its  consolidated  subsidiaries,  is made
               known to us by others within those entities,  particularly during
               the period in which this report is being prepared;

          b)   Evaluated  the  effectiveness  of  the  registrant's   disclosure
               control  and   procedures   and  presented  in  this  report  our
               conclusions  about the  effectiveness of the disclosure  controls
               and  procedures,  as of the  end of the  period  covered  by this
               report based on such evaluation; and

          c)   Disclosed in this report any change in the registrant's  internal
               control over financial  reporting that occurred  during the small
               business  issuer's most recent fiscal  quarter (the  registrant's
               fourth fiscal  quarter in the case of an annual  report) that has
               materially  affected,  or  is  reasonably  likely  to  materially
               affect,   the   registrant's   internal  control  over  financial
               reporting; and

     5.   The  registrant's  other  certifying  officer(s) and I have disclosed,
          based on our most recent evaluation of internal control over financial
          reporting, to the registrant's auditors and the audit committee of the
          registrant's  board of directors (or persons performing the equivalent
          functions):

          a)   All  significant  deficiencies  and  material  weaknesses  in the
               design or operation of internal control over financial  reporting
               which are reasonably  likely to adversely affect the registrant's
               ability  to  record,  process,  summarize  and  report  financial
               information; and

          b)   Any fraud,  whether or not material,  that involves management or
               other employees who have a significant  role in the  registrant's
               internal control over financial reporting.


Date: August 13, 2004                  /s/ AVIEL FALIKS
                                       _________________________________________
                                           Aviel Faliks
                                           President and Chief Executive Officer





</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31
<SEQUENCE>4
<FILENAME>ex31-2.txt
<DESCRIPTION>EXHIBIT 31.2
<TEXT>



                                                                    EXHIBIT 31.2


ACCUIMAGE DIAGNOSTICS CORP.


                                 CERTIFICATIONS


I, Kathleen M. Ryan, certify that:

     1.   I have reviewed this Form 10-QSB of AccuImage Diagnostics Corp.

     2.   Based on my  knowledge,  this  report  does  not  contain  any  untrue
          statement  of a  material  fact  or  omit to  state  a  material  fact
          necessary to make the statements  made, in light of the  circumstances
          under which such  statements were made, not misleading with respect to
          the period covered by this report;

     3.   Based on my knowledge,  the financial statements,  and other financial
          information  included in this report,  fairly  present in all material
          respects the financial condition, results of operations and cash flows
          of the  registrant  as of,  and for,  the  periods  presented  in this
          report;

     4.   The registrant's other certifying officer(s) and I are responsible for
          establishing  and maintaining  disclosure  controls and procedures (as
          defined  in  Exchange  Act Rules  13a-15(e)  and  15d-15-(e))  for the
          registrant and have:

          a)   Designed such disclosure controls and procedures,  or caused such
               disclosure  controls  and  procedures  to be  designed  under our
               supervision,  to ensure that material information relating to the
               registrant,  including  its  consolidated  subsidiaries,  is made
               known to us by others within those entities,  particularly during
               the period in which this report is being prepared;

          b)   Evaluated  the  effectiveness  of  the  registrant's   disclosure
               controls  and   procedures  and  presented  in  this  report  our
               conclusions  about the  effectiveness of the disclosure  controls
               and  procedures,  as of the  end of the  period  covered  by this
               report based on such evaluation; and

          c)   Disclosed in this report any change in the registrant's  internal
               control over financial  reporting that occurred  during the small
               business  issuer's most recent fiscal  quarter (the  registrant's
               fourth fiscal  quarter in the case of an annual  report) that has
               materially  affected,  or  is  reasonably  likely  to  materially
               affect,   the   registrant's   internal  control  over  financial
               reporting; and

     5.   The  registrant's  other  certifying  officer(s) and I have disclosed,
          based on our most recent evaluation of internal control over financial
          reporting, to the registrant's auditors and the audit committee of the
          registrant's  board of directors (or persons performing the equivalent
          functions):

          a)   All  significant  deficiencies  and  material  weaknesses  in the
               design or operation of internal control over financial  reporting
               which are reasonably  likely to adversely affect the registrant's
               ability  to  record,  process,  summarize  and  report  financial
               information; and

          b)   Any fraud,  whether or not material,  that involves management or
               other employees who have a significant  role in the  registrant's
               internal control over financial reporting.


Date: August 13, 2004                     /s/ KATHLEEN M. RYAN
                                          ___________________________
                                              Kathleen M. Ryan
                                              Chief Financial Officer








</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32
<SEQUENCE>5
<FILENAME>ex32-1.txt
<DESCRIPTION>EXHIBIT 32.1
<TEXT>



                                                                    EXHIBIT 32.1


ACCUIMAGE DIAGNOSTICS CORP.


                           SECTION 1350 CERTIFICATIONS

                   CERTIFICATION PURSUANT TO 18 U.S.C. SECTION
                 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE
                           SARBANES-OXLEY ACT OF 2002


     In  connection  with the Form 10-QSB of AccuImage  Diagnostics  Corp.  (the
"Company")  on Form 10-QSB for the quarter ended June 30, 2004 as filed with the
Securities and Exchange  Commission on the date hereof (the "Report"),  I, Aviel
Faliks, President and Chief Executive Officer of the Company,  certify, pursuant
to  18  U.S.C.  section  1350,  as  adopted  pursuant  to  Section  906  of  the
Sarbanes-Oxley Act of 2002, that based on my knowledge:

     1.   The Report fully  complies with the  requirements  of Section 13(a) or
          15(d) of the Securities Exchange Act of 1934; and

     2.   The  information  contained  in the  Report  fairly  presents,  in all
          material respects,  the financial  condition and results of operations
          of the Company.


Date:  August 13, 2004


/s/ AVIEL FALIKS
_____________________________________
Aviel Faliks
President and Chief Executive Officer




A SIGNED  ORIGINAL OF THIS WRITTEN  STATEMENT  REQUIRED BY SECTION 906, OR OTHER
DOCUMENT AUTHENTICATING, ACKNOWLEDGING, OR OTHERWISE ADOPTING THE SIGNATURE THAT
APPEARS IN TYPED FORM WITHIN THE  ELECTRONIC  VERSION OF THIS WRITTEN  STATEMENT
REQUIRED BY SECTION 906, HAS BEEN PROVIDED TO ACCUIMAGE  DIAGNOSTICS  CORP.  AND
WILL BE RETAINED BY ACCUIMAGE  DIAGNOSTICS CORP. AND FURNISHED TO THE SECURITIES
AND EXCHANGE COMMISSION OR ITS STAFF UPON REQUEST.



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32
<SEQUENCE>6
<FILENAME>ex32-2.txt
<DESCRIPTION>EXHIBIT 32.2
<TEXT>



                                                                    EXHIBIT 32.2


ACCUIMAGE DIAGNOSTICS CORP.


                           SECTION 1350 CERTIFICATIONS

                   CERTIFICATION PURSUANT TO 18 U.S.C. SECTION
                 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE
                           SARBANES-OXLEY ACT OF 2002


     In  connection  with the Form 10-QSB of AccuImage  Diagnostics  Corp.  (the
"Company")  on Form 10-QSB for the quarter ended June 30, 2004 as filed with the
Securities  and  Exchange  Commission  on the date  hereof  (the  "Report"),  I,
Kathleen M. Ryan, Chief Financial Officer of the Company,  certify,  pursuant to
18 U.S.C. section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, that based on my knowledge:

     1.   The Report fully  complies with the  requirements  of Section 13(a) or
          15(d) of the Securities Exchange Act of 1934; and

     2.   The  information  contained  in the  Report  fairly  presents,  in all
          material respects,  the financial  condition and results of operations
          of the Company.


Date:  August 13, 2004


/s/ KATHLEEN M. RYAN
_______________________
Kathleen M. Ryan
Chief Financial Officer




A SIGNED  ORIGINAL OF THIS WRITTEN  STATEMENT  REQUIRED BY SECTION 906, OR OTHER
DOCUMENT AUTHENTICATING, ACKNOWLEDGING, OR OTHERWISE ADOPTING THE SIGNATURE THAT
APPEARS IN TYPED FORM WITHIN THE  ELECTRONIC  VERSION OF THIS WRITTEN  STATEMENT
REQUIRED BY SECTION 906, HAS BEEN PROVIDED TO ACCUIMAGE  DIAGNOSTICS  CORP.  AND
WILL BE RETAINED BY ACCUIMAGE  DIAGNOSTICS CORP. AND FURNISHED TO THE SECURITIES
AND EXCHANGE COMMISSION OR ITS STAFF UPON REQUEST.

</TEXT>
</DOCUMENT>
</SUBMISSION>
