**EXHIBIT 10.1MODIFICATION TO BUSINESS LOAN AGREEMENT**

This First Modification to Business LoanAgreement (this “Modification”) is entered into by and between TAB PRODUCTS CO.(“Borrower”) and COMERICA BANK-CALIFORNIA (“Bank”) as of this 21stday of August, 2001, at San Jose, California.

RECITALS

             ThisModification is entered into upon the basis of the following facts andunderstandings of the parties, which facts and understandings are acknowledgedby the parties to be true and accurate:

             Bankand Borrower previously entered into a Business Loan Agreement dated November21, 2000.  The Business Loan Agreementand each modification shall collectively be referred to herein as the“Agreement.”

             NOW,THEREFORE, for good and valuable consideration, the receipt and sufficiency ofwhich are hereby acknowledged, the parties agree as set forth below.

AGREEMENT

             1.          Incorporation by Reference.  The Recitals and the documents referred totherein are incorporated herein by this reference.  Except as otherwise noted, the terms not defined herein shallhave the meaning set forth in the Agreement.

             2.          Modification to the Agreement.  Subject to the satisfaction of theconditions precedent as set forth in Section 3 hereof, the Agreement is herebymodified as set forth below.

             Section2(b) of the Addendum to Business Loan Agreement is hereby deleted in itsentirety and replaced with the following:

“TangibleEffective Net Worth in an amount not less than $35,000,000.00

Section2 is amended by the addition of the following at the end thereof as section(k):

“Borrowingunder the Line of Credit shall not exceed total collected Cash Balances (whichshall include Certificates of Deposit, Money Market Accounts and CheckingAccounts) at Comerica at any time.

             3.          Legal Effect.  The effectiveness of this Modification isconditioned upon receipt by Bank of this Modification, and any other documentswhich Bank may require to carry out the terms hereof.  Except as specifically set forth in this Modification, all of theterms and conditions of the Agreement remain in full force and effect.

             4.          Integration.  This is an integrated Modification andsupersedes all prior negotiations and agreements the subject matterhereof.  All amendments hereto must bein writing and signed by the parties.

 

             INWITNESS WHEREOF, the parties have agreed as of the date first set forth above.

 

| TAB  PRODUCTS CO. | COMERICA  BANK-CALIFORNIA        |
|-------------------|----------------------------------|
|              |                             |
| By:               | /s/  Donald J. Hotz              | By:  /s/ Nick Tsaigkas |
|                   |                             |  |
| Title:            | Chief  Financial Officer         | Nick  Tsiagkas |
|              |                             | Assistant  Vice President |
|              |                             |   |
| By:               | /s/  Caroline A. Damask          |   |
|                   |                             |   |
| Title:            | Asst.  Treasurer & Secretary |   |
|                   |                                  |  |  |  |