<PAGE>
                                                                   EXHIBIT 10.32


                                 LOAN AGREEMENT


                                     BETWEEN


                           SIRENZA MICRODEVICES, INC.


                                       AND


                              VARI-L COMPANY, INC.


                                 OCTOBER 7, 2002



<PAGE>
                                TABLE OF CONTENTS

<Table>
<Caption>
                                                                                                                   PAGE
<S>                                                                                                                <C>
ARTICLE 1.        INTERPRETATION......................................................................................1

         1.1      Definitions.........................................................................................1
         1.2      GAAP................................................................................................1
         1.3      Governing Law.......................................................................................1
         1.4      Construction........................................................................................1
         1.5      Entire Agreement....................................................................................1
         1.6      Calculation of Interest and Fees....................................................................1

ARTICLE 2.        LOANS...............................................................................................2

         2.1      Tranche A Loan......................................................................................2
         2.2      Tranche B Loans.....................................................................................2
         2.3      Interest............................................................................................2
         2.4      Maturity............................................................................................2
         2.5      Prepayments.........................................................................................2
         2.6      Application to Acquisition Consideration............................................................4
         2.7      Other Payment Terms.................................................................................4
         2.8      Notes...............................................................................................4
         2.9      Security; Further Assurances........................................................................4

ARTICLE 3.        REPRESENTATIONS AND WARRANTIES OF BORROWER..........................................................5

         3.1      Due Incorporation, Qualification, etc...............................................................5
         3.2      Authority...........................................................................................5
         3.3      Enforceability......................................................................................5
         3.4      Non-Contravention...................................................................................5
         3.5      Approvals...........................................................................................5
         3.6      No Violation or Default.............................................................................5
         3.7      Title...............................................................................................6
         3.8      No Agreements to Sell Assets........................................................................6
         3.9      Other Regulations...................................................................................6
         3.10     Governmental Charges and Other Indebtedness.........................................................6
         3.11     Solvency, Etc.......................................................................................6
         3.12     No Material Adverse Effect..........................................................................6
         3.13     Accuracy of Information Furnished...................................................................6

ARTICLE 4.        CONDITIONS TO EACH LOAN.............................................................................7

         4.1      Closing.............................................................................................7
         4.2      Conditions to Lender's Obligation to Make Each Loan.................................................8
         4.3      Covenant to Deliver.................................................................................8

ARTICLE 5.        COVENANTS OF BORROWER...............................................................................9

         5.1      Affirmative Covenants...............................................................................9
         5.2      Negative Covenants.................................................................................10
         5.3      Financial Covenants................................................................................12

ARTICLE 6.        EVENTS OF DEFAULT..................................................................................12

         6.1      Events of Default..................................................................................12
         6.2      Rights of Lender upon Default......................................................................13
</Table>



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<PAGE>

                                TABLE OF CONTENTS
                                   (CONTINUED)

<Table>
<Caption>
                                                                                                                   PAGE
<S>                                                                                                                <C>
ARTICLE 7.        MISCELLANEOUS......................................................................................14

         7.1      Notices............................................................................................14
         7.2      Expenses...........................................................................................15
         7.3      Indemnification....................................................................................15
         7.4      Waivers; Amendments................................................................................15
         7.5      Successors and Assigns.............................................................................15
         7.6      Set-off............................................................................................16
         7.7      No Third Party Rights..............................................................................16
         7.8      Partial Invalidity.................................................................................16
         7.9      Jury Trial.........................................................................................16
         7.10     Governing Law......................................................................................16
         7.11     Integration........................................................................................16
         7.12     Counterparts.......................................................................................16
</Table>



                                      -ii-
<PAGE>

                                 LOAN AGREEMENT


         This LOAN AGREEMENT (this "Loan Agreement"), dated as of October 7,
2002 is entered into by and between SIRENZA MICRODEVICES, INC., a Delaware
corporation ("Lender") and VARI-L COMPANY, INC., a Colorado corporation
("Borrower").

                                    AGREEMENT

         NOW, THEREFORE, in consideration of the foregoing and of the covenants,
conditions and agreements set forth herein, the parties agree as follows:

ARTICLE 1. INTERPRETATION.

         1.1 Definitions. Unless otherwise indicated in this Loan Agreement,
each term set forth in Schedule I, when used in this Loan Agreement, shall have
the respective meaning given to that term in Schedule I or in the provision of
this Loan Agreement referenced in Schedule I.

         1.2 GAAP. Unless otherwise indicated in this Loan Agreement, all
accounting terms used in this Loan Agreement shall be construed, and all
accounting and financial computations hereunder or thereunder shall be computed,
in accordance with GAAP. The term "GAAP" shall mean generally accepted
accounting principles and practices as in effect in the United States of America
from time to time, consistently applied.

         1.3 Governing Law. This Loan Agreement and each of the other Loan
Documents shall be governed by and construed in accordance with the laws of the
State of California without reference to conflicts of law rules.

         1.4 Construction. Each of this Loan Agreement and the other Loan
Documents is the result of negotiations among, and has been reviewed by,
Borrower, Lender and their respective counsel. Accordingly, this Loan Agreement
and the other Loan Documents shall be deemed to be the product of all parties
hereto, and no ambiguity shall be construed in favor of or against Borrower or
Lender.

         1.5 Entire Agreement. This Loan Agreement and each of the other Loan
Documents, taken together, constitute and contain the entire agreement of
Borrower and Lender and supersede any and all prior agreements, negotiations,
correspondence, understandings and communications among the parties, whether
written or oral, respecting the subject matter hereof.

         1.6 Calculation of Interest and Fees. All calculations of interest and
fees under this Loan Agreement and the other Loan Documents for any period shall
include the first day of such period and exclude the last day of such period.



<PAGE>
ARTICLE 2. LOANS

         2.1 Tranche A Loan. Subject to the terms and conditions of this Loan
Agreement, Lender agrees to advance to Borrower a term loan (the "Tranche A
Loan") in an aggregate principal amount not to exceed $1,353,861.80 to be used
to payoff existing Indebtedness to Wells Fargo Business Credit Inc. Borrower may
not reborrow the principal amount of the Tranche A Loan after repayment or
prepayment thereof.

         2.2 Tranche B Loans. Subject to the terms and conditions of this Loan
Agreement, Lender agrees to advance to Borrower, from time to time, term loans
(each, a "Tranche B Loan" and together with the Tranche A Loan, the "Loans", and
each a "Loan") according to Schedule II attached hereto (the "Funding
Schedule"), in an aggregate principal amount not to exceed $3,946,138.20 (the
"Tranche B Commitment"). Each month Borrower may request a Tranche B Loan in a
principal amount up to the sum of (i) the principal amount of Tranche B Loans
permitted to be advanced to the date of requested advance pursuant to the
Funding Schedule plus (ii) any Excess Amount. The term "Excess Amount" shall
mean the aggregate principal amount of Tranche B Loans permitted to be advanced
to the date of requested advance pursuant to the Funding Schedule minus the
aggregate amount of Tranche B Loans actually advanced to the date of requested
advance. In no event shall the aggregate principal amount of Tranche B Loans
advanced pursuant to this Loan Agreement exceed the Tranche B Commitment. No
more than one Tranche B Loan shall be advanced per calendar month (except that
Borrower may make two advances in the month of October 2002, provided that in no
event shall the aggregate principal amount of Loans advanced in such month
exceed $1,200,000) and each Tranche B Loan shall be made on a date at least
three (3) Business Days after the delivery to Lender in the manner specified in
Section 7.1 of a notice of borrowing in the form of Schedule III hereto (the
"Notice of Borrowing"). Borrower may not reborrow the principal amount of any
Tranche B Loan after repayment or prepayment thereof.

         2.3 Interest. Borrower shall pay interest at Maturity on the unpaid
principal amount of the Loans from the date of each such Loan until paid in
full, at a rate per annum equal to twenty five percent (25%). All computations
of such interest shall be based on a year of twelve thirty (30) day months.

         2.4 Maturity. Unless earlier prepaid or accelerated, all outstanding
principal and accrued interest under the Loans are due and payable in full on
September 25, 2003.

         2.5 Prepayments.

                  (a) Optional Prepayment

                           (1) Tranche A Loan. Provided that there are no
outstanding Tranche B Loans, at its option, Borrower may, upon five (5) Business
Days' written notice to Lender, prepay all, but not less than all of the Tranche
A Loan, provided that such prepayment shall include, all outstanding principal
on the Tranche A Loan, all accrued interest to the date of prepayment thereon
and all other fees and expenses due to Lender under the Loan Documents.

                           (2) Tranche B Loans. At its option, Borrower may,
upon five (5) Business Days' written notice to Lender, prepay all or part of any
Tranche B Loan, provided that such prepayment shall include, all outstanding
principal on the Tranche B Loan, all accrued interest to the date of prepayment
and all other fees and expenses due to Lender under the Loan Documents.



                                      -2-
<PAGE>

                           (3) Prepayment Fee. In the event that (i) a Change of
Control shall occur within 180 days following a date of prepayment pursuant to
this Section 2.5(a) upon which all outstanding Loans have been paid in full or
(ii) Borrower shall enter into a definitive acquisition agreement with a Person
other than Lender within 180 days following a date of prepayment upon which all
outstanding Loans have been paid in full that would result in a Change of
Control, then in either case, Borrower expressly agrees to pay (whether or not
any Obligations remain outstanding and whether or not Lender has any commitment
to make Loans hereunder) to Lender the Prepayment Fee upon the occurrence of
either event referenced in subsection (i) or (ii) of this sentence. Borrower's
express agreement to pay the Prepayment Fee pursuant to the terms set forth in
the previous sentence shall survive the termination of this Loan Agreement.

                  (b) Mandatory Prepayment of Loans. Upon the earlier of (i) the
fifth Business Day following the date of execution of a definitive agreement
with a Person other than Lender that would result in a Change of Control, or
(ii) the occurrence of a Change of Control, then in either case:

                           (1) Borrower shall, at Lender's option, either (A)
prepay in full all outstanding principal amounts due under the Tranche A Loan,
all accrued interest to the date of prepayment and all other fees and expenses
due under the Loan Documents, or (B) convert all outstanding principal amounts
due under the Tranche A Loan into Borrower's Equity Securities pursuant to the
conversion provisions contained in the Tranche A Note and pay to Lender all
accrued interest to the date of conversion and all other fees and expenses due
under the Loan Documents;

                           (2) Borrower shall prepay in full all outstanding
principal amounts due under the Tranche B Loans, all accrued interest to the
date of prepayment, and all other fees and expenses due under the Loan
Documents; and

                           (3) Borrower shall pay to Lender the Prepayment Fee.

                  (c) Application of Prepayments. All prepayments hereunder
shall be applied first to unpaid fees, costs and expenses then due and payable
under this Loan Agreement or the other Loan Documents, second to accrued
interest then due and payable under this Loan Agreement or the other Loan
Documents, third to the Prepayment Fee, if any, and finally to reduce the
principal amount of outstanding Loans.

                  (d) Conversion. At Lender's option, the principal amount of
the Tranche A Loan may be converted into Borrower's Equity Securities pursuant
to the conversion provisions contained in the Tranche A Note.

         2.6 Application to Acquisition Consideration. In the event that Lender
and Borrower enter into a definitive acquisition agreement that would result in
Lender acquiring Borrower, or all or substantially all of the assets of
Borrower, then all outstanding principal and accrued and unpaid interest under
the Tranche B Loans and all accrued and unpaid interest under the Tranche A Loan
to the date of the closing of such acquisition shall be applied to reduce the
purchase price paid by Lender pursuant to such acquisition agreement at a rate
of $1.00 for every $1.00 of such outstanding principal and accrued and unpaid
interest under the Tranche B Loans and all accrued and unpaid interest under the
Tranche A Loan. Each $1.00 applied in the previous sentence to reduce the
purchase price paid by Lender shall be deemed a $1.00 repayment of the
Obligations and such Obligations shall be deemed cancelled to the extent of such
repayment.



                                      -3-
<PAGE>
         2.7 Other Payment Terms

                  (a) Place and Manner. Borrower shall make all payments due to
Lender hereunder at the address specified in Section 7.1, in lawful money of the
United States and in same day or immediately available funds.

                  (b) Date. Whenever any payment due hereunder shall fall due on
a day other than a Business Day, such payment shall be made on the next
succeeding Business Day, and such extension of time shall be included in the
computation of interest or fees, as the case may be.

                  (c) Default Rate. From and after the occurrence of an Event of
Default and during the continuance thereof, Borrower shall pay interest on the
aggregate, outstanding balance of the Loans, and on interest (compounded
annually) and other amounts not paid when due hereunder or under the other Loan
Documents, from the date due thereof until those amounts are paid in full at a
per annum rate (the "Default Rate") equal to the lesser of (i) a rate equal to
five percentage points in excess of the rate otherwise applicable to the Loans
at such time or (ii) the maximum rate permitted by law, such rate to change from
time to time as the rate otherwise applicable to the Loans shall change. All
computations of such interest shall be based on a year of twelve thirty (30) day
months for the actual number of days elapsed.

         2.8 Notes. The obligation of Borrower to repay the Tranche A Loan and
to pay interest thereon at the rates provided herein shall be evidenced by a
convertible promissory note in the form of Exhibit A (the "Tranche A Note"). The
obligation of Borrower to repay the Tranche B Loans and to pay interest thereon
at the rates provided herein shall be evidenced by a promissory note in the form
of Exhibit B (the "Tranche B Note" and together with the Tranche A Note, the
"Notes" and each a "Note"). With respect to Tranche B Loans, Borrower
irrevocably authorizes Lender to make or cause to be made, an appropriate
notation on Lender's Record reflecting the making of such Tranche B Loan or (as
the case may be) the receipt of a payment or prepayment of such Tranche B Loan.
The outstanding amount of the Tranche B Loans set forth on such Lender's Record
shall be prima facie evidence (absent manifest error) of the principal amount
thereof owing and unpaid to such Lender, but the failure to record, or any error
in so recording, any such amount on such Lender's Record shall not limit or
otherwise affect the obligations of the Borrower hereunder or under the Tranche
B Note to make payments of principal of or interest on the Tranche B Note when
due.

         2.9 Security; Further Assurances

                  (a) Security. The Obligations shall be secured by a Security
Agreement in the form of Exhibit C (the "Security Agreement").

                  (b) Further Assurances. Borrower shall deliver to Lender the
Security Agreement and such other instruments, agreements, certificates and
documents as Lender may reasonably request to create, perfect, evidence and
maintain (i) a first priority security interest of Lender in all of the assets
of Borrower as further set forth in the Security Agreement, subject only to
Permitted Liens and (ii) the rights of Lender under this Loan Agreement and the
other Loan Documents. Borrower shall fully cooperate with Lender and perform all
additional acts reasonably requested by Lender to effect the purposes of the
foregoing and the rights granted to Lender hereunder.



                                      -4-
<PAGE>

ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF BORROWER.

         To induce Lender to enter into this Loan Agreement and to make Loans
hereunder, Borrower represents and warrants to Lender that, except as set forth
on the disclosure schedule attached hereto as Schedule IV (the "Disclosure
Schedule"):

         3.1 Due Incorporation, Qualification, etc. Each of Borrower and its
Subsidiaries (i) is a corporation duly organized, validly existing and in good
standing under the laws of its state of incorporation; (ii) has the power and
authority to own, lease and operate its properties and carry on its business as
now conducted; and (iii) is duly qualified, licensed to do business and in good
standing as a foreign corporation in each jurisdiction where the failure to be
so qualified or licensed could reasonably be expected to have a Material Adverse
Effect.

         3.2 Authority. The execution, delivery and performance by Borrower of
each Loan Document to be executed by Borrower and the consummation of the
transactions contemplated thereby (i) are within the power of Borrower and (ii)
have been duly authorized by all necessary actions on the part of Borrower.

         3.3 Enforceability. Each Loan Document executed, or to be executed, by
Borrower has been, or will be, duly executed and delivered by Borrower and
constitutes, or will constitute, a legal, valid and binding obligation of
Borrower, enforceable against Borrower in accordance with its terms, except as
limited by bankruptcy, insolvency or other laws of general application relating
to or affecting the enforcement of creditors' rights generally and general
principles of equity.

         3.4 Non-Contravention. The execution and delivery by Borrower of the
Loan Documents executed by Borrower and the performance and consummation of the
transactions contemplated thereby do not and will not (i) violate any material
Requirement of Law applicable to Borrower; (ii) violate any provision of, or
result in the breach or the acceleration of, or entitle any other Person to
accelerate (whether after the giving of notice or lapse of time or both), any
material Contractual Obligation of Borrower; or (iii) result in the creation or
imposition of any Lien upon any property, asset or revenue of Borrower (except
such Liens as may be created in favor of Lender pursuant to this Loan Agreement
or the other Loan Documents).

         3.5 Approvals. No consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Authority or other
Person (including, without limitation, the shareholders of any Person) is
required in connection with the execution and delivery of the Loan Documents
executed by Borrower and the performance and consummation of the transactions
contemplated thereby, other than filings that may be required under applicable
federal and state securities laws and filings necessary to perfect the Lender's
security interest in the Collateral (as defined in the Security Agreement).

         3.6 No Violation or Default. None of Borrower or Borrower's
Subsidiaries is in violation of or in default with respect to (i) any material
Requirement of Law; (ii) any material Contractual Obligation (nor is there any
waiver in effect which, if not in effect, would result in such a violation or
default), where, in each case, such violation or default, individually, or
together with all such violations or defaults, could reasonably be expected to
have a Material Adverse Effect. Without limiting the generality of the
foregoing, to the best knowledge of Borrower, none of Borrower or Borrower's
Subsidiaries (A) has violated any Environmental Laws, (B) has any liability
under any Environmental Laws or (C) has received notice or other communication
of an investigation or is under investigation by any Governmental Authority
having authority to enforce Environmental Laws, where such violation, liability
or investigation could reasonably be expected to have a Material Adverse Effect.
No Event of Default or Default has occurred and is continuing. Except as set
forth



                                      -5-
<PAGE>

(with estimates of the dollar amounts involved) in the Disclosure Schedule, no
actions (including, without limitation, derivative actions), suits, proceedings
or investigations are pending or, to the knowledge of Borrower, threatened
against Borrower at law or in equity in any court or before any other
governmental authority or (ii) seeks to enjoin, either directly or indirectly,
the execution, delivery or performance by Borrower of the Loan Documents or the
transactions contemplated thereby. The executed Memorandum of Understanding (the
"MOU") dated October 3, 2002, regarding a settlement of the certain outstanding
shareholder class action litigation involving Borrower referred to therein,
though it remains subject to court approval, has been entered into by Borrower
and all other necessary parties and is in full force and effect in accordance
with its terms.

         3.7 Title. Borrower and Borrower's Subsidiaries own and have good and
marketable title in fee simple absolute to, or a valid leasehold interest in,
all their respective real properties and good title to their other respective
assets and properties as reflected in the most recent Financial Statements
delivered to Lender (except those assets and properties disposed of in the
ordinary course of business since the date of such Financial Statements) and all
respective assets and properties acquired by Borrower and Borrower's
Subsidiaries since such date (except those disposed of in the ordinary course of
business). Such assets and properties are subject to no Lien, except for
Permitted Liens.

         3.8 No Agreements to Sell Assets. None of Borrower or Borrower's
Subsidiaries has any legal obligation, absolute or contingent, to any Person to
sell a material portion of the assets of Borrower or Borrower's Subsidiaries
(other than sales in the ordinary course of business), or to effect any merger,
consolidation or other reorganization of Borrower or to enter into any agreement
with respect thereto, except those transactions contemplated with Lender.

         3.9 Other Regulations. None of Borrower or its Subsidiaries is subject
to regulation under the Investment Company Act of 1940, the Public Utility
Holding Company Act of 1935, the Federal Power Act, the Interstate Commerce Act,
any state public utilities code or to any federal or state statute or regulation
limiting its ability to incur Indebtedness.

         3.10 Governmental Charges and Other Indebtedness. Each of Borrower and
its Subsidiaries has filed or caused to be filed all tax returns (including
extensions thereof) which are required to be filed by it. Borrower and
Borrower's Subsidiaries have paid, or made provision for the payment of, all
taxes and other Governmental Charges which have or may have become due pursuant
to said returns or otherwise and all other Indebtedness, except such
Governmental Charges or Indebtedness, if any, which are being contested in good
faith and as to which adequate reserves (determined in accordance with GAAP)
have been provided or which could not reasonably be expected to have a Material
Adverse Effect if unpaid.

         3.11 Solvency, Etc. As of the Closing Date, Borrower is Solvent and,
after the execution and delivery of the Loan Documents and the consummation of
the transactions contemplated thereby will be Solvent.

         3.12 No Material Adverse Effect. As of the Closing Date, since June 30,
2002, no event has occurred and no condition exists which could reasonably be
expected to have a Material Adverse Effect, except as disclosed in Borrower's
Draft No. 8 of its Annual Report on Form 10-K for its fiscal year ended June 30,
2002, a copy of which, dated October 4, 2002, has been previously provided to
Lender.

         3.13 Accuracy of Information Furnished. No representation or warranty
or other statement of Borrower in any written certificates, statements or
information furnished to Lender by or on behalf of



                                      -6-
<PAGE>

Borrower or Borrower's Subsidiaries in connection with the Loan Documents or the
transactions contemplated thereby contains any untrue statement of a material
fact or omits to state a material fact necessary to make the statements therein,
in light of the circumstances in which they were made, not misleading (it being
recognized by Lender that the projections and forecasts provided by Borrower
have been prepared in good faith, are based upon reasonable assumptions, are not
to be viewed as facts and that actual results during the period or periods
covered by any such projections and forecasts may differ from the projected or
forecasted results).

ARTICLE 4. CONDITIONS PRECEDENT.

         4.1 Closing. At the time of execution and delivery of this Loan
Agreement, Borrower shall have duly executed and/or delivered to Lender (unless
the Lender has agreed in writing to waive such condition or document):

                  (a) The Security Agreement, together with completed schedules;

                  (b) Account Control Agreements in form and substance
reasonably satisfactory to Lender, duly executed by all applicable parties, to
perfect Lender's security interest in Borrower's deposit and investment
accounts;

                  (c) UCC-1 Financing Statement to be filed with the Secretary
of State of the State of Colorado and Borrower shall have taken such actions and
delivered such documents, if any, as Lender shall reasonably determine are
necessary or desirable to perfect and protect its security interest in the
Collateral;

                  (d) Patent and Trademark Office filings and U.S. Copyright
Office filings, if applicable;

                  (e) Copies, certified by the Secretary, Assistant Secretary or
Chief Financial Officer of Borrower as of the Closing Date, of Borrower's
charter documents and bylaws and of all documents evidencing corporate action
taken by Borrower authorizing the execution, delivery and performance of the
Loan Documents to which Borrower is a party, in form and substance satisfactory
to Lender and its counsel;

                  (f) Good standing certificate from Borrower's state of
incorporation and the state in which Borrower's principal place of business is
located, together with certificates of the applicable governmental authorities
that Borrower is in compliance with the franchise tax laws of each such state,
each dated as of a recent date;

                  (g) Evidence of the insurance coverage required by Section
5.1(c) of this Loan Agreement;

                  (h) Evidence satisfactory to Lender (i) that Borrower's loan
facility with Wells Fargo Business Credit Inc. has been terminated, (ii) that
all obligations of Borrower under such loan facility have been paid in full and
(iii) that all security interests in favor of Wells Fargo Business Credit, Inc.
have been terminated;

                  (i) All necessary consents of shareholders and other third
parties with respect to the execution, delivery and performance of this
Agreement, and the other Loan Documents;

                  (j) Exclusivity And Right of First Refusal Agreement;



                                      -7-
<PAGE>

                  (k) Registration Rights Agreement; and

                  (l) A favorable opinion of counsel for Borrower, dated as of
the closing date, in the form attached hereto as Exhibit D;

         4.2 Conditions to Lender's Obligation to Make Each Loan. The making of
each Loan is subject to the further condition that on the date such Loan is made
and after giving effect thereto, the following shall be true and correct:

                  (a) Borrower shall have delivered to Lender the Notice of
Borrowing;

                  (b) Borrower shall have duly executed and delivered to Lender
the applicable Note;

                  (c) The funding date shall not be later than September 25,
2003;

                  (d) Borrower shall have provided to Lender such documents,
instruments and agreements as Lender shall reasonably request to evidence the
perfection and priority of the security interests granted to Lender pursuant to
the Security Agreement;

                  (e) The representations and warranties set forth in this Loan
Agreement and the other Loan Documents shall be true and correct in all material
respects as if made on such date, except to the extent such representations and
warranties address matters as of a particular date (which representations and
warranties shall remain true and correct as of such date);

                  (f) No Default or Event of Default has occurred and is
continuing or will result from the making of the Loan; and

                  (g) Each of the Loan Documents remains in full force and
effect;

The submission by Borrower to Lender of the Notice of Borrowing with respect to
the Loan shall be deemed to be a representation and warranty by Borrower as of
the date thereof as to the above.

         4.3 Covenant to Deliver(a). Borrower agrees (not as a condition but as
a covenant) to deliver to Lender each item required to be delivered to Lender as
a condition to closing under this Article 4. Borrower expressly agrees that the
occurrence of the Closing Date prior to the receipt by Lender of any such item
shall not constitute a waiver by Lender of Borrower's obligation to deliver such
item.

                  (b) Borrower agrees to file or cause to file all necessary
instruments or documents to terminate and release certain filed UCC-1 financing
statements in favor of Bank One, Colorado, NA and Tokai Financial Services
within 10 Business Days of the date of this Loan Agreement.

                  (c) Within 10 Business Days of the date of this Loan
Agreement, Borrower agrees to file or cause to be filed all necessary
assignments with the U.S. Patent and Trademark Office necessary to evidence the
assignment from Asvan Technology, LLC, Ganesh Basawapatna and Varalakshmi
Basawapatna to Borrower of patent application 09/997,468 filed on November 29,
2001 (Ferrite Crystal Resonator Coupling Structure).

                  (d) Borrower agrees not to maintain any bank accounts or
investment accounts, except (i) accounts listed on Section 13 of Schedule B of
the Security Agreement in which Lender has perfected its



                                      -8-
<PAGE>

security interest in such accounts and (ii) accounts in which Lender has taken
such action as it deems necessary to obtain a perfected security interest in
such accounts and Borrower agrees to deliver and execute all necessary documents
to effect the intent of the foregoing, including account control agreements.

ARTICLE 5. COVENANTS OF BORROWER.

         5.1 Affirmative Covenants. Until the termination of the commitment to
make Loans under this Loan Agreement and the satisfaction in full by Borrower of
all Obligations, Borrower shall comply, and shall cause compliance, with the
following affirmative covenants unless Lender shall otherwise consent in
writing:

                  (a) Financial Statements, Reports, etc. Borrower shall furnish
to Lender the following, each in such form and such detail as Lender shall
reasonably request:

                           (i) Within ten (10) Business Days after the end of
each fiscal month of Borrower, unaudited Financial Statements of Borrower as of
the last day of such fiscal month, certified by the chief financial officer or
controller of Borrower to present fairly in all material respects the financial
condition, results of operations and other information presented therein and to
have been prepared in accordance with GAAP consistently applied, subject to
normal year end adjustments and except that no footnotes need be included with
such Financial Statements;

                           (ii) Contemporaneously with the monthly financial
statements required by the foregoing clause (i), a certificate of the president
or chief financial officer of Borrower showing compliance with the financial
covenants set forth in Section 5.3 and stating that no Event of Default and no
Default has occurred, or, if any such Event of Default or Default has occurred,
a statement as to the nature thereof and what action Borrower proposes to take
with respect thereto;

                           (iii) As soon as possible and in no event later than
five (5) Business Days after a Responsible Officer becoming aware of the
occurrence or existence of: (A) any Reportable Event under any Employee Benefit
Plan or Multiemployer Plan; (B) any actual or overtly threatened litigation,
suits, claims or disputes against Borrower or its Subsidiaries involving
potential monetary damages payable by Borrower or its Subsidiaries of One
Hundred Thousand Dollars ($100,000) or more (alone or in the aggregate); (C) any
other event or condition which could reasonably be expected to have a Material
Adverse Effect; or (D) any Event of Default or Default; the statement of the
president or chief financial officer of Borrower setting forth details of such
event, condition, Event of Default or Default and the action which Borrower has
taken or proposes to take with respect thereto; and

                           (v) Such other instruments, agreements, certificates,
statements, documents and information relating to the operations or condition
(financial or otherwise) of Borrower or its Subsidiaries, and compliance by
Borrower with the terms of this Loan Agreement and the other Loan Documents as
Lender may from time to time reasonably request.

                  (b) Books and Records. Borrower and its Subsidiaries shall at
all times keep proper books of record and account in which full, true and
correct entries will be made of their transactions in accordance with GAAP.

                  (c) Insurance. Borrower and its Subsidiaries shall (i) carry
and maintain insurance at its expense of the types and in the amounts
customarily carried from time to time during the term of this Loan Agreement by
others engaged in substantially the same business as such Person and operating
in the same



                                      -9-
<PAGE>

geographic area as such Person, including, but not limited to, fire, property
damage and worker's compensation, such insurance to be in such form as is
carried with companies and in amounts satisfactory to Lender, and (ii) deliver
to Lender from time to time, as Lender may request, schedules or insurance
certificates setting forth all insurance then in effect. All property policies
shall name Lender as loss payee with respect to the Collateral and all liability
policies shall name Lender as an additional insured in the full amount of
Borrower's or its Subsidiaries' liability coverage limits.

                  (d) Governmental Charges and Other Indebtedness. Borrower and
its Subsidiaries shall (i) promptly pay and discharge when due all taxes and
other Governmental Charges prior to the date upon which penalties accrue
thereon, (ii) promptly pay and discharge when due all Indebtedness which, if
unpaid, could become a Lien upon the property of Borrower or its Subsidiaries
and (iii) promptly pay and discharge when due all other Indebtedness and (iv)
promptly pay and discharge all trade credit and accounts payable in a manner
consistent with Borrower's current practices and but in no event longer than
sixty (60) days (unless Borrower has specifically negotiated different terms
with the obligors of such trade credit and accounts payable), except for such
trade credit or accounts payable for which Borrower or its Subsidiaries is
contesting in good faith and for which adequate reserves are maintained in
accordance with GAAP.

                  (e) Intentionally omitted.

                  (f) General Business Operations. Each of Borrower and its
Subsidiaries shall (i) preserve and maintain its corporate existence and all of
its rights, privileges and franchises reasonably necessary to the conduct of its
business, (ii) conduct its business activities in compliance with all
Requirements of Law and Contractual Obligations applicable to such Person, the
violation of which could reasonably be expected to have a Material Adverse
Effect, (iii) keep all property useful and necessary in its business in good
working order and condition, ordinary wear and tear excepted, and (iv) maintain
its chief executive office and principal place of business at the address
specified in Section 7.1 unless it shall have given Lender thirty (30) days'
prior written notice of its intent to change the location thereof.

                  (g) Notices. Without limiting Borrower's obligations to Lender
in any other Loan Document or any other agreement between Borrower and Lender,
Borrower shall provide Lender with written notice upon: (i) the date of
execution by Borrower of a definitive acquisition agreement with a Person other
than Lender that would result in a Change of Control and (ii) the date of
commencement of a tender offer to purchase the outstanding Equity Securities of
Borrower for cash or other assets, including, but not limited to securities of
the acquiring Person.

         5.2 Negative Covenants. Until the termination of the commitment to make
Loans under this Loan Agreement and the satisfaction in full by Borrower of all
Obligations, Borrower shall comply, and shall cause compliance, with the
following negative covenants unless Lender shall otherwise consent in writing:

                  (a) Indebtedness. Neither Borrower nor any of its Subsidiaries
shall create, incur, assume or permit to exist any Indebtedness except for
Permitted Indebtedness.

                  (b) Liens. Neither Borrower nor any of its Subsidiaries shall
create, incur, assume or permit to exist any Lien on or with respect to any of
its assets or property of any character, whether now owned or hereafter
acquired, except for Permitted Liens.

                  (c) Asset Dispositions. Except pursuant to an acquisition
agreement with Lender, neither Borrower nor any of its Subsidiaries shall sell,
lease, transfer, license or otherwise dispose of (collectively, a



                                      -10-
<PAGE>

"Transfer") any of its assets or property, whether now owned or hereafter
acquired, except (i) Transfers of worn-out or obsolete equipment, (ii) Transfers
of inventory in the ordinary course of business, (iii) Transfers of
non-exclusive licenses for the use of Borrower's property in the ordinary course
of business, or (iv) other Transfers in an aggregate amount not to exceed
$100,000, provided that such Transfers are made upon terms at least as favorable
to Borrower or such Subsidiary as an arms-length transaction with a
non-Affiliate.

                  (d) Mergers, Acquisitions, Etc. Except pursuant to an
acquisition agreement with Lender, neither Borrower nor any of its Subsidiaries
shall consolidate with or merge into any other Person or permit any other Person
to merge into it, or acquire all or substantially all of the assets or capital
stock of any other Person; provided that any wholly-owned Subsidiary of Borrower
may merge into Borrower or any other wholly-owned Subsidiary of Borrower.

                  (e) Investments. Neither Borrower nor any of its Subsidiaries
shall make any Investment except for Permitted Investments.

                  (f) Dividends, Redemptions, Etc. Neither Borrower nor any of
its Subsidiaries shall (i) pay any dividends or make any distributions on its
Equity Securities; (ii) purchase, redeem, retire, defease or otherwise acquire
for value any of its Equity Securities (other than repurchases pursuant to the
terms of employee stock purchase plans, employee restricted stock agreements or
similar arrangements existing as of the date of this Loan Agreement in an
aggregate amount not to exceed One Hundred Thousand Dollars ($100,000)); (iii)
return any capital to any holder of its Equity Securities as such; (iv) make any
distribution of assets, Equity Securities, obligations or securities to any
holder of its Equity Securities as such; or (v) set apart any sum for any such
purpose.

                  (g) Capital Expenditures. Borrower and its Subsidiaries shall
not pay or incur Capital Expenditures which exceed an aggregate amount greater
than Five Hundred Thousand Dollars ($500,000).

                  (h) Change in Business. Neither Borrower nor any of its
Subsidiaries shall engage, either directly or indirectly through Affiliates, in
any business substantially different from its present business.

                  (i) Indebtedness Payments. Neither Borrower nor any of its
Subsidiaries shall (i) prepay, redeem, purchase, defease or otherwise satisfy in
any manner prior to the scheduled repayment thereof any Indebtedness for
borrowed money (other than the Obligations) or lease obligations, (ii) amend,
modify or otherwise change the terms of any Indebtedness for borrowed money
(other than the Obligations) or lease obligations so as to accelerate the
scheduled repayment thereof or (iii) repay any notes to officers, directors or
shareholders (other than the Obligations).

                  (j) Transactions With Affiliates. Neither Borrower nor any of
its Subsidiaries shall enter into any Contractual Obligation with any Affiliate
or engage in any other transaction with any Affiliate except upon terms at least
as favorable to Borrower or such Subsidiary as an arms-length transaction with
unaffiliated Persons. Borrower shall not breach any covenants or agreements
contained in the MOU and no request for preliminary or final approval of the
settlement described in the MOU shall have been denied by a court having
competent jurisdiction over such matter, and no more than ten percent (10%) of
the shareholders of Borrower included in the class of shareholders potentially
subject to the binding effect of such settlement as finally approved shall have
opted out of such settlement.

                  (k) Employees' Salaries. Borrower may not increase the
salaries of any employees of Borrower.



                                      -11-
<PAGE>

         5.3 Financial Covenants. Borrower shall maintain:

                  (a) Net Operating Loss. As of the last day of each month, Net
Operating Loss for the three (3) month period ending as of the last day of such
month in an amount not greater than the amount of Net Operating Loss for such
period that is set forth on Schedule V attached hereto. The term "Net Operating
Loss" shall mean for such period net operating income (or loss) determined in
accordance with GAAP (excluding restructuring, severance, extraordinary non-cash
charges, and legal and accounting fees incurred in connection with the
transactions contemplated by this Loan Agreement).

                  (b) Cash Used in Operations. As of the last day of each month,
Cash Used In Operations for the three (3) month period ending as of the last day
of such month in an amount not greater than the amount of Cash Used in
Operations for such period that is set forth on Schedule V attached hereto. The
term "Cash Used in Operations" shall mean for such period cash used in
operations as determined in accordance with GAAP and set forth in Borrower's
statement of cash flows (excluding cash used in connection with restructuring,
severance, and legal and accounting fees incurred in connection with the
transactions contemplated by this Loan Agreement).

ARTICLE 6. EVENTS OF DEFAULT.

         6.1 Events of Default. The occurrence of any of the following shall
constitute an "Event of Default" under this Loan Agreement and the Notes:

                  (a) Failure to Pay. Borrower shall fail to pay (i) when due
any principal or interest payment on the due date hereunder and such payment
shall not have been made within five (5) days of such due date or (ii) any other
payment required under the terms of this Loan Agreement or any other Loan
Document on the date due and such payment shall not have been made within five
(5) days of Borrower's receipt of Lender's written notice to Borrower of such
failure to pay; or

                  (b) Breaches of Certain Covenants. Borrower or any of its
Subsidiaries shall fail to observe or perform any covenant, obligation,
condition or agreement set forth in Section 4.3(b), Section 4.3(c), Section
4.3(d), Section 5.1(a), Section 5.1(c), Section 5.1(g), Section 5.2 or Section
5.3; or

                  (c) Breaches of Other Covenants. Borrower or any of its
Subsidiaries shall fail to observe or perform any other covenant, obligation,
condition or agreement contained in this Loan Agreement or the other Loan
Documents (other than those specified in Sections 6.1(a) and 6.1(b)) and such
failure shall continue for thirty (30) days; or

                  (d) Representations and Warranties. Any representation,
warranty, certificate, or other statement (financial or otherwise) made or
furnished by or on behalf of Borrower to Lender in writing in connection with
this Loan Agreement or any of the other Loan Documents, or as an inducement to
Lender to enter into this Loan Agreement, shall be false, incorrect or
misleading in any material respect when made or furnished in light of the
circumstances when made or deemed made; or

                  (e) Other Payment Obligations. Borrower or any of its
Subsidiaries shall (A)(i) fail to make any payment when due under the terms of
any bond, debenture, note or other evidence of Indebtedness to be paid by such
Person (excluding this Loan Agreement and the other Loan Documents but including
any other evidence of Indebtedness of Borrower or any of its Subsidiaries to
Lender) and such failure shall continue beyond any period of grace provided with
respect thereto, or (ii) default in the observance or



                                      -12-
<PAGE>

performance of any other agreement, term or condition contained in any such
bond, debenture, note or other evidence of Indebtedness, and (B) the effect of
such failure or default is to cause, or permit the holder or holders thereof to
cause Indebtedness in an aggregate amount of One Hundred Thousand Dollars
($100,000) or more to become due prior to its stated date of maturity; or

                  (f) Voluntary Bankruptcy or Insolvency Proceedings. Borrower
or any of its Subsidiaries shall (i) apply for or consent to the appointment of
a receiver, trustee, liquidator or custodian of itself or of all or a
substantial part of its property, (ii) be unable, or admit in writing its
inability, to pay its debts generally as they mature, (iii) make a general
assignment for the benefit of its or any of its creditors, (iv) be dissolved or
liquidated in full or in part, (v) commence a voluntary case or other proceeding
seeking liquidation, reorganization or other relief with respect to itself or
its debts under any bankruptcy, insolvency or other similar law now or hereafter
in effect or consent to any such relief or to the appointment of or taking
possession of its property by any official in an involuntary case or other
proceeding commenced against it, or (vi) take any action for the purpose of
effecting any of the foregoing; or

                  (g) Involuntary Bankruptcy or Insolvency Proceedings.
Proceedings for the appointment of a receiver, trustee, liquidator or custodian
of Borrower or any of its Subsidiaries or of all or a substantial part of the
property thereof, or an involuntary case or other proceedings seeking
liquidation, reorganization or other relief with respect to Borrower or any of
its Subsidiaries or the debts thereof under any bankruptcy, insolvency or other
similar law now or hereafter in effect shall be commenced and an order for
relief entered or such proceeding shall not be dismissed or discharged within
sixty (60) days of commencement; or

                  (h) Judgments. A final judgment or order for the payment of
money in excess of One Hundred Thousand Dollars ($100,000) (exclusive of amounts
covered by insurance issued by an insurer not an Affiliate of Borrower) shall be
rendered against Borrower or any of its Subsidiaries and the same shall remain
undischarged for a period of thirty (30) days during which execution shall not
be effectively stayed, or any judgment, writ, assessment, warrant of attachment,
or execution or similar process shall be issued or levied against a substantial
part of the property of Borrower or any of its Subsidiaries and such judgment,
writ, or similar process shall not be released, stayed, vacated or otherwise
dismissed within thirty (30) days after issue or levy; or

                  (i) Loan Documents. Any Loan Document or any material term
thereof shall cease to be, or be asserted by Borrower not to be, a legal, valid
and binding obligation of Borrower enforceable in accordance with its terms or
if the Liens of Lender in any of the assets of Borrower or its Subsidiaries
shall cease to be or shall not be valid, first priority perfected Liens, subject
only to Permitted Liens, or Borrower or any Subsidiary shall assert that such
Liens are not valid, first priority and perfected Liens, subject only to
Permitted Liens; or

                  (j) ERISA. Any Reportable Event occurs which constitutes
grounds for the termination of any Employee Benefit Plan by the PBGC or for the
appointment of a trustee to administer any Employee Benefit Plan, or any
Employee Benefit Plan shall be terminated within the meaning of Title IV of
ERISA or a trustee shall be appointed to administer any Employee Benefit Plan;
or

                  (k) Change in Control. A Change of Control shall occur.

         6.2 Rights of Lender upon Default. Upon the occurrence or existence of
any Event of Default (other than an Event of Default referred to in Sections
6.1(f) and 6.1(g)) and at any time thereafter during the continuance of such
Event of Default, Lender may, by written notice to Borrower, declare all
outstanding



                                      -13-
<PAGE>

Obligations payable by Borrower hereunder to be immediately due and payable
without presentment, demand, protest or any other notice of any kind, all of
which are hereby expressly waived, anything contained herein or in the Notes to
the contrary notwithstanding. Upon the occurrence or existence of any Event of
Default described in Sections 6.1(f) and 6.1(g), immediately and without notice,
all outstanding Obligations payable by Borrower hereunder shall automatically
become immediately due and payable, without presentment, demand, protest or any
other notice of any kind, all of which are hereby expressly waived, anything
contained herein or in the Notes to the contrary notwithstanding. In addition to
the foregoing remedies, upon the occurrence or existence of any Event of
Default, Lender may exercise any other right, power or remedy granted to it by
the Loan Documents or otherwise permitted to it by law, either by suit in equity
or by action at law, or both.

         In the event that (i) a Change of Control shall occur within 180 days
following the date of acceleration of the Loans or the exercise of Lender's
remedies pursuant to the Loan Documents or (ii) Borrower shall enter into a
definitive acquisition agreement within 180 days following the date of
acceleration of the Loans or the exercise of Lender's remedies pursuant to the
Loan Documents with a Person other than Lender that could result in a Change of
Control, then in either case, Borrower expressly agrees to pay (whether or not
any Obligations remain outstanding and whether or not Lender has any commitment
to make Loans hereunder) to Lender the Prepayment Fee upon the occurrence of
either event referenced in subsection (i) or (ii) of this sentence. Borrower's
express agreement to pay the Prepayment Fee pursuant to the terms set forth in
the previous sentence shall survive the termination of this Loan Agreement.

ARTICLE 7. MISCELLANEOUS.

         7.1 Notices. Except as otherwise provided herein, all notices,
requests, demands, consents, instructions or other communications to or upon
Lender or Borrower under this Agreement or the other Loan Documents shall be in
writing and telecopied, mailed or delivered to each party at its telecopier
number or address set forth below (or to such other telecopier number or address
for any party as indicated in any notice given by that party to the other
party). All such notices and communications shall be effective (a) when sent by
Federal Express or other overnight service of recognized standing, on the
Business Day following the deposit with such service; (b) when mailed by
registered or certified mail, first class postage prepaid and addressed as
aforesaid through the United States Postal Service, upon receipt; (c) when
delivered by hand, upon delivery; and (d) when telecopied, upon confirmation of
receipt; provided, however, that any notice delivered to Lender under Article 2
shall not be effective until received by Lender.

                  Lender:           SIRENZA MICRODEVICES, INC.
                                    522 Almanor Avenue
                                    Sunnyvale, CA 94085
                                    Attn: Chief Financial Officer
                                    Telephone: (408) 616-5400
                                    Telecopier: (408) 739-0970

                  with a copy to:   Wilson Sonsini Goodrich & Rosati, P.C.
                                    650 Page Mill Road
                                    Palo Alto, CA 94304
                                    Attention: Steven V. Bernard
                                    Telephone No.: 650-493-9300
                                    Facsimile No.: 650-493-6811



                                      -14-
<PAGE>

                  Borrower:         VARI-L COMPANY, INC.
                                    4895 Peoria St.
                                    Denver, CO 80239
                                    Attn: Chief Financial Officer
                                    Telephone: (303) 371-1560
                                    Telecopier: (303) 373-3868

                  with a copy to:   Cooley Godward LLP
                                    380 Interlocken Crescent, Suite 900
                                    Broomfield, CO 80021
                                    Attention: James Linfield
                                    Telephone No.: 720-566-4000
                                    Facsimile No.: 720-566-4099

         7.2 Expenses. Borrower shall pay on demand all reasonable fees and
expenses, including reasonable attorneys' fees and expenses, incurred by Lender
with respect to the enforcement or attempted enforcement of any of the
Obligations or in preserving any of Lender's rights and remedies (including,
without limitation, all such fees and expenses incurred in connection with any
bankruptcy or similar proceeding involving Borrower or any of its Subsidiaries).

         7.3 Indemnification. Borrower shall indemnify, defend, and hold
harmless Lender and each of Lender's Subsidiaries, Affiliates, directors,
officers, employees and agents (collectively, the "Indemnified Persons"), and
reimburse the Indemnified Persons for, from, and against all demands, claims,
actions or causes of action, assessments, losses, damages, liabilities, costs
and expenses, including, without limitation, interest, penalties and reasonable
attorneys' fees, disbursements and expenses, arising out of or in connection
with (i) any breach by Borrower of any of the representations and warranties
contained in this Loan Agreement or the other Loan Documents, (ii) any failure
by Borrower to perform any covenant, undertaking or obligation hereunder or
under any Loan Document, or (iii) any matter arising out of any use by Borrower
of any proceeds of the Loans, except to the extent such liability arises from
the gross negligence or willful misconduct of the Indemnified Person seeking
indemnity hereunder.

         7.4 Waivers; Amendments. Any term, covenant, agreement or condition of
this Agreement or any other Loan Document may be amended or waived if such
amendment or waiver is in writing and is signed by Borrower and Lender. No
failure or delay by Lender in exercising any right hereunder shall operate as a
waiver thereof or of any other right nor shall any single or partial exercise of
any such right preclude any other further exercise thereof or of any other
right. A waiver or consent given hereunder shall be effective only if in writing
and in the specific instance and for the specific purpose for which given.

         7.5 Successors and Assigns. This Agreement and the other Loan Documents
shall be binding upon and inure to the benefit of Borrower, Lender, all future
holders of the Notes and their respective successors and permitted assigns,
except that neither Borrower nor Lender may assign or transfer any of their
respective rights or obligations under any Loan Document (other than the Common
Stock of Borrower issuable upon conversion of the Tranche A Note) without the
prior written consent of the non-assigning party, except that Lender may,
without the prior written consent of Borrower, assign or transfer its respective
rights and obligations under the Loan Documents in connection with the merger or
consolidation of Lender with or into another Person. All references in this
Agreement to any Person shall be deemed to include all successors and assigns of
such Person.



                                      -15-
<PAGE>

         7.6 Set-off. In addition to any rights and remedies of Lender provided
by law, Lender shall have the right, without prior notice to Borrower, any such
notice being expressly waived by Borrower to the extent permitted by applicable
law, upon the occurrence and during the continuance of an Event of Default, to
set-off and apply against any Obligations, whether matured or unmatured, of
Borrower to Lender (including, without limitation, the Obligations), any amount
owing from Lender to Borrower. Lender agrees promptly to notify Borrower after
any such set-off and application made by Lender, provided that the failure to
give such notice shall not affect the validity of such set-off and application.

         7.7 No Third Party Rights. Nothing expressed in or to be implied from
this Agreement or any other Loan Document is intended to give, or shall be
construed to give, any Person, other than the parties hereto and thereto and
their permitted successors and assigns, any benefit or legal or equitable right,
remedy or claim under or by virtue of this Agreement or any other Loan Document.

         7.8 Partial Invalidity. If at any time any provision of this Agreement
is or becomes illegal, invalid or unenforceable in any respect under the law of
any jurisdiction, neither the legality, validity or enforceability of the
remaining provisions of this Agreement nor the legality, validity or
enforceability of such provision under the law of any other jurisdiction shall
in any way be affected or impaired thereby.

         7.9 Jury Trial. EACH OF BORROWER AND LENDER, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY
JURY AS TO ANY ISSUE RELATING TO ANY LOAN DOCUMENT IN ANY ACTION, PROCEEDING, OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENT.

         7.10 Governing Law. THIS LOAN AGREEMENT, THE OTHER LOAN DOCUMENTS AND
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO AND THERETO SHALL BE GOVERNED
BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
CALIFORNIA. ANY ACTION TO ENFORCE THIS AGREEMENT AGAINST BORROWER MAY BE BROUGHT
IN CALIFORNIA OR, WITH REGARD TO COLLATERAL, MAY ALSO BE BROUGHT WHEREVER SUCH
COLLATERAL IS LOCATED.

         7.11 Integration. This Loan Agreement and the Loan Documents constitute
the entire agreement between the Lender, on the one hand, and the Borrower, on
the other, and supercede any prior written or oral agreements or understandings
of the parties. Borrower acknowledges that it is not relying on any
representation or agreement made by any Lender or any employee, agent or
attorney of any Lender, other than the specific agreements set forth in this
Loan Agreement and the Loan Documents.

         7.12 Counterparts. This Agreement may be executed in any number of
identical counterparts, any set of which signed by all the parties hereto shall
be deemed to constitute a complete, executed original for all purposes.



                                      -16-
<PAGE>

         IN WITNESS WHEREOF, the parties have executed this Loan Agreement as of
the date first set forth above.


         Vari-L Company, Inc.

         By: /s/ CHARLES R. BLAND
            ------------------------

         Name: Charles R. Bland

         Title: CEO


         Sirenza Microdevices

         By: /s/ GERALD L. QUINNELL
            ------------------------

         Name: Gerald L. Quinnell

         Title: EVP Business Development





                       [Signature Page to Loan Agreement]
<PAGE>

                                   SCHEDULE I


                                   DEFINITIONS


         "Affiliate" shall mean, with respect to any Person, (a) each Person
that, directly or indirectly, owns or controls, whether beneficially or as a
trustee, guardian or other fiduciary, five percent (5%) or more of any class of
Equity Securities of such Person, (b) each Person that controls, is controlled
by or is under common control with such Person or any Affiliate of such Person
or (c) each of such Person's officers, directors, joint venturers and partners;
provided, however, that in no case shall Lender be deemed to be an Affiliate of
Borrower or any of its Subsidiaries for purposes of this Loan Agreement. For the
purpose of this definition, "control" of a Person shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of its
management or policies, whether through the ownership of voting securities, by
contract or otherwise.

         "Borrower" shall have the meaning given to that term in the
introductory paragraph hereof.

         "Business Day" shall mean any day other than a Saturday, Sunday or
public holiday under the laws of the State of California or any other day on
which commercial banks are authorized or required to close in the State of
California.

         "Capital Asset" shall mean, with respect to any Person, tangible
property owned or leased (in the case of a Capitalized Lease Obligation) by such
Person, or any expense incurred by any Person that is required by GAAP to be
reported as an asset on such Person's balance sheet.

         "Capital Expenditures" shall mean, with respect to any Person and any
period, all amounts expended and Indebtedness incurred or assumed by such Person
during such period for the acquisition of real property and other Capital Assets
(including amounts expended and Indebtedness incurred or assumed in connection
with Capitalized Lease Obligations).

         "Capitalized Lease Obligations" shall mean any and all obligations
under leases of property (whether real, personal or mixed) that, in accordance
with GAAP, are required to be reported as a capital lease on the balance sheet
of a lessee.

         "Change of Control" shall mean the occurrence of either of the
following:

                  (a) the acquisition by any Person (other than Lender or its
Affiliates) of beneficial ownership, directly or indirectly, through a purchase,
merger or other acquisition transaction or series of transactions, of shares of
capital stock of Borrower entitling such Person to exercise 20% or more of the
total voting power of all shares of capital stock of Borrower entitled to vote
generally in the elections of directors (any shares of voting stock of which
such Person is the beneficial owner that are not then outstanding being deemed
outstanding for purposes of calculating such percentage) other than any such
acquisition by Borrower or any employee benefit plan of Borrower; or

                  (b) any consolidation or merger of Borrower with or into, any
other Person (other than Lender or its Affiliates), any merger of another Person
with or into Borrower, or any conveyance, transfer, sale, lease or other
disposition of all or substantially all of the assets of Borrower to another
Person (other than (a) any such transaction pursuant to which holders of Common
Stock immediately prior to such transaction have the entitlement to exercise,
directly or indirectly, 80% or more of the total voting power of



                                                                     DEFINITIONS
                                      I-1
<PAGE>

all shares of capital stock entitled to vote generally in the election of
directors of the continuing or surviving Person immediately after such
transaction.

         "Charter Documents" shall mean, with respect to any Person, the
Articles or Certificate of Incorporation and Bylaws or any other organizational
or governing documents of such Person, in each case as amended to date.

         "Closing Date" shall mean the date on which each of the conditions set
forth in Articles 4.1 shall have been satisfied or waived in writing and the
initial Loan is made.

         "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.

         "Common Stock" shall mean the common stock of Borrower.

         "Contractual Obligation" of any Person shall mean, any indenture, note,
security, deed of trust, mortgage, security agreement, lease, guaranty,
instrument, contract, agreement or other form of obligation or undertaking to
which such Person is a party or by which such Person or any of its property is
bound.

         "Default" shall mean any event or circumstance not yet constituting an
Event of Default but which, with the giving of any notice or the lapse of any
period of time or both, would become an Event of Default.

         "Default Rate" shall have the meaning given to such term in Section
2.7(c).

         "Dollars" and "$" shall mean the lawful currency of the United States
of America and, in relation to any payment under this Loan Agreement, same day
or immediately available funds.

         "Employee Benefit Plan" shall mean any employee benefit plan within the
meaning of section 3(3) of ERISA maintained or contributed to by Borrower or any
ERISA Affiliate, other than a Multiemployer Plan.

         "Environmental Laws" means all Requirements of Law relating to the
protection of human health or the environment, including, without limitation,
all Requirements of Law, pertaining to reporting, licensing, permitting,
investigation, and remediation of emissions, discharges, releases, or threatened
releases of hazardous materials, chemical substances, pollutants, contaminants,
or hazardous or toxic substances, materials or wastes whether solid, liquid, or
gaseous in nature, into the air, surface water, groundwater, or land, or
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport, or handling of chemical substances, pollutants,
contaminants, or hazardous or toxic substances, materials, or wastes, whether
solid, liquid, or gaseous in nature.

         "Equity Securities" of any Person shall mean (a) all common stock,
preferred stock, participations, shares, partnership interests or other equity
interests in and of such Person (regardless of how designated and whether or not
voting or non-voting) and (b) all warrants, options and other rights to acquire
any of the foregoing.

         "ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as the same may from time to time be amended or supplemented, including any
rules or regulations issued in connection therewith.

         "ERISA Affiliate" shall mean any Person which is treated as a single
employer with Borrower under section 414 of the Code.



                                                                     DEFINITIONS
                                      I-2
<PAGE>

         "Event of Default" shall have the meaning given to that term in Section
6.1.

         "Exclusivity and Right of First Refusal Agreement" shall mean the
Exclusivity and Right of First Refusal Agreement, dated as of the date hereof,
by and between Lender and Borrower.

         "Financial Statements" shall mean, with respect to any accounting
period for any Person, statements of income and of cash flow of such Person for
such period, and balance sheets of such Person as of the end of such period,
setting forth in each case in comparative form figures for the corresponding
period in the preceding fiscal year if such period is less than a full fiscal
year or, if such period is a full fiscal year, corresponding figures from the
preceding fiscal year, all prepared in reasonable detail and in accordance with
GAAP. Unless otherwise indicated, each reference to Financial Statements of any
Person shall be deemed to refer to Financial Statements prepared on a
consolidated basis.

         "GAAP" shall have the meaning given to such term in Section 1.2.

         "Governmental Authority" shall mean any domestic or foreign national,
state or local government, any political subdivision thereof, any department,
agency, authority or bureau of any of the foregoing, or any other entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.

         "Governmental Charges" shall mean all taxes, levies, assessments, fees,
claims or other charges imposed by any Governmental Authority upon or relating
to (i) Borrower or its Subsidiaries, (ii) the Loans, (iii) employees, payroll,
income or gross receipts of Borrower or its Subsidiaries, (iv) the ownership or
use of any of its assets by Borrower or its Subsidiaries or (v) any other aspect
of the business of Borrower or its Subsidiaries.

         "Governmental Rule" shall mean any law, rule, regulation, ordinance,
order, code interpretation, judgment, decree, directive, guidelines, policy or
similar form of decision of any Governmental Authority.

         "Guaranty Obligations" shall mean, with respect to any Person, any
direct or indirect liability of that Person with respect to any Indebtedness,
lease, dividend, letter of credit or other obligation (the "primary
obligations") of another Person (the "primary obligor"), including any
obligation of that Person, whether or not contingent, (a) to purchase,
repurchase or otherwise acquire such primary obligations or any property
constituting direct or indirect security therefor, or (b) to advance or provide
funds (i) for the payment or discharge of any such primary obligation, or (ii)
to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency or any balance sheet item, level
of income or financial condition of the primary obligor, or (c) to purchase
property, securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor to make
payment of such primary obligation, or (d) otherwise to assure or hold harmless
the holder of any such primary obligation against loss in respect thereof.
Notwithstanding the foregoing, the term "Guaranteed Obligations" shall not
include any indemnification or expense advancement obligations, direct or
indirect, arising under or in connection with Borrower's articles of
incorporation, bylaws, Colorado law, or any agreements providing for
indemnification or expense advancement between Borrower and its current or
former officers, directors, employees or agents.

         "Indebtedness" of any Person shall mean and include the aggregate
amount of, without duplication (a) all obligations of such Person for borrowed
money, (b) all obligations of such Person evidenced by bonds, debentures, notes
or other similar instruments, (c) all obligations of such Person to pay the
deferred purchase



                                                                     DEFINITIONS
                                      I-3
<PAGE>

price of property or services (other than accounts payable incurred in the
ordinary course of business determined in accordance with GAAP), (d) all
Capitalized Lease Obligations of such Person, (e) all obligations or liabilities
of others secured by a lien on any asset of such Person, whether or not such
obligation or liability is assumed, (f) all Guaranty Obligations of such Person;
(g) all obligations created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person (even if
the rights and remedies of the seller or lender under such agreement upon an
event of default are limited to repossession or sale of such property), (h) net
exposure under interest rate interest rate swap, currency swap, currency swap,
forward, cap, floor or other similar contract that is not entered to in
connection with a bona fide hedging operation that provides offsetting benefits
to such Person, which agreements shall be marked to market on a current basis,
(i) all reimbursement and other payment obligations, contingent or otherwise, in
respect of letters of credit. Unless otherwise indicated, the term
"Indebtedness" shall include all Indebtedness of Borrower and its Subsidiaries.

         "Indemnified Persons" has the meaning given in Section 7.3.

         "Investment" of any Person shall mean any loan or advance of funds by
such Person to any other Person (other than advances to employees of such Person
for moving and travel expense, drawing accounts and similar expenditures in the
ordinary course of business), any purchase or other acquisition of any Equity
Securities or Indebtedness of any other Person, any capital contribution by such
Person to or any other investment by such Person in any other Person (including,
without limitation, any Indebtedness incurred by such Person of the type
described in clauses (b) and (c) of the definition of "Indebtedness" on behalf
of any other Person); provided, however, that Investments shall not include
accounts receivable or other indebtedness owed by customers of such Person which
are current assets and arose from sales in the ordinary course of such Person's
business.

         "Lender" shall have the meaning given in the introductory paragraph
hereof.

         "Lien" shall mean, with respect to any property, any security interest,
mortgage, pledge, lien, claim, charge or other encumbrance in, of, or on such
property or the income therefrom, including, without limitation, the interest of
a vendor or lessor under a conditional sale agreement, Capitalized Lease
Obligation or other title retention agreement, and the filing of any financing
statement or similar instrument under the Uniform Commercial Code or comparable
law of any jurisdiction.

         "Loan" shall have the meaning given in Section 2.1.

         "Loan Agreement" shall mean this Loan Agreement.

         "Loan Documents" shall mean and include this Loan Agreement, the Notes,
the Security Agreement, the Exclusivity And Right of First Refusal Agreement,
the Letter Agreement regarding mutual non-disclosure, dated as of October 3,
2002, between Lender and Borrower, the Registration Rights Agreement and all
other documents, instruments and agreements delivered to Lender in connection
with this Loan Agreement, including, without limitation, any account control
agreements or grant of security interests in patents, trademarks or copyrights.

         "Loans" shall have the meaning given in Section 2.1.

         "Material Adverse Effect" shall mean a material adverse effect on (a)
the business, assets, operations, financial or other condition of Borrower and
its Subsidiaries, taken as a whole (except for continuing losses as



                                                                     DEFINITIONS
                                      I-4
<PAGE>

contemplated by Borrower's business plan and projections as previously delivered
to Lender); (b) the rights and remedies of Lender under this Loan Agreement, the
other Loan Documents or any related document, instrument or agreement.

         "Maturity" shall mean, with respect to any Loan, interest, fees or
other amount payable by Borrower under this Loan Agreement or the other Loan
Documents, the date on which such Loan, interest, fee or other amount becomes
due, whether upon the stated maturity or due date, upon acceleration or
otherwise.

         "Multiemployer Plan" shall mean any multiemployer plan within the
meaning of section 3(37) of ERISA maintained or contributed to by Borrower or
any ERISA Affiliate.

         "Notes" shall have the meaning given in Section 2.8.

         "Notice of Borrowing" shall have the meaning given in Section 2.2.

         "Obligations" shall have the meaning given in the Security Agreement.

         "PBGC" shall mean the Pension Benefit Guaranty Corporation, or any
successor thereto.

         "Permitted Indebtedness" shall mean and include:

                  (a) Indebtedness of Borrower to Lender;

                  (b) Indebtedness of Borrower existing as of the date hereof
and as described on the Disclosure Schedule;

                  (c) Indebtedness arising from the endorsement of instruments
in the ordinary course of business;

                  (d) Indebtedness of Borrower under Capitalized Lease
Obligations and operating leases (including any such Indebtedness referenced in
subsection (b) of this definition of Permitted Indebtedness) in an aggregate
amount not to exceed Five Hundred Thousand Dollars ($500,000) at any time; and

                  (e) Other Indebtedness in an aggregate amount not to exceed
Fifty Thousand Dollars ($50,000) at any time.

         "Permitted Investments" shall mean and include:

                  (a) Deposits with commercial banks organized under the laws of
the United States or a state thereof to the extent such deposits are fully
insured by the Federal Deposit Insurance Corporation;

                  (b) Investments in marketable obligations issued or fully
guaranteed by the United States and maturing not more than one (1) year from the
date of issuance; and

                  (c) Investments in open market commercial paper rated at least
"A1" or "P1" or higher by a national credit rating agency and maturing not more
than one (1) year from the creation thereof.

                  (d) Investments pursuant to or arising under currency
agreements or interest rate agreements entered into in the ordinary course of
business;



                                                                     DEFINITIONS
                                      I-5
<PAGE>

                  (e) Investments of Borrower existing as of the date hereof and
as described on the Disclosure Schedule;

                  (f) Investments consisting of deposit accounts of Borrower in
which Lender has a perfected security interest; and

                  (g) Other Investment in an aggregate amount not to exceed
Fifty Thousand Dollars ($50,000) at any time.

         "Permitted Liens" shall mean and include:

                  (a) Liens for taxes or other Governmental Charges not at the
time delinquent or thereafter payable without penalty or being contested in good
faith, provided adequate reserves therefore are made in accordance with GAAP;

                  (b) Liens of carriers, warehousemen, mechanics, materialmen,
vendors, and landlords incurred in the ordinary course of business for sums not
overdue or being contested in good faith, provided adequate reserves therefore
are made in accordance with GAAP;

                  (c) Deposits under workers' compensation, unemployment
insurance and social security laws or to secure the performance of bids,
tenders, contracts (other than for the repayment of borrowed money) or leases,
or to secure statutory obligations of surety or appeal bonds or to secure
indemnity, performance or other similar bonds in the ordinary course of
business;

                  (d) Liens arising out of a judgment or award in circumstances
not constituting an Event of Default under Section 6.1(h);

                  (e) Liens securing obligations under a Capitalized Lease
Obligation if such lease is Permitted Indebtedness pursuant to clause (d) of the
definition thereof and such Liens do not extend to property other than the
property leased under such Capitalized Lease Obligation; and

                  (f) Easements, reservations, rights of way, restrictions,
minor defects or irregularities in title and other similar charges or
encumbrances affecting real property in a manner not materially or adversely
affecting the value or use of such property;

                  (g) Liens in favor of Lender;

                  (h) Leases or subleases and licenses and sublicenses granted
in the ordinary course of business for Borrower or its Subsidiaries;

                  (i) Liens in favor of financial institutions arising in
connection with Borrower's deposit accounts held at such institutions, provided
that Lender has a first priority perfected security interest in the amounts held
in such deposit accounts;

                  (j) Bankers' liens, rights of setoff and similar Liens
incurred on deposits made in the ordinary course of business, provided that with
respect to deposit accounts and investment accounts Lender has a first priority
perfected security interest in the amounts held in such accounts; and

                  (k) Liens existing as of the date hereof and as described on
the Disclosure Schedule.



                                                                     DEFINITIONS
                                      I-6
<PAGE>

         "Person" shall mean and include an individual, a partnership, a
corporation (including a business trust), a joint stock company, a limited
liability company, an unincorporated association, a joint venture or other
entity or a Governmental Authority.

         "Prepayment Fee" means an amount equal to One Million Dollars
($1,000,000).

         "Record" The grid attached to a Tranche B Note, or the continuation of
such grid, or any other similar record, including computer records, maintained
by any Lender with respect to any Tranche B Loan referred to in such Tranche B
Note.

         "Registration Rights Agreement" means the Registration Rights
Agreement, dated as of the date hereof, by and between Borrower and Lender.

         "Reportable Event" shall have the meaning given to that term in ERISA
and applicable regulations thereunder.

         "Requirement of Law" applicable to any Person shall mean (a) the
Charter Documents of such Person, (b) any Governmental Rule applicable to such
Person, (c) any license, permit, approval or other authorization granted by any
Governmental Authority to or for the benefit of such Person and (d) any
judgment, decision or determination of any Governmental Authority or arbitrator,
in each case applicable to or binding upon such Person or any of its property or
to which such Person or any of its property is subject.

         "Responsible Officer" shall mean, with respect to any Person, the chief
executive officer, chief financial officer or treasurer of such Person or any
other officer of such Person involved principally in its financial
administration.

         "Securities Act" shall mean the Securities Act of 1933, as amended.

         "Security Agreement" shall have the meaning given in Section 2.10.

         "Solvent" shall mean, with respect to any Person on any date, that on
such date (a) the fair value of the property of such Person is greater than the
fair value of the liabilities (including, without limitation, contingent
liabilities) of such Person, (b) the present fair saleable value of the assets
of such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured, (c) such Person does not intend to, and does not believe that it will,
incur debts or liabilities beyond such Person's ability to pay as such debts and
liabilities mature and (d) such Person is not engaged in business or a
transaction, and is not about in business or a transaction, for which such
Person's property would constitute an unreasonably small capital.

         "Subsidiary" of any Person shall mean (a) any corporation of which more
than 50% of the issued and outstanding Equity Securities having ordinary voting
power to elect a majority of the Board of Directors of such corporation
(irrespective of whether at the time capital stock of any other class or classes
of such corporation shall or might have voting power upon the occurrence of any
contingency) is at the time directly or indirectly owned or controlled by such
Person, by such Person and one or more of its other Subsidiaries or by one or
more of such Person's other Subsidiaries, (b) any partnership, joint venture, or
other association of which more than 50% of the equity interest having the power
to vote, direct or control the management of such partnership, joint venture or
other association is at the time owned and controlled by such Person, by such
Person and one or more of the other Subsidiaries or by one or more of such
Person's other subsidiaries and (c) any other Person included in the Financial
Statements of such Person on a consolidated basis. Any reference to a Subsidiary
without designation of the ownership of such Subsidiary shall be deemed to refer
to a Subsidiary of Borrower.



                                                                     DEFINITIONS
                                      I-7
<PAGE>

                                   SCHEDULE II

                                FUNDING SCHEDULE


<Table>
<Caption>
   TRANCHE B LOANS AVAILABLE
        ON OR AFTER:(1)                                   AMOUNT AVAILABLE
   -------------------------                              ----------------
<S>                                                       <C>
         October __, 2002                                  $   1,200,000

         November 15, 2002                                 $     600,000

         December 15, 2002                                 $     300,000

         January 15, 2003                                  $     600,000

         February 15, 2003                                 $     150,000

         March 15, 2003                                    $     200,000

         April 15, 2003                                    $     400,000

         May 15, 2003                                      $     300,000

         June 15, 2003                                     $      50,000

         July 15, 2003                                     $      50,000

         August 15, 2003                                   $      50,000

         September 15, 2003                                $      48,000

         TOTAL LOANS                                       $3,948,000.00
</Table>



----------

         (1) To the extent that a date does not fall on a Business Day, then
such Tranche B Loan shall be available on or after the first Business Day
following the date specified above.



                                                                FUNDING SCHEDULE
                                      II-1
<PAGE>

                                  SCHEDULE III

                               NOTICE OF BORROWING


                          _____________________, 200__


SIRENZA MICRODEVICES, INC.
522 Almanor Avenue
Sunnyvale, CA 94085
Attn: Chief Financial Officer

         1. Reference is made to that certain Loan Agreement, dated as of
October __, 2002 of (the "Loan Agreement"), between VARI-L COMPANY, INC.
("Borrower") and SIRENZA MICRODEVICES, INC. ("Lender"). Unless otherwise
indicated, all terms defined in the Loan Agreement have the same respective
meanings when used herein.

         2. Pursuant to Section 2.1 and 2.2 of the Loan Agreement, Borrower
hereby requests a Loan upon the following terms:

                  a. The type of Loan shall be a [Tranche A Loan][Tranche B
         Loan].

                  b. The principal amount of the requested Loan is to be
         $__________;

                  c. The date of the requested Loan is to be __________, 200__.

         3. Borrower hereby certifies to Lender that, on the date of such
borrowing and after giving effect to the requested borrowing:

                  a. The representations and warranties set forth in Article 3
         of the Loan Agreement will be true and correct in all material respects
         as if made on such date, except to the extent such representations and
         warranties address matters as of a particular date (which
         representations and warranties shall remain true and correct as of such
         date).

                  b. No Event of Default or Default has occurred and is
         continuing.

                  c. Each of the Loan Documents remains in full force and
         effect.

         4. Please disburse the proceeds of the requested Loan to
________________________.



                                                             NOTICE OF BORROWING
                                     III-1
<PAGE>

         IN WITNESS WHEREOF, Borrower has executed this Notice of Borrowing on
the date set forth above.


                                       VARI-L COMPANY, INC.


                                       By:
                                          --------------------------------------

                                       Name:
                                            ------------------------------------

                                       Title:
                                             -----------------------------------



                                                             NOTICE OF BORROWING
                                     III-2
<PAGE>

                                   SCHEDULE IV

                               DISCLOSURE SCHEDULE


         Litigation




         Existing Indebtedness




         Existing Investments




         Existing Liens



                                                             DISCLOSURE SCHEDULE
                                      IV-1
<PAGE>

                                   SCHEDULE V

                               FINANCIAL COVENANTS


<Table>
<Caption>
             CALENDAR MONTH                        NET OPERATING LOSS(2)                 CASH USED IN OPERATIONS(3)
             --------------                        ---------------------                 --------------------------
<S>                                                <C>                                   <C>
   As of the last day of October 2002                     $(2,454)                                $(2,174)

   As of the last day of November 2002                    $(1,994)                                $(1,987)

   As of the last day of December 2002                    $(1,585)                                $(2,532)

   As of the last day of January 2003                     $(1,529)                                $(1,734)

   As of the last day of February 2003                    $(1,568)                                $(1,174)

   As of the last day of March 2003                       $(1,489)                                $(1,114)

   As of the last day of April 2003                       $(1,294)                                $  (749)

   As of the last day of May 2003                         $  (700)                                $(1,382)

   As of the last day of June 2003                        $  (274)                                $(1,019)

   As of the last day of July 2003                        $  (246)                                $(1,078)

   As of the last day of August 2003                      $  (376)                                $  (671)
</Table>



----------

         (2) The figures in this column represent the aggregate Net Operating
Loss for the three month period ending on the last day of the calendar month set
forth in the corresponding row above.

         (3) The figures in this column represent the aggregate Cash Used in
Operations for the three month period ending on the last day of the calendar
month set forth in the corresponding row above.



                                                             FINANCIAL COVENANTS
                                      V-1
<PAGE>

                                    EXHIBIT A

                       FORM OF TRANCHE A CONVERTIBLE NOTE



<PAGE>


         THIS NOTE AND THE COMMON STOCK ISSUABLE UPON ITS CONVERSION HAVE NOT
BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT AND IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE
STATES OF THE UNITED STATES AND OTHER JURISDICTIONS.

                              VARI-L COMPANY, INC.

                           TRANCHE A CONVERTIBLE NOTE

October 7, 2002                                                    $1,353,861.80

         Vari-L Company, Inc., a Colorado corporation (the "Borrower"), for
value received, hereby promises to pay to Sirenza Microdevices, Inc., the
principal sum of One Million Three Hundred Fifty Three Thousand Eight Hundred
Sixty One Dollars and 80/100 Cents ($1,353,861.80) on September 25, 2003 (the
"Maturity Date") and to pay interest thereon, at the rate of 25% per annum until
the principal hereof is paid in full, and at the Default Rate after the
occurrence and during the continuance of an Event of Default. Borrower shall
make all payments hereunder to Lender as indicated in the Loan Agreement, in
lawful money of the United States and in same day or immediately available
funds. Capitalized terms used and not otherwise defined herein, shall have the
respective meanings given to those terms in the Loan Agreement, dated as of
October 7, 2002 (as amended from time to time, the "Loan Agreement"), by and
between Vari-L Company, Inc. and Sirenza Microdevices, Inc. This Note is the
Tranche A Note referred to in the Loan Agreement. This Note is subject to the
terms of the Loan Agreement, including the rights of prepayment and the rights
of acceleration of maturity.

         1. Payments. All outstanding principal and all accrued interest thereon
shall be due and payable on the Maturity Date.

         2. Prepayments. This Note shall be subject to the prepayment provisions
(both optional prepayment and mandatory prepayment) set forth in Section 2.5 of
the Loan Agreement.

         3. Security. THE OBLIGATIONS DUE UNDER THIS NOTE ARE SECURED BY A
SECURITY AGREEMENT DATED AS OF THE DATE HEREOF AND EXECUTED BY BORROWER IN FAVOR
OF LENDER. ADDITIONAL RIGHTS OF Lender ARE SET FORTH IN SUCH security AGREEMENT.

         4. Conversion.

                  (a) At Lender's sole option, Lender may convert the
outstanding principal amount due under this Note into the number of shares of
fully paid and nonassessable Common Stock as is determined pursuant to Section
4(b) below, at any time after the earliest to occur of the following:

                           (i) the fifth Business Day prior to Maturity of this
Note;



<PAGE>

                           (ii) upon receipt of Borrower's written notice of
Borrower's election to prepay this Note pursuant to Section 2.5(a) of the Loan
Agreement;

                           (iii) upon the date of the commencement of a tender
offer by a Person (other than Lender) to purchase the Common Stock of Borrower
for cash or other assets, including, but not limited to securities of the
acquiring Person; and

                           (iv) the date of execution of a definitive
acquisition agreement with a Person other than Lender that will result in a
Change of Control.

                  (b) The outstanding principal amount due under this Note shall
be convertible into the number of shares of fully paid and nonassessable Common
Stock that constitutes 19.9% of the fully diluted outstanding Common Stock as of
the date of conversion. For purposes of the preceding sentence, the "fully
diluted outstanding Common Stock" shall be determined immediately prior to the
conversion of this Note (except as noted in subsection (iv) below) and shall be
deemed to include:

                           (i) the number of shares of Common Stock actually
outstanding; plus

                           (ii) the number of shares of Common Stock deliverable
upon exercise or conversion of options to purchase or rights to subscribe for
Common Stock; plus

                           (iii) the number of shares of Common Stock
deliverable upon conversion of or in exchange for convertible or exchangeable
securities (other than this Note), or upon exercise of options to purchase or
rights to subscribe for such convertible or exchangeable securities and
subsequent conversion or exchange thereof; plus

                           (iv) the number of shares of Common Stock issuable
pursuant to any memorandum of understanding, settlement agreement or court order
regarding any shareholder class action litigation involving Borrower (giving
full effect to any antidilution adjustments thereto, whether resulting from the
conversion of this Note or otherwise).

         In the event that Borrower declares a record date for a distribution of
Equity Securities to its shareholders prior to the date of conversion which
distribution will occur after the date of conversion, then such Equity
Securities shall be deemed outstanding and included on a Common Stock equivalent
basis in the calculation of Borrower's "fully diluted outstanding Common Stock."

                  (c) If Lender elects to convert the outstanding principal
amount of this Note into Common Stock, then Lender shall:

                           (i) deliver to Borrower at Borrower's address set
forth in Section 7.1 of the Loan Agreement a Conversion Notice in the form
attached hereto as Exhibit A; and

                           (ii) surrender this Note to Borrower, duly endorsed
or assigned to Borrower or in blank, at Borrower's address set forth in Section
7.1 of the Loan Agreement, on or prior to the close of business on the date of
conversion; provided that any failure by Lender to



                                      -2-
<PAGE>

surrender this Note as provided herein shall not invalidate the conversion or
the effective date thereof.

         Borrower shall deliver to the Lender not more than three (3) Business
Days' after delivery by Lender of this Note to Borrower the certificates
representing shares of Common Stock issuable upon conversion of this Note. No
fractions of shares or scrip representing fractions of shares will be issued on
conversion, but instead of any fractional interest, Borrower shall round down to
the next higher whole share.

         Upon the date of conversion, Borrower shall pay to Lender all accrued
interest to the date of conversion with respect to this Note.

                  (d) Borrower shall at all times reserve and keep available,
free from preemptive rights, out of its authorized but unissued Common Stock,
for the purpose of effecting the conversion of this Note, the full number of
shares of Common Stock then issuable upon the conversion of this Note.

                  (e) Except as provided in the next sentence, Borrower will pay
any and all taxes and duties that may be payable in respect of the issue or
delivery of Common Stock on conversion of this Note. Borrower shall not,
however, be required to pay any tax or duty which may be payable in respect of
any transfer involved in the issue and delivery of Common Stock in a name other
than that of the holder of this Note, and no such issue or delivery shall be
made unless and until the Person requesting such issue has paid to Borrower the
amount of any such tax or duty, or has established to the satisfaction of
Borrower that such tax or duty has been paid.

                  (f) Borrower agrees that all Common Stock which may be
delivered upon conversion of this Note, upon such delivery, will have been duly
authorized and validly issued and will be fully paid and nonassessable and free
of preemptive rights (and shall be issued out of Borrower's authorized but
unissued Common Stock) and, except as provided in Section 4(e), Borrower will
pay all taxes, liens and charges with respect to the issue thereof.

                  (g) Borrower (i) will effect all registrations with, and
obtain all approvals by, all governmental authorities that may be necessary
under any United States Federal or state law (including the Securities Act, the
Exchange Act and state securities and Blue Sky laws) for the Common Stock
issuable upon conversion of this Note to be lawfully issued and delivered as
provided herein, and thereafter publicly traded (if permissible under the
Securities Act) and qualified or listed as contemplated by clause (ii) (it being
understood that Borrower shall not be required to register the offer, sale or
resale of Common Stock issuable on conversion hereof under the Securities Act
except pursuant to the Registration Rights Agreement between Borrower and
Lender); and (ii) if required, will list the Common Stock required to be issued
and delivered upon conversion of Securities, prior to such issuance or delivery,
on each national securities exchange on which outstanding Common Stock is listed
or quoted at the time of such delivery, or if the Common Stock is not then
listed on any securities exchange, to qualify the Common Stock for quotation on
the Nasdaq National Market or such other inter-dealer quotation system, if any,
on which the Common Stock is then quoted.



                                      -3-
<PAGE>

         4. Definitions. The following capitalized terms shall have the
following respective meanings when used herein:

         "Common Stock" means the Common Stock, par value $0.01 per share, of
Borrower authorized at the date of this Note as originally executed. Shares
issuable on conversion of this Note shall include only Common Stock or shares of
any class or classes of common stock resulting from any reclassification or
reclassifications thereof; provided, however, that if at any time there shall be
more than one such resulting class, the shares so issuable on conversion of this
Note shall include shares of all such classes, and the shares of each such class
then so issuable shall be substantially in the proportion which the total number
of shares of such class resulting from all such reclassifications bears to the
total number of shares of all such classes resulting from all such
reclassifications.

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

         "Trading Day" means (i) if the Common Stock is admitted to trading on
the Nasdaq National Market or any other system of automated dissemination of
quotations of securities prices, a day on which trades may be effected through
such system; (ii) if the Common Stock is listed or admitted for trading on the
New York Stock Exchange or any other national securities exchange, a day on
which such exchange is open for business; or (iii) if the Common Stock is not
admitted to trading on the Nasdaq National Market or listed or admitted for
trading on any national securities exchange or any other system of automated
dissemination of quotation of securities prices, a day on which the Common Stock
is traded regular way in the over-the-counter market and for which a closing bid
and a closing asked price for the Common Stock are available.

         5. Miscellaneous.

                  (a) No provision of this Note shall alter or impair the
obligation of Borrower, which is absolute and unconditional, to pay the
principal of and interest, if any, on this Note at the times, places and rate,
and in the coin or currency, herein prescribed or to convert this Note as herein
provided.

                  (b) This Note and the Common Stock issuable upon conversion of
this Note have not been registered under the Securities Act, or the securities
laws of any state or other jurisdiction. Neither this Note nor the Common Stock
issuable upon conversion of this Note nor any interest or participation herein
may be reoffered, sold, assigned, transferred, or otherwise disposed of (a
"Transfer") in the absence of such registration or unless such transaction is
exempt from, or not subject to the registration requirements of the Securities
Act.

                  (c) Lender by acceptance of this Note, represents that it is
an "accredited investor" within the meaning of Rule 501 of the Securities Act.
Lender by acceptance of this Note, acknowledges that it has been advised that
this Note has not been registered under the Securities Act, or any state
securities laws and, therefore, cannot be resold unless it is registered under
the Securities Act and applicable state securities laws or unless an exemption
from such registration requirements is available. Lender



                                      -4-
<PAGE>

by acceptance of this Note, acknowledges that it is aware that Borrower is under
no obligation to effect any such registration or to file for or comply with any
exemption from registration (other than Borrower's obligations under the
Registration Rights Agreement). Lender by acceptance of this Note, represents
that it has not been formed solely for the purpose of making this investment and
is acquiring this Note for its own account for investment, and not with a view
to, or for resale in connection with, the distribution thereof. Lender by
acceptance of this Note, acknowledges that it has such knowledge and experience
in financial and business matters that Lender is capable of evaluating the
merits and risks of such investment, is able to incur a complete loss of such
investment and is able to bear the economic risk of such investment for an
indefinite period of time.

                  (d) Upon receipt by Borrower of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Note,
and in the case of loss, theft or destruction, receipt of indemnity or Note
reasonably satisfactory to Borrower, and upon reimbursement to Borrower of all
reasonable expenses incidental thereto, and upon surrender and cancellation of
such Note, if mutilated, Borrower will deliver a new Note of like tenor and
dated as of such cancellation, in lieu of such Note.

                  (e) If Borrower shall have paid any interest on this Note in
excess of that permitted by law, then it is the express intent of Borrower and
Lender that all excess amounts previously collected by Borrower be applied to
reduce the principal balance of this Note, and the provisions hereof immediately
be deemed reformed and the amounts thereafter collectable as interest hereunder
be reduced, without the necessity of the execution of any new document, so as to
comply with the then applicable law, but so as to permit the recovery of the
fullest amount otherwise called for hereunder.

                  (f) Neither Borrower nor Lender shall Transfer this Note or
delegate any of their respective obligations or rights hereunder without the
prior written consent of the non-assigning party, except that Lender may assign
or transfer, without Borrower's prior written consent, its respective rights and
obligations under this Note in connection with the merger or consolidation of
Lender with or into another Person.

                  (g) Borrower hereby waives presentment, demand, notice of
dishonor, protest, notice of protest and all other demands, protests and notices
relative to the enforcement of this Note. (h) This Note shall be governed by and
construed in accordance with the laws of the State of California.

                  [Remainder of page intentionally left blank.]



                                      -5-
<PAGE>

         IN WITNESS WHEREOF, Borrower has caused this Note to be duly executed
as of the date first written above.



                                       VARI-L COMPANY, INC.

                                       By: /s/ CHARLES R. BLAND
                                          --------------------------------------

                                       Name: Charles R. Bland
                                            ------------------------------------

                                       Title: C.E.O.
                                             -----------------------------------



                       [Signature Page to Tranche A Note]
<PAGE>

                                    EXHIBIT A

                                CONVERSION NOTICE

         The undersigned holder of this Note hereby:

         [ ]      elects to exercise the option to convert $[_________] of the
                  principal amount of the Tranche A Note into Common Stock in
                  accordance with the terms of the Tranche A Note, and directs
                  that such shares, together with a check in payment for any
                  fractional share, be delivered to and be registered in the
                  name of the undersigned unless a different name has been
                  indicated below.

         [ ]      elects, contingent upon and effective immediately prior to the
                  closing of [insert reference to Change of Control
                  transaction], to exercise the option to convert $[__________]
                  of the principal amount of the Tranche A Note into Common
                  Stock in accordance with the terms of the Tranche A Note, and
                  directs that such shares, together with a check in payment for
                  any fractional share, be delivered to and be registered in the
                  name of the undersigned unless a different name has been
                  indicated below.

         If Common Stock or Securities are to be registered in the name of a
         Person other than the undersigned, the undersigned will pay all
         transfer taxes payable with respect thereto.

         The undersigned directs Borrower to pay Lender all accrued interest to
         the date of conversion upon the date of conversion.

                                       Dated:
                                             -----------------------------------

                                       SIRENZA MICRODEVICES, INC.

                                       By:
                                          --------------------------------------
                                       Name:
                                            ------------------------------------
                                       Title:
                                             -----------------------------------

If shares or Securities are to be registered in the name of a Person other than
the holder, please print such Person's name and address:

-----------------------------
Name

-----------------------------
Address

-----------------------------
Social Note or other Taxpayer Identification Number, if any



<PAGE>

                                    EXHIBIT B

                             FORM OF TRANCHE B NOTE



<PAGE>

                                 TRANCHE B NOTE


October 7, 2002                                                    $3,946,138.20


         VARI-L COMPANY, INC., a Colorado corporation (the "Borrower"), for
value received, hereby promises to pay to SIRENZA MICRODEVICES, INC., the lesser
of the principal sum of Three Million Nine Hundred Forty Six Thousand One
Hundred Thirty Eight Dollars and 20/100 Cents ($3,946,138.20) or the principal
amount outstanding under this Note on September 25, 2003 (the "Maturity Date")
and to pay interest thereon, at the rate of 25% per annum until the principal
hereof is paid in full, and at the Default Rate after the occurrence and during
the continuance of an Event of Default. Borrower shall make all payments
hereunder to Lender as indicated in the Loan Agreement, in lawful money of the
United States and in same day or immediately available funds. Capitalized terms
used and not otherwise defined herein, shall have the respective meanings given
to those terms in the Loan Agreement, dated as of October 7, 2002 (as amended
from time to time, the "Loan Agreement"), by and between VARI-L COMPANY, INC.
and SIRENZA MICRODEVICES, INC.. This Note is the Tranche B Note referred to in
the Loan Agreement. This Note is subject to the terms of the Loan Agreement,
including the rights of prepayment and the rights of acceleration of maturity.

         1. Payments. All outstanding principal and all accrued interest thereon
shall be due and payable on the Maturity Date.

         2. Prepayments. This Note shall be subject to the prepayment provisions
(both optional prepayment and mandatory prepayment) set forth in Section 2.5 of
the Loan Agreement.

         3. Security. THE OBLIGATIONS DUE UNDER THIS NOTE ARE SECURED BY A
SECURITY AGREEMENT DATED AS OF THE DATE HEREOF AND EXECUTED BY BORROWER IN FAVOR
OF LENDER. ADDITIONAL RIGHTS OF Lender ARE SET FORTH IN SUCH security AGREEMENT.

         4. Miscellaneous.

                  (a) Borrower irrevocably authorizes Lender to make or cause to
be made, an appropriate notation on the grid attached to this Note, or the
continuation of such grid, or any similar record, including computer records,
reflecting the making of such Tranche B Loan or (as the case may be) the receipt
of a payment or prepayment of such Tranche B Loan. The outstanding amount of the
Tranche B Loans set forth on the grid attached to this Note, or the continuation
of such grid, or any other similar record, including computer records,
maintained by Lender with respect to any Tranche B Loan shall be prima facie
evidence (absent manifest error) of the principal amount thereof owing and
unpaid to such Lender, but the failure to record, or any error in so recording,
any such amount on such Lender's Record shall not limit or otherwise affect the
obligations of the Borrower hereunder or under the Loan Agreement to make
payments of principal of or interest on this Note or the Tranche B Loans when
due.

                  (b) No provision of this Note shall alter or impair the
obligation of Borrower, which is absolute and unconditional, to pay the
principal of and interest, if any, on this Note at the times, places and rate,
and in the coin or currency, herein prescribed or to convert this Note as herein
provided.



                                      B-1
<PAGE>

                  (c) Upon receipt by Borrower of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Note,
and in the case of loss, theft or destruction, receipt of indemnity or Note
reasonably satisfactory to Borrower, and upon reimbursement to Borrower of all
reasonable expenses incidental thereto, and upon surrender and cancellation of
such Note, if mutilated, Borrower will deliver a new Note of like tenor and
dated as of such cancellation, in lieu of such Note.

                  (d) If Borrower shall have paid any interest on this Note in
excess of that permitted by law, then it is the express intent of Borrower and
Lender that all excess amounts previously collected by Borrower be applied to
reduce the principal balance of this Note, and the provisions hereof immediately
be deemed reformed and the amounts thereafter collectable as interest hereunder
be reduced, without the necessity of the execution of any new document, so as to
comply with the then applicable law, but so as to permit the recovery of the
fullest amount otherwise called for hereunder.

                  (e) Borrower hereby waives presentment, demand, notice of
dishonor, protest, notice of protest and all other demands, protests and notices
relative to the enforcement of this Note.

                  (f) This Note shall be governed by and construed in accordance
with the laws of the State of California.



                  [Remainder of page intentionally left blank.]



                                      B-2
<PAGE>

         IN WITNESS WHEREOF, Borrower has caused this Note to be duly executed
as of the date first written above.


         Vari-L Company, Inc.

         By: /s/ CHARLES R. BLAND
            ------------------------

         Name: Charles R. Bland

         Title: CEO



                                      B-3
<PAGE>

<Table>
<Caption>

                       Amount of Tranche B          Amount of Tranche B        Balance of
        Date                  Loan                     Loan Prepaid         Principal Unpaid           Notation Made By
        ----           -------------------          -------------------     ----------------           ----------------
<S>                    <C>                          <C>                     <C>                        <C>











</Table>



                                      B-4
<PAGE>

                                    EXHIBIT C

                           FORM OF SECURITY AGREEMENT



                                      C-1
<PAGE>

                                    EXHIBIT D

                           FORM OF OPINION OF COUNSEL



                                      D-1