<PAGE>
                                                                    EXHIBIT 10.1

                FIRST AMENDMENT TO CREDIT AND SECURITY AGREEMENT

                  This Amendment, dated as of September 17, 2001, is made by and
between VARI-L COMPANY, INC., a Colorado corporation (the "Borrower"), and WELLS
FARGO BUSINESS CREDIT, INC., a Minnesota corporation (the "Lender").

                                    Recitals

                  The Borrower and the Lender are parties to a Credit and
Security Agreement dated as of June 28, 2001 (the "Credit Agreement").
Capitalized terms used in these recitals have the meanings given to them in the
Credit Agreement unless otherwise specified.

                  The Borrower has requested that certain amendments be made to
the Credit Agreement, which the Lender is willing to make pursuant to the terms
and conditions set forth herein.

                  NOW, THEREFORE, in consideration of the premises and of the
mutual covenants and agreements herein contained, it is agreed as follows:

                  1. Capitalized terms used in this Amendment which are defined
in the Credit Agreement shall have the same meanings as defined therein, unless
otherwise defined herein. In addition, Section 1.1 of the Credit Agreement is
amended by adding or amending, as the case may be, the following definitions:

                  "Collateral" means all of the Borrower's Accounts,
         Receivables, chattel paper, deposit accounts, documents, Equipment,
         General Intangibles, goods, instruments, Inventory, Investment
         Property, letter-of-credit rights, letters of credit, all sums on
         deposit in any Collateral Account, and any items in any Lockbox;
         together with (i) all substitutions and replacements for and products
         of any of the foregoing; (ii) in the case of all goods, all accessions;
         (iii) all accessories, attachments, parts, equipment and repairs now or
         hereafter attached or affixed to or used in connection with any goods;
         (iv) all warehouse receipts, bills of lading and other documents of
         title now or hereafter covering such goods; (v) all collateral subject
         to the lien of any Security Document; (vi) any money, or other assets
         of the Borrower that now or hereafter come into the possession,
         custody, or control of the Lender; and (vii) proceeds of any and all of
         the foregoing.

                  "Current Maturities of Long Term Debt" means for a given
         period the amount of the Borrower's long-term debt and capitalized
         leases which became due during the period ending on the designated
         date.

                  "Debt Service Coverage Ratio" means the ratio of (i) the sum
         of (A) Funds from Operations and (B) Interest Expense minus (C)
         Unfinanced Capital Expenditures to (ii) the sum of (A) Current
         Maturities of Long Term Debt and (B) Interest Expense.



<PAGE>


                  "Funds From Operations" means for a given period, the sum of
         (i) after tax net income from continuing operations, (ii) depreciation
         and amortization, (iii) deferred income taxes, and (iv) other non-cash
         items, each as determined for such period in accordance with GAAP.

                  "Interest Expense" means for a given period, the Borrower's
         total gross interest expense during such period (excluding interest
         income), and shall in any event include (i) interest expensed (whether
         or not paid) on all Debt, (ii) the amortization of debt discounts,
         (iii) the amortization of all fees payable in connection with the
         incurrence of Debt to the extent included in interest expense, and (iv)
         the portion of any capitalized lease obligation allocable to interest
         expense.

                  2. Section 1.2 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:

                  "Section 1.2 Other Definitional Terms; Rules of
         Interpretation. The words "hereof", "herein" and "hereunder" and words
         of similar import when used in this Agreement shall refer to this
         Agreement as a whole and not to any particular provision of this
         Agreement. All accounting terms not otherwise defined herein have the
         meanings assigned to them in accordance with GAAP. All terms defined in
         the UCC and not otherwise defined herein have the meanings assigned to
         them in the UCC. References to Articles, Sections, subsections,
         Exhibits, Schedules and the like, are to Articles, Sections and
         subsections of, or Exhibits or Schedules attached to, this Agreement
         unless otherwise expressly provided. The words "include", "includes"
         and "including" shall be deemed to be followed by the phrase "without
         limitation". Unless the context in which used herein otherwise clearly
         requires, "or" has the inclusive meaning represented by the phrase
         "and/or". Defined terms include in the singular number the plural and
         in the plural number the singular. Reference to any agreement
         (including the Loan Documents), document or instrument means such
         agreement, document or instrument as amended or modified and in effect
         from time to time in accordance with the terms thereof (and, if
         applicable, in accordance with the terms hereof and the other Loan
         Documents), except where otherwise explicitly provided, and reference
         to any promissory note includes any promissory note which is an
         extension or renewal thereof or a substitute or replacement therefor.
         Reference to any law, rule, regulation, order, decree, requirement,
         policy, guideline, directive or interpretation means as amended,
         modified, codified, replaced or reenacted, in whole or in part, and in
         effect on the determination date, including rules and regulations
         promulgated thereunder."

                  3. Section 2.11(c) of the Credit Agreement is hereby amended
by changing the reference in that paragraph from Section 6.14 to Section 6.15.

                  4. Section 3.6 of the Credit Agreement is hereby amended by
adding the following new sentence before the first sentence of that Section:


                                      -2-
<PAGE>


         "The Borrower authorizes the Lender to file from time to time where
         permitted by law, such financing statements against collateral
         described as 'all personal property' as the Lender deems necessary or
         useful to perfect the Security Interest."

                  5. Section 6.12 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:

                  "Section 6.12 Minimum Book Net Worth. The Borrower will
         maintain, during each period described below, its Book Net Worth,
         determined as at the end of each month, at an amount not less than the
         amount set forth opposite such period:

<TABLE>
<CAPTION>
                            PERIOD                                      MINIMUM BOOK
                                                                         NET WORTH
           <S>                                                          <C>
           The month ending June 30, 2001                                $13,800,000
           The month ending July 31, 2001                                $12,650,000
           The month ending August 31, 2001                              $12,350,000
           The month ending September 30, 2001                           $12,045,000
           The month ending October 31, 2001                             $12,000,000
           The month ending November 30, 2001                            $11,850,000
           The month ending December 31, 2001                            $12,160,000
           The month ending January 31, 2002                             $13,250,000
           The month ending February 28, 2002                            $14,400,000
           The month ending March 31, 2002                               $15,445,000
           The month ending April 30, 2002                               $16,200,000
           The month ending May 31, 2002                                 $16,800,000
           The month ending June 30, 2002 and thereafter                 $17,045,000"
</TABLE>

                  6. Section 6.13 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:

                  "Section 6.13 Minimum Net Income. The Borrower will achieve
         during each period described below, Net Income of not less than, or a
         Net Loss not greater than, the amount set forth opposite such period
         (number appearing between "()" are negative):

<TABLE>
<CAPTION>
                                    PERIOD                             MINIMUM NET INCOME
                  <S>                                                  <C>
                  The twelve months ending June 30, 2001                  ($1,400,000)
                  The three months ending September 30, 2001              ($1,800,000)
                  The six months ending December 31, 2001                 ($1,685,000)
                  The nine months ending March 31, 2002                    $1,600,000
                  The twelve months ending June 30, 2002                   $3,200,000"
</TABLE>

                  7. Section 6.14 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:


                                      -3-
<PAGE>


                  "Section 6.14 Minimum Debt Service Coverage Ratio. The
         Borrower will achieve for twelve-month period ending June 30, 2002, a
         Debt Service Coverage Ratio of not less than 2.00 to 1.00."

                  8. The Credit Agreement is hereby amended by adding a new
Section 6.15 to read as follows:

                  "Section 6.15 New Covenants. On or before June 30, 2002, the
         Borrower and the Lender shall agree on new covenant levels for Section
         6.12, Section 6.13, Section 6.14 and Section 7.10 for periods after
         such date. The new covenant levels will be based on the Borrower's
         projections for such periods and shall be no less stringent than the
         present levels, but if the Borrower and the Lender do not agree, the
         Lender may designate the required amounts in its sole discretion and
         the failure by the Borrower to maintain the designated amounts shall
         constitute an Event of Default."

                  9. Section 7.10 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:

                  "Section 7.10 Capital Expenditures. The Borrower will not
         incur or contract to incur Unfinanced Capital Expenditures of more than
         (i) $4,000,000 during its fiscal year ending June 30, 2001; (ii)
         $750,000 during the period from July 1, 2001 through September 30,
         2001; (iii) $1,850,000 during the period from October 1, 2001 through
         December 31, 2001; (iv) $2,500,000 during the period from January 1,
         2002 through March 31, 2002; and (v) $2,800,000 during the period from
         April 1, 2002 through June 30, 2002."

                  10. Exhibit D of the Credit Agreement is hereby amended and
restated in its entirety and replaced with Exhibit D attached hereto.

                  11. No Other Changes. Except as explicitly amended by this
Amendment, all of the terms and conditions of the Credit Agreement shall remain
in full force and effect and shall apply to any advance or letter of credit
thereunder.

                  12. Amendment Fee. The Borrower shall pay the Lender as of the
date hereof a fully earned, non-refundable fee in the amount of $15,000 in
consideration of the Lender's execution and delivery of this Amendment.

                  13. Conditions Precedent. This Amendment shall be effective
when the Lender shall have received an executed original hereof, together with
(i) payment of the fee described in Paragraph 12 and (ii) such other matters as
the Lender may require, each in substance and form acceptable to the Lender in
its sole discretion.

                  14. Representations and Warranties. The Borrower hereby
represents and warrants to the Lender as follows:


                                      -4-
<PAGE>

                  (a) The Borrower has all requisite power and authority to
         execute this Amendment and to perform all of its obligations hereunder,
         and this Amendment has been duly executed and delivered by the Borrower
         and constitutes the legal, valid and binding obligation of the
         Borrower, enforceable in accordance with its terms.

                  (b) The execution, delivery and performance by the Borrower of
         this Amendment have been duly authorized by all necessary corporate
         action and do not (i) require any authorization, consent or approval by
         any governmental department, commission, board, bureau, agency or
         instrumentality, domestic or foreign, (ii) violate any provision of any
         law, rule or regulation or of any order, writ, injunction or decree
         presently in effect, having applicability to the Borrower, or the
         articles of incorporation or by-laws of the Borrower, or (iii) result
         in a breach of or constitute a default under any indenture or loan or
         credit agreement or any other agreement, lease or instrument to which
         the Borrower is a party or by which it or its properties may be bound
         or affected.

                  (c) All of the representations and warranties contained in
         Article V of the Credit Agreement are correct on and as of the date
         hereof as though made on and as of such date, except to the extent that
         such representations and warranties relate solely to an earlier date.

                  15. References. All references in the Credit Agreement to
"this Agreement" shall be deemed to refer to the Credit Agreement as amended
hereby; and any and all references in the Security Documents to the Credit
Agreement shall be deemed to refer to the Credit Agreement as amended hereby.

                  16. No Waiver. The execution of this Amendment and acceptance
of any documents related hereto shall not be deemed to be a waiver of any
Default or Event of Default under the Credit Agreement or breach, default or
event of default under any Security Document or other document held by the
Lender, whether or not known to the Lender and whether or not existing on the
date of this Amendment.

                  17. Release. The Borrower hereby absolutely and
unconditionally releases and forever discharges the Lender, and any and all
participants, parent corporations, subsidiary corporations, affiliated
corporations, insurers, indemnitors, successors and assigns thereof, together
with all of the present and former directors, officers, agents and employees of
any of the foregoing, from any and all claims, demands or causes of action of
any kind, nature or description, whether arising in law or equity or upon
contract or tort or under any state or federal law or otherwise, which the
Borrower has had, now has or has made claim to have against any such person for
or by reason of any act, omission, matter, cause or thing whatsoever arising
from the beginning of time to and including the date of this Amendment, whether
such claims, demands and causes of action are matured or unmatured or known or
unknown.

                  18. Costs and Expenses. The Borrower hereby reaffirms its
agreement under the Credit Agreement to pay or reimburse the Lender on demand
for all costs and expenses




                                      -5-
<PAGE>


incurred by the Lender in connection with the Loan Documents, including without
limitation all reasonable fees and disbursements of legal counsel. Without
limiting the generality of the foregoing, the Borrower specifically agrees to
pay all fees and disbursements of counsel to the Lender for the services
performed by such counsel in connection with the preparation of this Amendment
and the documents and instruments incidental hereto. The Borrower hereby agrees
that the Lender may, at any time or from time to time in its sole discretion and
without further authorization by the Borrower, make a loan to the Borrower under
the Credit Agreement, or apply the proceeds of any loan, for the purpose of
paying any such fees, disbursements, costs and expenses and the fee required
under paragraph 12 hereof.

                  19. Miscellaneous. This Amendment may be executed in any
number of counterparts, each of which when so executed and delivered shall be
deemed an original and all of which counterparts, taken together, shall
constitute one and the same instrument.

                  IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed as of the date first written above.



WELLS FARGO BUSINESS CREDIT, INC.             VARI-L COMPANY, INC.



By /s/ Timothy P. Ulrich                      By /s/ Richard P. Dutkiewicz
  ------------------------------                --------------------------------
  Timothy P. Ulrich                             Richard P. Dutkiewicz
  Its: Vice President                           Its: Vice President of Finance
                                                     and Chief Financial Officer





                                      -6-
<PAGE>


                   EXHIBIT D TO CREDIT AND SECURITY AGREEMENT

                             COMPLIANCE CERTIFICATE



To:               Timothy P. Ulrich
                  Wells Fargo Business Credit, Inc.

Date:             __________________, 200__
Subject:          Vari-L Company, Inc.
                  Financial Statements


         In accordance with our Credit and Security Agreement dated as of June
28, 2001 (the "Credit Agreement"), attached are the financial statements of
Vari-L Company, Inc. (the "Borrower") as of and for ________________, 20__ (the
"Reporting Date") and the year-to-date period then ended (the "Current
Financials"). All terms used in this certificate have the meanings given in the
Credit Agreement.

         I certify that the Current Financials have been prepared in accordance
with GAAP, subject to year-end audit adjustments, and fairly present the
Borrower's financial condition and the results of its operations as of the date
thereof.

         Events of Default. (Check one):

         [ ]      The undersigned does not have knowledge of the occurrence of a
Default or Event of Default under the Credit Agreement.

         [ ]      The undersigned has knowledge of the occurrence of a Default
or Event of Default under the Credit Agreement and attached hereto is a
statement of the facts with respect to thereto.

         I hereby certify to the Lender as follows:

         [ ]      The Reporting Date does not mark the end of one of the
Borrower's fiscal quarters, hence I am completing only paragraph __ below.

         [ ]      The Reporting Date marks the end of one of the Borrower's
fiscal quarters, hence I am completing all paragraphs below except paragraph __.

         [ ]      The Reporting Date marks the end of the Borrower's fiscal
year, hence I am completing all paragraphs below.


<PAGE>


         1.       Minimum Book Net Worth.  Pursuant to Section 6.12 of the
                  Credit Agreement, as of the Reporting Date, the Borrower's
                  Book Net Worth was $____________ which [ ] satisfies [ ] does
                  not satisfy the requirement that such amount be not less than
                  as set forth in table below:

<TABLE>
<CAPTION>
                            PERIOD                                                 MINIMUM BOOK
                                                                                    NET WORTH
            <S>                                                                    <C>
            The month ending June 30, 2001                                          $13,800,000
            The month ending July 31, 2001                                          $12,650,000
            The month ending August 31, 2001                                        $12,350,000
            The month ending September 30, 2001                                     $12,045,000
            The month ending October 31, 2001                                       $12,000,000
            The month ending November 30, 2001                                      $11,850,000
            The month ending December 31, 2001                                      $12,160,000
            The month ending January 31, 2002                                       $13,250,000
            The month ending February 28, 2002                                      $14,400,000
            The month ending March 31, 2002                                         $15,445,000
            The month ending April 30, 2002                                         $16,200,000
            The month ending May 31, 2002                                           $16,800,000
            The month ending June 30, 2002 and thereafter                           $17,045,000
</TABLE>


         2.       Minimum Net Income. Pursuant to Section 6.13 of the Credit
                  Agreement, the Borrower's Net Income for the ________ period
                  ending on the Reporting Date, was $____________, which [ ]
                  satisfies [ ] does not satisfy the requirement that such
                  amount be not less than, or such loss shall not be greater
                  than, $_____________ during such period as set forth in table
                  below:


<TABLE>
<CAPTION>
                                   PERIOD                             MINIMUM NET INCOME
                  <S>                                                 <C>
                  The twelve months ending June 30, 2001                 ($1,400,000)
                  The three months ending September 30, 2001             ($1,800,000)
                  The six months ending December 31, 2001                ($1,685,000)
                  The nine months ending March 31, 2002                   $1,600,000
                  The twelve months ending June 30, 2002                  $3,200,000
</TABLE>


         3.       Minimum Debt Service Coverage Ratio. Pursuant to Section 6.14
                  of the Credit Agreement, as of the Reporting Date, the
                  Borrower's Debt Service Coverage Ratio was ______ to 1.00
                  which [ ] satisfies [ ] does not satisfy the requirement that
                  such ratio be no less than 2.00 to 1.00 on the Reporting Date.


<PAGE>


         4.       Capital Expenditures. Pursuant to Section 7.10 of the Credit
                  Agreement, for the year-to-date period ending on the Reporting
                  Date, the Borrower has expended or contracted to expend during
                  the _____ month period ending _________________, for Capital
                  Expenditures, $__________________ in the aggregate, which [ ]
                  satisfies [ ] does not satisfy the requirement that such
                  expenditures not exceed $____________ in the aggregate during
                  such period.

         5.       Salaries. As of the Reporting Date, the Borrower [ ] is [ ]is
                  not in compliance with Section 7.17 of the Credit Agreement
                  concerning salaries.


         Attached hereto are all relevant facts in reasonable detail to
evidence, and the computations of the financial covenants referred to above.
These computations were made in accordance with GAAP.


                                            VARI-L COMPANY, INC.




                                            By:
                                               ---------------------------------
                                               Its:  Chief Financial Officer