<PAGE>
                                                                  Exhibit 10.1

 
                       Silicon Valley Financial Services

                       A Division of Silicon Valley Bank
                               3003 Tasman Drive
                             Santa Clara, CA 95054
                       (408)554-1000 - Fax (408) 980-5410



          This NON-RECOURSE RECEIVABLES PURCHASE AGREEMENT (the "Agreement"),
dated as of February 9, 1998, is between Silicon Valley Financial Services, a
division of Silicon Valley Bank, ("Buyer") and MMC Networks, Inc., a Delaware
corporation, ("Seller"), with its chief executive office at:


          Street Address: 1134 East Arques Avenue
          City:           Sunnyvale
          County:         Santa Clara
          State:          CA
          Zip code:       94086
          Fax:            (408) 731-1560



1. DEFINITIONS. In this Agreement:

     1.1  "Payment" is when Buyer has received payments equal to the Total
Purchased Receivables.

     1.2  "Purchased Receivables" is all accounts, receivables, chattel paper,
instruments, contract rights, documents, general intangibles, letters of credit,
drafts, bankers acceptances other rights to payment and all proceeds arising
from the invoices and other agreements on the Schedule.

     1.3  "Schedule" is the attached schedule showing the: Purchase Date, Due
Date, Total Purchased Receivables, Discount Rate, Purchase Price, Administrative
Fee and Interest Reserve amount.

2.   PURCHASE AND SALE OF RECEIVABLES.

     2.1  SALE AND PURCHASE. On the Purchase Date, Seller sells and Buyer buys
Seller's right, title, and interest (but none of Sellers obligations) to payment
from any person liable on a Purchased Receivable, ("Account Debtors").

     Each purchase and sale is at Buyer's and Seller's discretion. Buyer will
not (I) pay Seller an aggregate outstanding amount exceeding TWO MILLION AND
001100 DOLLARS ($2,000,000.00) or (ii) buy any Purchased Receivable after
FEBRUARY 8,1999. Each purchase and sale will be on an assignment form acceptable
to Buyer.

     2.2  PURCHASE PRICE AND RELATED MATTERS. For each Purchased Receivable:

          (a) Payment of Purchase Price. Buyer will pay Seller, on the Purchase
Date, the Purchase Price, less the Administrative Fee and legal fees (if any).
          (b) Late Payment. If Payment is made after the Due Date then on the
earlier of Payment or 90 days, Seller will also pay Buyer the product of the
Discount Rate and the average daily balance of the amounts outstanding on the
Purchased Receivables multiplied by the number of days in the first of Payment
or 90 days and divided by 350 days.

3.   COLLECTIONS, PAYMENTS AND REMITTANCES.

     3.1  Application of Payments. All payments for any Purchased Receivable,
received by Seller or Buyer, are Buyer's property.
<PAGE>
 
     3.2  COLLECTION BY SELLER.

          a.  Buyer appoints Seller its attorney-in-fact to receive payments and
enforce its rights and designates Seller it's assignee for collection. Seller
will use diligence and commercially reasonable means to collect Purchased
Receivables. Buyer may revoke these appointments if an Event of Default occurs
and continues.

          b.  Seller will begin legal proceedings about Purchased Receivables in
its name (as Buyer's assignee for collection or enforcement) or, with Buyer's
prior written consent, in Buyer's name. Seller will not make Buyer party to any
litigation or arbitration without Buyer's written consent.

          c.  Seller will hold in trust for and give Buyer: (I) all payments
made by Account Debtors, and (ii) all instruments, chattel paper and other
proceeds of the Purchased Receivables.

          d.  Unless an Event of Default occurs and continues Seller will remit
payments to Buyer on the last business day of each week ("Settlement Date")
starting the week after the Purchase Date. On each Settlement Date Seller will
deliver a report acceptable to Buyer of account activity (including dates and
amounts of payments) and changes for each Purchased Receivable.

     3.3  COLLECTION BY BUYER. If an Event of Default occurs and continues Buyer
is appointed Sellers attorney-in-fact and Buyer may:

          (a) demand, sue for and receive all payments for the Purchased
Receivables; and

          (b) enforce payment of each Purchased Receivable in Sellers name; and

          (c) endorse Seller's name on checks or other instruments; and

          (d) notify Account Debtors of the purchase and sale and require all
payments be made directly to Buyer.

          (e) compromise, prosecute or defend any action or claim involving a
Purchased Receivable including filing or voting a claim in a bankruptcy case.

          (f) require Seller, at its expense, to notify the Account Debtors to
pay Buyer directly; and

          (g) require Seller to assist collecting and enforcing claims and
execute any documents that Buyer reasonably requests.

     3.4  NO OBLIGATION TO TAKE ACTION. Buyer has no obligation to perform
Seller's obligations or to take action on any Purchased Receivable (including on
defaulted Purchased Receivables).

4.   NON-RECOURSE; REPURCHASE OBLIGATIONS.

     4.1  NON-RECOURSE AND SELLER'S AGREEMENT TO REPURCHASE. Buyer acquires
Purchased Receivables without recourse, except Seller will pay Buyer on demand
any unpaid portion of any Purchased Receivable if:

          (a) For which there has been any breach of warranty, representation or
covenant in this Agreement; or

          (b) For which the Account Debtor asserts any discount, allowance,
return, dispute, defense, right of recoupment, right of return, warranty claim,
or short payment;

together with Buyers reasonable attorneys' and professional fees and expenses
and all court costs for collecting Purchased Receivables and/or enforcing its
rights under this Agreement.

     4.2  PAYMENT TO BUYER. Seller will pay Buyer in immediately available
funds.

5.   REPRESENTATIONS, WARRANTIES AND COVENANTS.
<PAGE>
 
     5.1  PURCHASED RECEIVABLES - WARRANTIES, REPRESENTATIONS AND COVENANTS.
Seller warrants and covenants for each Purchased Receivable:


          (a) It is the owner with legal right to sell, transfer and assign
it;

          (b) The correct amount is on the Schedule and is not disputed;

          (c)  No payment is contingent on any obligation or contract, and it
               has fulfilled all its obligations as of the Purchase Date;

          (d)  It is based on actual sale and delivery of goods and/or services
               rendered, due no later than its Due Date and owing to Seller, it
               is not past due or in default, has not been previously sold,
               assigned, transferred, or pledged, and is free of any liens,
               security interests and encumbrances;

          (e)  There are no defenses, offsets, counterclaims or agreements in
               which the Account Debtor may claim any deduction or discount.

          (f)  It reasonably believes no Account Debtor is insolvent as defined
               in the United States Bankruptcy Code ("US Code") or the
               California Uniform Commercial Code ("UCC"') and no Account Debtor
               has filed or had filed against it a voluntary or involuntary
               petition for relief under the US CODE.; and

          (g)  No Account Debtor has objected to payment for or the quality or
               quantity of the subject of the Purchased Receivable,

          (h)  It will not assign, transfer, sell, or grant, or permit any lien
               or security interest without Buyer's prior written consent.

      5.2  ADDITIONAL WARRANTIES, REPRESENTATIONS AND COVENANTS. Seller
represents, warrants and covenants:

          (a)  Its name, form of organization, chief executive office, and the
               place where the records about all Purchased Receivables are kept
               is shown at the beginning of this Agreement and it will give
               Buyer at least 10 days prior written notice of changes to its
               name, organization, chief executive office or location of
               records.

          (b)  It will pay all its taxes including gross payroll, withholding
               and sales taxes when due and will deliver satisfactory evidence
               of payment if requested.

          (c)  It has not filed a voluntary petition or had filed against it an
               involuntary petition under the US CODE and does not anticipate
               any filing;

          (d)  If Payment of any Purchased Receivable does not occur by its Due
               Date then Seller will provide a written report, within 10 days,
               of the reasons for the delay.

          (e)  While any Purchased Receivable is outstanding, Seller will give
               Buyer copies of all Forms 1 0-K, 1 0-Q and 8-K (or equivalents)
               within 5 days of its filing with the Securities and Exchange
               Commission.

6.  ADJUSTMENTS. If any Account Debtor asserts a discount, allowance, return,
offset, defense, warranty claim, or the like (an "Adjustment") Seller will
promptly advise Buyer and, with Buyers approval, resolve the dispute. Seller
will resell any rejected, returned, or recovered personal property for Buyer, at
Sellers expense, with the proceeds payable to Buyer. While Seller has returned
goods that are Buyers property, Seller will segregate and mark them "property of
Silicon Valley Financial Services." Buyer owns the Purchased Receivables and
until Payment has the right to take possession of any rejected. returned, or
recovered personal property.
<PAGE>
 
7.  INDEMNIFICATION.

          (a) If any Account Debtor is released from any payment obligation for
any Purchased Receivable because of: (i) Seller's act or omission: or (ii) any
of the documentation about the Purchased Receivables which results in
termination of any part of the Account Debtor's obligation for the Purchased
Receivables, then Seller will pay Buyer the lesser of the amount of the
Purchased Receivable not payable or the unpaid portion of the Purchased
Receivable.

          (b) Seller indemnifies and holds Buyer harmless from any taxes from
this transaction (except Buyer's income taxes) and costs, expenses and
reasonable attorney fees if Buyer promptly notifies it of any taxes of which
Buyer has notice.

8.  Additional Rights. Seller grants Buyer a continuing lien on and security
interest in all of Seller's rights existing now or later and interest in:

          (a) Returned or rejected goods connected with the Purchased
Receivables

          (b) Books and records about the Purchased Receivables or returned or
rejected goods;

          (c) Proceeds from voluntary or involuntary dispositions, including
insurance proceeds.

(all the "'Related Property")

Seller may not sell or convey any interest in Related Property without Buyer's
prior written consent. Seller will sign UCC financing statements and any other
instruments or documents to evidence, perfect or protect Buyers interests in the
Purchased Receivables and Related Property. Seller will deliver to Buyer all
original instruments, chattel paper and documents about Purchased Receivables
and Related Property.

9.  DEFAULT. Any of the following is an Event of Default:

          (a)  Seller fails to pay Buyer any amount when due under Section
               2.2(b), 3.2(c) & (d), 4.1, 7 or 12;

          (b)  There is a voluntary or involuntary case against Seller under the
               US CODE, or an assignment for the benefit of creditors, or
               appointment of a receiver or custodian for its assets;

          (c)  Seller's debts are greater than the fair value of its assets or
               Seller is not paying its debts as they become due or has
               unreasonably small capital;

          (d)  An involuntary lien, garnishment, attachment or the like is
               issued against or attaches to the Purchased Receivables or
               Related Property;

          (e)  Seller breaches a covenant, agreement, warranty, or
               representation in this Agreement and the breach is not cured to
               Buyer's satisfaction within 10 days after Buyer gives Seller oral
               or written notice. A breach that cannot be cured is an immediate
               default.

          (f)  Seller defaults under any debt or liability to Buyer.

10.  REMEDIES ON DEFAULT. When an Event of Default occurs Buyer has all rights
and remedies under this Agreement and the law, including those of a secured
party under the UCC, and the right to collect, dispose of, sell, lease or use
all Purchased Receivables and Related Property.

11.  DEFAULT RATE. Amounts not paid by Seller when due under Section 2.2(b),
3.2(c) & (d), 4.1,7 or 12; will accrue interest until paid at the Discount Rate
plus 5%.

12.  FEES, COSTS AND EXPENSES. Immediately on demand Seller will pay all
reasonable fees, costs and expenses (including attorney and professional fees)
that Buyer incurs from (a) preparing,
<PAGE>
 
negotiating, administering and enforcing this Agreement or any other agreement,
including amendments, waivers or consents, (b) litigation or disputes relating
to the Purchased Receivables, the Related Property, this Agreement or any other
agreement, (c) enforcing rights against Seller, (d) protecting or enforcing its
title to the Purchased Receivables or its security interest in the Related
Property, (e) collecting any amounts due from Seller or for a Purchased
Receivable under a breach of Seller's representation, warranty or covenant and
(f) any bankruptcy case or insolvency proceeding involving Seller. Reimbursement
for fees, costs, and expenses through the initial Purchase Date will be limited
to $5,000.00.

13.  CHOICE OF LAW, VENUE AND JURY TRIAL WAIVER. California law governs this
Agreement. Seller and Buyer each submit to the exclusive jurisdiction of the
State and Federal courts in Santa Clara County, California.

SELLER AND BUYER EACH WAIVE ITS RIGHT TO A JURY TRIAL FROM ANY CAUSE OF ACTION
RELATED TO AGREEMENT, INCLUDING CONTRACT, TORT, BREACH OF DUTY OR OTHER CLAIM.
THIS WAIVER IS A MATERIAL INDUCEMENT FOR BOTH PARTIES TO ENTER THIS AGREEMENT.
EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.

14.  NOTICES. Notices or demands by either party about this Agreement must be in
writing and personally delivered or sent by an overnight delivery service, by
certified mail postage prepaid return receipt requested, or by FAX to the
addresses below:

     Seller:  MMC Networks, Inc.
              1134 East Arques Avenue
              Sunnyvale, CA 94086
              Attn:  Ray Solari
              FAX:  (408)731-1660

     Buyer:   Silicon Valley Financial Services, A Division of
              Silicon Valley Bank
              3003 Tasman Drive
              Santa Clara, CA 95054
              Attn:  Michael Field
              FAX: (408) 980-6410

     A party may change notice address by written notice to the other party.

 15. GENERAL PROVISIONS.

     15.1  Successors and Assigns. This Agreement binds and is for the benefit
of successors and permitted assigns of each party. Seller may not assign this
Agreement or any rights under it without Buyer's prior written consent which may
be granted or withheld in Buyer's discretion. Buyer may, without the consent of
or notice to Seller, sell, transfer, or grant participation in any part of
Buyer's obligations, rights or benefits under this Agreement.

     15.2  Indemnification. Seller will indemnify, defend and hold harmless
Buyer and its officers, employees, and agents against: (a) obligations, demands,
claims, and liabilities asserted by any other party in connection with the
transactions contemplated by this Agreement; and (b) losses or expenses
incurred, or paid by Borrower from or consequential to transactions between
Buyer and Seller (including reasonable attorneys fees and expenses), except for
losses caused by Buyer's gross negligence or willful misconduct.

     15.3  Time of Essence. Time is of the essence for performance of all
obligations in this Agreement.

     15.4  Severability of Provision. Each provision of this Agreement is
severable from every other provision in determining the enforceability of any
provision.
<PAGE>
 
     15.5  Amendments in Writing, Integration. All amendments to this Agreement
must be in writing. This Agreement is the entire agreement about this subject
matter and supersedes prior negotiations or agreements.

     15.6  Counterparts. This Agreement may be executed in any number of
counterparts and by different parties on separate counterparts and when executed
and delivered are one Agreement.

     15.7  Survival. All covenants, representations and warranties made in this
Agreement continue in full force while any Purchased Receivable amount remains
outstanding. Seller's indemnification obligations survive until all statutes of
limitations for actions that may be brought against Buyer have run.

     15.8  Buyer will use the same degree of care in handling Seller's
confidential information that it uses for its own proprietary information, but
may disclose information; (i) to its subsidiaries or affiliates in connection
with their business with Seller, (ii) to prospective transferees or purchasers
of any interest in the Agreement, (iii) as required by law, regulation,
subpoena, or other order, (iv) as required in connection with an examination or
audit and (v) as it considers appropriate exercising the remedies under this
Agreement. Confidential information does not include information that is either:
(a) in the public domain or in Buyer's possession when disclosed, or becomes
part of the public domain after disclosure to Buyer; or (b) disclosed to Buyer
by a third party, if Buyer does not know that the third party is prohibited from
disclosing the information.


SELLER:  MMC NETWORKS, INC.,
         A Delaware corporation


By: /s/ Uday Bellary
   _____________________________
       UDAY BELLARY


Title VICE PRESIDENT & CHIEF FINANCIAL OFFICER


BUYER: SILICON VALLEY FINANCIAL SERVICES
     A division of Silicon Valley Bank



By: /s/ Prabhat K. Dubey
   _____________________________
      PRABHAT K. DUBEY

Title:  PRESIDENT & CHIEF EXECUTIVE OFFICER

<PAGE>
 
                        SCHEDULE DATED ________________

                                        
                                      TO
                                        
                  NON-RECOURSE RECEIVABLES PURCHASE AGREEMENT
                          DATED AS OF FEBRUARY 9,1998



Seller:  MMC Networks, Inc.

BUYER:   Silicon Valley Financial Services, a division of Silicon Valley Bank

PURCHASE DATE:  _______________________________________

DUE DATE:  30 DAYS FROM PURCHASE DATE

TOTAL PURCHASED RECEIVABLES:   $___________________ (per attached List of
Receivables).

DISCOUNT RATE:  9.50%

PURCHASE PRICE:  $____________ (is 99.21% of the Total Purchased Receivables
which is the Straight Discount of the Total Purchased Receivables discounted
from the Due Date to the Purchase Date at the Discount Rate).

ADMINISTRATIVE FEE:  .20% of the Total Purchased Receivables amount.


Seller warrants and represents that (a) its warranties and representations in
the Agreement are true and correct as of the date of this Schedule and (b) no
Event of Default has occurred under the Agreement.


Seller:  MMC NETWORKS, INC.


By:     _______________________

Title:  _______________________


BUYER:  SILICON VALLEY FINANCIAL SERVICES,
        A division of Silicon Valley Bank


By:     _______________________

Title:  _______________________
<PAGE>
 
                          CORPORATE RESOLUTION TO SELL
                                        



I, the Secretary or Assistant Secretary of MMC NETWORKS INC. (the "Seller"),
certify that:

  The Seller is a DELAWARE corporation, and

  Attachments I and 2 are copies of Seller's Articles of Incorporation and
  Bylaws which are currently effective, and

  At a duly held meeting of Seller's directors at which a quorum was present (or
  by other authorized corporate action) the following resolutions were adopted:

     "RESOLVED that any 1 of the following officers of Seller, whose signatures
     are below:

     Name                  Title                    Signature

 
Prabhat K. Dubey           President and CEO        /s/  Prabhat K. Dubey
                                                    _______________________

 
Uday Bellary               Vice President, CFO      /s/  Uday Bellary
                           And Assistant Secretary  _______________________ 
 
 
______________________     ______________________   _______________________

______________________     ______________________   _______________________


     acting for Seller are authorized to:

     EXECUTE PURCHASE AGREEMENT. To enter a Purchase Agreement with Silicon
     Valley Bank ("Buyer") on terms agreed by them and Buyer for the sale of
     certain of Seller's accounts receivable and to execute renewals,
     extensions, modifications, refinancings, consolidations or substitutions of
     any accounts receivable and to do other acts and things and execute and
     deliver other documents that they consider necessary to carry out the
     effect of these Resolutions.

     FURTHER ACTS. To designate other individuals as authorized to request that
     Buyer purchase additional accounts receivable under the Purchase Agreement.

     FURTHER RESOLVED THAT:

     any acts authorized by these Resolutions but performed before their passage
     are ratified, and

     these Resolutions remain effective and Buyer may rely on them until it
     receives written notice of their revocation, but that notice will not
     affect any of Seller's agreements or commitments then effective."

I ALSO CERTIFY that the officers or agents above are duly elected or appointed
by Seller and hold the positions opposite their names and that the their
signatures are true and that the Resolutions are effective and have not been
modified or revoked.


/s/  Uday Bellary                                    2/16/98
______________________________________________    ________________________
(signature) Assistant Secretary or Secretary      Date
<PAGE>
 
                                   EXHIBIT A


                           SCHEDULE DATED ___________
                                       TO
                  NON-RECOURSE RECEIVABLES PURCHASE AGREEMENT
                         DATED AS OF DECEMBER 18, 1997

                                        
  Seller:    MMC NETWORKS, INC.

  Buyer:     Silicon Valley Financial Services, a division of Silicon Valley
             Bank

  Purchase Date:  ________________________________

  Due Date:  30 (days from the Purchase Date

  Total Purchased Receivables Amount: $      (per attached List of Receivables)

  Pricing:

        Discount Rate:  9.50%                      100% - 9.5% 12 mo = 99.21%

        Administrative Fee: .2004 of the gross invoice amount           12 mo

   Purchase Price: $__________________ (i.e., 99.21% the Total Purchased
                                       Receivables Amount, which is the Straight
                                       Discount of the Total Purchased
                                       Receivables Amount discounted from the
                                       Due Date to the Purchase Date at the
                                       Discount Rate).

  The undersigned agree that this Schedule is a "Schedule" under and as defined
  in the above referenced NON- RECOURSE RECEIVABLES PURCHASE AGREEMENT and is
  subject to all terms and conditions of such Agreement. Seller warrants and
  represents that (a) the warranties and representations of Seller in such
  Agreement are true and correct on and as of the date of this Schedule and (b)
  no Event of Default has occurred under such Agreement.

  SELLER:    MMC NETWORKS, INC.

  By:        _______________________________

  Title:     _______________________________


  BUYER:     SILICON VALLEY FINANCIAL SERVICES,
             A division of Silicon Valley Bank


  By:        _______________________________

  Title:     _______________________________
<PAGE>
 
Exhibit A attached to that certain UCC-1 Financing Statement and by this
reference made a part thereof.



                                   EXHIBIT A


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