BUSINESS LOAN AGREEMENT

SHADED AREA BEGINS
Principal     Loan Date    Maturity    Loan No.   Call   Collateral Officer
$2,500,000.00           08-13-1997   08-13-1998
152

Account    Initials

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 COLORADO   Lender:   BANK ONE, COLORADO, N.A.
          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 of 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 include 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 significant 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) Security
     Agreements granting to Lender security interests the Collateral (c)
     Financing Statements perfecting Lender's Security Interests (d) evidence
     of insurance as required below; and (e) 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 transact the businesses in which it is presently engaged or
     presently proposes to engage.  Borrower also is duly qualified as 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 Securities 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 by 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 extending Loan Advances 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' 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
     payable, 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 year, a projected
     balance sheet and income statement for the coming fiscal year.
     
          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 go 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; (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 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.  Incur aggregate capital expenditures in excess of
     five million dollars ($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 an event of default as defined herein and
under 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 become 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 (including any
obligation to make Loan Advances or disbursements), 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 be 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' fee 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 circumstance 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 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 G  SHERMAN, PRESIDENT/CEO     JOSEPH H. KISER, 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.   Call   Collateral Officer
$2,500,000.00           08-13-1997   08-13-1998
152

Account    Initials
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.          Lender:   BANK ONE, COLORADO, N.A.
          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