Document:

Exhibit 10.b

THIS STOCK SALES AND SECURITY AGREEMENT IS EXECUTED BY AND BETWEEN LEADVILLE
MINING & MILLING CORPORATION, REPRESENTED IN THIS ACT BY ITS AGENT, MR. JACK
VEEDER EVERETT, HEREINAFTER REFERRED TO AS "LEADVILLE MINING", AND LEADVILLE
MINING & MILLING HOLDING CORPORATION, REPRESENTED IN THIS ACT BY ITS AGENT, MR.
ROGER AUSTIN NEWELL, HEREINAFTER REFERRED TO AS "LEADVILLE HOLDING", ON ONE
HAND; AND INMOBILIARIA RUBA, S.A. DE C.V., REPRESENTED BY MR. JESUS MIGUEL
SANDOVAL ARMENTA, IN THE CAPACITY OF GENERAL AGENT, HEREINAFTER REFERRED TO AS
"RUBA", and LUIS ALFONSO ANCHONDO CUILTY, BY THEIR OWN RIGHT, HEREINAFTER
REFERRED TO AS "ANCHONDO", ON THE OTHER HAND; BY VIRTUE OF THE FOLLOWING
RECITALS AND CLAUSES:

R E C I T A L S

I.- By "LEADVILLE MINING" and "LEADVILLE HOLDING":

a)    They are companies with nationality and corporate domicile in Nevada,
      United States of America, duly organized under the laws of said state and
      their agents have sufficient powers to execute this agreement as evidenced
      in the powers of attorney attached hereto as exhibit "1", and said powers
      have not been revoked, limited or modified in any manner.

b)    They are the lawful owners having full use and enjoyment of all property
      and corporate rights on 169,033,675 Common Nominative Shares, (hereinafter
      referred to as "THE STOCK") issued by the company called MINERA CHANATE,
      S.A. de C.V., which has been organized as a split company, resulting from
      the corporate break-up of the corporation called EXPLORACION Y MINERIA
      INDEPENDENCIA, S.A. DE C.V. ("the split company"), said stock being
      full-paid and subscribed and free of any lien, and it wishes to sell by
      means of this Agreement to "RUBA" y "ANCHONDO", pursuant to the
      proportions set forth herein.

c)    At present, the issuing company, Minera Chanate, S.A. de C.V., has a
      capital stock of $169,033,675 pesos, represented by 169,033,675 shares
      without expressing the face value thereof, and said capital stock is
      formed as follows:

<PAGE>

                                                                    Exhibit 10.b

CAPITAL STOCK

--------------------------------------------------------------------------------
                                 SHARES COVERED
--------------------------------------------------------------------------------
                                       FIXED          VARIABLE
CERTIFICATE    STOCKHOLDER            CAPITAL         CAPITAL        TOTAL
--------------------------------------------------------------------------------
1            LEADVILLE MINING &       4'849,999                      4'849,999
             MILLING
             CORPORATION
--------------------------------------------------------------------------------
2            LEADVILLE MINING &       1                              1
             MILLING HOLDING
             CORPORATION
--------------------------------------------------------------------------------
3            LEADVILLE MINING &                      163'617,768     163'617,768
             MILLING
             CORPORATION
--------------------------------------------------------------------------------
4            LEADVILLE MINING &                      565,907         565,907
             MILLING
             CORPORATION
--------------------------------------------------------------------------------

                    TOTAL SHARES OF CAPITAL STOCK 169,033,675

d)    That the stockholders of the split company Minera Chanate, S.A. de C.V.
      (hereinafter referred to as "THE ISSUER"), have agreed to sell 100% of the
      capital stock of said company distributed among Inmobiliaria Ruba, S.A. de
      C.V. and "ANCHONDO", subject to the security stipulated herein.

e)    That "THE STOCK" referred to in subsection c) above, constitute 100% of
      the capital social of "THE ISSUER", and presently is full-paid and
      subscribed and is sellable without any charge or lien, except for the
      security stipulated herein, since the aforementioned corporate break-up
      became legally effective in the month of December, 1997.

f)    That "LEADVILLE MINING" and "LEADVILLE HOLDING" do not have knowledge that
      "THE SPLIT COMPANY" has been in breach of contract with any bank or any
      type of creditor or stockholder or that any lawsuit of any kind has been
      filed against them, which may nullify or affect the validity of
      resolutions and the corporate break-up process and do not have

                                  Page 2 of 17
<PAGE>

                                                                    Exhibit 10.b

      knowledge of any type of complaints, claims or objections regarding said
      break-up throughout said process, under the terms of article 228 bis of
      the General Law of Business Corporations or different than the latter;
      therefore, the aforementioned corporate break-up has become fully
      effective for all legal purposes without any responsibility of any kind to
      the split company MINERA CHANATE, S.A. DE C.V., or its present
      stockholders other than the responsibilities and debts contained in the
      financial statements of the corporate break-up, its attached documents and
      notes.

g)    Up to this date, "THE ISSUER" and its stockholders have no present or
      contingent lawsuits, trials or economic claims; labor or fiscal
      liabilities; bank debts or debts to stockholders, creditors or
      contractors; or liabilities, debts or responsibilities of any other
      nature, other than the responsibilities and debts contained in the
      financial statements of the corporate break-up, its attached documents and
      notes, and other than the responsibilities and debts contained in the
      financial statements of MINERA CHANATE S.A. DE C.V., its attached
      documents and notes, as of March 30, 2002, attached hereto as exhibit "2".

h)    "THE ISSUER" has performed all of its operations in compliance with the
      applicable legislation.

II.- By "RUBA" and "ANCHONDO":

c)    JESUS MIGUEL SANDOVAL ARMENTA is the agent of "RUBA" with powers and
      rights to execute this Agreement, as evidenced in Public Instrument number
      1,210, volume 53, dated July 14, 1999, executed before Atty. Oscar
      Cayetano Becerra Tucker, Notary Public Number 28, presently commissioned
      in the Judicial District of Bravos, State of Chihuahua, duly filed with
      the Public Registry of Property and Commerce of Ciudad Juarez, Chihuahua,
      also stating, under oath of telling the truth, that said powers and rights
      have neither been revoked nor limited in any manner. An certified copy of
      said public instrument is attached hereto as exhibit "3".

d)    "RUBA" and "ANCHONDO" stated that they wish to acquire "THE STOCK",
      pursuant to the proportion hereinafter stated, such purchase and sell
      being subject to the security object of the fifth clause hereof.

III.- By the parties:

c)    They intend to execute this Stock Sales Agreement Subject to a Security
      whereby (i) "RUBA" acquires, in its favor, 169,033,674

                                  Page 3 of 17
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                                                                    Exhibit 10.b

      Shares, issued by Minera Chanate, S.A. de C.V., and presently owned by
      "LEADVILLE MINING" (hereinafter called ""THE STOCK" OF LEADVILLE MINING",
      previously described in recital I, subsection c), which is deemed
      reproduced herein as if it had been literally inserted, said shares being
      represented by stock certificates 1, 3 and 4, as set forth in said
      recital, and (ii) "ANCHONDO" acquires, in his favor, 1 Share, issued by
      Minera Chanate, S.A. de C.V., presently owned by "LEADVILLE HOLDING"
      (hereinafter "THE STOCK OF LEADVILLE HOLDING", previously described in
      recital I, subsection c), which is deemed reproduced herein as if it had
      been literally inserted, said stock being represented by stock certificate
      2 as set forth in said recital.

d)    They expressly acknowledge their legal capacity and rights with which they
      appear and represent they have no legal impediment or of any other nature
      that may affect the valid execution of this instrument; due to the
      foregoing, they formalize this Stock Sales and Security Agreement by
      virtue of the following:

C L A U S E S

FIRST.- "LEADVILLE MINING" hereby sells, without any reserve or limitation
whatsoever, "THE STOCK" OF LEADVILLE MINING" to "RUBA", and thereby "LEADVILLE
MINING" conveys to "RUBA" each and every property and corporate right derived
from holding said stock.

In turn, "RUBA" acquires "THE STOCK" OF LEADVILLE MINING", free of liens, except
for the security object of the fifth clause, under the terms and conditions set
forth herein.

"LEADVILLE HOLDING" hereby sells, without any reserve or limitation whatsoever,
"THE STOCK" OF LEADVILLE HOLDING" to "ANCHONDO", and thereby "LEADVILLE HOLDING"
conveys to "ANCHONDO" each and every property and corporate right derived from
holding said stock.

In turn, "ANCHONDO" acquires "THE STOCK OF LEADVILLE HOLDING", free of liens,
except for the security object of the fifth clause, under the terms and
conditions set forth herein.

SECOND.- The total price established for "THE STOCK" by virtue of this sales
amounts to US$2,131,616.36 (two million one hundred thirty one thousand six
hundred sixteen dollars and thirty six cents, legal tender of the

                                  Page 4 of 17
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                                                                    Exhibit 10.b

United States of America), which shall be paid by "RUBA" and "ANCHONDO"
proportionally to the number of shares acquired by each of them, to "LEADVILLE
MINING" and "LEADVILLE HOLDING", through the following installments:

(A) The first installment of US$639,484.91 (six hundred thirty nine thousand
four hundred eighty four dollars and ninety one cents, legal tender of the
United States of America) paid by "RUBA" upon the execution of this Agreement to
"LEADVILLE MINING", with check number 7227105, drawn by "RUBA" from its account
in Banco Internacional S.A.. "LEADVILLE MINING" delivers to "RUBA" a payment
receipt being as broad as permitted by the law for said first installment.

(B) A second installment of US$497,377.15 (four hundred ninety seven thousand
three hundred seventy seven dollars and fifteen cents, legal tender of the
United States of America), minus US$14,336.40 (fourteen thousand three hundred
thirty six dollars and forty cents, legal tender of the United States of
America), due to obligations due and payable of "THE ISSUER", that "RUBA" shall
pay to "LEADVILLE MINING" with a certified check on August 9 (nine), 2002 (two
thousand two), at the latest, plus common contractual interest at an annual rate
of 4.5% (four point five percent) on unpaid balances, payable at the domicile
located at Pedro Rosales de Leon 7548, Fraccionamiento Jardines del Seminario,
Ciudad Juarez, Chihuahua, 32500.

(C) A third installment of US$994,754.30 (nine hundred ninety four thousand
seven hundred fifty four dollars and thirty cents, legal tender of the United
States of America), that "RUBA" shall pay "LEADVILLE MINING" with a certified
check on December 9 (nine), 2002 (two thousand two), at the latest, plus common
contractual interest at an annual rate of 4.5% (four point five percent) on
unpaid balances, payable at the domicile located at Pedro Rosales de Leon 7548,
Fraccionamiento Jardines del Seminario, Ciudad Juarez, Chihuahua, 32500.

Any unpaid balance of the installments referred to in subsections (B) and (C) of
this clause shall generate interest at a rate of 7% (seven percent) throughout
the time said balance remains unpaid. Any late payment charges, if any, shall
also be paid at Pedro Rosales de Leon 7548, Fraccionamiento Jardines del
Seminario, Ciudad Juarez, Chihuahua, 32500.

"THE STOCK OF LEADVILLE HOLDING" shall be deemed paid by "RUBA" to "LEADVILLE
HOLDING" for account of "ANCHONDO" upon payment to "LEADVILLE MINING" of the
installment referred to in the preceding paragraph.

                                  Page 5 of 17
<PAGE>

                                                                    Exhibit 10.b

Prior to the date of execution of this Agreement (hereinafter occasionally
referred to as "the Date of Execution"), "LEADVILLE MINING" and "LEADVILLE
HOLDING" designated Humberto Garcia Borbon as their representative in Mexico,
under the terms of and for purposes of article 5, article 190, paragraph five,
and article 208 of the Income Tax Law, article 13 of the United States-Mexico
Double Taxation Treaty, rule 3.31.15 of the Miscellaneous Tax Resolution in
force and other applicable tax rules.

THIRD.- In this act, simultaneously upon payment of the sum referred to in
subsection (A) of the Second clause, "LEADVILLE MINING" delivers Stock
Certificates number 1, 3 and 4 to "RUBA", duly endorsed to transfer title in its
favor, with respect to 169,033,674 shares fully covered by said Certificates,
and "LEADVILLE HOLDING" delivers Stock Certificate number 2 to "ANCHONDO", duly
endorsed to transfer title in his favor, with respect to 1 share fully covered
by said Certificate, without any title reserve or limitation, except for the
security object of the fifth clause hereof. Furthermore, an inscription was made
in the Stock Certificate Register of MINERA CHANATE, S.A. DE C.V. for purposes
of registering "RUBA" and "ANCHONDO" as new stockholders of said Corporation,
substituting "LEADVILLE MINING" and "LEADVILLE HOLDING", respectively.

FOURTH.- The transfer of "THE STOCK" is effected by "LEADVILLE MINING" and by
"LEADVILLE HOLDING, without any encumbrance, lien, legal limitation regarding
ownership or rights, tax liability and/or any other type of liability on said
stock, except of the security object of the fifth clause hereof, and "LEADVILLE
MINING" and "LEADVILLE HOLDING" assume an obligation to indemnify "RUBA" in the
event of dispossession of or hidden defects in the object of this sale.

FIFTH.- In order to guarantee "LEADVILLE MINING" and "LEADVILLE HOLDING"
(collectively referred to in this clause as the "Pledgees") the payment of the
installments referred to in subsections (B) and (C) of the second clause hereof,
and the respective common contractual interests and late payment charges and any
other sum referred to in subsection (B) of this clause, "RUBA" and "ANCHONDO"
(collectively referred to in this clause as "the Pledgors") hereby create a
security (hereinafter referred to as "the Security") on "THE STOCK" in favor of
the Pledgees, subject to the following rules, in addition to any other rules
applicable under this Agreement:

(A) The Pledgors hereby create the Security in favor of the Pledgees by
endorsing Stock Certificates 1, 3 and 4 in favor of "LEADVILLE MINING", and
Stock Certificate 2 in favor of "LEADVILLE HOLDING" and delivering the aforesaid
original Certificates to the respective Pledgees on the Date of Execution.

                                  Page 6 of 17
<PAGE>

                                                                    Exhibit 10.b

(B) The Pledgors hereby create the Security in favor of the Pledgees,
respectively, for purposes of guaranteeing (i) the timely and full payment of
the installments referred to in subsections (B) and (C) of the second clause,
(ii) the timely and full payment of common contractual interests and late
payment charges set forth in the second clause, and (iii) the timely and full
reimbursement of any legal costs and fees, including reasonable attorneys fees
paid by the Pledgees so as to exercise any rights derived from the Security and
any other rights derived from this Agreement and any laws applicable hereto.

(C) The aforesaid Security is created in the first place and degree and shall
keep such preference and priority until all of the debts and liabilities thereby
secured are fully paid, under the terms of this clause set forth in the
preceding subsection, to the satisfaction of the Pledgees.

(D) Pursuant to what is set forth in article 338 of the General Law of Credit
Instruments and Operations, the Pledgees shall keep and maintain the
Certificates of "THE STOCK" pledged. In the event of the payment obligations
referred to in the second clause and subsection (B) of this clause are not
fulfilled, the Pledgees may exercise the rights inherent to "THE STOCK",
including the exclusive right to vote with "THE STOCK", at or outside a meeting,
in the proportion that corresponds to each Pledgee, (i) for the resolutions that
correspond to the special shareholders' meeting referred to in sections I, II,
III, V, VI, VII, VIII, IX, X, XI (except for the change of corporate name,
domicile and purposes, which may be determined by the vote of the Pledgors
pursuant to what is set forth in the following subsection) and XII of article
182 of the General Law of Business Corporations; (ii) any matter reserved to the
special meeting pursuant to the corporate bylaws of "THE ISSUER); (iii) the
resolutions that correspond to the regular meeting with respect to matters not
reserved to the vote of the Pledgors under the following subsection of this
clause; and (iv) the resolutions referred to in subsection (E) of this clause.

(E) Except for what is set forth in the second paragraph of this subsection, the
Pledgors shall have the exclusive rights to vote with "THE STOCK", at or outside
a meeting, in the proportion that corresponds to each of them, solely with
respect to (i) the resolutions of any special meeting which purpose is to change
the corporate purpose, domicile and name of "THE ISSUER"; (ii) the resolutions
of regular meetings which purpose is to appoint agents, a sole administrator or
board of directors and stockholders' representatives, with the restrictions
referred to in the following subsection, determine the wage and salary of the
sole administrator or board members and stockholders' representatives, and
increase the variable portion of the capital stock. During the Pledge Period,
the Pledgors and the board members or the sole administrator of "THE ISSUER"
appointed by the Pledgors shall not vote on

                                  Page 7 of 17
<PAGE>

                                                                    Exhibit 10.b

or order any distribution of dividends, or cause "THE ISSUER" to deliver or
distribute said dividends, not even as provisional dividends. Furthermore,
during the Pledge Period, the Pledgors shall not cause "THE ISSUER", its board
members or its sole administrator or any other person to deliver or distribute
any other kind of revenues or accounting entries classified or considered as
dividends by any applicable fiscal or business law.

(F) At or outside a special meeting, the Pledgees may amend the corporate bylaws
of "THE ISSUER" (i) to make them compatible with the provisions hereof; (ii) to
prohibit the use or utilization of any benefit, right or privilege of any kind
(hereinafter, collectively referred to as "the Benefits"), that "THE ISSUER" may
have on the Date of Execution, prior to the fulfillment of any and all
obligation and commitment of the Pledgors hereunder; (iii) to deprive the
administrative body of "THE ISSUER" and its executives, grantors of powers of
attorney, agents, commission agents and dependents of any powers or rights they
may have so as to cause or order "THE ISSUER", or any other person or entity, to
use and utilize the Benefits of "THE ISSUER" as of the Date of Execution, prior
to the fulfillment of any and all of the obligations and commitments of the
Pledgors hereunder; and (iv) to amend the corporate bylaws of "THE ISSUER" in
any other sense so as to ensure that "THE ISSUER" or any other person or entity
shall not use or utilize the Benefits prior to the fulfillment of any and all of
the obligations of the Pledgors hereunder, and to secure any payment rights and
prior claims relative to the payment conferred to the Pledgees under the
Security and this Agreement.

Any acts conducted and any contracts or agreements executed in violation of what
is set forth in this clause and the amendments to the bylaws resolved by the
vote of the Pledgees pursuant to this clause shall not be binding upon, or be
opposable or exercised to the prejudice of "THE ISSUER" or the Pledgees or any
of the board members, executives, grantors, agents, commission agents or
dependents of the Pledgees.

(G) On the Date of Execution, the Pledgees deliver the respective receipts
referred to in article 337 of the General Law of Credit Instruments and
Operations to the Pledgors, so that the Pledgors can vote with "THE STOCK" at or
outside any of the meetings referred to in subsection (E) of this clause, in the
proportion that may correspond to each Pledgor. During the Pledge Period, the
original certificates of "THE STOCK" shall be kept in deposit by Humberto Garcia
Borbon at the offices located at Torre Hermosillo, Boulevard Kino 309, floor 10,
Colonia Country Club, Hermosillo, Sonora 83010. The depositary shall make said
Certificates available to the Pledgees and their advisors and consultants as
many times as necessary; furthermore, once the Pledgors have fulfilled their
obligations hereunder, the depositary shall deliver said Certificates to the
Pledgors.

                                  Page 8 of 17
<PAGE>

                                                                    Exhibit 10.b

Within 15 calendar days following the date of execution hereof, the Pledgees
shall deliver to the Pledgors a copy of the acceptance of position and of the
receipt of the original Stock Certificates signed by Humberto Garcia Borbon.

(H) In the event the Pledgors fail to pay the Pledgees any of the installments
set forth in subsections (B) and (C) of the second clause hereof and the
respective common contractual interests or late payment charges on the dates set
forth in said second clause at the latest, and any other sums referred to in
subsection (B) of this clause, the Pledgees shall keep the amounts already paid
by the Pledgors to the Pledgees, without any responsibility to the Pledgees, in
addition to other rights and actions of the Pledgees derived from the Pledgors'
failure to comply, pursuant to this agreement and the law, without the Pledgors'
obligation exceeding the debts specified in subsections (B) and (C) of the
second clause hereof, including the common interests and late payment charges
and other sums referred to in subsection (B) of this clause.

The Pledgors shall have a maximum of 15 calendar days to cure any failure to
perform their obligations under to this Agreement or to begin to cure the same,
the latter at the satisfaction of the Pledgees, as of the date on which said
failure to perform had occurred. If the Pledgors fail to cure said failure to
perform or to begin to cure the same within said period of 15 calendar days, the
latter at the satisfaction of the Pledgees, then the Pledgees may enforce and
exercise any and all rights and actions conferred to them under this agreement
and the law with respect to said failure to perform, either separately or
cumulatively; however, the exercise of any of said rights and actions shall not
imply or operate as a waiver or abandonment of any other rights and actions.

(I) Any agreements or contracts (hereinafter, "The Agreements of the Pledge
Period") executed by "THE ISSUER" during the term (hereinafter referred to as
"the Pledge Period") elapsed from the Date of Execution to the date on which the
Pledgees recover "THE STOCK" (hereinafter, "the Date of Recovery") due to the
Pledgors' default or any other reason or circumstance, shall be governed by the
following rules:

(1) Any Agreements executed by "THE ISSUER" with any of its shareholders,
affiliates or subsidiaries (hereinafter, all of the shall be referred to as "the
Affiliates") during the Pledge Period, shall terminate automatically on the Date
of Recovery, that is, without requiring any additional notice, request, demand,
order or agreement, whether written or oral.

For purposes of this agreement, a "shareholder" of "THE ISSUER" refers to any
individual or corporation that holds any shares issued by "THE ISSUER", in any
proportion; an "affiliate" of "THE ISSUER" refers to any corporation

                                  Page 9 of 17
<PAGE>

                                                                    Exhibit 10.b

controlled or whose stock is owned, at least 51% (fifty one percent) thereof, by
any stockholder that controls or owns at least 51% (fifty one percent) of the
stock of "THE ISSUER"; and a "subsidiary" of "THE ISSUER" refers to any entity
controlled by "THE ISSUER" or whose stock is owned by "THE ISSUER", at least by
51% (fifty one percent).

(2) "RUBA" shall also acquire or assume automatically the rights and duties
acquired by "THE ISSUER" under the Agreements of the Pledge Period executed by
"THE ISSUER" with any individuals or corporations other than the Affiliates,
effective as of the Date of Recovery, that is, without requiring any additional
notice, request, demand, order or agreement, either oral or written.

(3) By virtue of the inscription of this agreement in the Public Registry of
Property and Commerce, this agreement shall be opposable and binding without any
limitation or restriction upon those who had executed any Agreements of the
Pledge Period with "THE ISSUER". In any case, without prejudice to what is set
forth in this paragraph and other parts of this agreement, the Pledgors shall
have the duty to obtain from the other parties to said Agreements any additional
consent or acquiescence that may be necessary so that the acquisition or
assumption of rights and duties object of paragraph (2) of this subsection (I)
becomes effective, without any obligation or responsibility to "THE ISSUER", the
Pledgees or the board members, executives, agents, commission agents and
dependents of the Pledgees.

(4) The stipulations contained in paragraphs (2) and (3) of this subsection (I)
shall also be applicable to any separate labor agreement or any collective
bargaining agreement executed in a given case by "THE ISSUER" during the Pledge
Period.

(5) "RUBA" shall (i) be jointly and severally liable without limitation for the
performance of any and all obligations contracted by "THE ISSUER" under the
Agreements of the Pledge Period, not only to and with respect to the other
parties to said Agreements, but also to and with respect to any authority and
private organization of any kind, (ii) hold the Pledgees free and clear of any
obligations and liabilities of any kind, resulting from or related to the
Agreements of the Pledge Period, (iii) indemnify the Pledgors for any damages
resulting from or related to the Agreements of the Pledge Period, without any
limitation, and (iv) reimburse the Pledgees any reasonable attorney's fees and
any legal costs and expenses paid by the Pledgees so as to defend themselves
against the other parties to any Agreements of the Pledge Period executed by
"THE ISSUER" or against any authorities and private organizations of any kind as
regards the Agreements of the Pledge Period. "ANCHONDO" shall not be jointly and
severally responsible for the foregoing, but only for the value of his stock.

                                 Page 10 of 17
<PAGE>

                                                                    Exhibit 10.b

(6) The Pledgees shall have the option to cause "THE ISSUER" to assume any
Agreement of the Pledge Period, in which case the Pledgors shall be relieved of
any obligation or responsibility resulting from said Agreement of the Pledge
Period, in the understanding that such assumption must be written, express and
separate so that it may be effective against or with respect to "THE ISSUER".

(J) The Pledgors shall have the right to the early payment to the Pledgees of
the installments foreseen in subsections (B) and (C) of the second clause
hereof, plus the respective contractual interests or late payment charges,
without any penalty or charge of any kind to the Pledgors.

(K) The Pledgors shall pay the debts hereunder to the Pledgees prior to the
payment of any debt that the Pledgors may have or assume with "THE ISSUER",
notwithstanding their nature and the date on which said debts are or had been
contracted with "THE ISSUER" and regardless of any payment stipulations agreed
by the Pledgors and "THE ISSUER".

(L) The Pledgees shall deliver the original stock certificate book of "THE
ISSUER" within 10 working days following the date on which the Pledgors had paid
the Pledgees the three installments set forth in the second clause, plus any
contractual interests and late payment charges, if any, and any other sum set
forth in subsection (B) of this clause. During the Pledge Period, the original
stock certificate book of "THE ISSUER" shall be deposited with Humberto Garcia
Borbon, at the offices located at Torre Hermosillo, Boulevard Kino 309, 10th
floor, Colonia Country Club, Hermosillo, Sonora, 83010. The depositary shall
make said stock register book available to the Pledgees, their advisors and
consultants as frequently as necessary.

Through Attorneys Rodrigo Tena Cruz, Liliana Janeth Jaquez Peinado and Enrique
Marcos Abularach, the Pledgees shall deliver the Pledgors a copy of the
acceptance of position and receipt of stock certificate book referred to in the
preceding paragraph, signed by Humberto Garcia Borbon, within 15 calendar days
following the date of execution hereof,

The Pledgors shall have the right to receive from the Pledgees a certified copy
of any entries in the stock certificate book, at the sole expense of the
Pledgors, within 10 working days following the date on which the Pledgors had
requested the same in writing.

(M) The Security shall be registered in the stock certificate book of "THE
ISSUER" within 5 working days immediately following the Date of Execution.

                                 Page 11 of 17
<PAGE>

                                                                    Exhibit 10.b

(N) This agreement shall be filed for registration with the Public Registry of
Property and Commerce of the new corporate domicile of "THE ISSUER" as
determined by the vote of the Pledgors, or the Public Registry of Property and
Commerce of Hermosillo, Sonora, if the Pledgors do not change the corporate
domicile of "THE ISSUER" from Hermosillo, Sonora to any other Municipality, at
the sole expense of the Pledgors, so that the provisions contained in this
clause and this agreement are effective with respect to any third party.

SIXTH.- "LEADVILLE MINING" and "LEADVILLE HOLDING" shall deliver the original
documents relative to "THE ISSUER" held by "LEADVILLE MINING", "LEADVILLE
HOLDING" and by any third party of which "LEADVILLE MINING" and "LEADVILLE
HOLDING" have knowledge and which can be legally delivered to the legal agent of
"RUBA", containing the accounting records of "THE ISSUER", the performance of
its tax liabilities, all of the original authorized copies of instruments
executed by said company, as well as the original and, in a given case, the
certificate of any and all of the company's books, except for the stock
certificate book, and other legal, administrative, accounting and financial
documents of the company, within 15 calendar days following the date of
execution hereof, at the domicile located at Boulevard Hidalgo number 64,
Colonia Centenario, Hermosillo, Sonora. JESUS MIGUEL SANDOVAL ARMENTA shall keep
in deposit, at the domicile located at Fracc. Jadines del Seminario, Cd. Juarez,
Chihuahua, Mexico, the records, instruments, authorized copies, books,
statements and other documents referred to in this paragraph, and he shall have
the obligation to return the same to "LEADVILLE MINING" and "LEADVILLE HOLDING"
within 10 calendar days following the date on which "LEADVILLE MINING" and
"LEADVILLE HOLDING" request the same for having recovered "THE STOCK" in
accordance herewith.

Any accounting records and books, tax return statements and accounting and tax
documentation supporting any entries and data contained in said books, records
and statements of "THE SPLIT COMPANY" shall be kept in deposit and custody of
the "SPLIT COMPANY", pursuant to the provisions of the applicable tax laws.
"RUBA" may have access to all of said books, records, statements and documents
under the terms of the applicable laws and regulations. As of the date of
execution hereof and as far as "LEADVILLE MINING" and "LEADVILLE HOLDING" have
been able to find, said books, records, statements and documents are kept in the
files of the offices of the "Sanchez-Mejorada, Velasco y Valencia" Firm, in
Mexico City, except for the documents lent by said firm to "LEADVILLE MINING",
which shall be returned by the latter to said firm upon the expiration of the
term for which said documents were lent.

                                 Page 12 of 17
<PAGE>

                                                                    Exhibit 10.b

"LEADVILLE MINING" and "LEADVILLE HOLDING" shall inform "THE ISSUER" and "RUBA"
of any claim or complaint filed against them, as well as the commencement,
processing and conclusion of all kinds of tax examinations by any authority.

SEVENTH. Subject to what is set forth in the second paragraph of this clause,
"LEADVILLE MINING" and "LEADVILLE HOLDING" agree to indemnify "RUBA", MINERA
CHANATE, S.A. DE C.V., "ANCHONDO", their employees, directors, representatives,
agents or their successors and assigns (the "Indemnified Parties"), at the
express written request of any of the Indemnified Parties, for any loss,
responsibility, damage, property damage claims or expenses (including reasonable
attorney's fees and reasonable legal costs) directly or indirectly derived from
(i) any representation by "LEADVILLE MINING" and "LEADVILLE HOLDING" contained
herein that are substantially false or substantially incorrect, and (ii) any
liability or claim that may arise with respect to the businesses, operations or
administration of "THE SPLIT COMPANY" and/or MINERA CHANATE, S.A. DE C.V. prior
to the date of execution of this Agreement (hereinafter, the "Damages").

"LEADVILLE MINING'S" and "LEADVILLE HOLDING'S" obligation to indemnify, as set
forth in the preceding paragraph with respect to the "SPLIT COMPANY" shall be
proportional to the assets, liabilities and capital stock transferred by the
"SPLIT COMPANY" to MINERA EL CHANATE, S.A. DE C.V., as a result of the corporate
break-up. "LEADVILLE MINING'S" and "LEADVILLE HOLDING'S" obligation to indemnify
referred to in the preceding paragraph with respect to MINERA EL CHANATE, S.A.
DE C.V. shall be joint and several without any limitation.

The obligation of "LEADVILLE MINING" and "LEADVILLE HOLDING" under the preceding
paragraph shall remain effective for a period equal to that set forth in the
law.

EIGHTH. By virtue of the execution of this agreement, "LEADVILLE MINING" and
"LEADVILLE HOLDING" shall be jointly and severally, fully and unconditionally
responsible for any type of contractual obligation or indemnification contracted
by the "SPLIT COMPANY" prior to the date on which the corporate break-up became
effective, for any sale of stock, concessions, construction projects or
contracts, transfer of contracts, permits and businesses of any kind, subject to
what is set forth in the second paragraph of this clause.

"LEADVILLE MINING'S" and "LEADVILLE HOLDING'S" obligation to indemnify set forth
in the preceding paragraph with respect to the "SPLIT COMPANY" shall be
proportional to the assets, liabilities and capital stock

                                 Page 13 of 17
<PAGE>

                                                                    Exhibit 10.b

transferred by the "SPLIT COMPANY" to MINERA EL CHANATE, S.A. DE C.V. as a
result of the corporate break-up.

At the request of "LEADVILLE MINING" and "LEADVILLE HOLDING" or the assignees or
purchasers of "THE ISSUER" (collectively referred to as "the Purchasers"),
"RUBA" shall cause "THE ISSUER" to sign and deliver to any of them all of the
documents that "LEADVILLE MINING", "LEADVILLE HOLDING" or the Purchasers, in
their sole discretion, may need with respect to any transfer of the mining
concessions, lots and other assets effected prior to the Date of Execution, or
that "LEADVILLE MINING" and "LEADVILLE HOLDING" or the Purchasers, in their sole
discretion, may require so as to file said transfers with the competent
registries. "RUBA" and "ANCHONDO" shall vote with their stock in "THE ISSUER" so
as to confer upon the parties designated by the Purchaser, any power and right
that said designated parties may require so as to carry out said registration
and comply with any government requirements related to said transfers.

NINTH. Notwithstanding this transaction has been structured as a stock sale,
"RUBA" and "ANCHONDO" acknowledge and agree that neither of them nor "THE
ISSUER" shall have the right to receive or benefit from the value-added tax that
the Mexican fiscal authorities shall reimburse or return to "THE ISSUER" on the
date of execution hereof. "RUBA" and "ANCHONDO" hereby grant Humberto Garcia
Borbon, Eduardo Robles Elias and Jose Joaquin Cabrera Ochoa, an irrevocable
special power of attorney that may be exercised jointly or separately, with
delegation powers, so that they process and obtain said value-added tax refund,
on behalf of "THE ISSUER", and forward the same to "THE ISSUER", so that the
latter, in turn, sends or transfers the same to "LEADVILLE MINING" or any party
designated by the latter, within 15 calendar days following the date on which
"THE ISSUER" receives said refund, in the understanding that the granting of
said power of attorney is a condition for the execution of this agreement.
"RUBA" and "ANCHONDO" agree to forward to "LEADVILLE MINING", within 5 (five)
working days following the date of receipt, the aforementioned value-added tax
that "RUBA" and/or "ANCHONDO" may receive directly from Mexican tax authorities
in a given case. In the event the aforementioned special agents require any
authorization, consent or special power of attorney other than that which is
conferred under this clause, "RUBA" and "ANCHONDO" hereby irrevocably authorize
Rodrigo Tena Cruz, Liliana Janeth Jaquez Peinado and Enrique Marcos Abularach to
grant, either jointly or separately, any such authorization, consent or special
power of attorney other than that which is conferred under this clause before a
notary public. "RUBA" and "ANCHONDO" shall cause "THE ISSUER" to directly
process the aforementioned tax refund in the event the required formalities must
be conducted before the tax authorities of the new corporate domicile of "THE
ISSUER".

                                 Page 14 of 17
<PAGE>

                                                                    Exhibit 10.b

The delivery of said value-added tax to "LEADVILLE MINING" by "RUBA" and
"ANCHONDO" shall be deemed as a surcharge of "THE STOCK". However, the clauses
of this agreement relative to contractual interest and late payment charges or
those relative to the Security shall not be applicable to said surcharge.

TENTH. Rodrigo Tena Cruz, Liliana Janeth Jaquez Peinado and Enrique Marcos
Abularach, jointly or separately, on behalf of "RUBA" and "ANCHONDO", and
Eduardo Robles Elias and Jose Joaquin Cabrera Ochoa, jointly or separately, on
behalf of "LEADVILLE MINING" and "LEADVILLE HOLDING", shall appear before a
notary public selected by "RUBA" so as to formally register this agreement
within 15 (fifteen) calendar days following the date of execution of this
private agreement. Any notary's fees and expenses, any registration charges of
the Public Registry of Property and Commerce incurred due to the formal
registration hereof and any fees and expenses incurred as a result of the
acknowledgement of the contents of this private agreement and the ratification
of signatures hereof shall be paid by "RUBA" at its sole expense.

ELEVENTH.- Neither "RUBA" nor "ANCHONDO" shall assign or transfer the rights and
duties hereunder, including the rights and duties derived from the Security, as
set forth in the fifth clause, and the legal rules applicable hereto without the
prior written express consent of "LEADVILLE MINING" and "LEADVILLE HOLDING".
Notwithstanding said consent is granted, "RUBA" and the assignee shall jointly
and severally responsible for the obligations assigned to the latter.

TWELFTH. Any and all notices under this agreement may be personally delivered or
sent by registered mail with acknowledgement of receipt to the domiciles of the
parties as indicated in the following clause or to any other domicile
subsequently indicated in writing by any of the parties.

THIRTEENTH. For purposes of this agreement, the addresses of the parties shall
be the following:

To LEADVILLE MINING & MILLING CORPORATION and to LEADVILLE MINING AND MILLING
HOLDING CORPORATION:

76 Beaver Street, Suite 500, New York, New York 10005 U.S.A.
Boulevard Hidalgo 64, Colonia Centenario, Hermosillo, Sonora, Mexico.

C.c.: Randy Hubbard, randy.hubbard@dgslaw

Attn.: Roger Austin Newell or Jack Veeder Everett or Atty. Eduardo Robles Elias

Fax: 001 (303) 526 5100
e-mail: ranewell@compuserve.com
        jfeverett@worldcom.att.net.com and
        Eduardo Robles Elias: erobles@hmo.megared.net.mx

                                 Page 15 of 17
<PAGE>

                                                                    Exhibit 10.b

To
Inmobiliaria Ruba, S.A. de C.V. and to Luis Anchondo Cuilty:

Prof. Pedro Rosales de Leon 7548
Fracc. Jardines del Seminario, C.P. 32500
Cd. Juarez, Chihuahua,
Mexico

Attn.: Direction General and/or Finance Direction
Fax: (656) 688-04-06
e-mail: luis.anchondo@ruba.com.mx
        conlegal@infosel.net.mx

TENTH.- "LEADVILLE MINING" and "LEADVILLE HOLDING" may disclose the execution of
this agreement and exhibit it to the Security Exchange Commission of the United
States of America, the similar commission in Canada and any other authorities of
said countries where this agreement must be exhibited under the law. "RUBA" and
"ANCHONDO" agree that the execution of this agreement and its contents shall be
kept confidential except if they have to disclose the same to the Mexican
competent authorities. This duty of confidentiality shall not be deemed violated
if "RUBA" and "ANCHONDO" must show this agreement to their advisors and
auditors.

ELEVENTH. In everything related to the interpretation and performance hereof or
any dispute that may arise with respect to this Agreement, both parties submit
to the jurisdiction and competence of the Courts of the city of Chihuahua,
Chihuahua, hereby expressly waiving any other jurisdiction that may be
applicable by reason of their present or future domiciles or any other
circumstance.

                                 Page 16 of 17
<PAGE>

                                                                    Exhibit 10.b

Once the foregoing had been read and its value and force had been duly explained
to the contracting parties, they signed it in the city of Ciudad Juarez, on the
30th day of the month of March, 2002, before two attesting witnesses.

Sr. Jack Veeder Everett                 Eng. Jesus Miguel Sandoval Armenta
Agent of Leadville Mining & Milling     Agent of Inmobiliaria Ruba, S.A. de C.V.
Corporation

Sr. Roger Austin Newell                 C.P. Luis Alfonso Anchondo Cuilty,
Agent of                                by his own right
Leadville Mining & Milling Holding
Corporation

                                 Page 17 of 17<PAGE>

                                                                     EXHIBIT 4.1

                             CHOLESTECH CORPORATION

                       1999 NONSTATUTORY STOCK OPTION PLAN

                        (AS AMENDED EFFECTIVE MARCH 2002)

      1. Purposes of the Plan. The purposes of this Nonstatutory Stock Option
Plan are:

            -     to attract and retain the best available personnel for
                  positions of substantial responsibility,

            -     to provide additional incentive to Employees, Directors and
                  Consultants, and

            -     to promote the success of the Company's business.

            Options granted under the Plan will be Nonstatutory Stock Options.

      2. Definitions. As used herein, the following definitions shall apply:

            (a) "Administrator" means the Board or any of its Committees as
shall be administering the Plan, in accordance with Section 4 of the Plan.

            (b) "Applicable Laws" means the requirements relating to the
administration of stock option plans under U.S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or quotation
system on which the Common Stock is listed or quoted and the applicable laws of
any foreign country or jurisdiction where Options are, or will be, granted under
the Plan.

            (c) "Board" means the Board of Directors of the Company.

            (d) "Code" means the Internal Revenue Code of 1986, as amended.

            (e) "Committee" means a committee of Directors appointed by the
Board in accordance with Section 4 of the Plan.

            (f) "Common Stock" means the Common Stock of the Company.

            (g) "Company" means Cholestech Corporation, a California
corporation.

            (h) "Consultant" means any person, including an advisor, engaged by
the Company or a Parent or Subsidiary to render services to such entity.

            (i) "Director" means a member of the Board.

<PAGE>

            (j) "Disability" means total and permanent disability as defined in
Section 22(e)(3) of the Code.

            (k) "Employee" means any person, including Officers, employed by the
Company or any Parent or Subsidiary of the Company. A Service Provider shall not
cease to be an Employee in the case of (i) any leave of absence approved by the
Company or (ii) transfers between locations of the Company or between the
Company, its Parent, any Subsidiary, or any successor. Neither service as a
Director nor payment of a director's fee by the Company shall be sufficient to
constitute "employment" by the Company.

            (l) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

            (m) "Fair Market Value" means, as of any date, the value of Common
Stock determined as follows:

                  (i) If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the Nasdaq
National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its
Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system for
the last market trading day prior to the time of determination, as reported in
The Wall Street Journal or such other source as the Administrator deems
reliable;

                  (ii) If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, the Fair Market Value of
a Share of Common Stock shall be the mean between the high bid and low asked
prices for the Common Stock on the last market trading day prior to the day of
determination, as reported in The Wall Street Journal or such other source as
the Administrator deems reliable;

                  (iii) In the absence of an established market for the Common
Stock, the Fair Market Value shall be determined in good faith by the
Administrator.

            (n) "Notice of Grant" means a written or electronic notice
evidencing certain terms and conditions of an individual Option grant. The
Notice of Grant is part of the Option Agreement.

            (o) "Officer" means a person who is an officer of the Company within
the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.

            (p) "Option" means a nonstatutory stock option granted pursuant to
the Plan, that is not intended to qualify as an incentive stock option within
the meaning of Section 422 of the Code and the regulations promulgated
thereunder.

            (q) "Option Agreement" means an agreement between the Company and an
Optionee evidencing the terms and conditions of an individual Option grant. The
Option Agreement is subject to the terms and conditions of the Plan.

                                                                             -2-
<PAGE>

            (r) "Option Exchange Program" means a program whereby outstanding
options are surrendered in exchange for options with a lower exercise price.

            (s) "Optioned Stock" means the Common Stock subject to an Option.

            (t) "Optionee" means the holder of an outstanding Option granted
under the Plan.

            (u) "Parent" means a "parent corporation," whether now or hereafter
existing, as defined in Section 424(e) of the Code.

            (v) "Plan" means this 1999 Nonstatutory Stock Option Plan.

            (w) "Service Provider" means an Employee, Consultant or Director.

            (x) "Share" means a share of the Common Stock, as adjusted in
accordance with Section 12 of the Plan.

            (y) "Subsidiary" means a "subsidiary corporation," whether now or
hereafter existing, as defined in Section 424(f) of the Code.

      3. Stock Subject to the Plan. Subject to the provisions of Section 12 of
the Plan, the maximum aggregate number of Shares which may be optioned and sold
under the Plan is two million (2,000,000) Shares. The Shares may be authorized,
but unissued, or reacquired Common Stock.

            If an Option expires or becomes unexercisable without having been
exercised in full, or is surrendered pursuant to an Option Exchange Program, the
unpurchased Shares which were subject thereto shall become available for future
grant or sale under the Plan (unless the Plan has terminated).

      4. Administration of the Plan.

            (a) Administration. The Plan shall be administered by (i) the Board
or (ii) a Committee, which Committee shall be constituted to satisfy Applicable
Laws.

            (b) Powers of the Administrator. Subject to the provisions of the
Plan, and in the case of a Committee, subject to the specific duties delegated
by the Board to such Committee, the Administrator shall have the authority, in
its discretion:

                  (i) to determine the Fair Market Value of the Common Stock;

                  (ii) to select the Service Providers to whom Options may be
granted hereunder;

                  (iii) to determine whether and to what extent Options are
granted hereunder;

                                                                             -3-
<PAGE>

                  (iv) to determine the number of shares of Common Stock to be
covered by each Option granted hereunder;

                  (v) to approve forms of agreement for use under the Plan;

                  (vi) to determine the terms and conditions, not inconsistent
with the terms of the Plan, of any award granted hereunder. Such terms and
conditions include, but are not limited to, the exercise price, the time or
times when Options may be exercised (which may be based on performance
criteria), any vesting acceleration or waiver of forfeiture restrictions, and
any restriction or limitation regarding any Option or the shares of Common Stock
relating thereto, based in each case on such factors as the Administrator, in
its sole discretion, shall determine;

                  (vii) to reduce the exercise price of any Option to the then
current Fair Market Value if the Fair Market Value of the Common Stock covered
by such Option shall have declined since the date the Option was granted;

                  (viii) to institute an Option Exchange Program;

                  (ix) to construe and interpret the terms of the Plan and
awards granted pursuant to the Plan;

                  (x) to prescribe, amend and rescind rules and regulations
relating to the Plan, including rules and regulations relating to sub-plans
established for the purpose of qualifying for preferred tax treatment under
foreign tax laws;

                  (xi) to modify or amend each Option (subject to Section 14(b)
of the Plan), including the discretionary authority to extend the
post-termination exercisability period of Options longer than is otherwise
provided for in the Plan;

                  (xii) to authorize any person to execute on behalf of the
Company any instrument required to effect the grant of an Option previously
granted by the Administrator;

                  (xiii) to determine the terms and restrictions applicable to
Options;

                  (xiv) to allow Optionees to satisfy withholding tax
obligations by electing to have the Company withhold from the Shares to be
issued upon exercise of an Option that number of Shares having a Fair Market
Value equal to the amount required to be withheld. The Fair Market Value of the
Shares to be withheld shall be determined on the date that the amount of tax to
be withheld is to be determined. All elections by an Optionee to have Shares
withheld for this purpose shall be made in such form and under such conditions
as the Administrator may deem necessary or advisable; and

                  (xv) to make all other determinations deemed necessary or
advisable for administering the Plan.

                                                                             -4-
<PAGE>

            (c) Effect of Administrator's Decision. The Administrator's
decisions, determinations and interpretations shall be final and binding on all
Optionees and any other holders of Options.

      5. Eligibility. Options may be granted to Service Providers; provided,
however, that Options may not be granted to Officers and Directors, except in
connection with an Officer's or Director's initial service to the Company.

      6. Limitation. Neither the Plan nor any Option shall confer upon an
Optionee any right with respect to continuing the Optionee's relationship as a
Service Provider with the Company, nor shall they interfere in any way with the
Optionee's right or the Company's right to terminate such relationship at any
time, with or without cause.

      7. Term of Plan. The Plan shall become effective upon its adoption by the
Board. It shall continue in effect for ten (10) years, unless sooner terminated
under Section 14 of the Plan.

      8. Term of Option. The term of each Option shall be stated in the Option
Agreement.

      9. Option Exercise Price and Consideration.

            (a) Exercise Price. The per share exercise price for the Shares to
be issued pursuant to exercise of an Option shall be determined by the
Administrator.

            (b) Waiting Period and Exercise Dates. At the time an Option is
granted, the Administrator shall fix the period within which the Option may be
exercised and shall determine any conditions which must be satisfied before the
Option may be exercised.

            (c) Form of Consideration. The Administrator shall determine the
acceptable form of consideration for exercising an Option, including the method
of payment. Such consideration may consist entirely of:

                  (i) cash;

                  (ii) check;

                  (iii) promissory note;

                  (iv) other Shares which (A) in the case of Shares acquired
upon exercise of an option, have been owned by the Optionee for more than six
months on the date of surrender, and (B) have a Fair Market Value on the date of
surrender equal to the aggregate exercise price of the Shares as to which said
Option shall be exercised;

                  (v) consideration received by the Company under a cashless
exercise program implemented by the Company in connection with the Plan;

                                                                             -5-
<PAGE>

                  (vi) a reduction in the amount of any Company liability to the
Optionee, including any liability attributable to the Optionee's participation
in any Company-sponsored deferred compensation program or arrangement;

                  (vii) such other consideration and method of payment for the
issuance of Shares to the extent permitted by Applicable Laws; or

                  (viii) any combination of the foregoing methods of payment.

      10. Exercise of Option.

            (a) Procedure for Exercise; Rights as a Shareholder. Any Option
granted hereunder shall be exercisable according to the terms of the Plan and at
such times and under such conditions as determined by the Administrator and set
forth in the Option Agreement. An Option may not be exercised for a fraction of
a Share.

                  An Option shall be deemed exercised when the Company receives:
(i) written or electronic notice of exercise (in accordance with the Option
Agreement) from the person entitled to exercise the Option, and (ii) full
payment for the Shares with respect to which the Option is exercised. Full
payment may consist of any consideration and method of payment authorized by the
Administrator and permitted by the Option Agreement and the Plan. Shares issued
upon exercise of an Option shall be issued in the name of the Optionee or, if
requested by the Optionee, in the name of the Optionee and his or her spouse.
Until the Shares are issued (as evidenced by the appropriate entry on the books
of the Company or of a duly authorized transfer agent of the Company), no right
to vote or receive dividends or any other rights as a shareholder shall exist
with respect to the Optioned Stock, notwithstanding the exercise of the Option.
The Company shall issue (or cause to be issued) such Shares promptly after the
Option is exercised. No adjustment will be made for a dividend or other right
for which the record date is prior to the date the Shares are issued, except as
provided in Section 12 of the Plan.

                  Exercising an Option in any manner shall decrease the number
of Shares thereafter available, both for purposes of the Plan and for sale under
the Option, by the number of Shares as to which the Option is exercised.

            (b) Termination of Relationship as a Service Provider. If an
Optionee ceases to be a Service Provider, other than upon the Optionee's death
or Disability, the Optionee may exercise his or her Option, but only within such
period of time as is specified in the Option Agreement, and only to the extent
that the Option is vested on the date of termination (but in no event later than
the expiration of the term of such Option as set forth in the Option Agreement).
In the absence of a specified time in the Option Agreement, the Option shall
remain exercisable for three (3) months following the Optionee's termination.
If, on the date of termination, the Optionee is not vested as to his or her
entire Option, the Shares covered by the unvested portion of the Option shall
revert to the Plan. If, after termination, the Optionee does not exercise his or
her Option within the time specified by the Administrator, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.

                                                                             -6-
<PAGE>

            (c) Disability of Optionee. If an Optionee ceases to be a Service
Provider as a result of the Optionee's Disability, the Optionee may exercise his
or her Option within such period of time as is specified in the Option
Agreement, to the extent the Option is vested on the date of termination (but in
no event later than the expiration of the term of such Option as set forth in
the Option Agreement). In the absence of a specified time in the Option
Agreement, the Option shall remain exercisable for twelve (12) months following
the Optionee's termination. If, on the date of termination, the Optionee is not
vested as to his or her entire Option, the Shares covered by the unvested
portion of the Option shall revert to the Plan. If, after termination, the
Optionee does not exercise his or her Option within the time specified herein,
the Option shall terminate, and the Shares covered by such Option shall revert
to the Plan.

            (d) Death of Optionee. If an Optionee dies while a Service Provider,
the Option may be exercised within such period of time as is specified in the
Option Agreement (but in no event later than the expiration of the term of such
Option as set forth in the Notice of Grant), by the Optionee's estate or by a
person who acquires the right to exercise the Option by bequest or inheritance,
but only to the extent that the Option is vested on the date of death. In the
absence of a specified time in the Option Agreement, the Option shall remain
exercisable for twelve (12) months following the Optionee's termination. If, at
the time of death, the Optionee is not vested as to his or her entire Option,
the Shares covered by the unvested portion of the Option shall immediately
revert to the Plan. The Option may be exercised by the executor or administrator
of the Optionee's estate or, if none, by the person(s) entitled to exercise the
Option under the Optionee's will or the laws of descent or distribution. If the
Option is not so exercised within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.

            (e) Buyout Provisions. The Administrator may at any time offer to
buy out for a payment in cash or Shares, an Option previously granted based on
such terms and conditions as the Administrator shall establish and communicate
to the Optionee at the time that such offer is made.

      11. Non-Transferability of Options. Unless determined otherwise by the
Administrator, an Option may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws of
descent or distribution and may be exercised, during the lifetime of the
Optionee, only by the Optionee. If the Administrator makes an Option
transferable, such Option shall contain such additional terms and conditions as
the Administrator deems appropriate.

      12. Adjustments Upon Changes in Capitalization, Dissolution, Merger or
Asset Sale.

            (a) Changes in Capitalization. Subject to any required action by the
shareholders of the Company, the number of shares of Common Stock covered by
each outstanding Option, and the number of shares of Common Stock which have
been authorized for issuance under the Plan but as to which no Options have yet
been granted or which have been returned to the Plan upon cancellation or
expiration of an Option, as well as the price per share of Common Stock covered
by each such outstanding Option, shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Common Stock resulting
from a stock split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other increase or decrease in

                                                                             -7-
<PAGE>

the number of issued shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of Common Stock subject to an Option.

            (b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Administrator shall notify each
Optionee as soon as practicable prior to the effective date of such proposed
transaction. The Administrator in its discretion may provide for an Optionee to
have the right to exercise his or her Option until ten (10) days prior to such
transaction as to all of the Optioned Stock covered thereby, including Shares as
to which the Option would not otherwise be exercisable. In addition, the
Administrator may provide that any Company repurchase option applicable to any
Shares purchased upon exercise of an Option shall lapse as to all such Shares,
provided the proposed dissolution or liquidation takes place at the time and in
the manner contemplated. To the extent it has not been previously exercised, an
Option will terminate immediately prior to the consummation of such proposed
action.

            (c) Merger or Asset Sale. In the event of a merger of the Company
with or into another corporation, or the sale of substantially all of the assets
of the Company, each outstanding Option shall be assumed or an equivalent option
or right substituted by the successor corporation or a Parent or Subsidiary of
the successor corporation. In the event that the successor corporation refuses
to assume or substitute for the Option, the Optionee shall fully vest in and
have the right to exercise the Option as to all of the Optioned Stock, including
Shares as to which it would not otherwise be vested or exercisable. If an Option
becomes fully vested and exercisable in lieu of assumption or substitution in
the event of a merger or sale of assets, the Administrator shall notify the
Optionee in writing or electronically that the Option shall be fully vested and
exercisable for a period of fifteen (15) days from the date of such notice, and
the Option shall terminate upon the expiration of such period. For the purposes
of this paragraph, the Option shall be considered assumed if, following the
merger or sale of assets, the option or right confers the right to purchase or
receive, for each Share of Optioned Stock, immediately prior to the merger or
sale of assets, the consideration (whether stock, cash, or other securities or
property) received in the merger or sale of assets by holders of Common Stock
for each Share held on the effective date of the transaction (and if holders
were offered a choice of consideration, the type of consideration chosen by the
holders of a majority of the outstanding Shares); provided, however, that if
such consideration received in the merger or sale of assets is not solely common
stock of the successor corporation or its Parent, the Administrator may, with
the consent of the successor corporation, provide for the consideration to be
received upon the exercise of the Option, for each Share of Optioned Stock to be
solely common stock of the successor corporation or its Parent equal in fair
market value to the per share consideration received by holders of Common Stock
in the merger or sale of assets.

      13. Date of Grant. The date of grant of an Option shall be, for all
purposes, the date on which the Administrator makes the determination granting
such Option, or such other later date as is

                                                                             -8-
<PAGE>

determined by the Administrator. Notice of the determination shall be provided
to each Optionee within a reasonable time after the date of such grant.

      14. Amendment and Termination of the Plan.

            (a) Amendment and Termination. The Board may at any time amend,
alter, suspend or terminate the Plan.

            (b) Effect of Amendment or Termination. No amendment, alteration,
suspension or termination of the Plan shall impair the rights of any Optionee,
unless mutually agreed otherwise between the Optionee and the Administrator,
which agreement must be in writing and signed by the Optionee and the Company.
Termination of the Plan shall not affect the Administrator's ability to exercise
the powers granted to it hereunder with respect to options granted under the
Plan prior to the date of such termination.

      15. Conditions Upon Issuance of Shares.

            (a) Legal Compliance. Shares shall not be issued pursuant to the
exercise of an Option unless the exercise of such Option and the issuance and
delivery of such Shares shall comply with Applicable Laws and shall be further
subject to the approval of counsel for the Company with respect to such
compliance.

            (b) Investment Representations. As a condition to the exercise of an
Option the Company may require the person exercising such Option to represent
and warrant at the time of any such exercise that the Shares are being purchased
only for investment and without any present intention to sell or distribute such
Shares if, in the opinion of counsel for the Company, such a representation is
required.

      16. Inability to Obtain Authority. The inability of the Company to obtain
authority from any regulatory body having jurisdiction, which authority is
deemed by the Company's counsel to be necessary to the lawful issuance and sale
of any Shares hereunder, shall relieve the Company of any liability in respect
of the failure to issue or sell such Shares as to which such requisite authority
shall not have been obtained.

      17. Reservation of Shares. The Company, during the term of this Plan, will
at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.

                                                                             -9-
<PAGE>

                             CHOLESTECH CORPORATION

                       1999 NONSTATUTORY STOCK OPTION PLAN

                             STOCK OPTION AGREEMENT

        Unless otherwise defined herein, the terms defined in the Plan shall
have the same defined meanings in this Option Agreement.

I.      NOTICE OF STOCK OPTION GRANT

        [OPTIONEE'S NAME AND ADDRESS]

        You have been granted an option to purchase Common Stock of the Company,
subject to the terms and conditions of the Plan and this Option Agreement, as
follows:

        Grant Number                        ___________________________

        Date of Grant                       ___________________________

        Vesting Commencement Date           ___________________________

        Exercise Price per Share            $__________________________

        Total Number of Shares Granted      ___________________________

        Total Exercise Price                $__________________________

        Type of Option:                     Nonstatutory Stock Option

        Term/Expiration Date:               ___________________________

        Vesting Schedule:

        Subject to the Optionee continuing to be a Service Provider on such
dates, this Option shall vest and become exercisable in accordance with the
following schedule:

        [1/48 OF THE SHARES SUBJECT TO THE OPTION SHALL VEST EACH MONTH AFTER
THE VESTING COMMENCEMENT DATE.]

<PAGE>

        Termination Period:

        This Option may be exercised for three months after Optionee ceases to
be a Service Provider. Upon the death or Disability of the Optionee, this Option
may be exercised for twelve months following Optionee's termination as a Service
Provider. In no event shall this Option be exercised later than the
Term/Expiration Date as provided above.

II.     AGREEMENT

        1. Grant of Option. The Plan Administrator of the Company hereby grants
to the Optionee named in the Notice of Grant attached as Part I of this
Agreement (the "Optionee") an option (the "Option") to purchase the number of
Shares, as set forth in the Notice of Grant, at the exercise price per share set
forth in the Notice of Grant (the "Exercise Price"), subject to the terms and
conditions of the Plan, which is incorporated herein by reference. Subject to
Section 14(b) of the Plan, in the event of a conflict between the terms and
conditions of the Plan and the terms and conditions of this Option Agreement,
the terms and conditions of the Plan shall prevail.

        2. Exercise of Option.

               (a) Right to Exercise. This Option is exercisable during its term
in accordance with the Vesting Schedule set out in the Notice of Grant and the
applicable provisions of the Plan and this Option Agreement.

               (b) Method of Exercise. This Option is exercisable by delivery of
an exercise notice, in the form attached as Exhibit A (the "Exercise Notice"),
which shall state the election to exercise the Option, the number of Shares in
respect of which the Option is being exercised (the "Exercised Shares"), and
such other representations and agreements as may be required by the Company
pursuant to the provisions of the Plan. The Exercise Notice shall be completed
by the Optionee and delivered to Chief Financial Officer. The Exercise Notice
shall be accompanied by payment of the aggregate Exercise Price as to all
Exercised Shares. This Option shall be deemed to be exercised upon receipt by
the Company of such fully executed Exercise Notice accompanied by such aggregate
Exercise Price.

               No Shares shall be issued pursuant to the exercise of this Option
unless such issuance and exercise complies with Applicable Laws. Assuming such
compliance, for income tax purposes the Exercised Shares shall be considered
transferred to the Optionee on the date the Option is exercised with respect to
such Exercised Shares.

        3. Method of Payment. Payment of the aggregate Exercise Price shall be
by any of the following, or a combination thereof, at the election of the
Optionee:

               (a) cash;

               (b) check;

                                                                             -2-
<PAGE>

               (c) consideration received by the Company under a cashless
exercise program implemented by the Company in connection with the Plan; or

               (d) surrender of other Shares which (i) in the case of Shares
acquired upon exercise of an option, have been owned by the Optionee for more
than six (6) months on the date of surrender, and (ii) have a Fair Market Value
on the date of surrender equal to the aggregate Exercise Price of the Exercised
Shares.

        4. Non-Transferability of Option. This Option may not be transferred in
any manner otherwise than by will or by the laws of descent or distribution and
may be exercised during the lifetime of Optionee only by the Optionee. The terms
of the Plan and this Option Agreement shall be binding upon the executors,
administrators, heirs, successors and assigns of the Optionee.

        5. Term of Option. This Option may be exercised only within the term set
out in the Notice of Grant, and may be exercised during such term only in
accordance with the Plan and the terms of this Option Agreement.

        6. Tax Consequences. Some of the federal tax consequences relating to
this Option, as of the date of this Option, are set forth below. THIS SUMMARY IS
NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE.
THE OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR
DISPOSING OF THE SHARES.

               (a) Exercising the Option. The Optionee may incur regular federal
income tax liability upon exercise of an NSO. The Optionee will be treated as
having received compensation income (taxable at ordinary income tax rates) equal
to the excess, if any, of the Fair Market Value of the Exercised Shares on the
date of exercise over their aggregate Exercise Price. If the Optionee is an
Employee or a former Employee, the Company will be required to withhold from his
or her compensation or collect from Optionee and pay to the applicable taxing
authorities an amount in cash equal to a percentage of this compensation income
at the time of exercise, and may refuse to honor the exercise and refuse to
deliver Shares if such withholding amounts are not delivered at the time of
exercise.

               (b) Disposition of Shares. If the Optionee holds NSO Shares for
at least one year, any gain realized on disposition of the Shares will be
treated as long-term capital gain for federal income tax purposes.

        7. Entire Agreement; Governing Law. The Plan is incorporated herein by
reference. The Plan and this Option Agreement constitute the entire agreement of
the parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and Optionee with
respect to the subject matter hereof, and may not be modified adversely to the
Optionee's interest except by means of a writing signed by the Company and
Optionee. This agreement is governed by the internal substantive laws, but not
the choice of law rules, of California.

                                                                             -3-
<PAGE>

        8. NO GUARANTEE OF CONTINUED SERVICE. OPTIONEE ACKNOWLEDGES AND AGREES
THAT THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED
ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (AND NOT
THROUGH THE ACT OF BEING HIRED, BEING GRANTED AN OPTION OR PURCHASING SHARES
HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE
TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO
NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A
SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL
NOT INTERFERE WITH OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT TO TERMINATE
OPTIONEE'S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT
CAUSE.

        By your signature and the signature of the Company's representative
below, you and the Company agree that this Option is granted under and governed
by the terms and conditions of the Plan and this Option Agreement. Optionee has
reviewed the Plan and this Option Agreement in their entirety, has had an
opportunity to obtain the advice of counsel prior to executing this Option
Agreement and fully understands all provisions of the Plan and Option Agreement.
Optionee hereby agrees to accept as binding, conclusive and final all decisions
or interpretations of the Administrator upon any questions relating to the Plan
and Option Agreement. Optionee further agrees to notify the Company upon any
change in the residence address indicated below.

OPTIONEE                                           CHOLESTECH CORPORATION

------------------------------------               -----------------------------
Signature                                          By

------------------------------------               -----------------------------
Print Name                                         Title

------------------------------------
Residence Address

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

                                                                             -4-
<PAGE>

                                    EXHIBIT A

                             CHOLESTECH CORPORATION

                       1999 NONSTATUTORY STOCK OPTION PLAN

                                 EXERCISE NOTICE

Cholestech Corporation
3347 Investment Boulevard
Hayward, CA 94545-3877

Attention: Chief Financial Officer

        Exercise of Option. Effective as of today, ________________, _____, the
undersigned ("Purchaser") hereby elects to purchase ______________ shares (the
"Shares") of the Common Stock of Cholestech Corporation (the "Company") under
and pursuant to the 1999 Nonstatutory Stock Option Plan (the "Plan") and the
Stock Option Agreement dated, _________, ___ (the "Option Agreement"). The
purchase price for the Shares shall be $___, as required by the Option
Agreement.

        1. Delivery of Payment. Purchaser herewith delivers to the Company the
full purchase price for the Shares.

        2. Representations of Purchaser. Purchaser acknowledges that Purchaser
has received, read and understood the Plan and the Option Agreement and agrees
to abide by and be bound by their terms and conditions.

        3. Rights as Shareholder. Until the issuance (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company) of the Shares, no right to vote or receive dividends or
any other rights as a shareholder shall exist with respect to the Optioned
Stock, notwithstanding the exercise of the Option. The Shares so acquired shall
be issued to the Optionee as soon as practicable after exercise of the Option.
No adjustment will be made for a dividend or other right for which the record
date is prior to the date of issuance, except as provided in Section 12 of the
Plan.

        4. Tax Consultation. Purchaser understands that Purchaser may suffer
adverse tax consequences as a result of Purchaser's purchase or disposition of
the Shares. Purchaser represents that Purchaser has consulted with any tax
consultants Purchaser deems advisable in connection with

<PAGE>

the purchase or disposition of the Shares and that Purchaser is not relying on
the Company for any tax advice.

        5. Entire Agreement; Governing Law. The Plan and Option Agreement are
incorporated herein by reference. This Agreement, the Plan and the Option
Agreement constitute the entire agreement of the parties with respect to the
subject matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and Purchaser with respect to the subject matter
hereof, and may not be modified adversely to the Purchaser's interest except by
means of a writing signed by the Company and Purchaser. This agreement is
governed by the internal substantive laws, but not the choice of law rules, of
California.

Submitted by:                                 Accepted by:

PURCHASER                                     CHOLESTECH CORPORATION

------------------------------------------    ---------------------------------
Signature                                     By

------------------------------------------    ---------------------------------
Print Name                                    Title

                                              ---------------------------------
                                              Date Received

Address:                                     Address: 3347 Investment Boulevard
           -------------------------------            Hayward, CA 94545-3877

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

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

                                                                             -2-

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