BANK1ONE
                          BUSINESS LOAN AGREEMENT
                                     

SHADED AREA BEGINS
  Principal        Loan Date       Maturity       Loan No.
$4,700,000.00      08-13-1997     02-13-2001

     Call          Collateral      Account        Officer    Initials
                                                    152
SHADED AREA ENDS

References in the shaded area are for Lender's use only and do not limit
the applicability of this document to any particular loan or item.

Borrower: VARI-L COMPANY, INC., A  Lender:   BANK ONE, COLORADO, N.A.
          COLORADO CORPORATION               DENVER BANKING CENTER
          11101 EAST 51ST AVENUE             2696 SOUTH COLORADO BLVD.
          DENVER, CO 80239                   DENVER, CO 80222

THIS BUSINESS LOAN AGREEMENT between VARI-L COMPANY, INC., A COLORADO
CORPORATION ("Borrower") and BANK ONE, COLORADO, N.A. ("Lender") is made
and executed on the following terms and conditions.  Borrower has received
prior commercial loans from Lender or has applied to Lender for a
commercial loan or loans and other financial accommodations, including
those which may be described on any exhibit or schedule attached to this
Agreement.  All such loans and financial accommodations, together with all
future loans and financial accommodations from Lender to Borrower, are
referred to in this Agreement individually as the "Loan" and collectively
as the "Loans."  Borrower understands and agrees that: (a) in granting,
renewing, or extending any Loan, Lender is relying upon Borrower's
representations, warranties, and agreements, as set forth in this
Agreement; (b) the granting, renewing, or extending of any Loan by Lender
at all times shall be subject to Lender's sole judgment and discretion;
and (c) all such Loans shall be and shall remain subject to the following
terms and conditions of this Agreement.

TERM.  This Agreement shall be effective as of August 13, 1997, and shall
continue thereafter until all indebtedness of Borrower to Lender has been
performed in full and the parties terminate this Agreement in writing.

DEFINITIONS.  The following words shall have the following meanings when
used in this Agreement.  Terms not otherwise defined in this Agreement
shall have the meanings attributed to such terms in the Uniform Commercial
Code.  All references to dollar amounts shall mean amounts in lawful money
of the United States of America.

     Agreement.  The word "Agreement" means this Business Loan Agreement,
     as this Business Loan Agreement may be amended or modified from time
     to time, together with all exhibits and schedules attached to this
     Business Loan Agreement from time to time.
     
     Borrower.  The word "Borrower" means VARI-L COMPANY,  INC., A
     COLORADO CORPORATION.  The word "Borrower" also includes, as
     applicable, all subsidiaries and affiliates of Borrower as provided
     below in the paragraph titled "Subsidiaries and Affiliates."
     
     CERCLA.  The word "CERCLA" means the Comprehensive Environmental
     Response, Compensation, and Liability Act of 1980, as amended.
     
     Cash Flow.  The words "Cash Flow" mean net income after taxes, and
     exclusive of extraordinary gains and income, plus depreciation and
     amortization.
     
     Collateral.  The word "Collateral" means and includes without
     limitation all property and assets granted as collateral security for
     a Loan, whether real or personal property, whether granted directly
     or indirectly, whether granted now or in the future, and whether
     granted in the form of a security interest, mortgage, deed of trust,
     assignment, pledge, chattel mortgage, chattel trust, factor's lien,
     equipment trust, conditional sale, trust receipt, lien, charge, lien
     or title retention contract, lease or consignment intended as a
     security device, or any other security or lien interest whatsoever,
     whether created by law, contract, or otherwise.
     
     Debt.  The word "Debt" means all of Borrower's liabilities excluding
     Subordinated Debt.
     
     ERISA.  The word "ERISA" means the Employee Retirement Income
     Security Act of 1974, as amended.
     
     Event of Default.  The words "Event of Default" mean and include
     without limitation any of the Events of Default set forth below in
     the section titled "EVENTS OF DEFAULT."
     
     Grantor.  The word "Grantor" means and includes without limitation
     each and all of the persons or entities granting a Security Interest
     in any Collateral for the Indebtedness, including without limitation
     all Borrowers granting such a Security Interest.
     
     Guarantor.  The word "Guarantor" means and includes without
     limitation each and all of the guarantors, sureties, and
     accommodation parties in connection with any Indebtedness.
     
     Indebtedness.  The word "Indebtedness" means and includes without
     limitation all Loans, together with all other obligations, debts and
     liabilities of Borrower to Lender, or any one or more of them, as
     well as all claims by Lender against Borrower, or any one or more of
     them; whether now or hereafter existing, voluntary or involuntary,
     due or not due, absolute or contingent, liquidated or unliquidated;
     whether Borrower may be liable individually or jointly with others;
     whether Borrower may be obligated as a guarantor, surety, or
     otherwise; whether recovery upon such Indebtedness may be or
     hereafter may become barred by any statute of limitations; and
     whether such Indebtedness may be or hereafter may become otherwise
     unenforceable.
     
     Lender.  The word "Lender" means BANK ONE, COLORADO, N.A., its
     successors and assigns.
     
     Liquid Assets.  The words "Liquid Assets" mean Borrower's cash on
     hand plus Borrower's readily marketable securities.
     
     Loan.  The word "Loan" or "Loans" means and includes without
     limitation any and all commercial loans and financial accommodations
     from Lender to Borrower, whether now or hereafter existing, and
     however evidenced, including without limitation those loans and
     financial accommodations described herein or described on any exhibit
     or schedule attached to this Agreement from time to time.
     
     Note.  The word "Note" means and includes without limitation
     Borrower's promissory note or notes, if any, evidencing Borrower's
     Loan obligations in favor of Lender, as well as any substitute,
     replacement or refinancing note or notes therefor.
     
     Permitted Liens.  The words "Permitted Liens" mean: (a) liens and
     security interests securing Indebtedness owed by Borrower to Lender;
     (b) liens for taxes, assessments, or similar charges either not yet
     due or being contested in good faith; (c) liens of materialmen,
     mechanics, warehousemen, or carriers, or other like liens arising in
     the ordinary course of business and securing obligations which are
     not yet delinquent; (d) purchase money liens or purchase money
     security interests upon or in any property acquired or held by
     Borrower in the ordinary course of business to secure Indebtedness
     outstanding on the date of this Agreement or permitted to be incurred
     under the paragraph of this Agreement titled "Indebtedness and
     Liens"; (e) liens and security interests which, as of the date of
     this Agreement, have been disclosed to and approved by the Lender in
     writing; and (f) those liens and security interests which in the
     aggregate constitute an immaterial and insignificant monetary amount
     with respect to the net value of Borrower's assets.
     
     Related Documents.  The words "Related Documents" mean and include
     without limitation all promissory notes, credit agreements, loan
     agreements, environmental agreements, guaranties, security
     agreements, mortgages, deeds of trust, and all other instruments,
     agreements and documents, whether now or hereafter existing, executed
     in connection with the Indebtedness.
     
     Security Agreement.  The words "Security Agreement" mean and include
     without limitation any agreements, promises, covenants, arrangements,
     understandings or other agreements, whether created by law, contract,
     or otherwise, evidencing, governing, representing, or creating a
     Security Interest.
     
     Security Interest.  The words "Security Interest" mean and include
     without limitation any type of collateral security, whether in the
     form of a lien, charge, mortgage, deed of trust, assignment, pledge,
     chattel mortgage, chattel trust, factor's lien, equipment trust,
     conditional sale, trust receipt, lien or title retention contract,
     lease or consignment intended as a security device, or any other
     security or lien interest whatsoever, whether created by law,
     contract, or otherwise.
     
     SARA.  The word "SARA" means the Superfund Amendments and
     Reauthorization Act of 1986 as now or hereafter amended.
     
     Subordinated Debt.  The words "Subordinated Debt" mean Indebtedness
     and liabilities of Borrower which have been subordinated by written
     agreement to Indebtedness owed by Borrower to Lender in form and
     substance acceptable to Lender.
     
     Tangible Net Worth.  The words "Tangible Net Worth" mean Borrower's
     total assets excluding all intangible assets (i.e., goodwill,
     trademarks, patents, copyrights, organizational expenses, and similar
     intangible items, but including leaseholds and leasehold
     improvements) less total Debt.
     
     Working Capital.  The words "Working Capital" mean Borrower's current
     assets, excluding prepaid expenses, less Borrower's current
     liabilities.

CONDITIONS PRECEDENT TO EACH ADVANCE.  Lender's obligation to make the
Initial Loan Advance and each subsequent Loan Advance under this Agreement
shall be subject to the fulfillment to Lender's satisfaction of all of the
conditions set forth in this Agreement and in the Related Documents.

     Loan Documents.  Borrower shall provide to Lender in form
     satisfactory to Lender the following documents for the Loan: (a) the
     Note, (b) evidence of insurance as required below; and (c) any other
     documents required under this Agreement or by Lender or its counsel.
     
     Borrower's Authorization.  Borrower shall have provided in form and
     substance satisfactory to Lender properly certified resolutions, duly
     authorizing the execution and delivery of this Agreement, the Note
     and the Related Documents, and such other authorizations and other
     documents and instruments as Lender or its counsel, in their sole
     discretion, may require.
     
     Payment of Fees and Expenses.  Borrower shall have paid to Lender all
     fees, charges, and other expenses which are then due and payable as
     specified in this Agreement or any Related Document.
     
     Representations and Warranties.  The representations and warranties
     set forth in this Agreement, in the Related Documents, and in any
     document or certificate delivered to Lender under this Agreement are
     true and correct.
     
     No Event of Default.  There shall not exist at the time of any
     advance a condition which would constitute an Event of Default under
     this Agreement.
     
     REPRESENTATIONS AND WARRANTIES.  Borrower represents and warrants to
Lender, as of the date of this Agreement, as of the date of each
disbursement of Loan proceeds, as of the date of any renewal, extension or
modification of any Loan, and at all times any indebtedness exists:

     Organization.  Borrower is a corporation which is duly organized,
     validly existing, and in good standing under the laws of the State of
     Colorado and is validly existing and in good standing in all states
     in which Borrower is doing business.  Borrower has the full power and
     authority to own its properties and to transact the businesses in
     which it is presently engaged or presently proposes to engage.
     Borrower also is duly qualified as a foreign corporation and is in
     good standing in all states in which the failure to so qualify would
     have a material adverse effect on its businesses or financial
     condition.
     
     Authorization.  The execution, delivery, and performance of this
     Agreement and all Related Documents by Borrower, to the extent to be
     executed, delivered or performed by Borrower, have been duly
     authorized by all necessary action by Borrower; do not require the
     consent or approval of any other person, regulatory authority or
     governmental body; and do not conflict with, result in a violation
     of, or constitute a default under (a) any provision of its articles
     of incorporation or organization, or bylaws, or any agreement or
     other instrument binding upon Borrower or (b) any law, governmental
     regulation, court decree, or order applicable to Borrower.
     
     Financial Information.  Each financial statement of Borrower supplied
     to Lender truly and completely disclosed Borrower's financial
     condition as of the date of the statement, and there has been no
     material adverse change in Borrower's financial condition subsequent
     to the date of the most recent financial statement supplied to
     Lender.  Borrower has no material contingent obligations except as
     disclosed in such financial statements.
     
     Legal Effect.  This Agreement constitutes, and any instrument or
     agreement required hereunder to be given by Borrower when delivered
     will constitute, legal, valid and binding obligations of Borrower
     enforceable against Borrower in accordance with their respective
     terms.
     
     Properties.  Except as contemplated by this Agreement or as
     previously disclosed in Borrower's financial statements or in writing
     to Lender and as accepted by Lender, and except for property tax
     liens for taxes not presently due and payable, Borrower owns and has
     good title to all of Borrower's properties free and clear of all
     Security Interests, and has not executed any security documents or
     financing statements relating to such properties.  All of Borrower's
     properties are titled in Borrower's legal name, and Borrower has not
     used, or filed a financing statement under, any other name for at
     least the last five (5) years.
     
     Litigation and Claims.  No litigation, claim, investigation,
     administrative proceeding or similar action (including those for
     unpaid taxes) against Borrower is pending or threatened, and no other
     event has occurred which may materially adversely affect Borrower's
     financial condition or properties, other than litigation, claims, or
     other events, if any, that have been disclosed to and acknowledged by
     Lender in writing.
     
     Taxes.  To the best of Borrower's knowledge, all tax returns and
     reports of Borrower that are or were required to be filed, have been
     filed, and all taxes, assessments and other governmental charges have
     been paid in full, except those presently being or to be contested by
     Borrower in good faith in the ordinary course of business and for
     which adequate reserves have been provided.
     
     Lien Priority.  Unless otherwise previously disclosed to Lender in
     writing, Borrower has not entered into or granted any Security
     Agreements, or permitted the filing or attachment of any Security
     Interests on or affecting any of the Collateral directly or
     indirectly securing repayment of Borrower's Loan and Note, that would
     be prior or that may in any way be superior to Lender's Security
     Interests and rights in and to such Collateral.
     
     Binding Effect.  This Agreement, the Note, all Security Agreements
     directly or indirectly securing repayment of Borrower's Loan and Note
     and all of the Related Documents are binding upon Borrower as well as
     upon Borrower's successors, representatives and assigns, and are
     legally enforceable in accordance with their respective terms.
     
     Commercial Purposes.  Borrower intends to use the Loan proceeds
     solely for business or commercial related purposes.
     
     Employee Benefit Plans.  Each employee benefit plan as to which
     Borrower may have any liability complies in all material respects
     with all applicable requirements of law and regulations, and (i) no
     Reportable Event nor Prohibited Transaction (as defined in ERISA) has
     occurred with respect to any such plan, (ii) Borrower has not
     withdrawn from any such plan or initiated steps to do so, (iii) no
     steps have been taken to terminate any such plan, and (iv) there are
     no unfunded liabilities other than those previously disclosed to
     Lender in writing.
     
     Location of Borrower's Offices and Records.  Borrower's place of
     business, or Borrower's Chief executive office, if Borrower has more
     than one place of business, is located at 11101 EAST 51ST AVENUE,
     DENVER, CO 80239.  Unless Borrower has designated otherwise in
     writing this location is also the office or offices where Borrower
     keeps its records concerning the Collateral.
     
     Information.  All information heretofore or contemporaneously
     herewith furnished by Borrower to Lender for the purposes of or in
     connection with this Agreement or any transaction contemplated hereby
     is, and all information hereafter furnished by or on behalf of
     Borrower to Lender will be, true and accurate in every material
     respect on the date as of which such information is dated or
     certified; and none of such information is or will be, incomplete by
     omitting to state any material fact necessary to make such
     information not misleading.
     
     Survival of Representations and Warranties.  Borrower understands and
     agrees that Lender, without independent investigation, is relying
     upon the above representations and warranties in making the above
     referenced Loan to Borrower.  Borrower further agrees that the
     foregoing representations and warranties shall be continuing in
     nature and shall remain in full force and effect until such time as
     Borrower's Indebtedness shall be paid in full, or until this
     Agreement shall be terminated in the manner provided above, whichever
     is the last to occur.
     
     AFFIRMATIVE COVENANTS.  Borrower covenants and agrees with Lender
that, while this Agreement is in effect, Borrower will:

     Litigation.  Promptly inform Lender in writing of (a) all material
     adverse changes in Borrower's financial condition, and (b) all
     existing and all threatened litigation, claims, investigations,
     administrative proceedings or similar actions affecting Borrower or
     any Guarantor which could materially affect the financial condition
     of Borrower or the financial condition of any Guarantor.
     
     Financial Records.  Maintain its books and records in accordance with
     generally accepted accounting principles, applied on a consistent
     basis, and permit Lender to examine and audit Borrower's books and
     records at all reasonable times.
     
     Financial Statements.  Furnish Lender with, as soon as available, but
     in no event later than one hundred twenty (120) days after the end of
     each fiscal year, Borrower's balance sheet and income statement for
     the year ended, audited by a certified public accountant satisfactory
     to Lender, and, as soon as available, but in no event later than
     sixty 60) days after the end of each fiscal quarter, Borrower's
     balance sheet and profit and loss statement for the period ended,
     prepared and certified as correct to the best knowledge and belief by
     Borrower's chief financial officer or other officer or person
     acceptable to Lender.  All financial reports required to be provided
     under this Agreement shall be prepared in accordance with generally
     accepted accounting principles, applied on a consistent basis, and
     certified by Borrower as being true and correct.
     
     Additional Information.  Furnish such additional information and
     statements, lists of assets and liabilities, agings of receivables
     and payables, inventory schedules, budgets, forecasts, tax returns,
     and other reports with respect to Borrower's financial condition and
     business operations as Lender may reasonably request from time to
     time.  Specifically, Borrower shall provide Lender as soon as
     possible, but no later than ninety (90) days after the end of each
     fiscal period, a projected balance sheet and income statement for the
     coming fiscal year.
     
     Financial Covenants and Ratios.  Comply with the following covenants
     and ratios:

          Net Worth Ratio.  Maintain a ratio of Total Liabilities to
          Tangible Net Worth of less than 1.00 to 1.00.  Total Liabilities
          shall exclude any subordinated debt; tangible net worth shall
          include any subordinated debt.

          Current Ratio.  Maintain a ratio of Current Assets to Current
          Liabilities in excess of 1.50 to 1.00. Except as provided above,
          all computations made to determine compliance with the
          requirements contained in this paragraph shall be made in
          accordance with generally accepted accounting principles,
          applied on a consistent basis, and certified by Borrower as
          being true and correct.  Current assets shall exclude any
          prepaid expenses and any affiliate or related party receivables.
          
          Insurance.  Maintain fire and other risk insurance, public
          liability insurance, and such other insurance as Lender may
          require with respect to Borrower's properties and operations, in
          form, amounts, coverages and with insurance companies reasonably
          acceptable to Lender.  Borrower, upon request of Lender, will
          deliver to Lender from time to time the policies or certificates
          of insurance in form satisfactory to Lender, including
          stipulations that coverages will not be cancelled or diminished
          without at least ten (10) days' prior written notice to Lender.
          Each insurance policy also shall include an endorsement
          providing that coverage in favor of Lender will not be impaired
          in any way by any act, omission or default of Borrower or any
          other person.  In connection with all policies covering assets
          in which Lender holds or is offered a security interest for the
          Loans.  Borrower will provide Lender with such loss payable or
          other endorsements as Lender may require.
          
     Insurance Reports.  Furnish to Lender, upon request of Lender,
     reports on each existing insurance policy showing such information as
     Lender may reasonably request, including without limitation the
     following: (a) the name of the insurer; (b) the risks insured; (c)
     the amount of the policy; (d) the properties insured; and (f) the
     expiration date of the policy.
     
     Other Agreements.  Comply with all terms and conditions of all other
     agreements, whether now or hereafter existing, between Borrower and
     any other party and notify Lender immediately in writing of any
     default in connection with any other such agreements.
     
     Loan Proceeds.  Use all Loan proceeds solely for Borrower's business
     operations, unless specifically consented to the contrary by Lender
     in writing.
     
     Taxes, Charges and Liens.  Pay and discharge when due all of its
     Indebtedness and obligations, including without limitation all
     assessments, taxes, governmental charges, levies and liens, of every
     kind and nature, imposed upon Borrower or its properties, income, or
     profits, prior to the date on which penalties would attach, and all
     lawful claims that, if unpaid, might become a lien or charge upon any
     of Borrower's properties, income, or profits.  Provided however,
     Borrower will not be required to pay and discharge any such
     assessment, tax, charge, levy, lien or claim so long as (a) the
     legality of the same shall be contested in good faith by appropriate
     proceedings, and (b) Borrower shall have established on its books
     adequate reserves with respect to such contested assessment, tax,
     charge, levy, lien, or claim in accordance with generally accepted
     accounting practices.  Borrower, upon demand of Lender, will furnish
     to Lender evidence of payment of the assessments, taxes, charges,
     levies, liens and claims and will authorize the appropriate
     governmental official to deliver to Lender at any time a written
     statement of any assessments, taxes, charges, levies, liens and
     claims against Borrower's properties, income, or profits.
     
     Performance.  Perform and comply with all terms, conditions, and
     provisions set forth in this Agreement and in the Related Documents
     in a timely manner, and promptly notify Lender if Borrower learns of
     the occurrence of any event which constitutes an Event of Default
     under this Agreement or under any of the Related Documents.
     
     Operations.  Maintain executive and management personnel with
     substantially the same qualifications and experience as the present
     executive and management personnel; provide written notice to Lender
     of any change in executive and management personnel; conduct its
     business affairs in a reasonable and prudent manner and in compliance
     with all applicable federal, state and municipal laws, ordinances,
     rules and regulations respecting its properties, charters, businesses
     and operations, including without limitation, compliance with the
     Americans With Disabilities Act and with all minimum funding
     standards and other requirements of ERISA and other laws applicable
     to Borrower's employee benefit plans.
     
     Inspection.  Permit employees or agents of Lender at any reasonable
     time to inspect any and all Collateral for the Loan or Loans and
     Borrower's other properties and to examine or audit Borrower's books,
     accounts, and records and to make copies and memoranda of Borrower's
     books, accounts, and records.  If Borrower now or at any time
     hereafter maintains any records (including without limitation
     computer generated records and computer software programs for the
     generation of such records) in the possession of a third party,
     Borrower, upon request of Lender, shall notify such party to permit
     Lender free access to such records at all reasonable times and to
     provide Lender with copies of any records it may request, all at
     Borrower's expense.
     
     Compliance Certificate.  Unless waived in writing by Lender, provide
     Lender within sixty (60) days of the end  of each fiscal quarter with
     a certificate executed by Borrower's chief financial officer, or
     other officer or person acceptable to Lender, certifying that the
     representations and warranties set forth in this Agreement are true
     and correct as of the date of the certificate and further certifying
     that, as of the date of the certificate, no Event of Default exists
     under this Agreement.
     
     Environmental Compliance and Reports.  Borrower shall comply in all
     respects with all environmental protection federal, state and local
     laws, statutes, regulations and ordinances; not cause or permit to
     exist, as a result of an intentional or unintentional action or
     omission on its part or on the part of any third party, on property
     owned and/or occupied by Borrower, any environmental activity where
     damage may result to the environment, unless such environmental
     activity is pursuant to and in compliance with the conditions of a
     permit issued by the appropriate federal, state or local governmental
     authorities; shall furnish to Lender promptly and in any event within
     thirty (30) days after receipt thereof a copy of any notice, summons,
     lien, citation, directive, letter or other communication from any
     governmental agency or instrumentality concerning any intentional or
     unintentional action or omission on Borrower's part in connection
     with any environmental activity whether or not there is damage to the
     environment and/or other natural resources.
     
     Additional Assurances.  Make, execute and deliver to Lender such
     promissory notes, mortgages, deeds of trust, security agreements,
     financing statements, instruments, documents and other agreements as
     Lender or its attorneys may reasonably request to evidence and secure
     the Loans and to perfect all Security Interests.
     
NEGATIVE COVENANTS.  Borrower covenants and agrees with Lender that while
this Agreement is in effect, Borrower shall not, without the prior written
consent of Lender:

     Capital Expenditures. Aggregate capital expenditures in excess of
     five million ($5,000,000) during any fiscal year.
     
     Indebtedness and Liens. (a) Except for trade debt incurred in the
     normal course of business and indebtedness to Lender contemplated by
     this Agreement, create, incur or assume indebtedness for borrowed
     money, including capital leases, (b) except as allowed as a Permitted
     Lien, sell. transfer, mortgage, assign, pledge, lease, grant a
     security interest in, or encumber any of Borrower's assets, or (c)
     sell with recourse any of Borrower's accounts, except to Lender.
     
     Continuity of Operations.  (a) Engage in any business activities
     substantially different than those in which Borrower is presently
     engaged, (b) cease operations, liquidate, merge, transfer, acquire or
     consolidate with any other entity, change ownership, change its name,
     dissolve or transfer or sell Collateral out of the ordinary course of
     business, (c) pay any dividends on Borrower's stock (other than
     dividends payable in its stock), or (d) purchase or retire any of
     Borrower's outstanding shares or alter or amend Borrower's capital
     structure.
     
     Loans, Acquisitions and Guaranties. (a) Loan, invest in or advance
     money or assets, (b) purchase, create or acquire any interest in any
     other enterprise or entity, or (c) incur any obligation as surety or
     guarantor other than in the ordinary course of business.
     
CESSATION OF ADVANCES.  If Lender has made any commitment to make any Loan
to Borrower, whether under this Agreement or under any other agreement,
Lender shall have no obligation to make Loan Advances or to disburse Loan
proceeds if: (a) Borrower or any Guarantor is in default under the terms
of this Agreement or any of the Related Documents or any other agreement
that Borrower or any Guarantor has with Lender; (b) Borrower or any
Guarantor becomes insolvent, files a petition in bankruptcy or similar
proceedings, or is adjudged a bankrupt; (c) there occurs a material
adverse change in Borrower's financial condition, in the financial
condition of any Guarantor, or in the value of any Collateral securing any
Loan; or (d) any Guarantor seeks, claims or otherwise attempts to limit,
modify or revoke such Guarantor's guaranty of the Loan or any other loan
with Lender.

OTHER RATIO.  MAINTAIN A RATIO OF NET INCOME PLUS INTEREST EXPENSE PLUS
DEPRECIATION AND AMORTIZATION DIVIDED BY CURRENT MATURITIES OF LONG TERM
DEBT PLUS INTEREST EXPENSE OF NOT LESS THAN 1.4 TO 1.0.  SAID RATIO WILL
BE CALCULATED ON A ROLLING (4) QUARTER BASIS.

EXHIBIT "A".  An exhibit, titled "EXHIBIT "A"," is attached to this
Agreement and by this reference is made a part of this Agreement just as
if all the provisions, terms and conditions of the Exhibit had been fully
set forth in this Agreement.

RIGHT OF SETOFF.  Borrower grants to Lender a contractual possessory
security interest in, and hereby assigns, conveys, delivers, pledges, and
transfers to Lender all Borrower's right, title and interest in and to,
Borrower's accounts with Lender (whether checking, savings, or some other
account), including without limitation all accounts held jointly with
someone else and all accounts Borrower may open in the future, excluding
however all IRA and Keogh accounts, and all trust accounts for which the
grant of a security interest would be prohibited by law.  Borrower
authorizes Lender, to the extent permitted by applicable law and to the
extent in the event of default as defined herein and in Exhibit A shall
have occurred, to charge or setoff all sums owing on the Indebtedness
against any and all such accounts.

EVENTS OF DEFAULT.  Each of the following shall constitute an Event of
Default under this Agreement:

     Default on Indebtedness.  Failure of Borrower to make any payment
     when due on the Loans.
     
     Other Defaults.  Failure of Borrower or any Grantor to comply with or
     to perform when due any other term, obligation, covenant or condition
     contained in this Agreement or in any of the Related Documents, or
     failure of Borrower to comply with or to perform any other term,
     obligation, covenant or condition contained in any other agreement
     between Lender and Borrower.
     
     Default in Favor of Third Parties.  Should Borrower or any Grantor
     default under any loan, extension of credit, security agreement,
     purchase or sales agreement, or any other agreement, in favor of any
     other creditor or person that may materially affect any of Borrower's
     property or Borrower's or any Grantor's ability to repay the Loans or
     perform their respective obligations under this Agreement or any of
     the Related Documents.
     
     False Statements.  Any warranty, representation or statement made or
     furnished to Lender by or on behalf of Borrower or any Grantor under
     this Agreement or the Related Documents is false or misleading in any
     material respect at the time made or furnished, or becomes false or
     misleading at any time thereafter.
     
     Defective Collateralization.  This Agreement or any of the Related
     Documents ceases to be in full force and effect (including failure of
     any Security Agreement to create a valid and perfected Security
     Interest), at any time and for any reason.
     
     Insolvency.  The dissolution or termination of Borrower's existence
     as a going business, the insolvency of Borrower, the appointment of a
     receiver for any part of Borrower's property, any assignment for the
     benefit of creditors, any type of creditor workout, or the
     commencement of any proceeding under any bankruptcy or insolvency
     laws by or against Borrower.
     
     Creditor or Forfeiture Proceedings.  Commencement of foreclosure or
     forfeiture proceedings, whether by judicial proceeding, self-help,
     repossession or any other method, by any creditor of Borrower, any
     creditor of any Grantor against any collateral securing the
     Indebtedness, or by any governmental agency.  This includes a
     garnishment, attachment, or levy on or of any of Borrower's deposit
     accounts with Lender.
     
     Events Affecting Guarantor.  Any of the preceding events occurs with
     respect to any Guarantor of any of the Indebtedness or any Guarantor
     dies or becomes incompetent, or revokes or disputes the validity of,
     or liability under, any Guaranty of the Indebtedness.
     
     Change in Ownership.  Any change in ownership of sixty-seven percent
     (67%) or more of the common stock of Borrower.
     
     Adverse Change.  A material adverse change occurs in Borrower's
     financial condition, or Lender believes the prospect of payment or
     performance of the indebtedness is impaired.
     
EFFECT OF AN EVENT OF DEFAULT.  If any Event of Default shall occur,
except where otherwise provided in this Agreement or the Related
Documents, all commitments and obligations of Lender under this Agreement
or the Related Documents or any other agreement immediately will terminate
and, at Lender's option, all Indebtedness immediately will become due and
payable, all without notice of any kind to Borrower, except that in the
case of an Event of Default of the type described in the "Insolvency"
subsection above, such acceleration shall be automatic and not optional.
In addition, Lender shall have all the rights and remedies provided in the
Related Documents or available at law, in equity, or otherwise.  Except as
may be prohibited by applicable law, all of Lender's rights and remedies
shall be cumulative and may be exercised singularly or concurrently.
Election by Lender to pursue any remedy shall not exclude pursuit of any
other remedy, and an election to make expenditures or to take action to
perform an obligation of Borrower or of any Grantor shall not affect
Lender's right to declare a default and to exercise its rights and
remedies.

MISCELLANEOUS PROVISIONS.  The following miscellaneous provisions are a
part of this Agreement:

     Amendments.  This Agreement, together with any Related Documents,
     constitutes the entire understanding and agreement of the parties as
     to the matters set forth in this Agreement.  No alteration of or
     amendment to this Agreement shall be effective unless given in
     writing and signed by the party or parties sought to be charged or
     bound by the alteration or amendment.
     
     Applicable Law.  This Agreement has been delivered to Lender and
     accepted by Lender in the State of Colorado.  If there is a lawsuit,
     Borrower agrees upon Lender's request to submit to the jurisdiction
     of the courts of DENVER County, the State of Colorado.  Lender and
     Borrower hereby waive the right to any jury trial in any action,
     proceeding, or counterclaim brought by either Lender or Borrower
     against the other.  This Agreement shall be governed by and construed
     in accordance with the laws of the State of Colorado.
     
     Caption Headings.  Caption headings in this Agreement are for
     convenience purposes only and are not to be used to interpret or
     define the provisions of this Agreement.
     
          Multiple Parties; Corporate Authority.  All obligations of
     Borrower under this Agreement shall be joint and several, and all
     references to Borrower shall mean each and every Borrower.  This
     means that each of the Borrowers signing below is responsible for all
     obligations in this Agreement.
     
     Costs and Expenses.  Borrower agrees to pay upon demand all of
     Lender's expenses, including without limitation attorneys' fees,
     incurred in connection with the preparation, execution, enforcement,
     modification and collection of this Agreement or in connection with
     the Loans made pursuant to this Agreement.  Lender may pay someone
     else to help collect the Loans and to enforce this Agreement, and
     Borrower will pay that amount.  This includes, subject to any limits
     under applicable law, Lender's attorneys' fees and Lender's legal
     expenses, whether or not there is a lawsuit, including attorneys'
     fees for bankruptcy proceedings (including efforts to modify or
     vacate any automatic stay or injunction), appeals, and any
     anticipated post-judgment collection services.  Borrower also will
     pay any court costs, in addition to all other sums provided by law.
     
     Notices.  All notices required to be given under this Agreement shall
     be given in writing, may be sent by telefacsimile, and shall be
     effective when actually delivered or when deposited with a nationally
     recognized overnight courier or deposited in the United States mail,
     first class, postage prepaid, addressed to the party to whom the
     notice is to be given at the address shown above.  Any party may
     change its address for notices under this Agreement by giving formal
     written notice to the other parties, specifying that the purpose of
     the notice is to change the party's address.  To the extent permitted
     by applicable law, if there is more than one Borrower, notice to any
     Borrower will constitute notice to all Borrowers.  For notice
     purposes, Borrower will keep Lender informed at all times of
     Borrower's current address(es).
     
     Severability.  If a court of competent jurisdiction finds any
     provision of this Agreement to be invalid or unenforceable as to any
     person or circumstance, such finding shall not render that provision
     invalid or unenforceable as to any other persons or circumstances.
     If feasible, any such offending provision shall be deemed to be
     modified to be within the limits of enforceability or validity;
     however, if the offending provision cannot be so modified, it shall
     be stricken and all other provisions of this Agreement in all other
     respects shall remain valid and enforceable.
     
     Subsidiaries and Affiliates of Borrower.  To the extent the context
     of any provisions of this Agreement makes it appropriate, including
     without limitation any representation, warranty or covenant, the word
     "Borrower" as used herein shall include all subsidiaries and
     affiliates of Borrower.  Notwithstanding the foregoing however, under
     no circumstances shall this Agreement be construed to require Lender
     to make any Loan or other financial accommodation to any subsidiary
     or affiliate of Borrower.
     
     Successors and Assigns.  All covenants and agreements contained by or
     on behalf of Borrower shall bind its successors and assigns and shall
     inure to the benefit of Lender, its successors and assigns.  Borrower
     shall not, however, have the right to assign its rights under this
     Agreement or any interest therein, without the prior written consent
     of Lender.
     
     Survival.  All warranties, representations, and covenants made by
     Borrower in this Agreement or in any certificate or other instrument
     delivered by Borrower to Lender under this Agreement shall be
     considered to have been relied upon by Lender and will survive the
     making of the Loan and delivery to Lender of the Related Documents,
     regardless of any investigation made by Lender or on Lender's behalf.
     
     Time is of the Essence.  Time is of the essence in the performance of
     this Agreement.
     
     Waiver.  Lender shall not be deemed to have waived any rights under
     this Agreement unless such waiver is given in writing and signed by
     Lender.  No delay or omission on the part of Lender in exercising any
     right shall operate as a waiver of such right or any other right.  A
     waiver by Lender of a provision of this Agreement shall not prejudice
     or constitute a waiver of Lender's right otherwise to demand strict
     compliance with that provision or any other provision of this
     Agreement.  No prior waiver by Lender, nor any course of dealing
     between Lender and Borrower, or between Lender and any Grantor, shall
     constitute a waiver of any of Lender's rights or of any obligations
     of Borrower or of any Grantor as to any future transactions.
     Whenever the consent of Lender is required under this Agreement, the
     granting of such consent by Lender in any instance shall not
     constitute continuing consent in subsequent instances where such
     consent is required, and in all cases such consent may be granted or
     withheld in the sole discretion of Lender.


BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN
AGREEMENT, AND BORROWER AGREES TO ITS TERMS.  THIS AGREEMENT IS DATED AS
OF AUGUST 13, 1997.

BORROWER:

VARI-L COMPANY, INC., A COLORADO CORPORATION

By:/s/ David G. Sherman                 By:/s/Joseph H. Kiser
                                             DAVID SHERMAN, PRESIDENT/CEO
                                           CHAIRMAN/CSO/SECRETARY



LENDER:

BANK ONE, COLORADO, N.A.


By:/s/T.J. Kern
   Authorized Officer


                                EXHIBIT "A"

SHADED AREA BEGINS
  Principal        Loan Date       Maturity       Loan No.
$4,700,000.00      08-13-1997     02-13-2001

     Call          Collateral      Account        Officer    Initials
                                                    152
SHADED AREA ENDS

References in the shaded area are for Lender's use only and do not limit
the applicability of this document to any particular loan or item.

Borrower: VARI-L COMPANY, INC., A  Lender:   BANK ONE, COLORADO, N.A.
          COLORADO CORPORATION               DENVER BANKING CENTER
          11101 EAST 51ST AVENUE             2696 SOUTH COLORADO BLVD.
          DENVER, CO 80239                   DENVER, CO 80222

This EXHIBIT "A" is attached to and by this reference is made a part of
each Business Loan Agreement or Negative Pledge Agreement, dated August
13, 1997, and executed in connection with a loan or other financial
accommodations between BANK ONE, COLORADO, N.A. and VARI-L COMPANY, INC.,
A COLORADO CORPORATION.

Notwithstanding the events which have been defined earlier herein as those
events which shall constitute a default under this Business Loan
Agreement, any of the following shall constitute an Event of Default:

1.   Default in any payment of interest or of principal on the Loans when
     due and continuance thereof for fifteen (15) days; or

2.   Default in the observance or performance of any agreement of the
     Borrower herein set forth or in any other agreement between the
     Lender and the Borrower and continuance thereof for 20 days after
     written notice by Bank to Borrower; or

3.   Default by the Borrower in the payment of any other Indebtedness or
     in the observance or performance of any term, covenant or agreement
     of the Borrower in any agreement relating to any Indebtedness of the
     Borrower, the effect of which default is to permit the holder of such
     Indebtedness to declare the same due prior to the date fixed for its
     payment under the terms thereof and failure to cure such default
     within 30 days after written notice by Lender to Borrower; or

4.   Any representation or warranty made by the Borrower herein or in any
     statement or certificate furnished by the Borrower hereunder, is
     untrue in any material respect; or

5.   The occurrence of any litigation or governmental proceeding which is
     pending or threatened against Borrower, which could have a material
     adverse effect on the Borrower's financial condition or business and
     which is not remedied within a reasonable period of time after notice
     thereof to the Borrower; or

6.   The occurrence of any extraordinary situation which gives the Bank
     reasonable grounds to believe that Borrower may not be able to
     perform under the notes, the Agreement or any other documents
     executed in connection with the Loans;

Then or at any time thereafter, unless such event of default is remedied,
the Bank or the holder of the Notes may, by notice in writing to the
Borrower, declare the Loans to be terminated or the Loans to be due and
payable or both, whereupon the Loans shall immediately terminate or the
Loans shall immediately become due and payable or both, as the case may
be.

THIS EXHIBIT "A" is EXECUTED ON AUGUST 13, 1997.


BORROWER:

VARI-L COMPANY, INC., A COLORADO CORPORATION


By:/s/David G. Sherman             By:/s/Joseph H. Kiser
   DAVID G. SHERMAN, PRESIDENT/CEO    JOSEPH H. KISER,
                                      CHAIRMAN/CSO/SECRETARY


LENDER:

BANK ONE, COLORADO, N.A.


By:/s/T. J. Kern
   Authorized Officer

                              PROMISSORY NOTE

SHADED AREA BEGINS
  Principal        Loan Date       Maturity       Loan No.
$4,700,000.00      08-13-1997     02-13-2001
SHADED AREA ENDS

     Call          Collateral      Account        Officer    Initials
                                                    152

References in the shaded area are for Lender's use only and do not limit
the applicability of this document to any particular loan or item.

Borrower: VARI-L COMPANY, INC., A  Lender:   BANK ONE, COLORADO, N.A.
          COLORADO CORPORATION               DENVER BANKING CENTER
          11101 EAST 51ST AVENUE             2696 SOUTH COLORADO BLVD.
          DENVER, CO 80239                   DENVER, CO 80222
--------------------------------------------------------------------------

Principal Amount:  $4,700,000.00  Interest Rate:  8.010%
Date of Note:  August 13, 1997

PROMISE TO PAY.  VARI-L COMPANY, INC., A COLORADO CORPORATION ("Borrower")
promises to pay to BANK ONE, COLORADO, N.A. ("Lender"), or order, in
lawful money of the United States of America, the principal amount of Four
Million Seven Hundred Thousand & 00/100 Dollars ($4,700,000.00), together
with interest at the rate of 8.010% per annum on the unpaid principal
balance from August 13, 1997, until paid in full.

PAYMENT.  Borrower will pay this loan in 41 regular payments of $73,278.63
each and one irregular last payment estimated at $2,768,401.27.
Borrower's first payment is due September 13, 1997, and all subsequent
payments are due on the same day of each month after that.  Borrower's
final payment due February 13, 2001, will be for all principal and all
accrued interest not yet paid.  Payments include principal and interest.
Interest on this Note is computed on a 365/360 simple interest basis; that
is, by applying the ratio of the annual interest rate over a year of 360
days, multiplied by the outstanding principal balance, multiplied by the
actual number of days the principal balance is outstanding.  Borrower will
pay Lender at Lender's address shown above or at such other place as
Lender may designate in writing.  Unless otherwise agreed or required by
applicable law, payments will be applied first to accrued unpaid interest,
then to principal, and any remaining amount to any unpaid collection costs
and late charges.

PREPAYMENT; MINIMUM INTEREST CHARGE.  Borrower agrees that all loan fees
and other prepaid finance charges are earned fully as of the date of the
loan and will not be subject to refund upon early payment (whether
voluntary or as a result of default), except as otherwise required by law.
In any event, even upon full prepayment of this Note, Borrower understands
that Lender is entitled to a minimum interest charge of $25.00. Other than
Borrower's obligation to pay any minimum interest charge, Borrower may pay
without penalty all or a portion of the amount owed earlier than it is
due.  Early payments will not, unless agreed to by Lender in writing,
relieve Borrower of Borrower's obligation to continue to make payments
under the payment schedule.  Rather, they will reduce the principal
balance due and may result in Borrower making fewer payments.

DEFAULT.  Borrower will be in default if any of the following happens: (a)
Borrower fails to make any payment when due. (b) Borrower breaks any
promise Borrower has made to Lender, or Borrower falls to comply with or
to perform when due any other term, obligation, covenant, or condition
contained in this Note or any agreement related to this Note, or in any
other agreement or loan Borrower has with Lender. (c) Borrower defaults
under any loan, extension of credit, security agreement, purchase or sales
agreement, or any other agreement, in favor of any other creditor or
person that may materially affect any of Borrower's property or Borrower's
ability to repay this Note or perform Borrower's obligations under this
Note or any of the Related Documents. (d) Any representation or statement
made or furnished to Lender by Borrower or on Borrower's behalf is false
or misleading in any material respect either now or at the time made or
furnished. (e) Borrower becomes insolvent, a receiver is appointed for any
part of Borrower's property, Borrower makes an assignment for the benefit
of creditors, or any proceeding is commenced either by Borrower or against
Borrower under any bankruptcy or insolvency laws. (f) Any creditor tries
to take any of Borrower's property on or in which Lender has a lien or
security interest.  This includes a garnishment of any of Borrower's
accounts with Lender. (g) Any guarantor dies or any of the other events
described in this default section occurs with respect to any guarantor of
this Note. (h) A material adverse change occurs in Borrower's financial
condition, or Lender believes the prospect of payment or performance of
the indebtedness is impaired.

LENDER'S RIGHTS.  Upon default, Lender may declare the entire unpaid
principal balance on this Note and all accrued unpaid interest immediately
due, without notice, and then Borrower will pay that amount.  Upon
default, including failure to pay upon final maturity, Lender, at its
option, may also, if permitted under applicable law, do one or both of the
following: (a) Increase the interest rate on this Note to 25.000% per
annum, and (b) add any unpaid accrued interest to principal and such sum
will bear interest therefrom until paid at the rate provided in this Note
(including any increased rate).  The interest rate will not exceed the
maximum rate permitted by applicable law.  Lender may hire or pay someone
else to help collect this Note if Borrower does not pay.  Borrower also
will pay Lender that amount.  This includes, subject to any limits under
applicable law, Lender's attorneys' fees and Lender's legal expenses
whether or not there is a lawsuit, including attorney's fees and legal
expenses for bankruptcy proceedings (including efforts to modify or vacate
any automatic stay or injunction), appeals, and any anticipated post-
judgment collection services.  If not prohibited by applicable law,
Borrower also will pay any court costs, in addition to all other sums
provided by law.  This Note has been delivered to Lender and accepted by
Lender in the State of Colorado.  If there is a lawsuit, Borrower agrees
upon Lender's request to submit to the jurisdiction of the courts of
DENVER County, the State of Colorado.  Lender and Borrower hereby waive
the right to any jury trial in any action, proceeding, or counterclaim
brought by either Lender or Borrower against the other.  This Note shall
be governed by and construed in accordance with the laws of the State of
Colorado.

RIGHT OF SETOFF.  Borrower grants to Lender a contractual possessory
security interest in, and hereby assigns, conveys, delivers, pledges, and
transfers to Lender all Borrower's right, title and interest in and to,
Borrower's accounts with Lender (whether checking, savings, or some other
account), including without limitation all accounts held jointly with
someone else and all accounts Borrower may open in the future, excluding
however all IRA and Keogh accounts, and all trust accounts for which the
grant of a security interest would be prohibited by law.  Borrower
authorizes Lender, to the extent permitted by applicable law and to the
extent an event of default as defined under the Business Loan Agreement
shall have occurred, to charge or setoff all sums owing on this Note
against any and all such accounts.

GENERAL PROVISIONS.  Lender may delay or forgo enforcing any of its rights
or remedies under this Note without losing them.  Borrower and any other
person who signs, guarantees or endorses this Note, to the extent allowed
by law, waive presentment, demand for payment, protest and notice of
dishonor.  Upon any change in the terms of this Note, and unless otherwise
expressly stated in writing, no party who signs this Note, whether as
maker, guarantor, accommodation maker or endorser, shall be released from
liability.  All such parties agree that Lender may renew or extend
(repeatedly and for any length of time) this loan, or release any party or
guarantor or collateral; or impair, fail to realize upon or perfect
Lender's security interest in the collateral; and take any other action
deemed necessary by Lender without the consent of or notice to anyone.
All such parties also agree that Lender may modify this loan without the
consent of or notice to anyone other than the party with whom the
modification is made.

PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE
PROVISIONS OF THIS NOTE.  BORROWER AGREES TO THE TERMS OF THE NOTE AND
ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THE NOTE.

BORROWER:

VARI-L COMPANY, INC., A COLORADO CORPORATION


By:/s/David G. Sherman                  By:/s/Joseph H. Kiser
    DAVID G. SHERMAN, PRESIDENT/CEO        JOSEPH H. KISER,
                                           CHAIRMAN/CSO/SECRETARY