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                               SILICON VALLEY BANK

                           SPECIALTY FINANCE DIVISION

                     ACCOUNTS RECEIVABLE FINANCING AGREEMENT

         This ACCOUNTS RECEIVABLE FINANCING AGREEMENT (the "Agreement"), dated
as of November 10, 2000 is between Silicon Valley Bank, Specialty Finance
Division of ("Bank"), and AML Communications, Inc. a Delaware corporation,
("Borrowed"), whose address is 1000 Avenida Acaso, Camarillo, California 93012
and with a FAX number of (805) 388-1345.

1.       DEFINITIONS. In this Agreement:

         "ACCOUNTS" are all existing and later arising accounts, contract
rights, and other obligations owed Borrower in connection with its sale or lease
of goods (including licensing software and other technology) or provision of
services, all credit insurance, guaranties, other security and all merchandise
returned or reclaimed by Borrower and Borrower's Books relating to any of the
foregoing.

         "ACCOUNT DEBTOR" is defined in the California Uniform Commercial Code
and shall include any person liable on any Financed Receivable, such as, a
guarantor of the Financed Receivable and any issuer of a letter of credit or
banker's acceptance.

         "ADJUSTMENTS" are all discounts, allowances, returns, disputes,
counterclaims, offsets, defenses, rights of recoupment, rights of return,
warranty claims, or short payments, asserted by or on behalf of any Account
Debtor for any Financed Receivable.

         "ADVANCE" is defined in Section 2.2.

         "ADVANCE RATE" is 80%, net of deferred revenue and offsets related to
each specific Account Debtor, or another percentage as Bank establishes under
Section 2.2.

         "APPLICABLE RATE" is a rate per annum equal to the "Prime Rate" plus
1.00 percentage points.

         "BORROWER'S BOOKS" are all Borrower's books and records including
ledgers, records regarding Borrower's assets or liabilities, the Collateral,
business operations or financial condition and all computer programs or discs or
any equipment containing the information.

         "CODE" is the California Uniform Commercial Code.

         "COLLATERAL" is attached as Exhibit "A".

         "COLLATERAL HANDLING FEE" is defined in Section 3.5.

         "COLLECTIONS" are all funds received by Bank from or on behalf of an
Account Debtor for Financed Receivables.

         "COMPLIANCE CERTIFICATE" is attached as Exhibit "B".

         "EARLY TERMINATION FEE" is defined in Section 3.6.

         "EVENT OF DEFAULT" is defined in Section 9.

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         "FACILITY" is an extension of credit by Bank to Borrower in order to
finance receivables with an aggregate Account Balance not exceeding the Facility
Amount.

         "FACILITY AMOUNT" is $1,000,000.00.

         "FACILITY FEE" is defined in Section 3.4.

         "FACILITY PERIOD" is the period beginning on this date and continuing
until November 9, 2001, unless the period is terminated sooner by Bank with
notice to Borrower or by Borrower under Section 3.5.

         "FINANCE CHARGES" is defined in Section 3.2.

         "FINANCED RECEIVABLES" are all those accounts, receivables, chattel
paper, instruments, contract rights, documents, general intangibles, letters of
credit, drafts, bankers acceptances, and rights to payment, and all proceeds,
including their proceeds (collectively "receivables"), which Bank finances and
make an Advance. A Financed Receivable stops being a Financed Receivable (but
remains Collateral) when the Advance made for the Financed Receivable has been
finally paid.

         "FINANCED RECEIVABLE BALANCE" is the total outstanding amount, at any
time, of all Financed Receivables.

         "GUARANTOR" means any guarantor of the Obligations.

         "INELIGIBLE RECEIVABLE" is any accounts receivable:

         (A) that is unpaid (90) calendar days after the invoice date; or
         (B) that is owed by an Account Debtor that has filed, or has had filed
             against it, any bankruptcy ease, assignment for the benefit of
             creditors, receivership, or insolvency Proceeding or who has become
             insolvent (as defined in the United States Bankruptcy Code) or who
             is generally not paying its debts as they become due; or
         (C) for which there has been any breach of warranty or representation
             in Section 6 or any breach of any covenant in this Agreement; or
         (D) for which the Account Debtor asserts any discount, allowance,
             return, dispute, counterclaim, offset, defense, right of
             recoupment, right of return, warranty claim, or short payment.

         "INSOLVENCY PROCEEDING" are proceedings by or against any person under
the United States Bankruptcy Cede, or any other bankruptcy or insolvency law,
including assignments for the benefit of creditors, compositions, extensions
generally with its creditors, or proceedings seeking reorganization,
arrangement, or other relief.

         "INVOICE TRANSMITTAL" shows accounts receivable which Bank may finance
and, for each receivable, includes the Account Debtor's, name, address, invoice
amount, invoice date and invoice number and is signed by Borrower's authorized
representative.

         "LOCKBOX" is described in Section 6.2.

         "MINIMUM FINANCE CHARGE" is $3,000.00.

         "OBLIGATIONS" are all advances, liabilities, obligations, covenants and
duties owing, arising, due or payable by Borrower to Bank now or later under
this Agreement or any other document, instrument or agreement, account
(including those acquired by assignment) primary or secondary, such as all
Advances, Finance Charges. Administrative Fees, interest, fees, expenses,
professional fees and attorneys' fees or other.

         "PRIME RATE" is Bank's most recently announced "prime rate," even if it
is not Bank's lowest rate.

         "RECONCILIATION DAY" is the last calendar day of each month.

         "RECONCILIATION PERIOD" is each calendar month.

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2.       FINANCING OF ACCOUNTS RECEIVABLE.

         2.1. REQUEST FOR ADVANCES. During the Facility Period, Borrower may
         offer accounts receivable to Bank, if there is not an Event of Default.
         Borrower will deliver an Invoice Transmittal for each accounts
         receivable it offers. Bank may rely on information on or with the
         invoice Transmittal.

         2.2. ACCEPTANCE OF ACCOUNTS RECEIVABLE. Bank is not obligated to
         finance any accounts receivable. Bank may approve any Account Debtor's
         credit before financing any receivable. When Bank accepts a receivable,
         it will pay Borrower the Advance Rate times the face amount of the
         receivable (the "Advance"). Bank may, in its discretion, change the
         percentage of the Advance Rate. When Bank makes an Advance, the
         receivable becomes a "Financed Receivable." All representations and
         warranties in Section 6 must be true as of the date of the Invoice
         Transmittal and of the Advance and no Event of Default exists would
         occur as a result of the Advance. The aggregate amount of all Financed
         Receivables outstanding at any time may not exceed the Facility Amount.

         3. COLLECTIONS, FINANCE CHARGES, REMITTANCES AND FEES. The Obligations
         shall be subject to the following fees and Finance Charges. Fees and
         Finance Charges may, in Bank's discretion, be charged as an Advance,
         and shall thereafter accrue fees and Finance Charges as described
         below. Bank may, in its discretion, charge fee and Finance Charges to
         Borrower's deposit account maintained with Bank.

         3.1 COLLECTIONS. Collections will be credited to the Financed
         Receivables Balance, but if there is an Event of Default, Bank may
         apply Collections to the Obligation in any order it chooses. If Bank
         receives a payment for both Financed Receivable and a non Financed
         Receivable, the funds will first be applied to the Financed Receivable
         and, if there is not an Event of Default, the excess will be remitted
         to the Borrower, subject to Section 3.10.

         3.2. FINANCE CHARGES. In computing Finance Charges on the Obligations,
         all Collections received by Bank shall be deemed applied by Bank on
         account of the Obligations 5 Business Days after receipt of the
         Collections. Borrower will pay a finance charge (the "Finance Charge"),
         which is the greater of (i) the Applicable Rate times the number of
         days in the Reconciliation Period times the outstanding average daily
         Financed Receivable Balance for that Reconciliation Period or (ii) the
         Minimum Finance Charge. After an Event of Default, Obligations accrue
         interest at 5 percent above the Applicable Rate effective immediately
         before the Event of Default.

         3.3. INTENTIONALLY OMITTED.

         3.4. FACILITY FEE. A fully earned, non-refundable facility fee of
         $7,500.00 is due upon execution of this Agreement.

         3.5. COLLATERAL HANDLING FEE. On each Reconciliation Day, Borrower will
         pay to Bank a collateral handling fee, equal to .50% per month
         of the average daily Financed Receivable Balance outstanding during the
         applicable Reconciliation Period. After an Event of Default, the
         Collateral Handling Fee will increase an additional .50% effective
         immediately before the Event of Default.

         3.6. EARLY TERMINATION FEE. A fully earned, non-refundable early
         termination fee of $50,000.00 is due upon voluntary full payment of the
         Obligations and termination of this Facility prior to November 9, 2001
         unless the Obligations are paid in full from an initial advance from a
         loan agreement with Silicon Valley Bank.

         3.7. ACCOUNTING. After each Reconciliation Period, Bank will provide an
         accounting of the transactions for that Reconciliation Period,
         including the amount of all Financed Receivables, all Collections,
         Adjustments, Finance Charges, the Collateral Handling Fee and the
         Administrative Fee. If Borrower does not object to the accounting in
         writing within 30 days it is considered correct. All Finance Charges
         and other interest and fees calculated on the basis of a 360 day year
         and actual days elapsed.

         3.8. DEDUCTIONS. Bank may deduct fees, finance charges and other
         amounts due from any Advances made or Collections received by Bank.

         3.9. INTENTIONALLY OMITTED

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         3.10. ACCOUNT COLLECTION SERVICES. All Borrowers' receivables are to be
         paid to the same address/or party and Borrower and Bank must agree on
         such address. If Bank collects all receivables and there is not an
         Event of Default or an event that with notice or lapse of time will be
         an Event of Default, within five (5) days of receipt of those
         collections, Bank will give Borrower, the receivables collections it
         receives for receivables other than Financed Receivables and/or amount
         in excess of the amount for which Bank has made an Advance to Borrower,
         less any amount due to Bank, such as the Finance Charge, Administrative
         Fee, Collateral Handling Fee and expenses or otherwise. This Section
         does not impose any affirmative duty on Bank to do any act other than
         to turn over amounts. All receivables and collections are Collateral
         and if an Event of Default occurs, Bank need not remit collections of
         Collateral and may apply them to the Obligations.

4.       REPAYMENT OF OBLIGATIONS.

         4.1. REPAYMENT ON MATURITY. Borrower will repay each Advance on the
         earliest of: (a) payment of the Financed Receivable in respect which
         the Advance was made, (b) the Financed Receivable becomes an Ineligible
         Receivable, (c) when any Adjustment is made to the Financed Receivable
         (but only to the extant of the Adjustment if the Financed Receivable is
         not otherwise an Ineligible Receivable, or (d) the last day of the
         Facility Period (including any early termination). Each payment will
         also include all accrued Finance Charges on the Advance and all other
         amounts due hereunder.

         4.2. REPAYMENT ON EVENT OF DEFAULT. When there is an Event of Default,
         Borrower will, if Bank demands (or, in an Event of Default under
         Section 9(B), immediately without notice or demand from Bank) repay all
         of the Advances. The demand may, at Bank's option, include the Advance
         for each Financed Receivable then outstanding and all accrued Finance
         Charges, Administrative Fees, attorneys and professional fees, court
         costs and expenses, and any other Obligations.

5.       POWER OF ATTORNEY. Borrower irrevocably appoints Bank and its
         successors and assigns it attorney-in-fact and authorizes Bank,
         regardless of whether there has been an Event of Default, to:

         (A) sell, assign, transfer, pledge, compromise, or discharge all or any
             part of the Financed Receivables;

         (B) demand, collect, sue, and give releases to any Account Debtor for
             monies due and compromise, prosecute, or defend any action, claim,
             case or proceeding about the Financed Receivables, including filing
             a claim or voting a claim in any bankruptcy case in Bank's or
             Borrower's name, as Bank chooses;

         (C) prepare, file and sign Borrower's name on any notice, claim,
             assignment, demand, draft, or notice of or satisfaction of lien or
             mechanics' lien or similar document;

         (D) notify all Account Debtors to pay Bank directly;

         (E) receive, open, and dispose of mail addressed to Borrower;

         (F) endorse Borrower's name on check or other instruments;

         (G) execute on Borrower's behalf any instruments, documents, financing
             statements to perfect Bank's interests in the Financed Receivables
             and Collateral; and

         (H) do all acts and things necessary or expedient.

6.       REPRESENTATIONS, WARRANTIES AND COVENANTS.

         6.1. REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants
         for each Financed Receivable:

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

         (B) The correct amount is on the Invoice Transmittal and is not
             disputed;

         (C) Payment is not contingent on any obligation or contract and it has
             fulfilled all its obligations as of the

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             Invoice Transmittal date;

         (D) It is based on an actual safe and delivery of goods and/or services
             rendered, due to Borrower, it is not past duo 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 for
             which the Account Debtor may claim any deduction or discount;

         (F) It reasonably believes no Account Debtor is insolvent or subject to
             any Insolvency Proceedings;

         (G) It has not filed or had filed against it Insolvency Proceedings and
             does not anticipate any filing;

         (H) Bank has the right to endorse and/or require Borrower to endorse
             all payments received on Financed Receivables and all proceeds of
             Collateral.

         (I) No representation, warranty or other statement of Borrower in any
             certificate or written statement given to Bank contains any untrue
             statement of a material fact or omits to stake a material fact
             necessary to make the statement contained in the certificates or
             statement not misleading.

                  6.1.1    ADDITIONAL REPRESENTATIONS AND WARRANTIES. Borrower
                           represents and warrants as follows:

                  (A)      Borrower is duty existing and in good standing in its
                           state of formation and qualified and licensed to do
                           business in, and in good standing in, any stake in
                           which the conduct of its business or its ownership of
                           property requires that it be qualified. The
                           execution, delivery and performance of this Agreement
                           has been duly authorized, and does not conflict with
                           Borrower's organizational documents, nor constitute
                           an Event of Default under any material agreement by
                           which Borrower is bound Borrower is not in default
                           under any agreement to which or by which it is bound.

                  (B)      Borrower has good title to the Collateral. All
                           inventory is in all material respects of good and
                           marketable quality, free from material defects.

                  (C)      Borrower is not an "Investment company" or a company
                           "controlled" by an "investment company" under the
                           Investment Company Act. Borrower is not engaged as
                           one of its important activities in extending credit
                           for margin stock (under Regulations G, T and U of the
                           Federal Reserve Board of Governors). Borrower has
                           complied with the Federal Fair Labor Standards Act.
                           Borrower has not violated any laws, ordinances or
                           rules. None of Borrower's properties or assets has
                           been used by Borrower, to the best of Borrower's
                           knowledge, by previous persons, in disposing,
                           producing, storing, treating, or transporting any
                           hazardous substance other than legally. Borrower has
                           timely filed all required tax returns and paid, or
                           made adequate provision to pay, all taxes. Borrower
                           has obtained all consent, approvals and
                           authorizations of, made all declarations or filings
                           with, and given all notices to, all government
                           authorities that are necessary to continue its
                           business as currently conducted.

         6.2. AFFIRMATIVE COVENANTS. Borrower will do all of the following:

         (A) Maintain its corporate existence and good standing in its
             jurisdictions of incorporation and maintain its qualification in
             each jurisdiction necessary to Borrower's business or operations.

         (B) Give Bank at least 10 days prior written notice of changes to its
             name, organization, chief executive office or location of records.

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

         (D) Provide a written report within 10 days, if payment of any Financed
             Receivable does not occur by its due date and include the reasons
             for the delay.

         (E) Give Bank copies of all Forms 10-K, 10-Q and 8-K (or equivalents)
             within 5 days of filing with the

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         Securities and Exchange Commission, while any Financed Receivable is
         outstanding.

         (F) Execute any further instruments and take further action as Bank
             requests to perfect or continue Bank's security interest in the
             Collateral or to effect the purposes of this Agreement.

         (G) Provide Bank with a Compliance Certificate no later than 5 days
             following each quarter end or as requested by Bank.

         (H) Provide Bank with, as soon as available, but no later than 30 days
             following each Reconciliation Period, a company prepared balance
             sheet and income statement, prepared under GAAP, consistently
             applied, covering Borrower's operations during the period together
             with an aged listing of accounts receivable and accounts payable
             along with a deferred revenue report.

         (I) Immediately notify, transfer and deliver to Bank all collections
             Borrower receives for Financed Receivables.

         (J) Direct each Account Debtor to make payments to a lockbox account
             with Bank or to wire transfer payments to Bank.

         (K) Borrower will allow Bank to audit Borrower's Collateral, including
             but not limited to Borrower's Accounts, at Borrowers expense, no
             later than one year from the date of the execution of this
             Agreement and annually thereafter. Provided however, if an Event of
             Default has occurred, Bank may audit Borrower's Collateral,
             including but not limited to Borrower's Accounts at Bank's sole
             discretion and without notification and authorization from
             borrower.

         6.3. NEGATIVE COVENANTS. Borrower will not do any of the following
         without Bank's prior written consent:

         (A) Assign, transfer, sell or grant, or permit any lien or security
             interest in the Collateral.

         (B) Convey, sell, lease, transfer or otherwise dispose of the
             Collateral.

         (C) Create, incur, assume, or be liable for any indebtedness.

         (D) Become an "investment company" or a company controlled by an
             "investment company," under the Investment Company Act of 1940 or
             undertake as one of its important activities extending credit to
             purchase or carry margin stock, or use the proceeds of any Advance
             for that purpose; fail to meet the minimum funding requirements of
             ERISA, permit a Reportable Event or Prohibited Transaction, as
             defined in ERISA, to occur; fail to comply with the Federal Fair
             Labor Standards Act or violate any other law or regulation, or
             permit any of its subsidiaries to do so.

7.       ADJUSTMENTS. If any Account Debtor asserts a discount, allowance,
         return, offset, defense, warranty claim, or the like (an "Adjustment")
         or if Borrower breaches any of the representations, warranties or
         covenants set forth in Section 6, Borrower will promptly advise Bank.
         Borrower will resell any rejected, returned, returned, or recovered
         personal property for Bank, at Borrower's expense, and pay proceeds to
         Bank. While Borrower has returned goods that are Borrower property,
         Borrower will segregate and mark them "property of Silicon Valley
         Bank." Bank owns the Financed Receivables and until receipt of payment,
         has the right to take possession of any rejected, returned, or
         recovered personal property.

8.       SECURITY INTEREST. Borrower grants to Bank a continuing security
         interest in all presently and later acquired Collateral. Any security
         interest will be a first priority security interest in the Collateral.

9.       EVENTS OF DEFAULT. Any one or more of the following is an event of
         Default.

         (A) Borrower fails to pay any amount owed to Bank when due;

         (B) Borrower files or has filed against it any Insolvency Proceedings
             or any assignment for the benefit of creditors, or appointment of a
             receiver or custodian for any of its assets;

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         (C) Borrower becomes insolvent or is generally not paying its debts as
             they become due or is left with unreasonably small capital;

         (D) Any involuntary lien, garnishment, attachment attaches to the
             Financed Receivables or any Collateral;

         (E) Borrower breaches any covenant, agreement, warranty, or
             representation and does not cure it to Bank's satisfaction within
             10 days; but a breach that cannot be cured it is an immediate Event
             of Default;

         (F) Borrower is in default under any document, instrument or agreement
             evidencing any debt, obligation or liability in favor of Bank its
             affiliates or vendors regardless of whether the debt, obligation or
             liability is direct or indirect, primary or secondary, or fixed or
             contingent:

         (G) An event of default occurs under any Guaranty of the Obligations or
             any material provision of any Guaranty is not valid or enforceable
             or a Guaranty is repudiated or terminated;

         (H) A material default or Event of Default occurs under any agreement
             between Borrower and any creditor of Borrower that signed a
             subordination agreement with Bank;

         (I) Any creditor that has signed a subordination agreement with Bank
             breaches any terms of the subordination agreement; or

         (J) (i) A material impairment to the perfection or priority of the
             Bank's security interest in the Collateral; (ii) a material adverse
             change in the business, operations, or conditions (financial or
             otherwise) of the Borrower occurs; or (iii) a materiel impairment
             of the prospect of repayment of any portion of the Advances occurs.

10.      REMEDIES.

         10.1. REMEDIES UPON DEFAULT. When an Event of Default occurs, (1) Bank
         may stop financing receivables or extending credit to Borrower; (2) at
         Banks option and on demand, all or a portion of the Obligations or, for
         to an Event of Default described in Section 9(B), automatically and
         without demand, are due and payable in full; (3) apply to the
         Obligations any (i) balances and deposits of Borrower it holds, or (ii)
         any amount held by Bank owing to or for the credit or the account of
         Borrower; and (4) Bank may exercise all rights and remedies under this
         Agreement and the law, including those of a secured party under the
         Code, power of attorney rights in Section 5 for the Collateral, and the
         right to collect, dispose of, sell, lease, use, and realize upon all
         Financed Receivables and Collateral in any commercial manner. Borrower
         agrees that any notice of sale required to be given to Borrower is
         deemed given if at least five days before the sale may be held.

         10.2. DEMAND WAIVER. Borrower waives demand, notice of default or
         dishonor, notice of payment and nonpayment, notice of any default,
         nonpayment at maturity, release, compromise, settlement, extension, or
         renewal of accounts, documents, instruments, chattel paper, and
         guaranties held by Bank on which Borrower is liable.

         10.3. DEFAULT RATE. If any amount is not paid when due, the amount
         bears interest at the Applicable Rate plus five percent until the
         earlier of (a) payment in good funds or (b) entry of a final judgment
         when the principal amount of any money judgment will accrue interest at
         the highest rate allowed by law.

11.      FEES, COSTS AND EXPENSES. The Borrower will pay on demand all fees,
         costs and expenses (including attorneys' and professionals fees with
         costs and expenses) that Bank incurs from: (a) preparing, negotiating,
         administering, and enforcing this Agreement or related agreement,
         including any amendments, waivers or consents, (b) any litigation or
         dispute relating to the Financed Receivables, the Collateral, this
         Agreement or any other agreement, (c) enforcing any rights against
         Borrower or any guarantor, or any Account Debtor, (d) protecting or
         enforcing its interest in the Financed Receivables or other Collateral,
         (e) collecting the Financed Receivables and the Obligations, and (f)
         any bankruptcy case or insolvency proceeding involving Borrower, any
         Financed Receivable, the Collateral, any Account Debtor, or any
         Guarantor.

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

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         BORROWER AND BANK EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM
         OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT OR ANY
         CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND
         ALL OTHER CLAIMS. THIS WAIVER IS A MATERIAL INDUICEMENT FOR BOTH
         PARTIES TO ENTER INTO THIS AGREEMENT. EACH PARTY HAS REVIEWED THIS
         WAIVER WITH ITS COUNSEL

13.      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 listed at the beginning of this Agreement. A
         party may change notice address by written notice to the other party.

14.      GENERAL PROVISIONS

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

         14.2. INDEMNIFICATION. Borrower wilt indemnify, defend and hold
         harmless Bank 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 Bank from or
         consequential to transactions between Bank and Borrower (including
         reasonable attorneys fees and expenses), except for losses caused by
         Bank's gross negligence or willful misconduct.

         14.3. TIME OF ESSENCE. Time is of the essence for performance of all
         obligations in this Agreement.

         14.4. SEVERABILITY OF PROVISION. Each provision of this Agreement is
         severable from every other provision in determining the enforceability
         of any provision.

         14.5. 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.

         14.6. 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.

         14.7. SURVIVAL. All covenants, representations and warranties made in
         this Agreement continue in force while any Financed Receivable amount
         remains outstanding. Borrower's indemnification obligations survive
         until all statutes of limitations for actions that may be brought
         against Bank have run.

         14.8. CONFIDENTIALITY. Bank will use the same degree of care handling
         Borrower's confidential information that it uses for its own
         confidential information, but may disclose information; (i) to its
         subsidiaries or affiliates in connection with their business with
         Borrower, (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 net include information
         that is either: (a) in the public domain or in Bank's possession when
         disclosed, or becomes part of the public domain after disclosure to
         Bank; or (b) disclosed to Bank by a third party, if Bank does net know
         that the third party is prohibited from disclosing the information.

         14.9. OTHER AGREEMENTS. This Agreement may not adversely affect Banks
         rights under any other document or agreement. If there is a conflict
         between this Agreement and any agreement between Borrower and Bank,
         Bank may determine in its sole discretion which provision applies.
         Borrower acknowledges that any security agreements, liens and/or
         security interests securing payment of Borrower's Obligations also
         secure Borrower's Obligations under this Agreement and are not
         adversely affected by this Agreement. Additionally, (a) any Collateral
         under other agreements or documents between Borrower and Bank secures
         Borrowers Obligations under this Agreement and (b) a default by
         Borrower under this Agreement is a default under agreements between
         Borrower and Bank.

                                       8
<PAGE>

                           BORROWER: AML Communications, Inc.

                           By /s/ Karl R. Brier
                             ---------------------------------------------------

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

                           BANK: SILICON VALLEY BANK

                           By /s Michael Field
                             ---------------------------------------------------

                           Title SENIOR VICE PRESIDENT
                                ------------------------------------------------

                                       9
<PAGE>

                                    EXHIBIT A

         The Collateral consists of all of Borrower's right, title and interest
in end to the following:

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

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

         All contract rights and general intangibles now owned or hereafter
acquired, including, without limitation, goodwill, trademarks, service marks,
trade styles, trade names, patents, patent applications, leases, license
agreements, franchise agreements, blueprints, drawings, purchase orders,
customer fists, mute lists, infringements, claims, computer programs, computer
discs, computer tapes, literature, reports, catalogs, design rights, income tax
refunds, payments of insurance and rights to payment of any kind;

         All now existing and hereafter arising accounts, contract rights,
royalties, license rights and all other forms of obligations owing to Borrower
arising out of the sale or lease of goods, the licensing of technology or the
rendering of services by Borrower, whether or not earned by performance, and any
and all credit insurance, guaranties, and other security therefor, as well as
all merchandise returned to or reclaimed by Borrower;

         All documents, cash, deposit accounts, securities, securities
entitlements, securities accounts, investment property, financial assets,
letters of credit, certificates of deposit, instruments and chattel paper now
owned or hereafter acquired and Borrower's Books relating to the foregoing;

         All copyright rights, copyright applications, copyright registrations
and like protections in each work of authorship and derivative work thereof,
whether published or unpublished, now owned or hereafter acquired; all trade
secret rights, including all rights to unpatented inventions, know-how,
operating manuals, license rights and agreements and confidential information,
now owned or hereafter acquired; all mask work or similar rights available for
the protection of semiconductor chips, now owned or hereafter acquired; all
claims for damages by way of any pack, present and future infringement of any of
the foregoing;

         All Borrower's Books relating to the foregoing and any and all claims,
rights and interests in any of the above and all substitutions for, additions
and accessions to and proceeds thereof.

                                       1INTELLECTUAL PROPERTY SECURITY AGREEMENT

         This Intellectual Property Security Agreement (this "lP Agreement") is
made as of November 10, 2000 by and between AML Communications. Inc.
("Grantor"), and Silicon Valley Bank, a California banking corporation ("Bank").

                                    RECITALS

         A. Bank will make advances to Grantor ("Advances") as described in the
Accounts Receivable Financing Agreement (the "Financing Agreement"), but only if
Grantor grants Bank a security interest in its Copyrights, Trademarks, Patents,
and Mask Works. Defined terms used but not defined herein shall have the same
meanings as in the Financing Agreement,

         B. Pursuant to the terms of the Financing Agreement, Grantor has
granted to Bank a security interest in all of Grantor's right title and
interest, whether presently existing or hereafter acquired in, to and under all
of the Collateral.

         NOW, THEREFORE, for good and valuable consideration, receipt of which
is hereby acknowledged and intending to be legally bound, as collateral security
for the prompt and complete payment when due of Grantor's Indebtedness under the
Financing Agreement, Grantor hereby represents, warrants, covenants and agrees
as follows:

         1. GRANT OF SECURITY INTEREST. As collateral security for the prompt
and complete payment and performance of all of Grantor's present or future
Indebtedness, obligations and liabilities to Bank, Grantor hereby grants a
security interest in all of Grantor's right, title and interest in, to and under
its Intellectual Property Collateral (all of which shall collectively be called
the "Intellectual Property Collateral"), including, without limitation, the
following:

         (a) Any and all copyright rights, copyright applications, copyright
registrations and like protections in each work or authorship and derivative
work thereof, whether published or unpublished and whether or not the same also
constitutes a trade secret, now or hereafter existing, created, acquired or
held, including without limitation those set forth on Exhibit A attached hereto
(collectively, the "Copyrights");

         (b) Any and all trade secrets, and any and all intellectual property
rights in computer software anti computer software products now or hereafter
existing, created, acquired or held;

         (c) Any and all design rights which may be available to Grantor now or
hereafter existing, created, acquired or held;

         (d) All patents, patent applications and like protections including,
without limitation, improvements, divisions, continuations, renewals, reissues,
extensions and continuations-in-part of the same, including without limitation
the patents and patent applications set forth on Exhibit B attached hereto
(collectively, the "Patents");

         (e) Any trademark and servicemark rights, whether registered or not,
applications to register and registrations of the same and like protections, and
the entire goodwill of the business of Grantor connected with arid symbolized by
such trademarks, including without limitation those set forth on Exhibit C
attached hereto (collectively, the "Trademarks")

         (f) All mask works or similar rights available for the protection of
semiconductor chips, now owned or hereafter acquired, including, without
limitation those set forth on Exhibit D attached hereto (collectively, the "Mask
Works");

         (g) Any and all claims for damages by way of past, present and future
infringements of any of the rights included above, with the right, but not the
obligation, to sue far and collect such damages far said use or infringement of
the intellectual property rights identified above:

         (h) All licenses or other rights to use any of the Copyrights, Patents,
Trademarks, or Mask Works and all license fees and royalties arising from such
use to the extent permitted by such license or rights; and

         (i) All amendments, extensions, renewals and extensions of any of the
Copyrights, Trademarks, Patents, or Mask Works; and

                                       1
<PAGE>

         (j) All proceeds and products of the foregoing, including without
limitation all payments under insurance or any indemnity or warranty payable in
respect of any of the foregoing.

       2. AUTHORIZATION AND REQUEST. Grantor authorizes and requests that the
Register of Copyrights and the Commissioner of Patents and Trademarks record
this IP Agreement.

       3. COVENANTS AND WARRANTIES. Grantor represents, warrants, covenants and
agrees as follows:

         (a) Grantor is now the sole owner of the Intellectual Property
Collateral, except for port-exclusive licenses granted by Grantor to its
customers in the ordinary course of business,

         (b) Performance of this IP Agreement does not conflict with or result
in a breach of any IP Agreement to which Grantor is bound, except to the extent
that certain intellectual property agreements prohibit the assignment of the
rights thereunder to a third party without the licenser's or other party's
consent and this IP Agreement constitutes a security interest.

         (c) During the term of this IP Agreement, Grantor will not transfer or
otherwise encumber any interest in the intellectual Properly Collateral, except
for non-exclusive licenses granted by Grantor in the ordinary course of business
or as set forth in this IP Agreement;

         (d) To its knowledge, each of the Patents is valid and enforceable, and
no part of the intellectual Property Collateral has been judged invalid or
unenforceable, in whole or in part, and no claim has been made that any part of
the intellectual Property Collateral violates the rights of any third party;

         (e) Grantor shall promptly advise Bank of any material adverse change
in the composition of the Collateral, including but not limited to any
subsequent ownership right of the Grantor in or to any Trademark, Patent,
Copyright, or Mask Work specified in this IP Agreement;

         (f) Grantor shall (i) protect, defend and maintain the validity and
enforceability of the Trademarks, Patents, Copyrights, and Mask Works, (ii) use
its best efforts to detect infringements of the Trademarks, Patents, Copyrights,
and Mask Works and promptly advise Bank in writing of material infringements
detected and (iii) not allow any Trademarks, Patents, Copyrights, or Mask Works
to be abandoned, forfeited or dedicated to the public without the written
consent of Bank, which shall not be unreasonably withheld, unless Grantor
determines that reasonable business practices suggest that abandonment is
appropriate.

         (g) Grantor shall promptly register the most recent version of any of
Grantor's Copyrights, if not so already registered, and shall, from time to
time, execute and file such other instruments, and take such further actions as
Bank may reasonably request from time to time to perfect or continue the
perfection of Bank's interest in the intellectual Property Collateral;

         (h) This IP Agreement creates, and in the case of after acquired
Intellectual Property Collateral, this IP Agreement will create at the time
Grantor first has rights in such after acquired intellectual Property
Collateral, in favor of Bank a valid and perfected first priority security
interest in the intellectual Property Collateral in the United States securing
the payment and performance of the obligations evidenced by the Financing
Agreement upon making the filings referred to in clause (i) below;

         (i) To its knowledge, except for, and upon, the filing with the United
Skates Patent and Trademark office With respect to the patents and Trademarks
and the Register of Copyrights with respect to the Copyrights and Mask Works
necessary to perfect the security interests created hereunder and except as has
been already made or obtained, no authorization, approval or other action by,
and no notice to or filing with, any U.S. governmental authority of U_S.
regulatory body is required either (i) for the grant by Grantor of the security
interest granted hereby or for the execution, delivery or performance of this 1P
Agreement by Grantor in the U.S. or (ii) for the perfection in the United States
or the exercise by Bank of its rights and remedies thereunder;

         (j) All information heretofore, herein or hereafter supplied to Bank by
or on behalf of Granter with respect to the Intellectual Property Collateral is
accurate end complete in all material respects.

         (k) Grantor shall not enter into any agreement that would materially
impair or conflict with Grantor's obligations hereunder without Bank's prior
written consent, which consent shall not be unreasonably withheld.

                                       2
<PAGE>

         Grantor shall not permit the inclusion in any material contract to
which it becomes a party of any provisions that could or might in any way
prevent the creation of a security interest in Grantor's rights and interest in
any property included within the definition of the Intellectual property
Collateral acquired under such contracts, except that certain contracts may
contain anti-assignment provisions that could in effect prohibit the creation of
a security interest in such contracts.

         (l) Upon any executive officer of Grantor obtaining actual knowledge
thereof, Grantor will promptly notify Sank in writing of any event that
materially adversely affects the value of any material intellectual Property
Collateral, the ability of Grantor to dispose of any material Intellectual
Property Collateral of the tights and remedies of Bank in relation thereto,
including the levy of any legal process against any of the Intellectual Property
Collateral-

         4. BANK'S RIGHTS. Bank shall have the right, but net the obligation, to
take, at Grantor's sole expense, any actions that Grantor is required under this
IP Agreement to take but which Grantor fails to take, after fifteen (15) days
notice to Grantor. Grantor shall reimburse and indemnify Bank for all reasonable
costs and reasonable expenses incurred in the reasonable exercise of its rights
under this section 4.

         5. INSPECTION RIGHTS. Grantor hereby grants to Bank and its employees,
representatives and agents the right to visit, during reasonable hours upon
prior reasonable written notice to Grantor, and any of Grantor's plants and
facilities that manufacture, install or store products (or that have done so
during the prior six-month period) that are sold utilizing any of the
Intellectual Property Collateral, and to inspect the products and quality
control records relating thereto upon reasonable written notice to Grantor and
as often as may be reasonably requested, but not more than one (1) in every six
(6) months; provided, however, nothing herein shall entitle Bank access to
Grantor's trade secrets and other proprietary information.

                                       3
<PAGE>

         6. FURTHER ASSURANCES; ATTORNEY IN FACT.

         (a) On a continuing basis, Grantor will, subject to any prior licenses,
encumbrances and restrictions and prospective licenses, make, execute,
acknowledge and deliver, and file and record in the proper filing and recording
places in the United States, all such instruments, including appropriate
financing and continuation statements and collateral agreements and filings with
the United States Patent and Trademarks Office and the Register of Copyrights,
and take all such action as may reasonably be deemed necessary or advisable, or
as requested by Bank, to perfect Bank's security interest in all Copyrights,
Patents, Trademarks, and Mask Works and otherwise to carry out the intent and
purposes of this IP Agreement, or for assuring and confirming to Bank the grant
or perfection of a security interest in all Intellectual Property Collateral.

         (b) Grantor hereby irrevocably appoints Bank as Grantor's
attorney-in-fact, with full authority in the place and stead of Grantor and in
the name of Grantor, Bank or otherwise, from time to time in Bank's discretion,
upon Grantor's failure or inability to do so, to take any action and to execute
any instrument which Bank may deem necessary or advisable to accomplish the
purposes of this IP Agreement, including:

         (i) To modify, in its sole discretion, this IP Agreement without first
obtaining Grantor's approval of or signature to such modification by amending
Exhibit A, Exhibit B, Exhibit C, and Exhibit D hereof, as appropriate, to
include reference to any right, title or Interest in any Copyrights, Patients,
Trademarks or Mask Works acquired by Grantor after the execution hereof or to
delete any reference to any right, title or interest in any Copyrights, Patents,
Trademarks, or Mask Works to which Grantor no longer has or claims any right,
title or interest; and

         (ii) To file, in its sole discretion, one or more financing or
continuation statements and amendments thereto, relative to any of the
Intellectual Property Collateral without the signature of Grantor where
permitted by Law.

         7. EVENTS OF DEFAULT. The occurrence of any of the following shall
constitute an Event of Default under this IP Agreement:

         (a) An Event of Default occurs under the Financing Agreement; or

         (b) Grantor breaches any warranty or agreement made by Grantor in this
IP Agreement.

         8. REMEDIES. Upon the occurrence and continuance of an Event of
Default, Bank shall have the right to exercise all the remedies of a secured
party under the California Uniform Commercial Code, including without limitation
the right to require Grantor to assemble the Intellectual Properly Collateral
and any tangible property in which Bank has a security interest and to make it
available to Bank at a place designated by Bank. Bank shall have a nonexclusive,
royalty free license to use the Copyrights, Patents, Trademarks, and Mask Works
to the extent reasonably necessary to permit Bank to exercise its rights and
remedies upon the occurrence of an Event of Default. Grantor will pay any
expenses (including reasonable attorney's fees) incurred by Bank in connection
with the exercise of any of Bank's rights hereunder, including without
limitation any expense incurred in disposing of the Intellectual Property
Collateral. All of Bank's rights and remedies with respect to the Intellectual
Property Collateral shall be cumulative.

         9. INDEMNITY. Grantor agrees to defend, indemnify and hold harmless
Bank and its officers, employees, and agents against: (a) all obligations,
demands, claims, and liabilities claimed or asserted by any other party in
connection with the transactions contemplated by this IP Agreement, and (b) all
losses or expenses in any way suffered, incurred, or paid by Bank as a result of
or in any way arising out of, following or consequential to transactions between
Bank and Grantor, whether under this IP Agreement or otherwise (Including
without limitation, reasonable attorneys fees and reasonable expenses), except
for losses arising from or out of Bank's gross negligence or willful misconduct.

         10. REASSIGNMENT. At such time as Grantor shall completely satisfy all
of the obligations secured hereunder, Bank shall execute and deliver to Grantor
all deed, assignments, and other instruments as may be necessary or proper to
reinvest in Grantor full title to the property assigned hereunder, subject to
any disposition thereof which may have been roads by Bank pursuant hereto.

         11. COURSE OF DEALING.No course of dealing, nor any failure to
exercise, nor any delay in exercising any right, power or privilege hereunder
shaft operate as a waiver thereof.

                                       4
<PAGE>

         12. ATTORNEYS FEES. If any action relating to this IP Agreement is
brought by either party hereto against the other party, the prevailing party
shall be entitled to recover reasonable attorneys' fees, costs and
disbursements.

         13. AMENDMENTS. This 1P Agreement may be amended only by a written
instrument signed by both parties hereto.

         14. COUNTERPARTS. This IP Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute the same instrument.

         15. LAW AND JURISDICTION. This IP Agreement shall be governed by and
construed in accordance with the laws of the State of California, without regard
for choice of law provisions. Grantor and Bank consent to the nonexclusive
jurisdiction of any state or federal court located in Santa Clara County,
California.

         16. CONFIDENTIALITY. In handling any confidential information, Bank
shall exercise the same degree of care that it exercises with respect to its own
proprietary information of the same types to maintain the confidentiality of any
nonpublic information thereby received or received pursuant to this IP Agreement
except that the disclosure of this information may be made (i) to the affiliates
of the Bank, (ii) to prospective transferee or purchasers of an interest in the
obligations secured hereby, provided that they have entered into comparable
confidentiality agreement in favor of grantor and have deliver a copy to
Grantor, (iii) as required by law, regulation, rule or order, subpoena judicial
order or similar order and (iv) as may be required in connection with the
examination, audit or similar investigation of Bank.

         IN WITNESS WHEREOF, the parties hereto have executed this IP Agreement
on the day and year first above written.

ADDRESS OF GRANTOR:                     GRANTOR:

1000 Avenida Acaso                      AML Communications, Inc
Camarillo, California 93412
                                        By:    /s/ Karl R. Brier
                                               --------------------

                                        Name:  Karl R. Brier
                                               --------------------

                                        Title: Chief Financial Officer
                                               and Treasurer
                                               -----------------------

                                       5
<PAGE>

Exhibit "A" attached to that certain Intellectual Property Security Agreement
dated November 10, 2000

                                   EXHIBIT "A"

                                   COPYRIGHTS

SCHEDULE A - ISSUED COPYRIGHTS
------------------------------

<TABLE>
<CAPTION>
COPYRIGHT                       REGISTRATION                 DATE OF
DESCRIPTION                     NUMBER                       ISSUANCE
-----------                     ------------                 --------
<S>                             <C>                          <C>

</TABLE>

SCHEDULE B - PENDING COPYRIGHT APPLICATIONS
-------------------------------------------

<TABLE>
<CAPTION>
                                                                FIRST DATE
COPYRIGHT       APPLICATION                                     OF PUBLIC
DESCRIPTION     NUMBER         DATE OF FILING     CREATION      DISCTRIBUTION
-----------     ------         --------------     --------      -------------
<S>             <C>            <C>                <C>           <C>

</TABLE>

SCHEDULE C - UNREGISTERED COPYRIGHTS (Where No Copyright Application is Pending)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                DATE AND
                                                                RECORDATION
                                                                NUMBER OF
                                                                IP AGREEMENT TO
                                                                OWNER OF
                                             ORIGINAL           GRANTOR (IF
                                             AUTHOR OR          ORIGINAL AUTHOR
                                             OWNER OF           OR OWNER OF
                            FIRST DATE       COPYRIGHT          COPYRIGHT IS
COPYRIGHT       DATE OF     OF               (IF DIFFERENT      DIFFERENT FROM
DESCRIPTION     CREATION    DISTRIBUTION     FROM GRANTOR)      GRANTOR)
-----------     --------    ------------     -------------      ---------------
<S>             <C>         <C>              <C>                <C>

</TABLE>

                                       6
<PAGE>

Exhibit "B" attached to that certain Intellectual Property Security Agreement
dated November 10, 2000

                                   EXHIBIT "B"

                                     PATENTS

<TABLE>
<CAPTION>
PATENT
DESCRIPTION   DOCKET NO.  COUNTRY    SERIAL NO.    FILING DATE      STATUS
-----------   ----------  --------   -----------   ------------     ------
<S>           <C>         <C>        <C>           <C>              <C>

</TABLE>

                                       7
<PAGE>

Exhibit "C" attached to that certain Intellectual Property Security Agreement
dated November 10, 2000

                                   EXHIBIT "C"

                                   TRADEMARKS

<TABLE>
<CAPTION>
TRADEMARK
DESCRIPTION     COUNTRY     SERIAL NO.   REG. NO    STATUS
-----------     -------     ----------   -------    ------
<S>             <C>         <C>           <C>        <C>

</TABLE>

                                       8
<PAGE>

Exhibit "D" attached to that certain intellectual Property Security Agreement
dated November 10, 2000

                                   EXHIBIT"D"

                                   MASK WORKS

<TABLE>
<CAPTION>
MASK WORK
DESCRIPTION             COUNTRY       SERIAL NO.        RED. NO.          STATUS
-----------             -------       ----------        --------          ------
<S>                     <C>           <C>               <C>               <C>

</TABLE>

                                       9

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