Document:

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                                                                   EXHIBIT 10.33

                               SECURITY AGREEMENT

         This Security Agreement (as amended, modified or otherwise supplemented
from time to time, this "SECURITY AGREEMENT"), dated as of October 7, 2002, is
executed by Vari-L Corporation, Inc., a Colorado corporation (together with its
successors and assigns, "DEBTOR"), in favor of Sirenza Microdevices, Inc., a
Delaware corporation as secured party (together with its successors and assigns,
"SECURED PARTY").

                                    RECITALS

         A. Debtor and Secured Party have entered into a Loan Agreement, dated
as of the date hereof, which provides up to $5.3 million in term loans (as
amended, modified or otherwise supplemented from time to time, the "LOAN
AGREEMENT").

         B. In order to induce Secured Party to extend the credit evidenced by
the Loan Agreement, Debtor has agreed to enter into this Security Agreement and
to grant Secured Party the security interest in the Collateral described below.

                                    AGREEMENT

         NOW, THEREFORE, in consideration of the above recitals and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Debtor hereby agrees with Secured Party as follows:

         1. Definitions and Interpretation. When used in this Security
Agreement, the following terms have the following respective meanings:

                  "COLLATERAL" has the meaning given to that term in Section 2
hereof.

                  "OBLIGATIONS" means all loans, advances, debts, liabilities
and obligations, howsoever arising, owed by Debtor to the Secured Party of every
kind and description (whether or not evidenced by any note or instrument and
whether or not for the payment of money), now existing or hereafter arising
under or pursuant to the terms of the Loan Agreement, the Notes or any other
Loan Document, including, all interest, fees, charges, expenses, attorneys' fees
and costs and accountants' fees and costs chargeable to and payable by Debtor
hereunder and thereunder, in each case, whether direct or indirect, absolute or
contingent, due or to become due, and whether or not arising after the
commencement of a proceeding under Title 11 of the United States Code (11 U.S.C.
Section 101 et seq.), as amended from time to time (including post-petition
interest) and whether or not allowed or allowable as a claim in any such
proceeding.

                  "UCC" means the Uniform Commercial Code as in effect in the
State of California from time to time (and each reference in this Security
Agreement to an Article or Division thereof shall refer to that Article or
Division as from time to time in effect); provided, however, in the event that,
by reason of mandatory provisions of law, any or all of the perfection or
priority of the Secured Party's security interest in any Collateral is governed
by the Uniform Commercial Code as in effect in a jurisdiction other than the
State of California, the term "UCC" shall mean the Uniform Commercial Code
(including the Articles or Divisions thereof) as in effect at such time in such
other jurisdiction for purposes of the provisions hereof relating to such
perfection or priority and for purposes of definitions related to such
provisions.

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All capitalized terms not otherwise defined herein shall have the respective
meanings given in the Loan Agreement. Terms defined in the UCC and not otherwise
defined herein shall have the respective meanings set forth in the UCC.

         2. Grant of Security Interest. As security for the Obligations, Debtor
hereby pledges to Secured Party and grants to Secured Party a security interest
of first priority, subject only to Permitted Liens, in all right, title and
interests of Debtor in and to the property described in Attachment 1 hereto,
whether now existing or hereafter from time to time acquired (collectively, the
"COLLATERAL"). Notwithstanding the foregoing provisions of this Section 2, the
pledge and grant of a security interest as provided herein shall not extend to,
and the term "Collateral" shall not include: "intent-to-use" trademarks at all
times prior to the first use thereof, whether by the actual use thereof in
commerce, the recording of a statement of use with the United States Patent and
Trademark Office or otherwise.

         3. Representations and Warranties. Debtor represents and warrants to
Secured Party that:

                  (a) Collateral. (i) Except as set forth in Article 3.7 of the
Disclosure Schedule (as defined in and attached to the Loan Agreement) (the
"DISCLOSURE SCHEDULE") the Debtor is the owner of the Collateral (or, in the
case of after-acquired Collateral, at the time Debtor acquires rights in the
Collateral, will be the owner thereof) and that no other Person has (or, in the
case of after-acquired Collateral, at the time Debtor acquires rights therein,
will have) any right, title, claim or interest (by way of Lien or otherwise) in,
against or to the Collateral, other than Permitted Liens; (ii) upon the filing
of UCC-1 financing statements in the appropriate filing offices, Secured Party
has (or in the case of after-acquired Collateral, at the time Debtor acquires
rights therein, will have) a first priority perfected security interest in the
Collateral to the extent that a security interest in the Collateral can be
perfected by such filing, except for Permitted Liens; (iii) all inventory has
been (or, in the case of hereafter produced inventory, will be) produced in
compliance with the Fair Labor Standards Act and all other material applicable
laws; (iv) all accounts receivable and payment intangibles are bona fide and
existing obligations; (v) the originals of all documents evidencing all accounts
receivable and payment intangibles of Debtor and the only original books of
account and records of Debtor relating thereto are, and will continue to be,
kept at the chief executive office of Debtor set forth on Schedule B or at such
other locations as Debtor may establish in accordance with Section 4(d), and (f)
all information set forth in Schedules A and B hereto is true and correct.

                  (b) Intellectual Property. (i) Debtor does not own any
patents, trademarks, copyrights or mask works registered in, or the subject of
pending applications in, the Patent and Trademark Office or the Copyright Office
or any similar offices or agencies in any other country or any political
subdivision thereof, other than those described on Schedule A hereto; (ii)
Debtor has, except for Permitted Liens, the sole, full and unencumbered right,
title and interest in and to the trademarks shown on Schedule A and the goods
and services covered by the registrations thereof and, such trademarks are valid
and enforceable and in full force and effect; (iii) except as set forth in
Article 3.7 of the Disclosure Schedule, Debtor has, except for Permitted Liens,
the sole, full and unencumbered right, title and interest in and to each of the
patents shown on Schedule A, such patents are valid and enforceable and in full
force and effect; (iv) Debtor has, except for Permitted Liens, the sole, full
and unencumbered right, title and interest in and to each of the copyrights
shown on Schedule A, such copyrights are valid and enforceable and in full force
and effect; (v) Debtor has, except for Permitted Liens, the sole, full and
encumbered right, title and interest in and to the mask works shown on Schedule
A such mask works are valid and enforceable and in full force and effect; (vi)
except as set forth in Article 3.6 of the Disclosure Schedule, there is no claim
by any third party that any such patents, trademarks, copyrights or mask works
are invalid and unenforceable or do or may violate the rights of any Person;
(vii) all licenses (other than non-exclusive licenses to end-users) of patents,
trademarks, copyrights, mask works and trade secrets which Debtor has granted to
any Person are set forth in Schedule A hereto; (viii) all licenses of patents,
trademarks, copyrights, mask works and trade secrets which any Person has
granted to

                                      -2-

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Debtor are set forth on Schedule A hereto, other than those licenses of patents,
trademarks, copyrights, mask works and trade secrets consisting of "off the
shelf" software or standard products; (ix) except as set forth in Article 3.7 of
the Disclosure Schedule, Debtor has obtained from each employee who may be
considered the inventor of patentable inventions (invented within the scope of
such employee's employment) an assignment to Debtor of all rights to such
inventions, including patents; and (x) Debtor has taken all reasonable steps
necessary to protect the secrecy and the validity under applicable law of all
material trade secrets.

         4. Covenants Relating to Collateral. Debtor hereby agrees, except as
otherwise permitted by the terms hereof or the terms of the Loan Agreement (a)
to perform all acts that may be necessary to maintain, preserve, protect and
perfect the Collateral, the Lien granted to Secured Party therein and the
perfection and priority of such Lien, except for Permitted Liens; (b) not to use
or permit any Collateral to be used (i) in violation in any material respect of
any applicable law, rule or regulation of any Governmental Authority, or (ii) in
violation of any policy of insurance covering the Collateral; (c) to pay
promptly when due all taxes and other Governmental Charges, unless contested in
good faith and for which adequate reserves therefor are made in accordance with
GAAP, all Liens and all other charges now or hereafter imposed upon or affecting
any Collateral, other than Permitted Liens; (d) without 30 days' written notice
to Secured Party, (i) not to change Debtor's name or place of business (or, if
Debtor has more than one place of business, its chief executive office), or the
office in which Debtor's records relating to accounts receivable and payment
intangibles are kept, (ii) not to change Debtor's state of incorporation, (iii)
not to keep Collateral consisting of chattel paper at any location other than
its chief executive office set forth in item 1 of Schedule B hereto, and (iv)
not to keep Collateral consisting of equipment or inventory at any location
other than the locations set forth in item 6 of Schedule B hereto, (f) to
procure, execute and deliver from time to time any endorsements, assignments,
financing statements and other writings reasonably deemed necessary or
appropriate by Secured Party to perfect, maintain and protect its Lien hereunder
and the priority thereof and to deliver promptly to Secured Party all originals
of Collateral consisting of instruments; (g) to appear in and defend any action
or proceeding which may adversely affect its title to or Secured Party's
interest in the Collateral; (h) if Secured Party gives value to enable Debtor to
acquire rights in or the use of any Collateral, to use such value for such
purpose; (i) to keep separate, accurate and complete records of the Collateral
and to provide Secured Party with such records and such other reports and
information relating to the Collateral as Secured Party may reasonably request
from time to time; (j) not to surrender or lose possession of (other than to
Secured Party), sell, encumber, lease, rent, or otherwise dispose of or transfer
any Collateral or right or interest therein except as otherwise permitted in the
Loan Agreement, and to keep the Collateral free of all Liens except Permitted
Liens; (k) if requested by Secured Party, to type, print or stamp conspicuously
on the face of all original copies of all Collateral consisting of chattel paper
a legend satisfactory to Secured Party indicating that such chattel paper is
subject to the security interest granted hereby; (l) to collect, enforce and
receive delivery of the accounts receivable and payment intangibles in
accordance with past practice until otherwise notified by Secured Party; (m) to
comply with all material Requirements of Law relating to the production,
possession, operation, maintenance and control of the Collateral (including the
Fair Labor Standards Act); and (n) to permit Secured Party and its
representatives the right, at any time during normal business hours, upon
reasonable prior notice, to visit and inspect the properties of Debtor and its
corporate, financial and operating records, and make abstracts therefrom, and to
discuss Debtor's affairs, finances and accounts with its directors, officers and
independent public accountants.

         5. Covenants Regarding Intellectual Property. Debtor hereby agrees:

                  (a) Debtor will perform all acts and execute all documents,
including notices of security interest for each relevant type of intellectual
property in forms suitable for filing with the Patent and Trademark Office or
the Copyright Office, that may be necessary or desirable to record, maintain,
preserve, protect and perfect Secured Party's interest in the Collateral, the
Lien granted to Secured Party in the Collateral and the first priority of such
Lien;

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                  (b) Except to the extent that Secured Party gives its prior
written consent:

                           (i) Debtor (either itself or through licensees) will
continue to use its material trademarks in connection with each and every
trademark class of goods or services applicable to its current line of products
or services as reflected in its current catalogs, brochures, price lists or
similar materials in order to maintain such trademarks in full force and effect
free from any claim of abandonment for nonuse, and Debtor will not (and will not
permit any licensee thereof to) do any act or knowingly omit to do any act
whereby any material trademark may become invalidated;

                           (ii) Debtor will not do any act or omit to do any act
whereby any material patent registrations may become abandoned or dedicated to
the public domain or the remedies available against potential infringers
weakened and shall notify Secured Party immediately if it knows of any reason or
has reason to know that any material patent registration may become abandoned or
dedicated; and

                           (iii) Debtor will not do any act or omit to do any
act whereby any material registered copyrights or mask works may become
abandoned or dedicated to the public domain or the remedies available against
potential infringers weakened and shall notify Secured Party immediately if it
knows of any reason or has reason to know that any material copyright or mask
work may become abandoned or dedicated to the public domain.

                  (c) Debtor will promptly (and in any event within 5 Business
Days) notify Secured Party upon the filing, either by Debtor or through any
agent, employee, licensee or designee, of (i) an application for the
registration of any patent, trademark, copyright or mask work with the Patent
and Trademark Office or the Copyright Office or any similar office or agency in
any other country or any political subdivision thereof, (ii) any assignment of
any patent or trademark, which Debtor may acquire from a third party, with the
Patent and Trademark Office or any similar office or agency in any other country
or any political subdivision thereof, or (iii) any assignment of any copyright
or mask work, which Debtor may acquire from a third party, with the Copyright
Office or any similar office or agency in any other country or any political
subdivision thereof. Debtor will promptly (and in any event within 5 Business
Days) notify Secured Party of the registration of any patent, trademark,
copyright or mask work with the Patent and Trademark Office or the Copyright
office or any similar office or agency in any other country or any political
subdivision thereof. Upon the request of Secured Party, Debtor shall execute and
deliver any and all assignments, agreements, instruments, documents and papers
as Secured Party may request to evidence Secured Party's security interest in
such patent, trademark (and the goodwill and general intangibles of Debtor
relating thereto or represented thereby), copyright or mask work, and Debtor
authorizes Secured Party to amend an original counterpart of the applicable
notice of security interest executed pursuant to Section 6(a) of this Security
Agreement without first obtaining Debtor's approval of or signature to such
amendment and to record such document with the Patent and Trademark Office or
Copyright Office, as applicable.

                  (d) Debtor will take all necessary steps in any proceeding
before the Patent and Trademark Office, the Copyright Office or any similar
office or agency in any other country or any political subdivision thereof, to
diligently prosecute or maintain, as applicable, each material application and
registration of the patents, trademarks, copyrights and mask works, including
filing of renewals, affidavits of use, affidavits of incontestability and
opposition, interference and cancellation proceedings (except to the extent that
dedication, abandonment or invalidation is permitted hereunder);

                  (e) While any Obligations are outstanding, Debtor shall (i)
make application to the Patent and Trademark Office to register any material
unpatented but patentable inventions developed by Debtor or its employees
(within the scope of their employment), unless Debtor, in the exercise of its
reasonable business judgment, deems any such patent not to have any significant
commercial value or determines that its rights

                                      -4-

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thereunder are better preserved as a trade secret; (ii) make application to the
Patent and Trademark Office to register any registerable but unregistered
material trademarks used by Debtor in connection with its products or services;
and (iii) upon Secured Party's written request, make application to the
Copyright Office to register any material unregistered copyright or mask work to
which Debtor has rights;

                  (f) Debtor shall (i) use proper statutory notice in connection
with its use of the material patents, trademarks, copyrights and mask works,
(ii) maintain consistent standards of quality in its manufacture of products
sold under the trademarks or provision of services in connection with the
trademarks, and (iii) take all steps necessary to protect the secrecy and the
validity under applicable law of all material trade secrets;

                  (g) Debtor agrees that if it learns of any use by any Person
of any term or design likely to cause confusion with any material trademark,
Debtor shall promptly notify Secured Party of such use and of all steps taken
and to be taken to remedy any infringement of any material trademark; and

                  (h) Debtor shall maintain with each employee who may have
access to the trade secrets of Debtor an agreement by which such employee agrees
not to disclose such trade secrets and with each employee who may be the
inventor of patentable inventions (invented within the scope of such employee's
employment) an invention assignment agreement requiring such employee to assign
all rights to such inventions, including patents and patent applications, to
Debtor and further requiring such employee to cooperate fully with Debtor, its
successors in interest, including Secured Party, and their counsel, in the
prosecution of any patent application or in any litigation involving the
invention, whether such cooperation is required during such employee's
employment with Debtor or after the termination of such employment.

         6. Authorized Action by Secured Party. Debtor hereby irrevocably
appoints Secured Party as its attorney-in-fact (which appointment is coupled
with an interest) and agrees that Secured Party may perform (but Secured Party
shall not be obligated to and shall incur no liability to Debtor or any third
party for failure so to do) any act which Debtor is obligated by this Security
Agreement to perform, and to exercise such rights and powers as Debtor might
exercise with respect to the Collateral, including the right to (a) collect by
legal proceedings or otherwise and endorse, receive and receipt for all
dividends, interest, payments, proceeds and other sums and property now or
hereafter payable on or on account of the Collateral; (b) enter into any
extension, reorganization, deposit, merger, consolidation or other agreement
pertaining to, or deposit, surrender, accept, hold or apply other property in
exchange for the Collateral; (c) make any compromise or settlement, and take any
action it deems advisable, with respect to the Collateral; (d) insure, process
and preserve the Collateral; (e) pay any indebtedness of Debtor relating to the
Collateral; and (f) execute UCC financing statements and other documents,
instruments and agreements required hereunder; provided, however, that Secured
Party shall not exercise any such powers granted pursuant to subsections (a)
through (c) prior to the occurrence of an Event of Default and shall only
exercise such powers during the continuance of an Event of Default. Debtor
agrees to reimburse Secured Party upon demand for any reasonable costs and
expenses, including attorneys' fees, Secured Party may incur while acting as
Debtor's attorney-in-fact hereunder, all of which costs and expenses are
included in the Obligations. It is further agreed and understood between the
parties hereto that such care as Secured Party gives to the safekeeping of its
own property of like kind shall constitute reasonable care of the Collateral
when in Secured Party's possession; provided, however, that Secured Party shall
not be required to make any presentment, demand or protest, or give any notice
and need not take any action to preserve any rights against any prior party or
any other person in connection with the Obligations or with respect to the
Collateral.

         7. Litigation and Other Proceedings. Upon the occurrence and during the
continuation of an Event of Default, Secured Party shall have the right but not
the obligation to bring suit or institute proceedings in the name of Debtor or
Secured Party to enforce any rights in the Collateral, including any license
thereunder, in

                                      -5-

<PAGE>

which event Debtor shall at the request of Secured Party do any and all lawful
acts and execute any and all documents reasonably required by Secured Party in
aid of such enforcement. If Secured Party elects not to bring suit to enforce
any right under the Collateral, including any license thereunder, Debtor agrees
to use all reasonable measures, whether by suit, proceeding or other action, to
cause to cease any infringement of any right under the Collateral by any Person
and for that purpose agrees to diligently maintain any action, suit or
proceeding against any Person so infringing necessary to prevent such
infringement.

         8. Default and Remedies.

                  (a) Default. Debtor shall be deemed in default under this
Security Agreement upon the occurrence and during the continuance of an Event of
Default.

                  (b) Remedies. Upon the occurrence and during the continuance
of any such Event of Default, Secured Party shall have the rights of a secured
creditor under the UCC, all rights granted by this Security Agreement and by
law, including the right to: (a) require Debtor to assemble the Collateral and
make it available to Secured Party at a place to be designated by Secured Party;
and (b) prior to the disposition of the Collateral, store, process, repair or
recondition it or otherwise prepare it for disposition in any manner and to the
extent Secured Party deems appropriate and in connection with such preparation
and disposition, without charge, use any trademark, trade name, copyright,
patent or technical process used by Debtor. Debtor hereby agrees that ten (10)
days' notice of any intended sale or disposition of any Collateral is
reasonable. In furtherance of Secured Party's rights hereunder, Debtor hereby
grants to Secured Party an irrevocable, non-exclusive license (exercisable
without royalty or other payment by Secured Party, but only in connection with
the exercise of remedies hereunder) to use, license or sublicense any patent,
trademark, trade name, copyright or other intellectual property in which Debtor
now or hereafter has any right, title or interest together with the right of
access to all media in which any of the foregoing may be recorded or stored.

         9. Miscellaneous.

                  (a) Notices. Except as otherwise provided herein, all notices,
requests, demands, consents, instructions or other communications to or upon
Debtor or Secured Party under this Security Agreement shall be made in
accordance with Section 7.1 of the Loan Agreement.

                  (b) Nonwaiver. No failure or delay on Secured Party's part 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.

                  (c) Amendments and Waivers. This Security Agreement may not be
amended or modified, nor may any of its terms be waived, except by written
instruments signed by Debtor and Secured Party. Each waiver or consent under any
provision hereof shall be effective only in the specific instances for the
purpose for which given.

                  (d) Assignments. This Security Agreement shall be binding upon
and inure to the benefit of Secured Party and Debtor and their respective
successors and assigns; provided, however, that neither Secured Party nor Debtor
may sell, assign or delegate their respective rights and obligations hereunder
without the prior written consent of the other party hereto, except that Lender
may assign or transfer, without Debtor's prior written consent, its respective
rights and obligations under this Security Agreement in connection with the
merger or consolidation of Lender with or into another Person.

                  (e) Cumulative Rights, etc. The rights, powers and remedies of
Secured Party under this Security Agreement shall be in addition to all rights,
powers and remedies given to Secured Party by virtue of

                                      -6-

<PAGE>

any applicable law, rule or regulation of any governmental authority, the Loan
Documents or any other agreement, all of which rights, powers, and remedies
shall be cumulative and may be exercised successively or concurrently without
impairing Secured Party's rights hereunder. Debtor waives any right to require
Secured Party to proceed against any Person or to exhaust any Collateral or to
pursue any remedy in Secured Party's power.

                  (f) Payments Free of Taxes, Etc. All payments made by Debtor
under the Loan Documents shall be made by Debtor free and clear of and without
deduction for any and all present and future taxes, levies, charges, deductions
and withholdings. In addition, Debtor shall pay upon demand any stamp or other
taxes, levies or charges of any jurisdiction with respect to the execution,
delivery, registration, performance and enforcement of this Security Agreement.
Upon request by Secured Party, Debtor shall furnish evidence satisfactory to
Secured Party that all requisite authorizations and approvals by, and notices to
and filings with, governmental authorities and regulatory bodies have been
obtained and made and that all requisite taxes, levies and charges have been
paid.

                  (g) Partial Invalidity. If at any time any provision of this
Security Agreement is or becomes illegal, invalid or unenforceable in any
respect under the law or any jurisdiction, neither the legality, validity or
enforceability of the remaining provisions of this Security 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.

                  (h) Expenses. Debtor shall pay on demand all reasonable fees
and expenses, including reasonable attorneys' fees and expenses, incurred by
Secured Party in connection with custody, preservation or sale of, or other
realization on, any of the Collateral or the enforcement or attempt to enforce
any of the Obligations which is not performed as and when required by this
Security Agreement.

                  (i) Headings. Headings in this Security Agreement and each of
the other Loan Documents are for convenience of reference only and are not part
of the substance hereof or thereof.

                  (j) Plural Terms. All terms defined in this Security Agreement
or any other Loan Document in the singular form shall have comparable meanings
when used in the plural form and vice versa.

                  (k) Construction. Each of this Security Agreement and the
other Loan Documents is the result of negotiations among, and has been reviewed
by, Debtor, Secured Party and their respective counsel. Accordingly, this
Security 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 Debtor or Secured Party.

                  (l) Entire Agreement. This Security Agreement and each of the
other Loan Documents, taken together, constitute and contain the entire
agreement of Debtor and Secured Party and supersede any and all prior
agreements, negotiations, correspondence, understandings and communications
among the parties, whether written or oral, respecting the subject matter
hereof.

                  (m) Other Interpretive Provisions. References in this Security
Agreement and each of the other Loan Documents to any document, instrument or
agreement (a) includes all exhibits, schedules and other attachments thereto,
(b) includes all documents, instruments or agreements issued or executed in
replacement thereof, and (c) means such document, instrument or agreement, or
replacement or predecessor thereto, as amended, modified and supplemented from
time to time and in effect at any given time. The words "hereof," "herein" and
"hereunder" and words of similar import when used in this Security Agreement or
any other Loan Document refer to this Security Agreement or such other Loan
Document, as the case may be, as a whole and not to any particular provision of
this Security Agreement or such other Loan Document,

                                      -7-

<PAGE>

as the case may be. The words "include" and "including" and words of similar
import when used in this Security Agreement or any other Loan Document shall not
be construed to be limiting or exclusive.

                  (a) Governing Law. This Security Agreement shall be governed
by and construed in accordance with the laws of the State of California without
reference to conflicts of law rules (except to the extent governed by the UCC).

            [The remainder of this page is intentionally left blank]

                                      -8-

<PAGE>

         IN WITNESS WHEREOF, Debtor has caused this Security Agreement to be
executed as of the day and year first above written.

                                          Vari-L Company, Inc.

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

                                          Name: Charles R. Bland

                                          Title: CEO

Agreed To:

Sirenza Microdevices

By: /s/ Gerald L. Quinnell
   -------------------------

Name: Gerald L. Quinnell

Title: EVP Business Development

                     [Signature Page to Security Agreement]

<PAGE>

                                  ATTACHMENT 1

                              TO SECURITY AGREEMENT

         All right, title, interest, claims and demands of Debtor in and to the
following property:

                  (i) All goods and equipment now owned or hereafter acquired,
including, without limitation, all laboratory equipment, computer equipment,
office equipment, machinery, fixtures, vehicles, and any interest in any of the
foregoing, and all attachments, accessories, accessions, replacements,
substitutions, additions, and improvements to any of the foregoing, wherever
located;

                  (ii) All inventory now owned or hereafter acquired, including,
without limitation, all merchandise, raw materials, parts, supplies, packing and
shipping materials, work in process and finished products including such
inventory as is temporarily out of Debtor's custody or possession or in transit
and including any returns upon any accounts or other proceeds, including
insurance proceeds, resulting from the sale or disposition of any of the
foregoing and any documents of title representing any of the above, and Debtor's
books relating to any of the foregoing;

                  (iii) All contract rights, general intangibles, health care
insurance receivables, payment intangibles and commercial tort claims, now owned
or hereafter acquired, including, without limitation, all patents, patent rights
(and applications and registrations therefor), trademarks and service marks (and
applications and registrations therefor), inventions, copyrights, mask works
(and applications and registrations therefor), trade names, trade styles,
software and computer programs, trade secrets, methods, processes, know how,
drawings, specifications, descriptions, and all memoranda, notes, and records
with respect to any research and development, goodwill, license agreements,
franchise agreements, blueprints, drawings, purchase orders, customer lists,
route lists, infringements, claims, computer programs, computer disks, computer
tapes, literature, reports, catalogs, design rights, income tax refunds,
payments of insurance and rights to payment of any kind and whether in tangible
or intangible form or contained on magnetic media readable by machine together
with all such magnetic media;

                  (iv) All now existing and hereafter arising accounts, contract
rights, royalties, license rights and all other forms of obligations owing to
Debtor arising out of the sale or lease of goods, the licensing of technology or
the rendering of services by Debtor (subject, in each case, to the contractual
rights of third parties to require funds received by Debtor to be expended in a
particular manner), whether or not earned by performance, and any and all credit
insurance, guaranties, and other security therefor, as well as all merchandise
returned to or reclaimed by Debtor and Debtor's books relating to any of the
foregoing;

                  (v) All documents, cash, deposit accounts, letters of credit,
letter of credit rights, supporting obligations, certificates of deposit,
instruments, chattel paper, electronic chattel paper, tangible chattel paper and
investment property, including, without limitation, all securities, whether
certificated or uncertificated, security entitlements, securities accounts,
commodity contracts and commodity accounts, and all financial assets held in any
securities account or otherwise, wherever located, now owned or hereafter
acquired and Debtor's books relating to the foregoing; and

                  (vi) Any and all claims, rights and interests in any of the
above and all substitutions for, additions and accessions to and proceeds
thereof, including, without limitation, insurance, condemnation, requisition or
similar payments and the proceeds thereof.

<PAGE>

                                   SCHEDULE A
                              TO SECURITY AGREEMENT

                                   COPYRIGHTS

<Table>
<Caption>
Description                                Registration Date                       Registration No.
-----------                                -----------------                       ----------------
<S>                                        <C>                                     <C>

None.
</Table>

                                     PATENTS

<Table>
<Caption>
Title                                            Date Issued              Country                  Patent No.
-----                                            -----------              -------                  ----------
<S>                                              <C>                      <C>                      <C>
Wide Range Electronic Oscillator                 November 4, 1986         USA                      4,621,241

Wide Range Electronic Oscillator                                          Singapore                95  90657-4

Wide Range Electronic Oscillator                                          Hong Kong                821/1995

Wide Range Electronic Oscillator                                          Canada                   1,267,941

Wide Range Electronic Oscillator                                          United Kingdom           0,207,650

Wide Range Electronic Oscillator                                          Austria                  0,207,650

Wide Range Electronic Oscillator                                          Sweden                   86304343

Wide Range Electronic Oscillator                                          Belgium                  0,207,650

Wide Range Electronic Oscillator                                          Italy                    0,207,650

Wide Range Electronic Oscillator                                          France                   0,207,650

Wide Range Electronic Oscillator                                          Germany                  0,207,650

Wide Range Electronic Oscillator                                          Netherlands              0,207,650

Wide Range Electronic Oscillator                                          Switzerland              0,207,650

Multiple Single Layer Monolithic Passive
Integrated Circuits and Methods                  May 11, 1999             USA                      5,903,431

Oscillator Voltage Regulator                     October 7, 1997          USA                      5,675,478

Oscillator Voltage Regulator                                              Eurasian                 199900014

OSCILLATOR VOLTAGE REGULATOR                                              EPC APP. NO.             97924617.0

Oscillator Voltage Regulator                                              Australia                29998/97

Oscillator Voltage Regulator                                              Norway                   19990202

Oscillator Voltage Regulator                                              China                    97196418.1

Oscillator Voltage Regulator                                              Canada                   2,259,662

High Impedance Ratio Wideband Transformer
Circuit                                          April 8, 1997            USA                      2,619,172

High Impedance Ratio Wideband Transformer
Circuit                                                                   Australia                704537

High Impedance Ratio Wideband Transformer
Circuit                                                                   Canada                   2,231,832
</Table>

<PAGE>

<Table>
<Caption>
Title                                            Date Issued              Country                  Patent No.
-----                                            -----------              -------                  ----------
<S>                                              <C>                      <C>                      <C>
High Impedance Ratio Wideband Transformer
Circuit                                                                   EPC                      96930789.1

High Impedance Ratio Wideband Transformer
Circuit                                                                   Brazil                   PI9610500-3

High Impedance Ratio Wideband Transformer
Circuit                                                                   China                    96197553.9

High Impedance Ratio Wideband Transformer
Circuit                                                                   Norway                   19981086

Unbalanced to Balanced High Impedance Ratio
Wideband Transformer Circuit                     April 21, 1998           USA                      5,742,213

Orthogonally Mounted Substrate Based Resonators  February 2, 1999         USA                      5,867,069

Orthogonally Mounted Substrate Based Resonators                           EPC                      98925304.2

Orthogonally Mounted Substrate Based Resonators                           China                    98805934.7

Orthogonally Mounted Substrate Based Resonators                           Singapore                9906005-5

Orthogonally Mounted Substrate Based Resonators                           Norway                   19996139

Orthogonally Mounted Substrate Based Resonators                           Australia                77289/98

Orthogonally Mounted Substrate Based Resonators                           Canada                   2,289,538

Oscillator Selectively Operable with a
Parallel Tuned or a Series Tuned Resonant
Circuit (Switched Mode Oscillator)               November 9, 1999         USA                      5,982,243

Continuously Adjustable Resonator                January 5, 1999          USA                      5,856,769

Continuously Adjustable Resonator                                         China                    98806014.0

Continuously Adjustable Resonator                                         EPC                      98926521.0

Continuously Adjustable Resonator                                         Canada                   2,293,357

Continuously Adjustable Resonator                                         Norway                   19996138

Continuously Adjustable Resonator                                         Australia                78340/98

Continuously Adjustable Resonator                                         Japan                    503159/99

Continuously Adjustable Resonator                                         Singapore                9906033-7

First and Second Oscillator Circuits Selectively
Coupled Through Passive Output Circuit to a Loan
(Passive Switched Oscl. Output Circuit)          December 19, 2000        USA                      5,999,061

Oscillator with Power Conservation Mode          December 19, 2000        USA                      6,163,228
</Table>

<PAGE>

                               PATENT APPLICATIONS

<Table>
<Caption>
Title                                      Application Date                        Application No.
-----                                      -----------------                       ---------------
<S>                                        <C>                                     <C>
Ferrite Crystal Resonator Structure        11/29/01                                [_______]
</Table>

                                   TRADEMARKS

<Table>
<Caption>
Mark                                             Registration Date        Country                  Registration No.
----                                             -----------------        -------                  ----------------
<S>                                              <C>                      <C>                      <C>
VARI-L                                           March 17, 1998           USA                      2,144,712

VARI-L Trademark                                 March 10, 1998           USA                      2,142,727

VARI-L Trademark                                                          Korea                    457,609

VARI-L Trademark                                                          Australia                776,901

VARI-L Trademark                                                          Puerto Rico              44,792

VARI-L Trademark                                                          Norway                   196,837

VARI-L Trademark                                                          Israel                   124,416

VARI-L Trademark                                                          China                    1,417,320

VARI-L TRADEMARK                                                          COMMUNITY                001008978

VARI-L Trademark                                                          Canada                   528,046

VARI-L Trademark                                                          Hong Kong                00420
</Table>

                             TRADEMARK APPLICATIONS

<Table>
<Caption>
Mark                                             Application Date         Country                  Application No.
----                                             ----------------         -------                  ---------------
<S>                                              <C>                      <C>                      <C>
PLAMAG                                           January 30, 2001         USA                      78045586
</Table>

                                   MASK WORKS

<Table>
<Caption>
Description                                Registration Date                       Registration No.
-----------                                -----------------                       ----------------
<S>                                        <C>                                     <C>
None.
</Table>

            LICENSES OF PATENTS, TRADEMARKS, COPYRIGHTS OR MASK WORKS
                (other than non-exclusive licenses to end-users)

<PAGE>

                                   SCHEDULE B
                              TO SECURITY AGREEMENT

                                 DEBTOR PROFILE

1. NAME. The legal name of Debtor is and the address of its chief executive
office is:

                           VARI-L COMPANY, INC.
                           4895 PEORIA STREET
                           DENVER CO 80239

2. ORGANIZATIONAL IDENTIFICATION NUMBER; FEDERAL EMPLOYER IDENTIFICATION NUMBER.
The Debtor's organizational identification number in its state of incorporation
is 01-65949-000 and Debtor's federal employer identification number is
06-0679347.

3. STATE OF INCORPORATION; PRIOR NAMES. Debtor was incorporated on June 27, 1985
in the state of Colorado. Since its incorporation Debtor has had the following
legal names (other than its current legal name):

                                                   Date Debtor's Name
         Prior Name                                Was Changed From Such Name

         NONE

4. DEBTOR DOES BUSINESS UNDER THE FOLLOWING TRADE NAMES:

<Table>
<Caption>
         Trade Name        Is This Name Registered?           Registration No.          Registration Date
         ----------        ------------------------           ----------------          -----------------
<S>                        <C>                                <C>                       <C>
         NONE
</Table>

5. PLACE OF BUSINESS. Debtor has the following places of business:

<Table>
<Caption>
         Address                                                       Owner of Location
         -------                                                       -----------------
<S>                                                                    <C>
         11101 E. 51st Ave.                                            Kenneth L. & Jean M. Bettenhausen
         Denver, CO

         5165 Peoria Street                                            J.C. Enterprises
         Denver, CO

         4895 Peoria Street                                            Five K Investments
         Denver, CO

         4955 Peoria Street, Unit D                                    First Industrial, LP
         Denver, CO
</Table>

6. ASSETS IN POSSESSION OF THIRD PARTIES. The following are names and addresses
of all persons or entities other than Debtor, such as lessees, consignees,
warehousemen or purchasers of chattel paper, which have possession or are
intended to have possession of any of the Collateral consisting of instruments,
chattel paper, inventory or equipment:

<Table>
<Caption>
         Name              Mailing Address           County                     State
         ----              ---------------           ------                     -----
<S>                        <C>                       <C>                        <C>
         NONE
</Table>

<PAGE>

7. QUALIFICATION TO DO BUSINESS. Debtor is qualified to do business in the
following states: Colorado and Washington.

8. EXISTING SECURITY INTERESTS. Debtor's assets are subject to the following
security interest of Persons other than the Collateral Agent:

         Assets                                      Name of Secured Party

         SEE ATTACHED

9. TAX ASSESSMENTS. The following tax assessments are currently outstanding and
unpaid:

<Table>
<Caption>
         Assessing Authority                         Amount and Description
         -------------------                         ----------------------
<S>                                                  <C>
         State of Colorado                           Monthly use tax of approx. $3,000
         City of Denver                              Monthly use tax of approx. $1,000
</Table>

10. GUARANTIES. Debtor has directly or indirectly guaranteed the following
obligations of third parties:

<Table>
<Caption>
         Creditor                           Amount                     Debtor
         --------                           ------                     ------
<S>                                         <C>                        <C>
         Carolyn Kiser                      $94,113                    Joseph H. Kiser & David G. Sherman
</Table>

11. SUBSIDIARIES. Debtor has the following subsidiaries (list jurisdiction and
date of incorporation, federal employer identification number, type and value of
assets): NONE

12. SECURITIES; INSTRUMENTS. The following is a complete list of all stocks,
bonds, debentures, notes and other securities and investment property owned by
Debtor (provide name of issuer, whether certificated or uncertificated,
certificate no. (if applicable), number of shares): NONE

13. BANK ACCOUNTS; SECURITIES ACCOUNTS: The following is a complete list of all
bank accounts and securities accounts maintained by Debtor (provide name and
address of depository bank (or brokerage firm), type of account and account
number):

<Table>
<Caption>
Name and Address                                             Type of Account                           Account Number
----------------                                             ---------------                           --------------
<S>                                                     <C>                                            <C>
Wells Fargo Bank                                               Collateral                                850579707
1740 Broadway, Denver, CO

Wells Fargo Bank                                                Operating                                1010874603
1740 Broadway, Denver, CO

Wells Fargo Bank                                              Money Market                               1018061084
1740 Broadway, Denver, CO

Wells Fargo Bank                                        Controlled Disbursements                         8012700636
1740 Broadway, Denver, CO
</Table>

<PAGE>

                           EXISTING SECURITY INTERESTS

<Table>
<Caption>
         Creditor                                Collateral
         --------                                ----------
<S>                                              <C>
         Glesby-Marks Corporation                Toyota Truck, VIN 4TAPM62N9WZ165382

         Dell Financial Services                 No. 245813-500 Computer Equipment

         Dell Financial Services                 No. 245813-502 Computer Equipment

         Dell Financial Services                 No. 245813-503 Computer Equipment

         Dell Financial Services                 No. 245813-507 Computer Equipment

         Dell Financial Services                 No. 245813-508 Computer Equipment

         Dell Financial Services                 No. 245813-509 Computer Equipment

         Dell Financial Services                 No. 245813-510 Computer Equipment

         Dell Financial Services                 No. 245813-511 Computer Equipment

         Dell Financial Services                 No. 245813-513 Computer Equipment

         Dell Financial Services                 No. 245813-514 Computer Equipment

         Dell Financial Services                 No. 245813-515 Computer Equipment

         Dell Financial Services                 No. 245813-517 Computer Equipment

         Dell Financial Services                 No. 245813-518 Computer Equipment

         Dell Financial Services                 No. 245813-521 Computer Equipment
</Table><PAGE>
                                                                   EXHIBIT 10.34

                EXCLUSIVITY AND RIGHT OF FIRST REFUSAL AGREEMENT

         This EXCLUSIVITY AND RIGHT OF FIRST REFUSAL AGREEMENT (the "Agreement")
is made and entered into as of October 7, 2002 among Sirenza Microdevices, Inc.,
a Delaware corporation ("Parent"), and Vari-L Company, Inc., a Colorado
corporation (the "Company").

                                    RECITALS

         A. Parent and Company wish to mutually evaluate a potential acquisition
by Parent of all or substantially all of the assets of the Company (the
"Transaction"), on terms to be set forth in a definitive and binding written
agreement between the Company and Parent (the "Definitive Agreement").

         B. In order to assist the Company in meeting certain working capital
requirements and to secure the promises of the Company contained herein, Parent
has agreed to lend the Company up to $5,300,000 upon the terms and subject to
the conditions set forth in that certain Loan Agreement between the parties
dated the date hereof regarding such loan facility (together with the related
security agreement any and all exhibits, attachments and other agreements and
instruments contemplated thereby, the "Loan Agreement").

         C. As an inducement to Parent to make the Loan Agreement and to
evaluate the potential Transaction, the Company wishes to make the covenants and
enter into the agreements set forth below.

         NOW, THEREFORE, in consideration of the substantial amount of resources
Parent has and will expend in evaluating and negotiating the terms of the
Transaction, the Loan Agreement and the covenants, promises and representations
set forth herein, and for other good and valuable consideration, intending to be
legally bound hereby, the parties agree as follows:

                                    ARTICLE I
                                   EXCLUSIVITY

         1.1 No Solicitation.

             (a) No Solicitation or Negotiation. From and after the date of this
Agreement until March 31, 2003, unless earlier terminated pursuant to Section
1.2 hereof (the "Exclusivity Period"), and except as set forth in this Section
1.1, the Company shall not, nor shall it authorize or permit any of its
subsidiaries or any of its or its subsidiaries' respective directors, officers,
investment bankers, attorneys, accountants or other advisors or representatives
retained by them

<PAGE>

(such directors, officers, employees, investment bankers, attorneys,
accountants, other advisors and representatives, collectively,
"Representatives") to directly or indirectly:

             (i) solicit, initiate, or knowingly encourage or induce the making
of any Acquisition Proposal (as defined in Section 1.1(e)), including without
limitation to amend or grant any waiver or release under any standstill or
similar agreement with respect to any equity securities of the Company; or

             (ii) enter into, continue or otherwise participate in any
discussions or negotiations regarding, furnish to any person any information
with respect to, assist or participate in any effort by any person with respect
to, or otherwise cooperate in any way with, any Acquisition Proposal.

         Notwithstanding the foregoing, during the Exclusivity Period, the
Company may, to the extent required by the fiduciary obligations of the board of
directors of the Company (the "Company Board"), as determined in good faith by
the Company Board after consultation with outside counsel, in response to a
Superior Proposal (as defined in Section 1.1(e)) that did not result from a
breach by Company of this Section 1.1, and subject to compliance with Section
1.1(c), (x) furnish information with respect to the Company to the person making
such Superior Proposal and its Representatives pursuant to a customary
confidentiality agreement not less restrictive of the other party than the
Confidentiality Agreement (as defined in Section 1.1(e)), provided that any such
information not previously provided to Parent shall be concurrently provided to
Parent as well, (y) participate in discussions or negotiations with such person
and its Representatives regarding any Superior Proposal, and (z) enter into a
definitive agreement or other documents with respect to such Superior Proposal
with such person after complying with all applicable obligations of the Company
set forth in Article II hereof. Without limiting the foregoing, it is agreed
that any violation of the restrictions set forth in this Section 1.1(a) by any
Representative of the Company or any of its subsidiaries, whether or not such
person is purporting to act on behalf of the Company or otherwise, shall be
deemed to be a breach of this Section 1.1(a) by the Company.

         (b) No Alternative Acquisition Agreement. During the Exclusivity
Period, neither the Company Board nor any committee thereof shall:

             (i) cause or permit the Company to enter into any letter of intent,
memorandum of understanding, agreement in principle, acquisition agreement,
merger agreement or similar agreement constituting or relating to any
Acquisition Proposal (other than a confidentiality agreement referred to in
Section 1.1(a) entered into in the circumstances referred to in Section 1.1(a));
or

             (ii) adopt, approve or recommend, or propose to adopt, approve or
recommend, any Acquisition Proposal.

         Notwithstanding the foregoing, during the Exclusivity Period, the
Company Board may, in response to a Superior Proposal that did not result from a
breach by the Company of this Section 1.1, take any action described in clauses
(i) or (ii) of the first sentence of this Section 1.1(b), but only to the extent
that the Company Board determines in good faith (after consultation with outside
counsel)

                                      -2-
<PAGE>

that its fiduciary obligations require it to do so, and only after (A) the fifth
business day following receipt by Parent of written notice advising it that the
Company Board desires to take such action due to the existence of a Superior
Proposal, specifying the action proposed to be taken by the Company Board, the
material terms and conditions of such Superior Proposal and the identity of the
person making such Superior Proposal, and (B) the Company has satisfied in all
respects any and all of its applicable obligations to Parent pursuant to Article
II hereof. Nothing in this Section 1.1 shall be deemed to affect any obligation
of the Company under this Agreement except as explicitly set forth above.
Notwithstanding the foregoing, the notice contemplated by clause (A) above need
not be given with respect to any Third Party Offer (as defined in Section 2.2)
during any period in which Article II is not applicable by virtue of Section
2.4.

             (c) Notices; Additional Negotiations. The Company shall promptly
advise Parent orally, with written confirmation to follow promptly (and in any
event within one business day), of any Acquisition Proposal or any request for
nonpublic information, or of any inquiry with respect to, or that could
reasonably be expected to lead to, any Acquisition Proposal, the material terms
and conditions of any such Acquisition Proposal or inquiry and the identity of
the person making any such Acquisition Proposal or inquiry. The Company shall
not provide any information to or participate in discussions or negotiations
with the person or entity making any Superior Proposal until two business days
after the Company has first notified Parent of such Acquisition Proposal as
required by the preceding sentence. The Company shall (i) keep Parent fully
informed, on a current basis, of the status and details (including any change to
the terms) of any such Acquisition Proposal or inquiry, (ii) provide to Parent
as soon as practicable after receipt or delivery thereof copies of all
correspondence and other written material (A) sent or provided to the Company
from any third party in connection with any Acquisition Proposal (other than
confidential due diligence materials regarding such third party sent to the
Company by such third party in connection with an Acquisition Proposal) or (B)
sent or provided by the Company to any third party in connection with any
Superior Proposal, and (iii) if Parent shall make a counterproposal, consider
and cause its financial and legal advisors to negotiate on its behalf in good
faith with respect to the terms of such counterproposal. Contemporaneously with
providing any information to a third party in connection with any such Superior
Proposal or inquiry, the Company shall furnish a copy of such information to
Parent to the extent that such copy has not previously been provided to Parent.
In addition to the foregoing, the Company shall provide Parent with at least 24
hours prior notice (or such lesser prior notice as provided to the members of
the Company Board but in no event less than eight hours) of any meeting of the
Company Board at which the Company Board is reasonably expected to consider a
Superior Proposal or to recommend a Superior Proposal to its stockholders and
together with such notice a copy of the definitive documentation relating to
such Superior Proposal to the extent that such copy has not previously been
provided to Parent.

             (d) Cessation of Ongoing Discussions. The Company shall, and shall
cause its subsidiaries and its and their Representatives to, cease immediately
all discussions and negotiations existing as of the date of this Agreement
regarding any proposal that constitutes, or could reasonably be expected to lead
to, an Acquisition Proposal. As of the date of this Agreement, the Company
represents that neither it nor any of its subsidiaries nor their Representatives
is engaged, directly or indirectly, in any discussions or negotiations with any
other party (other than Parent) with respect to an Acquisition Proposal.

                                      -3-
<PAGE>

             (e) Definitions. For purposes of this Agreement:

         "Acquisition Proposal" means (i) any inquiry, proposal or offer for a
merger, consolidation, dissolution, sale of substantial assets, tender offer,
recapitalization, share exchange or other business combination involving the
Company or any of its subsidiaries, (ii) any proposal for the issuance by the
Company or any of its subsidiaries of over 15% of its equity securities or (iii)
any proposal or offer to acquire in any manner, directly or indirectly, over 15%
of the equity securities or assets (on a book or market value basis) of the
Company, in each case other than a proposal or offer by Parent.

         "Confidentiality Agreement" means that certain letter agreement between
the parties hereto and dated the date hereof regarding their mutual
non-disclosure obligations.

         "Superior Proposal" means any unsolicited, bona fide written proposal
made by a third party to acquire more than 50% of the equity securities or
assets of the Company, pursuant to a tender or exchange offer, a merger, a
consolidation or a sale of its assets or otherwise, (i) on terms which the
Company Board determines in its good faith judgment to be materially more
favorable to the stockholders of the Company than the Transaction as then
currently proposed by Parent in a Definitive Agreement or otherwise, taking into
account all the terms and conditions of such third party proposal and the
Transaction as then currently proposed by Parent in a Definitive Agreement or
otherwise (including any proposal by Parent to amend the terms of the
Transaction or the Definitive Agreement in response to the third party proposal)
and (ii) that in the good faith judgment of the Company Board is reasonably
capable of being completed on the terms proposed, taking into account all
financial, regulatory, legal and other aspects of such proposal; provided,
however, that no Acquisition Proposal shall be deemed to be a Superior Proposal
if any financing required to consummate the Acquisition Proposal is not
committed, unless the Company Board determines in its good faith judgment (after
consultation with a nationally recognized financial adviser) that such financing
is more likely than not to be obtained upon reasonable terms and on a timely
basis.

             (f) Anti-Takeover Statutes. The Company hereby represents to Parent
that the entry by the parties into this Agreement, the Loan Agreement and the
other documents and instruments contemplated thereby will not result in the
applicability of any State of Colorado super-majority vote requirement,
interested stockholder statute, anti-takeover statute or similar law or
regulation to the parties or the Transaction.

         1.2 Termination. This Article I shall terminate upon the earlier of the
date that Parent advises the Company in writing that (i) Parent is terminating
all negotiations with the Company regarding a Transaction, (ii) Parent is no
longer interested in pursuing the Transaction with the Company, or (iii) Parent
defaults on its obligations to make loans pursuant to the Loan Agreement.

                                   ARTICLE II

                             RIGHT OF FIRST REFUSAL

         2.1 Grant of Right of First Refusal. The Company hereby grants to
Parent a right of first refusal ("Right of First Refusal") as follows: the
Company shall not execute or enter into any definitive agreement providing for,
or redeem, amend or otherwise make its Rights Plan inapplicable

                                      -4-
<PAGE>

to, an Acquisition Proposal unless a Third Party Sale Notice (as defined below)
shall have first been provided to Parent and all applicable terms of this
Article II shall have first been complied with by the Company. As used herein,
"Rights Plan" shall mean that certain Rights Agreement dated as of March 15,
1996 between the Company and American Securities Transfer, Inc., as amended from
time to time.

         2.2 Notice of Offer. The "Third Party Sale Notice" required to be
delivered to Parent under Section 2.1 hereof shall include the following
elements: (a) a bona fide, written offer to the Company from a third party that
sets forth in reasonable detail the material terms of the contemplated
Acquisition Proposal, including, without limitation, the structure of the
proposed transaction, the form and amount of consideration to be received by the
Company and/or its shareholders, the material conditions to closing and pre and
post closing covenants, any indemnity, escrow and termination fee terms, the
material terms of any related agreements to be entered into in connection
therewith and the name and address of the offeror (collectively, a "Third Party
Offer"), (b) if such approval would be required to consummate the transaction
contemplated by the Acquisition Proposal under the terms of the Company's
charter documents or applicable law, written confirmation by an authorized
representative of the Company that the Third Party Offer has been approved by
resolution of the Company Board, (c) written confirmation by an authorized
representative of the Company that Parent has the right to exercise its Right of
First Refusal with regard to the Third Party Offer, and (d) copies of any
correspondence and other materials available to the Company relating to such
Third Party Offer (to the extent not previously provided).

         2.3 Exercise of Right of First Refusal. Upon delivery of a Third Party
Sale Notice and within ten (10) business days of delivery thereof, Parent may
elect to exercise its Right of First Refusal by providing the Company with an
offer on terms and conditions which are in all material respects not less
favorable from a financial point of view to the stockholders of the Company than
those proposed by the Third Party Offer (the "Parent Offer"). The determination
of whether the terms and conditions of a Parent Offer are in all material
respects not less favorable from a financial point of view to the stockholders
of the Company than those proposed by the Third Party Offer shall be made in
good faith by the Company Board. Parent shall exercise its Right of First
Refusal, if at all, by delivery of written notice to the Company on or before
that date which is ten (10) business days following delivery of a Third Party
Sale Notice (the "Expiration Date"). Failure to deliver such written notice by
the Expiration Date shall be deemed conclusive evidence of Parent's intent not
to exercise such Right of First Refusal with respect to the Acquisition Proposal
specified in the Third Party Sale Notice. In the event that Parent exercises its
Right of First Refusal in accordance with this Article II, the Company shall use
its commercially reasonable efforts in good faith to negotiate and execute a
Definitive Agreement that reflects the Parent Offer, and the Company and its
Representatives shall, consistent with the fiduciary duties of the Company
Board, immediately terminate all current discussions with the third party
regarding the Third Party Offer.

         2.4 Non-Exercise of a Right of First Refusal. In the event Parent does
not affirmatively exercise its Right of First Refusal by the Expiration Date,
the Company shall have the right, but not the obligation, to effect the
transaction contemplated by the Acquisition Proposal proposed in the Third Party
Offer on terms and conditions that are the same in all material respects to the
terms and conditions described in the Third Party Sale Notice and the Third
Party Offer. In the event such Acquisition Proposal is not (a) set forth in a
definitive and binding written agreement executed by all

                                      -5-
<PAGE>

necessary parties thereto within thirty (30) days following the Expiration Date,
and (b) consummated within one hundred fifty (180) days following the Expiration
Date, then the provisions of this Article II shall once again apply to such
transaction and the Company shall be required to deliver a new Third Party Sale
Notice with respect thereto and to otherwise comply with the terms hereof with
respect thereto. If any new or modified Acquisition Proposal arises during the
pendency of such a Third Party Offer, such Acquisition Proposal shall be subject
to Article I (to the extent stated therein), Parent's Right of First Refusal and
this Article II as well.

         2.5 Termination. Parent's Right of First Refusal shall expire at the
earlier of: (i) the date that Parent advises the Company in writing that Parent
is terminating all negotiations with the Company regarding a Transaction, (ii)
the date that Parent advises the Company in writing that Parent is no longer
interested in pursuing the Transaction with the Company, (iii) such time as the
Loan Agreement has terminated and no loans remain outstanding thereunder, or
(iv) such time as Parent defaults on its obligations to make loans pursuant to
the Loan Agreement.

                                   ARTICLE III

                                  MISCELLANEOUS

         3.1 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally or by commercial
delivery service, or mailed by registered or certified mail (return receipt
requested) or sent via facsimile (with acknowledgment of complete transmission)
to the parties at the following addresses (or at such other address for a party
as shall be specified by like notice):

             (a) if to Parent, to:

             Sirenza Microdevices, Inc.
             522 Almanor Avenue
             Sunnyvale, CA 94085
             Attention: Chief Financial Officer
             Telephone No.:  (408) 616-5441
             Facsimile No.:  (408) 739-0952

                      with a copy to:

             Wilson Sonsini Goodrich & Rosati, P.C.
             650 Page Mill Road
             Palo Alto, California 94304
             Attention: Steven V. Bernard
             Telephone No.:  (650) 493-9300
             Facsimile No.:  (650) 493-6811

             (b) if to the Company, to:

                                      -6-
<PAGE>

             Vari-L Company, Inc.
             4895 Peoria Street
             Denver, CO 80239
             Attention: Chief Financial Officer
             Telephone No.:  (303) 371-1560
             Facsimile No.:  (303) 373-3870

                      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.:  (650) 566-4099

         3.2 Interpretation. The word "agreement" when used herein shall be
deemed in each case to mean any contract, commitment or other agreement, whether
oral or written, that is legally binding. The headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.

         3.3 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party, it being understood that all
parties need not sign the same counterpart.

         3.4 Entire Agreement; Assignment. This Agreement and the documents and
instruments and other agreements among the parties hereto referenced herein: (a)
constitute the entire agreement among the parties with respect to the subject
matter hereof and supersede all prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereof;
(b) are not intended to confer upon any other person any rights or remedies
hereunder; and (c) shall not be assigned by operation of law or otherwise except
as otherwise specifically provided, except that Parent may assign its rights and
delegate its obligations hereunder to its affiliates.

         3.5 Severability. In the event that any provision of this Agreement or
the application thereof, becomes or is declared by a court of competent
jurisdiction to be illegal, void or unenforceable, the remainder of this
Agreement will continue in full force and effect and the application of such
provision to other persons or circumstances will be interpreted so as reasonably
to effect the intent of the parties hereto. The parties further agree to replace
such void or unenforceable provision of this Agreement with a valid and
enforceable provision that will achieve, to the greatest extent possible, the
economic, business and other purposes of such void or unenforceable provision.

         3.6 Other Remedies. Except as otherwise provided herein, any and all
remedies herein expressly conferred upon a party will be deemed cumulative with
and not exclusive of any other

                                      -7-
<PAGE>

remedy conferred hereby, or by law or equity upon such party, and the exercise
by a party of any one remedy will not preclude the exercise of any other remedy.

         3.7 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, regardless of the laws that
might otherwise govern under applicable principles of conflicts of laws thereof.
Each of the parties hereto agrees that process may be served upon them in any
manner authorized by the laws of the State of Delaware for such persons and
waives and covenants not to assert or plead any objection which they might
otherwise have to such jurisdiction and such process.

         3.8 Rules of Construction. The parties hereto agree that they have been
represented by counsel during the negotiation and execution of this Agreement
and, therefore, waive the application of any law, regulation, holding or rule of
construction providing that ambiguities in an agreement or other document will
be construed against the party drafting such agreement or document.

         3.9 Specific Performance. The parties hereto agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereof in any court of the United States
or any state having jurisdiction, this being in addition to any other remedy to
which they are entitled at law or in equity.

         3.10 Termination. This Agreement may be terminated at any time by
mutual written consent of the Company and Parent, and otherwise shall terminate
at such time as all agreements contained in Articles I and II hereof have
terminated by their terms.

         3.11 Amendment and Waiver. This Agreement may be amended (and
compliance with any provision hereof may be waived) by the parties hereto at any
time by execution of an instrument in writing signed on behalf of each of the
parties hereto.

         3.12 No Obligation. The Company and Parent acknowledge and agree that
except as otherwise expressly provided herein, neither this Agreement nor any
action taken in connection with this Agreement will give rise to any obligation
on the part of either party (a) to continue discussions or negotiations with the
other with respect to the Transaction, or (b) to pursue or enter into the
Transaction or any other relationship of any nature with the other party.

                  [Remainder of page intentionally left blank]

                                      -8-
<PAGE>
         IN WITNESS WHEREOF, Parent and the Company have caused this Agreement
to be signed by their duly authorized respective officers, all as of the date
first written above.

         Sirenza Microdevices

         By: GERALD L. QUINNELL
            -----------------------

         Name: Gerald L. Quinnell

         Title: EVP Business Development

         Vari-L Company, Inc.

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

         Name: Charles R. Bland

         Title: CEO

                                      -9-

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