Document:

From:    Deutsche Bank, Mr. Muller and Mr. Jakobi
         Blumenstrasse 13, 42849 Remscheid, Germany

To:      IKS Klingelnberg GmbH, Mr. Thomas Meyer
         In der Fleute 18, 42897 Remscheid, Germany

Confirmation of Conditions

Dear Mr. Meyer:

In  reference  to our  recent  conversations  we  confirm  to you  that  we have
committed to IKS Klingelnberg  Group-Germany the following lines of credit/ bank
loans within the framework of our general  conditions  (AGB). With regard to the
duration,  conditions,  collaterals  and  covenants  we refer to the  individual
credit agreements.

o   Operating line of credit in the amount of                   DEM 7,500,000.00

o   KfW bank loan to IKS Klingelnberg GmbH
    for the acquisition of the company Rolf Meyer;
    current value of                                            DEM 5,000,000.00

o   KfW bank loan to IKS Klingelnberg GmbH
    for the Joint-Venture China; current value of               DEM 2,500,000.00

o   KfW bank loan to IKS Klingelnberg GmbH
    for the financing of the Remscheid building;
    current value is                                            DEM 3,771,000.00

o   KfW bank loan to IKS Klingelnberg Falz-
    messer GmbH for the acquisition of the company
    Rolf Meyer; current value of                                DEM 5,000,000.00

o   KfW bank loan to IKS Messerfabrik Gerings-
    walde GmbH; current value is                                DEM   731,000.00

o   Deutsche Bank expenditure loan to IKS
    Messerfabrik Geringswalde GmbH; current value
    of approximately                                            DEM   504,000.00

In addition to these bank  loans/lines  of credit,  we are pleased to be able to
commit to IKS  Klingelnberg  GmbH,  Remscheid  a line of credit for  prospective
expenditures/company  acquisitions  in  the  amount  of  DEM  8,500,000.00  with
duration of up to 10 years within the framework of our General Conditions (AGB).

<PAGE>

At a later date, we will agree on the terms and  conditions  in accordance  with
the then-current market circumstances.

Generally  the  individual  assets  acquired  with  these  funds  will  serve as
collateral. In addition,  International Knife & Saw Inc. will confirm to us that
it will not require repayment of the approximately DEM 9.4 million  intercompany
loan to IKS Klingelnberg GmbH prior to a complete repayment of the loans we have
made to IKS Klingelnberg GmbH.

Please sign the enclosed copy of this letter to indicate your agreement and send
it back to us.

We thank you for your trust in us and look  forward to a smooth and  trustworthy
relationship.From:    Deutsche Bank, Mr. Jakobi
         Blumenstrasse 13, 42849 Remscheid, Germany

To:      IKS Klingelnberg GmbH
         In der Fleute 18, 42897 Remscheid, Germany

Increase of Lines of Credit

Gentlemen:

This is in reference to our discussion at your office on November 3.

As requested, we confirm to you that we will increase the current line of credit
by an amount of US$  5,000,000.00  subject to the final approval of our internal
Credit Committee.

We expect that our Credit  Committee  will  approve  this  increase  and we look
forward to strengthening our business relationship.From:    Deutsche Bank, Mr. Jakobi
         Blumenstrasse 13, 42849 Remscheid, Germany

To:      International Knife & Saw, Inc., Mr. Thomas Meyer
         C/O IKS Klingelnberg GmbH
         In der Fleute 18, 42897 Remscheid, Germany

Credit Lines

Dear Mr. Meyer:

In reference to our discussions in recent weeks, we hereby confirm to you within
the  framework  of our  General  Conditions  (AGB)  that  we have  committed  to
International Knife & Saw, Inc. a total credit line including  guarantees in the
amount of DEM  74,175,000.00  since November 1998. With regard to the individual
loans and collaterals, we refer to the respective agreements.

We are prepared to commit DEM 52 Million out of the above mentioned total credit
line to the IKS Klingelnberg  GmbH Group, as long as International  Knife & Saw,
Inc. agrees to convert at least DEM 10 million of its inter-company  loan to IKS
Klingelnberg  GmbH into a capital  contribution.  By doing this, the minimum 30%
equity  requirement  agreed upon in October 1996 will continue to be maintained,
along with the other  agreements.  We would provide this credit line without the
guarantee of International Knife & Saw, Inc.

We hope that this meets your needs and look forward to a  continuing  smooth and
trustworthy relationship.From:    Deutsche Bank, Mr. Bauermann and Mr. Jakobi
         Blumenstrasse 13, 42849 Remscheid, Germany

To:      International Knife & Saw, Inc., Mr. Thomas Meyer
         C/O IKS Klingelnberg GmbH
         In der Fleute 18, 42897 Remscheid, Germany

Confirmation of Current Lines of Credit

Dear Mr. Meyer:

We refer to our credit  commitment of October 8, 1996; our letter of January 19,
1999; and the discussions we have had with you in recent weeks.

We are pleased to confirm  that,  within the  framework of our general  business
conditions  (AGB), we are making available to you a short-term line of credit in
the amount of US $13,000,000 for operating needs.  Drawdowns on the line will be
handled via  Euro-Credits  in minimum amounts of $1 million at LIBOR + 1.25% per
annum.  If at least 50% of the credit line has not been drawn down, then we will
charge a commitment fee of 0.25%.

You commit to us that no third  parties have any rights to your  receivables  or
inventories. Upon our demand for such, you agree to grant us these rights.

In addition, the following covenants are a condition of our credit commitment:

o    You will pledge fixed assets as  additional  collateral,  in the event that
     the result in the  consolidated  financial  statements  before interest and
     taxes (EBIT) is more than 30% under the original  plan (1998:  $22,041,000;
     1999 $25,098,000).

o    You must  provide  quarterly  financial  information  and annual  financial
     statements to us. The year end financial statements must be presented to us
     no later than 4 months after year end.

o    German law and German courts govern this agreement.

This credit  commitment is valid until further  notice,  assuming  constant good
financial conditions.

Please sign the enclosed copy of this letter to indicate your agreement and send
it back to us.

We thank  you for  your  trust  in us and  hope  for a  smooth  and  trustworthy
relationship.From:    Deutsche Bank, Mr. Bovermann and Mr. Jakobi
         Blumenstrasse 13, 42849 Remscheid, Germany

To:      IKS Klingelnberg GmbH, Mr. Thomas Meyer
         In der Fleute 18, 42897 Remscheid, Germany

Confirmation of Financing

Dear Mr. Meyer:

We refer to our  discussions  in recent  weeks,  in which you advised us of your
intention to acquire Bohler Miller Messer & Sagen GmbH, Vienna, and also of your
intention to increase your equity stake in your Chinese joint venture to 80%.

Currently we have committed to IKS Klingelnberg GmbH and its subsidiaries  lines
of credit of DEM 52  million  in  accordance  with  various  credit  agreements.
Approximately  DEM 31.8  million  of these  lines  have been used for  long-term
loans.

We are pleased, within the framework of our General Conditions (AGB), to be able
to increase the above  referenced  lines of credit by the current purchase price
of "Bohler Miller Messer und Sagen GmbH, Vienna,  equal to a converted amount of
approximately DEM 14.5 million;  and by the price of the additional equity stake
in China,  equal to approximately  DEM 1.5 million,  for a total increase of DEM
16.0 million. Up to DEM 7 million thereof may be used for long term purposes.

As a result  the total  credit  lines  for the IKS  Klingelnberg  GmbH  group of
companies is DEM 68 million.

The existing collateral agreements are:

- DEM 5.0 Million  first  mortgage  on the  building  in  Bargteheide
- DEM 5.1 Million  first  mortgage on the  building in Remscheid  Bergisch-Born
- DEM 2.8 Million first  mortgage on the building in  Geringswalde
- Chattel  mortgage on various  machines of IKS Messerfabrik Geringswalde  GmbH
- Declaration of Non-encumbrance for the investments held by IKS Klingelnberg
  GmbH

In  addition,  you must also  assign to us as  collateral  for the total line of
credit the current and future trade accounts receivables of the German companies
and Bohler  Miller  Messer

<PAGE>

und  Sagen  GmbH,  Vienna,  and  assign  to us  the  future  inventories  of the
previously mentioned companies.

The agreement  that the equity of IKS  Klingelnberg  GmbH will not be lower than
30% of total  assets  and that  gross  cash flow will stay  positive  and remain
unchanged.

In addition we request you to provide us with  quarterly  reports and the annual
financial statements on a timely basis.

We hope that you will agree to this  arrangement  and look  forward to continued
cooperation.  We will  contact you in the coming  days  regarding  the  specific
details on the credit contracts.EXHIBIT 10.1

                   TERMINATION AND CONSULTING AGREEMENT

     THIS AGREEMENT, effective August 1, 2000, is made and entered into by
and between VARI-L COMPANY, INC. (the "Company") and DAVID G. SHERMAN
("Employee").

     WHEREAS, the Company and Employee entered into an Employment
Agreement dated June 1, 1997, whereby Employee would serve as the
Company's President and Chief Executive Officer (the "Employment
Agreement"); and

     WHEREAS, as of the effective date hereof (the "Resignation Date"),
Employee has voluntarily resigned as an employee of the Company, as its
President and Chief Executive Officer, as the Trustee of its Employee
Profit Sharing Plan, and as a member of its Board of Directors, but has
agreed to assist the Company by providing consulting services to the
Company for a period of one year from the date hereof, during which time
the Company will continue to pay him the salary prescribed by the
Employment Agreement; and

     WHEREAS, the parties wish for this Agreement to supersede and replace
all terms and conditions contained in the Employment Agreement, and to set
forth the entire understanding of the parties concerning the termination
of Employee's relationship with the Company, including but not limited to
the terms of his employment as set forth in the Employment Agreement.

     NOW, THEREFORE, for good and valuable consideration, the parties
hereto agree as follows:

     1.   CONSULTANT.  The Company hereby agrees to engage Employee as a
consultant to the Company for a period of one year from Employee's
Resignation Date (the "Consulting Period").  Employee shall report to
Joseph H. Kiser, or his designee.  While Employee's title shall be
"Consultant", he be treated as an "employee" of the Company for purposes
of tax withholding and employee benefits during the Consulting Period.
From August 1, 2000 through September 30, 2000, Employee shall devote 40
hours per week to his duties as a consultant to the Company.  From October
1 through November 30, 2000, Employee shall devote no less than 20 hours
per week to those duties.  From December 1, 2000 through July 31, 2001,
Employee shall be available on an as needed basis but in no event shall he
be required by the Company to provide more than 20 hours in consulting
services in any single week.

     2.   PAYMENT OBLIGATION.  The Company will continue to be obligated
to pay Employee the compensation described in Section 3 below even if it
elects not to utilize his services for some portion of the Consulting
Period.  Moreover, the Company's obligation to pay such compensation will
continue even if information is subsequently discovered by, or brought to
the attention of, the Company which suggests that Employee may be liable
to the Company for damages caused by his negligent or reckless behavior.
On the other hand, the Company may elect to terminate such compensation
upon a finding by the Audit Committee of the Company's Board of Directors
or another committee composed entirely of outside directors that Employee
has embezzled or misappropriated funds of the Company, or has engaged in
knowing and willful fraud in the course of performing his duties on behalf
of the Company, provided, however, that, for purposes hereof, any amounts
which may in the future be determined to be owed by Employee to the
Company as the result of a review of the travel and expense reports
previously submitted by Employee shall not be grounds for terminating the
Company's obligation to compensate Employee hereunder, and provided
further, that nothing herein is intended to waive or compromise the
Company's right to recover such amounts, if any, from Employee.

     3.   COMPENSATION AND EMPLOYEE BENEFITS.

          (a)  STOCK OPTIONS.  Through the term of this Agreement, all of
Employee's stock options shall continue to vest in accordance with the
notices of option grant previously issued to Employee.  All unvested stock
options and stock appreciation rights previously granted to Employee shall
fully vest in the event of a Change of Control of the Company as that term
was defined in the Employment Agreement.  Moreover, if and to the extent
that Employee honors his non-compete and non-solicitation obligations
after the Consulting Period for the full Noncompete Period (as defined
below), then he shall, for purposes of the Company's Tandem Stock Option
and Stock Appreciation Rights Plan (the "Plan") only, be deemed to be an
unpaid consultant for such time and, as a result, his stock options shall
continue to vest and remain exercisable during such time in accordance
with the terms of the Plan.

          (b)  SALARY.  For all services rendered by Employee under this
Agreement, the Company shall pay Employee the minimum salary prescribed by
the Employment Agreement irrespective of any subsequent increases that may
have previously been authorized by the Board of Directors or the
Compensation Committee.  Employee irrevocably waives any right or claim to
any previous increases in base salary that may have been authorized by the
Compensation Committee but have not yet been paid to him.

          (c)  BONUS COMPENSATION.  Employee acknowledges that all unpaid
cash or stock bonuses to which he may be entitled to receive before or
after his Resignation Date shall be forfeited.  Nothing herein is intended
to require the repayment of any amounts previously paid to Employee as
salary or bonus.

          (d)  VACATION.  Upon execution of this Agreement, Employee shall
be entitled to receive payment for eight (8) weeks of unused vacation
accrued under the provisions of his Employment Agreement.  Employee
irrevocably waives any right or claim to payment or compensation for
additional vacation time accrued but not paid or for sick leave, personal
time or any other type of paid leave.

          (e)  EMPLOYEE BENEFITS.  During the term of this Agreement,
Employee shall be entitled to receive all of the rights, benefits, and
privileges of a non-officer employee under any retirement, pension,
profit-sharing, insurance, health and hospital, and other employee benefit
plans which may be now in effect or hereafter adopted by the Company.
During the Consulting Period, Employee will be treated the same as any
other employee for purposes of the Company's qualified profit sharing and
401(k) plans as well as all other qualified and unqualified employee
benefit plans.

          (f)  WORKING FACILITIES.  While the Company may elect to provide
Employee with office space, stenographic help, and such other facilities
and services adequate for the performance of the duties required by this
Agreement, it is under no obligation to provide such amenities.

          (g)  EXPENSES.  The Company will reimburse Employee for all
reasonable expenses in connection with his responsibilities as a
consultant to the Company upon submission of appropriate receipts or other
documentation.  Individual expenses greater than $100 must be pre-approved
by Joseph H. Kiser or his designee.

          (h)  AUTOMOBILE.  Employee shall be entitled to continue to use
the automobile previously provided to Employee under the Employment
Agreement until the earlier of (i) beginning on November 30, 2000, such
time as the Employee has failed to provide at least 80 hours of consulting
services per month on behalf of the Company, or (ii) February 1, 2001.  As
the owner of the vehicle, the Company will continue to be responsible for
maintaining insurance coverage and for the cost of regularly scheduled
maintenance of, or necessary repairs to, the automobile during its use by
Employee.  The Company shall reimburse Employee for any expenses incurred
by Employee for such maintenance or repairs.  Employee shall be
responsible for the cost of fuel, oil and similar routine operating
expenses.  Mileage will not be paid for use of the automobile for business
purposes. Employee may purchase the automobile from the Company at its
then fair market value at any time during the period of use prescribed by
this Agreement.

          (i)  PAYMENT FOR CAROLYN KISER NOTE.  If Employee completes the
Consulting Period and the balance of the Noncompete Period (as defined
below) without violating his non-compete and non-solicitation obligations
under Section 4 below, the Company shall pay him an amount equal to the
current balance on Employee's promissory note to Carolyn Y. Kiser, which
the parties agree to be $57,236.  If Employee has not violated such
obligations before March 1, 2003, the Company will pay the $57,236 to him
on that date.  While such payment will be made prior to the end of the
Noncompete Period, Employee agrees to repay the entire $57,236 to the
Company immediately upon receipt of written demand therefor if he violates
the non-compete or non-solicitation obligations of Section 4 after such
payment but before the termination of the Noncompete Period.  Because
Employee will no longer be an "employee" of the Company for purposes of
tax withholding and employee benefits after the Consulting Period, no
deduction will be made from such payment for state or federal income
taxes, FICA or similar liabilities and Employee acknowledges and agrees
that he will be solely responsible for the payment of all such taxes or
liabilities thereon.

          (j)  ESTATE PLANNING SERVICES.  The Company shall honor its
prior agreement to pay legal fees and expenses owed to Gorsuch Kirgis LLP
by Employee on account of estate planning services rendered to Employee.

     4.   NONCOMPETE AND NONSOLICITATION.  During the one (1) year period
during which salary and employee benefits are being paid to Employee by
the Company and for a period of two (2) years thereafter (the "Noncompete
Period"), the Employee will not, directly or indirectly, own, manage,
operate, control, provide services to, be employed by, participate in, or
be connected in any manner with the ownership, management, operation, or
control of any business which is similar to the type of business conducted
by the Company and which conducts such business or sells its products
within and to the same market as the Company's market.  Employee agrees
not to solicit any other Company employee during the Noncompete Period to
leave the employ of the Company or to provide services to another person
or business in lieu of providing services to the Company, including but
not limited to services to a competitor of the Company, except when such
other employee's departure is determined by management of the Company to
be in the Company's best interests.

          It is agreed that any breach of this section of the Agreement
during the Consulting Period will cause immediate irreparable harm to the
Company and that monetary damages for such breach would be difficult if
not impossible to ascertain.  Therefore, the parties agree that upon any
breach of the covenants of this section during the Consulting Period the
Company may obtain from the district court for the City and County of
Denver, Colorado, or any other court of competent jurisdiction, an
appropriate restraining order, preliminary injunction or other form of
equitable relief with respect thereto. Nothing contained herein shall be
construed as prohibiting the Company from pursuing any other available
remedies for such breach during the Consulting Period, including the
recovery of damages, costs, and attorney fees.

          Notwithstanding the foregoing, in the event of a Change of
Control, as defined in the Employment Agreement, not recommended by a
majority of the Board of Directors of the Company as constituted prior to
the date of such Change of Control, this non-compete agreement shall
terminate upon the date of such Change of Control.

     5.   REPRESENTATIONS AND COVENANTS OF THE COMPANY.

          The Company hereby represents that, at its meeting on August 1,
2000, the Board of Directors of the Company unanimously resolved that it
has no present intent to bring any claims or actions against Employee for
any acts committed prior to Employee's Resignation Date.  The parties
acknowledge, however, that this declaration of the Company's present
intent does not constitute, and should not be construed as, a release of
Employee, his agents, successors, or assigns from any claims or rights of
action which the Company may have against Employee, nor does it in any way
relieve Employee of any liabilities or obligations arising under federal,
state, or local law by statute, common law, public policy, or equity which
he may have to the Company.

          The Company agrees that all inquiries seeking references
regarding Employee's prior employment with the Company during or after the
term of this Agreement will be directed to the attention of Joseph H.
Kiser.

          The Company shall provide Employee with a copy, on CD-ROM or
other non-paper form, of all information retrieved from the computer
previously used by Employee while acting as the Company's President and
Chief Executive Officer, as well as the information contained on the
computer used by the Employee's assistant, Tina Brown.

          The Company will provide Employee with copies of drafts of press
releases concerning Employee's resignation as the Company's President and
Chief Executive Officer as well as an opportunity to comment thereon prior
to publication thereof.  The final wording and content of any such
releases, however, shall remain within the sole discretion of the Company.

     6.   RELEASE BY EMPLOYEE.

          Except for the enforcement of the terms and covenants in this
Agreement, Employee hereby releases the Company and its officers,
directors, employees, agents, successors, and assigns from any and all
claims and obligations arising under federal, state, or local law by
statute, common law, public policy, or equity that Employee may have
against the Company arising out of the employment relationship, including
but not limited to any rights, privileges, benefits, compensation or
claims arising from or related to the Employment Agreement.  Employee
specifically waives any claim for unlawful discrimination including, but
not limited to claims for race, sex, age, religion, disability, or
national origin discrimination. Employee further agrees to waive and
release any rights he might have under the federal Age Discrimination in
Employment Act of 1967, as amended (29 U.S.C.  621 et seq.) ("ADEA")
against the Company, pursuant to the terms of the attached ADEA Waiver and
Release. Employee acknowledges and agrees that this release covers claims
and obligations even if they are unknown at this time. Employee further
agrees that this Agreement is a complete defense to any claim and
obligation released and waived by this Agreement which may be subsequently
asserted.  This release shall survive the termination of this Agreement.

     7.   RETURN OF COMPANY PROPERTY.

          Upon execution hereof, Employee will immediately return to the
Company all Company property, including any and all sales aids, customer
lists, catalogues, manuals, software programs, drawings, blueprints,
notes, memoranda, and any and all other documents, computer files, and
electronic information which are or have been in Employee's possession or
control and which contain any trade secrets or confidential information or
which otherwise relate to the Company's business.  Employee may, however,
retain all personal property presently located on the Company's premises
and may keep copies of contact lists, address books, rolodex files and
other records of persons with whom he came in contact while employed by
the Company.

     8.   CONFIDENTIALITY.

          Employee understands that, in the ordinary course of its
business, the Company has developed various valuable trade secrets and
confidential business information. Employee acknowledges that he has been
exposed to such trade secrets and information and that the protection of
such is of vital importance to the Company's business.  All information,
whether written or not, regarding the Company's business, is presumed to
be confidential. Examples of confidential information would include
information as to any of the Company's patented components, research and
development projects and in patent process components, and personal
relationships with present and potential customers, suppliers,
contractors, and governmental agencies as well as technology, procedures,
systems, and techniques relating to the products developed or distributed
by the Company (hereinafter collectively referred to as "Confidential
Information").   Therefore, Employee agrees not to disclose or use,
whether for the benefit of Employee or any other person or entity, at any
time during or after the term of this Agreement, any Confidential
Information to any person or entity other than the Company or persons
authorized by the Company to receive such Confidential Information.  This
nondisclosure and confidentiality agreement is in addition to, and is not
a replacement for, all other nondisclosure and confidentiality agreements
relating to the Company's business previously entered into by Employee,
including but not limited to the nondisclosure and confidentiality
covenants in the Employment Agreement and the various nondisclosure and
confidentiality agreements which Employee entered into on behalf of the
Company.

     9.   NONDISPARAGEMENT.

          During the term of this Agreement and for a period of three (3)
years thereafter, the Company and the Employee both agree that neither one
of them will defame, libel, contravene, contradict, or make disparaging
remarks relating to the other, provided, however, that nothing herein
shall preclude the Company or Employee from making any public or private
disclosures of fact concerning the Company or Employee or actions taken by
the Company or Employee, as the case may be, if such disclosures are
required by applicable law, including but not limited to the Company's or
Employee's obligations under applicable securities laws and regulations or
legal process.

     10.  AGREEMENT, UNDERTAKING AND AFFIRMATION.

     Notwithstanding the general provisions herein concerning the
extinguishment of prior agreements, the parties acknowledge and agree that
the Agreement, Undertaking and Affirmation by and between the Company and
the Employee dated June 5, 2000, shall remain in full force and effect in
accordance with its terms after the execution of this Agreement.

     11.  COOPERATIVE ACCESS TO INFORMATION.

          The parties agree that, during the term of this Agreement and
thereafter, they will each cooperate with the other in providing
information to the other party for use in, as well as access to records
necessary in the defense of, the presently ongoing SEC investigation, the
Tellabs/Steinbrecher collection action, the Broussard EEOC claim, and the
shareholder class actions as well as any other ongoing or future
litigation.

     12.  TERMINATION PROVISIONS.

          (a)  DEATH.  In the event of Employee's death, the Company shall
pay to any beneficiary designated by Employee or, if no such beneficiary
has been designated, to his estate, any unpaid amounts for services
actually provided under this Agreement, payable on the Company's regular
payroll dates.

          (b)  EARLY TERMINATION.  Subject only to the limitations set
forth in Section 2 hereof concerning Employee's previous expense reports,
the Company may terminate this Agreement at any time without further
obligation to Employee upon a finding by the Audit Committee of the
Company Board of Directors or another committee composed entirely of
outside directors that Employee committed any of the following acts in his
capacity as an employee of the Company: embezzlement, theft, or knowing
and willful fraud.  Employee may terminate this Agreement at any time by
written notice delivered not less than ten (10) days prior to the date of
such termination to the Company, delivered to the attention of Joseph H.
Kiser or his designee.

          (c)  LIFE INSURANCE.  Employee acknowledges that, upon the
Resignation Date, the Company's obligation to maintain the special life
insurance policies on Employee's life provided for in the Employment
Agreement shall terminate although Employee shall continue to participate
in the Group Life Insurance Policy afforded the Company's employees
generally.  The parties agree that, at any time before the next scheduled
payment date for any premiums due on the special policies on Employee and
in any event for the thirty (30) day period following the Resignation
Date, Employee may acquire some or all of these policies from the Company
by providing written notice to the Company of his wish to assume
responsibility for paying all future premiums to continue such policies in
effect, subject only to the limitations imposed by the policies on such
transfer and the payment to the Company of the policies' cash surrender
value, if any.

     13.  NOTICES.  Any notice required or permitted to be given under
this Agreement shall be sufficient if in writing and delivered in person
or sent by Fedex or other nationally recognized overnight package delivery
service or by registered or certified mail.  Such notices shall be sent to
Employee's residence in the case of Employee or to its principal office in
the case of the Company and shall be deemed to have been received when
delivery is effected or first attempted to be effected by the overnight
delivery service or the U. S. Postal Service.

     14.  WAIVER.  The waiver of any provision of this Agreement shall not
operate or be construed as a waiver of any other provision of this
Agreement.  No waiver shall be valid unless in writing and executed by the
party to be charged therewith.

     15.  SEVERABILITY/MODIFICATION.  In the event that any clause or
provision of this Agreement shall be determined to be invalid, illegal or
unenforceable, such clause or provision may be severed or modified to the
extent necessary, and, as severed and/or modified, this Agreement shall
remain in full force and effect.

     16.  ASSIGNMENT.  Except for a transfer by will or by the laws of
descent or distribution, Employee's right to receive payments or benefits
under this Agreement shall not be assignable or transferable, whether by
pledge, creation of a security interest or otherwise.  In the event of any
attempted assignment or transfer contrary to this paragraph, the Company
shall have no liability to pay any amount so attempted to be assigned or
transferred.  Employee acknowledges that the services to be rendered under
this Agreement are unique and personal.  Accordingly, Employee may not
assign such duties or obligations under this Agreement.

     17.  SUCCESSORS.  This is a binding agreement.  This Agreement shall
benefit and be binding upon the Company's successors and assigns, and
Employee's executors, administrators, and representatives.

     18.  ENTIRE AGREEMENT.  Except as otherwise expressly provided in
Sections 3, 8 and 10 hereof, this instrument contains the entire agreement
concerning the employment arrangement between the parties and shall, as of
the effective date hereof, supersede all other such agreements between the
parties, including but not limited to the Employment Agreement and the
previous Executive Employment Agreement dated November 12, 1992, as
amended March 10, 1995 and any resolutions or other actions by or on
behalf of the Company's Board of Directors or Compensation Committee.
This Agreement may not be amended except by an agreement in writing signed
by both parties.

     19.  GOVERNING LAW AND JURISDICTION.  This Agreement shall be
interpreted, construed, and enforced under the laws of the State of
Colorado.  The courts of the State of Colorado shall have sole
jurisdiction and venue over all controversies which may arise with respect
to this Agreement.

     20.  VOLUNTARY EXECUTION.  Employee acknowledges that he has read
this Agreement, understands its terms and legal consequences, has been
given an opportunity to consider this Agreement and its release of all
claims, and it has been entered into by him voluntarily. Employee further
acknowledges that he has been advised to consult with an attorney prior to
executing this Agreement and has in fact done so.  Employee also declares
and confirms that he has not assigned any claims against the Company to
any other person and that the Company is relying upon such declaration in
entering into this Agreement.

     21.  TIME.  In comparing any period of time prescribed or allowed by
this Agreement, the day of the act or event from which the designated
period of time begins to run shall not be included.  The last day of the
period so computed shall be included, unless it is a Sunday or legal
holiday, in which event the period runs until the end of the next day
which is not a Sunday or legal holiday.  For purposes of this paragraph a
legal holiday shall mean any day which banks are required to be closed in
the State of Colorado.  For purposes of calculating the duration of the
Noncompete Period, the parties agree that such period shall be extended by
one day for each day that Employee competes with Company in violation of
such covenant.

     IN WITNESS WHEREOF, the parties have executed this Agreement the date
and year indicated below.

                              VARI-L COMPANY, INC.

                              By:/s/Joseph H. Kiser
                                 Joseph H. Kiser, Chairman of the Board
                                 and Chief Scientific Officer

                              EMPLOYEE:

                              /s/David G. Sherman
                              David G. Sherman
                                  RELEASE

     1.   This Release, effective on the date signed below, is between
DAVIDG. SHERMAN ("Employee"), and Vari-L Company, Inc. (the "Company").

     2.   The Company and Employee agree that all terms and conditions
contained in the Termination and Severance Agreement between the Company
and Employee dated August 1, 2000 (the "Agreement"), are hereby
incorporated by this reference into this Release.  Employee hereby
voluntarily waives any Claims or rights arising out of any alleged
deficiencies of this Release caused by the omission of such terms,
conditions or definitions in the body of this Release.

     3.   The Company and Employee each agree that they have had adequate
time to review and consider the terms of the Agreement and this Release,
and that they fully understand the effect of such terms.

     4.   In consideration of the Company's covenants to pay compensation
to Employee as set forth in the Agreement, and the other consideration
provided by the Agreement, Employee as a free, knowing and voluntary act
releases, discharges, and promises not to sue or assert any charge or
proceeding against the Company for any claims that Employee might have
against the Company arising out of any matter, cause or claim, including
without limitation claims arising out of Employee's employment with the
Company, which have accrued prior to Employee's execution of this Release.

               NOTICE TO EMPLOYEES 40 YEARS OF AGE OR OLDER
           OF PERIOD TO CONSIDER RELEASE AND OF RIGHT TO REVOKE

     5.   Employee acknowledges that he has been given at least twenty-one
(21) calendar days to consider this Release and that EMPLOYEE HAS BEEN
ADVISED TO CONSULT WITH AN ATTORNEY PRIOR TO SIGNING THIS RELEASE.
Employee acknowledges that his signing of this Release is completely
knowing and voluntary.

     6.   Employee has the right to revoke (that is, to cancel) this
Release within seven (7) calendar days of signing it by delivering a
written statement of revocation within that seven (7) day period by
certified mail to Joseph H. Kiser, Chairman of the Board, Vari-L Company,
Inc., 4895 Peoria Street, Denver, Colorado 80239.

            THIS IS A RELEASE - READ CAREFULLY BEFORE SIGNING.
                 EMPLOYEE SHOULD CONSULT WITH AN ATTORNEY.

THE COMPANY:                                      EMPLOYEE:

VARI-L COMPANY, INC.

By:/s/Joseph H. Kiser                             /s/David G, Sherman
     Joseph H. Kiser, Chairman of the Board       David G. Sherman

Date:  8-7-00                                     Date:  8/7/00

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