Document:

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                                                                   EXHIBIT 10.16

                SECOND AMENDMENT TO CREDIT AND SECURITY AGREEMENT

         This Amendment, dated as of February 8, 2002, 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 "Original Credit Agreement"), as
amended by the First Amendment to Credit and Security Agreement dated as of
September 17, 2001 (as so amended, 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:

                  "Availability" means the difference of (i) the Borrowing Base
         and (ii) the sum of (A) the outstanding principal balance of the
         Revolving Note and (B) the L/C Amount.

                  "Borrowing Base" means, at any time the lesser of:

                  (a) the Maximum Line; or

                  (b) subject to change from time to time in the Lender's sole
         discretion, upon three (3) business days notice to the Borrower, the
         sum of:

                           (i) 80% of Eligible Accounts, plus

                           (ii) the lesser of (A) 0.00% (zero percent) of
         Eligible Inventory or (B) $0.00 (zero dollars).

                  "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

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         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; (vii) all sums on
         deposit in the Special Account; and (viii) proceeds of any and all of
         the foregoing.

                  "Commitment" means the Lender's commitment to make Advances
         to, and to cause the Issuer to issue Letters of Credit for the account
         of, the Borrower pursuant to Article II.

                  "Issuer" means the issuer of any Letter of Credit.

                  "L/C Amount" means the sum of (i) the aggregate face amount of
         any issued and outstanding Letters of Credit and (ii) the unpaid amount
         of the Obligation of Reimbursement.

                  "L/C Application" means an application and agreement for
         letters of credit in a form acceptable to the Issuer and the Lender.

                  "Letter of Credit" has the meaning specified in Section 2.17.

                  "Loan Documents" means this Agreement, the Notes, the Security
         Documents and any L/C Application.

                  "Maximum Line" means $4,000,000, unless said amount is reduced
         pursuant to Section 2.10, in which event it means the amount to which
         said amount is reduced.

                  "Obligation of Reimbursement" has the meaning specified in
         Section 2.19(a).

                  "Obligations" means each Note, the Obligation of Reimbursement
         and each and every other debt, liability and obligation of every type
         and description which the Borrower may now or at any time hereafter owe
         to the Lender, whether such debt, liability or obligation now exists or
         is hereafter created or incurred, whether it arises in a transaction
         involving the Lender alone or in a transaction involving other
         creditors of the Borrower, and whether it is direct or indirect, due or
         to become due, absolute or contingent, primary or secondary, liquidated
         or unliquidated, or sole, joint, several or joint and several, and
         including all indebtedness of the Borrower arising under any Loan
         Document or guaranty between the Borrower and the Lender, whether now
         in effect or hereafter entered into.

                                      -2-

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                  "Revolving Floating Rate" means (i) from the Funding Date to
         and including January 31, 2002, an annual rate equal to the sum of the
         Prime Rate plus one half of one percent (0.50%) and (ii) from February
         1, 2002 to the Termination Date, an annual rate equal to the sum of the
         Prime Rate plus one percent (1.00%); which annual rate shall change
         when and as the Prime Rate changes.

                  "Special Account" means a specified cash collateral account
         maintained by Wells Fargo Bank West N.A. in connection with Letters of
         Credit, as contemplated by Section 2.18.

                  "Term Floating Rate" means (i) from the Funding Date to and
         including January 31, 2002, an annual rate equal to the sum of the
         Prime Rate plus one percent (1.00%) and (ii) from February 1, 2002 to
         the Termination Date, an annual rate equal to the sum of the Prime Rate
         plus two and one half percent (2.50%); which annual rate shall change
         when and as the Prime Rate changes.

         2. Section 2.3 of the Credit Agreement is hereby amended and restated
in its entirety to read as follows:

                  "Section 2.3 Payment of Term Note. The outstanding principal
         balance of the Term Note shall be due and payable as follows:

                  (a) (i) Beginning on the first day of the month following each
         Term Advance, and on the first day of each month thereafter, to and
         including February 2002, in substantially equal monthly installments
         equal to an amount sufficient to fully amortize the principal balance
         of the Term Note over an assumed term ending on the seventh anniversary
         of the date of each Term Advance and (ii) Beginning on the first day of
         March 2002 and on the first day of each month thereafter, in equal
         monthly installments of $43,434; and

                  (b) On the Termination Date, the entire unpaid principal
         balance of the Term Note, and all unpaid interest accrued thereon,
         shall in any event be due and payable."

         3. Section 2.4 of the Credit Agreement is hereby amended by changing
the dollar amount in romanette (i) of the first paragraph from $1,500,000 to
$0.00 (zero dollars).

         4. Section 2.7 of the Credit Agreement is hereby amended by amending
and restating Section 2.7(b) in its entirety and by adding new Sections 2.7(e)
and (f) to read as follows:

                  "(b) Unused Line Fee. For the purposes of this Section 2.7(b),
         "Unused Amount" means the Maximum Line reduced by outstanding Revolving
         Advances and the outstanding L/C Amount. The Borrower agrees to pay to
         the Lender an unused line fee at the rate of one quarter of one percent
         (0.25%) per annum on the average daily Unused Amount from the date of
         this Agreement to and including

                                      -3-

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         the Termination Date, due and payable monthly in arrears on the first
         day of the month and on the Termination Date.

                  (e) Letter of Credit Fees. The Borrower agrees to pay to the
         Lender on the date of the issuance of each Letter of Credit issued
         hereunder a fully earned and non-refundable Letter of Credit fee equal
         to two and one half percent (2.50%) of the face amount of each Letter
         of Credit issued hereunder, plus any processing and administrative
         fees.

                  (f) Letter of Credit Administrative Fees. The Borrower agrees
         to pay the Lender, on written demand, the administrative fees charged
         by the Issuer in connection with the honoring of drafts under any
         Letter of Credit, amendments thereto, transfers thereof and all other
         activity with respect to the Letters of Credit at the then-current
         rates published by the Issuer for such services rendered on behalf of
         customers of the Issuer generally."

         5. Section 2.9 of the Credit Agreement is hereby amended and restated
in its entirety to read as follows:

                  "Section 2.9 Increased Costs; Capital Adequacy. If the Lender
         determines at any time that its Return has been reduced as a result of
         any Rule Change, the Lender may so notify the Borrower and require the
         Borrower, beginning fifteen (15) days after such notice, to pay it the
         amount necessary to restore its Return to what it would have been had
         there been no Rule Change. For purposes of this Section 2.9:

                  (a) "Capital Adequacy Rule" means any law, rule, regulation,
         guideline, directive, requirement or request regarding capital
         adequacy, or the interpretation or administration thereof by any
         governmental or regulatory authority, central bank or comparable
         agency, whether or not having the force of law, that applies to any
         Related Lender, including rules requiring financial institutions to
         maintain total capital in amounts based upon percentages of outstanding
         loans, binding loan commitments and letters of credit.

                  (b) "L/C Rule" means any law, rule, regulation, guideline,
         directive, requirement or request regarding letters of credit, or the
         interpretation or administration thereof by any governmental or
         regulatory authority, central bank or comparable agency, whether or not
         having the force of law, that applies to any Related Lender, including
         those that impose taxes, duties or other similar charges, or mandate
         reserves, special deposits or similar requirements against assets of,
         deposits with or for the account of, or credit extended by any Related
         Lender, on letters of credit.

                  (c) "Related Lender" includes (but is not limited to) the
         Lender, any parent of the Lender, any assignee of any interest of the
         Lender hereunder and any participant in the Credit Facility.

                                      -4-

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                  (d) "Return", for any period, means the percentage determined
         by dividing (i) the sum of interest and ongoing fees earned by the
         Lender under this Agreement during such period, by (ii) the average
         capital the Lender is required to maintain during such period as a
         result of its being a party to this Agreement, as determined by the
         Lender based upon its total capital requirements and a reasonable
         attribution formula that takes account of the Capital Adequacy Rules
         and L/C Rules then in effect, costs of issuing or maintaining any
         Advance or Letter of Credit and amounts received or receivable under
         this Agreement or the Note with respect to any Advance or Letter of
         Credit. Return may be calculated for each calendar quarter and for the
         shorter period between the end of a calendar quarter and the date of
         termination in whole of this Agreement.

                  (e) "Rule Change" means any change in any Capital Adequacy
         Rule or L/C Rule occurring after the date of this Agreement, or any
         change in the interpretation or administration thereof by any
         governmental or regulatory authority, but the term does not include any
         changes that at the Funding Date are scheduled to take place under the
         existing Capital Adequacy Rules or L/C Rules or any increases in the
         capital that the Lender is required to maintain to the extent that the
         increases are required due to a regulatory authority's assessment of
         that Lender's financial condition.

                  The initial notice sent by the Lender shall be sent as
         promptly as practicable after the Lender learns that its Return has
         been reduced, shall include a demand for payment of the amount
         necessary to restore the Lender's Return for the quarter in which the
         notice is sent, and shall state in reasonable detail the cause for the
         reduction in its Return and its calculation of the amount of such
         reduction. Thereafter, the Lender may send a new notice during each
         calendar quarter setting forth the calculation of the reduced Return
         for that quarter and including a demand for payment of the amount
         necessary to restore its Return for that quarter. The Lender's
         calculation in any such notice shall be conclusive and binding absent
         demonstrable error."

         6. Section 2.12 of the Credit Agreement is hereby amended and restated
in its entirety to read as follows:

                  "Section 2.12 Mandatory Prepayment. Without notice or demand,
         if the outstanding principal balance of the Revolving Advances plus the
         L/C Amount shall at any time exceed the Borrowing Base, the Borrower
         shall (i) first, immediately prepay the Revolving Advances to the
         extent necessary to eliminate such excess; and (ii) if prepayment in
         full of the Revolving Advances is insufficient to eliminate such
         excess, pay to the Lender in immediately available funds for deposit in
         the Special Account an amount equal to the remaining excess. Any
         payment received by the Lender under this Section 2.12 or under Section
         2.10 may be applied to the Obligations, in such order and in such
         amounts as the Lender, in its discretion, may from time to time
         determine; provided that any prepayment

                                      -5-

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         under Section 2.10 which the Borrower designates as a partial
         prepayment of the Term Note or the CapEx Note, as the case may be,
         shall be applied to principal installments of the Term Note or the
         CapEx Note, as the case may be, in inverse order of maturity."

         7. The Credit Agreement is hereby amended by adding a new Section 2.17
to read as follows:

         "Section 2.17 Letters of Credit.

                  (a) The Lender agrees, on the terms and subject to the
         conditions herein set forth, to cause an Issuer to issue, from the
         Funding Date to the Termination Date, one or more irrevocable standby
         or documentary letters of credit (each, a "Letter of Credit") for the
         Borrower's account by guaranteeing payment of the Borrower's
         obligations or being a co-applicant. The Lender shall have no
         obligation to cause an Issuer to issue any Letter of Credit if the face
         amount of the Letter of Credit to be issued would exceed the lesser of:

                           (i) $250,000 less the L/C Amount, or

                           (ii) Availability.

                  Each Letter of Credit, if any, shall be issued pursuant to a
         separate L/C Application entered into between the Borrower and the
         Lender for the benefit of the Issuer, completed in a manner
         satisfactory to the Lender and the Issuer. The terms and conditions set
         forth in each such L/C Application shall supplement the terms and
         conditions hereof, but if the terms of any such L/C Application and the
         terms of this Agreement are inconsistent, the terms hereof shall
         control.

                  (b) No Letter of Credit shall be issued with an expiry date
         later than the Termination Date in effect as of the date of issuance.

                  (c) Any request to cause an Issuer to issue a Letter of Credit
         shall be deemed to be a representation by the Borrower that the
         conditions set forth in Section 4.2 have been satisfied as of the date
         of the request."

         8. The Credit Agreement is hereby amended by adding a new Section 2.18
to read as follows:

                  "Section 2.18 Special Account. If the Credit Facility is
         terminated for any reason while any Letter of Credit is outstanding,
         the Borrower shall thereupon pay the Lender in immediately available
         funds for deposit in the Special Account an amount equal to the L/C
         Amount. The Special Account shall be an interest bearing account
         maintained for the Lender by Wells Fargo Bank West N.A. Any interest
         earned on amounts deposited in the Special Account shall be credited to
         the Special Account. The Lender may apply amounts on deposit in the
         Special

                                      -6-

<PAGE>

         Account at any time or from time to time to the Obligations in the
         Lender's sole discretion. The Borrower may not withdraw any amounts on
         deposit in the Special Account as long as the Lender maintains a
         security interest therein. The Lender agrees to transfer any balance in
         the Special Account to the Borrower when the Lender is required to
         release its security interest in the Special Account under applicable
         law."

         9. The Credit Agreement is hereby amended by adding a new Section 2.19
to read as follows:

                  "Section 2.19 Payment of Amounts Drawn Under Letters of
         Credit; Obligation of Reimbursement. The Borrower acknowledges that the
         Lender, as co-applicant, will be liable to the Issuer for reimbursement
         of any and all draws under Letters of Credit and for all other amounts
         required to be paid under the applicable L/C Application. Accordingly,
         the Borrower shall pay to the Lender any and all amounts required to be
         paid under the applicable L/C Application, when and as required to be
         paid thereby, and the amounts designated below, when and as designated:

                  (a) The Borrower shall pay to the Lender on the day a draft is
         honored under any Letter of Credit a sum equal to all amounts drawn
         under such Letter of Credit plus any and all reasonable charges and
         expenses that the Issuer or the Lender may pay or incur relative to
         such draw and the applicable L/C Application, plus interest on all such
         amounts, charges and expenses as set forth below (the Borrower's
         obligation to pay all such amounts is herein referred to as the
         "Obligation of Reimbursement").

                  (b) Whenever a draft is submitted under a Letter of Credit,
         the Borrower authorizes the Lender to make a Revolving Advance in the
         amount of the Obligation of Reimbursement and to apply the proceeds of
         such Revolving Advance thereto. Such Revolving Advance shall be
         repayable in accordance with and be treated in all other respects as a
         Revolving Advance hereunder.

                  (c) If a draft is submitted under a Letter of Credit when the
         Borrower is unable, because a Default Period exists or for any other
         reason, to obtain a Revolving Advance to pay the Obligation of
         Reimbursement, the Borrower shall pay to the Lender on demand and in
         immediately available funds, the amount of the Obligation of
         Reimbursement together with interest, accrued from the date of the
         draft until payment in full at the Default Rate. Notwithstanding the
         Borrower's inability to obtain a Revolving Advance for any reason, the
         Lender is irrevocably authorized, in its sole discretion, to make a
         Revolving Advance in an amount sufficient to discharge the Obligation
         of Reimbursement and all accrued but unpaid interest thereon.

                                      -7-

<PAGE>

                  (d) The Borrower's obligation to pay any Revolving Advance
         made under this Section 2.19, shall be evidenced by the Revolving Note
         and shall bear interest as provided in Section 2.6."

         10. The Credit Agreement is hereby amended by adding a new Section 2.20
to read as follows:

                  "Section 2.20 Obligations Absolute. The Borrower's obligations
         arising under Section 2.19 shall be absolute, unconditional and
         irrevocable, and shall be paid strictly in accordance with the terms of
         Section 2.19, under all circumstances whatsoever, including (without
         limitation) the following circumstances:

                  (a) any lack of validity or enforceability of any Letter of
         Credit or any other agreement or instrument relating to any Letter of
         Credit (collectively the "Related Documents");

                  (b) any amendment or waiver of or any consent to departure
         from all or any of the Related Documents;

                  (c) the existence of any claim, setoff, defense or other right
         which the Borrower may have at any time, against any beneficiary or any
         transferee of any Letter of Credit (or any persons or entities for whom
         any such beneficiary or any such transferee may be acting), or other
         person or entity, whether in connection with this Agreement, the
         transactions contemplated herein or in the Related Documents or any
         unrelated transactions;

                  (d) any statement or any other document presented under any
         Letter of Credit proving to be forged, fraudulent, invalid or
         insufficient in any respect or any statement therein being untrue or
         inaccurate in any respect whatsoever;

                  (e) payment by or on behalf of the Issuer under any Letter of
         Credit against presentation of a draft or certificate which does not
         strictly comply with the terms of such Letter of Credit; or

                  (f) any other circumstance or happening whatsoever, whether or
         not similar to any of the foregoing."

         11. Section 4.1 of the Credit Agreement is hereby amended by amending
and restating the introductory paragraph in Section 4.1 and by amending and
restating Section 4.1(r) to read as follows:

                  "Section 4.1 Conditions Precedent to the Initial Revolving,
         Term and CapEx Advances and Letter of Credit. The Lender's obligation
         to make the initial Revolving, Term and CapEx Advances or to cause any
         Letters of Credit to be issued hereunder shall be subject to the
         condition precedent that the Lender shall have received all of the
         following, each in form and substance satisfactory to the Lender:

                                      -8-

<PAGE>

                  (r) Payment of the fees and commissions due through the date
         of the initial Advance or Letter of Credit under Section 2.7 and
         expenses incurred by the Lender through such date and required to be
         paid by the Borrower under Section 9.6, including all legal expenses
         incurred through the date of this Agreement."

         12. Section 4.2 of the Credit Agreement is hereby amended and restated
in its entirety to read as follows:

                  "Section 4.2 Conditions Precedent to All Advances and Letters
         of Credit. The Lender's obligation to make each Advance and to cause
         each Letter of Credit to be issued shall be subject to the further
         conditions precedent that on such date:

                  (a) the representations and warranties contained in Article V
         are correct on and as of the date of such Advance or issuance of a
         Letter of Credit as though made on and as of such date, except to the
         extent that such representations and warranties relate solely to an
         earlier date; and

                  (b) no event has occurred and is continuing, or would result
         from such Advance or issuance of a Letter of Credit which constitutes a
         Default or an Event of Default."

         13. 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 January 31, 2002                                      $ 11,400,000
The month ending February 28, 2002                                     $ 11,400,000
The month ending March 31, 2002                                        $ 11,025,000
The month ending April 30, 2002                                        $ 10,900,000
The month ending May 31, 2002                                          $ 10,650,000
The month ending June 30, 2002 and thereafter                          $ 11,025,000"
</Table>

         14. 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 (excluding any impact of the settlement of
         the private shareholder class actions settled by

                                      -9-

<PAGE>

         payment by the Borrower of shares of the Borrower), the amount set
         forth opposite such period (number appearing between "()" are
         negative):

<Table>
<Caption>
                                    PERIOD                             MINIMUM NET INCOME
<S>                                                                    <C>
                  The nine months ending March 31, 2002                  ($2,900,000)
                  The twelve months ending June 30, 2002                 ($2,900,000)"
</Table>

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

                  "Section 6.14 "Intentionally Omitted.""

         16. Section 6.15 of the Credit Agreement is hereby amended and restated
in its entirety 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 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."

         17. 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) $1,000,000 during the period from July 1, 2001 through February 28,
         2002; and (ii) $2,000,000 during the period from July 1, 2001 through
         June 30, 2002."

         18. Section 8.2 of the Credit Agreement is hereby amended by adding a
new Section 8.2(g) to read as follows:

                  "(g) the Lender may make demand upon the Borrower and,
         forthwith upon such demand, the Borrower will pay to the Lender in
         immediately available funds for deposit in the Special Account pursuant
         to Section 2.18 an amount equal to the aggregate maximum amount
         available to be drawn under all Letters of Credit then outstanding,
         assuming compliance with all conditions for drawing thereunder."

         19. Section 9.6 of the Credit Agreement is hereby amended and restated
in its entirety to read as follows:

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<PAGE>

                  "Section 9.6 Costs and Expenses. The Borrower agrees to pay on
         demand all costs and expenses, including (without limitation)
         attorneys' fees, incurred by the Lender in connection with the
         Obligations, this Agreement, the Loan Documents, any Letter of Credit
         and any other document or agreement related hereto or thereto, and the
         transactions contemplated hereby, including without limitation all such
         costs, expenses and fees incurred in connection with the negotiation,
         preparation, execution, amendment, administration, performance,
         collection and enforcement of the Obligations and all such documents
         and agreements and the creation, perfection, protection, satisfaction,
         foreclosure or enforcement of the Security Interest."

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

         21. 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.

         22. Amendment Fee. The Borrower shall pay the Lender as of the date
hereof a fully earned, non-refundable fee in the amount of $50,000 in
consideration of the Lender's execution and delivery of this Amendment, and in
full satisfaction of any fees which may have otherwise been due and owing to the
date hereof.

         23. 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 22 and (ii) such other matters as the
Lender may require, each in substance and form acceptable to the Lender in its
sole discretion.

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

                  (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.

                                      -11-

<PAGE>

                  (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.

         25. 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.

         26. 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.

         27. 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.

         28. 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 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 22 hereof.

         29. 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.

                                      -12-

<PAGE>

         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

                                      -13-

<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, as amended by (i) the First Amendment to Credit and Security Agreement
dated as of September 17, 2001 and (ii) the Second Amendment to Credit and
Security Agreement dated as of February 8, 2002 (as so amended, 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>
                                                                       MINIMUM BOOK
           PERIOD                                                        NET WORTH
<S>                                                                    <C>
The month ending January 31, 2002                                      $ 11,400,000
The month ending February 28, 2002                                     $ 11,400,000
The month ending March 31, 2002                                        $ 11,025,000
The month ending April 30, 2002                                        $ 10,900,000
The month ending May 31, 2002                                          $ 10,650,000
The month ending June 30, 2002 and thereafter                          $ 11,025,000
</Table>

2.       Minimum Net Income. Pursuant to Section 6.13 of the Credit Agreement,
         the Borrower's Net Income (excluding any impact of the settlement of
         the private shareholder class actions settled by payment by the
         Borrower of shares of the Borrower) 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 nine months ending March 31, 2002                  ($2,900,000)
            The twelve months ending June 30, 2002                 ($2,900,000)
</Table>

3.       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.

4.       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<PAGE>
                                                                   EXHIBIT 10.17

                              VARI-L COMPANY, INC.
                            (A COLORADO CORPORATION)

                            INDEMNIFICATION AGREEMENT

This Indemnification Agreement ("AGREEMENT") is entered into as of
___________________ by and between VARI-L COMPANY, INC., a Colorado corporation
(the "COMPANY") and _________________________ ("INDEMNITEE").

                                    RECITALS

         A. The Company and Indemnitee recognize the significant increases in
the cost of liability insurance for the Company's directors, officers,
employees, agents and fiduciaries.

         B. The Company and Indemnitee further recognize the substantial
increase in corporate litigation in general, subjecting directors, officers,
employees, agents and fiduciaries to expensive litigation risks at the same time
as the availability and coverage of liability insurance has been severely
limited.

         C. Indemnitee does not regard the current protection available as
adequate under the present circumstances, and Indemnitee and other directors,
officers, employees, agents and fiduciaries of the Company may not be willing to
continue to serve in such capacities without additional protection.

         D. The Company desires to attract and retain the services of highly
qualified individuals, such as Indemnitee, to serve the Company and, in part, in
order to induce Indemnitee to continue to provide services to the Company,
wishes to provide for the indemnification and advancing of expenses to
Indemnitee to the maximum extent permitted by law.

         E. In view of the considerations set forth above, the Company desires
that Indemnitee be indemnified by the Company as set forth herein.

         NOW, THEREFORE, the Company and Indemnitee hereby agree as follows:

         1. INDEMNIFICATION.

                  (a) Indemnification of Expenses. The Company shall indemnify
Indemnitee to the fullest extent permitted by law if Indemnitee was or is or
becomes a party to or witness or other participant in, or is threatened to be
made a party to or witness or other participant in, any threatened, pending or
completed action, suit, proceeding or alternative dispute resolution mechanism,
or any hearing, inquiry or investigation that Indemnitee in good faith believes
might lead to the institution of any such action, suit, proceeding or
alternative dispute resolution mechanism, whether civil, criminal,
administrative, investigative or other (hereinafter a "CLAIM") by reason of (or
arising in part out of) any event or occurrence related to the fact that
Indemnitee is or was a director, officer, employee, agent or fiduciary of the
Company, or any

<PAGE>

subsidiary of the Company, or is or was serving at the request of the Company as
a director, officer, employee, agent or fiduciary of another corporation,
partnership, joint venture, trust or other enterprise, or by reason of any
action or inaction on the part of Indemnitee while serving in such capacity
(hereinafter an "INDEMNIFIABLE EVENT") against any and all expenses (including
attorneys' fees and all other costs, expenses and obligations incurred in
connection with investigating, defending, being a witness in or participating in
(including on appeal), or preparing to defend, be a witness in or participate
in, any such action, suit, proceeding, alternative dispute resolution mechanism,
hearing, inquiry or investigation), judgments, fines, penalties and amounts paid
in settlement (if such settlement is approved in advance by the Company, which
approval shall not be unreasonably withheld) of such Claim and any federal,
state, local or foreign taxes imposed on Indemnitee as a result of the actual or
deemed receipt of any payments under this Agreement (collectively, hereinafter
"EXPENSES"), including all interest, assessments and other charges paid or
payable in connection with or in respect of such Expenses. Such payment of
Expenses shall be made by the Company as soon as practicable but in any event no
later than five days after written demand by Indemnitee therefor is presented to
the Company.

                  (b) Reviewing Party. Notwithstanding the foregoing, (i) the
obligations of the Company under Section 1(a) shall be subject to the condition
that the Reviewing Party (as described in Section 10(e) hereof) shall not have
determined (in a written opinion, in any case in which the Independent Legal
Counsel referred to in Section 1(c) hereof is involved) that Indemnitee would
not be permitted to be indemnified under applicable law, and (ii) the obligation
of the Company to make an advance payment of Expenses to Indemnitee pursuant to
Section 2(a) (an "EXPENSE ADVANCE") shall be subject to the condition that, if,
when and to the extent that the Reviewing Party determines that Indemnitee would
not be permitted to be so indemnified under applicable law, the Company shall be
entitled to be reimbursed by Indemnitee (who hereby agrees to reimburse the
Company) for all such amounts theretofore paid; provided, however, that if
Indemnitee has commenced or thereafter commences legal proceedings in a court of
competent jurisdiction to secure a determination that Indemnitee should be
indemnified under applicable law, any determination made by the Reviewing Party
that Indemnitee would not be permitted to be indemnified under applicable law
shall not be binding and Indemnitee shall not be required to reimburse the
Company for any Expense Advance until a final judicial determination is made
with respect thereto (as to which all rights of appeal therefrom have been
exhausted or lapsed). Indemnitee's obligation to reimburse the Company for any
Expense Advance shall be unsecured and no interest shall be charged thereon. If
there has not been a Change in Control (as defined in Section 10(c) hereof), the
Reviewing Party shall be selected by the Board of Directors, and if there has
been such a Change in Control (other than a Change in Control which has been
approved by a majority of the Company's Board of Directors who were directors
immediately prior to such Change in Control), the Reviewing Party shall be the
Independent Legal Counsel referred to in Section 1(c) hereof. If there has been
no determination by the Reviewing Party or if the Reviewing Party determines
that Indemnitee substantively would not be permitted to be indemnified in whole
or in part under applicable law, Indemnitee shall have the right to commence
litigation seeking an initial determination by the court or challenging any such
determination by the Reviewing Party or any aspect thereof, including the legal
or factual bases therefor, and the Company hereby consents to service of process
and to

<PAGE>

appear in any such proceeding. Any determination by the Reviewing Party
otherwise shall be conclusive and binding on the Company and Indemnitee.

                  (c) Change in Control. The Company agrees that if there is a
Change in Control of the Company (other than a Change in Control which has been
approved by a majority of the Company's Board of Directors who were directors
immediately prior to such Change in Control) then, with respect to all matters
thereafter arising concerning the rights of Indemnitees to payments of Expenses
and Expense Advances under this Agreement or any other agreement or under the
Company's Articles of Incorporation or Bylaws as now or hereafter in effect,
Independent Legal Counsel (as defined in Section 10(d) hereof) shall be selected
by Indemnitee and approved by the Company (which approval shall not be
unreasonably withheld). Such counsel, among other things, shall render its
written opinion to the Company and Indemnitee as to whether and to what extent
Indemnitee would be permitted to be indemnified under applicable law and the
Company agrees to abide by such opinion. The Company agrees to pay the
reasonable fees of the Independent Legal Counsel referred to above and to fully
indemnify such counsel against any and all expenses (including attorneys' fees),
claims, liabilities and damages arising out of or relating to this Agreement or
its engagement pursuant hereto.

                  (d) Mandatory Payment of Expenses. Notwithstanding any other
provision of this Agreement other than Section 9 hereof, to the extent that
Indemnitee has been successful on the merits or otherwise, including, without
limitation, the dismissal of an action without prejudice, in defense of any
action, suit, proceeding, inquiry or investigation referred to in Section (1)(a)
hereof or in the defense of any claim, issue or matter therein, Indemnitee shall
be indemnified against all Expenses incurred by Indemnitee in connection
therewith.

         2. EXPENSES; INDEMNIFICATION PROCEDURE.

                  (a) Advancement of Expenses. The Company shall advance all
Expenses incurred by Indemnitee. The advances to be made hereunder shall be paid
by the Company to Indemnitee as soon as practicable but in any event no later
than five days after written demand by Indemnitee therefor to the Company.

                  (b) Notice/Cooperation by Indemnitee. Indemnitee shall, as a
condition precedent to Indemnitees' right to be indemnified under this
Agreement, give the Company notice in writing as soon as practicable of any
Claim made against Indemnitee for which indemnification will or could be sought
under this Agreement. Notice to the Company shall be directed to the Chief
Executive Officer of the Company at the address shown on the signature page of
this Agreement (or such other address as the Company shall designate in writing
to Indemnitee). In addition, Indemnitee shall give the Company such information
and cooperation as it may reasonably require and as shall be within Indemnitee's
power.

                  (c) No Presumptions; Burden of Proof. For purposes of this
Agreement, the termination of any Claim by judgment, order, settlement (whether
with or without court approval) or conviction, or upon a plea of nolo
contendere, or its equivalent, shall not create a presumption that Indemnitee
did not meet any particular standard of conduct or have any particular belief or
that a court has determined that indemnification is not permitted by applicable

<PAGE>

law. In addition, neither the failure of the Reviewing Party to have made a
determination as to whether Indemnitee has met any particular standard of
conduct or had any particular belief, nor an actual determination by the
Reviewing Party that Indemnitee has not met such standard of conduct or did not
have such belief, prior to the commencement of legal proceedings by Indemnitee
to secure a judicial determination that Indemnitee should be indemnified under
applicable law, shall be a defense to Indemnitee's claim or create a presumption
that Indemnitee has not met any particular standard of conduct or did not have
any particular belief. In connection with any determination by the Reviewing
Party or otherwise as to whether Indemnitee is entitled to be indemnified
hereunder, the burden of proof shall be on the Company to establish that
Indemnitee is not so entitled.

                  (d) Notice to Insurers. If, at the time of the receipt by the
Company of a notice of a Claim pursuant to Section 2(b) hereof, the Company has
liability insurance in effect which may cover such Claim, the Company shall give
prompt notice of the commencement of such Claim to the insurers in accordance
with the procedures set forth in the respective policies. The Company shall
thereafter take all necessary or desirable action to cause such insurers to pay,
on behalf of Indemnitee, all amounts payable as a result of such action, suit,
proceeding, inquiry or investigation in accordance with the terms of such
policies.

                  (e) Selection of Counsel. In the event the Company shall be
obligated hereunder to pay the Expenses of any Claim, the Company shall be
entitled to assume the defense of such Claim with counsel approved by
Indemnitee, which approval shall not be unreasonably withheld, upon the delivery
to Indemnitee of written notice of its election so to do. After delivery of such
notice, approval of such counsel by Indemnitee and the retention of such counsel
by the Company, the Company will not be liable to Indemnitee under this
Agreement for any fees of counsel subsequently incurred by Indemnitee with
respect to the same Claim; provided that, (i) Indemnitee shall have the right to
employ Indemnitee's counsel in any such Claim at Indemnitee's expense and (ii)
if (A) the employment of counsel by Indemnitee has been previously authorized by
the Company, (B) Indemnitee shall have reasonably concluded that there is a
conflict of interest between the Company and Indemnitee in the conduct of any
such defense, or (C) the Company shall not continue to retain such counsel to
defend such Claim, then the fees and expenses of Indemnitee's counsel shall be
at the expense of the Company. The Company shall have the right to conduct such
defense as it sees fit in its sole discretion, including the right to settle any
claim against Indemnitee without the consent of Indemnitee.

         3. ADDITIONAL INDEMNIFICATION RIGHTS; NONEXCLUSIVITY.

                  (a) Scope. The Company hereby agrees to indemnify Indemnitee
to the fullest extent permitted by law, notwithstanding that such
indemnification is not specifically authorized by the other provisions of this
Agreement, the Company's Articles of Incorporation, the Company's Bylaws or by
statute. In the event of any change after the date of this Agreement in any
applicable law, statute or rule which expands the right of a Colorado
corporation to indemnify a member of its Board of Directors or an officer,
employee, agent or fiduciary, it is the intent of the parties hereto that
Indemnitee shall enjoy by this Agreement the greater benefits afforded by such
change. In the event of any change in any applicable law, statute or rule which
narrows the right of a Colorado corporation to indemnify a member of its Board
of Directors or

<PAGE>

an officer, employee, agent or fiduciary, such change, to the extent not
otherwise required by such law, statute or rule to be applied to this Agreement,
shall have no effect on this Agreement or the parties' rights and obligations
hereunder except as set forth in Section 8(a) hereof.

                  (b) Nonexclusivity. The indemnification provided by this
Agreement shall be in addition to any rights to which Indemnitee may be entitled
under the Company's Articles of Incorporation, its Bylaws, any agreement, any
vote of shareholders or disinterested directors, the Colorado Business
Corporation Act, or otherwise. The indemnification provided under this Agreement
shall continue as to Indemnitee for any action Indemnitee took or did not take
while serving in an indemnified capacity even though Indemnitee may have ceased
to serve in such capacity.

         4. NO DUPLICATION OF PAYMENTS. The Company shall not be liable under
this Agreement to make any payment in connection with any Claim made against
Indemnitee to the extent Indemnitee has otherwise actually received payment
(under any insurance policy, the Articles of Incorporation, Bylaws or otherwise)
of the amounts otherwise indemnifiable hereunder.

         5. PARTIAL INDEMNIFICATION. If Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for some or a
portion of Expenses incurred in connection with any Claim, but not, however, for
all of the total amount thereof, the Company shall nevertheless indemnify
Indemnitee for the portion of such Expenses to which Indemnitee is so entitled.

         6. MUTUAL ACKNOWLEDGEMENT. Both the Company and Indemnitee acknowledge
that in certain instances, Federal law or applicable law or public policy may
prohibit the Company from indemnifying its directors, officers, employees,
agents or fiduciaries under this Agreement or otherwise. Indemnitee understands
and acknowledges that the Company has undertaken or may be required in the
future to undertake with the Securities and Exchange Commission to submit the
question of indemnification to a court in certain circumstances for a
determination of the Company's right under public policy to indemnify
Indemnitee.

         7. LIABILITY INSURANCE. To the extent the Company maintains liability
insurance applicable to directors, officers, employees, agents or fiduciaries,
Indemnitee shall be covered by such policies in such a manner as to provide
Indemnitee the same rights and benefits as are accorded to the most favorably
insured of the Company's directors, if Indemnitee is a director; or of the
Company's officers, if Indemnitee is not a director of the Company but is an
officer; or of the Company's key employees, agents or fiduciaries, if Indemnitee
is not an officer or director but is a key employee, agent or fiduciary.

         8. EXCEPTIONS. Any other provision herein to the contrary
notwithstanding, the Company shall not be obligated pursuant to the terms of
this Agreement:

                  (a) Excluded Actions or Omissions. (i) To indemnify Indemnitee
for Indemnitee's acts, omissions or transactions for which Indemnitee may not be
indemnified under

<PAGE>

applicable law; or (ii) to indemnify Indemnitee for Indemnitee's intentional
acts or transactions in violation of the Company's policies;

                  (b) Claims Initiated by Indemnitee. To indemnify or advance
expenses to Indemnitee with respect to Claims initiated or brought voluntarily
by Indemnitee and not by way of defense, except (i) with respect to actions or
proceedings brought to establish or enforce a right to indemnification under
this Agreement or any other agreement or insurance policy or under the Company's
Articles of Incorporation or Bylaws now or hereafter in effect relating to
Claims for Indemnifiable Events, or (ii) in specific cases if the Board of
Directors has approved the initiation or bringing of such Claim, advance expense
payment or insurance recovery, as the case may be;

                  (c) Lack of Good Faith. To indemnify Indemnitee for any
expenses incurred by Indemnitee with respect to any proceeding instituted by
Indemnitee to enforce or interpret this Agreement, if a court of competent
jurisdiction determines that each of the material assertions made by Indemnitee
in such proceeding was not made in good faith or was frivolous; or

                  (d) Claims Under Section 16(b). To indemnify Indemnitee for
expenses and the payment of profits arising from the purchase and sale by
Indemnitee of securities in violation of Section 16(b) of the Securities
Exchange Act of 1934, as amended, or any similar successor statute.

         9. PERIOD OF LIMITATIONS. No legal action shall be brought and no cause
of action shall be asserted by or in the right of the Company against
Indemnitee, Indemnitee's estate, spouse, heirs, executors or personal or legal
representatives after the expiration of two years from the date of accrual of
such cause of action, and any claim or cause of action of the Company shall be
extinguished and deemed released unless asserted by the timely filing of a legal
action within such two-year period; provided, however, that if any shorter
period of limitations is otherwise applicable to any such cause of action, such
shorter period shall govern.

         10. CONSTRUCTION OF CERTAIN PHRASES.

                  (a) For purposes of this Agreement, references to the
"COMPANY" shall include, in addition to the resulting corporation, any
constituent corporation (including any constituent of a constituent) absorbed in
a consolidation or merger which, if its separate existence had continued, would
have had power and authority to indemnify its directors, officers, employees,
agents or fiduciaries, so that if Indemnitee is or was a director, officer,
employee, agent or fiduciary of such constituent corporation, or is or was
serving at the request of such constituent corporation as a director, officer,
employee, agent or fiduciary of another corporation, partnership, joint venture,
employee benefit plan, trust or other enterprise, Indemnitee shall stand in the
same position under the provisions of this Agreement with respect to the
resulting or surviving corporation as Indemnitee would have with respect to such
constituent corporation if its separate existence had continued.

                  (b) For purposes of this Agreement, references to "OTHER
ENTERPRISES" shall include employee benefit plans; references to "fines" shall
include any excise taxes assessed on

<PAGE>

Indemnitee with respect to an employee benefit plan; and references to "serving
at the request of the Company" shall include any service as a director, officer,
employee, agent or fiduciary of the Company which imposes duties on, or involves
services by, such director, officer, employee, agent or fiduciary with respect
to an employee benefit plan, its participants or its beneficiaries; and if
Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to
be in the interest of the participants and beneficiaries of an employee benefit
plan, Indemnitee shall be deemed to have acted in a manner "not opposed to the
best interests of the Company" as referred to in this Agreement.

                  (c) For purposes of this Agreement a "CHANGE IN CONTROL" shall
be deemed to have occurred if (i) any "PERSON" (as such term is used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended), other than
a trustee or other fiduciary holding securities under an employee benefit plan
of the Company or a corporation owned directly or indirectly by the shareholders
of the Company in substantially the same proportions as their ownership of stock
of the Company, (A) who is or becomes the beneficial owner, directly or
indirectly, of securities of the Company representing 10% or more of the
combined voting power of the Company's then outstanding Voting Securities,
increases his beneficial ownership of such securities by 5% or more over the
percentage so owned by such person, or (B) becomes the "BENEFICIAL OWNER" (as
defined in Rule 13d-3 under said Act), directly or indirectly, of securities of
the Company representing more than 20% of the total voting power represented by
the Company's then outstanding Voting Securities, (ii) during any period of two
consecutive years, individuals who at the beginning of such period constitute
the Board of Directors of the Company and any new director whose election by the
Board of Directors or nomination for election by the Company's shareholders was
approved by a vote of at least two-thirds of the directors then still in office
who either were directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any reason to
constitute a majority thereof, or (iii) the shareholders of the Company approve
a merger or consolidation of the Company with any other corporation other than a
merger or consolidation which would result in the Voting Securities of the
Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into Voting Securities of the
surviving entity) at least 80% of the total voting power represented by the
Voting Securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation, or the shareholders of the
Company approve a plan of complete liquidation of the Company or an agreement
for the sale or disposition by the Company of (in one transaction or a series of
transactions) all or substantially all of the Company's assets.

                  (d) For purposes of this Agreement, "INDEPENDENT LEGAL
COUNSEL" shall mean an attorney or firm of attorneys, selected in accordance
with the provisions of Section 1(c) hereof, who shall not have otherwise
performed services for the Company or Indemnitee within the last three years
(other than with respect to matters concerning the rights of Indemnitee under
this Agreement, or of other indemnitees under similar indemnity agreements).

                  (e) For purposes of this Agreement, a "REVIEWING PARTY" shall
mean any appropriate person or body consisting of a member or members of the
Company's Board of Directors or any other person or body appointed by the Board
of Directors who is not a party to

<PAGE>

the particular Claim for which Indemnitee is seeking indemnification, or
Independent Legal Counsel.

                  (f) For purposes of this Agreement, "VOTING SECURITIES" shall
mean any securities of the Company that vote generally in the election of
directors.

         11. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original.

         12. BINDING EFFECT; SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the parties
hereto and their respective successors, assigns, including any direct or
indirect successor by purchase, merger, consolidation or otherwise to all or
substantially all of the business and/or assets of the Company, spouses, heirs,
and personal and legal representatives. The Company shall require and cause any
successor (whether direct or indirect by purchase, merger, consolidation or
otherwise) to all, substantially all, or a substantial part, of the business
and/or assets of the Company, by written agreement in form and substance
satisfactory to Indemnitee, expressly to assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform if no such succession had taken place. This Agreement shall
continue in effect with respect to Claims relating to Indemnifiable Events
regardless of whether Indemnitee continues to serve as a director, officer,
employee, agent or fiduciary of the Company or of any other enterprise at the
Company's request.

         13. ATTORNEYS' FEES. In the event that any action is instituted by
Indemnitee under this Agreement or under any liability insurance policies
maintained by the Company to enforce or interpret any of the terms hereof or
thereof, Indemnitee shall be entitled to be paid all Expenses incurred by
Indemnitee with respect to such action and shall be entitled to the advancement
of Expenses with respect to such action, unless, as a part of such action, a
court of competent jurisdiction over such action determines that each of the
material assertions made by Indemnitee as a basis for such action was not made
in good faith or was frivolous. In the event of an action instituted by or in
the name of the Company under this Agreement to enforce or interpret any of the
terms of this Agreement, Indemnitee shall be entitled to be paid all Expenses
incurred by Indemnitee in defense of such action (including costs and expenses
incurred with respect to Indemnitee counterclaims and cross-claims made in such
action), and shall be entitled to the advancement of Expenses with respect to
such action, unless, as a part of such action, a court having jurisdiction over
such action determines that each of Indemnitee's material defenses to such
action was made in bad faith or was frivolous.

         14. NOTICE. All notices and other communications required or permitted
hereunder shall be in writing, shall be effective when given, and shall in any
event be deemed to be given (a) five (5) days after deposit with the U.S. Postal
Service or other applicable postal service, if delivered by first class mail,
postage prepaid, (b) upon delivery, if delivered by hand, (c) one business day
after the business day of deposit with Federal Express or similar overnight
courier, freight prepaid, or (d) one day after the business day of delivery by
facsimile transmission, if delivered by facsimile transmission, with copy by
first class mail, postage prepaid, and shall be addressed if to Indemnitee, at
Indemnitee's address as set forth beneath Indemnitee's signature to

<PAGE>

this Agreement and if to the Company at the address of its principal corporate
offices (attention: Secretary) or at such other address as such party may
designate by ten days' advance written notice to the other party hereto.

         15. CONSENT TO JURISDICTION. The Company and Indemnitee each hereby
irrevocably consent to the jurisdiction of the courts of the State of Colorado
for all purposes in connection with any action or proceeding which arises out of
or relates to this Agreement and agree that any action instituted under this
Agreement shall be commenced, prosecuted and continued only in the City and
County of Denver of the State of Colorado, which shall be the exclusive and only
proper forum for adjudicating such a claim.

         16. SEVERABILITY. The provisions of this Agreement shall be severable
in the event that any of the provisions hereof (including any provision within a
single section, paragraph or sentence) are held by a court of competent
jurisdiction to be invalid, void or otherwise unenforceable, and the remaining
provisions shall remain enforceable to the fullest extent permitted by law.
Furthermore, to the fullest extent possible, the provisions of this Agreement
(including, without limitation, each portion of this Agreement containing any
provision held to be invalid, void or otherwise unenforceable, that is not
itself invalid, void or unenforceable) shall be construed so as to give effect
to the intent manifested by the provision held invalid, illegal or
unenforceable.

         17. CHOICE OF LAW. This Agreement shall be governed by and its
provisions construed and enforced in accordance with the laws of the State of
Colorado, as applied to contracts between Colorado residents, entered into and
to be performed entirely within the State of Colorado, without regard to the
conflict of laws principles thereof.

         18. SUBROGATION. In the event of payment under this Agreement, the
Company shall be subrogated to the extent of such payment to all of the rights
of recovery of Indemnitee who shall execute all documents required and shall do
all acts that may be necessary to secure such rights and to enable the Company
effectively to bring suit to enforce such rights.

         19. AMENDMENT AND TERMINATION. No amendment, modification, termination
or cancellation of this Agreement shall be effective unless it is in writing
signed by both the parties hereto. No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a waiver of any other provisions
hereof (whether or not similar) nor shall such waiver constitute a continuing
waiver.

         20. INTEGRATION AND ENTIRE AGREEMENT. This Agreement sets forth the
entire understanding between the parties hereto and supersedes and merges all
previous written and oral negotiations, commitments, understandings and
agreements relating to the subject matter hereof between the parties hereto.

         21. NO CONSTRUCTION AS EMPLOYMENT AGREEMENT. Nothing contained in this
Agreement shall be construed as giving Indemnitee any right to be retained in
the employ of the Company or any of its subsidiaries.

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.

                                      VARI-L COMPANY, INC.

                                      /s/ Charles R. Bland
                                      ------------------------------------------
                                      By:  Charles R. Bland
                                      Chief Executive Officer

                                      AGREED TO AND ACCEPTED BY:

                                      Signature:

                                      ------------------------------------------

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