Document:

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                                    [LOGO]

                         SECURITY AND LOAN AGREEMENT
                            (ACCOUNTS RECEIVABLE)

This Agreement is entered into between SILICON LABORATORIES INC., a DELAWARE
CORPORATION (herein called "Borrower") and IMPERIAL BANK (herein called "Bank").

1.   Bank hereby commits, subject to all the terms and conditions of this
     Agreement and prior to the termination of its commitment as hereinafter
     provided, to make loans to Borrower from time to time in such amounts as
     may be determined by Bank up to, but not exceeding in the aggregate
     unpaid principal balance, the following Borrowing Base:

                             80% of Eligible Accounts

and in no event more than $ 3,000,000.00

2.   The amount of each loan made by Bank to Borrower hereunder shall be
     debited to the loan ledger account of Borrower maintained by Bank (herein
     called "Loan Account") and Bank shall credit the Loan Account with all
     loan repayments made by Borrower. Borrower promises to pay Bank (a) the
     unpaid balance of Borrower's Loan Account earlier of event of default or
     maturity date and (b) on or before the tenth day of each month, interest
     on the average daily unpaid balance of the Loan Account during the
     immediately preceding month at the rate of ZERO percent (0%) per annum in
     excess of the rate of interest which Bank has announced as its prime
     lending rate ("Prime Rate") which shall vary concurrently with any change
     in such Prime Rate. Interest shall be computed at the above rate on the
     basis of the actual number of days during which the principal balance of
     the loan account is outstanding divided by 360, which shall for interest
     computation purposes be considered one year. Bank at its option may demand
     payment of any or all of the amount due under the Loan Account including
     accrued but unpaid interest at any time. Such notice may be given verbally
     or in writing and should be effective upon receipt by Borrower. The amount
     of interest payable each first of the month by Borrower shall not be less
     than a minimum monthly charge of $250.00. Bank is hereby authorized to
     charge Borrower's deposit account(s) with Bank for all sums due Bank under
     this Agreement.

3.   Requests for loans hereunder shall be in writing duly executed by
     Borrower in a form satisfactory to Bank and shall contain a
     certification setting forth the matters referred to in Section 1, which
     shall disclose that Borrower is entitled to the amount of loan being
     requested.

4.   As used in this Agreement, the following terms shall have the following
     meanings:

     A.   "Accounts" means any right to payment for goods sold or leased, or
          to be sold or to be leased, or for services rendered or to be
          rendered no matter how evidenced, including accounts receivable,
          contract rights, chattel paper, instruments, purchase orders,
          notes, drafts, acceptances, and other forms of obligations and
          receivables.

     B.   "Collateral" means any and all personal property of Borrower which
          is assigned or hereafter is assigned to Bank as security or in which
          Bank now has or hereafter acquires a security interest.

     C.   "Eligible Accounts" means all of Borrower's Accounts excluding,
          however, (1) all Accounts under which payment is not received within
          90 days from any invoice date, (2) all Accounts against which the
          account debtor or any other person obligated to make payment thereon
          asserts any defense, offset, counterclaim or other right to avoid or
          reduce the liability represented by the Account in excess of 2.5% of
          the total Account and (3) any Accounts if the account debtor or any
          other person liable in connection therewith is insolvent, subject to
          bankruptcy or receivership proceedings or has made an assignment for
          the benefit of creditors or whose credit standing is unacceptable to
          Bank and Bank has so notified Borrower.

5.   Borrower hereby assigns to Bank all Borrower's present and future
     Accounts, including all proceeds due thereunder, all guaranties and
     security therefor, and hereby grants to Bank a continuing security
     interest in all moneys in the Collateral Account referred to in Section 6
     hereof, as security for any and all obligations of Borrower to Bank,
     whether now owing or hereafter incurred and whether direct, indirect,
     absolute or contingent. So long as Borrower is indebted to Bank or Bank
     is committed to extend credit to Borrower, Borrower will execute and
     deliver to Bank such assignments, including Bank's standard forms of
     Specific or General Assignment covering individual Accounts, notices,
     financing statements, and other documents and papers as Bank may require
     in order to affirm, effectuate or further assure the assignment to Bank
     of the Collateral or to give any third party, including the account
     debtors obligated on the Accounts, notice of Bank's interest in the
     Collateral.

6.   Until Bank exercises its rights to collect the Accounts pursuant to
     paragraph 10, Borrower will collect in accordance with Borrower's
     customary practices all Borrower's Accounts, provided that no legal
     action shall be maintained thereon or in connection therewith without
     Bank's prior written consent. Any collection of Accounts by Borrower,
     whether in the form of cash, checks, notes, or other instruments for the
     payment of money (properly endorsed or assigned where required to enable
     Bank to collect same), shall be in trust for Bank, and (A) and upon event
     of default Borrower shall keep all such collections separate and apart
     from all other funds and property so as to be capable of identification
     as the property of Bank and deliver said collections daily to Bank in the
     identical form received. The proceeds of such collections when received by
     Bank may be applied by Bank directly to the payment of Borrower's Loan
     Account or any other obligation secured hereby. Any credit given by Bank
     upon receipt of said proceeds shall be conditional credit subject to
     collection. Returned items at Bank's option may be charged to Borrower's
     general account. All collections of the Accounts shall be set forth on an
     itemized schedule, showing the name of the account debtor, the amount of
     each payment and such other information as Bank may request.

7.   Until Bank exercises its rights to collect the Accounts pursuant to
     paragraph 10, Borrower may continue its present policies with respect to
     returned merchandise and adjustments. However, Borrower shall immediately
     notify Bank of all cases greater of $50,000 or 20% per account, involving
     returns, repossessions, and loss or damage of or to merchandise
     represented by the Accounts and of any credits, adjustments or disputes
     arising in connection with the goods or services represented by the
     Accounts and, in any of such events, if borrower is out of compliance with
     borrowing base Borrower will immediately pay to Bank from its own funds
     (and not from the proceeds of Accounts or Inventory) for application to
     Borrower's Loan Account or any other obligation secured hereby the amount
     of any credit for such returned or repossessed merchandise and adjustments
     made to any of the Accounts.

8.   Borrower represents and warrants to Bank: (i) If Borrower is a corporation,
     that Borrower is duly incorporated and existing in the State of its
     incorporation and the execution, delivery and performance hereof are within
     Borrower's corporate powers, have been duly authorized and are not in
     conflict with law or the terms of any charter, by-law or other
     incorporation papers, or of any material indenture, agreement or
     undertaking to which Borrower is a party or by which Borrower is found or
     affected; (ii) Borrower is, or at the time the collateral becomes subject
     to Bank's security interest will be, the true and lawful owner of and has,
     or at the time the Collateral becomes subject to Bank's security interest
     will have, good and clear title to the Collateral, subject only to Bank's
     rights therein; (iii) Each Account is, or at the time the Account comes
     into existence will be, a true and correct statement of a bona fide
     indebtedness incurred by the debtor named therein in the amount of the
     Account for either merchandise sold or delivered (or being held subject to
     Borrower's delivery instructions) to, or services rendered, performed and
     accepted by, the account debtor; (iv) That there are or will be no
     defenses, counterclaims, or setoffs which may be asserted against the
     Accounts; and (v) any and all financial information, including information
     relating to the Collateral, submitted by Borrower to Bank, whether
     previously or in the future, is or will be materially correct.

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9.   Borrower will: (i) Furnish Bank from time to time such financial statements
     and information as Bank may reasonably request and inform Bank immediately
     upon the occurrence of a material adverse change therein; (ii) Furnish Bank
     periodically, in such form and detail and at such times as Bank may
     require, statements showing aging and reconciliation of the Accounts and
     collections thereon; (iii) Permit representatives of Bank to inspect the
     Borrower's books and records relating to the Collateral and make extracts
     therefrom at any reasonable time and to arrange for verification of the
     Accounts, under reasonable procedures, acceptable to Bank, directly with
     the account debtors or otherwise at Borrower's expense; (iv) Promptly
     notify Bank of any attachment or other legal process levied against any of
     the Collateral and any information received by Borrower relative to the
     Collateral, including the Accounts, the account debtors or other persons
     obligated in connection therewith, which may in the reasonable judgement of
     bank affect the value of the Collateral or the rights and remedies of Bank
     in respect thereto; (v) Reimburse Bank upon demand for any and all legal
     costs, including reasonable attorneys' fees, and other expense incurred in
     collecting any sums payable by Borrower under Borrower's Loan Account or
     any other obligation secured hereby, enforcing any term or provision of
     this Security Agreement or otherwise or in the checking, handling and
     collection of the Collateral and the preparation and enforcement of any
     agreement relating thereto; (vi) Notify Bank of each location and of each
     office of Borrower at which records of Borrower relating to the Accounts
     are kept; (vii) Provide, maintain and deliver to Bank policies insuring
     the Collateral against loss or damage by such risks and in such amounts,
     forms and companies as Bank may require and with loss payable solely to
     Bank, and, in the event Bank takes possession of the Collateral, the
     insurance policy or policies and any unearned or returned premium thereon
     shall at the option of Bank become the sole property of Bank, such policies
     and the proceeds of any other insurance covering or in any way relating to
     the Collateral, whether now in existence or hereafter obtained, being
     hereby assigned to Bank; (viii) In the event the unpaid balance of
     Borrower's Loan Account shall exceed the maximum amount of outstanding
     loans to which Borrower is entitled under Section 1 hereof, Borrower shall
     immediately pay to Bank.

10.  After the occurrence and continuation of an Event of Default, Bank may
     collect the Accounts and may give notice of assignment to any and all
     account debtors, and Borrower does hereby make, constitute and appoint Bank
     its irrevocable, true and lawful attorney with power to receive, open and
     dispose of all mail addressed to Borrower, to endorse the name of Borrower
     upon any checks or other evidences of payment that may come into the
     possession of Bank upon the Accounts to endorse the name of the undersigned
     upon any document or instrument relating to the Collateral; in its name or
     otherwise, to demand, sue for, collect and give acquittances for any and
     all moneys due or to become due upon the Accounts; to compromise, prosecute
     or defend any action, claim or proceeding with respect thereto; and to do
     any and all things necessary and proper to carry out the purpose herein
     contemplated.

11.  Until Borrower's Loan Account and all other obligations secured hereby
     shall have been repaid in full, Borrower shall not sell, dispose of or
     grant a security interest in any of the Collateral other than to Bank, or
     execute any financing statements covering the Collateral in favor of any
     secured party or person other than Bank.

12.  Should: (i) Default which is not cured by Borrower within fifteen (15) days
     of receipt of notice thereof be made in the payment of any obligation, or
     breach be made in any warranty, statement, promise, term or condition,
     contained herein or hereby secured; (ii) Any material statement or
     representation made for the purpose of obtaining credit hereunder prove
     false; (iii) (iv) Borrower become insolvent or make an assignment for the
     benefit of creditors; or (v) Any proceeding be commenced by or against
     Borrower and if against Borrower, is not cured within 60 days of action
     under any bankruptcy, reorganization, arrangement, readjustment of debt or
     moratorium law or statute; then in any such event, Bank may, at its option
     and without demand first made and without additional notice to Borrower, do
     any one or more of the following: (a) Terminate its obligation to make
     loans to Borrower as provided in Section 1 hereof; (b) Declare all sums
     secured hereby immediately due and payable; (c) Immediately take possession
     of the Collateral wherever it may be found, using all necessary force so to
     do, or require Borrower to assemble the Collateral and make it available to
     Bank at a place designated by Bank which is reasonably convenient to
     Borrower and Bank, and Borrower waives all claims for damages due to or
     arising from or connected with any such taking; (d) Proceed in the
     foreclosure of Bank's security interest and sale of the Collateral in any
     manner permitted by law, or provided for herein; (e) Sell, lease or
     otherwise dispose of the Collateral at public or private sale, with or
     without having the Collateral at the place of sale, and upon terms and in
     such manner as Bank may determine, and Bank may purchase same at any such
     sale; (f) Retain the Collateral in full satisfaction of the obligations
     secured thereby; (g) Exercise any remedies of a secured party under the
     Uniform Commercial Code. Prior to any such disposition, Bank may, at as
     option, cause any of the Collateral to be repaired or reconditioned in such
     manner and to such extent as Bank may deem advisable, and any sums expended
     therefor by Bank shall be repaid by Borrower and secured hereby. Bank shall
     have the right to enforce one or more remedies hereunder successively or
     concurrently, and any such action shall not estop or prevent Bank from
     pursuing any further remedy which it may have hereunder or by law. If a
     sufficient sum is not realized from any such disposition of Collateral to
     pay all obligations secured by this Security Agreement, Borrower hereby
     promises and agrees to pay Bank any deficiency.

13.  If any writ of attachment, garnishment, execution or other legal process be
     issued against any property of Borrower, or if any assessment for taxes
     against Borrower, other than real property, is made by the Federal or State
     government or any department thereof, the obligation of Bank to make loans
     to Borrower as provided in Section 1 hereof shall immediately terminate and
     the unpaid balance of the Loan Account, all other obligations secured
     hereby and all other sums due hereunder shall immediately become due and
     payable without demand, presentment or notice.

14.  Borrower authorizes Bank to destroy all invoices, delivery receipts,
     reports and other types of documents and records submitted to Bank in
     connection with the transactions contemplated herein at any time subsequent
     to four months from the time such items are delivered to Bank.

15.  Nothing herein shall in any way limit the effect of the conditions set
     forth in any other security or other agreement executed by Borrower, but
     each and every condition hereof shall be in addition thereto.

16.  Should default be made in the payment of principal or interest which is not
     cured by Borrower within fifteen (15) days of receipt of notice thereof, or
     in the performance or observance, which is not cured by Borrower within
     fifteen (15) days of receipt of notice thereof, of any item, covenant or
     condition of this Agreement, any deed of trust, security agreement or other
     agreement (including amendments or extensions thereof) securing or
     pertaining to this Agreement, at the option of the holder hereof and
     without notice or demand, the entire balance of principal and accrued
     interest then remaining unpaid shall (a) become immediately due and
     payable, and (b) thereafter bear interest, until paid in full, at the
     increased rate of 5% per year in excess of the rate provided for above, as
     it may vary from time to time.

17.  If any installment payment, interest payment, principal payment or
     principal balance payment due hereunder is delinquent twenty (20) or more
     days, Borrower agrees to pay Bank a late charge in the amount of 5% of the
     payment so due and unpaid, in addition to the payment; but nothing in this
     paragraph is to be construed as any obligation on the part of the Bank to
     accept payment of any payment past due or less than the total unpaid
     principal balance after maturity.

     All payments shall be applied first to any late charges owing, then to
     interest and the remainder, if any, to principal.

18.  Reference Provision.

     A.   Other than (i) non-judicial foreclosure and all matters in connection
          therewith regarding security interests in real or personal property;
          or (ii) the appointment of a receiver, or the exercise of other
          provisional remedies (any and all of which may be initiated pursuant
          to applicable law), each controversy, dispute or claim between the
          parties arising out of or relating to this document ("Agreement"),
          which controversy, dispute or claim is not settled in writing within
          thirty (30) days after the "Claim Date" (defined as the date on which
          a party subject to the Agreement gives written notice to all other
          parties that a controversy, dispute or claim exists), will be settled
          by a reference proceeding in California in accordance with the
          provisions of Section 638 et seq. of the California Code of Civil
          Procedure, or their successor section ("CCP"), which shall constitute
          the exclusive remedy for the settlement of any controversy, dispute or
          claim concerning this Agreement, including whether such controversy,
          dispute or claim is subject to the reference proceeding and except as
          set forth above, the parties waive their rights to initiate any legal
          proceedings against each other in any court or jurisdiction other than
          the Superior Court in the County where the Real Property, if any, is
          located or Los Angeles County if none (the "Court"). The referee shall
          be a retired Judge of the Court selected by mutual agreement of the
          parties, and if they cannot so agree within forty-five (45) days after
          the Claim Date, the referee shall be promptly selected by the
          Presiding Judge of the Court (or his representative). The referee
          shall be appointed to sit as a temporary judge, with all of the powers
          of a temporary judge, as authorized by law, and upon selection should
          take and subscribe to the oath of office as provided for in Rule 244
          of the California Rules of Court (or any subsequently enacted Rule).
          Each party shall have one peremptory challenge pursuant to CCP Section
          170.6. The referee shall (a) be requested to set the matter for
          hearing within sixty (60) days after the Claim Date and (b) try any
          and all issues of law or fact and report a statement of decision upon
          them, if possible, within ninety (90) days of the Claim Date.  Any
          decision rendered by the referee will be final, binding and conclusive
          and judgment shall be entered pursuant to CCP Section 644 in any court
          in the State of California having jurisdiction. Any party may apply
          for a reference proceeding at any time after thirty (30) days
          following notice to any other party of the nature of the controversy,
          dispute or claim, by filing a petition for a hearing and/or trial.
          All discovery permitted by this Agreement shall be completed no later
          than fifteen (15) days before the first hearing date established by
          the referee. The referee may extend such period in the event of a
          party's refusal to provide requested discovery for any reason
          whatsoever, including, without limitation, legal objections raised to
          such discovery or unavailability of a witness due to absence or
          illness. No party shall be entitled to "priority" in conducting
          discovery. Depositions may be

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          taken by either party upon seven (7) days written notice, and request
          for production or inspection of documents shall be responded to within
          ten (10) days after service. All disputes relating to discovery which
          cannot be resolved by the parties shall be submitted to the referee
          whose decision shall be final and binding upon the parties. Pending
          appointment of the referee as provided herein, the Superior Court is
          empowered to issue temporary and/or provisional remedies, as
          appropriate.

     B.   Except as expressly set forth in this Agreement, the referee shall
          determine the manner in which the reference proceeding is conducted
          including the time and place of all hearings, the order of
          presentation of evidence, and all other questions that arise with
          respect to the course of the reference proceeding. All proceedings and
          hearings conducted before the referee, except for trial, shall be
          conducted without a court reporter, except that when any party so
          requests, a court reporter will be used at any hearing conducted
          before the referee. The party making such a request shall have the
          obligation to arrange for and pay for the court reporter. The costs of
          the court reporter at the trial shall be borne equally by the parties.

     C.   The referee shall be required to determine all issues in accordance
          with existing case law and the statutory laws of the State of
          California. The rules of evidence applicable to proceedings at law in
          the State of California will be applicable to the reference
          proceeding. The referee shall be empowered to enter equitable as well
          as legal relief, to provide all temporary and/or provisional remedies
          and to enter equitable orders that will be binding upon the parties.
          The referee shall issue a single judgment at the close of the
          reference proceeding which shall dispose of all of the claims of the
          parties that are the subject of the reference. The parties hereto
          expressly reserve the right to contest or appeal from the final
          judgment or any appealable order or appealable judgment entered by the
          referee. The parties hereto expressly reserve the right to findings of
          fact, conclusions of law, a written statement of decision, and the
          right to move for a new trial or a different judgment, which new
          trial, if granted, is also to be a reference proceeding under this
          provision.

     D.   In the event that the enabling legislation which provides for
          appointment of a referee is repealed (and no successor statute is
          enacted), any dispute between the parties that would otherwise be
          determined by the reference procedure herein described will be
          resolved and determined by arbitration. The arbitration will be
          conducted by a retired judge of the Court, in accordance with the
          California Arbitration Act, Section 1280 through Section 1294.2 of the
          CCP as amended from time to time. The limitations with respect to
          discovery as set forth hereinabove shall apply to any such arbitration
          proceeding.

19.  Additional Provisions: SUBJECT TO THE PROVISIONS OF THE CREDIT TERMS AND
     CONDITIONS AGREEMENT DATED JUNE 25, 1999, AND ALL AMENDMENTS THERETO AND
     REPLACEMENTS THEREFOR.

/ /  If checked, the Addendum or Exhibit "A" attached (and all amendments
     thereto and replacements therefor) is incorporated herein by this
     reference.

     Executed this 25TH day of JUNE, 1999

                               SILICON LABORATORIES INC., A DELAWARE CORPORATION
                               -------------------------------------------------
                                         (Name of Borrower)
                                                              Chief
IMPERIAL BANK                     BY:  /s/ John W. McGovern   Financial Officer
                                    --------------------------------------------
                                          (Authorized Signature and Title)
                         SVP &                                VP-
BY: /s/ Tommy Davenport, Manager  BY: /s/ Jeffery W. Scott    Engineering
   -----------------------------    --------------------------------------------
                       Title              (Authorized Signature and Title)

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IMPERIAL BANK
Member FDIC

226 Airport Parkway
San Jose, CA 95110

Subject: Credit Terms and Conditions ("Agreement")
                                                                  June 25, 1999
Gentlemen:
                                            Borrower: Silicon Laboratories Inc.

To induce Imperial Bank (herein sometimes referred to as "you" and sometimes
as "Bank") to make loans to the undersigned (herein called "Borrower"), and
in consideration of any loan or loans you, in your sole discretion, may make
to Borrower, Borrower warrants and agrees as follows:

A.  Borrower represents and warrants that:
    1.  EXISTENCE AND RIGHTS.
          Borrower is a Delaware corporation.

Borrower is duly organized and existing and in good standing under the laws
of the State of Delaware and is authorized and in good standing to do
business in the State of Texas. Borrower has powers and adequate authority,
rights and franchises to own its property and to carry on its business as now
conducted, and is duly qualified and in good standing in each State in which
the character of the properties owned by it therein or the conduct of its
business makes such qualification necessary, and Borrower has the power and
adequate authority to make and carry out this Agreement. Borrower has no
investment in any other business entity, except as previously disclosed to
Bank.

    2.  AGREEMENT AUTHORIZED.  The execution, delivery and performance of this
Agreement are duly authorized and do not require the consent or approval of
any governmental body or other regulatory authority; are not in contravention
of or in conflict with any law or regulation or any term or provision of
Borrower's articles of incorporation, by-laws, or Articles of Association, as
the case may be, and this Agreement is the valid, binding and legally
enforceable obligation of Borrower in accordance with its terms.

    3.  NO CONFLICT.  The execution, delivery and performance of this
Agreement are not in contravention of or in conflict with any agreement,
indenture or undertaking to which Borrower is a party or by which it or any
of its property may be bound or affected, and do not cause any lien, charge
or other encumbrance to be created or imposed upon any such property by
reason thereof.

    4.  LITIGATION.  There is no litigation or other proceeding pending or
threatened against or affecting Borrower, received in writing or known by
Borrower, and Borrower is not in default with respect to any order, writ,
injunction, decree or demand of any court or other governmental or regulatory
authority, except as previously disclosed in writing to bank.

    5.  FINANCIAL CONDITION.  The balance sheet of Borrower as of May 1,
1999, and the related profit and loss statement for the 4 months ended on
that date, a copy of which has heretofore been delivered to you by Borrower,
and all other statements and data submitted in writing by Borrower to you in
connection with this request for credit are true and correct, and said
balance sheet and profit and loss statement truly present the financial
condition of Borrower as of the date thereof and the results of the
operations of Borrower for the period covered thereby, and have been prepared
in accordance with generally accepted accounting principles on a basis
consistently maintained, except for the two million dollar equipment
financing transaction with Finova Capital Corporation previously disclosed to
bank and subordinated in form and substance respective of a specific lien
satisfactory to Bank. Since such date there have been no materially adverse
changes in the financial condition or business of Borrower. Borrower has no
knowledge of any material liabilities, contingent or otherwise, at such date
not reflected in said balance sheet, and Borrower has not entered into any
special commitments or substantial contracts which are not reflected in said
balance sheet, other than in the ordinary and normal course of its business,
which may have a materially adverse effect upon its financial condition,
operations or business as now conducted.

    6.  TITLE TO ASSETS.  Except for transactions with COMDISCO, Third Coast
Capital and Finova Capital Corporation, leasehold improvement affixed to
landlord owned real estate and software in the form of software licenses
rather than ownership of source code, borrower has good title to its assets,
and the same are not subject to any liens or encumbrances other than those
permitted by Section C.3 hereof.

    7.  TAX STATUS.  Borrower has no known liability for any delinquent
state, local or federal taxes, and if Borrower has contracted with any
government agency, Borrower has no liability for renegotiation of profits.

    8.  TRADEMARKS, PATENTS.  To the best of it's knowledge, Borrower, as of
the date hereof, possesses all necessary trademarks, trade names, copyrights,
patents, patent rights, and licenses to conduct its business as now operated,
without any known material conflict with the valid trademarks, trade names,
copyrights, patents and license rights of others. Notwithstanding the
foregoing, there is no pending intellectual property litigation against the
Company. The Company has no reason to believe it has infringed on any
intellectual property rights. The semiconductor industry is characterized by
vigorous protection and pursuit of intellectual property rights or positions,
which have resulted in significant and often protracted, expensive
litigation. The Company or its foundries may from time to time in the future
receive notice of claims that the Company has infringed patents or other
intellectual property rights owned by others. The Company may seek licenses
under such patents or other intellectual property rights. However, these can
be no assurance that licenses will be offered or that the terms of any
offered licenses will be acceptable to the Company.

    9.  REGULATION U.  The proceeds of this loan shall not be used to
purchase or carry margin stock (as defined with Regulation U of the Board of
Governors of the Federal Reserve system).

    10. YEAR 2000 COMPLIANCE.  Borrower has reviewed the areas within their
operations and business which could be adversely affected by, and have
developed or are developing a program to address on a timely basis, the Year
2000 Problem and have made related appropriate inquiry of material suppliers
and vendors, and based on such review and program, the Year 2000 Problem will
not have a material adverse effect upon its financial condition, operations
or business as now conducted. "Year 2000 Problem" means the risk that any
computer applications used by Borrower may be unable to recognize and
properly perform date-sensitive functions involving certain dates prior to
and any dates one or after December 31, 1999.

B.  Borrower agrees that so long as it is indebted to you, it will, unless
you shall otherwise consent in writing:

    1.  RIGHTS AND FACILITIES.  Maintain and preserve all rights, franchises
and other authority adequate for the conduct of its business; maintain its
properties, equipment and facilities in good order and repair; conduct its
business in an orderly manner without voluntary interruption and, if a
corporation or partnership, maintain and preserve its existence.

    2.  INSURANCE.  Maintain public liability, property damage and workers'
compensation insurance and insurance on all its insurable property against
fire and other hazards with responsible insurance carriers to the extent
usually maintained by similar businesses.

    3.  TAXES AND OTHER LIABILITIES.  Pay and discharge, before the same
become delinquent and before penalties accrue thereon, all taxes, assessments
and governmental charges upon or against it or any of its properties, and all
its other liabilities at any time existing, except to the extent and so long
as:

(a) The same are being contested in good faith and by appropriate proceedings
in such manners as not to cause any materially adverse effect upon its
financial condition or the loss of any right of redemption from any sale
thereunder, and

(b) it shall have set aside on its books reserves (segregated to the extent
required by generally accepted accounting practice) deemed by it adequate
with respect thereto.

    4.  RECORDS AND REPORTS.  Maintain a standard and modern system of
accounting in accordance with generally accepted accounting principles on a
basis consistently maintained; permit your representatives to have access to,

<PAGE>

and to examine its properties, books and records at all reasonable times; and
furnish you:

(a)   As soon as available, and in any event within 25 days after the close
of each month of each fiscal year of Borrower, commencing with the month next
ending, a balance sheet, profit and loss statement and reconciliation of
Borrower's capital accounts as of the close of such period and covering
operations for the portion of Borrower's fiscal year ending on the last day
of such period, all in reasonable detail and stating in comparative form the
figures for the corresponding date and period in the previous fiscal year,
prepared in accordance with generally accepted accounting principles on a
basis consistently maintained by Borrower and certified by an appropriate
officer of Borrower, subject, however, to year-end audit adjustments;

(b)   As soon as available, and in any event within 90 days after the close of
each fiscal year of Borrower, a report of audit of Company as of the close
of and for such fiscal year, all in reasonable detail and stating in
comparative form the figures as of the close of and for the previous fiscal
year, with the unqualified opinion of accountants satisfactory to you.

(c)  Within 25 days after the close of each month of each fiscal year of
Borrower, a certificate by chief financial officer or partner of Borrower,
stating that Borrower has performed and observed each and every covenant
contained in this Letter of Inducement to be performed by it and that no
event has occurred and no condition then exists which constitutes an event of
default hereunder or would constitute such an event of default upon the lapse
of time or upon the giving of notice and the lapse of time specified herein,
or, if any such event has occurred or any such condition exists, specifying
the nature thereof;

(d)  Promptly after the receipt thereof by Borrower, copies of any detailed
audit reports submitted to Borrower by independent accountants in connection
with each annual or interim audit of the accounts of Borrower made by such
accountants;

(e)  Promptly after the same are available, copies of all such proxy
statements, financial statements and reports as Borrower shall send to its
stockholders, if any, and copies of all reports which Borrower may file with
the Securities and Exchange Commission or any governmental authority at any
time substituted therefor; and

(f)  Such other information relating to the affairs of Borrower as you
reasonably may request from time to time.

(g)  Notice of Default. Promptly notify the Bank in writing of the occurrence
of any event of default hereunder or any event which upon notice and lapse of
time would be an event of default.

     5.   INTELLECTUAL PROPERTY.   Borrower shall (i) protect, defend and
maintain the validity and enforceability of the Trademarks, Patents and
Copyrights, (ii) use its best efforts to detect infringements of the
Trademarks, Patents and Copyrights and promptly advise Bank in writing of
material infringements detected.

6.   YEAR 2000 COMPLIANCE. Borrower shall perform all acts reasonably
necessary to ensure that Borrower and any business in which Borrower holds a
substantial interest become Year 2000 Compliant in a timely manner. Such acts
shall include, without limitation, performing a comprehensive review and
assessment of all Borrower's systems and adopting a detailed plan, with
itemized budget, for the remediation, monitoring and testing of such systems.
Borrower shall also take reasonably necessary steps to ensure that it will
not be materially adversely affected as a result of any customer, supplier or
vendor's failure to become Year 2000 compliant. As used in this paragraph,
"Year 2000 Compliant" shall mean, in regard to any entity, that all software,
hardware, firmware, equipment, goods or systems utilized by or material to
the business operations or financial condition of such entity, will properly
perform date sensitive functions before, during and after the year 2000.
Borrower shall, immediately upon request, provide to Bank such certifications
or other evidence of Borrower's compliance with the terms of this paragraph
as Bank may from time to time require.

C.   Borrower agrees that so long as it is indebted to you, it will not,
without your written consent:

     1.   TYPE OF BUSINESS; MANAGEMENT. Make any substantial change in the
character of its business; or make any change in its executive management

     2.   OUTSIDE INDEBTEDNESS. Create, incur, assume or permit to exist any
indebtedness for borrowed moneys other than loans from you except obligations
now existing as shown in financial statement dated May 1, 1999, excluding
those being refinanced by your bank; or sell or transfer, either with or
without recourse, any accounts or notes receivable or any moneys due to
become due and except for transactions with COMDISCO. Third Coast Capital and
Finova Capital Corporation, including follow-on equipment schedules to
existing permitted financing lines.

     3.  LIENS AND ENCUMBRANCES. Except for transactions with COMDISCO, Third
Coast Capital and Finova Capital Corporation, including follow-on equipment
schedules to existing permitted financing lines, create, incur, or assume any
mortgage, pledge encumbrance, lien or charge of any kind (including the
charge upon property at any time purchased or acquired under conditional sale
or other title retention agreement) upon any asset (including Borrower's
intellectual property to a financial institution), now owned or hereafter
acquired by it, other than liens for taxes not delinquent, materialmen and
mechanics liens, provided they are discharged within sixty days, and liens in
your favor. Purchase money security interests are allowed.

     4.  LOANS, INVESTMENTS, SECONDARY LIABILITIES. Make any loans or
advances to any person or other entity other than in the ordinary and normal
course of its business as now conducted or make any investment in securities
other than United States Government Treasuries or Agencies, Imperial Bank
sponsored paper, or the Monarch Money Market Funds; or guarantee or otherwise
become liable upon the obligation of any person or other entity, except by
endorsement of negotiable instruments for deposit or collection in the
ordinary and normal course of its business.

     5.  ACQUISITION OR SALE OF BUSINESS; MERGER OR CONSOLIDATION. Purchase
or otherwise acquire all or substantially all of the assets or business of
any person or other entity; or liquidate, dissolve, merge or consolidate, or
commence any proceedings therefor; or sell any assets except in the ordinary
and normal course of its business as now conducted; or sell, lease, assign,
or transfer any substantial part of its business or fixed assets, or any
property or other assets necessary for the continuance of its business as now
conducted including without limitation the selling of any property or other
asset accompanied by the leasing back of the same.

     6.  DIVIDENDS, STOCK PAYMENTS. If a corporation, declare or pay any
dividend (other than dividends payable in common stock of Borrower) or make
any other distribution on any of its capital stock now outstanding or
hereafter issued or purchase (other than the routine repurchase of common
stock shares issued to employees under the 1997 Stock Option/Stock Issuance
Plan and any successor plans), redeem or retire any of such stock.

D.   The occurrence of any one of the following events of default shall, at
your option, terminate your commitment to lend and make all sums of principal
and interest then remaining unpaid on all Borrower's indebtedness to you
immediately due and payable, all without demand, presentment or notice, all
of which are hereby expressly waived;

     1.   FAILURE TO PAY. Failure to pay any installment of principal or of
interest on any indebtedness of Borrower to you, provided such failure is not
cured by Borrower within fifteen (15) days of receipt of notice thereof.

     2.   BREACH OF COVENANT. Failure of Borrower to perform any other term
or condition of this Agreement binding upon Borrower. Provided such failure
is not cured by Borrower within fifteen (15) days of receipt of notice
thereof.

     3.   BREACH OF WARRANTY. Any of Borrower's representations or warranties
made herein or any statement or certificate at any time given in writing
pursuant hereto or in connection herewith shall be false or misleading in any
material respect.

     4.   INSOLVENCY; RECEIVER OR TRUSTEE. Borrower shall become insolvent;
or admit its inability to pay its debts as they mature; or make an assignment
for the benefit of creditors; or apply for or consent to the appointment of a
receiver or trustee for it or for a substantial part of its property or
business.

     5.   JUDGMENTS, ATTACHMENTS. Any money judgment, writ or warrant of
attachment, or similar process in excess of two hundred fifty thousand dollars
($250,000), shall be entered or filed against Borrower or any of its assets
and shall remain unvacated unbonded or unstayed for a period of 10 days or in
any event later than five days prior to the date of any proposed sale
thereunder

     6.   BANKRUPTCY. Bankruptcy, insolvency, reorganization or liquidation
proceedings or other proceedings for relief under any bankruptcy law or any
law for the relief of debtors shall be instituted by or against Borrower and,
if instituted against it, shall be consented to.

E.   Miscellaneous Provisions.

     1.   FAILURE OR INDULGENCE NOT WAIVER. No failure or delay on the part
of your Bank or any holder of Notes issued hereunder, in the exercise of any
power, right or privilege hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such power, right or privilege
preclude other or further exercise thereof or of any other right, power or
privilege. All rights and remedies existing under this agreement or any note
issued in connection with a loan that your Bank may make hereunder, are
cumulative to, and not exclusive of, any rights or remedies otherwise
available.

<PAGE>

     2.   LEASE OF PERSONAL PROPERTY. Notwithstanding anything contained
herein or in any security agreement or any other document executed by
Borrower in favor of Bank ("Loan Documents"), the Borrower is hereby
permitted to rent and or lease personal property and to execute such
documents as necessary to effect such transactions, including the granting of
a purchase money security interest if the property being rented or leased.
Any such rental or lease will not be a violation of any of the Loan Documents.

     3.   APPLICABLE LAW. This Agreement and all other agreements and
instruments required by Bank in connection therewith shall be governed by and
construed according to the laws of the state of California, to the
jurisdiction of whose courts the parties hereby agree to submit.

     4.   WAIVER OF JURY TRIAL. TO THE EXTENT NOT PROHIBITED BY APPLICABLE
LAW WHICH CANNOT BE WAIVED, THE BANK AND THE BORROWER EACH HEREBY WAIVES AND
COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR
OTHERWISE) ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE,
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE SUBJECT MATTER HEREOF OR THEREOF
OR ANY OBLIGATION OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO
THE DEALINGS OF THE BANK OR THE BORROWER IN CONNECTION WITH ANY OF THE ABOVE,
IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING AND WHETHER IN
CONTRACT OR TORT OR OTHERWISE.

     5.   JUDICIAL REFERENCE (a) Other than (i) non-judicial foreclosure and
all matters in connection therewith regarding security interests in real or
personal property; or (ii) the appointment of a receiver, or the exercise of
other provisional remedies (any and all of which may be initiated pursuant to
applicable law), each controversy, dispute or claim between the parties
arising out of or relating to this document ("Agreement"), which controversy,
dispute or claim is not settled in writing within thirty (30) days after the
"Claim Date" (defined as the date on which a party subject to the Agreement
gives written notice to all other parties that a controversy, dispute or
claim exists), will be settled by a reference proceeding in California in
accordance with the provisions of Section 638 ET SEQ. of the California Code
of Civil Procedure, or their successor section ("CCP"), which shall
constitute the exclusive remedy for the settlement of any controversy,
dispute or claim concerning this Agreement, including whether such
controversy, dispute or claim is subject to the reference proceeding and
except as set forth above, the parties waive their rights to initiate any
legal proceedings against each other in any court or jurisdiction other than
the Superior Court in the County where the Real Property, if any, is located
or Los Angeles County if none (the "Court"). The referee shall be a retired
Judge of the Court selected by mutual agreement of the parties, and if they
cannot so agree within forty-five (45) days after the Claim Date, the referee
shall be promptly selected by the Presiding Judge of the Court (or his
representative). The referee shall be appointed to sit as a temporary judge,
with all of the powers for a temporary judge, as authorized by law, and upon
selection should take and subscribe to the oath of office as provided for in
Rule 244 of the California Rules of Court (or any subsequently enacted Rule).
Each party shall have one peremptory challenge pursuant to CCP Section 170.6.
The referee shall (a) be requested to set the matter for hearing within sixty
(60) days after the Claim Date and (b) try any and all issues of law or fact
and report a statement of decision upon them, if possible, within ninety (90)
days of the Claim Date. Any decision rendered by the referee will be final,
binding and conclusive and judgment shall be entered pursuant to CCP Section
644 in any court in the State of California having jurisdiction. Any party
may apply for a reference proceeding at any time after thirty (30) days
following notice to any other party of the nature of the controversy, dispute
or claim, by filing a petition for a hearing and/or trial. All discovery
permitted by this Agreement shall be completed no later than fifteen (15)
days before the first hearing date established by the referee. The referee
may extend such period in the event of a party's refusal to provide requested
discovery for any reason whatsoever, including, without limitation, legal
objections raised to such discovery or unavailability of a witness due to
absence or illness. No party shall be entitled to "priority" in conducting
discovery. Depositions may be taken by either party upon seven (7) days
written notice, and request for production or inspection of documents shall
be responded to within ten (10) days after service. All disputes relating to
discovery which cannot be resolved by the parties shall be submitted to the
referee whose decision shall be final and binding upon the parties. Pending
appointment of the referee as provided herein, the Superior Court is
empowered to issue temporary and/or provisional remedies, as appropriate.

     (b)   Except as expressly set forth in this Agreement, the referee shall
determine the manner in which the reference proceeding is conducted including
the time and place of all hearings, the order of presentation of evidence,
and all other questions that arise with respect to the course of the
reference proceeding. All proceedings and hearings conducted before the
referee, except for trial, shall be conducted without a court reporter,
except that when any party so requests, a court reporter will be used at any
hearing conducted before the referee.  The party making such a request shall
have the obligation to arrange for and pay for the court reporter. The costs
of the court reporter at the trial shall be borne equally by the parties.

     (c)   The referee shall be required to determine all issues in
accordance with existing case law and the statutory laws of the State of
California. The rules of evidence applicable to proceedings at law in the
State of California will be applicable to the reference proceeding. The
referee shall be empowered to enter equitable as well as legal relief, to
provide all temporary and/or provisional remedies and to enter equitable
orders that will be binding upon the parties. The referee shall issue a
single judgment at the close of the reference proceeding which shall dispose
of all of the claims of the parties that are the subject of the reference.
The parties hereto expressly reserve the right to contest or appeal from the
final judgment or any appealable order or appealable judgment entered by the
referee. The parties hereto expressly reserve the right to findings of fact,
conclusions of law, a written statement of decision, and the right to move
for a new trial or a different judgment, which new trial, if granted, is also
to be a reference proceeding under this provision.

     (d)   In the event that the enabling legislation which provides for
appointment of a referee is repealed (and no successor statute is enacted),
any dispute between the parties that would otherwise be determined by the
reference procedure herein described will be resolved and determined by
arbitration. The arbitration will be conducted by a retired judge of the
Court, in accordance with the California Arbitration Act, Section 1280
through Section 1294.2 of the CCP as amended from time to time. The
limitations with respect to discovery as set forth hereinabove shall apply to
any such arbitration proceeding.

     6.  RIDER TO STANDBY LETTER OF CREDIT AND SECURITY AGREEMENT. Borrower
hereby agrees that the Rider to Standby Letter of Credit and Security
Agreement dated September 4, 1998 remain in full force and effect and the
reference therein to Credit Agreement shall mean this Agreement as may be
amended or replaced.

The Commitment Letter dated April 19, 1999, attached hereto and all
amendments and replacements thereto, is incorporated herein by this reference
for additional terms. In the event of a conflict between this Agreement and
the Letter, the terms in the Letter shall take precedence.

SILICON LABORATORIES INC.

By /s/ JOHN W. MCGOVERN
   ------------------------
       Authorized Signature

Name:  JOHN W. MCGOVERN
       --------------------

Title: CHIEF FINANCIAL OFFICER
       -----------------------

By /s/ JEFFREY W. SCOTT
   ------------------------
       Authorized Signature

Name:  JEFFREY W. SCOTT
       ----------------

Title: VP ENGINEERING
       ---------------<PAGE>

[LETTERHEAD]

    TO:      S.W. AUSTIN OFFICE BUILDING LTD
             C/O KNOX DEVELOPMENT
             5316 HWY 290 W. #360
             AUSTIN, TEXAS 78735

    DATE:    07/30/99
    AMOUNT:  USD453,600.00
    REF:     CSF98000506

    AMENDMENT NO. 1

    AT THE REQUEST OF THE ACCOUNT PARTY, WE ENCLOSE HEREWITH ORIGINAL
    AMENDMENT TO SUBJECT LETTER OF CREDIT.

    PLEASE EXAMINE THE TERMS AND CONDITIONS OF THE AMENDMENT TO ENSURE THAT
    ALL THE TERMS AND CONDITIONS CAN BE STRICTLY COMPLIED WITH.

    IF THE BENEFICIARY IS UNABLE TO COMPLY, WE SUGGEST THAT THEY CONTACT THE
    ACCOUNT PARTY OF THE LETTER OF CREDIT TO MAKE CHANGES AS REQUIRED.

   SINCERELY,

   /s/ [ILLEGIBLE]
       -------------------------
       AUTHORIZED SIGNATURE

   ILCAMBBK
   NNNN

                                Page 1

<PAGE>

[LETTERHEAD]

    DATE:  FRIDAY, JULY 30, 1999

    FROM:                 IMPERIAL BANK
                          INTERNATIONAL DIVISION
                          2015 MANHATTAN BEACH BLVD
                          REDONDO BEACH, CA 90278
                          U.S.A.
                          TELEX:  3730628 (IMPERIAL INW)

    APPLICANT:            SILICON LABORATORIES, INC.
                          2024 E. ST. ELMO RD.
                          AUSTIN, TX 78744-1018

    IN FAVOR OF:          S.W. AUSTIN OFFICE BUILDING LTD.
                          C/O KNOX DEVELOPMENT
                          5316 HWY 290 W. SUITE 360
                          AUSTIN, TEXAS 78735

                           ++++++AMENDMENT NO.1++++++

    WE HEREBY AMEND OUR IRREVOCABLE STANDBY LETTER OF CREDIT NO. OSF98000506
    ISSUED 09/03/98 AS FOLLOWS:

    NEW DATE OF EXPIRY:  09/08/00

    DUE TO SYSTEM CONVERSION, SB20011682 IS NOW OSF98000506. PLEASE MARK ALL
    RECORDS ACCORDINGLY.

    BENEFICIARY'S ADDRESS IS NOW:

    5316 HWY 290 WEST, SUITE 360
    AUSTIN, TX 78735

    +ALL OTHER TERMS AND CONDITIONS REMAIN UNCHANGED. THIS AMENDMENT IS AN
    INTEGRAL PART OF THE ABOVE MENTIONED CREDIT AND MUST BE ATTACHED THERETO.

    +THIS CREDIT IS SUBJECT TO UCP 500.

    AUTHORIZED SIGNATURE                        AUTHORIZED SIGNATURE

    /s/ [ILLEGIBLE]                             /s/ [ILLEGIBLE]
    ---------------------------                 ----------------------------

                                   Page 1

<PAGE>

[LETTERHEAD]

    IMPERIAL BANK
    INTERNATIONAL BANKING DIVISION
    2015 MANHATTAN BEACH BLVD., 2ND. FLOOR
    REDONDO BEACH, CA 90278
    TEL: 310 725-4488   FAX:  310 649-3407

    DATE:  07/30/99

    Silicon Laboratories, Inc.
    2024 E. St. Elmo Rd.
    Austin, TX 78744-1018

    DEAR CUSTOMER:

    AT YOUR REQUEST, WE HEREBY TODAY AMEND OUR STANDBY LETTER OF CREDIT NO.
    OSF98000506, A COPY OF WHICH IS ATTACHED FOR YOUR INFORMATION. SHOULD YOU
    HAVE ANY QUESTIONS REGARDING THIS L/C, PLEASE CONTACT OUR INTERNATIONAL
    BANKING DIVISION AT 310-725-4488.

    PLEASE REVIEW THE DETAILS OF THE AMENDMENT.

    ANY INCONGRUITY MUST BE REPORTED AS SOON AS POSSIBLE OR THE TERMS AND
    CONDITIONS OF THE LETTER OF CREDIT SHALL BE DEEMED CONCLUSIVELY TO COMPLY
    WITH THE APPLICATION. THIS L/C IS SUBJECT TO THE U.C.P. 1993 ICC
    PUBLICATION NO. 500.

    THIS IS A COMPUTER GENERATED ADVICE WHICH DOES NOT REQUIRE AN AUTHORIZED
    SIGNATURE.

    L/C NO. OSF98000506
    AMENDMENT NO.: 1
    AMOUNT: USD .00
    EXPIRY DATE:  09/08/00
    TYPE:  IRREVOCABLE
    IN FAVOR OF:  S.W. AUSTIN OFFICE BUILDING LTD
                  C/O KNOX DEVELOPMENT
                  5316 HWY 290 W. #360
                  AUSTIN, TEXAS 78735

    OSFAMAPP

                                      Page 1

<PAGE>

[LETTERHEAD]

    DATE:    FRIDAY, JULY 30, 1999

    FROM:                    IMPERIAL BANK
                             INTERNATIONAL DIVISION
                             2015 MANHATTAN BEACH BLVD
                             REDONDO BEACH, CA 90278
                             U.S.A.
                             TELEX:  3730628(IMPERIAL INW)

    APPLICANT:               SILICON LABORATORIES
                             2024 E. ST. ELMO RD.
                             AUSTIN, TX 78744-1018

    IN FAVOR OF:             S.W. AUSTIN OFFICE BUILDING LTD
                             C/O KNOX DEVELOPMENT
                             5316 HWY 290 W. SUITE 360
                             AUSTIN, TEXAS 78735

                            +++++++AMENDMENT NO.1+++++++

    WE HEREBY AMEND OUR IRREVOCABLE STANDBY LETTER OF CREDIT NO. 0SF98000506
    ISSUED 09/03/98 AS FOLLOWS:

    NEW DATE OF EXPIRY: 09/08/00

    DUE TO SYSTEM CONVERSION, SB20011682 IS NOW OSF98000506. PLEASE MARK ALL
    RECORDS ACCORDINGLY.

    BENEFICIARY'S ADDRESS IS NOW:

    5316 HWY 290 WEST, SUITE 360
    AUSTIN, TX 78735

    +ALL OTHER TERMS AND CONDITIONS REMAIN UNCHANGED. THIS AMENDMENT IS AN
    INTEGRAL PART OF THE ABOVE MENTIONED CREDIT AND MUST BE ATTACHED THERETO.

    +THIS CREDIT IS SUBJECT TO UCP 500.

    AUTHORIZED SIGNATURE                      AUTHORIZED SIGNATURE

    /s/ [ILLEGIBLE]                           /s/ [ILLEGIBLE]
    --------------------------                ---------------------------

                                        Page 1

<PAGE>

                                  [LETTERHEAD]

INTERNATIONAL BANKING OFFICE, 275 BATTERY STREET, SUITE 1100, SAN FRANCISCO,
 CA 94111

IRREVOCABLE STANDBY LETTER OF CREDIT NO. SB20011682 DATED: SEP 03, 98

BENEFICIARY***************************APPLICANT**********************
S.W. AUSTIN OFFICE BUILDING, LTD.   * SILICON LABORATORIES
C/O KNOX DEVELOPMENT                * 2024 E. ST. ELMO ROAD
5316 HWY 290 WEST, SUITE 410        * AUSTIN, TX  78744-1018
AUSTIN, TEXAS 78735                 *
                                    *
EXPIRY DATE AND PLACE*****************AMOUNT*************************
08 SEP, 99                          * USD453,600.00
AT OUR COUNTERS                     * U.S. DOLLAR CURRENCY
275 BATTERY STREET, SUITE 1100      * FOUR HUNDRED FIFTY THREE
SAN FRANCISCO, CA 94111             * THOUSAND SIX HUNDRED ONLY
                                    *
*********************************************************************

GENTLEMEN:

WE HEREBY AUTHORIZE YOU TO VALUE ON IMPERIAL BANK FOR THE ACCOUNT OF SILICON
LABORATORIES FOR A SUM OR SUMS NOT EXCEEDING AT TOTAL OF FOUR HUNDRED FIFTY
THREE THOUSAND SIX HUNDRED DOLLARS (USD $453,600.00) AVAILABLE BY YOUR DRAFT OR
DRAFTS AT SIGHT.  DRAFTS MUST BE DRAWN AND PRESENTED AT OUR OFFICE AT 275
BATTERY STREET, SUITE 1100, SAN FRANCISCO, CA 94111 ATTN: INTERNATIONAL
DEPARTMENT NO LATER THAN SEPTEMBER 8, 1999.

ALL DRAFTS MUST BE MARKED "DRAWN ON IMPERIAL BANK STANDBY LETTER OF CREDIT NO.
SB20011682" AND ALL DRAWINGS NEGOTIATED UNDER THIS CREDIT MUST BE ENDORSED ON
THE REVERSE HEREOF.

WE HEREBY AGREE WITH THE DRAWERS, ENDORSERS, AND BONA FIDE HOLDERS OF ALL
DRAFTS DRAWN ON AND IN COMPLIANCE WITH THE TERMS OF THIS CREDIT THAT SUCH
DRAFTS WILL BE DULY HONORED ON THE DAY OF PRESENTATION TO THE DRAWEE AND THAT
ANY STATUTORY, UCP, OR OTHER RIGHTS TO DELAY HONOR OF SIGHT DRAFTS, INCLUDING
SUCH RIGHTS UNDER ARTICLE 5, SECTION 5-122 (1) (A) AND (B) OF THE UNIFORM
COMMERCIAL CODE, ARE HEREBY SPECIFICALLY WAIVED.  WE FURTHER AGREE, UPON THE
PRESENTATION OF SUCH DRAFT TO THE DRAWEE, TO HONOR SUCH DRAFT BY DELIVERING ON
THE DAY OF SUCH PRESENTATION THE AMOUNT OF THE DRAFT, BY OFFICIAL BANK OR
CERTIFIED FUNDS CHECK, TO THE S.W. AUSTIN OFFICE BUILDING, LTD. OR, AT S.W.
AUSTIN OFFICE BUILDING, LTD.'S SOLE OPTION, BY WIRING ON THE DAY OF SUCH
PRESENTATION FEDERAL FUNDS IN THE AMOUNT OF THE DRAFT INTO SUCH ACCOUNT(S) AS
S.W. AUSTIN OFFICE BUILDING, LTD. MAY SPECIFICALLY DIRECT, IN WRITING.

<PAGE>

                                  [LETTERHEAD]

ALL NOTICES AND OTHER WRITINGS DIRECTED TO THE S.W. AUSTIN OFFICE BUILDING,
LTD. SHALL BE SENT TO S.W. AUSTIN OFFICE BUILDING, LTD. C/O KNOW DEVELOPMENT
5316 HWY 290 WEST, SUITE 410, AUSTIN, TEXAS 78735.

THIS LETTER OF CREDIT IS SUBJECT TO THE 1993 REVISION OF THE UNIFORM CUSTOMS
AND PRACTICE FOR DOCUMENTARY CREDITS OF THE INTERNATIONAL CHAMBER OF COMMERCE
(PUBLICATION NO. 500).

      /s/  [ILLEGIBLE]                       /s/  [ILLEGIBLE]
_____________________________           _______________________________
    AUTHORIZED SIGNATURE                     AUTHORIZED SIGNATURE

<PAGE>

                                  [LETTERHEAD]

TO:  IMPERIAL BANK
     INTERNATIONAL BANKING DIVISION
     2015 MANHATTAN BEACH BOULEVARD                     DATE:  SEPTEMBER 4, 1998
     REDONDO BEACH, CALIFORNIA 90278
     TELEX 3730628   SWIFT IMPBUS66

PLEASE ESTABLISH AN IRREVOCABLE LETTER OF CREDIT ON THE FOLLOWING TERMS AND
CONDITIONS BY:
 / / FULL TEXT CABLE   / / AIRMAIL   / / AIRMAIL WITH BRIEF PRELIMINARY CABLE
ADVICE  /X/ OTHER:  COURIER

 ------------------------------------------------------------------------------
                ADVISING BANK                       FOR ACCOUNT OF
        (IF BLANK, CORRESPONDENT BANK)
                                             SILICON LABORATORIES, INC.
                                             2024 E. ST. ELMO ROAD
                                             AUSTIN, TEXAS 78744-1018

 ------------------------------------------------------------------------------
            IN FAVOR OF (BENEFICIARY)                    AMOUNT

      S.W. AUSTIN OFFICE BUILDING LTD.      USD $453,600.00
      C/O KNOX DEVELOPMENT               --------------------------------------
      5316 HWY. 290 WEST, STE 410                    EXPIRATION DATE
      AUSTIN, TEXAS 78735                 DRAFTS TO BE DRAWN AND PRESENTED TO
                                          PAYING BANK ON OR BEFORE

                                             SEPTEMBER 8, 1999
 ------------------------------------------------------------------------------

AVAILABLE BY DRAFTS AT SIGHT  ***********************************  DRAWN ON YOU.

REFERENCE: _____________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________

DOCUMENTS REQUIRED:     PLEASE SEE ATTACHED EXHIBIT "A" ________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________

SPECIAL INSTRUCTIONS:    PLEASE SEE ATTACHED EXHIBIT "A" _______________________
________________________________________________________________________________
________________________________________________________________________________

ALL DOCUMENTS TO BE FORWARDED IN ONE COVER, BY AIRMAIL, UNLESS OTHERWISE STATED
UNDER SPECIAL INSTRUCTIONS.
--------------------------------------------------------------------------------

THE OPENING OF THIS CREDIT IS SUBJECT TO THE TERMS AND CONDITIONS AS SET
FORTH IN THE STANDBY LETTER OF CREDIT AND SECURITY AGREEMENT APPEARING ON THE
REVERSE HEREOF WHICH ARE AGREED TO.

         APPLICANT NAME       SILICON LABORATORIES, INC.

    SIGNATURE AND TITLE     X  /s/ NAVDEEP S. SOOCH, PRESIDENT
                             ----------------------------------------------

                            X  /s/ JOHN W. MCGOVERN CHIEF FINANCIAL OFFICER
                             ----------------------------------------------

<PAGE>

                 STANDBY LETTER OF CREDIT AND SECURITY AGREEMENT

The undersigned ("Customer") applies to Imperial Bank ("Bank") for a loan
(the "Loan") in the principal amount of U.S. DOLLARS FOUR HUNDRED FIFTY THREE
THOUSAND SIX HUNDRED AND 00/100 *****************************DOLLARS
($453,600.00) subject to the following terms and conditions: (If the standby
letter of credit is issued in a foreign currency, the principal of the Loan
will be the U.S. Dollar equivalent of the foreign currency amount, converted
at the rate of exchange on the date of drawing.)

         1. The Loan shall be disbursed only by means of drawings under the
Letter of Credit, for which application appears on the reverse hereof.

         2. If Customer has not executed and delivered a promissory note to Bank
for said Loan, each advance which is disbursed as provided in Paragraph 1 shall
be payable on demand and bear interest payable monthly at a rate per year (based
on a three hundred sixty (360) day year and actual days elapsed) zero percent
(0.00%) in excess of the rate that Bank has announced to be its prime rate
("Prime Rate") and shall vary concurrently with any change in the Prime Rate.

         3. Customer shall pay to Bank its commission, payable in advance,
computed from the date hereof at the rate of ONE & QUARTER percent (1.25%) per
year (based on a three hundred sixty (360) day year and actual days elapsed) for
the entire life of the Letter of Credit. There shall be no refund of any portion
of the commission in the event the Letter of Credit commitment expires, is
reduced, terminated or otherwise modified.

         4. Customer agrees to pay to Bank, on demand, its commissions and fees
in such amounts as Bank determines to be proper and all charges and expenses
paid or incurred by Bank in connection with the Letter of Credit or the Loan,
and interest at the rate set forth herein or, if no rate is set forth, 5% over
Bank's Prime Rate as it may vary from time to time.

         5. Customer hereby reaffirms that security interest granted to the Bank
by the Borrower pursuant to that General Security Agreement (Tangible and
Intangible Personal Property) dated March 28, 1997, as may be amended or
replaced ("Security Agreement"), and agrees that the Customer's obligations
under this Agreement and the Loan are secured pursuant to the terms and
conditions of the Security Agreement.

         6. Upon default, at Bank's option without formal demand or notice,
all or any part of the Loan shall immediately become due.  Default is hereby
defined as the occurrence of any event of default contained in that Credit
Terms and Conditions ("Credit Agreement") executed by Customer, dated March
28, 1997, as such shall be amended or replaced, and upon such a default the
Bank shall have all the rights and remedies available to it under the Credit
Agreement. Amounts due under this Agreement shall be deemed to be
indebtedness for the provisions of Section D.1. of the Credit Agreement. If
at the time of any such event there remains any portion of the Loan
undisbursed (that is, if the Letter of Credit is still in effect and has not
been completely drawn against) Customer shall, upon Bank's demand, pay to
Bank for application to drawings under the Letter of Credit the entire
principal amount which has not been drawn. Any amount so paid which has not
been drawn on the expiry date of the Letter of Credit shall be repaid to
Customer without interest.  Except as provided above, the Agreement remains
unchanged.

SILICON LABORATORIES, INC.

By:      /s/ Navdeep S. Sooch                      /s/ John W. McGovern
   ----------------------------------           -------------------------------
Name:    Navdeep S. Sooch                          John W. McGovern
     --------------------------------           -------------------------------
Title:   President                                 Chief Financial Officer
     --------------------------------           -------------------------------

IMPERIAL BANK

By:      /s/ Tommy Deavenport
   ----------------------------------
Name:    Tommy Deavenport
     --------------------------------
Title:   Senior Vice President
     --------------------------------

         7. Neither Bank nor its correspondents shall be in any way responsible
for performance by any beneficiary of its obligations to Customer, nor for the
form, sufficiency, correctness, genuineness, authority of person signing,
falsification or legal effect of any documents called for under the Letter of
Credit if such documents on their face appear to be in order.

         8. Subject to the law and customs and practice of the trade, existing
in the area where the beneficiary is located, said Letter of Credit shall be
subject to, and performance by Bank, its correspondent and the beneficiary
thereunder shall be governed by the "Uniform Customs and Practice for
Documentary Credits" fixed by The International Chamber of Commerce, in effect
on the date of issuance of the Letter of Credit.

         9. It is agreed that all directions and correspondence relating to said
Letter of Credit are to be sent at Customer's risk and that Bank does not assume
any responsibility for any inaccuracy, interruption, error or delay in
transmission or delivery by post, telegraph or cable, or for any inaccuracy of
translation.

       10. If this Agreement is signed by two or more parties, it shall be
the joint and several agreement of such parties.

-----------------------------------  -------------------------------------------
     INTERNATIONAL USE ONLY                     BANKING OFFICE USE ONLY
-----------------------------------  -------------------------------------------
Approved By             Date         Banking Office/Department Name       Number
X                                     SW-EGIG                              2105
-----------------------------------  -------------------------------------------
                                     Lending Officer                      Date
                                     X  /s/ Tommy Deavenport              9-3-98
                                     -------------------------------------------

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