Document:

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                                                                   EXHIBIT 10.18

                [LOGO OF GENERAL INSTRUMENT/(R)/ APPEARS HERE]

                            C 0 N F I D E N T I A L
                            -----------------------

                       DEVELOPMENT AND SUPPLY AGREEMENT

                                by and between

                                MICROTUNE, INC.

                                      and

                        GENERAL INSTRUMENT CORPORATION

                                 JUNE 14, 2000
<PAGE>

     DEVELOPMENT AND SUPPLY AGREEMENT dated this 14th day of June, 2000 by and
between GENERAL INSTRUMENT CORPORATION, a Delaware corporation doing business as
the Broadband Communications Sector of Motorola, Inc.  and having an office at
101 Tournament Drive, Horsham, PA 19044 ("Buyer"), and MICROTUNE, INC., a Texas
corporation with its principal place of business at 2540 East Plano Parkway,
Suite 188, Plano, Texas 75074 ("Seller" and collectively with the Buyer, the
"Parties").

W I T N E S S E T H:
-------------------

     WHEREAS,  Seller has expertise in developing and manufacturing RF tuner
devices which may be used in a variety of broadband communication applications,
including cable modem, set top box and IP telephony products; and

     WHEREAS, Buyer desires to have Seller develop and manufacture for Buyer,
and Seller is willing to develop and manufacture for Buyer, and Buyer desires to
purchase from Seller, RF tuner modules for Buyer's cable modem, set top box and
IP telephony products; and

     WHEREAS, it is the intention of both parties to establish a strategic
alliance pursuant to which Seller is a preferred RF tuner supplier for Buyer and
Buyer is a strategic customer of Seller;

     NOW, THEREFORE, in consideration of the premises and mutual covenants set
forth in this Agreement, the parties, intending to be legally bound, agree as
follows:

ARTICLE 1.  DEFINITIONS

     All defined terms used herein but not otherwise defined shall have the
meanings set forth in Exhibit A.

ARTICLE 2.  DEVELOPMENT OF PRODUCTS

2.1  Development Program

     (a)  The Parties shall establish a development program (the "Development
          Program") for the development of silicon tuners (the "Silicon Tuners")
          in accordance with the terms of the letter agreement dated the date
          hereof by and between Seller and Buyer (the "Development Agreement"),
          a copy of which is attached as Exhibit B hereto.

     (b)  Buyer will make engineering resources available on a reasonable basis
          to work with Seller to qualify the ***** Microtune RF tuner module
          (together with Seller's *****, the "RF Tuner Modules") into Buyer's
          Surfboard cable modem line, with the initial focus to target DOCSIS
          qualification ***** of Seller's tuner module in the SB4100 product
          during *****.

     (c)  Buyer will make engineering resources available on a reasonable basis
          to work with Seller to develop RF tuner modules for Buyer's set top
          and IP telephony DOCSIS applications.

***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
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     (d)  Buyer will make engineering and procurement resources available on a
          reasonable basis to evaluate the technical and commercial feasibility
          of designing in the Seller solution for Analog video RF tuners. Buyer
          shall also provide to Seller its specifications required to meet the
          performance of the current analog tuner in production in the *****
          by July 1, 2000.

2.2  Delivery and Acceptance of Development  Products

     After the release of the Silicon Tuners for commercial production in
accordance with the Development Agreement, the Silicon Tuners shall become
Products which may be purchased and sold pursuant to this Agreement. After the
qualification of the ***** Microtune RF tuner module into Buyer's Surfboard
cable modem line, the ***** Microtune RF tuner module shall become a Product
which may be purchased and sold pursuant to this Agreement.

ARTICLE 3. PURCHASE AND SALE OF PRODUCTS

3.1  Right to Purchase.

     (a)   Buyer agrees to purchase and Seller agrees to sell, in such
quantities and at such prices as are set forth in Sections 3.10 and 6.5 and in
purchase orders or releases ("Orders") received and accepted (or deemed
accepted, as provided in Section 3.1(c) hereof) by Seller and as provided
hereunder, the products specified in Exhibit C (the "Products") Orders for the
Products may be placed by any of the divisions, subsidiaries and affiliates of
Buyer listed on Exhibit D hereto (each hereinafter considered to be a "Buyer"
for purposes of this Agreement) which may be amended by Buyer at any time to
include additional locations for such divisions, subdivisions and affiliates.

     (b)   Subject to Section 3.3, nothing contained in this Agreement shall
restrict Buyer from purchasing Products, or components thereof, from other
suppliers.

     (c)   For purposes of this Agreement any Order for a Product within the
lead time for such Product as set forth in Exhibit C and which is for a quantity
of such Product which does not exceed the lesser of (i), after taking into
account any other Products ordered by Buyer at the same time, ***** of the total
quantity of RF tuner modules utilizing the ***** that Seller's manufacturing
facilities are capable of producing and (ii) the amount of such Product
forecasted to be ordered in the most recent Rolling Forecast for the period in
which such Order is placed, may not be rejected by Seller and shall be deemed
accepted for all purposes of this Agreement, regardless of whether accepted or
acknowledged by Seller.

3.2  Content of Orders (Terms and Conditions); Acknowledgment.

     (a)   Buyer shall issue Orders for Products Buyer elects to purchase in
accordance with the lead times set forth in Exhibit C and the other terms of
this Agreement.

     (b)   All sales shall be pursuant to the "Terms of Purchase" attached
hereto as Exhibit E and incorporated herein by reference (the "Terms of
Purchase"). In the event of a conflict between the terms and conditions
contained in this Agreement and the Exhibits attached hereto, on the one hand,
and Buyer's standard terms and conditions of purchase and

***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

                                       2
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any Order or any acknowledgement or acceptance by Seller, on the other hand, the
terms and conditions contained in this Agreement and the Exhibits attached
hereto shall control. The parties acknowledge that the preprinted provisions on
the reverse side of any such Order, quotation, release, acknowledgment or
invoice shall be deemed deleted.

3.3  Forecasts.

     Buyer will provide Seller with a written twelve (12) month forecast (the
"Rolling Forecast") of its anticipated orders of Products, broken down on a
monthly basis. Buyer's Rolling Forecasts shall constitute good faith estimates
on the part of the Buyer and Buyer shall not be obligated to purchase any
quantities estimated in a Rolling Forecast; provided, that Buyer shall be
obligated  to purchase quantities of the Products as set forth in an Order
(including any modified Order pursuant to Section 3.8) and as may be required by
operation of the provisions of Section 3.10.

3.4  No Commitment to Purchase Minimum Amount.

     Except as otherwise expressly set forth in this Agreement (including
without limitation in Section 3.10), this Agreement is a non-commitment contract
and Products shall be manufactured, purchased and sold only on an "as ordered"
basis.

3.5  Reports.

     Seller, at Buyer's reasonable request, shall issue reports on the status of
open Orders.  Seller shall provide such other information as Buyer may
reasonably request from time to time.

3.6  Time is of the Essence

     Time is of the essence with respect to all Orders placed under this
Agreement.

3.7  Purchase Agreement Coordinators.

     To facilitate implementation of this Agreement, Buyer and Seller designate
the individuals listed on Exhibit F as their "Purchase Agreement Coordinators".
The respective Purchase Agreement Coordinators are authorized to act on behalf
of Seller and Buyer under this Agreement.

3.8  Quantity Increases and Shipment Schedule Changes.

     For any accepted Order, Buyer may (i) increase the quantity of Products or
(ii) reschedule the quantity of Products and their shipment date as provided in
the table below:

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   Maximum Allowable Variance From Purchase Order Quantities/Shipment Dates
   ------------------------------------------------------------------------

          # of days before     Allowable   Maximum     Maximum
          Shipment Date        Quantity   Reschedule  Reschedule
          on Purchase Order    Increases   Quantity     Period
          -------------------  ---------  ----------  ----------
          0-30                 *****      *****       ***** days
          61-90                *****      *****       ***** days
          91-120               *****      *****       ***** days
          121                  *****      *****       ***** days

Any Order quantities increased or rescheduled pursuant to this Section may not
be subsequently increased or rescheduled without the prior written approval of
Seller.  All other changes in quantity or shipment date require Seller's prior
written consent and shall be subject to an inventory carrying charge of *****
per month for finished Product, and Inventory and Approved Special Inventory
procured to support the original schedule.  Allowable quantity increases are
subject to material availability.  Seller will use reasonable commercial efforts
to meet quantity increases.  If there are extra costs to meet a schedule
increase in excess of the above limits, Seller will inform Buyer in advance of
incurring such extra costs in order to provide Buyer an opportunity to approve
such extra costs (and Buyer shall have no obligation with respect to any such
extra costs not approved by Buyer in writing) or to revise the schedule to avoid
such extra costs.  Buyer and Seller agree to mutually review and revise the
terms of this Section  for the Silicon Tuners.

3.9  Cancellation.

     Except as provided in Sections 3.10 and 6.5 below, Buyer shall be entitled
to cancel any Order, or any portion of an Order, by giving Seller written notice
of such cancellation. The cancellation shall be effective immediately upon
receipt of the notice by Seller. Should Buyer cancel any Order, or any portion
of any Order, for any reason not otherwise permissible under the terms of this
Agreement, Buyer's sole liability and responsibility and the sole remedy of
Seller with respect to such cancellation shall be payment by Buyer of a
cancellation charge, which shall consist of the following:

          (i)  the contract price for all Product in a finished goods state at
     the time of cancellation, limited to that quantity of the Product that was
     scheduled under the cancelled Order for delivery within the next *****
     days;

          (ii) the cost of all Inventory required for the cancelled Products and
     for which Seller is liable at the time of cancellation, whether on order,
     or on hand in raw form or in the form of work-in-process, which cannot be
     cancelled, returned to vendors or used for other customers, less salvage
     value.

3.10 Special Purchase Arrangements

     (a)  Subject to the following provisions of this Section 3.10(a), Buyer
agrees to purchase from Seller on a nonchangeable and noncancellable basis, and
Seller agrees to sell

***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

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to Buyer, the following quantities of qualified DOCSIS and EuroDOCSIS RF Tuner
Modules or Silicon Tuners for delivery during the following calendar quarters:

--------------------------------------------------------------------------------
             Calendar Quarter               Aggregate Quantity
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
                 4Q 2000                         *****
--------------------------------------------------------------------------------
                 1Q 2001                         *****
--------------------------------------------------------------------------------
                 2Q 2001                         *****
--------------------------------------------------------------------------------

The mix of the Products to be purchased and sold, which may consist of any
combination of RF Tuner Modules or Silicon Tuners at Buyer's sole discretion,
and the delivery dates within such calendar quarters for such Products shall be
determined by Orders submitted by Buyer in accordance with the provisions of
this Agreement. In the event that Buyer submits Orders for the delivery of
Products in excess of the amounts set forth above for such calendar quarters,
Seller shall use all commercially reasonable efforts to accept and fill such
Orders, but Seller shall have no obligation to allocate any production capacity
required by Seller's other customers to satisfy such excess amounts requested by
Buyer. Buyer's obligation to submit such Orders and to purchase such Products
are subject to the Seller's satisfaction of the following minimum technology,
quality, delivery, and other performance and cost criteria with respect to each
Product:

        (i)    technology: product compliance with the product specific
               functional specifications referred to in Exhibit G; product is
               DOCSIS certifiable; product passes Buyer's qualification testing.
               The current tuner specification is General Instrument *****
               specification ***** and General Instrument ***** specification
               *****. Both parties acknowledge that Seller's current product,
               the *****, conforms to the ***** specification and the *****
               conforms to the ***** specification, except that the ***** must
               be DOCSIS certified with the General Instrument *****. Further,
               if any parts of Buyer's specifications are waived or deviated by
               Buyer for any other tuner supplier, those same parts of the
               specifications shall be waived or deviated for Seller. The Seller
               will be notified in a timely manner of any such waivers or
               deviations.

        (ii)   quality: product quality meets minimum quality standards set in
               product specification; product failure rate in production
               decreases in accordance with a mutually acceptable minimum
               learning curve.

        (iii)  delivery: product is available in the quantities set forth in
               Buyer's Rolling Forecasts (not exceeding ***** of the total
               quantity of RF tuner modules utilizing the ***** which Seller's
               manufacturing facilities are capable of manufacturing) and within
               the time schedule set forth in Buyer's Rolling Forecasts as
               specified in this Agreement.

***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

                                       5
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           (iv)  cost: product meets or exceeds the cost learning curve as
                 specified in Exhibit C.

      (b)  Buyer shall have no obligation to submit Orders for the delivery of
Products on or after *****, except as set forth in this Section 3.10(b). On or
before *****, Buyer may send to Seller a proposal referring to this Section (the
"Buyer's Proposal") to order Products at a specified price for delivery during
the *****. Seller may accept Buyer's Proposal by a written acceptance (the
"Seller's Acceptance") delivered to Buyer within thirty (30) days after Seller's
receipt of the Buyer's Notice. In the event that Seller has timely provided the
Seller's Acceptance to Buyer, Buyer shall be obligated to submit to Seller, and
Seller shall be obligated to accept, Orders in accordance with the terms of this
Agreement for any combination of qualified DOCSIS and EuroDOCSIS RF tuner
modules which represents an aggregate amount of at least ***** of the total
aggregate quantity of qualified DOSCIS and EuroDOCSIS RF Tuner Modules that
Buyer orders from all suppliers for Buyer's cable modem, IP telephony, and set
top products concerning which Seller has a qualified Product, subject to the
Seller's satisfaction of the minimum technology, quality, delivery, and other
performance and cost criteria described in (i) through (iv) of Section 3.10(a)
or as otherwise agreed in writing with respect to each Product.

3.11  [Most Favored Customer]

      Buyer will receive pricing terms on any and all of Seller's products,
including the Products, which are *****. Seller shall also make available for
purchase by Buyer on such terms any and all new products developed by Seller.

ARTICLE 4. TERM AND TERMINATION

4.1   Term.

      The term of this Agreement shall commence on the date hereof and shall
continue until December 31, 2001, subject to earlier termination pursuant to
Section 4.2 hereof.  Unless otherwise terminated by either party by written
notice at ninety (90) days prior to the expiration of the term, this Agreement
shall renew for additional one (1) year periods.

4.2   Termination.

      Buyer or Seller may terminate this Agreement at any time if (i) the other
party has breached any provision hereof, including, without limitation, any
representation or warranty contained herein where the breaching Party fails to
cure such breach within thirty (30) days following receipt of notice of such
breach from the non-breaching Party; or (ii) either Party making an assignment
for the benefit of creditors, or if a receiver, trustee in bankruptcy or similar
officer shall be appointed to take charge of any and all of the other parties
property, or if the other Party files a petition for reorganization of its
indebtedness or other similar activities

***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

                                       6
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4.3  Effect of Termination.

     Termination of this Agreement for any reason shall not affect the
obligations of either party that exist as of the date of termination.

ARTICLE 5. PRICES AND PAYMENT

5.1  Prices; Shipping.

     The purchase prices for the Products are set forth in Exhibit C and are
subject to adjustment as hereinafter provided.

5.2  Payment of Invoices.

     Buyer's payment of any invoice shall not constitute acceptance of the
Products related to such invoice.

5.3  Delivery of Invoices.

All invoices shall reference this Agreement and shall be submitted to Buyer at:

     Motorola, Inc.
     101 Tournament Drive
     Horsham, Pennsylvania 19044
     Attention:  Accounts Payable

With a copy to Buyer's designated Purchase Agreement Coordinator listed in
Exhibit F. All invoices shall contain such information as Buyer shall reasonably
request.

5.4  Payment Terms.

     Payment for a conforming Product shall be due (i) for invoices received by
Buyer prior to the first anniversary of the date of this Agreement, within *****
days after Buyer's receipt of the invoice and (ii) for invoices received by
Buyer after the first anniversary of the date of this Agreement, within *****
days after Buyer's receipt of the invoice. Payments shall be made in lawful U.S.
currency.

ARTICLE 6. MANUFACTURING OF PRODUCTS

6.1  Specifications and Drawings.

     On or before the date of this Agreement, Buyer shall have delivered to
Seller all information and documentation necessary to permit Seller to perform
its obligations under this Agreement. Such information includes, but is not
limited to the information listed in Exhibit G. All Products will be
manufactured in accordance with the Specifications (see Section 3.10(i)). Seller
shall make no change to the Specifications, to any materials or component parts
described therein, or to the Products, including, without limitation, changes in
form, fit, function, design, appearance or place of manufacture of the Products
or changes which would affect the reliability of any of the Products, without
Buyer's express written consent obtained in

***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

                                       7
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accordance with the "Product/Process Change Request Notification" procedure
***** found in Exhibit K.

6.2  Initial Qualification.

     Prior to the commercial production of any of the Products, the Products and
components thereof shall be qualified in accordance with the acceptance test
procedures and qualification plans set forth in Exhibit I, and Exhibit K . The
methods of testing for the qualification of the Products and components thereof,
and the timetable for the qualification of the Products, shall be as set forth
in Exhibit I or as otherwise agreed to between the parties. The current tuner
specification is General Instrument ***** specification ***** and General
Instrument ***** specification *****. Both parties acknowledge that, *****,
Seller's current products, the *****, have been qualified in accordance with the
acceptance test procedures and qualification plans set forth in Exhibit I, and
Exhibit K.

6.3  Manufacturing Location; Restriction on Subcontracting.

     Seller shall initially manufacture the Products, which are RF tuner
modules, at Seller's facilities in Manila, Philippines ("Seller's Facility").
The Products shall not be manufactured for Buyer by any person or entity other
than Seller, without Buyer's express written consent, which shall not be
unreasonably withheld. Buyer reserves the right to audit and approve any
contract manufacturer or alternate location Seller proposes to manufacture
Products. The Silicon Tuners may be manufactured at locations other than Manila
which are mutually acceptable to Seller and Buyer. As of the date of this
Agreement, Buyer acknowledges that IBM's facilities in Burlington, Vermont and
xFab's facilities in Erfert, Germany are acceptable facilities for wafer
fabrication, Amkor/Anam's facilities in Korea and the Philippines are acceptable
facilities for assembly and testing, Seller's facilities in Plano for testing
and any facilities currently used for fabrication, assembly or testing by
Motorola's Semiconductor Division are acceptable facilities for fabrication,
assembly or testing.

6.4  Material Procurement.

     (a) Seller shall purchase materials to manufacture Products necessary to
comply with its obligations to supply Products specified in Exhibit C.  Seller
shall use in its production of Products such parts and components of a type,
quality, and grade as were used in the Products when they were initially
qualified under this Agreement.  Seller shall make no substitution of any
components, raw materials or vendors which would affect the reliability of the
Products without Buyer's written consent.  In the event such substitution is
requested by Seller, Seller shall provide documented evidence of the
qualification of such components, raw materials or vendors in accordance with
Buyer's Component Qualification Procedures identified in Exhibit K.  Seller
shall not use materials with date codes older than one (1) year without Buyer's
consent.

     (b) Buyer's accepted Orders will constitute authorization for Seller to
procure, using the purchasing practices set forth in this Agreement, the
components, materials and supplies necessary for the manufacture of Products
("Inventory") covered by such purchase orders.

***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

                                       8
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     (c)  In addition, Buyer may authorize Seller to purchase, in amounts beyond
the amount necessary to fill accepted Orders, the components, materials, and
supplies: (i) with lead times greater than ***** days at the time the Order is
placed ("Long Lead Time Components") plus ***** days to account for the order,
shipment, receipt and manufacturing time and, (ii) purchased in quantities above
the required amount in order to achieve price targets ("Economic Order
Inventory"), and (iii) purchased in excess of requirements because of minimum
lot sizes available from manufacturers ("Minimum Order Inventory"). Together
these are called "Special Inventory". Seller shall notify Buyer's Purchaser
Representative of its intent to Purchase Special Inventory at least ten (10)
days prior to such purchase. Such notice shall contain a detailed identification
of the Special Inventory to be purchased, the proposed purchase price, the
vendor supplying the Special Inventory, and a reference to Buyer's obligations
under this Section. During the ten day period, Buyer shall notify Seller whether
or not the purchase of such Special Inventory is authorized. In the event Buyer
notifies Seller that Seller is authorized to purchase such Special Inventory,
the Special Inventory shall be considered to be "Approved Special Inventory" for
purposes of this Agreement. In the event Buyer does not so notify Seller, Seller
shall consider the purchase of the Special Inventory not to be authorized by
Buyer and such Special Inventory shall not be considered "Approved Special
Inventory" for any purpose of this Agreement.

     (d)  Seller may purchase Long Lead Time Components sufficient to meet all
deliveries under the Orders in effect at the time the order with the supplier is
placed, and may reasonably purchase Minimum Order Inventory even if greater than
the amount necessary to meet Orders and Product forecast, in each case only if
authorized by Buyer as set forth in Section 6.4(c) above.  Seller may, from time
to time, at the written request of Buyer hold Long Lead Time Components and
finished Products in inventory to increase Buyer's sourcing flexibility in
amounts authorized by Buyer and at the expense of Buyer.  The components and
quantities of all such inventory will be documented in a separate letter and
signed by both Seller and Buyer.

     (e)  Buyer will be responsible for all Approved Special Inventory purchased
by Seller under this Section 6.4 if such purchases are authorized by Buyer
pursuant to this Section 6.4.  Seller shall be responsible for any Special
Inventory not approved by Buyer and all other Inventory.

6.5  ALLOCATION OF PRODUCTION CAPACITY

     Throughout the term of this Agreement, Seller shall make available for
purchase by Buyer at least ***** of the total quantity of RF tuner modules
utilizing the ***** its manufacturing facilities are capable of producing within
Seller's historical lead times for the production of such products. Without
limiting the general nature of Seller's foregoing obligation to allocate its
manufacturing capacity, in no event shall the quantity of RF tuner modules
utilizing the ***** available for purchase by Buyer be less than the following
amounts during the following periods:

            Time Period              Minimum Quantity
            -----------              ----------------

            4/1/00 to 6/30/00        *****

            7/1/00 to 9/30/00        *****

***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

                                       9
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Seller will use all commercially reasonable efforts to supply an additional
***** RF Tuner Modules  to Buyer during the months of June and July 2000.

Buyer agrees to pay Seller a unit price of ***** for delivery of Products from
the period of April 1, 2000 through *****. During the second ***** quarters of
2000 and any period in which Buyer requires at least ***** of Seller's
manufacturing capacity in accordance with this Agreement, Buyer's Orders shall
be noncancelable, but may be modified in accordance with the provisions of
Section 3.8.

ARTICLE 7. EXCLUSIVE PRODUCTS; LICENSES

7.1  Exclusive Products.

     Seller shall not sell any Products incorporating Buyer's Technology to any
other party during or after the term of this Agreement.  For avoidance of doubt,
Seller represents that it will not be necessary to, and that it will not,
incorporate Buyer's Technology into any Product hereunder.

7.2  Proprietary Rights.

     Seller hereby confirms that Buyer has and shall retain the sole right,
title, and interest in and to all proprietary rights in Buyer's Intellectual
Property, including all patents, patent applications, copyrights, trade secrets
or other proprietary rights relating to or embodied therein, including all
documentation, methods, processes, software, and information relating to or
embodied therein ("Buyer's Technology"). Buyer hereby confirms that Seller has
and shall retain the sole right, title, and interest in and to all proprietary
rights in Seller's Products and Seller's Intellectual Property, including all
patents, patent applications, copyrights, trade secrets or other proprietary
rights relating to or embodied therein, including all documentation, methods,
processes, software, and information relating to or embodied therein ("Seller's
Technology").

7.3  Transactions With Other Parties.

     Subject to the provisions of Section 7.1, Seller shall have the right to
separately manufacture and sell to others products which are comparable to the
Products. Nothing contained in this Section 7.3 shall permit Seller to use any
proprietary information or rights of Buyer, including, without limitation,
Buyer's Technology for that purpose or for the purpose of designing or
developing products.

ARTICLE 8. CONFIDENTIALITY

     The terms and conditions of the Non-Disclosure Agreement (the "NDA")
attached hereto as Exhibit H are incorporated herein by reference as if the
entire NDA were set forth herein with the exception that the term of the NDA
shall extend for the term of this Agreement, provided that any termination of
the this Agreement shall not relieve either party from its obligations imposed
by this Agreement with respect to nondisclosure, confidentiality and use of the
Confidential Information disclosed prior to the date of termination.  The
obligations imposed upon the parties under this Agreement shall continue for a
period of ***** years after the receipt of the Confidential Information.

***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

                                       10
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ARTICLE 9.  EXCUSED PERFORMANCE

     A party shall be excused from performing an obligation under this Agreement
and shall not be considered in default to the extent such party's performance
has been prevented, in whole or in part, by (i) an act of Force Majeure (as
defined below), or (ii) the non-performance of any other party to this
Agreement; provided, however, that a party shall not be so excused from the
performance of its obligations under this Agreement to the extent that the other
party's non-performance is attributable to the party seeking to be excused from
the performance of its obligations under this Agreement failing to perform its
obligations under this Agreement. "Force Majeure" shall mean, without
limitation, (a) any act of God, war, riot, fire, rupture, explosion, flood,
strike, injunction, governmental action, inaction, or order, transportation
failures, unavailability of materials, supplies or energy, or unscheduled outage
or shut-down, (b) any lockout or other labor disturbance, even if such lockout
or disturbance is within the power of a party to settle, or (c) any other cause,
whether similar or dissimilar to the foregoing, which is beyond the reasonable
control of a party (or any affiliate of such party) claiming Force Majeure
interference with the performance of such party under this Agreement. Upon the
occurrence of Force Majeure, the obligations of the party whose performance has
not been affected shall be suspended and such party shall have the rights
available to it under the Uniform Commercial Code.

ARTICLE 10. AGREEMENT

     This Agreement, the Exhibits and all Orders issued hereunder constitute the
final written expression of all terms of the Agreement relating to the
transactions described herein.  This Agreement supersedes all previous
communications, representations, agreements, promises or statements, either oral
or written, with respect to such transactions.  No addition to or modification
of any provision of this Agreement will be binding unless made in writing.

ARTICLE 11. GOVERNING LAW

     The rights and obligations of the parties under this Agreement shall be
governed and determined according to the substantive laws of the State of
California (excluding the conflict of laws principles thereof).

ARTICLE 12. PUBLICITY

     Buyer and Seller will issue a joint press release announcing the
relationship, including development of the single chip silicon tuner, upon
execution of this Agreement and prior to the marketing of initial public
offering of Microtune securities. In addition, Buyer acknowledges that Seller
may be required to file a copy of this Agreement with the Securities and
Exchange Commission. In connection with such filing, Seller shall make an
initial request for confidential treatment for any of the terms of this
Agreement designated by Buyer. In responding to any comments made or positions
taken by the Securities and Exchange Commission with respect to Seller's request
for confidential treatment, Seller shall notify Buyer of such comments or
positions and, to the extent the procedures of the Securities and Exchange
Commission provide it an opportunity to do so, shall use commercially reasonable
efforts to obtain confidential treatment for the terms of this Agreement
designated by Buyer, but shall have no obligation to Buyer if the Securities and
Exchange Commission ultimately declines to provide such confidential treatment
to the terms designated by Buyer.

                                       11
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     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date and year first above written.

Buyer:                                  Seller:

GENERAL INSTRUMENT CORPORATION          MICROTUNE, INC.

By:     /s/ Keith C. Jones              By:     /s/ Douglas J. Bartek
     -----------------------------           ------------------------

Name:   Keith C. Jones                  Name:   Douglas J. Bartek
Title:  V.P. & Director, Supply Mgmt.   Title:  CEO and Chairman
Date:   June 14, 2000                   Date:   June 14, 2000

                                       12
<PAGE>

                                   EXHIBIT A

                                  DEFINITIONS

     "Business Day" means a day other than a Saturday, Sunday, Holiday or other
day on which commercial banks located in Philadelphia, Pennsylvania or Dallas,
Texas are obligated or authorized by law to close.

     "Buyer's Designated Warehouse" means each of  those warehouses designated
by Buyer which are set forth on Exhibit D hereto.

     "Confidential Information" has the meaning referred to in the NDA.

     "Critical Defect" means a Defect that might reasonably be expected to
endanger life or be a hazard to health, including, but not limited to, Defects
that might give an electric shock or create a fire hazard.

     "Defect" means  any malfunction of a Product, or any adverse deviation of a
Product  from the Specifications.

     "Field Rejection Rate" means, with respect to a Product, the percentage of
units of such Product delivered to Buyer since the commencement of this
Agreement which (i) have a Critical Defect or a Major Defect discovered prior to
or upon installation of the Product by Buyer's customer, or (ii) have been
returned to Seller for warranty repair under this Agreement. A Critical Defect
or Major Defect arising solely from a defect in design furnished by Buyer shall
not be included in the calculation of Field Rejection Rate.

     "Buyer's Intellectual Property" means all of Buyer's technology,
techniques, software, proprietary databases, patents, copyrights, mask works,
trade secrets and practices, Buyer's Know-how, methods, specifications, designs,
design elements and all other intellectual property provided or disclosed to
Seller by Buyer in the course of the parties' transactions under, or in
contemplation of, this Agreement.

     "Seller's Intellectual Property" means all of Seller's technology,
techniques, software, proprietary databases, patents, copyrights, mask works,
trade secrets and practices, Sellers Know-how, methods, specifications, designs,
design elements and all other intellectual property provided or disclosed to
Buyer by Seller in the course of the parties' transactions under, or in
contemplation of, this Agreement.

     "Buyer's Know-how" means all information and data not generally known
(including formulae, procedures, protocols, techniques and results of
experimentation and testing) which are necessary or useful to make the Products,
which is owned by or licensed to Buyer and which has been disclosed by Buyer to
Seller prior to or during the term of this Agreement; all to the extent and only
to the extent that Buyer now has or hereafter will have the right to grant
licenses, immunities or other rights thereunder.

     "Seller's Know-how" means all information and data not generally known
(including formulae, procedures, protocols, techniques and results of
experimentation and testing) which
<PAGE>

are necessary or useful to make the Products, which is owned by or licensed to
Seller independent of Buyer.

     "Major Defect" means a Defect that causes a unit of a Product to be
functionally inoperative, materially unusable, or unable to meet the
Specifications in any material respect.  No Product shall be considered to have
a Major Defect if a Major Defect cannot be detected after the return of the
Product to Seller pursuant to mutually acceptable testing procedures.

     "Minor Defect" means a Defect that does not reduce the reliability or
usability of a unit or Product.

     "Products" means all products listed in Exhibit C attached hereto, as such
exhibit may be amended from time to time, and any portion(s) of any of such
Products, and in any subsequent Exhibits as hereafter mutually agreed upon and
attached hereto and made a part hereof, as the context may require.

     "Specifications" means the specifications, drawings and technical
information attached or referenced to in Exhibit G hereto, (including, without
limitation, General Instrument ***** specification ***** and General Instrument
***** specification ***** as such exhibit may be revised by Buyer from time to
time, as well as all supplementary specifications and related documents which
Buyer may provide to Seller from time to time and which are designated as part
of the Specifications covered by this Agreement.

***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

<PAGE>

                                   EXHIBIT B

                             DEVELOPMENT AGREEMENT

     DEVELOPMENT AGREEMENT dated as of the ___ day of June, 2000 by and between
GENERAL INSTRUMENT CORPORATION, a Delaware corporation doing business as the
Broadband Communications Sector of Motorola, Inc.  and having an office at 101
Tournament Drive, Horsham, PA 19044 ("Buyer"), and MICROTUNE, INC., a Texas
corporation with its principal place of business at 2540 East Plano Parkway,
Suite 188, Plano, Texas 75074 ("Seller" and collectively with the Buyer, the
"Parties").

                                   Background

     Buyer and Seller are parties to a Development and Supply Agreement dated
the date hereof (the "Purchase Agreement"). This is the Development Agreement
referred to in the Purchase Agreement.

                                   Agreement

     NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby
agree as follows:

1.0  Silicon Tuner Program.   Buyer will provide technical guidance to Seller on
the development of a single chip silicon tuner, providing access to Buyer's
engineering resources as defined below:

     1.1  Seller will provide a confidential copy of the silicon tuner product
          specification to Buyer no later than July 1, 2000.

     1.2  Buyer will review and provide feedback on all specifications within 30
          days of receiving the specification.

     1.3  Seller will use commercially reasonable efforts to incorporate Buyer's
          feedback to the final specification, which shall be delivered to Buyer
          no later than ***** after receipt by Seller of Buyer's feedback.

     1.4  Seller shall fabricate, specify (in the manner provided herein),
          design, simulate, prototype, assemble, test, and deliver a prototype
          silicon tuner in accordance with the final specification no later than
          *****.

     1.5  Buyer will develop or modify an existing cable modem and/or IP
          telephony and/or set-top box design to receive either a silicon tuner
          or silicon tuner-based module, in preparation for testing once the
          silicon tuner is available. The Buyer prototype testing design will be
          completed and available to receive the Microtune silicon tuner product
          within one week of delivery of the prototype tuner product to Buyer.
          Seller will provide a delivery schedule of the prototype tuner product
          a minimum of ***** in advance of the delivery date.

***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

<PAGE>

      1.6  Buyer and Seller agree to mutually develop and execute a prototype
           evaluation schedule that coincides with first availability of the
           silicon tuner.

      1.7  Seller agrees to make early samples of the silicon tuner product
           available to Buyer for evaluation and feedback and Buyer agrees to
           evaluate the Microtune silicon tuner and provide timely feedback to
           Seller.

      1.8  Seller agrees to incorporate pertinent performance enhancements and
           anomaly fixes into the Silicon Tuner per Buyer's input.

      1.9  Buyer agrees to identify potential programs for the Microtune silicon
           tuner solution and make best efforts to incorporate it into its
           product line under the condition that the Silicon Tuner solution
           meets GI's performance, cost, and power consumption goals.

2.0  Payment of NRE. In consideration for the resources and information made
     available to Seller hereunder, Seller agrees to pay Buyer the sum of
     ***** (the "NRE Amount"), payable in the following manner:

      ***** upon Seller's delivery of the final specification referred to in
      Section 1.3 of the Development Agreement;

      ***** upon completion of ***** of the Seller's silicon tuner with formal
      feedback to Seller;

      ***** upon completion of ***** incorporating the Seller's silicon tuner;

      ***** upon completion of ***** of the Seller's silicon tuner in Buyer's
      product (DOCSIS certification or other); and

      ***** upon first Buyer order for Seller's silicon tuner product in
      commercial quantities, but in no event less than *****.

   All payments of NRE shall be made within sixty (60) days after the date of
   Buyer's invoice for such payments and approval by Seller of completion of the
   respective milestones.

***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first written above.

Buyer:                                  Seller:

GENERAL INSTRUMENT CORPORATION          MICROTUNE, INC.

By:                                     By:
    --------------------------------        ----------------------------------
Name:  Keith C. Jones                   Name:  Douglas J. Bartek
Title: V.P. & Director, Supply Mgmt.    Title: CEO and Chairman
Date:                                   Date:
      ------------------------------          --------------------------------
<PAGE>

                                   EXHIBIT C

                          PRODUCTS, PRICES, LEAD TIMES
<TABLE>
<CAPTION>

                                       Q2-CY00    Q3-CY00    Q4-CY00    Q1-CY01    Q2-CY01    Q3-CY01    Q4-CY01
                                      ---------  ---------  ---------  ---------  ---------  ---------  ---------
<S>                                   <C>        <C>        <C>        <C>        <C>        <C>        <C>
CABLE MODEM TUNER UNIT
PURCHASES (Note 1)
*****                                 *****      *****      *****      *****      *****          -            -
*****                                                       *****      *****      *****      *****        *****
*****                                                                             *****      *****        *****
*****                                                                                        *****        *****
Total Units                           *****      *****      *****      *****      *****      *****        *****

CABLE MODEM TUNER UNIT PRICES
*****                                 *****      *****      *****      *****      *****
*****                                                       *****      *****      *****      *****        *****
*****                                                                             *****      *****        *****
*****                                                                                        *****        *****
Average Unit Price                    *****      *****      *****      *****      *****      *****        *****

CABLE MODEM TUNER EST. LEAD
TIME (WKS)
*****                                 *****      *****      *****      *****      *****      *****        *****
*****                                 *****      *****      *****      *****      *****      *****        *****
*****                                                                             *****      *****        *****
*****                                                                                        *****        *****
</TABLE>

Note 1  The quantities set forth in
this table are estimates only and
do not create any obligation on
the part of Buyer to purchase the
quantities shown.
Note 2:  Pricing is an estimate based on current silicon tuner module projected
costs
Note 3:  Pricing is an estimate based upon current silicon tuner development
plans and die size and cost estimates

***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
<PAGE>

                                   EXHIBIT D

                 BUYER'S DIVISIONS, SUBSIDIARIES AND AFFILIATES
                       PERMITTED TO ORDER UNDER AGREEMENT

                                       2
<PAGE>

                                   EXHIBIT E

                               TERMS OF PURCHASE

1.   Order / Acceptance.

     (a) Each order ("Order") is an offer by General Instrument Corporation
("Buyer") to purchase the goods and/or services ("Products") identified by
Buyer, pursuant to the terms and conditions in the Manufacture and Supply
Agreement (the "Agreement") these terms and conditions and any other provisions
specifically incorporated by reference by Buyer on the face thereof. Each Order
shall be in the form of a written or electronic communication and shall contain
the following information unless otherwise specified in the Agreement:

       (i)  A description of the Product;
       (ii)  The quantity of the Product;
       (iii) The delivery date;
       (iv) The location to which the Products are to be shipped;
       (v) The location to which invoices shall be sent for payment; and
       (vi) Transportation instructions.

(b)  Seller shall accept and acknowledge each Order it is obligated to accept
under the provisions of this Agreement within five (5) Business Days of receipt
by Seller of such Order without conditioning such acceptance upon the acceptance
by Buyer of any terms inconsistent with or in addition to those set forth in the
Agreement and these terms and conditions. Seller shall respond to all other
Orders within five (5) Business Days of Seller's receipt of such other Order.
Acceptance of the Order by Seller may be made by signing and returning the
attached acknowledgment copy of the Order, by other express acceptance, or by
attempted part or full performance. Acceptance of the Order is limited to these
terms and conditions and such referenced provisions, and Buyer hereby rejects
any other terms, conditions and provisions. If Seller uses its own form to
accept the Order, it is understood that such use is for Seller's convenience
only and that Buyer hereby refuses to assent to any terms or conditions
contained therein, conflicting with or in addition to those contained herein,
and such conflicting and/or additional terms and conditions shall be of no force
or effect. The failure of Seller to acknowledge or accept any Order which it is
obligated to accept under the provisions of this Agreement shall have no effect
on Buyer's obligation to purchase and Seller's obligation to sell the Products
covered by such Order.

     (c) All quotations, purchase orders, acknowledgments and invoices issued
pursuant to the Agreement are issued for convenience of the Parties only and
shall be subject to the provisions of the Agreement and the Exhibits thereto.
The parties acknowledge that the preprinted provisions on the reverse side of
any such quotation, purchase order, release, acknowledgment or invoice shall be
deemed deleted. No modification to the Agreement, the Exhibits or any Order
shall be valid without the prior written consent of the Purchase Agreement
Coordinators of Seller and Buyer.

     (d) Termination or expiration of the Agreement shall not affect Orders
previously issued hereunder. In addition, the Agreement shall apply to Orders
issued by Buyer to Seller and accepted by Seller before the date of the
Agreement, and for which deliveries are scheduled after the date hereof. Such
Orders are hereby amended to reflect the prices contained in Exhibit C.  The
right to purchase granted hereunder shall apply only with respect to Products
actually ordered by Buyer prior to the termination date of the Agreement and
requested for delivery by Buyer not later than ***** months after said
termination date.

2.   Prices and Payment Terms

     (a) All prices are FOB Seller's place of manufacture, which for RF tuners
is currently in Manila, The Philippines  or such other location agreed to by
both Seller and Buyer.  Risk of loss and title shall pass to Buyer upon Buyer's
receipt of conforming goods at Seller's place of manufacture.  All prices are to
be paid in U.S. dollars.  At the time Seller ships any Products under this
Agreement it shall send to Buyer by overnight delivery service, telefax or
electronic mail a notice of such shipment.

     (b) Seller's prices include packaging, and all sales, use and excise taxes
levied upon, or measured by the sale, price or use of the Products prior to
delivery to the Buyer.  Seller assumes sole responsibility for payment of all
such taxes with respect to its sale of the Products to Buyer.  If Buyer is
purchasing the Products for resale and claiming a tax exemption in connection
therewith, Buyer shall furnish Seller with an applicable resale certificate.
Buyer shall be responsible for all taxes not included in the selling price and
for all import duties in connection with the shipment of the Products purchased
by Buyer.

     (c) Seller shall, subject to any relevant obligation of confidentiality,
provide to Buyer information and documentation reasonably requested by Buyer
with respect to the cost of items of Inventory and Special Inventory.Buyer shall
also review the test requirements for the Products. Seller shall provide
reasonable assurances to Buyer that *****

     (d) Seller shall maintain, for a period of not less than five (5) years
after the date of sale, or for such longer period as required by applicable law,
such records as

***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
<PAGE>

are necessary to permit each Product identified with a lot number by Seller and
sold by Buyer to be traced by lot number and customer account. Buyer shall have
the right to audit such records periodically, either by itself or through a
designated agent acceptable to Buyer, during normal business hours following at
least seventy-two (72) hours advance notification, to verify compliance with
this Section.

(e)  The Parties agree to cooperate in good faith to implement a product cost
reduction program involving new technologies, component cost reduction,
productivity, quality and reliability improvements, and manufacturing processes.
Buyer shall provide Seller with reasonable assistance in the selection of raw
materials, components and manufacturing processes.

     Any cost savings which are achieved by Seller as a result of implementing
cost reductions proposed by Buyer shall reduce the purchase price of the
Products by an amount up to *****

(f)  Seller and Buyer shall cooperate in identifying selected components used in
the Products for potential cost reductions. Information to be shared will
include the manufacturer's or supplier's part number and, when possible, the
purchase price. If Buyer is able to obtain for Seller a supply of any components
utilized by Seller in the Products of comparable quality for a lower price than
the price then being paid by Seller for such component, and upon other terms
acceptable to Seller (which terms shall be deemed acceptable if substantially
similar to the terms provided by Seller's existing supplier of such components),
the price of any Product in which such component is used shall be reduced by an
amount up to the amount of the decrease in the price of the component to Seller,
but only to the extent that there is no decrease in Seller's gross profit margin
for such affected Product.

3.   Manufacturing of Products

     (a) Buyer may, from time to time, request changes to the Specifications.
Seller shall use commercially reasonable efforts to accommodate the requested
changes.  If changes result in a change in the cost or in the time required to
manufacture such Products, an adjustment to the prices and/or lead times (if
any) listed on Exhibit C will be made.  Any adjustment to prices or lead times
shall be in writing.  No changes shall be implemented and become a part of the
Agreement until ninety (90) days following Seller's and Buyer's mutual agreement
of the modifications and price changes, if any.

     (b) Seller shall consult with Buyer no less than once each calendar quarter
to perform a thorough review of Seller's quality and delivery performance under
the Agreement. Buyer shall provide Seller, on a bi-annual basis, a business
metric review consisting of a review of Seller's technology, quality, cost and
service metrics. The criteria on which these business metrics are based shall be
at the discretion of Buyer to facilitate continuous performance enhancement. The
locations of both business and metrics review meetings shall be held at sites
alternately selected by Seller and Buyer and mutually agreed upon.

4.   Packing, Transportation and Risk of Loss.

Seller shall mark, pack, package, crate, transport, ship and store all Products
to ensure (i) delivery of the goods to their ultimate destination in safe
condition, (ii) compliance with all requirements of the carrier and destination
authorities, (iii) compliance with any reasonable special instructions of Buyer,
and (iv) the ***** transportation costs consistent with the above.  All
invoices, shipping documents, exterior packaging and correspondence related
thereto shall indicate the applicable Order number and include suitable markings
and information to reference the covered Products.   All shipments shall be
accompanied by the appropriate shipping documents, including without limitation,
applicable customs and export documentation and a packing list indicating the
Order number, description of the goods, model numbers and total quantity by
"lot" for such goods.  Buyer's count and/or weights shall be conclusive on
shipments not accompanied by a conforming packing list.  Seller shall bear all
excess transportation and other charges and costs resulting from any failure to
follow Buyer's instructions hereunder. Notwithstanding the above, overshipments
to allow for reasonable efficiencies in packing and shipping will be allowed.

5.   Inspection - Nonconformity.

     (a)  Buyer may inspect the Products upon receipt and/or at any time prior
thereto, provided that such inspection is completed within thirty (30) days of
receipt of the Products at Buyer's facility.  Buyer shall, however, be under no
duty to inspect the Products prior to Buyer's use or resale of the Products.
Buyer reserves the right to refuse to accept Products which do not conform with
the requirements of an Order (including, without limitation, delivery schedule
and shipping instructions) or the Specifications for the Products. Neither
receipt, retention, use, resale, nor payment of or for the same shall be
construed to constitute an acceptance of any Product not in compliance with the
terms of Buyer's Order or the Specifications, or construed to constitute a
waiver of any obligations of Seller with respect to its warranty relating to
such Product. Buyer may reject a lot or group of Products if five percent (5%)
defective Products are discovered and in such case, upon Seller's approval, the
expenses of Buyer in sorting and testing the Products in order to find defective
units shall be reimbursed to Buyer by Seller.  Buyer shall promptly return to
Seller for repair or replacement, nonconforming Products, including Products
becoming nonconforming due to latent material or workmanship defects not
discovered during any inspection, testing and/or acceptance.  Products
containing latent material or workmanship defects shall be deemed rejected as of
the time of delivery in the same manner as Products found defective at the time
of incoming inspection. Seller shall promptly and without expense to Buyer
replace or correct defects in any nonconforming Products. Seller shall bear the
risk, and all costs and expenses, including, without limitation, storage,
transportation, shipping, recalling, repacking, reshipping, and the like,
associated with repair and/or replacement of nonconforming Products. Buyer shall
bear all of the risk, and all costs and expenses, associated with Products that
have been returned to Seller for which there is no defect found.     Within
fifteen (15) days after the end of each calendar quarter during the term of the
Agreement, Buyer shall provide Seller with its calculation of the Field
Rejection Rate as of the end of such calendar quarter.

***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

                                       2
<PAGE>

     (b) Seller has the right to retest any Products returned by Buyer under
this Section 5, and Buyer has a right to witness any such retest.  Seller agrees
to promptly and without expense to Buyer, replace or correct Defects in any
nonconforming Products. Seller shall bear the risk, and all costs and expenses
including without limitation, storage, transportation, shipping, recalling,
repacking, reshipping and the like, associated with such repair and replacement.
Buyer shall bear all of the risk, and all costs and expenses, associated with
Products that have been returned to Seller for which there is no Defect found.

     (c) Seller agrees to deliver conforming Products ordered within five (5)
calendar days of the scheduled delivery dates contained in the Orders
(including, if so scheduled, weekly scheduled deliveries).  Whenever Seller has
reason to believe performance will not be made strictly in accordance with
Buyer's schedule for any reason whatsoever, Seller shall immediately notify
Buyer by telephone of the same, to be followed promptly by written notification
to Buyer stating the causes for the anticipated delay. If Seller fails to
deliver to Buyer any conforming Product within the time period required under
any Order (provided that any lead time for such Product has expired and further
provided that such delay has not been caused by Buyer), Buyer shall have the
right to cancel the Order for such Product. In addition, in the event that
Seller is not able to meet a delivery date for any conforming Products which is
within the time period requested (provided that such time period is within the
lead times established under the Agreement and further provided that such delay
has not been caused by Buyer), Buyer may instruct Seller with regard to Buyer's
preferred method of shipment, the cost of which shall be borne entirely by
Seller.

     (d) Buyer reserves the right to reject Products delivered more than five
(5) Business Days in advance of the scheduled delivery date.  If Buyer retains
such Products it will hold Seller's invoice until the date it would ordinarily
be due if delivery had been made in accordance with the scheduled delivery date.

     (e) Except for reasonable efficiencies in packing and shipping, Seller will
not make partial shipments of units of Products covered by an Order without the
prior written consent of Buyer.

     (f) Buyer expects ***** acceptable parts, manufactured and tested to the
Specifications, and will not be bound by any Seller procedure designating any
other acceptable quality level.

     (i) In the event that the Field Rejection Rate of any Product at any time
is greater than *****, beginning on the date that Seller receives written
notification from Buyer of the Field Rejection Rate excess, the purchase price
for any units of such Product to be delivered after the notification date shall
be reduced by an amount equal to ***** of such purchase price until such time as
the Field Rejection Rate decreases to less than *****.

     (j) Subject to Buyer's review and reasonable approval, Seller shall
establish and maintain quality assurance procedures to produce Products with
performance and reliability characteristics meeting or exceeding those required
by the Agreement and shall provide and maintain a quality control, inspection
and test system for all Products in accordance with industry standards. Upon the
reasonable request by Buyer, Seller shall provide written certification of such
compliance with such program and standards. Seller represents that all
facilities used to manufacture Products under this Agreement are ISO 9002
certified and the parties agree that achievement of ISO 9002 certification meets
the quality control, inspection and test system requirements for all Products
hereunder.  Prior to shipping any Products from Seller's Facility, and upon the
request of Buyer, Seller will issue to Buyer a certificate as to the compliance
of Products with applicable Specifications (a "Certificate of Compliance").
Within twenty-four (24) hours following the receipt of such Certificate of
Compliance, Buyer shall have the right to instruct Seller to forego shipping
such Products based on unsatisfactory test results for such Products.  If Seller
fails to provide Buyer with a Certificate of Compliance, after Buyer request,
for any Product by at least twenty-four (24) hours prior to shipment, Buyer
shall have the right to reject such Product at any time as nonconforming.  Buyer
may inspect Products at Seller's Facility and Seller shall provide all
reasonable facilities and assistance for such inspection, provided, Buyer gives
Seller at least seventy two (72) hours advance notice and such inspection does
not interrupt the standard course of Seller's business  To the extent that test
procedures or quality control requirements are included in Exhibit I, such test
procedures and requirements shall be in addition to the obligations described in
this Section.  Seller shall replace all Products that do not pass any test
procedures described herein.  Complete and accurate records relating to such
tests shall be maintained by Seller at all times during the term of the
Agreement and for a period of three years thereafter. Buyer shall have the right
to inspect all testing records maintained by Seller during normal hours and
after Buyer gives Seller at least seventy-two (72) hours notification.

     (m) This Section (or any action taken by Buyer hereunder) shall not be
construed or interpreted to mean that Buyer has waived any rights it may have
under any provision of the Agreement (including the Exhibits hereto), or
otherwise, in connection with late deliveries of Products by Seller.

6.   Performance and Warranty.

     (a) The performance dates indicated on the Order shall be deemed to be of
the essence of this contract, and failure to adhere to such dates (which in the
case of the  delivery of Products shall be within five (5) calendar days of such
dates) shall be a breach hereof.  Products manufactured or delivered, inventory
purchased, or commitments or production arrangements made, in excess of the
amount, or in advance of the time reasonably necessary to meet Buyer's schedule
or Buyer's express releases are entirely at Seller's risk, and may be rejected
and/or returned to Seller at Seller's expense.  When Seller has reason to
believe performance may not be made strictly in accordance with Buyer's schedule
or releases, Seller shall immediately notify Buyer by telephone, with written
confirmation, providing the details of such potential failure, and if so
requested by Buyer, Seller shall use commercially reasonable efforts *****.

***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

                                       3
<PAGE>

     (b) Seller warrants to Buyer and to Buyer's customers that for a period of
one (1) year from the date of the receipt of each Product at Buyer's facility
that such Product will conform to all applicable Specifications, and will be
free from defects, material and workmanship. This warranty does not apply to (a)
materials consigned or supplied by Buyer to Seller; (b) defects resulting from
Buyer's Specifications or the design of the Products; or (c) Products that have
been abused, damaged, altered or misused by any person or entity after they have
been received by Buyer at Buyer's facility.  With respect to first articles,
prototypes, pre-production units, test units or other similar Products, Seller
makes no representations or warranties whatsoever.  Notwithstanding anything
else in the Agreement, Seller assumes no liability for or obligation related to
the performance, accuracy, specifications, failure to meet specifications or
defects of or due to tooling, designs or instructions produced or supplied by
Buyer and Buyer shall be liable for costs or expenses incurred by Seller related
thereto.

     (c) Seller's shall replace or repair, at Seller's option, defective or
nonconforming Products.

     (d) The warranties provided in this Section 6 are applicable only if Seller
receives written notice of a breach of warranty mailed to its office within
sixty (60) days after the end of the applicable warranty period.  The warranties
provided herein shall not apply to Products or parts thereof that have been
subjected to misuse, neglect, accident, damage in transit, abuse or unusual
hazard.

     (e) Failure by Seller to repair or replace a defective Product within
fifteen (15) Business Days after it has been received and verified by Seller
shall be considered a default.

     (f) Seller shall pay all transportation costs for the return of the
Products to Seller and for the shipment of the repaired or replacement Products
to Buyer and shall bear all risk of loss or damage to such Products while in
transit. Seller shall repair or replace any Products returned to it for warranty
repair within fifteen (15) Business Days after Seller receives the Product, and
will provide Buyer with a failure analysis report and a corrective action plan.
In the event that any Product is returned for warranty repair more than two (2)
times based on similar reasons relating to its functionality or usability,
Seller shall immediately provide Buyer or Buyer's customers with a new,
conforming replacement Product or if so elected by Buyer or Buyer's customers,
provide a refund of the purchase price of such Product.  In the event that any
Product is returned for warranty repair and such Product is not repaired within
fifteen (15) days from the date of receipt by Seller of such Product, Seller
shall immediately provide Buyer or Buyer's customers with a new, conforming
replacement Product or if so elected by Buyer or Buyer's customers, provide a
refund of the purchase price of such product.  Any repaired Product shall be
warranted as set forth in this Section 6 for a period equal to the greater of
(i) the balance of the applicable warranty period relating to such Product or
(ii) ninety (90) days after it is received by Buyer's customer. Any replacement
Product shall be warranted for the applicable warranty period set forth in this
Section 6 relating to a new Product.  If any Product returned for warranty
repair is not covered by the terms of the warranty applicable to such Product or
does not have a Defect, the actual shipping costs incurred shall be paid by
Buyer to Seller.

     (g) In addition to "in-warranty" repairs under this Section 6, Seller
agrees to provide repair service for any Product ordered during the term of the
Agreement for a period of one (1) year after the termination of the warranty
period applicable to such Product. Seller shall provide such out-of-warranty
repairs at the repair charges then generally charged by Seller for such repairs
or, if such repairs are not then being performed by Seller, at reasonable rates.

     Defective Products out-of-warranty may be returned at Buyer's expense to
Seller for repair or replacement. If any Product returned to Seller for repair
is reasonably determined to be irreparable, Seller shall promptly notify Buyer.
Seller shall then, at Buyer's option, sell to Buyer a replacement Product, if
available, at the prices set forth in the Agreement or, if the Agreement is then
terminated, at Seller's then current price for such Product.

     Seller shall complete repairs and ship the repaired Product or, as
authorized by Buyer in an equipment repair order, a replacement Product within
Seller's then standard lead time for the replacement Product. Buyer shall bear
the risk of loss or damage during transit of the Product to and from the Seller
and shall prepay and bear the cost of transportation charges for shipment to and
from the Seller of the Product to be repaired or replaced. If Seller reasonably
determines that the Product returned is not defective, Seller shall promptly
advise Buyer in writing of such determination. In such case, Seller shall return
the Product to Buyer, at Buyer's expense, in its "as received" condition.

     Any out-of-warranty repair performed by Seller shall be warranted as set
forth in this Section 6 for a period of one (1) year after the repaired Product
is returned to the Buyer.  Any replacement Products shall be warranted for the
applicable warranty period set forth in this Section 6 relating to a new Product

  (h) The warranties in this Section shall run to Buyer, its successors and
assigns, and shall not be the exclusive remedies of such parties.

7.   Representations and Warranties

Seller and Buyer hereby represent and warrant as follows:

     (a) To their knowledge, Seller and Buyer respectively represent and warrant
that no impediment exists to their entering into the Agreement and they have not
made any agreement with any third party which will interfere with their
performance under the Agreement.

     (b) To their knowledge, Seller and Buyer respectively represent and warrant
that no information contained in any proposal, quotation or other document
submitted by Seller or Buyer to the other in connection with the transactions
contemplated by the Agreement is incorrect or misleading.

     (c) Seller's performance under the Agreement, as well as all Products
provided hereunder, will

                                       4
<PAGE>

comply with all applicable international, national, federal, state and local
laws and ordinances, and all orders, rules, regulations and requirements
thereunder. All Products will be marked, as required, to show compliance with
the laws of any country in which such Products will be used, sold or leased by
Buyer.

8.   Indemnity.

     (a) Seller shall indemnify, defend, and hold harmless Buyer and Buyer's,
affiliates, directors, officers, employees, agents, other representatives and
customers from all demands, claims, actions, causes of action, proceedings,
assessments, losses, damages, liabilities, settlements, judgments, fines,
penalties, interest, costs and expenses (including reasonable fees and
disbursements of counsel) of every kind based upon (i) personal injury, death,
or property damage to the extent any of the foregoing is proximately caused
either by a  Defect in material or workmanship of such Product or by the
negligent or willful acts or omissions of Seller or its officers, employees,
subcontractors or agents, or (ii) strict liability in tort or products liability
of any kind in connection with any Product to the extent any of the foregoing is
proximately caused either by a  Defect in material or workmanship or by the
negligent or willful acts or omissions of Seller or its officers, employees,
subcontractors or agents. The foregoing indemnity, to the extent permitted by
law, shall apply in the case of all claims that arise from the negligence,
misconduct or other fault of Seller, provided, however, that if a claim is the
result of joint negligence, joint misconduct, or joint fault of Seller and
Buyer, the amount of the claim for which Buyer is entitled to indemnification
shall be limited to that portion of such claim that is attributable to the
negligence, misconduct, or other fault of Seller. The obligations of Seller
under this paragraph are in addition to Seller's obligation to provide insurance
and shall not be limited by any limitation on the amount of type of damages,
compensation or benefits payable by Seller under any workers compensation acts
or similar employee benefit act.

     (b)  Buyer shall indemnify, defend, and hold harmless Seller and Seller's
affiliates, directors, officers, employees, contractors, agents and other
representatives from all demands, claims, actions, causes of action,
proceedings, assessments, losses, damages, liabilities, settlements, judgments,
fines, penalties, interest, costs and expenses (including reasonable fees and
disbursements of counsel) of every kind based upon (i) personal injury, death,
or damage to tangible personal property to the extent any of the foregoing is
caused by a defect in the designs and/or Specifications provided by Buyer for
the Product, or (ii) strict liability in tort or products liability of any kind
in connection with any Product to the extent any of the foregoing is caused by a
defect in the designs and/or Specifications provided by Buyer for the Product.
If a claim is the result of joint negligence, joint misconduct, or joint fault
of Buyer and Seller, the amount of the claim for which Seller is entitled to
indemnification shall be limited to that portion of such claim that is
attributable to the negligence, misconduct, or other fault of Buyer. The
obligations of Buyer under this paragraph are in addition to Buyer's insurance
and shall not be limited by any limitation on the amount of type of damages,
compensation or benefits payable by Buyer under any workers compensation acts or
similar employee benefit act.

     (c) A party entitled to indemnification pursuant to Section 8(a) or 8(b)
(the "Indemnitee") shall promptly notify the other party (the "Indemnitor") in
writing of any suits, claims or demands covered by this indemnity. Promptly
after receipt of such notice, the Indemnitor shall assume the defense of such
claim with counsel reasonably satisfactory to the Indemnitee. If the Indemnitor
fails, within a reasonable time after receipt of such notice, to assume the
defense with counsel reasonably satisfactory to the Indemnitee or, if in the
reasonable judgment of the Indemnitee, a direct or indirect conflict of interest
exists between the parties with respect to the claim, the Indemnitee shall have
the right to undertake the defense, compromise and settlement of such claim for
the account and at the expense of the Indemnitor. Notwithstanding the foregoing,
if the Indemnitee in its sole judgment so elects, the Indemnitee may also
participate in the defense of such action by employing counsel at its expense,
without waiving the Indemnitor's obligation to indemnify and defend. The
Indemnitor shall not compromise any claim or consent to the entry of any
judgment without an unconditional release of all liability of the Indemnitee to
each claimant or plaintiff.

     (d) Seller shall indemnify, defend, and hold harmless Buyer and Buyer's
customers affiliates, directors, officers, employees, and , agents from all
demands, claims, actions, causes of action, proceedings, assessments, losses,
damages, liabilities, settlements, judgments, fines, penalties, interest, costs
and expenses (including fees and disbursements of counsel) arising from or
relating to any actual or alleged infringement or misappropriation of any
patent, trademark, copyright, trade secret or any actual or alleged violation of
any other intellectual property rights arising from or in connection with the
manufacture of the Products, except to the extent that such infringement exists
solely as a result of use by Seller of the  designs and/or Specifications
provided by Buyer for the Product and such infringement would not exist but for
the use by Seller of the designs and/or Specifications provided by Buyer for the
Product.

     (e) In the event of any allegation of infringement of the type described in
Section 8(d), or a claim or suit based thereon (the "Allegation"), the
indemnified party shall promptly notify Seller of such Allegation in writing.
Seller shall assume the defense of such claim with counsel reasonably
satisfactory to Buyer. If Seller fails, within a reasonable time after receipt
of such notice, to assume the defense with counsel reasonably satisfactory to
Buyer or, if in the reasonable judgment of Buyer a direct or indirect conflict
of interest exists between the parties with respect to the claim, Buyer shall
have the right to undertake the defense, compromise and settlement of such claim
for the account and at the expense of the Seller. Notwithstanding the foregoing,
if Buyer in its sole judgment so elects, Buyer may also participate in the
defense of such actions by employing counsel at its expense, without waiving
Seller's obligation to indemnify and defend. Seller shall not compromise any
claim or consent to the entry of any judgment without an unconditional release
of all liability of Buyer to each claimant or plaintiff.

     (f) In the event that the use of any Product is enjoined, Seller shall at
its option, do one or more of the following:

                                       5
<PAGE>

          (i)   procure the right to continue using the infringing Product at no
cost to Buyer or its customers; or

          (ii) replace the infringing Product with a non-infringing product or
modify the infringing Product so that it is no longer infringing; provided that
                                                                  --------
the replacement product or modified Product complies with the Specifications in
all material respects.

     If Seller is unable to accomplish (i) or (ii) within ninety (90) days after
the issuance of such injunction, Buyer may, in addition to all other rights and
remedies available to it, require Seller to refund the entire purchase price for
the infringing Product and to pay to Buyer any amounts Buyer is required to pay
to its customers as a result of the injunction], including, without limitation,
any refund of the purchase price of Buyer's products rendered unusable as a
result of the injunction.

     (g) Notwithstanding any other provision of this Section to the contrary,
Seller shall have no liability for any Allegation or portion of an Allegation
based solely upon either (a) the combination of non-infringing Products with
other products, unless Seller sold, manufactured, or recommended such other
products or was aware of the intended combination with such other products or
such combination is necessary for the intended use of the Products or (b) the
modification of the Products after they are delivered to Buyer unless Seller
makes or recommends such modification, the modification constitutes normal
repair or replacement in accordance with Seller's repair procedures, or the
modification is the result of the implementation of Seller provided options and
enhancements for the Products.

     (h) Buyer  shall indemnify, defend, and hold harmless Seller and Seller's
directors, officers, employees, and agents from all demands, claims, actions,
causes of action, proceedings, assessments, losses, damages, liabilities,
settlements, judgments, fines, penalties, interest, costs and expenses
(including reasonable fees and disbursements of counsel) arising from or
relating to any actual or alleged infringement or misappropriation of any
patent, trademark, copyright, trade secret or any actual or alleged violation of
any other intellectual property rights arising from or in connection with the
manufacture of the Products, but only to the extent that such infringement
exists as a result of the authorized use by Seller of designs and/or
Specifications provided by Buyer for the Product and such infringement would not
exist but for the use by Seller of the designs and/or Specifications provided by
Buyer for the Product or as a result of any modifications by Buyer to the
Products after delivery to Buyer by Seller hereunder. In the event of any
Allegation of infringement of the type described in this Section 8(h) or a claim
or suit based thereon, the indemnified party shall promptly notify Buyer of such
Allegation in writing. Buyer shall assume the defense of such claim with counsel
reasonably satisfactory to Seller. If Buyer fails, within a reasonable time
after receipt of such notice, to assume the defense with counsel reasonably
satisfactory to Seller, or, if in the reasonable judgment of Seller a direct or
indirect conflict of interest exists between the parties with respect to the
claim, Seller shall have the right to undertake the defense, compromise and
settlement of such claim for the account and at the expense of the Buyer.
Notwithstanding the foregoing, if Seller in its sole judgment so elects, Seller
may also participate in the defense of such actions by employing counsel at its
expense, without waiving Buyer's obligation to indemnify and defend. Buyer shall
not compromise any claim or consent to the entry of any judgment without an
unconditional release of all liability of Seller to each claimant or plaintiff.

10.  Insurance.

     Seller shall maintain during the term of the Agreement adequate levels of
insurance, customary in the industry, such as workers compensation,  employer's
liability insurance, comprehensive automobile liability insurance, comprehensive
general liability insurance, and comprehensive general liability.  Buyer has a
right to review Seller's insurance policies with Seller and make recommendations
regarding the levels of insurance carried by Seller.

11.  General Provisions

     (a) Neither party may assign its rights, nor secure the assumption of its
obligations, nor subcontract or delegate performance, under the Agreement,
without the prior written consent of the other not to be unreasonably withheld;
provided, however, that such consent shall not be required for a transfer or
assignment of this Agreement to a parent or subsidiary of such party as of the
date of this Agreement or a subsequent parent or subsidiary of such party upon
the reincorporation or restructuring of the party which does not change the
ultimate ownership of the party.

     (b) Other than as provided herein, the Agreement does not create any
exclusive arrangement between the parties, and either party hereto may meet,
exchange information, enter into agreements and conduct business relationships
of any kind with third parties, to the exclusion of the other party.

     (c) Seller and Buyer are each independent contractors.  Nothing in the
Agreement shall constitute the parties as partners, joint ventures, co-owners or
otherwise as participants in a joint or common undertaking.  Neither party shall
be considered an agent or legal representative of the other for any purpose, and
neither party nor any of their respective directors, officers, agents or
employees shall be, or be considered, an agent or employee of the other.
Neither Seller nor Buyer has authority to assume or create any obligation or
responsibility on behalf of the other or in the other's name, and neither Seller
nor Buyer will attempt to do so.

     (d) Seller shall, at Seller's expense (i) promptly furnish to Buyer such
assurances, product markings, certifications and information as Buyer may
request with respect to any local or regional origin content requirements for
the Products  (Seller will further coordinate the selection of its suppliers in
compliance therewith).  Seller shall comply with all laws, regulations,
executive orders and policies applicable to it by any jurisdiction, including
without limitation, those related to workplace conditions and environmental
regulation, and shall obtain all permits needed to complete this transaction
under the laws of the country from which the shipment is made, including among
other things, any required export permits. It shall be a breach of the Order if
any gratuities are offered or given to

                                       6
<PAGE>

any officer, agent, employee or representative of Buyer or to the extent
violative of any law, to any representative of any government or political
party, for the purpose of securing favorable treatment with respect to the
awarding, performance or amendment of any contract. In the event Seller will be
performing services hereunder at Buyer's facility Seller shall maintain adequate
insurance coverage for public liability, personal injury and property damage
(and shall evidence the same at Buyer's request), shall otherwise comply with
all security procedures and other applicable rules affecting the services
provided.

     (e) A party may deduct from any payment due to the other party, or set-off
against any claim by the other, any amount which is due to it for any reason,
including, among other reasons, any charges caused by deviations from the terms,
conditions and provisions of the Order and/or this Agreement.. If any
manufacturer's excise tax, value added tax or other tax measured by selling
price is included in or added to the price of the goods paid by Buyer, then, in
the event all or any part of that tax shall be refunded to Seller, Seller shall
promptly remit such refund in full to Buyer.

     (f) EXCEPT TO THE EXTENT SET FORTH IN SECTION 8 HEREOF OR IN THE NON-
DISCLOSURE AGREEMENT ATTACHED TO THIS AGREEMENT, IN NO EVENT SHALL EITHER PARTY
BE LIABLE TO THE OTHER FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES.

     (g) This document and any other documents referenced herein, constitute the
entire agreement between the parties on this subject.  All other prior
representations, negotiations or arrangements on this subject matter are
superseded by these terms and shall not form a basis for interpretation of these
terms.  All amendments to these terms must be agreed to in writing by Buyer and
Seller.  Seller or Buyer may waive performance of any condition, but any waiver
by Buyer or Seller shall not be considered a waiver for succeeding performance.
If any provision of the Agreement or these Terms of Purchase is declared invalid
by any tribunal or legal authority having jurisdiction, the remaining provisions
not so declared invalid shall be enforced to the fullest extent permitted by
law, unless the removal of such invalid part shall have the effect of materially
impairing the Agreement.

     (h) This transaction and all its terms shall be governed and construed in
accordance with the laws of the State of California., without giving effect to
conflicts of law principles, specifically including the provisions of the
California Uniform Commercial Code and excluding the provisions of the
Convention on the International Sale of Goods.

     (i) Each party agrees that it will not export or re-export, directly or
indirectly, any of the other party's Confidential Information or items to any
country for which the United States of America, at the time of export or re-
export, requires an export license or other governmental approval, without first
obtaining such license or approval.

                                       7
<PAGE>

                                   EXHIBIT F

                        PURCHASE AGREEMENT COORDINATORS

          FOR BUYER:

               Motorola, Inc.
               101 Tournament Drive
               Horsham, PA  19044
               Attention:
                         -----------------------
               Phone:  (215)
                            --------------------
               Fax:    (215)
                            --------------------

          FOR SELLER:

               Microtune, Inc.
               2540 East Plano Parkway, Suite 188
               Plano, Texas 75074

               ---------------
               Attention: President
               Phone:(972) 673-1600
               Fax:(972) 673-1602
<PAGE>

                                   EXHIBIT H

                           NON-DISCLOSURE AGGREMENT

Non-disclosure Agreement dated 13th October 1999

<PAGE>

                   [LOGO OF GENERAL INSTRUMENT APPEARS HERE]

                            NON-DISCLOSURE AGREEMENT
                            ------------------------

Agreement made this 13th day of October 1999, by and between MICROTUNE, INC.,
having an office at 2540 east plano parkway, suite 188, plano, tx 75074
("Microtune") and GENERAL INSTRUMENT CORPORATION, having an office at 101
tournament drive, horsham, pa  19044 ("GI").

1.  Recitals.  the parties hereto acknowledge that either one of them may from
    --------
time to time disclose to the other ("Recipient") information which is deemed to
be confidential, secret and/or proprietary to the disclosing party ("Discloser")
for the purpose of Microtune submitting to GI a proposal and/or quotation to
design, manufacture, and/or supply integrated circuits, pursuant to GI
specifications and/or Request For Information ("RFI") documentation.

2.  Definition.
    ----------

    2.1  "Confidential Information" shall mean (i) all information designated
as "Confidential Information" pursuant to Paragraph 3 and disclosed by Discloser
to Recipient, including, without limitation, any component specifications,
equipment designs, electronic configurations, design information, product
architecture, algorithms, quality assurance plans, marketing strategies,
business plans and strategies, inventions (whether or not the subject of pending
patent applications), cost and profit data, distribution and marketing plans,
business and financial information; and (ii) any information which can be
obtained by examination, testing or analysis of any hardware, software or any
component part thereof provided by Discloser to Recipient, notwithstanding the
fact that the requirements for marking and designation referred to in Paragraph
3 shall not have been fulfilled.

    2.2  Confidential Information shall not include information that:

                        (a)   Is or becomes part of the public domain through no
               fault or breach on the part of recipient, any of its
               subsidiaries, affiliates or persons to whom Confidential
               Information is disclosed pursuant to paragraph 3.2; or

                        (b)   Was known to Recipient or any of its subsidiaries
               or affiliates free of any obligation of confidentiality at the
               time of Discloser's communication thereof to Recipient hereunder,
               and such knowledge can be shown by written records; or

                        (c)   Is subsequently rightfully obtained by Recipient
               or any of its subsidiaries or affiliates from a third party who
               has the legal right to disclose it, without an obligation to keep
               such information confidential; or

                        (d)   Is independently developed by Recipient or any of
               its subsidiaries or affiliates without the use of any
               Confidential Information or any breach of this Agreement; or

                        (e)   Is approved for public release by Discloser; or

<PAGE>

                         (f)  Is required to be disclosed by prior agreement or
               judicial action provided that the Recipient has first given
               Discloser reasonable notice of such requirement and fully
               cooperates with Discloser in seeking confidential treatment for
               any such disclosure.

3.   Disclosure and Protection of Confidential Information.
     -----------------------------------------------------

     3.1  As to any information which Discloser regards as "Confidential
Information", such disclosures shall be made subject to the following
conditions:

                         (a)  If such information is in writing, or in a
               drawing, or in some other tangible form, such information at the
               time of disclosure must be clearly marked as "Confidential
               Information" or "Proprietary".

                         (b)  In the event that such information is orally or
               visually disclosed, as may happen during meetings of the parties,
               Discloser shall specifically state, before or during such
               disclosure, what portion is deemed by Discloser to be
               confidential and Discloser shall deliver to Recipient, within
               thirty (30) days of such disclosure, a letter specifically
               identifying any such Confidential Information so disclosed and
               indicating that such information is to be treated as Confidential
               Information under this Agreement. All of the protection and
               restrictions contained in this Agreement as to the use and
               disclosure of Confidential Information shall apply during said
               thirty (30) day period.

     3.2  Recipient shall use Confidential Information for the purposes of this
Agreement only and shall not use Confidential Information for its own benefit,
nor disclose Confidential Information or any part thereof to any other person,
corporation or other organization and shall restrict circulation of Confidential
Information to the same extent the Recipient restricts its own proprietary
information, except Recipient may disclose or make available the Confidential
Information to a limited number of persons, including Recipient's subsidiaries
and affiliates, on a "need to know basis" for the exclusive purpose of reviewing
the Confidential Information.  Such disclosure by Recipient to any person,
subsidiary or affiliate, including officers, directors, employees, agents or
representatives of such Recipient, its subsidiaries or affiliates shall be
subject to the terms and conditions of this Agreement.  Recipient acknowledges
that all Confidential Information is provided by Discloser "AS IS" without any
warranty, whether express or implied, as to its accuracy, completeness or use
for a particular purpose unless otherwise specifically set forth in writing by
Discloser.

     3.3  Neither the execution of this Agreement nor the furnishing of the
Confidential Information by either party shall be construed as granting to
Recipient either expressly, by implication, estoppel, or otherwise, any license
or right to make any use of any such Confidential Information, except as
otherwise provided herein, and Recipient agrees that neither it nor any of its
subsidiaries, affiliates, officers, directors, employees, agents or
representatives will make use thereof without the specific and express written
consent of Discloser prior to such use.  Furthermore, Recipient agrees that the
Confidential Information is the sole property of Discloser and that Recipient
has no proprietary interest in such information whatsoever.

     3.4  Within ten (10) business days of receipt of Discloser's written
request, Recipient will return to Discloser all materials, including but not
limited to documents, drawings, programs, lists, models, records, compilations,
notes, extracts and summaries regardless of whether prepared by Discloser or
Recipient or any of its subsidiaries, affiliates, officers, directors,
employees, agents or representatives, and all copies thereof containing
Confidential Information, except for one copy which may be retained in the files
of the patent or law department of Recipient, or, at the option of Discloser,
shall destroy such documents and provide Discloser with an affidavit

                                       2
<PAGE>

attesting to such destruction. For purposes of this section, the term
"documents" includes all information fixed in any tangible medium of expression,
in whatever form or format whether now known or hereafter created.

    3.5   Recipient acknowledges and agrees that unauthorized use or disclosure
of Confidential Information will cause serious, irreparable and significant
harm, damage or loss to Discloser which will be difficult or impossible to
ascertain.  Accordingly, Recipient agrees that Discloser will have, in addition
to all other remedies at law or in equity, the right to seek immediate
injunctive relief to enforce Recipient's obligations under this Agreement.  All
costs, including reasonable attorneys' fees, borne by either party in the event
of legal action shall be paid by the non-prevailing party.

4.  Term.  This Agreement shall remain in force and effect for two (2) years
    ----
from the date hereof; provided, however that any termination of this Agreement
shall not relieve the Recipient from its obligations imposed by this Agreement
with respect to the nondisclosure, confidentiality and use of the Confidential
Information disclosed prior to the date of termination.  The obligations imposed
on Recipient under this Agreement shall continue for a period of five (5) years
after the receipt of the Confidential Information.

5.  Entire Agreement; Governing Law; Amendments or Waivers.  This Agreement is
    ------------------------------------------------------
the entire agreement between the parties with respect to the subject matter
contained herein and supersedes all prior or contemporaneously oral or written
agreements concerning this subject matter.  This Agreement shall be governed and
construed in accordance with the laws of the Commonwealth of Pennsylvania and
the parties hereby agree to submit themselves to the jurisdiction of all federal
and state courts within such Commonwealth.  This Agreement may not be amended
except by written agreement signed by authorized representatives of both
parties.  No failure to or delay in exercising any right under this Agreement
will operate as a waiver of such right.

6.  No Obligations.  This Agreement and any action taken pursuant to the terms
    --------------
and conditions hereof shall not obligate either party to enter into any further
business relationship.  The terms and conditions of any such relationship shall
be subject to separate negotiation and agreement of the parties.

7.  Publicity.  Neither party shall publicly announce or disclose the terms or
    ---------
conditions of this Agreement, or advertise or release any publicity regarding
this Agreement or the fact that the aforesaid discussions are taking place or
the nature of such discussions, without the prior written consent of the other
party.  This provision shall survive the expiration, termination or cancellation
of this Agreement.

8.  Non-exclusivity.  Except as otherwise agreed in writing by the parties and
    ---------------
subject to the confidentiality restrictions contained herein, the parties hereto
agree that either party may meet, exchange information, enter into agreements
and conduct business relationships of any kind with third parties, to the
exclusion of the other party hereto relating to projects which are the same or
similar to those set forth in the Recitals hereto.  Subject to the terms and
conditions of this Agreement and except as otherwise agreed to in writing by the
parties, discussion and/or communications between the parties will not serve to
impair the right of either party to develop, make, use, procure, and/or market
products or services now or in the future that may be competitive with those
offered by the other, nor to develop and provide products to competitors of the
other party, nor require either party to disclose any planning or other
information to the other.  Neither party has made any commitment to the other
regarding the consummation of any proposed business relationship and each party
will bear its own costs and expenses in connection with this Agreement whether
or not such a relationship is consummated.

9.  Export.  Each party agrees that it will not export or re-export, directly or
    ------
indirectly, any of the other party's Confidential Information, or any products
using the other party's Confidential Information, to any country for which the
United States government, or any agency thereof, at the time of export, requires
an export license or other governmental approval, without first obtaining such
license or approval.

                                       3
<PAGE>

10.  Binding Effect.  This Agreement shall be binding on and inure to the
     --------------
benefit of the Parties and their respective successors and assigns, but no Party
shall have the power to assign this Agreement or any rights or obligations
hereunder without the prior written consent of the other Party hereto or as
otherwise provided herein.  Notwithstanding the foregoing, a Party may, without
the consent of the other Party, assign its rights and obligations under this
Agreement to any successor entity in the event of such Party's sale or transfer
of substantially all of the assets or stock of such Party or a division thereof
responsible for the performance of such Party's obligations hereunder, or in the
event of a merger, consolidation or reorganization; provided, however, in any
such event, such assignor shall not be relieved of any of its obligations
hereunder except to the extent performed or satisfied by the assignee.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

GENERAL INSTRUMENT CORPORATION          MICROTUNE, INC.

By:  /s/ W. Douglas Holdren             By:  /s/ James A. Fontaine
     ---------------------------             -------------------------------
     W. Douglas Holdren                      James A. Fontaine
     Associate General Counsel               President

                                       4
<PAGE>

                                   EXHIBIT J

                        THIS PAGE IS INTENTIONALLY BLANKAGREEMENT

                                       AND

                             PLAN OF REORGANIZATION

                                  BY AND AMONG

                                VHS NETWORK, INC.

                                       AND

                              VHS ACQUISITION, INC.

                                       AND

                           VHS NETWORK (CANADA), INC.

================================================================================

                                                           Dated: April 10, 1997

<PAGE>

         Agreement and Plan of Reorganization  ("Agreement"),  dated as of April
__, 1997, by and among VHS Network, Inc., a Florida corporation ("VHS Network");
VHS Acquisition, Inc., a Florida corporation ("VHS Acquisition") and VHS Network
(Canada), Inc., a Canadian corporation ("VHS Network Canada").

                             BACKGROUND INFORMATION
                             ----------------------

         VHS Network and VHS Network (Canada) deem it advisable that VHS Network
Canada  be  merged  into  VHS  Acquisition  pursuant  to this  Agreement  and in
accordance  with the applicable  statutes of the State of Florida.  VHS Network,
VHS Network Canada and VHS Acquisition  desire to adopt a plan of reorganization
within the meaning of Section 368(a)(2)(D) of the Internal Revenue Code of 1986,
as amended (the "Code"). Accordingly, in consideration of the promises contained
herein,  VHS Network,  VHS Acquisition and VHS Network Canada adopt this plan of
reorganization and agree as follows:

                              OPERATIVE PROVISIONS
                              --------------------

                                    ARTICLE 1
                                    ---------

                                     Merger
                                     ------

         1.1 Transfer of Property and  Liabilities.  Upon the Effective Date (as
defined  in Article 3 hereof)  of the  merger,  the  separate  existence  of VHS
Network  Canada  shall  cease;  all of the  outstanding  shares  of stock of VHS
Network  Canada shall be exchanged for and  converted  into shares of the common
stock of VHS  Network  and a  promissory  note  issued  by VHS  Acquisition,  as
hereinafter  provided;  and upon the filing of a Certificate  of Merger with the
Secretary of State of the State of Florida,  VHS  Acquisition  shall possess all
the rights,  privileges,  immunities,  powers and  purposes,  and all  property,
causes of action and every other asset of VHS  Network  Canada and shall  assume
and be liable for all the liabilities,  obligations and penalties of VHS Network
Canada, in accordance with Florida law.

         1.2 Surviving  Corporation.  Following the merger, the existence of VHS
Acquisition shall continue unaffected and unimpaired by the merger, with all the
rights,  privileges,  immunities  and  powers,  and  subject to all the  duties,
obligations  and  liabilities,  of a  corporation  organized  under  the laws of
Florida.  The Certificate of Incorporation and Bylaws of VHS Acquisition,  as in
effect immediately prior to the Effective Date, shall continue in full force and
effect,  and,  except as  provided in Article  1.3,  shall not be changed in any
manner by the merger. The directors of VHS Acquisition  immediately prior to the
Effective  Date shall  resign,  however,  immediately  prior  thereto they shall
appoint as their successors the persons set forth on Schedule 1.2.

         1.3 Name.   The  name of VHS  Acquisition  shall be  changed  as of the
Effective Date to "VHS Network Canada, Inc."

                                       1
<PAGE>

                                    ARTICLE 2
                                    ---------

                              Conversion of Shares.
                              ---------------------

         2.1 Conversion  Ratio.  As a result of the merger  contemplated by this
Agreement,  the  shareholder  of VHS Network  Canada will receive (a)  8,000,000
shares of the common  capital  stock of VHS Network (the "VHS Network  Shares");
and (b) VHS Acquisition's  secured promissory note for $500,000 (the "Note"). In
order to effect such conversion, the shares of VHS Network Canada's common stock
issued and outstanding immediately prior to the Effective Date (the "VHS Network
Canada Shares") shall be converted by the merger into the VHS Network Shares and
the Note.  The Note shall bear  interest at an annual rate of 8%. The Note shall
be amortized over a five year period following the Closing Date in equal monthly
installments. The Note shall be secured by all of the shares of VHS Acquisition.

         2.2 Shares  of VHS  Acquisition.   None  of the  issued  shares  of VHS
Acquisition  shall be converted as a result of the merger and all of such shares
shall remain issued shares of capital stock of VHS Acquisition.

                                   ARTICLE 3.
                                   ----------

                         Closing; Certificate of Merger.
                         -------------------------------

         3.1 Closing.  The Closing  contemplated by Section 1.1 shall be held at
the  offices of VHS  Network,  unless  another  place or date is agreed  upon in
writing by the parties  (the  "Closing  Date").  At the Closing,  all  documents
called for by this Agreement (the "Closing  Documents") shall be executed by the
respective parties.  VHS Network shall deliver to the shareholder of VHS Network
Canada  the  stock  certificate  for the VHS  Network  Shares,  the  Note and an
executed Stock Pledge Agreement in the form of Schedule 3.1 attached hereto. The
shareholder  of VHS Network  Canada shall deliver to VHS  Acquisition  the stock
certificate  for the VHS Network  Canada Shares and the books and records of VHS
Network Canada.

         3.2 Certificate of Merger.   After the Closing  provided for in Section
3.1 above, the Certificate of Merger executed by the parties at Closing shall be
submitted  for filing with the  Secretary  of State of Florida.  The date of the
latter of such  filing,  or such  other  date as the  parties  may agree upon in
writing  pursuant to applicable  law,  shall be the effective date of the Merger
(the "Effective Date").

                                       2
<PAGE>

                                   ARTICLE 4.
                                   ----------

                 Related Transactions and Additional Agreements.
                 -----------------------------------------------

         4.1 Stock Purchase Agreement. VHS Network has entered into an agreement
to purchase  2,400,000  shares of the common  stock of VHS Network  from Srotnac
Group,  LLC for  $112,500,  payable  in cash,  the  closing  of  which  shall be
consummated in accordance with the terms of that agreement.

         4.2 Board of  Directors  of VHS  Network.   On the  Effective  Date the
existing  Board of Directors  shall appoint Elwin  Cathcart and David Smelsky as
members to the Board of Directors of VHS Network  and,  immediately  thereafter,
all other members of the Board of Directors of VHS Network  shall resign,  other
than Thomas Roberts.

         4.3 Officers of VHS Network.  On the Effective Date, all of the current
officers of VHS Network shall resign.

         4.4 Offering  Proceeds;  Dividends.  VHS Network  intends to conduct an
offering  of  shares  of its  common  stock  (the  "Offering")  pursuant  to the
transactional  exemption from the registration  provisions of the Securities Act
of  1933,  as  amended  (the  "Act")  set  forth  in Rule  504 of  Regulation  D
promulgated by the Securities and Exchange Commission pursuant to the Act. It is
also the intention of VHS Acquisition,  after the merger, to generate sufficient
funds to be able to pay a dividend  to VHS  Network.  VHS  Network  will use the
proceeds of the Offering and the dividends that it receives from VHS Acquisition
to pay the  following  liabilities  of VHS Network,  prior to the payment of any
other liability of VHS Network:  (a) checks returned for insufficient funds; (b)
Internal Revenue Service obligations; (c) product shipments; (d) Cumberland Bank
overdrafts;  and  (e)  American  Express  obligations  of  VHS  Network,  in the
approximate amount of $50,000, the payment of which has been guaranteed by David
George.

         4.5 Office Equipment and Furniture.  The office equipment and furniture
set forth on Schedule 4.5 shall be transferred to David George,  effective as of
the Closing.  VHS Network  will,  within 30 days after the Closing,  establish a
fair market value for the office equipment and furniture and, to the extent that
the fair market value of the equipment and  furniture  exceeds any  indebtedness
secured by the office  equipment and furniture  which is assumed by Mr.  George,
then the difference  shall be credited against amounts owed to Mr. George by VHS
Network for accrued but unpaid salary.

         4.6 Vehicles.   VHS  Network  shall  assign  all of its  rights  to the
automobiles  set  forth  on  Schedule  4.6  to  David  George,  subject  to  the
liabilities  set forth on that schedule.  VHS Network  represents  that the fair
market value of the automobiles is approximately  equal to the indebtedness owed
by VHS Network and secured by the  automobiles.  David George shall use his best
efforts to cause VHS Network to be released from such liabilities.

         4.7 Scheduling Debt Obligations. VHS Network will use its best efforts,
after the Closing, to amicably reschedule the payment of indebtedness to each of
John Baldwin, Daryl Dinkla and Thomas Roberts.

                                       3
<PAGE>

                                    ARTICLE 5

                        Representations and Warranties of
                               VHS Network Canada

         VHS  Network  Canada  represents  and  warrants  to VHS Network and VHS
Acquisition as follows:

         5.1 Organization, Power, Standing and Qualification. VHS Network Canada
is a corporation duly organized,  validly  existing,  and in good standing under
the laws of Canada and has full  corporate  power and  authority to carry on its
business as it is now being  conducted and to own and operate the properties and
assets now owned and operated by it. VHS Network  Canada is duly qualified to do
business  and is in good  standing  in each and  every  jurisdiction  where  the
failure to qualify or to be in good standing  would have an adverse  effect upon
its  financial  condition,  the conduct of its business or the  ownership of its
assets.

         5.2 Authority.   VHS  Network  Canada  has the power and  authority  to
execute,  deliver and perform this Agreement;  and this Agreement is a valid and
binding obligation of the VHS Network Canada, enforceable in accordance with its
terms,  except as such  enforcement  may be  limited by  applicable  bankruptcy,
insolvency,  moratorium, or similar laws affecting the enforcement of creditors'
rights generally.

         5.3 Validity of Contemplated Transactions;  Interference. Other than as
provided in Schedule  5.3,  the  execution,  delivery  and  performance  of this
Agreement and the  consummation of the transactions  contemplated  hereby do not
and will not (a) contravene any provision of the Certificate of Incorporation or
Bylaws of VHS Network  Canada;  (b) violate,  be in conflict with,  constitute a
default under,  cause the acceleration of any payments pursuant to, or otherwise
impair the good standing,  validity, or effectiveness of any material agreement,
contract,  indenture, lease, or mortgage to which VHS Network Canada is a party;
(c)  subject  the  assets  of VHS  Network  Canada to any  indenture,  mortgage,
contract,  commitment,  or agreement,  other than this Agreement; (d) reasonably
interfere with any other  agreement to which VHS Network  Canada is a party;  or
(e) violate any material provision of law, rule,  regulation,  order, permit, or
license to which VHS Network Canada is subject.

         5.4 Capitalization  of  VHS  Network  Canada.    VHS  Network  Canada's
authorized  capital  stock  consists of ______  shares of common  stock,  no par
value, _______ of which shares are presently outstanding,  validly issued, fully
paid and non-assessable.  There are no outstanding options, warrants, conversion
privileges,  subscriptions,  calls,  commitments  or  rights  of  any  character
relating to any authorized but unissued capital stock of VHS Network Canada.

                                       4
<PAGE>

         5.5 Title to  Properties.   VHS  Network  Canada  has  good,  valid and
marketable title to all of its assets,  free and clear of all mortgages,  liens,
pledges,  security  interests  and other  encumbrances,  except as otherwise set
forth on Schedule 5.5.

         5.6 Absence of Undisclosed Liabilities.  Except as provided in Schedule
5.6, VHS Network Canada has no material  liabilities  or obligations  except for
those incurred in the ordinary course of business.  Except as otherwise provided
in  this  Agreement,  the  term  "liabilities  or  obligations"  as used in this
Agreement  shall  include  any direct or  indirect  indebtedness,  claim,  loss,
damage,   deficiency   (including   deferred   income  tax  and  other  net  tax
deficiencies), cost, expense, obligation, guarantee, or responsibility,  whether
accrued, absolute, or contingent, known or unknown, fixed or unfixed, liquidated
or unliquidated, secured or unsecured.

         5.7 Litigation;  Compliance with Laws. There is no suit, action, claim,
arbitration,  administrative  or  legal  or other  proceeding,  or  governmental
investigation  pending or, to the  knowledge of VHS Network  Canada,  threatened
against or related to VHS  Network  Canada.  There has been no failure to comply
with, nor any default under, any law,  ordinance,  requirement,  regulation,  or
order  applicable  to VHS Network  Canada or its  business  operations,  nor any
violation of or default with respect to any order, writ,  injunction,  judgment,
or  decree  of any  court  or  federal,  state or  local  department,  official,
commission, authority, board, bureau, agency, or other instrumentality issued or
pending  against VHS Network  Canada which in any such case would  reasonable be
expected  to have a material  adverse  effect on the  financial  condition,  its
business, results of operations, properties or assets of VHS Network Canada.

         5.8 Veracity of Statements.  To the knowledge of VHS Network Canada, no
representation or warranty by VHS Network Canada contained in this Agreement and
no  statement  contained  in  any  certificate,  schedule  or  other  instrument
furnished  to  VHS  Acquisition  pursuant  hereto  or  in  connection  with  the
transactions  contemplated  hereby  contains any untrue  statement of a material
fact or omits to state a material fact necessary to make it not misleading.

         5.9 Acquisition of VHS Network Shares for  Investment.  The shareholder
of VHS  Network  Canada  is  acquiring  the  common  stock  of VHS  Network  for
investment  purposes,  for its own  account and not with a view to the resale or
distribution  thereof in violation of any state or federal  securities laws. The
shareholder  shall not sell,  transfer,  pledge  or  hypothecate  any of the VHS
Network Shares in the absence of registration  under or pursuit to an applicable
exception from, federal and all applicable security law.

                                       5
<PAGE>

                                    ARTICLE 6
                                    ---------

                  Representations and Warranties of VHS Network
                  ---------------------------------------------

         VHS Network and VHS Acquisition,  jointly and severally,  represent and
warrant to VHS Network Canada as follows:

         6.1 Organization,  Power, Standing and Qualification.  VHS Network is a
corporation duly organized, validly existing and in good standing under the laws
in the State of Delaware and has full corporate  power and authority to carry on
its business as it is now being  conducted and to own and operate the properties
and assets now owned and operated by it.

         6.2 Capitalization  of VHS Network,  Inc..   VHS  Network's  authorized
capital stock  consists of 100,000,000  shares of common stock,  $.01 par value,
and 25,000,000 shares of preferred stock, $.01 par value.  Prior to the issuance
of the  shares of common  stock  pursuant  to this  Agreement  VHS  Network  had
12,481,000  shares of common  stock  issued and  outstanding,  which  shares are
presently  outstanding,  validly  issued,  fully  paid and  non-assessable.  VHS
Network  has not  issued  any  shares  of its  preferred  stock or any  options,
warrants or rights to acquire such shares.

         6.3 Financial  Statements.   VHS Network has  delivered  to VHS Network
Canada its  audited  balance  sheet for its fiscal year ended July 31, 1996 (the
"VHS Network Balance Sheet") as well as its consolidated statement of income and
loss for the year ended July 31, 1996,  which have been  prepared in  accordance
with the  applicable  books and records of VHS Network and  presents  fairly the
financial  condition of VHS Network as of July 31,  1996,  and there has been no
material change in such financial  condition of VHS Network since July 31, 1996,
except as otherwise set forth on Schedule 6.3.

         6.4 Absence of Undisclosed Liabilities.  VHS Network has no liabilities
or obligations  except for those (i) reflected on the VHS Network Balance Sheet;
(ii) reflecting contractual  liabilities or obligations incurred in the ordinary
course of  business  that are not  required  by  generally  accepted  accounting
principles to be reflected in a balance  sheet;  (iii)  incurred in the ordinary
course of business  subsequent to the date of the VHS Network  Balance Sheet and
not required to be disclosed  pursuant to the terms of this Agreement;  and (iv)
specifically  disclosed  in Schedule 6.4  attached  hereto.  Except as otherwise
provided in this  Agreement,  the term  "liabilities  or obligations" as used in
this Agreement shall include any direct or indirect  indebtedness,  claim, loss,
damage,   deficiency   (including   deferred   income  tax  and  other  net  tax
deficiencies), cost, expense, obligation, guarantee, or responsibility,  whether
accrued, absolute, or contingent, known or unknown, fixed or unfixed, liquidated
or unliquidated, secured or unsecured.

         6.5 Certain Tax  Matters.  Except as  disclosed  on Schedule  6.5,  VHS
Network  has duly filed all  federal,  state,  and local tax returns and reports
required to be filed by VHS Network for all periods  ending on or prior to March
31, 1997 and all taxes,  including income,  gross receipts,  and other taxes and
any penalties with respect  thereto,  shown thereon to be due and payable,  have
been paid, withheld,  or reserved for or are reflected as a liability in the VHS
Network Balance Sheet. The returns and reports are, to the best knowledge of VHS
Network,  correct and complete.  VHS Network has not entered into any agreements
for the extension of time for the assessment of any tax or tax delinquency,  has

                                       6
<PAGE>

received no outstanding or unresolved  notices from the Internal Revenue Service
or any taxing body of any proposed  examination or of any proposed deficiency or
assessment, and has properly withheld all amounts required by law to be withheld
for income taxes and unemployment  taxes,  including  without  limitation social
security and unemployment compensation,  relating to its employees, and remitted
such withheld amounts to the appropriate taxing authority as required by law.

         6.6 Litigation;  Compliance with Laws.  Except as set forth on Schedule
6.6, there is no suit, action,  claim,  arbitration,  administrative or legal or
other proceeding, or governmental  investigation pending or, to the knowledge of
VHS  Network  threatened  against or related to VHS  Network.  There has been no
failure to comply with, nor any default under, any law, ordinance,  requirement,
regulation,  or order applicable to VHS Network or its business operations,  nor
any  violation  of or  default  with  respect to any  order,  writ,  injunction,
judgment,  or  decree  of any  court or  federal,  state  or  local  department,
official, commission, authority, board, bureau, agency, or other instrumentality
issued or pending against VHS Network which might have a material adverse effect
on the financial condition, its business,  results of operations,  properties or
assets of VHS Network.

         6.7 No  Changes.  Except as set forth on Schedule  6.7,  since July 31,
1996 there has not been:

                  a. Any change in the  financial  or other  condition,  assets,
         liabilities or business of VHS Network,  which  individually  or in the
         aggregate has been materially adverse to VHS Network;

                  b. Any damage,  destruction or loss (whether or not covered by
         insurance) or any condemnation by governmental authorities which has or
         may  adversely  affect  the  business  or  assets of VHS  Network  to a
         material degree;

                  c. Any  declaration,  setting aside or payment of any dividend
         or other  distribution in respect of any of VHS Network's shares or any
         direct or indirect  redemption,  purchase or other  acquisition  of VHS
         Network's  shares or any direct or  indirect  payment or  incurring  of
         management fees or other  transactions  between the shareholders of VHS
         Network and VHS Network; or

                  d. Any  increase  in the  compensation  payable  or to  become
         payable by VHS Network to any of its officers,  employees or agents, or
         any known payment or arrangement made to or with any thereof, except in
         the ordinary course of business.

         6.8 Veracity  of  Statements.   No  representation  or  warranty by VHS
Network  or VHS  Acquisition  contained  in  this  Agreement  and  no  statement
contained  in any  certificate,  schedule or other  instrument  furnished to VHS
Network  Canada  pursuant   hereto  or  in  connection  with  the   transactions
contemplated hereby contains any untrue statement of a material fact or omits to
state a material fact necessary to make it not misleading.

                                       7
<PAGE>

         6.9 Copies of Articles of  Incorporation,  Bylaws and Stock Records.  A
copy of VHS Network's  Certificate  of  Incorporation,  Bylaws and stock records
(certified  by the  Secretary of VHS Network) has been  delivered to VHS Network
Canada and each is  correct  and in effect as at the date of this  Agreement.  A
copy of VHS Acquisition's Certificate of Incorporation, Bylaws and stock records
(certified  by the  Secretary  of VHS  Acquisition)  has been  delivered  to VHS
Network  Canada  and  each  is  correct  and in  effect  as at the  date of this
Agreement.  Such books and records have been regularly and properly kept and are
complete, accurate and legally sufficient under applicable law.

         6.10  Directors and Officers.  Schedule 6.10 attached  hereto is a true
and  complete  list as of the date of this  Agreement  showing  the names of VHS
Network's directors and officers, each of whom has been duly elected.

                                    ARTICLE 7
                                    ---------

                                 INDEMNIFICATION
                                 ---------------

         7.1 VHS Network Indemnification of VHS Network (Canada). From and after
the Effective  Date,  VHS Network shall  indemnify and hold harmless VHS Network
(Canada) and its affiliates  (collectively,  the "Indemnitees") from and against
any and all damages, losses,  obligations,  deficiencies,  liabilities,  claims,
encumbrances,  penalties,  costs, and expenses,  including reasonable attorneys'
fees (together,  a "Loss") which the Indemnitees may suffer or incur,  resulting
from,  related  to, or arising  out of: (a) being an officer or  director of VHS
Network;   (b)   the   transactions   contemplated   by  this   Agreement;   (c)
misrepresentation, breach of warranty, or nonfulfillment of any of the covenants
or   agreements   of  VHS  Network   Canada  in  this   Agreement  or  from  any
misrepresentation  in or omission from any certificate or document  furnished or
to be furnished to the Indemnitees hereunder and (d) any and all actions, suits,
investigations, proceedings, demands, assessments, audits, judgments, and claims
(including  employment-related  claims)  arising  out of  any of the  foregoing;
provided,  however, that before the Indemnitees may assert a claim for indemnity
under  this  Section,  the  Indemnitees  must give or cause to be given  written
notice of such claim to VHS Network as provided in Article 7.2.

         7.2 Notice.  Promptly after acquiring  knowledge of any Loss or action,
suit, investigation,  proceeding,  demand, assessment, audit, judgment, or claim
against  which  the  Indemnitees  have  been  indemnified  by VHS  Network,  the
Indemnitees shall give to VHS Network written notice thereof. VHS Network shall,
at its own expense,  promptly defend,  contest or otherwise  protect against any
Loss or action, suit,  investigation,  proceeding,  demand,  assessment,  audit,
judgment,  or claim against which it has  indemnified the  Indemnitees,  and VHS
Network  shall  receive  from  the  Indemnitees  all  necessary  and  reasonable
cooperation  in said  defense  including,  but not limited  to, the  services of
employees of the other party who are familiar with the transactions out of which
any such Loss or action, suit, investigation,  proceeding,  demand,  assessment,

                                       8
<PAGE>

audit,  judgment,  or claim may have arisen. VHS Network shall have the right to
control  the defense of any such  proceeding  unless  relieved of its  liability
hereunder  with respect to such defense by the  Indemnitees.  VHS Network  shall
have the right, at its option, and, unless so relieved, to compromise or defend,
at its own expense by its own counsel,  any such matter  involving  the asserted
liability of the  Indemnitees.  In the event that VHS Network shall undertake to
compromise or defend any such asserted  liability,  it shall promptly notify the
Indemnitees  of its  intention  to do so. In the event that VHS  Network,  after
written  notice from an  Indemnitee,  fails to take timely  action to defend the
same, the  Indemnitee  shall have the right to defend the same by counsel of its
or his own choosing, but at the cost and expense of VHS Network.

         7.3 Money  Damages.  If the Loss  indemnified  against  pursuant to the
provisions of Article 7.1 hereof can be compensated by the payment of money, VHS
Network  shall,  within 21 days  after  receipt  of a written  notice of a claim
pursuant to Article 7.2 deliver to the Indemnitee either: (i) the amount of such
claim by check or by wire transfer to the bank account of that party's choosing,
or (ii) a written  notice  stating that it objects to the validity of such claim
and setting forth in reasonable detail the grounds on which it is contesting the
validity of the claim.

                                    ARTICLE 8
                                    ---------

                          SURVIVAL OF REPRESENTATIONS,
                      WARRANTIES, GUARANTEES, AND COVENANTS
                      -------------------------------------

         8.1 Date Certain For Survival.  All representations and warranties made
by VHS  Network,  VHS  Acquisition  or VHS Network  Canada in this  Agreement or
pursuant  hereto shall survive the closing  hereunder for a period ending on the
third anniversary of the Effective Date.

                                    ARTICLE 9
                                    ---------

                          CONDUCT OF VHS Network Canada
                VHS Network AND VHS Acquisition AFTER THE MERGER
                ------------------------------------------------

         9.1 Additional  Actions and  Cooperation.  After the Effective Date, at
the request of either party and at the requesting  party's expense,  but without
additional consideration, the other party shall execute and deliver from time to
time such further  instruments  of assignment,  conveyance  and transfer,  shall
cooperate in the conduct of  litigation  and the  processing  and  collection of
insurance  claims,  and shall  take such  other  actions  as may  reasonably  be
required to convey and deliver more effectively to VHS Acquisition the assets of
VHS Network Canada or to confirm and perfect the interest of the  shareholder of
VHS  Network  Canada  in the  common  stock of VHS  Network,  and  otherwise  to
accomplish  the orderly  transfer to VHS Network of the  business of VHS Network
Canada as contemplated by this Agreement.

         9.2 Audit  Access.  VHS  Network  will  preserve  the  books,  records,
reports,  documents  and lists  owned by it for a period of at least seven years
from the Effective  Date,  will not thereafter  destroy or otherwise  dispose of

                                       9
<PAGE>

such records without giving the  Indemnitees  notice and the opportunity to take
possession  thereof,  and,  while in  possession  of such  records,  will permit
representatives  of the  Indemnitees to have access at reasonable  times to such
books, records,  reports,  documents and files, to make such copies therefrom as
such  representatives  reasonably  request.  The Indemnitees  shall,  subject to
applicable law and regulation,  and the terms of any confidentiality  agreement,
hold in confidence any nonpublic  information  concerning  VHS Network  obtained
hereunder.

                                   ARTICLE 10
                                   ----------

                               BROKERAGE; EXPENSES
                               -------------------

         Except as set forth on Schedule 10, none of the parties has employed or
will employ any broker, agent, finder, or consultant (collectively, "Broker") or
has incurred or will incur any liability for any  brokerage  fees,  commissions,
finders' fees, or other fees, in connection with the negotiation or consummation
of the transactions contemplated by this Agreement,  except as herein set forth.
VHS  Network  Canada is  responsible  for and hereby  indemnifies  and holds the
Indemnitees  harmless  against and in respect of any claim for  brokerage  fees,
commissions,  or other finders' fees or commissions of any such Broker  employed
by VHS Network Canada and any additional such claims incurred by the Indemnitees
relative to this  Agreement  and the  transactions  contemplated  hereby and any
attorney  fees incurred by any of these parties in relation to any such claim by
a  Broker  not  otherwise  disclosed  herein.  Similarly,  the  Indemnitees  are
responsible for and hereby  indemnify and hold VHS Network  harmless against and
in respect of any claim for brokerage fees, commissions,  or other finders' fees
or commissions of any such Broker employed by the Indemnitees or VHS Network and
not  disclosed  herein and any  additional  such claims  incurred by VHS Network
relative to this  Agreement  and the  transactions  contemplated  hereby and any
attorney fees incurred by VHS Network in relation to any such claim by a Broker.

                                   ARTICLE 11
                                   ----------

                                 CORPORATE NAMES
                                 ---------------

         VHS  Acquisition  shall have the  exclusive  right to use the corporate
name "VHS Network Canada" after the Effective Date.

                                   ARTICLE 12
                                   ----------

                                     GENERAL
                                     -------

         12.1 Entire  Agreement;  Amendments.  This  Agreement  constitutes  the
entire  understanding  among the  parties  with  respect to the  subject  matter
contained  herein and supersedes any prior  understandings  and agreements among
them   respecting   such  subject   matter.   This  Agreement  may  be  amended,
supplemented,  and terminated only by a written  instrument duly executed by all
of the parties.

                                       10
<PAGE>

         12.2 Headings.  The headings in this  Agreement are for  convenience of
reference only and shall not affect its interpretation.

         12.3 Gender;  Number.  Words  of  gender  may  be  read  as  masculine,
feminine,  or neuter,  as required  by  context.  Words of number may be read as
singular or plural, as required by context.

         12.4 Exhibits and  Schedules.  Each  Exhibit and  Schedule  referred to
herein is incorporated into this Agreement by such reference.

         12.5 Severability.  If any provision of this Agreement is held illegal,
invalid, or unenforceable, such illegality, invalidity, or unenforceability will
not  affect  any  other  provision   hereof.   This  Agreement  shall,  in  such
circumstances,  be deemed modified to the extent necessary to render enforceable
the provisions hereof.

         12.6 Notices. All notices and other  communications  hereunder shall be
in  writing  and shall be given to the  person  by  sending  a copy  thereof  by
certified mail or by telecopy.  Notice shall be deemed to have been given to the
person  entitled  thereto  when  deposited  in the  United  States  mail or when
transmitted.

         If to VHS Network, to:

                           G. David George, President
                                VHS Network, Inc.
                                 P.O. Box 291989
                           Nashville, Tennessee 37229

         If to VHS Network Canada:

                              Mr. Elwin D. Cathcart
                            VHS Network Canada, Inc.
                        1599 Hurontario Street, Suite 200
                          Mississauga, Ontario L5F 4S1
                             Fax No. (905) 891-5698

                                       11
<PAGE>

Notice of any change in any such  address  shall also be given in the manner set
forth  above.  Whenever  the  giving of notice is  required,  the giving of such
notice may be waived by the party entitled to receive such notice.

         12.7 Waiver. The failure of any party to insist upon strict performance
of any of the terms or conditions of this Agreement will not constitute a waiver
of any of its rights hereunder.

         12.8 Assignment.  No party may assign any of its rights or delegate any
of its  obligations  hereunder  without the prior  written  consent of the other
parties.

         12.9 Successors  and  Assigns.   This  Agreement  binds,  inures to the
benefit of, and is enforceable by the successors and assigns of the parties, and
does not confer any rights on any other persons or entities.

         12.10 Governing Law; Jurisdiction. The parties agree that, irrespective
of any wording that might be construed  to be in conflict  with this  paragraph,
this Agreement is one for performance in Florida.  The parties to this Agreement
agree that they waive any objection, constitutional,  statutory or otherwise, to
a Florida  court's taking  jurisdiction of any dispute between them. By entering
into this agreement, the parties, and each of them understand that they might be
called upon to answer a claim asserted in a Florida court.  This Agreement shall
be construed and enforced in accordance with law of the State of Florida.  Venue
for any such action shall be deemed proper in Hillsborough County, Florida.

         12.11 No Benefit to Others. The representations,  warranties, covenants
and  agreements  contained  in this  Agreement  are for the sole  benefit of the
parties hereto and their successors and assigns, and they shall not be construed
as conferring and are not intended to confer any rights on any other persons.

         12.12 Publicity.   Prior to the  Effective  Date,  all notices to third
parties and all other  publicity  relating to the  transactions  contemplated by
this  Agreement  shall be  jointly  planned,  coordinated  and  agreed to by the
Shareholder  and VHS  Network.  Except as may be required  by law,  prior to the
Effective Date none of the parties hereto shall act  unilaterally in this regard
without  the  prior  approval  of the  Shareholder  and VHS  Network;  provided,
however, that such approval shall not be unreasonably withheld.

         12.13 Counterparts.   This  Agreement  may be executed in any number of
counterparts  and any party  hereto may  execute any such  counterpart,  each of
which when executed and  delivered  shall be deemed to be an original and all of
which  counterparts  taken  together  shall  constitute  but one  and  the  same
instrument.  The execution of this Agreement by any party hereto will not become
effective  until  counterparts  hereof  have been  executed  by all the  parties
hereto.  It shall not be  necessary  in making  proof of this  Agreement  or any
counterpart hereof to produce or account for any of the other counterparts.

                                       12
<PAGE>

         12.14 Limitations  Upon  Consent:   Whenever,  under  the terms of this
Agreement,  the parties  hereto are called upon to give their  written  consent,
such written consent will not be unreasonably withheld.

         12.15 Form of Consent:  All  consents of any kind  required  under this
Agreement shall be in writing.  Whenever, under the terms of this Agreement, VHS
Network,  and/or VHS Network Canada are authorized to give consent, such consent
may be given and shall be conclusively evidenced by the Chairman of the Board of
Directors or the president of each respective  corporation  giving such consent.
Whenever,  under  the  terms  of  this  Agreement,  any  of the  Shareholder  is
authorized  to give  his  consent,  such  consent  may be  given  and  shall  be
conclusively  evidenced  in  writing  as  certified  by  each of  these  persons
individually or by their duly appointed legal representative.

         12.16 Attorneys' Fees and Court Actions: If a legal action is initiated
by any party to this Agreement  against  another,  arising out of or relating to
the  alleged   performance  or   non-performance  of  any  right  or  obligation
established  hereunder,  or any dispute  concerning  the same, any and all fees,
costs and expenses  reasonably  incurred by each successful  party or his or its
legal counsel in investigating,  preparing for, prosecuting,  defending against,
or providing evidence, producing documents or taking any other action in respect
of, such action shall be the joint and several  obligation  of and shall be paid
or reimbursed by the unsuccessful party.

         12.17 Binding Effect:  This Agreement shall inure to the benefit of and
be binding  upon VHS Network and VHS Network  Canada,  and their  successors  or
assigns,  including but not limited to any  corporation or other business entity
which may acquire all or  substantially  all of VHS Network's and/or VHS Network
Canada's  assets and business,  or with, or into which VHS Network Canada and/or
any VHS Network Canada  subsidiary may be consolidated  or merged,  and upon the
executors, administrators and legal representatives thereof.

         IN WITNESS  WHEREOF,  the parties have executed  this  Agreement on the
date first above written.

                                      VHS Network, Inc.

                                      By:/s/ G. David George
                                      ----------------------
                                             G. David George, President

                                      VHS Acquisition, Inc.

                                      By: /s/ G. David George
                                      -----------------------
                                              G. David George, President

                                      VHS Network Canada, Inc.

                                      By:/s/ Elwin Cathcart
                                      ---------------------
                                             Elwin Cathcart, President

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