Document:

<PAGE>

                                                                     Exhibit 4.6

                                  BRIAZZ, INC.
                                  1996 AMENDED
                                STOCK OPTION PLAN

                              AMENDED AND RESTATED
                             STOCK OPTION AGREEMENT

THIS AGREEMENT is entered into as of the date set forth below between BRIAZZ,
INC., a Washington corporation (the "Company"), and the undersigned optionee
(the "Optionee"). Unless otherwise defined herein, the terms defined in the 1996
Amended Stock Option Plan (the "Plan") shall have the same defined meanings in
this Amended and Restated Stock Option Agreement (the "Agreement").

                    WHEREAS, the Company issued certain options to purchase the
Common Stock of the Company to the Optionee in consideration for his services on
the Board of Directors of the Company at a time when the directors were not
eligible to participate in such option grants under the Plan (the "Non-Plan
Options");

                    WHEREAS, the Non-Plan Options were made expressly subject to
the terms of the Plan at their times of issuance;

                    WHEREAS, the Company effected a 100-for-1 reverse split on
July 16, 1999 and a 6-for-1 reverse split on April 2, 2001 (collectively, the
"Stock Splits");

                    WHEREAS, under the terms of the Plan and the Non-Plan
Options, the terms of the Non-Plan Options automatically adjust to account for
the Stock Splits; and

                    WHEREAS, the Company and the Optionee now desire to amend
and restate their understandings under the Non-Plan Options to reflect all such
adjustments as of the date hereof;

                    NOW, THEREFORE, the Company and the Optionee agree that this
Amended and Restated Option Agreement hereby supercedes and replaces the
Non-Plan Options and represents the sole understanding between the Company and
the Optionee with respect to the options granted to the Optionee pursuant to the
Non-Plan Options and the Company agrees to offer to the Optionee the option to
purchase (upon the terms and conditions set forth herein, in the Plan, and in
the notice of grant of stock options and option agreement, attached hereto as
Exhibit A (the "Notice")) the total number of Option Shares set forth in the
first paragraph of the Notice.

                    1.   Options not Transferable. This Option may not be
                         ------------------------
transferred in any manner other than by will or by the laws of descent or
distribution and may be exercised during the lifetime of Optionee only by
Optionee. The terms of the Plan and this Agreement shall be binding upon the
executors, administrators, heirs, successors and assigns of the Optionee. Upon
any attempt to transfer, pledge, hypothecate or otherwise dispose of any Option
or of any right or privilege conferred by the Plan contrary to the provisions
thereof, or upon the sale, levy or attachment or similar process upon the rights
and privileges conferred by the Plan, such Option shall thereupon terminate and
become null and void.

                    2.   Investment Intent. By accepting the Option, the
                         -----------------
Optionee represents and agrees that none of the shares of Common Stock purchased
upon exercise of the Option will be distributed in violation of applicable
federal and state laws and regulations. In addition, the Company may require, as
a condition of exercising the Options, that the Optionee execute an undertaking,
in such a form as the Company shall reasonably specify, that the Stock is being
purchased only for investment and without any then present intention to sell or
distribute such shares.

                    3.   Termination of Options.
                         ----------------------

                            (a)  Unless otherwise provided for in Section 8 of
this Agreement and Section 5 of the Plan, all unvested Options shall expire upon
any termination of Optionee's employment or contractual relationship with the
Company, whether voluntary or involuntary, or upon the death or Disability of
Optionee.

<PAGE>

                         (b)  Unless otherwise provided for in Section 8 of this
Agreement and Section 5 of the Plan, all vested Options shall expire at the
earliest of the following:

                                   (1)   ten (10) years from the date of the
                                         Notice; provided, however, that the
                                         expiration date of any Incentive Stock
                                         Option granted to a greater-than-10%
                                         shareholder shall not be later than
                                         five (5) years from the date of Grant;

                                   (2)   three (3) months after voluntary or
                                         involuntary termination of Optionee's
                                         employment or contractual relationship
                                         with the Company other than termination
                                         as described in Paragraphs (3) or (4)
                                         below;

                                   (3)   upon termination of Optionee's
                                         employment or contractual relationship
                                         with the Company for cause (as
                                         determined in the sole discretion of
                                         the Plan Administrator); or

                                   (4)   one (1) year after the termination of
                                         Optionee's employment or contractual
                                         relationship with the Company on
                                         account of Optionee's death or
                                         Disability.

               4.   Adjustments to Total Number of Option Shares. In the case of
                    --------------------------------------------
any stock split, stock dividend or like change in the nature of shares of Common
Stock covered by this Agreement, the number of Option Shares set forth in the
Notice and the Exercise Price set forth in the Notice shall be proportionately
adjusted in accordance with Section 5(m) of the Plan.

               5.   Exercise of Option. Options shall be exercisable, in full or
                    ------------------
in part, at any time after vesting, until termination; provided, however, that
any Optionee who is subject to the reporting and liability provisions of Section
16 of the Securities Exchange Act of 1934 with respect to the Common Stock shall
be precluded from selling or transferring any Common Stock or other security
underlying an Option during the six (6) months immediately following the grant
of that Option. If less than all of the shares included in the vested portion of
any Option are purchased, the remainder may be purchased at any subsequent time
prior to the expiration of the Option term. No portion of any Option for less
than one hundred (100) shares (as adjusted pursuant to Section 5(m) of the Plan)
may be exercised: provided, that if the vested portion of any Option is less
than one hundred (100) shares, it may be exercised with respect to shares for
which it is vested. Only whole shares may be issued pursuant to an Option, and
to the extent that an Option covers less than one (1) share, it is
unexercisable.

                    Each exercise of the Option shall be by means of delivery of
a notice of election to exercise (which may be in the form attached hereto as
Exhibit B to the Secretary of the Company at its principal executive office,
---------
specifying the number of shares of Common Stock to be purchased and accompanied
by payment in cash by certified check or cashier's check in the amount of the
full exercise price for the Common Stock to be purchased. In addition to payment
in cash by certified check or cashier's check, an Optionee may pay for all or
any portion of the aggregate Exercise Price by complying with one or more of the
following alternatives:

                         (a)  with the prior approval of the Plan Administrator,
by delivering to the Company shares of Common Stock previously held by such
person, which shares of Common Stock shall have a fair market value at the date
of exercise (as determined by the Plan Administrator) equal to the aggregate
purchase price to be paid by the Optionee upon such exercise;

                         (b)  by delivering a properly executed exercise notice
together with irrevocable instructions to a broker promptly to sell or margin a
sufficient portion of the shares and deliver directly to the Company the amount
of sale or margin loan proceeds to pay the exercise price; or

                         (c)  by complying with any other payment mechanism
approved by the Plan Administrator at the time of exercise.

                                      -2-

<PAGE>

It is a condition precedent to the issuance of shares of Common Stock that the
Optionee executes and delivers to the Company a Stock Transfer Agreement, in a
form acceptable to the Company, to the extent required pursuant to the terms
thereof.

                    6.   Type of Option; Tax Consequences. Unless otherwise
                         --------------------------------
provided for in the Notice, Options granted in accordance with the Plan shall be
Non-Qualified Stock Options ("NSO"). If the Notice provides that Options granted
to Optionee are Incentive Stock Options ("ISO"), such Options are intended to
qualify as Incentive Stock Options under Section 422 of the Code. Set forth
below is a brief summary as of the date of this Agreement of some of the federal
tax consequences of exercise of this Option and disposition of the Option
Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS
ARE SUBJECT TO CHANGE. THE OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE
EXERCISING THIS OPTION OR DISPOSING OF THE OPTION SHARES.

                            (a)  Exercise of NSO. There may be a regular federal
income tax liability, at ordinary income tax rates, upon the exercise of an NSO.
If Optionee is an Employee or a former Employee, the Company will be required to
withhold from Optionee's compensation or collect from Optionee and pay to the
applicable taxing authorities an amount in cash equal to a percentage of this
compensation income at the time of exercise, and may refuse to honor the
exercise and refuse to deliver Shares if such withholding amounts are not
delivered at the time of exercise.

                            (b)  Exercise of ISO. If this Option qualifies as an
ISO, there will be no regular federal income tax liability upon the exercise of
the Option, although the Optionee may be subject to the alternative minimum tax
in the year of exercise.

                            (c)  Disposition of Shares. The disposition of
Option Shares is generally a taxable event. The tax treatment will depend on
whether the Option is an ISO or an NSO, and on the length of time for which
Optionee has held the Option Shares.

                    7.   Notice of Disqualifying Disposition of ISO Shares. If
                         -------------------------------------------------
the Option granted to Optionee herein is an ISO, and if Optionee sells or
otherwise disposes of any of the Option Shares acquired pursuant to the ISO on
or before the later of (1) the date two years after the Date of Grant, or (2)
the date one year after the date of exercise, the Optionee agrees to report
sales of such shares prior to the above determined date to the Company within
one (1) business day after such sale is concluded. The Optionee also agrees to
pay to the Company, within five (5) business days after such sale is concluded,
the amount necessary for the Company to satisfy its withholding requirement
required by the Code in the manner specified in Section 5(l)(2) of the Plan.
Nothing in this Section 6 is intended as a representation that Common Stock may
be sold without registration under state and federal securities laws or an
exemption therefrom, or that such registration or exemption will be available at
any specified time

                    8.   Change in Control.
                         -----------------

                            (a)  Notwithstanding the vesting schedule set forth
in the Notice, and subject to the Provisions of Section 13 below, the right to
purchase all Option Shares shall vest, and the Optionee may purchase up to the
full extent of Option Shares for which Options have been granted to such
Optionee and for which the Options have not been exercised under the following
conditions:

                                     (1)   The Optionee may conditionally
purchase, any or all Option Shares during the period commencing twenty-seven
(27) days and ending seven (7) days prior to the scheduled effective date of a
merger or consolidation (as such effective date may be delayed from time to
time) wherein the Company is not to be the surviving corporation, which merger
or consolidation is not between or among the Company and other corporations
related to or affiliated with the Company;

                                     (2)   The Optionee may conditionally
purchase any or all Option Shares during the period commencing on the initial
date of a tender offer or takeover bid for the Option Shares (other than a
tender offer by the Company) subject to the Securities Exchange Act of 1934 and
the rules promulgated thereunder and ending on the day preceding the scheduled
termination date of acceptance of tenders of shares by the offeror under any
such tender offer or takeover bid (as such termination date may be extended by
such offeror);

                                      -3-

<PAGE>

                              (3)  The Optionee may conditionally purchase any
or all Option Shares during the period commencing an the date the shareholders
the Company approve a sale of all or substantially all the assets of the Company
of and ending seven (7) days prior to the scheduled closing date of such sale
(as such closing date may be delayed from time to time); and

                              (4)  The Optionee may conditionally purchase any
or all Option Shares during the period commencing on the date the Company files
a Statement of Intent to Dissolve and ending thirty (30) days later but not in
any event later than the day before the Company files Articles of Dissolution.

                       (b)  If the merger, consolidation, tender offer, takeover
bid, sale of assets or dissolution, as the case may be, and as described in
Subsections (1) through (4) of Section 8(a), once commenced, is cancelled or
revoked, the conditional purchase of shares for which the Option to purchase
would not have otherwise been exercisable at the time of said calculation or
revocation, but for the operation of Section 8(a), shall be rescinded. With
respect to all other shares conditionally purchased, the Optionee may rescind
such purchase at his or her option.

                       (c)  If the merger, consolidation, tender offer, takeover
bid or sale of assets does occur or thirty (30) days passes after a Statement of
intent to Dissolve is filed (or Articles of Dissolution are filed), as the case
may be, and as described in Subsections (1) through (4) of Section 8(a), and the
Optionee has not conditionally purchased all Option Shares, all unexercised
Options shall terminate on the effective, termination or closing date, or thirty
(30) days after the Statement of Intent to Dissolve is filed (but not later than
the day before Articles of Dissolution are filed), as the case may be.

                       (d)  If the Company shall be the surviving corporation in
any merger or is a party to a merger or consolidation which is between or among
the Company and other corporations related to or affiliated with the Company,
any Option granted hereunder shall pertain and apply to the securities to which
a holder of the number of shares of common stock subject to the option would
have been entitled upon the consummation of such merger or consolidation.

                       (e)  Nothing herein shall allow the Optionee to purchase
Option Shares, the Options for which have expired.

                       (f)  Section 5(n) of the Plan provides that any and all
options that are outstanding under the Plan will become immediately vested and
fully exercisable during specified exercise periods following the occurrence of
certain events involving a change in control of the Company. Section 5(n) of the
Plan also provides that if the shareholders of the Company receive shares of
stock of another company in a transaction providing for the conversion or
exchange of all or substantially all of the outstanding shares of Common Stock,
then options granted under the Plan will become exercisable for a number of
shares of stock of the other company determined using the same conversion or
exchange ratio applicable to the transaction, unless the Board of Directors of
the Company determines that some or all of such options shall instead terminate.

               9.  Subject to 1996 Stock Option Plan. The terms of the Options
                   ---------------------------------
are subject to the provisions of the Plan, as the same may from time to time be
amended, and any inconsistencies between this Agreement and the Plan, as the
same may be from time to time amended, shall be governed by the provisions of
the Plan, a copy of which has been delivered to the Optionee, and which is
available for inspection at the principal offices of the Company.

               10.  Plan Subject to Change. The Plan and the policies governing
                    ----------------------
grants of Options under the Plan, including, without limitation, grant timing,
vesting schedules, and eligibility standards, are subject to change at any time
after the date of this Agreement by the Board of Directors of the Company or its
Compensation Committee.

                                      -4-

<PAGE>

               11.  Professional Advice. The acceptance of the Options and the
                    -------------------
sale of Common Stock issued pursuant to the exercise of Options may have
consequences under federal and state tax and securities laws which may vary
depending upon the individual circumstances of the Optionee. Accordingly, the
Optionee acknowledges that he or she has been advised to consult his or her
personal legal and tax advisor in connection with this Agreement and his or her
dealings with respect to Options for the Common Stock. Without limiting other
matters to be considered, the Optionee should consider whether upon the exercise
of options, the Optionee will file an election with the Internal Revenue Service
pursuant to Section 83(b) of the Code.

               12.  No Employment Relationship. Whether or not any Options are
                    --------------------------
to be granted under the Plan shall be exclusively within the discretion of the
Plan Administrator, and nothing contained in the Plan or this Agreement shall be
construed as giving any person any right to participate under the Plan. The
grant of an Option shall in no way constitute any form of agreement or
understanding binding on the Company or any related company, express or implied,
that the Company or any related company will employ or contract with an Optionee
for any length of time, nor shall it interfere in any way with the Company's, or
where applicable, a related company's right to terminate Optionee's employment
at any time, which right is hereby reserved.

               13.  Securities Laws. Notwithstanding the foregoing, no Option
                    ---------------
shall vest or be exercisable unless and until all requirements imposed by or
pursuant to Section 5(l) of the Plan are satisfied.

          SECTION 5(l) OF THE PLAN DESCRIBES CERTAIN IMPORTANT CONDITIONS
RELATING TO FEDERAL AND STATE SECURITIES LAWS THAT MUST BE SATISFIED BEFORE THIS
OPTION CAN BE EXERCISED AND BEFORE THE COMPANY CAN ISSUE ANY OPTION SHARES TO
THE OPTIONEE. THE COMPANY HAS NO OBLIGATION TO REGISTER THE OPTION SHARES. THE
OPTIONEE WILL NOT BE ABLE TO EXERCISE THIS OPTION UNLESS SUCH ARE REGISTERED OR
AN EXEMPTION FROM REGISTRATION IS AVAILABLE. AT THE PRESENT TIME, EXEMPTIONS
FROM REGISTRATION UNDER FEDERAL AND STATE SECURITIES LAWS ARE VERY LIMITED AND
MIGHT BE UNAVAILABLE TO THE OPTIONEE PRIOR TO THE EXPIRATION OF THIS OPTION.
CONSEQUENTLY, THE OPTIONEES MIGHT HAVE NO OPPORTUNITY TO EXERCISE THIS OPTION
AND TO RECEIVE OPTION SHARES UPON SUCH EXERCISE.

          Notwithstanding the foregoing, the Company may restrict the Optionee's
right to purchase Option Shares after a public offering of Common Stock pursuant
to the Securities Act of 1933, as amended, until a date ninety (90) days
following completion of the public offering.

               14.  Entire Agreement. This Agreement is the only agreement
                    ----------------
between the Optionee and the Company with respect to the Options, and this
Agreement and the Plan supersede all prior and contemporaneous oral and written
statements and representations, including, but not limited to, the Non-Plan
Options, and contain the entire agreement between the parties with respect to
the Options.

               15.  Notices. Any notice required or permitted to be made or
                    -------
given hereunder shall be mailed or delivered personally to the addresses set
forth below, or as changed from time to time by written notice to the other:

          The Company:          BRIAZZ, INC.
                                3901 7/th/ Ave., Suite 200
                                Seattle, Washington 98134
                                Attention: Linda Baldwin

         The Optionee:          (As set forth in the Notice)

                                      -5-

<PAGE>

Optionee acknowledges receipt of the Notice and a copy of the Plan. Optionee
represents that he or she is familiar with the terms and provisions thereof, and
hereby accepts this Option subject to all of the terms and provisions thereof.
Optionee has reviewed the Plan, the Notice and this Option Agreement in their
entirety, has had an opportunity to obtain the advice of counsel prior to
executing this Option and fully understands all provisions of the Option.
Optionee hereby agrees to accept as binding, conclusive and final all decisions
or interpretations of the Plan Administrator upon any questions arising under
the Plan or this Option. Optionee further agrees to notify the Company upon any
change in the residence address indicated in the Notice.

BRIAZZ, INC.

By:    /s/ Tracy L. Warner                          October 22, 2001
    -----------------------------------         --------------------------
                                                Date
Its:   Chief Financial Officer
     ----------------------------------

OPTIONEE

       /s/ Howard Schultz                           October 12, 2001
---------------------------------------         --------------------------
Howard Schultz                                  Date

               THERE MAY NOT BE PRESENTLY AVAILABLE EXEMPTIONS FROM THE
REGISTRATION REQUIREMENTS OF APPLICABLE FEDERAL AND STATE SECURITIES LAWS FOR
THE ISSUANCE OF SHARES OF STOCK UPON EXERCISE OF THESE OPTIONS. ACCORDINGLY,
THESE OPTIONS CANNOT BE EXERCISED UNLESS THESE OPTIONS AND THE SHARES OF STOCK
TO BE ISSUED UPON EXERCISE OF THE OPTIONS ARE REGISTERED OR AN EXEMPTION FROM
SUCH REGISTRATION REQUIREMENTS IS AVAILABLE.

               THE SHARES OF STOCK ISSUED PURSUANT TO THE EXERCISE OF OPTIONS
WILL BE "RESTRICTED SECURITIES" AS DEFINED IN RULE 144 UNDER THE SECURITIES ACT
OF 1933 AND WILL BEAR A LEGEND RESTRICTING RESALE UNLESS THEY ARE REGISTERED
UNDER STATE AND FEDERAL SECURITIES LAWS OR AN EXEMPTION FROM REGISTRATION IS
AVAILABLE. THE COMPANY IS NOT OBLIGATED TO REGISTER THE SHARES OF STOCK OR TO
MAKE AVAILABLE ANY EXEMPTION FROM REGISTRATION.

                                      -6-

<PAGE>

                                   EXHIBIT A
                                   ---------

                                          Briazz Inc.
Notice of Grant of Stock Options          ID: 91-1672311
and Option Agreement                      3901 7th Ave. So, Suite 200
                                          Seattle, WA 98134

________________________________________________________________________________

Howard Schultz                            Option Number:   00000000
Street                                    Plan:            1996
City, State Zip                           ID:              0000001

________________________________________________________________________________

Effective as of the individual dates of grant of the Non-Plan Options, you have
been granted a Non-Qualified Stock Option to buy 12,337 shares of Briazz Inc.
(the "Company") common stock at the prices per share set forth below (the
"Shares"):

<TABLE>
<CAPTION>
      Original
   Date of Grant           Number of Shares        Price Per Share        Total Price
   -------------           ----------------        ---------------        -----------
<S>                        <C>                     <C>                    <C>
June 1, 1996                             261              $1,632.00          $425,952.00
October 18, 1996                         167                $600.00          $100,200.00
August 15, 1997                          193              $3,900.00          $752,700.00
August 29, 1997                           49              $3,900.00          $191,100.00
November 1, 1999                      10,000                  $6.00           $60,000.00
November 1, 2000                       1,667                  $1.50            $2,500.50
                                       -----                                   ---------
            TOTALS:                   12,337                  -             $1,532,452.50
</TABLE>

The total option price of the Shares is One Million Five Hundred Thirty Two
Thousand Four Hundred Fifty Two Dollars and Fifty Cents ($1,532,452.50.)

The Shares are fully vested.

________________________________________________________________________________

By your signature and the Company's signature below, you and the Company agree
that these options are governed by the terms and conditions of the Company's
Stock Option Plan as amended and the Amended and Restated Option Agreement, all
of which are attached and made a part of this document.

________________________________________________________________________________

   /s/ Tracy L. Warner                            October 22, 2001
----------------------------------            ---------------------------------
Briazz Inc.                                   Date

   /s/ Howard Schultz                             October 12, 2001
----------------------------------            ----------------------------------
Howard Schultz                                Date

                                      -7-

<PAGE>

                                    EXHIBIT B
                                    ---------

                         Notice of Election to Exercise
                         ------------------------------

               This Notice of Election to Exercise shall constitute proper
notice pursuant to Section 5(h) of the BRIAZZ, INC. 1996 Amended Stock Option
Plan (the "Plan") and Section 5 of that certain Amended and Restated Stock
Option Agreement (the "Agreement") dated as of the ____ day of __________ 2001
between BRIAZZ, INC. (the "Company") and the undersigned Optionee ("Optionee").

               Optionee hereby elects to exercise Optionee's option to
purchase ___________ shares of the common stock of the Company at a price of
$__________ per share, for aggregate consideration of $__________, on the terms
and conditions set forth in the Agreement and the Plan. Such aggregate
consideration, in the form specified in Section 5 of the Agreement, accompanies
this notice.

               The undersigned have executed this Notice this ____ day of
__________, 200_.

Submitted by:                              Accepted by:

OPTIONEE                                   BRIAZZ, INC.

____________________________________       _____________________________________
Signature                                  By

____________________________________       _____________________________________
Print Name                                 Title

Address:                                   Address:
-------                                    -------

____________________________________       _____________________________________

____________________________________       _____________________________________

                                           _____________________________________

                                      -8-<PAGE>
                                                                    EXHIBIT 10.1

                FIRST AMENDMENT TO CREDIT AND SECURITY AGREEMENT

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

                                    Recitals

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

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

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

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

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

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

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

<PAGE>

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

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

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

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

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

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

                                      -2-
<PAGE>

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

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

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

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

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

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

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

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

                                      -3-
<PAGE>

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

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

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

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

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

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

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

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

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

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

                                      -4-
<PAGE>

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

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

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

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

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

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

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

                                      -5-
<PAGE>

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

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

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

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

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

                                      -6-
<PAGE>

                   EXHIBIT D TO CREDIT AND SECURITY AGREEMENT

                             COMPLIANCE CERTIFICATE

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

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

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

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

         Events of Default. (Check one):

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

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

         I hereby certify to the Lender as follows:

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

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

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

<PAGE>

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

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

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

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

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

<PAGE>

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

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

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

                                            VARI-L COMPANY, INC.

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

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