<PAGE>   1
                                                                    EXHIBIT 10.3



                                    FORM OF
                  GENERAL ASSIGNMENT AND ASSUMPTION AGREEMENT

                                      AMONG

                            C-CUBE MICROSYSTEMS INC.,

                            C-CUBE SEMICONDUCTOR INC.

                                       AND

                          C-CUBE SEMICONDUCTOR II INC.

                              __________ ____, 2000


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                                TABLE OF CONTENTS

<TABLE>
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ARTICLE I CONTRIBUTION AND ASSUMPTION.................................................1

     Section 1.1     Contribution of Assets and Assumption of Liabilities.............1
     Section 1.2     Semiconductor Assets.............................................2
     Section 1.3     Semiconductor Liabilities........................................5
     Section 1.4     Methods of Transfer and Assumption...............................7
     Section 1.5     Governmental Approvals and Consents..............................8
     Section 1.6     Nonrecurring Costs and Expenses..................................9
     Section 1.7     Novation of Assumed Semiconductor Liabilities....................9

ARTICLE II INTELLECTUAL PROPERTY LICENSES............................................10

     Section 2.1     License to C-Cube...............................................10
     Section 2.2     License to Semiconductor........................................11
     Section 2.3     Transfers and Sublicense........................................11

ARTICLE III LITIGATION...............................................................12

     Section 3.1     Allocation......................................................12
     Section 3.2     Cooperation.....................................................12

ARTICLE IV MISCELLANEOUS.............................................................13

     Section 4.1     Entire Agreement................................................13
     Section 4.2     Governing Law...................................................13
     Section 4.3     Notices.........................................................13
     Section 4.4     Parties in Interest.............................................13
     Section 4.5     Counterparts....................................................13
     Section 4.6     Assignment......................................................13
     Section 4.7     Severability....................................................13
     Section 4.8     Failure or Indulgence Not Waiver; Remedies Cumulative...........14
     Section 4.9     Amendment.......................................................14
     Section 4.10    Authority.......................................................14
     Section 4.11    Interpretation..................................................14
     Section 4.12    Conflicting Agreements..........................................14

ARTICLE V DEFINITIONS................................................................15

     Section 5.1     Action..........................................................15
     Section 5.2     Affiliated Company..............................................15
     Section 5.3     Ancillary Agreement.............................................15
     Section 5.4     Assets..........................................................15
     Section 5.5     C-Cube Group....................................................16
     Section 5.6     Consents........................................................17
     Section 5.7     Contracts.......................................................17
     Section 5.8     Distribution....................................................17
</TABLE>



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                                TABLE OF CONTENTS
                                   (CONTINUED)
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     Section 5.9     DiviCom Business................................................17
     Section 5.10    Distribution Date...............................................17
     Section 5.11    Environmental Actions...........................................17
     Section 5.12    Excluded Assets.................................................17
     Section 5.13    Excluded Liabilities............................................17
     Section 5.14    Governmental Approvals..........................................17
     Section 5.15    Governmental Authority..........................................17
     Section 5.16    Indemnification and Insurance Matters Agreement.................17
     Section 5.17    Insurance Policies..............................................17
     Section 5.18    Insured Semiconductor Liability.................................17
     Section 5.19    Intellectual Property...........................................18
     Section 5.20    Liabilities.....................................................18
     Section 5.21    Litigation Disclosure Letter....................................18
     Section 5.22    Person..........................................................18
     Section 5.23    Retained Cash...................................................18
     Section 5.24    Retained Payables...............................................18
     Section 5.25    Retained Receivables............................................18
     Section 5.26    Security Interest...............................................19
     Section 5.27    Semiconductor Assets............................................19
     Section 5.28    Semiconductor Pro Forma Balance Sheet...........................19
     Section 5.29    Semiconductor  Business.........................................19
     Section 5.30    Semiconductor Contingent Gain...................................19
     Section 5.31    Semiconductor Contingent Liability..............................19
     Section 5.32    Semiconductor Contracts.........................................19
     Section 5.33    Semiconductor Group.............................................20
     Section 5.34    Semiconductor Intellectual Property.............................20
     Section 5.35    Semiconductor Liabilities.......................................20
     Section 5.36    Separation......................................................20
     Section 5.37    Separation Agreement............................................20
     Section 5.38    Separation Date.................................................20
     Section 5.39    Subsidiary......................................................20
     Section 5.40    Taxes...........................................................20
</TABLE>



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                                    SCHEDULES

Schedule 1.1(a)        Assets to be Transferred to Semiconductor I
Schedule 1.1(b)        Liabilities to be Transferred to Semiconductor I



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                   GENERAL ASSIGNMENT AND ASSUMPTION AGREEMENT

        This General Assignment and Assumption Agreement (this "AGREEMENT") is
entered into on _______ ___, 2000 by and among C-Cube Microsystems Inc., a
Delaware corporation ("C-CUBE"), C-Cube Semiconductor Inc., a Delaware
corporation ("SEMICONDUCTOR I"), and C-Cube Semiconductor II Inc., a Delaware
corporation ("SEMICONDUCTOR II"). Capitalized terms used herein and not
otherwise defined herein shall have the meanings ascribed to such terms in
ARTICLE IV hereof.

                                    RECITALS

        WHEREAS, C-Cube hereby and by certain other instruments of even date
herewith transfers or will transfer to Semiconductor I and Semiconductor II
effective as of the Separation Date, substantially all of the business and
assets of the Semiconductor Business owned by C-Cube in accordance with the
Master Separation and Distribution Agreement dated as of _______ ___, 2000
between the parties (the "SEPARATION AGREEMENT"). It is the intent of the
parties hereto, by this Agreement and the other agreements and instruments
provided for in the Separation Agreement, that C-Cube and its Subsidiaries
convey to Semiconductor I and Semiconductor II and their Subsidiaries
substantially all of the business and assets of the Semiconductor Business;

        WHEREAS, it is further intended between the parties that Semiconductor I
and Semiconductor II assume certain of the liabilities related to the
Semiconductor Business, as provided in this Agreement, the Separation Agreement
or the other agreements and instruments provided for in the Separation
Agreement;

        WHEREAS, C-Cube has entered into the Agreement and Plan of Merger and
Reorganization, dated as of October 27, 1999 (the "MERGER AGREEMENT"), with
Harmonic Inc. ("HARMONIC") pursuant to which, subsequent to the sale or
distribution of C-Cube of Semiconductor, C-Cube will merge with and into
Harmonic (the "MERGER").

        WHEREAS, C-Cube and Harmonic entered into an Amended and Restated
Agreement and Plan of Merger and Reorganization dated as of December 9, 1999
(the "RESTATED MERGER AGREEMENT");

        NOW, THEREFORE, in consideration of the foregoing and the covenants and
agreements set forth below, the parties hereto agree as follows:

                                    ARTICLE I

                           CONTRIBUTION AND ASSUMPTION

        SECTION 1.1 CONTRIBUTION OF ASSETS AND ASSUMPTION OF LIABILITIES.

        (a) Transfer of Assets. (i) Effective on the Separation Date, C-Cube
hereby assigns, transfers, conveys and delivers to Semiconductor II, and agrees
to cause its applicable Subsidiaries


<PAGE>   6

to assign, transfer, convey and deliver to Semiconductor II's applicable
Subsidiaries, and Semiconductor II hereby accepts from C-Cube, and agrees to
cause its applicable Subsidiaries to accept from C-Cube's applicable
Subsidiaries, all of C-Cube's and its applicable Subsidiaries' respective right,
title and interest in all Semiconductor Assets except for those Semiconductor
Assets set forth on Schedule 1.1(a) hereto; provided, however, that any
Semiconductor Assets that are specifically assigned or transferred pursuant to
another Ancillary Agreement shall not be assigned or transferred pursuant to
this Section 1.1(a).

                  (ii) Effective on the Separation Date, C-Cube hereby assigns,
transfers, conveys and delivers to Semiconductor I, and agrees to cause its
applicable Subsidiaries to assign, transfer, convey and deliver to Semiconductor
I's applicable Subsidiaries, and Semiconductor I hereby accepts from C-Cube, and
agrees to cause its applicable Subsidiaries to accept from C-Cube's applicable
Subsidiaries, all of C-Cube's and its applicable Subsidiaries' respective right,
title and interest in all Semiconductor Assets listed on Schedule 1.1(a) hereto.

        (b) Assumption of Liabilities. (i) Effective on the Separation Date,
Semiconductor II hereby assumes and agrees faithfully to perform and fulfill,
all the Semiconductor Liabilities held by C-Cube in accordance with their
respective terms, and agrees to cause its applicable Subsidiaries to assume,
perform and fulfill all the Semiconductor Liabilities held by its Subsidiaries,
in accordance with their respective terms except for with respect to those
Semiconductor Liabilities set forth on Schedule 1.1(b) hereto.

                  (i) Effective on the Separation Date, Semiconductor I hereby
assumes and agrees faithfully to perform and fulfill, all the Semiconductor
Liabilities listed on Schedule 1.1(b) hereto held by C-Cube in accordance with
their respective terms, and agrees to cause its applicable Subsidiaries to
assume, perform and fulfill all the Semiconductor Liabilities listed on Schedule
1.1(b) held by its Subsidiaries, in accordance with their respective terms.

        (c) Misallocated Assets and Liabilities. In the event that at any
time or from time to time (whether prior to, on or after the Separation Date),
any party hereto (or any member of such party's respective Group), shall receive
or otherwise possess any Asset or Liability that is misallocated to any other
Person pursuant to this Agreement or any Ancillary Agreement, such party shall
promptly transfer, or cause to be transferred, such Asset or Liability to the
Person so entitled thereto. Prior to any such transfer, the Person receiving or
possessing such Asset shall hold such Asset or Liability in trust for any such
other Person.

        SECTION 1.2 SEMICONDUCTOR ASSETS.

        (a) Included Assets. For purposes of this Agreement, "SEMICONDUCTOR
ASSETS" shall mean (without duplication) the following Assets, except as
otherwise provided for in any Ancillary Agreement or other express agreement of
the parties:

                 (i) all assets reflected in the unaudited consolidated balance
sheet (including notes thereto) of the Semiconductor Business as of September
30, 1999 attached hereto as



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Annex 1.2(a) (the "BALANCE SHEET"), subject to any dispositions of such Assets
subsequent to the date of such Balance Sheet;

                  (ii) all assets that have been written off, expensed or fully
depreciated that, had they not been written off, expensed or fully depreciated,
would have been reflected in the Balance Sheet in accordance with the principles
and accounting policies under which the Balance Sheet was prepared;

                  (iii) all assets acquired by C-Cube or its Subsidiaries after
the date of the Balance Sheet that would be reflected in the consolidated
balance sheet of the Semiconductor Business as of the Separation Date if such
consolidated balance sheet was prepared at the time of the Semi Disposition
using the same principles and accounting policies under which the Balance Sheet
was prepared;

                  (iv) all assets that are used primarily by the Semiconductor
Business at the Separation Date but are not reflected in the Balance Sheet due
to mistake or unintentional omission;

                  (v) all claims or other rights of C-Cube or the Semiconductor
Business that primarily relate to the Semiconductor Business, whenever arising,
against any Person or entity other than an officer, employee, director or
consultant of the Semiconductor Business, if and to the extent that (i) such
claim or right arises out of the events, acts or omissions occurring on or
before the Separation Date (based on then existing law) and (ii) the existence
or scope of the obligation of such other Person or entity as of the Separation
Date was not acknowledged, fixed or determined in any material respect, due to a
dispute or other uncertainty as of the Separation Date or as a result of the
failure of such claim or other right to have been discovered or asserted as of
the Separation Date. A claim or right meeting the foregoing definition shall be
considered an "SEMICONDUCTOR CONTINGENT GAIN" regardless of whether there was
any action pending, threatened or contemplated as of the Separation Date with
respect thereto. In the case of any claim or right, a portion of which arises
out of events, acts or omissions occurring prior to the Separation Date and a
portion of which arises out of events, acts or omissions occurring on or after
the Separation Date, only that portion that arises out of events, acts or
omissions occurring prior to the Separation Date, shall be considered a
Semiconductor Contingent Gain. For purposes of the foregoing a claim or right
shall be deemed to have accrued as of the Separation Date if all the elements of
the claim necessary for its assertion shall have occurred on or prior to the
Separation Date, would not be dismissed by a court on ripeness or similar
grounds. Notwithstanding the foregoing, none of (i) any insurance proceeds, (ii)
any Excluded Assets (as defined below), (iii) any reversal of any litigation or
other reserve, or (iv) any matters relating to Taxes which are governed by the
Tax Sharing Agreement shall be deemed to be a Semiconductor Contingent Gain;

                  (vi) all contracts in which C-Cube is a party or by which it
or any of its assets is bound whether or not in writing, except for any such
contract or agreement that is contemplated to be retained by C-Cube because it
relates primarily to the DiviCom Business including:

                      (1) all prepaid expenses, trade accounts and other
accounts and notes receivables;



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                      (2) all rights under contracts or agreement, all claims or
rights against any person or entity arising from the ownership of any Asset, all
rights in connection with any bids or offers and all claims, choices in action
or similar rights, whether accrued or contingent;

                      (3) all rights under insurance policies and rights in the
nature of insurance, indemnification or contribution;

                      (4) all licenses, permits, approvals and authorization
which have been issued by any governmental authority; and

                      (5) interest rate, currency, commodity or other swap,
collar, cap or other hedging or similar agreements or arrangements.

                  (vii) all computers, desks, equipment (including equipment
used for research and development) and other Assets used primarily by employees
of C-Cube that will become employees of the Semiconductor Business;

                  (viii) to the extent permitted by law and subject to any
agreement regarding indemnification and/or insurance matters, all rights of the
Semiconductor Business under any of C-Cube's insurance policies;

                  (ix) all (a) accounts receivable and other rights to payment
for goods or services sold, leased or otherwise provided in the conduct of the
Semiconductor Business that, as of the Separation Date, are payable by a third
party to C-Cube or any of C-Cube's subsidiaries, whether past due, due or to
become due, including any interest, sales or use taxes, finance charges, late or
returned check charges and other obligations of the accounts debtor with respect
thereto, and any proceeds of any of the foregoing and (b) other miscellaneous
Assets for which an adjustment is made in the Balance Sheet;

                  (x) C-Cube's rights in the trade and service marks and domain
names incorporating or based on the name C-CUBE and any goodwill associated
therewith;

                  (xi) All Intellectual Property owned or transferable by C-Cube
or the Semiconductor Business that arises out of the activities of, or that is
primarily related to, the Semiconductor Business, including all Intellectual
Property listed on Schedule 1.2(a)(xi) (all of the foregoing, "SEMICONDUCTOR
INTELLECTUAL PROPERTY"), and all rights to sue for, recover and retain any
damages from any third party's infringement of any such Intellectual Property
rights; and

                  (xii) cash or cash equivalents, bank accounts, lock boxes and
other deposit arrangements (other than the Retained Cash).

                  (xiii) all outstanding shares in subsidiaries conducting
Semiconductor Business owned directly by C-Cube Microsystems Inc. including
shares in:



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                      (1) C-Cube Microsystems International Ltd., a company
organized under the laws of Bermuda;

                      (2) C-Cube U.S. Inc., a company organized in Delaware;

                      (3) C-Cube Japan, Inc., a company organized in Japan and
assets owned by these subsidiaries;

                      (4) C-Cube Technology Limited, a company organized under
the laws of Bermuda; and

                      (5) Media Computer Technologies, Inc., a California
corporation.

        (b) Excluded Assets. For the purposes of this Agreement, "EXCLUDED
ASSETS" shall mean:

               C-Cube Registered Intellectual Property listed on the Company
Disclosure Schedule (as defined in the Merger Agreement.)

        SECTION 1.3 SEMICONDUCTOR LIABILITIES.

        (a) Included Liabilities.  For the purposes of this Agreement,
"SEMICONDUCTOR LIABILITIES" shall mean (without duplication) the following
Liabilities, except as otherwise provided for in any Ancillary Agreement or
other express agreement of the parties:

                  (i) all Liabilities reflected in the Balance Sheet, subject to
any discharge of such Liabilities subsequent to the date of the Balance Sheet;

                  (ii) all Liabilities of C-Cube or its Subsidiaries that arise
after the date of the Balance Sheet that would be reflected in the consolidated
balance sheet of the Semiconductor Business as of the Separation Date if such
consolidated balance sheet was prepared using the same principles and accounting
policies under which the Balance Sheet was prepared;

                  (iii) all Liabilities that are related primarily to the
Semiconductor Business at the Separation Date but are not reflected in the
Balance Sheet due to mistake or unintentional omission;

                  (iv) any Liability of C-Cube or the Semiconductor Business
that primarily related to the Semiconductor Business, whenever arising, to any
Person or entity other than an officer, director, employee or consultant of the
Semiconductor Business, if and to the extent that (i) such Liability arises out
of the events, acts or omissions occurring on or before the Separation Date and
(ii) the existence or scope of the obligation to such Person or entity as of the
Separation Date with respect to such Liability was not acknowledged, fixed or
determined in any material respect, due to a dispute or other uncertainty as of
the Separation Date or as a result of the failure of such Liability to have been
discovered or asserted as of the Separation Date (it being understood that the
existence of a litigation or other reserve with respect to any Liability shall
not be sufficient for such Liability to be considered acknowledged, fixed or
determined) (each, a "SEMICONDUCTOR CONTINGENT



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LIABILITY"). In the case of any Liability, a portion of which arises out of
events, acts or omissions occurring prior to the Separation Date and a portion
of which arises out of events, acts or omissions occurring on or after the
Separation Date, only that portion that arises out of events, acts or omissions
occurring prior to the Separation Date shall be considered a Semiconductor
Contingent Liability. For purposes of the foregoing, a Liability shall be deemed
to have arisen out of events, acts or omissions occurring prior to the
Separation Date if all the elements necessary for the assertion of a claim with
respect to such Liability shall have occurred on or prior to the Separation
Date, such that the claim, were it asserted in an action on or prior to the
Separation Date, would not be dismissed by a court on ripeness or similar
grounds. For purposes of clarification of the foregoing, the parties agree that
no Liability relating to, arising out of or resulting from any obligation of any
person or entity to satisfy any obligation accrued under any employee stock
option plan, stock purchase plan or the like as of the Separation Date, shall be
deemed to be a Semiconductor Contingent Liability. For purposes of determining
whether a claim relating to the Year 2000 problem is a Semiconductor Contingent
Liability, claims relating to products shipped prior to the Separation Date
shall be deemed to have arisen prior to the Separation Date.

                  (v) all Liabilities (other than Liabilities for Taxes),
whether arising before on or after the Separation Date, primarily relating to,
arising out of or resulting from:

                      (1) the operation of the Semiconductor Business, as
conducted at any time prior to, on or after the Separation Date (including any
Liability relating to, arising out of or resulting from any act or failure to
act by any director, officer, employee, agent or representative (whether or not
such act or failure to act is or was within such Person or entity's authority));

                      (2) the operation of any business conducted by the
Semiconductor Business at any time after the Separation Date (including any
Liability relating to, arising out of or resulting from any act or failure to
act by any director, officer, employee, agent or representative (whether or not
such act or failure to act is or was within such person or entity's authority));
or

                      (3) any Semiconductor Assets;

                  (vi) all fees and expenses of C-Cube incurred in connection
with the Merger and the spin-off transaction;

                  (vii) all accounts payable and other obligations of payment
for goods or services purchased, leased or otherwise received in the conduct of
the Semiconductor Business that as of the Separation Date are payable to a third
party by C-Cube or any of C-Cube's subsidiaries, whether past due, due or to
become due, including any interest, sales or use taxes, finance charges, late or
returned check charges and other obligations of C-Cube or any of C-Cube's
Subsidiaries with respect thereto, and any obligations related to any of the
foregoing;



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                  (viii) all employee compensation Liabilities relating to
employees of the Semiconductor Business other than Continuing Employees; and

                  (ix) all severance payments and related Liabilities arising
out of any termination of non-Continuing Employees (as defined in the Merger
Agreement).

Notwithstanding anything in this Agreement, the Merger Agreement or the
Ancillary Agreements to the contrary, to the extent that the amount provided by
C-Cube to the Semiconductor Business has been reduced on account of certain
liabilities set forth in clauses (i) through (v) of the definition of "Retained
Cash," such liabilities shall not constitute Semiconductor Liabilities.

Notwithstanding the foregoing, the Semiconductor Liabilities shall not include
the Excluded Liabilities referred to in SECTION 1.3(b) below.

        (b) Excluded Liabilities. For the purposes of this Agreement,
"EXCLUDED LIABILITIES" shall mean:

                  (i) all Liabilities to the extent that (i) it is covered under
the terms of C-Cube's insurance policies in effect prior to the Separation Date
and (ii) the Semiconductor Business is not a named, insured under, or otherwise
entitled to the benefits of, such insurance policies;

                  (ii) all Liabilities for Pre-Semi Disposition Taxes not
attributable to the Semiconductor Business; and

                  (iii) all agreements and obligations of C-Cube under the
agreements governing the Distribution.

        SECTION 1.4   METHODS OF TRANSFER AND ASSUMPTION.

        (a) Terms of Other Ancillary Agreements Govern. The parties shall
enter into the other Ancillary Agreements, on or about the date of this
Agreement. To the extent that the transfer of any Semiconductor Asset or the
assumption of any Semiconductor Liability is expressly provided for by the terms
of any other Ancillary Agreement, the terms of such other Ancillary Agreement
shall effect, and determine the manner of, the transfer or assumption. It is the
intent of the parties that pursuant to SECTIONS 1.1, 1.2 and 1.3, the transfer
and assumption of all other Semiconductor Assets and Semiconductor Liabilities
shall be made effective as of the Separation Date.

        (b) Mistaken Assignments and Assumptions. In addition to those
transfers and assumptions accurately identified and designated by the parties to
take place but which the parties are not able to effect prior to the Separation
Date, there may exist (i) Assets that the parties discover were, contrary to the
agreements between the parties, by mistake or omission, transferred to
Semiconductor I or Semiconductor II or any of their Subsidiaries or retained by
C-Cube or (ii) Liabilities that the parties discover were, contrary to the
agreements between the parties, by mistake or omission, assumed by Semiconductor
I or Semiconductor II or any of their Subsidiaries or not assumed by
Semiconductor I or Semiconductor II or any of their Subsidiaries. The parties
shall



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cooperate in good faith to effect the transfer or re-transfer of such Assets,
and/or the assumption or re-assumption of such Liabilities, to or by the
appropriate party and shall not use the determination that remedial actions need
to be taken to alter the original intent of the parties hereto with respect to
the Assets to be transferred to or Liabilities to be assumed by Semiconductor I
or Semiconductor II or any of their Subsidiaries. Each party shall reimburse the
other or make other financial adjustments (e.g., without limitation, cash
reserves) or other adjustments to remedy any mistakes or omissions relating to
any of the Assets transferred hereby or any of the Liabilities assumed hereby.

        (c) Transfer of Assets and Liabilities Not Included in Semiconductor
Assets and Semiconductor Liabilities. In the event the parties discover Assets
and Liabilities that relate primarily to the Semiconductor Business but do not
constitute Semiconductor Assets under SECTION 1.2 or Semiconductor Liabilities
under SECTION 1.3, the parties shall cooperate in good faith to effect the
transfer of such Assets at book value, or the assumption of such Liabilities, to
Semiconductor I or Semiconductor II or any of their Subsidiaries, as applicable,
and shall not use the determination of remedial actions contemplated in the
Separation Agreement to alter the original intent of the parties hereto with
respect to the Assets to be transferred to or Liabilities to be assumed by
Semiconductor I or Semiconductor II or any of their Subsidiaries, as applicable.
Each party shall reimburse the other or make other financial adjustments (e.g.,
without limitation, cash reserves) or other adjustments to remedy any mistakes
or omissions relating to any of the Assets transferred hereby or any of the
Liabilities assumed hereby.

        (d) Documents Relating to Other Transfers of Assets and Assumption of
Liabilities. In furtherance of the assignment, transfer and conveyance of
Semiconductor Assets and the assumption of Semiconductor Liabilities set forth
in SECTIONS 1.4(a), (b) and (c) and certain Ancillary Agreements, simultaneously
with the execution and delivery hereof or as promptly as practicable thereafter,
(i) C-Cube shall execute and deliver such bills of sale, stock powers,
certificates of title, assignments of contracts and other instruments of
transfer, conveyance and assignment as and to the extent necessary to evidence
the transfer, conveyance and assignment of all of C-Cube's and its Subsidiaries'
right, title and interest in and to the Semiconductor Assets to Semiconductor I
or Semiconductor II or any of their Subsidiaries, as applicable, and (ii)
Semiconductor I or Semiconductor II or any of their Subsidiaries, as applicable,
shall execute and deliver, to C-Cube and its Subsidiaries such bills of sale,
stock powers, certificates of title, assumptions of contracts and other
instruments of assumption as and to the extent necessary to evidence the valid
and effective assumption of the Semiconductor Liabilities by Semiconductor I or
Semiconductor II or any of their Subsidiaries, as applicable.

        SECTION 1.5 GOVERNMENTAL APPROVALS AND CONSENTS.

        (a) Transfer In Violation of Laws. If and to the extent that the
valid, complete and perfected transfer assignment or novation to the
Semiconductor Group of any Semiconductor Assets and Semiconductor Liabilities
(or from the Semiconductor Group of any Non-Semiconductor Assets) would be a
violation of applicable laws or require any Consent or Governmental Approval in
connection with the Separation or the Distribution, then, unless C-Cube shall
otherwise determine, the transfer, assignment or novation to or from the
Semiconductor Group,



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<PAGE>   13

as the case may be, of such Semiconductor Assets or Non-Semiconductor Assets,
respectively, shall be automatically deemed deferred and any such purported
transfer, assignment or novation shall be null and void until such time as all
legal impediments are removed and/or such Consents or Governmental Approvals
have been obtained. Notwithstanding the foregoing, such Asset shall still be
considered a Semiconductor Asset for purposes of determining whether any
Liability is a Semiconductor Liability; provided, however, that if such
covenants or Governmental Approvals have not been obtained within six months of
the Distribution Date, the parties will use their reasonable commercial efforts
to achieve an alternative solution in accordance with the parties' intentions.

        (b) Transfers Not Consummated Prior to Separation Date. If the
transfer, assignment or novation of any Assets intended to be transferred or
assigned hereunder is not consummated prior to or on the Separation Date,
whether as a result of the provisions of SECTION 1.5(a) or for any other reason,
then the Person retaining such Asset shall thereafter hold such Asset for the
use and benefit, insofar as reasonably possible, of the Person entitled thereto
(at the expense of the Person entitled thereto). In addition, the Person
retaining such Asset shall take such other actions as may be reasonably
requested by the Person to whom such Asset is to be transferred in order to
place such Person, insofar as reasonably possible, in the same position as if
such Asset had been transferred as contemplated hereby and so that all the
benefits and burdens relating to such Semiconductor Assets (or such
Non-Semiconductor Assets, as the case may be), including possession, use, risk
of loss, potential for gain, and dominion, control and command over such Assets,
are to inure from and after the Separation Date to the Semiconductor Group (or
the C-Cube Group, as the case may be). If and when the Consents and/or
Governmental Approvals, the absence of which caused the deferral of transfer of
any Asset pursuant to SECTION 1.5(a), are obtained, the transfer of the
applicable Asset shall be effected in accordance with the terms of this
Agreement and/or the applicable Ancillary Agreement.

        (c) Expenses. The Person retaining an Asset due to the deferral of
the transfer of such Asset shall not be obligated, in connection with the
foregoing, to expend any money unless the necessary funds are advanced by the
Person entitled to the Asset, other than reasonable out-of-pocket expenses,
attorneys' fees and recording or similar fees, all of which shall be promptly
reimbursed by the Person entitled to such Asset.

        SECTION 1.6 NONRECURRING COSTS AND EXPENSES. Notwithstanding anything
herein to the contrary, any nonrecurring costs and expenses incurred by the
parties hereto to effect the transactions contemplated hereby which are not
allocated pursuant to the terms of the Separation Agreement, this Agreement or
any other Ancillary Agreement shall be the responsibility of the party which
incurs such costs and expenses.

        SECTION 1.7 NOVATION OF ASSUMED SEMICONDUCTOR LIABILITIES.

        (a) Reasonable Commercial Efforts. Each of C-Cube, and Semiconductor
I or Semiconductor II or any of their Subsidiaries, as applicable, at the
request of the other, shall use their reasonable commercial efforts to obtain,
or to cause to be obtained, any consent, substitution, approval or amendment
required to novate (including with respect to any federal government



                                      -9-
<PAGE>   14

contract) or assign all rights and obligations under agreements, leases,
licenses and other obligations or Liabilities of any nature whatsoever that
constitute Semiconductor Liabilities or to obtain in writing the unconditional
release of all parties to such arrangements other than any member of the
Semiconductor Group, so that, in any such case, Semiconductor I or Semiconductor
II or any of their Subsidiaries, as applicable, will be solely responsible for
such Liabilities; provided, however, that none of C-Cube, Semiconductor I,
Semiconductor II or any of their Subsidiaries shall be obligated to pay any
consideration therefor to any third party from whom such consents, approvals,
substitutions and amendments are requested.

        (b) Inability to Obtain Novation. If C-Cube, Semiconductor I or
Semiconductor II or any of their Subsidiaries, as applicable, is unable to
obtain, or to cause to be obtained, any such required consent, approval,
release, substitution or amendment, the applicable member of the C-Cube Group
shall continue to be bound by such agreements, leases, licenses and other
obligations and, unless not permitted by law or the terms thereof (except to the
extent expressly set forth in this Agreement, the Separation Agreement or any
other Ancillary Agreement), Semiconductor I or Semiconductor II or any of their
Subsidiaries, as applicable, shall, as agent or subcontractor for C-Cube or such
other Person, as the case may be, pay, perform and discharge fully, or cause to
be paid, transferred or discharged all the obligations or other Liabilities of
C-Cube or such other Person, as the case may be, thereunder from and after the
date hereof. C-Cube shall, without further consideration, pay and remit, or
cause to be paid or remitted, to Semiconductor I or Semiconductor II or any of
their Subsidiaries, as applicable, or its appropriate Subsidiary promptly all
money, rights and other consideration received by it or any member of its
respective Group in respect of such performance (unless any such consideration
is an Excluded Asset). If and when any such consent, approval, release,
substitution or amendment shall be obtained or such agreement, lease, license or
other rights or obligations shall otherwise become assignable or able to be
novated, C-Cube shall thereafter assign, or cause to be assigned, all its
rights, obligations and other Liabilities thereunder or any rights or
obligations of any member of its respective Group to Semiconductor I or
Semiconductor II or any of their Subsidiaries, as applicable, without payment of
further consideration and Semiconductor I or Semiconductor II or any of their
Subsidiaries, as applicable, shall, without the payment of any further
consideration, assume such rights and obligations.

                                  ARTICLE II

                         INTELLECTUAL PROPERTY LICENSES

        SECTION 2.1 LICENSE TO C-CUBE.

        (a) Grant. To the extent any of the Semiconductor Intellectual
Property is necessary for, or would be infringed by, the operation of the
DiviCom Business as such business is operated as of or prior to the Separation
Date, subject to all limitations set forth herein Semiconductor I and
Semiconductor II or any of their Subsidiaries hereby grant to C-Cube, to the
extent of






                                      -10-
<PAGE>   15

Semiconductor I and Semiconductor II's or any of their Subsidiaries'
rights in such Semiconductor Intellectual Property and without any
representation or warranty of any kind, a worldwide, perpetual, irrevocable,
non-exclusive, license to continue to operate the DiviCom Business in
substantially the same manner such business was conducted as of or prior to the
Separation Date.

        (b) Limitations. All rights and licenses to the Semiconductor
Intellectual Property not expressly granted to C-Cube in Section 2.1(a) or in a
written agreement between the parties are reserved to Semiconductor I or
Semiconductor II or any of their Subsidiaries, as applicable. Without limiting
the foregoing, C-Cube shall not have any right or license under the foregoing
and is not granted any license hereunder to (i) make or have made any
semiconductor device, and (ii) [___________].

        (c) No Technology Transfer. Nothing set forth in Section 2.1(a) shall
obligate Semiconductor I or Semiconductor II or any of their Subsidiaries, as
applicable, to transfer or disclose to C-Cube any Intellectual Property
including any know how, software, or other materials.

        SECTION 2.2   LICENSE TO SEMICONDUCTOR.

        (a) Grant. To the extent any of the Excluded Assets or any other
assets retained by C-Cube include any Intellectual Property that is necessary
for or would be infringed by the operation of the Semiconductor Business as such
business was conducted as of or prior to the Separation Date, subject to all
limitations set forth herein C-Cube hereby grants to Semiconductor I or
Semiconductor II or any of their Subsidiaries, as applicable, to the extent of
C-Cube's rights in such Intellectual Property and without any representation or
warranty of any kind, a worldwide, perpetual, irrevocable, non-exclusive license
to continue to operate the Semiconductor Business in substantially the same
manner such business was conducted as of or prior to the Separation Date.

        (b) Limitations. All rights and licenses to the Intellectual Property of
C-Cube not expressly granted to Semiconductor I or Semiconductor II or any of
their Subsidiaries, as applicable, in Section 2.2(a) or in a written agreement
between the parties are reserved to C-Cube.

        (c) No Technology Transfer. Nothing set forth in Section 2.2(a) shall
obligate C-Cube to transfer to or disclose to Semiconductor I or Semiconductor
II or any of their Subsidiaries, as applicable, any Intellectual Property
including any know how, software, or other materials.

        SECTION 2.3 TRANSFERS AND SUBLICENSE. The licenses granted to each party
in this ARTICLE II may neither: (i) be assigned or transferred by the licensed
party except in connection with the sale or merger of such party or the sale of
substantially all of the assets of such party, nor (ii) licensed by such
licensed party except in connection with the granting by such party of a license
of substantial other Intellectual Property of such party.]



                                      -11-
<PAGE>   16

                                   ARTICLE III

                                   LITIGATION

        SECTION 3.1   ALLOCATION.

        (a) Litigation to Be Transferred to Semiconductor II. Notwithstanding
any contrary provisions in the provisions of the Indemnification and Insurance
Matters Agreement, on the Separation Date, the responsibilities for management
of the litigation identified in SECTION 3.1(a) of a litigation disclosure letter
(the "LITIGATION DISCLOSURE LETTER"), which will be delivered by C-Cube to
Semiconductor II or any of its Subsidiaries on the Separation Date, shall be
transferred in their entirety from C-Cube and its Subsidiaries to Semiconductor
II or any of its Subsidiaries and its Subsidiaries. As of the Separation Date
and thereafter, Semiconductor II or any of its Subsidiaries shall manage the
defense of this litigation and shall cause its applicable Subsidiaries to do the
same. C-Cube and its Subsidiaries must first obtain the prior consent of
Semiconductor II or any of its Subsidiaries or its applicable Subsidiary for any
action taken subsequent to the Separation Date in connection with the litigation
identified in the Litigation Disclosure Letter, which consent cannot be
unreasonably withheld or delayed. All other matters relating to such litigation,
including but not limited to indemnification for such claims, shall be governed
by the provisions of the Indemnification and Insurance Matters Agreement.

        (b) LITIGATION to be Defended by C-Cube at Semiconductor II's
Expense. Notwithstanding any contrary provisions in the Indemnification and
Insurance Matters Agreement, C-Cube shall defend, and shall cause its applicable
Subsidiaries to defend, the litigation identified in SECTION 3.1(b) of the
Litigation Disclosure Letter. All other matters relating to such litigation,
including but not limited to indemnification for such claims, shall be governed
by the provisions of the Indemnification and Insurance Matters Agreement.

        (c) All Other Litigation. All other litigation outstanding at the
Separation Date not included in the Litigation Disclosure Letter shall remain
with C-Cube, and Semiconductor II, or any of its Subsidiaries shall have no
liability in connection with, or responsibility for defending, such litigation.

        SECTION 3.2 COOPERATION. C-Cube and Semiconductor I and their respective
Subsidiaries shall cooperate with each other in the defense of any litigation
covered under this ARTICLE III and afford to each other reasonable access upon
reasonable advance notice to witnesses and information (other than information
protected from disclosure by applicable privileges) that is reasonably required
to defend this litigation as set forth in SECTION 4.4 of the Separation
Agreement. The foregoing agreement to cooperate includes, but is not limited to,
an obligation to provide access to qualified assistance to provide information,
witnesses and documents to respond to discovery requests in specific lawsuits.
In such cases, cooperation shall be timely so that the party responding to
discovery may meet all court-imposed deadlines. The party requesting information
shall reimburse the party providing information consistent with the terms of
SECTION 4.4 of the Separation Agreement. The obligations set forth in this
paragraph are more clearly defined in SECTION 4.4 of the Separation Agreement,
to which reference is hereby made.



                                      -12-
<PAGE>   17

                                   ARTICLE IV

                                  MISCELLANEOUS

        SECTION 4.1 ENTIRE AGREEMENT. This Agreement, the Restated Merger
Agreement, the Master Separation Agreement, the other Ancillary Agreements and
the Exhibits and Schedules referenced or attached hereto and thereto,
constitutes the entire agreement between the parties with respect to the subject
matter hereof and shall supersede all prior written and oral and all
contemporaneous oral agreements and understandings with respect to the subject
matter hereof. In the event any provision of any agreement conflicts with a
provision of the Restated Merger Agreement, the Restated Merger Agreement will
govern.

        SECTION 4.2 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware as to all matters
regardless of the laws that might otherwise govern under principles of conflicts
of laws applicable thereto.

        SECTION 4.3 NOTICES. Any notice, demand, offer, request or other
communication required or permitted to be given by either party pursuant to the
terms of this Agreement shall be in writing and shall be deemed effectively
given the earlier of (i) when received, (ii) when delivered personally, (iii)
one (1) business day after being delivered by facsimile (with receipt of
appropriate confirmation), (iv) one (1) business day after being deposited with
an overnight courier service or (v) four (4) days after being deposited in the
US mail, First Class with postage prepaid, and addressed to the attention of the
party's General Counsel at the address of its principal executive office or such
other address as a party may request by notifying the other in writing.

        SECTION 4.4 PARTIES IN INTEREST. This Agreement, including the Schedules
and Exhibits hereto, and the other documents referred to herein, shall be
binding upon and inure solely to the benefit of each party hereto and their
legal representatives and successors, and nothing in this Agreement, express or
implied, is intended to confer upon any other Person any rights or remedies of
any nature whatsoever under or by reason of this Agreement.

        SECTION 4.5 COUNTERPARTS. This Agreement, including the Schedules and
Exhibits hereto, and the other documents referred to herein, may be executed in
counterparts, each of which shall be deemed to be an original but all of which
shall constitute one and the same agreement.

        SECTION 4.6 ASSIGNMENT. This Agreement shall inure to the benefit of and
be binding upon the parties hereto and their respective legal representatives
and successors. This Agreement may not be assigned by any party hereto.
Notwithstanding the foregoing, each party (or its permitted successive assignees
or transferees hereunder) may assign or transfer this Agreement as a whole
without consent to a Person that succeeds to all or substantially all of the
business or assets of such party. Without limiting the foregoing, this Agreement
will be binding upon and inure to the benefit of the parties and their permitted
successors and assigns.

        SECTION 4.7 SEVERABILITY. If any term or other provision of this
Agreement or the Schedules or Exhibits attached hereto is determined by a
nonappealable decision by a court,



                                      -13-
<PAGE>   18

administrative agency or arbitrator to be invalid, illegal or incapable of being
enforced by any rule of law or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full force and effect
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to any party. Upon such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner to the end that transactions contemplated
hereby are fulfilled to the fullest extent possible.

        SECTION 4.8 FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE. No
failure or delay on the part of any party hereto in the exercise of any right
hereunder shall impair such right or be construed to be a waiver of, or
acquiescence in, any breach of any representation, warranty or agreement herein,
nor shall any single or partial exercise of any such right preclude other or
further exercise thereof or of any other right. All rights and remedies existing
under this Agreement or the Schedules or Exhibits attached hereto are cumulative
to, and not exclusive of, any rights or remedies otherwise available.

        SECTION 4.9 AMENDMENT. No change or amendment will be made to this
Agreement except by an instrument in writing signed on behalf of each of the
parties to such agreement.

        SECTION 4.10 AUTHORITY. Each of the parties hereto represents to the
other that (a) it has the corporate or other requisite power and authority to
execute, deliver and perform this Agreement, (b) the execution, delivery and
performance of this Agreement by it have been duly authorized by all necessary
corporate or other action, (c) it has duly and validly executed and delivered
this Agreement, and (d) this Agreement is a legal, valid and binding obligation,
enforceable against it in accordance with its terms subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally and general equity principles.

        SECTION 4.11 INTERPRETATION. The headings contained in this Agreement,
in any Exhibit or Schedule hereto and in the table of contents to this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Any capitalized term used in any Schedule or
Exhibit but not otherwise defined therein, shall have the meaning assigned to
such term in this Agreement. When a reference is made in this Agreement to an
Article or a Section, Exhibit or Schedule, such reference shall be to an Article
or Section of, or an Exhibit or Schedule to, this Agreement unless otherwise
indicated.

        SECTION 4.12 CONFLICTING AGREEMENTS. In the event of conflict between
this Agreement and any other Ancillary Agreement or other agreement executed in
connection herewith, the provisions of Ancillary Agreement and such other
agreement shall prevail.



                                      -14-
<PAGE>   19

                                    ARTICLE V

                                   DEFINITIONS

        SECTION 5.1 ACTION. "ACTION" means any demand, action, suit,
countersuit, arbitration, inquiry, proceeding or investigation by or before any
federal, state, local, foreign or international governmental authority or any
arbitration or mediation tribunal.

        SECTION 5.2 AFFILIATED COMPANY. "AFFILIATED COMPANY" means, with respect
to C-Cube, any entity in which C-Cube holds a 50% or less ownership interest and
that is listed on SCHEDULE 6.1(a) to the Separation Agreement and, with respect
to Semiconductor I or Semiconductor II, any entity in which Semiconductor I or
Semiconductor II holds a 50% or less ownership interest and that is listed on
SCHEDULE 6.1(b) to the Separation Agreement. SCHEDULES 6.1(a) and 6.1(b) may be
amended from time to time after the date hereof upon mutual written consent of
the parties.

        SECTION 5.3 ANCILLARY AGREEMENT. "ANCILLARY AGREEMENT" has the meaning
set forth in SECTION 2.1 of the Separation Agreement.

        SECTION 5.4 ASSETS. "ASSETS" means assets, properties and rights
(including goodwill), wherever located (including in the possession of vendors
or other third parties or elsewhere), whether real, personal or mixed, tangible,
intangible or contingent, in each case whether or not recorded or reflected or
required to be recorded or reflected on the books and records or financial
statements of any Person, including the following:

                  (i) all accounting and other books, records and files whether
in paper, microfilm, microfiche, computer tape or disc, magnetic tape or any
other form;

                  (ii) all apparatus, computers and other electronic data
processing equipment, fixtures, machinery, equipment, furniture, office
equipment, automobiles, trucks, aircraft, rolling stock, vessels, motor vehicles
and other transportation equipment, special and general tools, test devices,
prototypes and models and other tangible personal property;

                  (iii) all inventories of materials, parts, raw materials,
supplies, work-in-process and finished goods and products;

                  (iv) all interests in real property of whatever nature,
including easements, whether as owner, mortgagee or holder of a Security
Interest, lessor, sublessor, lessee, sublessee or otherwise;

                  (v) all interests in any capital stock or other equity
interests of any Subsidiary or any other Person; all bonds, notes, debentures or
other securities issued by any Subsidiary or any other Person; all loans,
advances or other extensions of credit or capital contributions to any
Subsidiary or any other Person; and all other investments in securities of any
Person;



                                      -15-
<PAGE>   20

                  (vi) all license agreements, leases of personal property, open
purchase orders for raw materials, supplies, parts or services, unfilled orders
for the manufacture and sale of products and other contracts, agreements or
commitments;

                  (vii) all deposits, letters of credit and performance and
surety bonds;

                  (viii) all written technical information, data,
specifications, research and development information, engineering drawings,
operating and maintenance manuals, and materials and analyses prepared by
consultants and other third parties;

                  (ix) all Intellectual Property and licenses from third Persons
granting the right to use any Intellectual Property;

                  (x) all computer applications, programs and other software,
including operating software, network software, firmware, middleware, design
software, design tools, systems documentation and instructions;

                  (xi) all cost information, sales and pricing data, customer
prospect lists, supplier records, customer and supplier lists, customer and
vendor data, correspondence and lists, product literature, artwork, design,
development and manufacturing files, vendor and customer drawings, formulations
and specifications, quality records and reports and other books, records,
studies, surveys, reports, plans and documents;

                  (xii) all prepaid expenses, trade accounts and other accounts
and notes receivables;

                  (xiii) all rights under contracts or agreements, all claims or
rights against any Person arising from the ownership of any Asset, all rights in
connection with any bids or offers and all claims, choses in action or similar
rights, whether accrued or contingent;

                  (xiv) all rights under insurance policies and all rights in
the nature of insurance, indemnification or contribution;

                  (xv) all licenses (including radio and similar licenses),
permits, approvals and authorizations which have been issued by any Governmental
Authority;

                  (xvi) cash or cash equivalents, bank accounts, lock boxes and
other deposit arrangements; and

                  (xvii) interest rate, currency, commodity or other swap,
collar, cap or other hedging or similar agreements or arrangements.

        SECTION 5.5 C-CUBE GROUP. "C-CUBE GROUP" means C-Cube, each Subsidiary
and Affiliated Company of C-Cube (other than any member of the Semiconductor
Group) immediately after the Separation Date and each Person that becomes a
Subsidiary or Affiliate Company of C-Cube after the Separation Date.



                                      -16-
<PAGE>   21

        SECTION 5.6 CONSENTS. "CONSENTS" means any consents, waivers or
approvals from, or notification requirements to, any third parties.

        SECTION 5.7 CONTRACTS. "CONTRACTS" means any contract, agreement, lease,
license, sales order, purchase order, instrument or other commitment that is
binding on any Person or any part of its property under applicable law.

        SECTION 5.8 DISTRIBUTION. "DISTRIBUTION" means C-Cube's pro rata
distribution to the holders of its common stock, $0.001 par value of all of the
shares of Semiconductor I common stock owned by C-Cube.

        SECTION 5.9 DIVICOM BUSINESS. "DIVICOM BUSINESS" means any business of
C-Cube other than the Semiconductor Business.

        SECTION 5.10 DISTRIBUTION DATE. "DISTRIBUTION DATE" has the meaning set
forth in SECTION 3.1 of the Separation Agreement.

        SECTION 5.11 ENVIRONMENTAL ACTIONS. "ENVIRONMENTAL ACTIONS" has the
meaning set forth in SECTION 4.11 of the Indemnification and Insurance Matters
Agreement.

        SECTION 5.12 EXCLUDED ASSETS. "EXCLUDED ASSETS" has the meaning set
forth in SECTION 1.2(b) of this Agreement.

        SECTION 5.13 EXCLUDED LIABILITIES. "EXCLUDED LIABILITIES" has the
meaning set forth in SECTION 1.3(b) of this Agreement.

        SECTION 5.14 GOVERNMENTAL APPROVALS. "GOVERNMENTAL APPROVALS" means any
notices, reports or other filings to be made, or any consents, registrations,
approvals, permits or authorizations to be obtained from, any Governmental
Authority.

        SECTION 5.15 GOVERNMENTAL AUTHORITY. "GOVERNMENTAL AUTHORITY" means any
federal, state, local, foreign or international court, government, department,
commission, board, bureau, agency, official or other regulatory, administrative
or governmental authority.

        SECTION 5.16 INDEMNIFICATION AND INSURANCE MATTERS AGREEMENT.
"INDEMNIFICATION AND INSURANCE MATTERS AGREEMENT" means the Indemnification and
Insurance Matters Agreement attached as Exhibit I to the Separation Agreement.

        SECTION 5.17 INSURANCE POLICIES. "INSURANCE POLICIES" means insurance
policies pursuant to which a Person makes a true risk transfer to an insurer.

        SECTION 5.18 INSURED SEMICONDUCTOR LIABILITY. "INSURED SEMICONDUCTOR
LIABILITY" means any Semiconductor Liability to the extent that (i) it is
covered under the terms of C-Cube's Insurance Policies in effect prior to the
Distribution Date and (ii) Semiconductor is not a named insured under, or
otherwise entitled to the benefits of, such Insurance Policies.



                                      -17-
<PAGE>   22
        SECTION 5.19 INTELLECTUAL PROPERTY. "INTELLECTUAL PROPERTY" means all
domestic and foreign patents and patent applications, together with any
continuations, continuations-in-part or divisional applications thereof, and all
patents issuing thereon (including reissues, renewals and re-examinations of the
foregoing); design patents, invention disclosures; mask works; copyrights, and
copyright applications and registrations; Web addresses, trademarks, service
marks, trade names, and trade dress, in each case together with any applications
and registrations therefor and all appurtenant goodwill relating thereto; trade
secrets, commercial and technical information, know-how, proprietary or
confidential information, including engineering, production and other designs,
notebooks, processes, drawings, specifications, formulae, and technology;
computer and electronic data processing programs and software (object and source
code), data bases and documentation thereof; inventions (whether patented or
not); utility models; registered designs, certificates of invention and all
other intellectual property under the laws of any country throughout the world.

        SECTION 5.20 LIABILITIES. "LIABILITIES" means all debts, liabilities,
guarantees, assurances, commitments and obligations, whether fixed, contingent
or absolute, asserted or unasserted, matured or unmatured, liquidated or
unliquidated, accrued or not accrued, known or unknown, due or to become due,
whenever or however arising (including, without limitation, whether arising out
of any Contract or tort based on negligence or strict liability) and whether or
not the same would be required by generally accepted principles and accounting
policies to be reflected in financial statements or disclosed in the notes
thereto.

        SECTION 5.21 LITIGATION DISCLOSURE LETTER. "LITIGATION DISCLOSURE
LETTER" has the meaning set forth in SECTION 3.1(a) of this Agreement.

        SECTION 5.22 PERSON. "PERSON" means an individual, a partnership, a
corporation, a limited liability company, an association, a joint stock company,
a trust, a joint venture, an unincorporated organization and a governmental
entity or any department, agency or political subdivision thereof.

        SECTION 5.23 RETAINED CASH. "RETAINED CASH" has the meaning set forth in
the Separation Agreement.

        SECTION 5.24 RETAINED PAYABLES. "RETAINED PAYABLES" means (i) all
accounts payable and other obligations of payment for goods or services
purchased, leased or otherwise received in the conduct of the Semiconductor
Business that as of the Separation Date are payable to a third Person by C-Cube
or any of C-Cube's Subsidiaries, whether past due, due or to become due,
including any interest, sales or use taxes, finance charges, late or returned
check charges and other obligations of C-Cube or any of C-Cube's Subsidiaries
with respect thereto, and any obligations related to any of the foregoing and
(ii) all employee compensation Liabilities and other miscellaneous Liabilities
for which an adjustment is made in the Semiconductor Pro Forma Balance Sheet.

        SECTION 5.25 RETAINED RECEIVABLES. "RETAINED RECEIVABLES" means (i) all
accounts receivable and other rights to payment for goods or services sold,
leased or otherwise provided in the conduct of the Semiconductor Business that
as of the Separation Date are payable by a third Person to C-Cube or any of
C-Cube's Subsidiaries, whether past due, due or to become due, including any
interest, sales or use taxes, finance charges, late or returned check charges
and other obligations of



                                      -18-
<PAGE>   23

the account debtor with respect thereto, and any proceeds of any of the
foregoing and (ii) all other miscellaneous Assets for which an adjustment is
made in the Semiconductor Pro Forma Balance Sheet.

        SECTION 5.26 SECURITY INTEREST. "SECURITY INTEREST" means any mortgage,
security interest, pledge, lien, charge, claim, option, right to acquire, voting
or other restriction, right-of-way, covenant, condition, easement, encroachment,
restriction on transfer, or other encumbrance of any nature whatsoever.

        SECTION 5.27 SEMICONDUCTOR ASSETS. "SEMICONDUCTOR ASSETS" has the
meaning set forth in SECTION 1.2 of this Agreement.

        SECTION 5.28 SEMICONDUCTOR PRO FORMA BALANCE SHEET. "SEMICONDUCTOR PRO
FORMA BALANCE SHEET" means the unaudited condensed consolidated balance sheet as
set forth in C-Cube Semiconductor's Registration Statement on Form 10, filed on
December 29, 1999, as amended.

        SECTION 5.29 SEMICONDUCTOR BUSINESS. "SEMICONDUCTOR BUSINESS" means the
business and operations of C-Cube defined as the Semiconductor Business in the
Restated Merger Agreement.

        SECTION 5.30 SEMICONDUCTOR CONTINGENT GAIN. "SEMICONDUCTOR CONTINGENT
GAIN" has the meaning set forth in SECTION 1.2 of this Agreement.

        SECTION 5.31 SEMICONDUCTOR CONTINGENT LIABILITY. "SEMICONDUCTOR
CONTINGENT LIABILITY" has the meaning set forth in SECTION 1.3 of this
Agreement.

        SECTION 5.32 SEMICONDUCTOR CONTRACTS. "SEMICONDUCTOR CONTRACTS" means
the following contracts and agreements to which C-Cube is a party or by which it
or any of its Assets is bound, whether or not in writing, except for any such
contract or agreement that is contemplated to be retained by C-Cube or any
member of the C-Cube Group pursuant to any provision of this Agreement or any
other Ancillary Agreement:

                  (i) any contract or agreement entered into in the name of, or
expressly on behalf of, any division or business unit of Semiconductor I or
Semiconductor II or any of their Subsidiaries;

                  (ii) any contract or agreement that relates primarily to the
Semiconductor Business;

                  (iii) any contracts or agreements related to the computers,
desks, equipment and other Assets used or managed primarily by employees of
C-Cube that will become employees of Semiconductor I or Semiconductor II or any
of their Subsidiaries in connection with the Separation;

                  (iv) any contract or agreement that is otherwise expressly
contemplated pursuant to this Agreement, the Separation Agreement or any of the
other Ancillary Agreements to be assigned to Semiconductor I or Semiconductor II
or any of their Subsidiaries; and



                                      -19-
<PAGE>   24

                  (v) any guarantee, indemnity, representation, warranty or
other Liability of any member of the Semiconductor Group or the C-Cube Group in
respect of any other Semiconductor Contract, any Semiconductor Liability or the
Semiconductor Business (including guarantees of financing incurred by customers
or other third parties in connection with purchases of products or services from
the Semiconductor Business).

        SECTION 5.33 SEMICONDUCTOR GROUP. "SEMICONDUCTOR GROUP" means
Semiconductor I, Semiconductor II, each Subsidiary and Affiliated Company of
Semiconductor immediately after the Separation Date and each Person that becomes
a Subsidiary or Affiliate Company of Semiconductor after the Separation Date.

        SECTION 5.34 SEMICONDUCTOR INTELLECTUAL PROPERTY. "SEMICONDUCTOR
INTELLECTUAL PROPERTY" has the meaning set forth in SECTION 1.2 of this
Agreement.

        SECTION 5.35 SEMICONDUCTOR LIABILITIES. "SEMICONDUCTOR LIABILITIES" has
the meaning set forth in SECTION 1.3 of this Agreement.

        SECTION 5.36 SEPARATION. "SEPARATION" means the transfer and
contribution from C-Cube to Semiconductor, and Semiconductor's receipt and
assumption of, directly or indirectly, substantially all of the Assets and
Liabilities currently associated with the Semiconductor Business and the stock,
investments or similar interests currently held by C-Cube in subsidiaries and
other entities that conduct such business.

        SECTION 5.37 SEPARATION AGREEMENT. "SEPARATION AGREEMENT" means the
Master Separation and Distribution Agreement dated as of _______ ___, 2000, of
which this is an Exhibit thereto.

        SECTION 5.38 SEPARATION DATE. "SEPARATION DATE" means the effective date
and time of each transfer of property, assumption of liability, license,
undertaking, or agreement in connection with the Separation, which shall be
12:01 a.m., Pacific Time, _______ ___, 2000, or such date as may be fixed by the
Board of Directors of C-Cube.

        SECTION 5.39 SUBSIDIARY. "SUBSIDIARY" means with respect to any
specified Person, any corporation, any limited liability company, any
partnership or other legal entity of which such Person or its Subsidiaries owns,
directly or indirectly, more than 50% of the stock or other equity interest
entitled to vote on the election of the members of the board of directors or
similar governing body. Unless context otherwise requires, reference to C-Cube
and its Subsidiaries shall not include the subsidiaries of C-Cube that will be
transferred to Semiconductor after giving effect to the Separation and those
Subsidiaries will be treated as Subsidiaries of Semiconductor I or Semiconductor
II, as applicable.

        SECTION 5.40 TAXES. "TAXES" has the meaning set forth in the Tax Sharing
Agreement.



                         [SIGNATURES ON FOLLOWING PAGE]



                                      -20-
<PAGE>   25
        IN WITNESS WHEREOF, each of the parties has caused the General
Assignment and Assumption Agreement to be executed on its behalf by its officers
thereunto duly authorized on the day and year first above written.

                                       C-CUBE MICROSYSTEMS INC.

                                       By:
                                           -------------------------------------
                                       Name:
                                            ------------------------------------
                                       Title:
                                             -----------------------------------


                                       C-CUBE SEMICONDUCTOR INC.

                                       By:
                                           -------------------------------------
                                       Name:
                                            ------------------------------------
                                       Title:
                                             -----------------------------------




                                       C-CUBE SEMICONDUCTOR II INC.



                                       By:
                                           -------------------------------------
                                       Name:
                                            ------------------------------------
                                       Title:
                                             -----------------------------------




         [SIGNATURE PAGE TO GENERAL ASSIGNMENT AND ASSUMPTION AGREEMENT]

<PAGE>   26
                                SCHEDULE 1.1(a)

                  ASSETS TO BE TRANSFERRED TO SEMICONDUCTOR I
   (ASSETS RELATED TO THE SEMICONDUCTOR BUSINESS SALE AND MARKETING DIVISION)
                       AND THE STOCK OF C-CUBE U.S. INC.

<PAGE>   27
                                SCHEDULE 1.1(b)

                LIABILITIES TO BE TRANSFERRED TO SEMICONDUCTOR I
(LIABILITIES RELATED TO THE SEMICONDUCTOR BUSINESS SALES AND MARKETING DIVISION)