Document:

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                                                                    EXHIBIT 10.1

                     SEVERANCE AGREEMENT AND GENERAL RELEASE

       This Severance Agreement and General Release (the "Agreement") is entered
into between Pete Keeler ("Employee") and Next Level Communications, Inc. ("Next
Level" or the "Company") as of December 4, 2000.

       WHEREAS, by mutual agreement Employee's employment as Chief Executive
Officer and President terminated effective as of December 4, 2000.

       WHEREAS, it is the desire of the parties for Employee to continue to
serve as Chairman of the Company's Board of Directors until March 31, 2001.

       NOW, THEREFORE, for and in consideration of the mutual promises and
undertakings herein set forth, the parties agree:

1.     SEVERANCE OF EMPLOYMENT

       (a) Employee's employment with the Company ceased as of the close of
business on December 4, 2000 (the "Termination Date"). Employee shall continue
to serve as the Chairman of the Company's Board of Directors (the "Board") until
March 31, 2001 or such earlier time as determined by the Board, and Employee
shall be paid a fee of $10,000 per month for such services during any such
partial or full month.

       (b) Through December 4, 2003, the Company will pay for Employee's health,
dental and vision coverage that is substantially similar to the coverage
currently provided to Employee. Except as otherwise set forth in this Agreement
or pursuant to the terms of the Company's employee benefit plans in which
Employee currently participates, Employee will not be entitled to any other
employee benefits after December 4, 2000.

       (c) The stock option agreements related to Employee's Next Level stock
options shall be amended and restated as of the date hereof in the form attached
as Exhibit A to this Agreement.

       (d) The Company and Employee acknowledge and reaffirm the terms of
Employee's stock option grants dated January 10, 1997 and November 3, 1997, as
set forth in the stock option grant notices and stock option agreements attached
hereto as Exhibit B.

       (e) On or before February 15, 2001, Employee will receive payment of his
2000 bonus under the Company's Annual Incentive Plan as if he had remained an
employee of the Company through the time of such payment.

       (f) The Company agrees to defend and indemnify Employee against any and
all claims or causes of action of any type asserted against him arising from any
alleged actions or omissions on his part in the course and scope of his service
to the Company as an officer, director or employee to the same extent he was so
entitled on the Termination Date and to the extent permitted under Delaware law.
In addition, for a period of six years from the date that Employee is no longer
an officer or director of the Company (the "Coverage Period"), the Company shall
include Employee as a named insured on any and all directors and officers
liability insurance policies maintained by the Company sufficient to provide
coverage to him for any acts or omissions on his part during his service to the
Company as an officer or director (the

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"Coverage"). During the Coverage Period, the Company shall provide Employee with
documentation sufficient to verify the Coverage, at a minimum, within thirty
(30) days after he ceases to be a director of the Company, on or before January
31 of each calendar year during the Coverage Period, and within thirty (30) days
after any change in insurance carrier providing the Coverage.

2.     ADDITIONAL COVENANTS

       Employee acknowledges and reaffirms his obligations to the Company
pursuant to his Proprietary Information and Inventions Agreement, a copy of
which is attached hereto as Exhibit C.

3.     GENERAL RELEASE

       Except for the rights and obligations created by this Agreement, Employee
hereby releases, acquits and forever discharges Next Level and its subsidiary
corporations and/or successors, assigns, partners, employees, agents, officers,
trustees, stockholders, attorneys and insurers ("Releasees") from any claims,
expenses, debts, demands, costs, contracts, liabilities, obligations, actions
and causes of action of every nature, whether known or unknown, whether in law
or in equity, which he had or has or may claim to have by reason of any and all
matters from the beginning of time to the date he signs this Agreement,
including, but not limited to, claims for wrongful termination, breach of
contract, breach of the implied covenant of good faith and fair dealing, fraud,
misrepresentation, intentional and negligent infliction of emotional distress,
reimbursement of employee expenses, reimbursement of medical expenditures,
violation of civil rights, defamation, conspiracy, claims for severance pay,
claims for workers' compensation benefits, claims under the Labor Code of the
State of California, claims under the federal Wage and Hours laws and claims for
discrimination based on race, color, national origin, sex, religion, sexual
preference, marital status, medical condition, age and/or disability, under
federal and state law. Employee also releases and discharges any and all claims,
rights and/or remedies under the Age Discrimination in Employment Act of 1967,
as amended, the Employee Retirement Income Security Act of 1974, as amended, and
any other federal, state or local statute or regulation which relates to his
employment or its termination. Employee agrees to file no suit or other action
alleging any such claim, demand or cause of action. Employee acknowledges that
he has been advised to seek advice of legal counsel before signing this
Agreement. Employee acknowledges that he has been advised to seek advice of
legal counsel before signing this Agreement, that he has had at least twenty-one
(21) days to review and consider it and that he understands he can rescind this
Agreement within seven (7) days of signing it.

       Employee acknowledges familiarity and understanding of section 1542 of
the California Civil Code, which provides as follows:

              A general release does not extend to claims which the creditor
              does not know or suspect to exist in his favor at the time of
              executing the release, which if known by him must have materially
              affected his settlement with the debtor.

       To the extent that section 1542 or any similar law or statute may
otherwise apply to the foregoing release, Employee hereby waives and
relinquishes as to all matters released hereunder all rights and benefits that
he has, or may have, under Section 1542 of the California Civil Code, or under
the laws of California or any other jurisdiction to the same or similar effect.

4.     EMPLOYEE'S SPECIFIC RELEASE

       Employee acknowledges that he is entitled to no salary, wages, bonuses,
commissions, accrued vacation pay, insurance or other compensation from any
Releasee except as specifically set forth herein.

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5.     NO CLAIMS AGAINST EMPLOYEE

Next Level represents that as of the date this Agreement is signed on its behalf
the Company is not aware of any facts that would give rise to any claim or cause
of action of any type Next Level might have against Employee.

6.     COVENANT NOT TO COMPETE

       During the period commencing on December 4, 2000 and ending on the date
that is one (1) year from the Termination Date (the "Non-Competition Period"),
Employee shall not, unless acting in accordance with the Company's prior written
consent (which consent may be withheld in the Company's sole and absolute
discretion), be engaged as a director, officer, employer, employee or partner
with any business or organization engaged in developing or marketing switched
digital broadband access products (the "Business") in any area in which the
Business is conducted.

7.     NON-SOLICITATION/NON-DISPARAGEMENT

       Employee agrees that he will not, and will use reasonable efforts to
ensure that his attorneys, agents or other representatives do not, take any
action or make or publish any statement, whether oral or written, which
disparages in any way, directly or indirectly, the Company or any employees,
principals, directors or affiliates of the Company. The Company agrees that its
officers and directors will not take any action or make or publish any
statement, whether oral or written, which disparages in any way, directly or
indirectly, the Employee in his business or personal reputation.

8.     BREACH BY EMPLOYEE

       In the event of a breach by Employee of any of the provisions of this
Agreement, the Company's obligation to disburse all compensation payments and
benefits otherwise payable to Employee shall cease. The existence (or not) of
any such breach shall be determined by binding arbitration, conducted by a
single arbitrator, administered by Judicial Arbitration and Mediation Services
("JAMS") pursuant to the applicable JAMS arbitration rules. The Company shall
not terminate any compensation or benefits to Employee under this Agreement
pending the outcome of such arbitration.

9.     DEATH

       In the event of Employee's death before March 31, 2001, his estate (or
designated beneficiary by will or other testamentary instrument) shall receive
the unpaid portion of his compensation in accordance with the terms of this
Agreement, including but not limited to the fees stated in paragraph 1(a) above
through March 31, 2000; provided, however, that Employee's estate and/or other
beneficiary shall only be entitled to exercise Employee's stock options to the
extent vested as of the date of his death, and then only pursuant to the terms
and conditions of the applicable stock option grants and the stock option
agreements as described in paragraphs 1(c) and 1(d) above.

10.    WITHHOLDING

       Any amounts payable under this Agreement shall be subject to any
applicable state, federal or local income and employment tax withholding
obligations.

11.    SUCCESSORS

       This Agreement shall be binding on Employee and the Company as well as
their respective successors and assigns.

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12.    PARTIES' FULL UNDERSTANDING

       Each party represents and warrants that it has had the opportunity to
discuss this agreement with the party's attorney, that each party has carefully
read and understands each provision hereof and that each party is entering into
this Agreement voluntarily.

13.    SOLE AGREEMENT

       This Agreement is the only, sole, entire and complete agreement of the
parties relating in any way to the subject matter hereof. No statements,
promises or representations have been made by any party to any other, or relied
upon, and no consideration has been offered, promised, expected or held out
other than as expressly provided herein.

14.    CONSTRUCTION

       The language of all parts of this Agreement shall in all cases be
construed as a whole, according to its fair meaning, and not strictly for or
against either party. The headings of each paragraph are for convenience only
and are not part of the Agreement. This agreement may be amended only in a
writing signed by the parties hereto.

15.    APPLICABLE LAW

       This Agreement shall be governed by and interpreted and construed in
accordance with the laws of the State of California applicable to contracts
entered into and to be performed wholly within California by California
residents. If any provision of this Agreement shall, for any reason, be adjudged
by any court of competent jurisdiction to be invalid or unenforceable, in whole
or in part, such judgment shall not affect, impair or invalidate the remainder
of the Agreement.

16.    COUNTERPARTS

       This Agreement may be executed and delivered in two or more counterparts
each of which when so executed and delivered shall be the original, but such
counterparts together shall constitute but one and the same instrument.

       IN WITNESS WHEREOF, the parties have executed this instrument on the
dates indicated below.

Pete Keeler                             Next Level Communications, Inc.

/s/ Peter W. Keeler                     By: /s/ Keith A. Zar
----------------------------------          ----------------
Dated: December 4, 2000                 Title: Chief Administrative Officer
       ----------------                        ----------------------------
                                        Dated:  December 4, 2000
                                                ----------------

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                                                                    EXHIBIT 10.2

TAX ALLOCATION AND SHARING AGREEMENT

       This Agreement is entered into by and between Motorola Inc., a Delaware
corporation ("Parent"), and Next Level Communications, Inc., a Delaware
corporation ("NLC") (Parent and NLC are sometimes collectively referred to
herein as the "Companies"). Capitalized terms used in this Agreement are defined
in Section 1 below. Unless otherwise indicated, all "Section" references in this
Agreement are to sections of this Agreement.

                                    RECITALS

WHEREAS, as a result of the merger of a subsidiary of Parent with and into
General Instrument Corporation (the "Merger") on January 5, 2000, Parent became
the indirect owner of 80.4% of the issued and outstanding shares of voting
common stock of NLC;

WHEREAS, as of January 5, 2000, Parent is the common parent of an affiliated
group of corporations (as defined in Section 1504 of the Code), including NLC,
which has elected to file consolidated Federal income tax returns;

WHEREAS, NLC has tax attributes available for carryover from taxable years
before NLC became a member of the Parent Group;

WHEREAS, NLC ceased as of May 16, 2000 to be a member of the affiliated group
(as that term is defined in Section 1504 of the Code) of which Parent is the
common parent (the "Deconsolidation"); and

WHEREAS, the Companies desire to provide for and agree upon the allocation
between the parties of liabilities for Taxes arising prior to, as a result of,
and subsequent to the Deconsolidation, and to provide for and agree upon other
matters relating to Taxes;

WHEREAS, NLC expects to report a loss on its tax return for tax year 2000. The
portion of such NLC Year 2000 Losses allocable to the part of the year for which
NLC was a member of Parent's Group, plus carryforward losses from earlier years,
will be eligible for inclusion in Parent's consolidated federal income tax
return for 2000.

WHEREAS, Parent does not at this time expect for the next 5 years to receive a
regular tax cash flow benefit from the inclusion of the NLC Year 2000 Losses.

WHEREAS, Parent will make a current payment to NLC for anticipated beneficial
use of the NLC Year 2000 Losses.

NOW THEREFORE, in consideration of the mutual agreements contained herein, the
Companies hereby agree as follows:

SECTION 1.    DEFINITION OF TERMS. For purposes of this Agreement (including the
recitals hereof), the following terms have the following meanings:

"ACCOUNTING CUTOFF DATE" means, with respect to NLC, any date as of the end of
which there is a closing of the financial accounting records for such entity.

"ACCOUNTING FIRM" shall have the meaning provided in Section 14.

"ADJUSTMENT REQUEST" means any formal or informal claim or request filed with
any Tax Authority, or with any administrative agency or court, for the
adjustment, refund, or credit of Taxes, including (a) any

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amended Tax return claiming adjustment to the Taxes as reported on a Tax Return
or, if applicable, as previously adjusted, or (b) any claim for refund or credit
of Taxes previously paid.

"AFFILIATE" means any entity that is directly or indirectly "controlled" by the
person in question. "Control" means the possession of the power to direct or
cause the direction of the management and policies of a person, whether through
ownership of voting securities, by contract or otherwise.

"AGREEMENT" shall mean this Tax Allocation and Sharing Agreement.

"ALLOCATED FEDERAL TAX LIABILITY" shall have the meaning provided in Section
5.01(b).

"CARRYBACK" means any net operating loss, net capital loss, excess tax credit,
or other similar Tax item, which may or must be carried from one Tax Period to
another Tax Period under the Code or other applicable Tax Law.

"CHANGE IN CONTROL" means Parent's direct stock ownership in NLC falling below
50% and/or Parent's accounting treatment for its investment in NLC moving to
equity accounting.

"CODE" means the U.S. Internal Revenue Code of 1986, as amended, or any
successor law.

"COMPANIES" means Parent and NLC, collectively, and "COMPANY" means either
Parent or NLC.

"CONSOLIDATED OR COMBINED INCOME TAX" means any Income Tax computed by reference
to the assets and activities of members of more than one Group.

"CONSOLIDATED OR COMBINED STATE INCOME TAX" means any State Income Tax computed
by reference to the assets and activities of members of more than one Group.

"CURRENT PAYMENTS" means the payments that Parent will make to NLC for
anticipated beneficial use of the NLC Year 2000 Losses.

"DECONSOLIDATION DATE" means the last date on which NLC qualifies as a member of
the affiliated group (as that term is defined in Section 1504 of the Code) of
which Parent is the common parent.

"DECONSOLIDATION" shall have the meaning provided in the Recitals.

"DISCOUNTED ESTIMATED YEAR 2000 TAX BENEFIT" means the Estimated NLC Year 2000
         Tax Benefit discounted at a rate of 7.5% for a 5-year period (monthly
         compounding over 60 months). This is because it is assumed Parent will
         not realize the full cash flow benefit of the Estimated Year 2000 Tax
         Benefit for 5 years.

"DISCOUNTED YEAR 2000 TAX BENEFIT" means the NLC Year 2000 Tax Benefit
discounted at a rate of 7.5% for a 5-year period (monthly compounding over 60
months). This is because it is assumed Parent will not realize the full cash
flow benefit of the Year 2000 Tax Benefit for 5 years.

"ESTIMATED NLC YEAR 2000 LOSS" means the loss NLC expects to report on its tax
return for tax year 2000, plus $18.5 million of carryforward losses. A
calculation is attached as Schedule A.

"FEDERAL INCOME TAX" means any Tax imposed by Subtitle A or F of the Code.

"FOREIGN INCOME TAX" means any Tax imposed by any foreign country or any
possession of the United States, or by any political subdivision of any foreign
country or United States possession, which is an income tax as defined in
Treasury Regulation Section 1.901-2.

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"ESTIMATED YEAR 2000 TAX BENEFIT" means the Implied Tax Benefit arising from the
inclusion of the Estimated NLC Year 2000 Losses in Parent's Year 2000 tax
return.

"GROUP" means either the Parent Group or the NLC Group, or both, as the context
requires.

"IMPLIED TAX BENEFIT" means any refund, credit, or other reduction in otherwise
required Tax payments that would result from the NLC Year 2000 Losses if Parent
could currently utilize them in its Federal Income Tax Return at a 35% tax rate.

"INCOME TAX" means any Federal Income Tax, State Income Tax, or Foreign Income
Tax.

"NLC ADJUSTMENT" means any proposed adjustment by a Tax Authority or claim for
refund asserted in a Tax Contest to the extent NLC would be exclusively liable
for any resulting Tax under this Agreement and exclusively entitled to receive
any resulting Tax Benefit under this Agreement.

"NLC GROUP" means NLC and its Affiliates.

"NLC GROUP PRIOR FEDERAL TAX LIABILITY" shall have the meaning provided in
Section 2.02(c)(ii).

"NLC GROUP PRIOR STATE TAX LIABILITY" shall have the meaning provided in Section
2.03(b)(ii)(B).

"NLC GROUP RECOMPUTED FEDERAL TAX LIABILITY" shall have the meaning provided in
Section 2.02(c)(i).

"NLC GROUP RECOMPUTED STATE TAX LIABILITY" shall have the meaning provided in
Section 2.03(b)(ii)(A).

"NLC YEAR 2000 LOSSES" means the actual NLC Group loss reported on its tax
         returns for tax year 2000, plus $18.5 million of carryforward losses.

"OUTSTANDING IMPLIED TAX BENEFIT" means the amount of the Implied Tax Benefit
that has not been realized as actual Tax Benefit and has not been repaid to
Parent pursuant to Section 6. This occurs when there is any refund, credit, or
other reduction in otherwise required tax payments.

"PARENT FEDERAL CONSOLIDATED TAX RETURN" means any United States federal Tax
Return for the affiliated group (as that term is defined in Code Section 1504)
that includes Parent as the common parent and includes any member of the NLC
Group.

"PARENT GROUP" means Parent and its Affiliates, excluding any entity that is a
member of the NLC Group.

"PAYMENT DATE" means (i) with respect to any Parent Federal Consolidated Tax
Return, the due date for any required installment of estimated taxes determined
under Code Section 6655, the due date (determined without regard to extensions)
for filing the return determined under Code Section 6072, and the date the
return is filed, and (ii) with respect to any Tax Return for any Consolidated or
Combined State Income Tax, the corresponding dates determined under the
applicable Tax Law.

"POST-DECONSOLIDATION PERIOD" means any Tax Period beginning after the
Deconsolidation Date, and, in the case of any Straddle Period, the portion of
such Straddle Period beginning the day after the Deconsolidation Date.

"PRE-DECONSOLIDATION PERIOD" means any Tax Period ending on or before the
Deconsolidation Date, and, in the case of any Straddle Period, the portion of
such Straddle Period ending on the Deconsolidation Date.

"PRIME RATE" means the base rate on corporate loans charged by [CITIBANK, N.A.,
NEW YORK, NEW YORK] from time to time, compounded daily on the basis of a year
of 365 or 366 (as applicable) days and actual days elapsed.

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 "RESPONSIBLE COMPANY" means, with respect to any Tax Return, the Company having
responsibility for preparing and filing such Tax Return under this Agreement.

"SEPARATE COMPANY TAX" means any Tax computed by reference to the assets and
activities of a member or members of a single Group.

"STRADDLE PERIOD" means any Tax Period that begins on or before and ends after
the Deconsolidation Date.

"STATE INCOME TAX" means any Tax imposed by any State of the United States or by
any political subdivision of any such State which is imposed on or measured by
net income, including state and local franchise or similar Taxes measured by net
income.

"TAX" or "TAXES" means any income, gross income, gross receipts, profits,
capital stock, franchise, withholding, payroll, social security, workers
compensation, unemployment, disability, property, ad valorem, stamp, excise,
severance, occupation, service, sales, use, license, lease, transfer, import,
export, value added, alternative minimum, estimated or other similar tax
(including any fee, assessment, or other charge in the nature of or in lieu of
any tax) imposed by any governmental entity or political subdivision thereof,
and any interest, penalties, additions to tax, or additional amounts in respect
of the foregoing.

"TAX AUTHORITY" means, with respect to any Tax, the governmental entity or
political subdivision thereof that imposes such Tax, and the agency (if any)
charged with the collection of such Tax for such entity or subdivision.

"TAX BENEFIT" means any refund, credit, or other reduction in otherwise required
regular Tax payments.

"TAX CONTEST" means an audit, review, examination, or any other administrative
or judicial proceeding with the purpose or effect of redetermining Taxes of any
of the Companies or their Affiliates (including any administrative or judicial
review of any claim for refund) for (1) any Tax Period ending on or before the
Deconsolidation Date, (2) any Straddle Period, or (3) any Tax Period to the
extent a Consolidated or Combined Income Tax Return was filed with respect to
such Tax Period.

"TAX ITEM" means, with respect to any Income Tax, any item of income, gain,
loss, deduction, or credit.

"TAX LAW" means the law of any governmental entity or political subdivision
thereof relating to any Tax.

"TAX PERIOD" means, with respect to any Tax, the period for which the Tax is
reported as provided under the Code or other applicable Tax Law.

"TAX RECORDS" means Tax Returns, Tax Return workpapers, documentation relating
to any Tax Contests, and any other books of account or records required to be
maintained under the Code or other applicable Tax Laws or under any record
retention agreement with any Tax Authority.

"TAX RETURN" means any report of Taxes due, any claim for refund of Taxes paid,
any information return with respect to Taxes, or any other similar report,
statement, declaration, or document required to be filed under the Code or other
Tax Law, including any attachments, exhibits, or other materials submitted with
any of the foregoing, and including any amendments or supplements to any of the
foregoing.

"TREASURY REGULATIONS" means the regulations promulgated from time to time under
the Code as in effect for the relevant Tax Period.

"THIRD PARTY FINANCING" means debt or equity funds / financing obtained by NLC
from parties unrelated to Parent.

"YEAR 2000 TAX BENEFIT" means the Implied Tax Benefit arising from the NLC Year
2000 Losses.

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SECTION 2.    ALLOCATION OF TAX LIABILITIES.

       Section 2.01. General Rule

       (a) Parent Liability. Parent shall be liable for Taxes not specifically
allocated to NLC under this Section 2. Parent shall indemnify and hold harmless
the NLC Group from and against any liability for Taxes for which Parent is
liable under this Section 2.

       (b) NLC Liability. NLC shall be liable for, and shall indemnify and hold
harmless the Parent Group from and against any liability for, Taxes, which are
allocated to NLC under this Section 2.

       Section 2.02. Allocation of United States Federal Income Taxes. Except as
provided in Section 2.05:

       (a) Allocation of Tax Relating to Parent Federal Consolidated Tax
Returns. With respect to any Parent Federal Consolidated Tax Return, the
liability of NLC with respect to such Tax Return shall be the amount (if any) of
federal Income Taxes for which NLC would have been liable for that year,
computed as though the NLC Group had filed a separate consolidated Tax Return,
giving effect to any net operating loss carryovers (as defined by Section 172 of
the Code) or other Tax attributes incurred by NLC for any period ending on or
before the date of the Merger. Any amount so allocated to NLC shall be a
liability of NLC to Parent under this Section 2, regardless of whether or not
such amount exceeds the total consolidated Tax liability shown on the Parent
Federal Consolidated Tax Return. If, except as provided below in Section
2.02(b)(with respect to Current Payments resulting from Outstanding Implied Tax
Benefits if Repayments under Section 6 are less than or equal to Tax Benefits),
with respect to any Parent Federal Consolidated Tax Return, the NLC Group has a
net operating loss or other Tax attribute that reduced the consolidated Tax
liability below the amount that would have been payable if the NLC Group had not
incurred such loss or other Tax attribute, then Parent shall be liable to NLC
for the amount of the reduction so computed. Amounts described in Code Section
1561 (relating to limitations on certain multiple benefits) shall be divided
equally among the members of the Parent Group and the members of the NLC Group
to the extent permitted by the Code.

       (b) The Current Payments:

              (i) Payments for Losses. The Current Payments are being made based
       on estimates of $327 Million of Year 2000 NLC losses, plus $18.5 million
       of carryforward losses, to be eligible for inclusion in Parent's 2000 tax
       return. This gives rise to an Estimated Year 2000 Tax Benefit of $47
       million (calculation is included on Schedule A), and a Discounted
       Estimated Year 2000 Tax Benefit of $32.3 million. Of this amount, $15
       million was paid by Parent to NLC on December 28, 2000, with the balance
       to be paid by a mutually agreeable date in January 2001.

              (ii) True-up Provision. Computations will be completed by
       September 30, 2001 to determine the Year 2000 Tax Benefit to Parent and
       the Discounted Year 2000 Tax Benefit. If the Discounted Year 2000 Tax
       Benefit is greater than the Discounted Year 2000 Estimated Tax Benefit,
       then Parent will pay the difference to NLC. If the Discounted Year 2000
       Estimated Tax Benefit is greater than the Discounted Year 2000 Tax
       Benefit, then NLC will pay the difference to Parent. Payments required
       under this section will be made by October 15, 2001.

       (c) Allocation of Federal Consolidated Return Tax Adjustments. If there
is any adjustment to the reported Tax liability with respect to any Parent
Federal Consolidated Tax Return, or to such Tax liability as previously
adjusted, NLC shall be liable to Parent for the excess (if any) of--

              (i) the consolidated Tax Liability of the NLC Group computed as if
       all members of the NLC Group included in the Tax Return had filed a
       separate consolidated Tax Return for such members based on the Tax Items
       of such members as so adjusted (the "NLC Group Recomputed Federal Tax
       Liability"); over

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              (ii) the consolidated Tax Liability of the NLC Group computed as
       if such members of the NLC Group had filed a separate consolidated Tax
       Return for such members based on the Tax Items of such members as
       reported (or, if applicable, as previously adjusted) (the "NLC Group
       Prior Federal Tax Liability").

If the NLC Group Prior Federal Tax Liability exceeds the NLC Group Recomputed
Federal Tax Liability, Parent shall be liable to NLC for such excess. For
purposes of this Section 2.02(c), if the NLC Group has a net operating loss
after taking into account the adjustments allocable to such Group (or if it had
a net operating loss based on Tax Items as reported, or, if applicable, as
previously adjusted), the NLC Group Recomputed Federal Tax Liability (or, if
applicable the NLC Group Prior Federal Tax Liability) shall be less than zero to
the extent such net operating loss produces (or produced) a Tax Benefit in
consolidation for the applicable Tax Period. For purposes of this paragraph, the
determination and payment of estimated Taxes (including the determination and
payment of any Tax required to be paid with a request for an extension of time
to file a Tax Return) shall not be treated as an adjustment to Tax liability
with respect to any Parent Federal Consolidated Tax Return.

       Section 2.03 Allocation of State Income Taxes. Except as provided in
Section 2.05, State Income Taxes shall be allocated as follows:

       (a) Separate Company Taxes. In the case of any State Income Tax that is a
Separate Company Tax, NLC shall be liable for such Tax imposed on any members of
the NLC Group.

       (b) Consolidated or Combined State Income Taxes. In the case of any
Consolidated or Combined State Income Tax, the liability of NLC with respect to
such Tax for any Tax Period shall be computed as follows:

              (i) Allocation of Tax. In the case of any Consolidated or Combined
       State Income Tax, NLC shall be liable to Parent for the State Income Tax
       liability computed as if all members of the NLC Group included in the
       computation of such Tax had filed a Consolidated or Combined State Income
       Tax Return for such NLC Group members based on the income and other Tax
       Items of such members, but based on the apportionment factors derived by
       including all appropriate entities of both Groups on such Consolidated or
       Combined State Income Tax Return. Any amount so allocated to the NLC
       Group shall be a liability of NLC to Parent under this Section 2,
       regardless of whether or not such amount exceeds the total Tax liability
       shown on the Consolidated or Combined State Income Tax Return. If, with
       respect to any Consolidated or Combined State Income Tax Return, the NLC
       Group has a net operating loss or other Tax attribute that reduced the
       combined Tax liability below the amount that would have been payable if
       the NLC Group had not incurred such loss or other Tax attribute, then
       Parent shall be liable to NLC for the amount of the reduction.

              (ii) Allocation of Combined or Consolidated State Income Tax
       Adjustments. If there is any adjustment to the reported Tax Liability
       with respect to any Consolidated or Combined State Income Tax Return (or
       to such Tax Liability as previously adjusted), NLC shall be liable to
       Parent for the excess (if any) of--

                     (A) the State Income Tax liability of the NLC Group
              computed as if all members of the NLC Group included in the Tax
              Return had filed a Consolidated or Combined State Income Tax
              Return for such members (based on the income and other Tax Items
              of such members, but based on the apportionment factors derived by
              including all appropriate entities of both Groups on such
              Consolidated or Combined State Income Tax Return) as so adjusted
              (the "NLC Group Recomputed State Tax Liability"); over

                     (B) the State Income Tax liability of the NLC Group
              computed as if all members of the NLC Group included in the Tax
              Return had filed a Consolidated or Combined State Income Tax
              Return for such members (based on the income and other Tax Items
              of such members, but based on the apportionment factors derived by
              including all

                                       32
<PAGE>   7

              appropriate entities of both Groups on such Consolidated or
              Combined State Income Tax Return) as reported (or, if applicable,
              as previously adjusted) (the "NLC Group Prior State Tax
              Liability").

If the NLC Group Prior State Tax Liability exceeds the NLC Group Recomputed
State Tax Liability, Parent shall be liable to NLC for such excess. For purposes
of this paragraph 2.03(b)(ii), if the NLC Group has a net operating loss after
taking into account the adjustments allocable to such Group (or if it had a net
operating loss based on Tax Items as reported, or, if applicable, as previously
adjusted), the NLC Group Recomputed State Tax Liability (or, if applicable, the
NLC Group Prior State Tax Liability) shall be less than zero to the extent such
net operating loss produces (or produced) a Tax Benefit in consolidation for the
applicable Tax Period. For purposes of this paragraph, the determination and
payment of estimated Taxes (including the determination and payment of any Tax
required to be paid with a request for an extension of time to file a Tax
Return) shall not be treated as an adjustment to the related Consolidated or
Combined State Income Tax.

       Section 2.04 Allocation of Other Taxes. Except as provided in Section
2.05, all Taxes other than those specifically allocated pursuant to Sections
2.02 and 2.03 shall be allocated based on the legal entity on which the legal
incidence of the Tax is imposed. As between NLC and Parent, NLC shall be liable
for all Taxes imposed on any member of the NLC Group. The Companies believe that
there is no Tax not specifically allocated pursuant to Sections 2.02 and 2.03
which is legally imposed on more than one legal entity (e.g., joint and several
liability); however, if there is any such Tax, it shall be allocated in
accordance with any reasonable allocation method determined by Parent.

       Section 2.05 Deconsolidation and Other Taxes. NLC shall be liable for,
and shall indemnify and hold harmless the Parent Group from and against any
liability for, all Taxes resulting from the Deconsolidation, including any Tax
resulting from any income or gain recognized under Treasury Regulation Sections
1.1502-13 or 1.1502-19 (or any corresponding provisions of other applicable Tax
Laws) as a result of the Deconsolidation.

SECTION 3.    PRORATION OF TAXES FOR STRADDLE PERIODS

       (a) In the case of any Straddle Period, Tax Items shall be apportioned
between Pre-Deconsolidation Periods and Post-Deconsolidation Periods in
accordance with the principles of Treasury Regulation Section 1.1502-76(b) as
reasonably interpreted and applied by the Companies. Parent and NLC shall (and,
if necessary, shall cause their Affiliates to) join in making an irrevocable
election under Treasury Regulation Section 1.1502-76(b)(2)(ii) (relating to
ratable allocation of a year's items).

       (b) In determining the apportionment of Tax Items between
Pre-Deconsolidation Periods and Post-Deconsolidation Periods, any Tax Items
relating to the exercise of employee stock options shall not be treated as
extraordinary items described in Treasury Regulation Section
1.1502-76(b)(2)(ii)(C) and, therefore, shall be ratably allocated in accordance
with Section 3(a) above.

SECTION 4.    PREPARATION AND FILING OF TAX RETURN

       Section 4.01 General. Except as otherwise provided in this Section 4, Tax
Returns shall be prepared and filed when due (including extensions) by the
person obligated to file such Tax Returns under the Code or applicable Tax Law.
The Companies shall provide, and shall cause their Affiliates to provide,
assistance and cooperation to one another in accordance with Section 8 with
respect to the preparation and filing of Tax Returns, including providing
information required to be provided in Section 8.

       Section 4.02 Parent's Responsibility. Parent has the exclusive obligation
and right to prepare and file, or to cause to be prepared and filed:

       (a) the Parent Federal Consolidated Tax Returns for any Tax Periods
ending on, before, or after the Deconsolidation Date;

                                       33
<PAGE>   8

       (b) all Tax Returns for Consolidated or Combined State Income Taxes which
Parent reasonably determines are required to be filed by either of the Companies
or any of their Affiliates for Tax Periods ending on, before, or after the
Deconsolidation Date; and

       (c) all Tax Returns for State Taxes (not including Tax Returns with
respect to State Taxes that are Separate Company Taxes of the NLC Group) which
Parent reasonably determines are required to be filed by the Companies or any of
their Affiliates for Tax Periods ending on or before the Deconsolidation Date.

       Section 4.03 NLC Responsibility. NLC shall prepare and file, or shall
cause to be prepared and filed, all Tax Returns required to be filed by or with
respect to members of the NLC Group other than those Tax Returns which Parent is
required to prepare and file under Section 4.02. The Tax Returns required to be
prepared and filed by NLC under this Section 4.03 shall include (a) the NLC
Federal Consolidated Tax Return for Tax Periods ending after the Deconsolidation
Date (b) the NLC Federal Consolidated Tax Return for Tax Periods ending before
the consolidation date and (c) Tax Returns with respect to State Taxes that are
Separate Company Taxes of the NLC Group.

       Section 4.04 Tax Accounting Practices

       (a) General Rule. Except as otherwise provided in this Section 4.04, any
Tax Return which Parent has the right and obligation to file under Section 4.02,
and any Tax Return to the extent items reported on such Tax Return might
reasonably affect items reported on any Tax Return which Parent has the right
and obligation to file under Section 4.02, shall be prepared in accordance with
Parent's Tax accounting practices (unless such practices are no longer
permissible under the Code or other applicable Tax Law), and, to the extent any
items are not covered by Parent's practices (or in the event such practices are
no longer permissible under the Code or other applicable Tax Law), in accordance
with reasonable Tax accounting practices selected by the Responsible Company.

       (b) Reporting of Deconsolidation Tax Items. Parent shall reasonably
determine the tax treatment reported on any Tax Return of Tax Items relating to
the Deconsolidation.

       Section 4.05 Consolidated or Combined Income Tax Returns. If required by
applicable Tax Law, or, if at any time and from time to time Parent so elects,
some or all members of the NLC Group shall join some or all members of the
Parent Group in the filing of a Consolidated or Combined Income Tax Return for
any Tax Period for which the Groups are required or permitted to file such a
return. Parent and NLC agree (and, if necessary, agree to cause their
Affiliates) to file such consents, elections, and other documents and take such
other actions as may be necessary or appropriate to carry out the purposes of
this Section 4.05.

       Section 4.06 Execution of Returns Prepared by Other Party. In the case of
any Tax Return which is required to be prepared and filed by one Company under
this Agreement and which is required by law to be signed by the other Company
(or by its authorized representative or by any of its Affiliates), the Company
(or Affiliate) which is legally required to sign such Tax Return shall sign such
Tax Return unless there is no reasonable basis for the Tax treatment of a
material item reported on the Tax Return.

       Section 4.07 Claims for Refund, Carrybacks, and Self-Audit Adjustments:
Parent Consent Required for Adjustment Requests Related to Consolidated or
Combined Income Taxes. NLC hereby agrees that, unless Parent consents in
writing, (i) no Adjustment Request with respect to any Consolidated or Combined
Income Tax shall be filed, and (ii) any available elections to waive the right
to claim in any Pre-Deconsolidation Period with respect to any Consolidated or
Combined Income Tax any NLC Carryback arising in a Post-Deconsolidation Period
shall be made, and no affirmative election shall be made to claim any such NLC
Carryback. Any Adjustment Request that Parent consents to make under this
Section 4.07 shall be prepared and filed by the Responsible Company for the Tax
Return to be adjusted.

SECTION 5.    TAX PAYMENTS AND INTERCOMPANY BILLINGS

                                       34
<PAGE>   9

       Section 5.01 Payment of Taxes With Respect to Parent Federal Consolidated
Tax Returns. In the case of any Parent Federal Consolidated Tax Return:

       (a) Computation and Payment of Tax Due. Parent shall compute the amount
of Tax required to be paid to the Internal Revenue Service on such Payment Date
and shall pay such amount to the Internal Revenue Service on or before such
Payment Date.

       (b) Computation and Payment of NLC Liability With Respect to Tax Due.
Within 30 days following the filing of the Parent Federal Consolidated Tax
Return, except with regard to losses taken into account in the computation of
the Current Payment, NLC will pay to Parent the consolidated Tax liability
determined as of such Payment Date with respect to the applicable Tax Period
allocable to the members of the NLC Group as determined by Parent in a manner
consistent with Section 2.02(a) (the "Allocated Federal Tax Liability").

       (c) Interest on Intergroup Tax Allocation Payments. In the case of any
payments required to be made to Parent under paragraph (b) of this subsection
5.01, NLC shall also pay to Parent an amount of interest computed at the Prime
Rate on the amount of the payment required based on the number of days from the
date of filing of Parent Federal Consolidated Return to the date of payment by
NLC.

       Section 5.02 Determination of Tax Benefit Realized.

       (a) Computation. If there is an Outstanding Implied Tax Benefit and
Repayments under Section 6 are less than or equal to the Tax Benefit, then for
Tax Benefits realized a calculation under this Section will be completed by
September 30th annually, until and including the year 2006, to determine whether
and to what extent Parent has realized a Tax Benefit for the NLC Year 2000
Losses.

              (i) In the case of any Parent Federal Consolidated Tax Returns for
       Tax Years 2000 to 2005, the following calculations will be made. Within
       30 days following the Filing of the Parent Federal Consolidated Tax
       Return, Parent will prepare a calculation to determine whether or not the
       NLC Year 2000 Tax Loss has produced a Tax Benefit in Parent's return.

              (ii) If Parent realizes any Tax Benefit from utilization of the
       NLC Year 2000 Losses prior to the expiration of the 5-year discounting
       period, then Parent will make a payment to NLC computed as follows.
       First, the Tax Benefit realized will be discounted (at 7.5% compounded
       monthly) over the number of years elapsed from September 15, 2001 to
       September 15 of the year in which it was determined that the Tax Benefit
       was realized. Second, the Tax Benefit will be discounted (at 7.5%
       compounded monthly) over 5 years. The second number is subtracted from
       the first number and the result will be paid to NLC.

              (iii) If any portion of the NLC Year 2000 Losses have provided no
       Tax Benefit as of September 15, 2006, then a payment will be made by NLC
       to Motorola in the amount by which the Outstanding Implied Tax Benefit
       exceeds the Tax Benefit.

              (iv) Payments required under this section will be made by October
       15.

       Section 5.03 Payment of Federal Income Tax Related to Adjustment

       (a) Adjustments Resulting in Underpayments. Parent shall pay to the
Internal Revenue Service when due any additional Federal Income Tax required to
be paid as a result of any adjustment to the consolidated Tax liability with
respect to any Parent Federal Consolidated Tax Return. Parent shall compute the
amount attributable to the NLC Group in accordance with Section 2.02(c) and NLC
shall pay to Parent any amount due Parent (or Parent shall pay NLC any amount
due NLC) under Section 2.02(c) within 30 days from the later of (i) the date the
additional Tax was paid by Parent or (ii) the date of receipt by NLC of a
written notice and demand from Parent for payment of the amount due, accompanied
by evidence of payment and a statement detailing the Taxes paid and describing
in reasonable detail the

                                       35
<PAGE>   10

particulars relating thereto. Any payments required under this Section 5.03(a)
shall include interest computed at the Prime Rate based on the number of days
from the date payment was made under 5.01(b) to the date the additional Tax was
paid by Parent to the Internal Revenue Service.

       (b) Adjustments Resulting in Overpayments. Within 30 days of receipt by
Parent of any Tax Benefit resulting from any adjustment to the consolidated Tax
liability with respect to any Parent Federal Consolidated Tax Return, Parent
shall pay to NLC, or NLC shall pay to Parent (as the case may be), their
respective amounts due from or to Parent as determined by Parent in accordance
with Section 2.02(c). Any payments required under this Section 5.03(b) shall
include interest computed at the Prime Rate based on the number of days from the
date the Tax Benefit was received by Parent to the date of payment to NLC under
this Section 5.03(b).

       Section 5.04 Payment of State Income Tax

       (a) Computation and Payment of Tax Due. At least three business days
prior to any Payment Date with respect to any State Income Tax, the Responsible
Company shall compute the amount of Tax required to be paid to the applicable
Tax Authority (taking into account the requirements of Section 4.04 relating to
consistent accounting practices) on such Payment Date and --

              (i) If such Tax Return is with respect to a Consolidated or
       Combined State Income Tax, Parent will pay such amount to such Tax
       Authority on or before such Payment Date.

              (ii) If such Tax Return is with respect to a Separate Company Tax,
       the Responsible Company shall, if it is not the Company liable for the
       Tax reported on such Tax Return, notify the Company liable for such Tax
       in writing of the amount of Tax required to be paid on such Payment Date.
       The Company liable for such Tax will pay such amount to such Tax
       Authority on or before such Payment Date.

       (b) Computation and Payment of NLC Liability With Respect To Tax Due.
Within 30 days following the earlier of (i) the due date (including extensions)
for filing any Tax Return for any Consolidated or Combined State Income Tax
(excluding any Tax Return with respect to payment of estimated Taxes or Taxes
due with a request for extension of time to file) or (ii) the date on which such
Tax Return is filed, NLC will pay to Parent (or Parent shall pay to NLC) the
amount allocable to the NLC Group, as determined by the Responsible Company in
accordance with the provisions of Section 2.03(b)(i), plus interest computed at
the Prime Rate on the amount of the payment based on the number of days from
earlier of (i) the due date of the Tax Return (including extensions) or (ii) the
date on which such Tax Return is filed, to the date of payment.

       Section 5.05 Payment of State Income Taxes Related to Adjustments

       (a) Adjustments Resulting in Underpayments. Parent shall pay to the
applicable Tax Authority when due any additional State Income Tax required to be
paid as a result of any adjustment to the tax liability with respect to any
Consolidated or Combined State Income Tax Return. Parent shall compute the
amount attributable to the NLC Group in accordance with Section 2.03(b)(ii) and
NLC shall pay to Parent any amount due Parent (or Parent shall pay NLC any
amount due NLC) under Section 2.03(b)(ii) within 30 days from the later of (i)
the date the additional Tax was paid by Parent or (ii) the date of receipt by
NLC of a written notice and demand from Parent for payment of the amount due,
accompanied by evidence of payment and a statement detailing the Taxes paid and
describing in reasonable detail the particulars relating thereto. Any payments
required under this Section 5.05(a) shall include interest computed at the Prime
Rate based on the number of days from the date the additional Tax was paid by
Parent to the date of the payment under this Section 5.05(a).

       (b) Adjustments Resulting in Overpayments. Within 30 days of receipt by
Parent of any Tax Benefit resulting from any adjustment to the Tax liability
with respect to any Consolidated or Combined State Income Tax Return, Parent
shall pay to NLC, or NLC shall pay to Parent (as the case may be, the respective
amounts due from or to Parent as determined by Parent in accordance with Section
2.03(b)(ii).

                                       36
<PAGE>   11

Any payments required under this Section 5.05(b) shall include interest computed
at the Prime Rate based on the number of days from the date the Tax Benefit was
received by Parent to the date of the payment under this Section 5.05(b).

       Section 5.05 Payment of Separate Company Taxes. Each Company shall pay,
or shall cause to be paid, to the applicable Tax Authority when due all Separate
Company Taxes owed by such Company or a member of such Company's Group.

       Section 5.06 Indemnification Payments. If any Company (the "payor") is
required to pay to a Tax Authority a Tax that another Company (the "responsible
party") is required to pay to such Taxing Authority under this Agreement, the
responsible party shall reimburse the payor within 30 days of delivery by the
payor to the responsible party of an invoice for the amount due, accompanied by
evidence of payment and a statement detailing the Taxes paid and describing in
reasonable detail the particulars relating thereto. The reimbursement shall
include interest on the Tax payment computed at the Prime Rate based on the
number of days from the date of the payment to the Tax Authority to the date of
reimbursement under this Section 5.06.

SECTION 6.    REPAYMENT REQUIREMENT IF NLC RECEIVES THIRD PARTY FINANCING.

       Section 6.01 At the same time as the annual determination of Tax Benefit
Realized under section 5.02, a determination of any repayment requirement
arising from NLC having received Third Party Financing will be made as follows:

       (a) NLC will be required to disclose to Motorola by September 15th of
each year whether they have received any Third Party Financing.

       (b) If Third Party Financing has been received by NLC then an obligation
of NLC to repay some portion of the Outstanding Implied Tax Benefit will arise
based on the following schedule:

<TABLE>
<CAPTION>
    Financing Received       Repayment Obligation
    ------------------       --------------------
<S>                          <C>
    Up to $25M               No repayment.

    Up to $50M               NLC pays to Parent one third of the Financing
                             received in excess of $25 million (up to $50
                             million), cumulative payments not to exceed the
                             then Outstanding Implied Tax Benefit to Motorola.

    Up to $75M               NLC pays to Parent one third of the Financing
                             received in excess of $25 million (up to $50
                             million) and 50% of the Financing received in
                             excess of $50 million (up to $75 million),
                             cumulative payments not to exceed the then
                             Outstanding Implied Tax Benefit to Motorola.

    $75M and up              NLC pays to Parent one third of the Financing received
                             in excess of $25 million (up to $50 million), 50% of the
                             Financing received in excess of $50 million (up to $75
                             million), and 100% of the Financing received in excess
                             of $75 million, cumulative payments not to exceed the
                             then Outstanding Implied Tax Benefit to Motorola.
</TABLE>

       (c) If there has been a Change in Control then NLC will repay to Parent
the then Outstanding Implied Tax Benefit.

       (d) Payments required by the section will be made by October 15 of the
year in which the computation is made.

SECTION 7.    TAX BENEFITS

                                       37
<PAGE>   12

       (a) General. If a member of one Group receives any Tax Benefit with
respect to any Taxes which a member of another Group is allocated hereunder, the
Company receiving such Tax Benefit shall make a payment to the Company who is
allocated such Taxes hereunder within 30 days following receipt of the Tax
Benefit in an amount equal to the Tax Benefit, plus interest on such amount
computed at the Prime Rate based on the number of days from the date of receipt
of the Tax Benefit to the date of payment of such amount under this Section 7.

       (b) NLC Liability for Separate Return Years. Without limiting the
application of Section 7(a) above, if NLC leaves Parent's affiliated group (as
defined by Section 1504 of the Code) and files separate federal Income Tax
Returns, it shall, by the 15th day of the tenth month after the end of each of
the first five taxable years for which it files such Tax Returns, pay to Parent
the excess (if any) of (a) the Federal Income Tax NLC would have paid for such
years (on a separate return basis, giving appropriate effect to its net
operating loss carryovers) had it never been a member of Parent's affiliated
group over (b) the amount of Federal Income Tax NLC has actually paid or will
actually pay for such year.

SECTION 8.    ASSISTANCE AND COOPERATION

       (a) General. Each of the Companies shall cooperate (and shall cause its
Affiliates to cooperate) with the other and with the other's agents, including
accounting firms and legal counsel, in connection with Tax matters relating to
the Companies and their Affiliates including (i) preparation and filing of Tax
Returns, (ii) determining the liability for and amount of any Taxes due
(including estimated Taxes) or the right to and amount of any refund of Taxes,
(iii) examinations of Tax Returns, and (iv) any administrative or judicial
proceeding in respect of Taxes assessed or proposed to be assessed. Such
cooperation shall include making all information and documents in their
possession relating to the other Company and its Affiliates available to such
other Company as provided in Section 9. Each of the Companies shall also make
available to the other, as reasonably requested and available, personnel
(including officers, directors, employees and agents of the Companies or their
respective Affiliates) responsible for preparing, maintaining, and interpreting
information and documents relevant to Taxes, and personnel reasonably required
as witnesses or for purposes of providing information or documents in connection
with any administrative or judicial proceedings relating to Taxes. Any
information or documents provided under this Section 8 shall be kept
confidential by the Company receiving the information or documents, except as
may otherwise be necessary in connection with the filing of Tax Returns or in
connection with any administrative or judicial proceedings relating to Taxes.

       (b) Income Tax Return Information. Each Company will provide to the other
Company information and documents relating to its Group required by the other
Company to prepare Tax Returns. The Responsible Company shall determine a
reasonable compliance schedule for such purpose in accordance with its past
practices. Any additional information or documents the Responsible Company
requires to prepare such Tax Returns will be provided as the Responsible Company
reasonably requests and in sufficient time for the Responsible Company to file
such Tax Returns on a timely basis.

SECTION 9.   TAX RECORDS

(a) Retention of Tax Records. Each Company shall preserve and keep all Tax
Records relating to the assets and activities of its Group, and Parent shall
preserve and keep all other Tax Records relating to Taxes of the Groups, for so
long as the contents thereof may become material in the administration of any
matter under the Code or other applicable Tax Law, but in any event until the
later of (i) the expiration of any applicable statutes of limitation, and (ii)
seven years after the end of the last Tax Period for which a Consolidated or
Combined Income Tax Return is filed. If, prior to the expiration of the
applicable statute of limitation and such seven-year period, a Company
reasonably determines that any Tax Records which it is required to preserve and
keep under this Section 9 are no longer material in the administration of any
matter under the Code or other applicable Tax Law, such Company may dispose of
such records upon 90 days prior notice to the other Company. Such notice shall
include a list of the records to be disposed of describing in reasonable detail
each file, book, or other record accumulation being disposed. The notified
Company shall have the opportunity, at its cost and expense, to copy or remove,
within such 90-day period, all or any part of such Tax Records.

                                       38
<PAGE>   13

       (b) Access to Tax Records. The Companies and their respective Affiliates
shall make available to each other for inspection and copying during normal
business hours upon reasonable notice all Tax Records in their possession to the
extent reasonably required by the other Company in connection with the
preparation of Tax Returns, audits, litigation, or the resolution of items under
this Agreement.

SECTION 10.   TAX CONTESTS

       Section 10.01 Notice. Each of the parties shall provide prompt notice to
the other party of any pending or threatened Tax audit, assessment or proceeding
or other Tax Contest of which it becomes aware related to Taxes for Tax Periods
for which it is indemnified by other party hereunder. Such notice shall contain
factual information (to the extent known) describing any asserted Tax liability
in reasonable detail and shall be accompanied by copies of any notice and other
documents received from any Tax Authority in respect of any such matters. If an
indemnified party has knowledge of an asserted Tax liability with respect to a
matter for which it is to be indemnified hereunder and such party fails to give
the indemnifying party prompt notice of such asserted Tax liability, then (i) if
the indemnifying party is precluded from contesting the asserted Tax liability
in any forum as a result of the failure to give prompt notice, the indemnifying
party shall have no obligation to indemnify the indemnified party for any Taxes
arising out of such asserted Tax liability, and (ii) if the indemnifying party
is not precluded from contesting the asserted Tax liability in any forum, but
such failure to give prompt notice results in a monetary detriment to the
indemnifying party, then any amount which the indemnifying party is otherwise
required to pay the indemnified party pursuant to this Agreement shall be
reduced by the amount of such detriment.

       Section 10.02 Control of Tax Contests

       (a) Separate Company Taxes. In the case of any Tax Contest with respect
to any Separate Company Tax, the Company having liability for the Tax shall have
exclusive control over the Tax Contest, including exclusive authority with
respect to any settlement of such Tax liability.

       (b) Consolidated or Combined Income Taxes. In the case of any Tax Contest
with respect to any Consolidated or Combined Income Tax Parent shall control the
defense or prosecution of all portions of any Tax Contest, including settlement
thereof.

       SECTION 11.    EFFECTIVE DATE. This Agreement shall be effective as of
January 5, 2000.

       SECTION 12.    SURVIVAL OF OBLIGATIONS. The representations, warranties,
covenants and agreements set forth in this Agreement shall be unconditional and
absolute and shall remain in effect without limitation as to time.

       SECTION 13.    TREATMENT OF PAYMENTS; TAX GROSS UP

       Section 13.01 Treatment of Tax Indemnity and Tax Benefit Payments. In the
absence of any change in tax treatment under the Code or other applicable Tax
Law,

       (a) any Current Payments made under Section 2, Tax indemnity payments
made by a Company under Section 5 and Repayments made under Section 6 shall be
reported for Tax purposes by the payor and the recipient as distributions or
capital contributions, as appropriate, occurring immediately before the
Deconsolidation, but only to the extent the payment does not relate to a Tax
allocated to the payor in accordance with Treasury Regulation Section
[1.1502-33(d)] (or under corresponding principles of other applicable Tax Laws),
and

       (b) any Tax Benefit payments made by a Company under Section 6, shall be
reported for Tax purposes by the payor and the recipient as distributions or
capital contributions, as appropriate, occurring immediately before the
Deconsolidation, but only to the extent the payment does not relate to a Tax
allocated to the payor in accordance with Treasury Regulation Section
[1.1502-33(d)] (or under corresponding principles of other applicable Tax Laws).

                                       39
<PAGE>   14

        Section 13.02 Interest Under This Agreement. Anything herein to the
contrary notwithstanding, to the extent one Company ("indemnitor") makes a
payment of interest to another Company ("indemnitee") under this Agreement with
respect to the period from the date that the indemnitee made a payment of Tax to
a Tax Authority to the date that the indemnitor reimbursed the indemnitee for
such Tax payment, or with respect to the period from the date that the
indemnitor received a Tax Benefit to the date indemnitor paid the Tax Benefit to
the indemnitee, the interest payment shall be treated as interest expense to the
indemnitor (deductible to the extent provided by law) and as interest income by
the indemnitee (includible in income to the extent provided by law). The amount
of the payment shall not be adjusted to take into account any associated Tax
Benefit to the indemnitor or increase in Tax to the indemnitee.

       SECTION 14.    DISAGREEMENTS. If after good faith negotiations the
parties cannot agree on the application of this Agreement to any matter, then
the matter will be referred to a nationally recognized accounting firm
acceptable to each of the parties (the "Accounting Firm"). The Accounting Firm
shall furnish written notice to the parties of its resolution of any such
disagreement as soon as practical, but in any event no later than 45 days after
its acceptance of the matter for resolution. Any such resolution by the
Accounting Firm will be conclusive and binding on all parties to this Agreement.
In accordance with Section 15, each party shall pay its own fees and expenses
(including the fees and expenses of its representatives) incurred in connection
with the referral of the matter to the Accounting Firm. All fees and expenses of
the Accounting Firm in connection with such referral shall be shared equally by
the parties affected by the matter.

       SECTION 15.   LATE PAYMENTS. Any amount owed by one party to another
party under this Agreement which is not paid when due shall bear interest at the
Prime Rate plus two percent, compounded semiannually, from the due date of the
payment to the date paid. To the extent interest required to be paid under this
Section 15 duplicates interest required to be paid under any other provision of
this Agreement, interest shall be computed at the higher of the interest rate
provided under this Section 15 or the interest rate provided under such other
provision.

       SECTION 16.    EXPENSES. Except as provided in Section 14, each party and
its Affiliates shall bear their own expenses incurred in connection with
preparation of Tax Returns, Tax Contests, and other matters related to Taxes
under the provisions of this Agreement.

       SECTION 17.    GENERAL PROVISIONS

       Section 17.01 Addresses and Notices. Any notice, demand, request or
report required or permitted to be given or made to any party under this
Agreement shall be in writing and shall be deemed given or made when delivered
in party or when sent by first class mail or by other commercially reasonable
means of written communication (including delivery by an internationally
recognized courier service or by facsimile transmission) to the party at the
party's address as follows:

If to Parent:         Director, Taxes

                      --------------------------

                      --------------------------

                      --------------------------

                      --------------------------

If to NLC:            Chief Financial Officer
                      James T. Wandrey
                      6085 State Farm Drive
                      Rohnert Park, California
                      94928

A party may change the address for receiving notices under this Agreement by
providing written notice of the change of address to the other parties.

                                       40
<PAGE>   15

       Section 17.02 Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their successors and assigns.

       Section 17.03 Waiver. No failure by any party to insist upon the strict
performance of any obligation under this Agreement or to exercise any right or
remedy under this Agreement shall constitute waiver of any such obligation,
right, or remedy or any other obligations, rights, or remedies under this
Agreement.

       Section 17.04 Invalidity of Provisions. If any provision of this
Agreement is or becomes invalid, illegal or unenforceable in any respect, the
validity, legality, and enforceability of the remaining provisions contained
herein shall not be affected thereby.

       Section 17.05 Further Action. The parties shall execute and deliver all
documents, provide all information, and take or refrain from taking action as
may be necessary or appropriate to achieve the purposes of this Agreement,
including the execution and delivery to the other parties and their Affiliates
and representatives of such powers of attorney or other authorizing
documentation as is reasonably necessary or appropriate in connection with Tax
Contests (or portions thereof) under the control of such other parties in
accordance with Section 9.

       Section 17.06 Integration. This Agreement constitutes the entire
agreement among the parties pertaining to the subject matter of this Agreement
and supersedes all prior agreements and understandings pertaining thereto.

       Section 17.07 Construction. The language in all parts of this Agreement
shall in all cases be construed according to its fair meaning and shall not be
strictly construed for or against any party.

       Section 17.08 No Double Recovery; Subrogation. No provision of this
Agreement shall be construed to provide an indemnity or other recovery for any
costs, damages, or other amounts for which the damaged party has been fully
compensated under any other provision of this Agreement or under any other
agreement or action at law or equity. Unless expressly required in this
Agreement, a party shall not be required to exhaust all remedies available under
other agreements or at law or equity before recovering under the remedies
provided in this Agreement. Subject to any limitations provided in this
Agreement (for example, the limitation in Section 4.07), the indemnifying party
shall be subrogated to all rights of the indemnified party for recovery from any
third party.

       Section 17.09 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, and all of which taken
together shall constitute one and the same instrument.

       Section 17.10 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware applicable to
contracts executed in and to be performed in that State.

       Section 17.11 NLC Subsidiaries. If at any time NLC acquires or creates
one or more subsidiary corporations that are includable corporations of the NLC
Group, they shall be subject to this Agreement and all references to NLC herein
shall thereafter be interpreted to refer to NLC and such subsidiaries as a
Group.

       Section 17.12 Successors. This Agreement shall be binding on and inure to
the benefit of any successor, by merger, acquisition of assets, or otherwise, to
any of the parties hereto (including but not limited to any successor of Parent
or NLC succeeding to the tax attributes of either under Section 381 of the
Code), to the same extent as if such successor had been an original party to
this Agreement.

                                       41
<PAGE>   16

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by the
respective officers as of the date set forth above.

PARENT

By:     /s/ Ray A. Dybala
Its:    Sr. VP & Director of Worldwide Tax

NLC

By:     /s/ James T. Wandrey
Its:    Sr. VP & Chief Financial Officer

                                       42

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