Document:

<PAGE>   1
                                                                    EXHIBIT 10.1

                                    FORM OF

                  MASTER SEPARATION AND DISTRIBUTION AGREEMENT

                                      AMONG

                            C-CUBE MICROSYSTEMS INC.,

                            C-CUBE SEMICONDUCTOR INC.

                                       AND

                          C-CUBE SEMICONDUCTOR II INC.

                                 EFFECTIVE AS OF

                              __________ ____, 2000

<PAGE>   2
                                TABLE OF CONTENTS

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ARTICLE I         SEPARATION......................................................2
        Section 1.1   Separation Date.............................................2
        Section 1.2   Closing of Transactions.....................................2
        Section 1.3   Exchange of Secretary's Certificates........................2

ARTICLE II        DOCUMENTS AND ITEMS TO BE DELIVERED ON THE SEPARATION DATE......2
        Section 2.1   Documents to Be Delivered By C-Cube.........................2
        Section 2.2   Retention of Cash Reserves..................................3
        Section 2.3   Documents to Be Delivered by Semiconductor I and
                      Semiconductor II............................................4

ARTICLE III       THE DISTRIBUTION................................................4
        Section 3.1   The Distribution............................................4
        Section 3.2   Actions Prior To The Distribution...........................5
        Section 3.3   Sole Discretion of C-Cube...................................6
        Section 3.4   Conditions To Distribution..................................6
        Section 3.5   Fractional Shares...........................................6

ARTICLE IV        COVENANTS AND OTHER MATTERS.....................................7
        Section 4.1   Other Agreements............................................7
        Section 4.2   Further Instruments.........................................7
        Section 4.3   Transitional Services Agreement.............................8
        Section 4.4   Agreement For Exchange of Information.......................8
        Section 4.5   Payment of Expenses.........................................9
        Section 4.6   Dispute Resolution..........................................9
        Section 4.7   Governmental Approvals.....................................10
        Section 4.8   Cooperation in Obtaining New Agreements....................11
        Section 4.9   Property Damage to Semiconductor Assets Prior to the
                      Separation Date............................................11

ARTICLE V         MISCELLANEOUS..................................................11
        Section 5.1   Limitation of Liability....................................11
        Section 5.2   Entire Agreement...........................................12
        Section 5.3   Governing Law..............................................12
        Section 5.4   Termination................................................12
        Section 5.5   Notices....................................................12
        Section 5.6   Counterparts...............................................12
        Section 5.7   Binding Effect; Assignment.................................12
        Section 5.8   Severability...............................................12
        Section 5.9   Failure or Indulgence Not Waiver; Remedies Cumulative......13
        Section 5.10  Amendment..................................................13
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                                TABLE OF CONTENTS
                                   (CONTINUED)

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        Section 5.11  Authority..................................................13
        Section 5.12  Interpretation.............................................13
        Section 5.13  Conflicting Agreements.....................................13

ARTICLE VI        DEFINITIONS....................................................13
        Section 6.1   Affiliated Company.........................................13
        Section 6.2   Ancillary Agreements.......................................14
        Section 6.3   Assignment Agreement.......................................14
        Section 6.4   Business Day...............................................14
        Section 6.5   Code.......................................................14
        Section 6.6   Commission.................................................14
        Section 6.7   Disputes...................................................14
        Section 6.8   Distribution...............................................14
        Section 6.9   Distribution Agent.........................................14
        Section 6.10  Distribution Date..........................................14
        Section 6.11  Exchange Act...............................................14
        Section 6.12  Governmental Approvals.....................................14
        Section 6.13  Governmental Authority.....................................14
        Section 6.14  Information................................................14
        Section 6.15  Nasdaq.....................................................15
        Section 6.16  NYSE.......................................................15
        Section 6.17  Person.....................................................15
        Section 6.18  Prime Rate.................................................15
        Section 6.19  Record Date................................................15
        Section 6.20  Semi Spin Taxes............................................15
        Section 6.21  Semiconductor Assets.......................................15
        Section 6.22  Semiconductor Business.....................................15
        Section 6.23  Semiconductor Pro Forma Balance Sheet......................15
        Section 6.24  Separation.................................................15
        Section 6.25  Separation Date............................................15
        Section 6.26  Subsidiary.................................................15
        Section 6.27  WSGR.......................................................16
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                                    EXHIBITS

Exhibit A      Certificate of Secretary of C-Cube

Exhibit B      Certificate of Secretary of Semiconductor

Exhibit C      General Assignment and Assumption Agreement

Exhibit D      Transitional Services Agreement

Exhibit E      Employee Matters Agreement

Exhibit F      Tax Sharing Agreement

Exhibit G      Master Confidential Disclosure Agreement

Exhibit H      Indemnification and Insurance Matters Agreement

Exhibit I      Real Estate Matters Agreement

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                                    SCHEDULES

Schedule 2.1(b)   Subsidiaries of C-Cube to be Transferred to Semiconductor I or
                  Semiconductor II

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                  MASTER SEPARATION AND DISTRIBUTION AGREEMENT

        This Master Separation and Distribution Agreement (this "AGREEMENT") is
entered into as of _______ ___, 2000, by and among C-Cube Microsystems Inc., a
Delaware corporation ("C-CUBE"), C-Cube Semiconductor Inc., a Delaware
corporation ("SEMICONDUCTOR I"), and C-Cube Semiconductor II Inc., a Delaware
corporation ("SEMICONDUCTOR II"). Capitalized terms used herein and not
otherwise defined shall have the meanings ascribed to such terms in Article VI
hereof.

                                    RECITALS

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

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

        WHEREAS, the Boards of Directors of C-Cube, Semiconductor I and
Semiconductor II have each determined that, if the Merger receives all required
approvals, it would be appropriate and desirable for C-Cube to contribute and
transfer to Semiconductor I and Semiconductor II, and for Semiconductor to
receive and assume, directly or indirectly, substantially all of the assets and
liabilities currently associated with the Semiconductor Business, including the
stock, investments or similar interests currently held by C-Cube in subsidiaries
and other entities that conduct such business (the "SEPARATION");

        WHEREAS, C-Cube currently contemplates that, following the transfer and
assumption of such assets and liabilities to Semiconductor I and Semiconductor
II and immediately prior to and in connection with the Merger, C-Cube will
distribute to the holders of its common stock, $0.01 par value, by means of a
pro rata distribution, all of the shares of Semiconductor I common stock owned
by C-Cube (the "DISTRIBUTION");

        WHEREAS, C-Cube and Semiconductor I intend the Distribution to qualify
as a distribution tax-free to stockholders under Section 355(a) of the Code,
although C-Cube and Semiconductor I anticipate that C-Cube will incur corporate
tax in connection with the Distribution; and

        WHEREAS, the parties intend in this Agreement, including the Exhibits
and Schedules hereto, to set forth the principal arrangements between them
regarding the separation of the Semiconductor Business.

<PAGE>   7
        NOW, THEREFORE, in consideration of the foregoing and the covenants and
agreements set forth below, the parties hereto agree as follows:

                                   ARTICLE I

                                   SEPARATION

        SECTION 1.1 SEPARATION DATE. Unless otherwise provided in this
Agreement, or in any agreement to be executed in connection with this Agreement,
the effective time and date of each transfer of property, assumption of
liability, license, undertaking, or agreement in connection with the Separation
shall be 12:01 a.m., Pacific Time, _______ ___, 2000 or such other date as may
be fixed by the Board of Directors of C-Cube (the "SEPARATION DATE").

        SECTION 1.2 CLOSING OF TRANSACTIONS. Unless otherwise provided herein,
the closing of the transactions contemplated in ARTICLE II shall occur by the
lodging of each of the executed instruments of transfer, assumptions of
liability, undertakings, agreements, instruments or other documents executed or
to be executed with Wilson Sonsini Goodrich & Rosati, Professional Corporation
("WSGR"), 650 Page Mill Road, Palo Alto, California 94304, to be held in escrow
for delivery as provided in SECTION 1.3 of this Agreement.

        SECTION 1.3 EXCHANGE OF SECRETARY'S CERTIFICATES. Upon receipt of a
certificate of the Secretary or an Assistant Secretary of C-Cube in the form
attached to this Agreement as Exhibit A, WSGR shall deliver to Semiconductor I
and Semiconductor II on behalf of C-Cube all of the items required to be
delivered by C-Cube hereunder pursuant to SECTION 2.1 of this Agreement and each
such item shall be deemed to be delivered to Semiconductor I and Semiconductor
II as of the Separation Date upon delivery of such certificate. Upon receipt of
a certificate of the Secretary or an Assistant Secretary of Semiconductor I and
Semiconductor II in the form attached to this Agreement as EXHIBIT B, WSGR shall
deliver to C-Cube on behalf of Semiconductor I and Semiconductor II all of the
items required to be delivered by Semiconductor I and Semiconductor II hereunder
and each such item shall be deemed to be delivered to C-Cube as of the
Separation Date upon receipt of such certificate.

                                   ARTICLE II

           DOCUMENTS AND ITEMS TO BE DELIVERED ON THE SEPARATION DATE

        SECTION 2.1 DOCUMENTS TO BE DELIVERED BY C-CUBE. (a) On the Separation
Date, C-Cube will deliver, or will cause its appropriate Subsidiaries to
deliver, to Semiconductor I and Semiconductor II all of the following items and
agreements (collectively, together with all agreements and documents
contemplated by such agreements, the "ANCILLARY AGREEMENTS"):

        (b) A duly executed General Assignment and Assumption Agreement (the
"ASSIGNMENT AGREEMENT") substantially in the form attached hereto as EXHIBIT C;

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        (c) Certificates representing the stock and/or investments in the
Subsidiaries and other holdings of C-Cube set forth on SCHEDULE 2.1(B) with duly
executed stock powers in the form proper for transfer;

        (d) A duly executed Transitional Services Agreement substantially in the
form attached hereto as EXHIBIT D;

        (e) A duly executed Employee Matters Agreement substantially in the form
attached hereto as EXHIBIT E;

        (f) A duly executed Tax Sharing Agreement substantially in the form
attached hereto as EXHIBIT F;

        (g) A duly executed Master Confidential Disclosure Agreement
substantially in the form attached hereto as EXHIBIT G;

        (h) A duly executed Indemnification and Insurance Matters Agreement
substantially in the form attached hereto as EXHIBIT H;

        (i) A duly executed Real Estate Matters Agreement substantially in the
form attached hereto as EXHIBIT I;

        (j) Resignations of each person who is an officer or director of any
member of C-Cube or its Subsidiaries, immediately prior to the Separation Date,
and who will be employees of Semiconductor I or Semiconductor II or any of their
Subsidiaries from and after the Separation Date; and

        (k) Such other agreements, documents or instruments as the parties may
agree are necessary or desirable in order to achieve the purposes hereof,
including, without limitation, all service level agreements entered into in
accordance with SECTION 4.3 and those documents referred to in SECTION 4.4.

        SECTION 2.2 RETENTION OF CASH RESERVES. (a) On or around the Separation
Date, C-Cube will provide to Semiconductor I all cash of C-Cube and its
Subsidiaries other than the following amounts (collectively, the "Retained
Cash"), the sum of (i) sixty million dollars ($60,000,000), (ii) cash in an
amount reasonably estimated to be sufficient to pay all Taxes of C-Cube and its
Subsidiaries accrued through the Distribution Date but not including, as
determined pursuant to the Tax Sharing Agreement, Semi Spin Taxes (the "Pre-Semi
Disposition Taxes"), (iii) cash in an amount sufficient to pay the fees and
expenses associated with the transactions contemplated by the Merger Agreement,
including, but not limited to, the fees and expenses of C-Cube's investment
bankers, attorneys, accountants and other professional advisors, (iv) cash in an
amount reasonably estimated to be sufficient to pay the Semi Spin Taxes, as
determined pursuant to the Tax Sharing Agreement, and (v) cash in an amount
sufficient to make all severance payments to any employee of C-Cube who is not a
Continuing Employee nor an employee of the Semiconductor Business, it being
understood that any cash retained under this paragraph in excess of the actual
amounts required to be

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paid will be included in C-Cube's basis in Semiconductor I or the Semiconductor
Business assets for purposes of calculating the Semi Spin Taxes.

        (b) The amount of cash retained under Sections 2.2(a)(ii) and (iv) shall
be subject to adjustment pursuant to Sections 4.2 and 4.3 of the Tax Sharing
Agreement. For purposes of calculating the Semi Spin Taxes, any such adjustment
shall be treated as an adjustment to C-Cube's basis in the stock of
Semiconductor I in accordance with Sections 4.2(b) or 4.3(e) of the Tax Sharing
Agreement.

        (c) Prior to the Distribution, C-Cube shall certify the amount of the
Retained Cash to Harmonic, which schedule shall include a breakdown of the
amount retained for Pre-Semi Disposition Taxes and Semi Spin Taxes (in each case
on a Tax-by-Tax basis).

        SECTION 2.3 DOCUMENTS TO BE DELIVERED BY SEMICONDUCTOR I AND
SEMICONDUCTOR II. As of the Separation Date, Semiconductor I and Semiconductor
II will or will cause their appropriate Subsidiaries to deliver to C-Cube all of
the following:

        (a) In each case where Semiconductor I or Semiconductor II or any of
their subsidiaries is a party to any agreement or instrument referred to in
SECTION 2.1, a duly executed counterpart of such agreement or instrument; and

        (b) Resignations of each person who is an officer or director of C-Cube,
or any of its Subsidiaries, immediately prior to the Separation Date, and who
will be employees of Semiconductor I or Semiconductor II or any of their
Subsidiaries from and after the Separation Date.

                                  ARTICLE III

                                THE DISTRIBUTION

        SECTION 3.1 THE DISTRIBUTION.

        (a) Delivery of Shares for Distribution. Subject to SECTION 3.4 hereof,
on or prior to the date the Distribution is effective (the "DISTRIBUTION DATE"),
C-Cube will deliver to the distribution agent (the "DISTRIBUTION AGENT") to be
appointed by C-Cube to distribute to the stockholders of C-Cube the shares of
common stock of Semiconductor I held by C-Cube pursuant to the Distribution for
the benefit of holders of record of common stock of C-Cube on the Record Date, a
single stock certificate, endorsed by C-Cube in blank, representing all of the
outstanding shares of common stock of Semiconductor I then owned by C-Cube, and
shall cause the transfer agent for the shares of common stock of C-Cube to
instruct the Distribution Agent to distribute on the Distribution Date the
appropriate number of such shares of common stock of Semiconductor I to each
such holder or designated transferee or transferees of such holder.

        (b) Shares Received. Subject to SECTIONS 3.4 and 3.5, each holder of
common stock of C-Cube on the Record Date (or such holder's designated
transferee or transferees) will be entitled to receive in the Distribution a
number of shares of common stock of Semiconductor I equal

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to the number of shares of common stock of C-Cube held by such holder on the
Record Date multiplied by a fraction the numerator of which is the number of
shares of common stock of Semiconductor I beneficially owned by C-Cube on the
Record Date and the denominator of which is the number of shares of common stock
of C-Cube outstanding on the Record Date.

        (c) Obligation to Provide Information. Semiconductor I and C-Cube, as
the case may be, will provide to the Distribution Agent all share certificates
and any information required in order to complete the Distribution on the basis
specified above.

        SECTION 3.2 ACTIONS PRIOR TO THE DISTRIBUTION.

        (a) Transfer of Semiconductor II Stock. C-Cube will, (i) before the
Separation, cause Semiconductor II to issue all outstanding shares of Non-Voting
Series A Preferred Stock to WSGR in exchange for legal and other related
services, and (ii) after the Separation, will transfer all outstanding shares of
Common Stock of Semiconductor II to Semiconductor I.

        (b) Information Statement. C-Cube and Semiconductor I shall prepare and
mail, prior to the Distribution Date, to the holders of common stock of C-Cube,
such information concerning the Semiconductor Business and the Distribution and
such other matters as C-Cube shall reasonably determine are necessary and as may
be required by law. C-Cube and Semiconductor I will prepare, and Semiconductor I
will, to the extent required under applicable law, file with the Securities and
Exchange Commission (the "COMMISSION") any such documentation which C-Cube and
Semiconductor I determine is necessary or desirable to effectuate the
Distribution, and C-Cube and Semiconductor I shall each use its reasonable
commercial efforts to obtain all necessary approvals from the Commission with
respect thereto as soon as practicable.

        (c) Blue Sky. C-Cube, Semiconductor I and Semiconductor II shall take
and shall cause any of their Subsidiaries to take all such actions as may be
necessary or appropriate under the securities or blue sky laws of the United
States (and any comparable laws under any foreign jurisdiction) in connection
with the Distribution.

        (d) NYSE or Nasdaq Listing. Semiconductor I shall prepare and file, and
shall use its reasonable commercial efforts to have approved, an application for
the listing of the common stock of Semiconductor I to be distributed in the
Distribution on the New York Stock Exchange (the "NYSE") or the Nasdaq National
Market (the "NASDAQ"), subject to official notice of distribution.

        (e) Retained Cash. The amount of case required to be retained by C-Cube
pursuant to Section 2.2(a) hereof shall have been retained.

        (f) Conditions. C-Cube, Semiconductor I and Semiconductor II shall take
and shall cause any of their Subsidiaries to take all reasonable steps necessary
and appropriate to cause the conditions set forth in SECTION 3.4 to be satisfied
and to effect the Distribution on the Distribution Date.

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        SECTION 3.3 SOLE DISCRETION OF C-CUBE. C-Cube shall, in its sole and
absolute discretion, determine the date of the consummation of the Distribution
and all terms of the Distribution, including, without limitation, the form,
structure and terms of any transaction(s) and/or offering(s) to effect the
Distribution and the timing of and conditions to the consummation of the
Distribution. In addition, C-Cube may at any time and from time to time until
the completion of the Distribution modify or change the terms of the
Distribution, including, without limitation, by accelerating or delaying the
timing of the consummation of all or part of the Distribution. Semiconductor I
and Semiconductor II shall cooperate with C-Cube in all respects to accomplish
the Distribution and shall, at C-Cube's direction, promptly take any and all
actions necessary or desirable to effect the Distribution, including, without
limitation, the registration under the Securities Exchange Act of 1934, as
amended (the "EXCHANGE ACT") of the common stock of Semiconductor I on an
appropriate registration form or forms to be designated by C-Cube. C-Cube shall
select any financial printer, solicitation and/or exchange agent and outside
counsel for C-Cube; provided, however, that nothing herein shall prohibit
Semiconductor I from engaging (at its own expense) its own financial, legal,
accounting and other advisors in connection with the Distribution.

        SECTION 3.4 CONDITIONS TO DISTRIBUTION. The following are conditions to
the consummation of the Distribution. The conditions are for the sole benefit of
C-Cube and shall not give rise to or create any duty on the part of C-Cube or
the C-Cube Board of Directors to waive or not waive any such condition.

        (a) Government Approvals. Any material governmental approvals and
consents necessary to consummate the Distribution shall have been obtained and
be in full force and effect;

        (b) No Legal Restraints. No order, injunction or decree issued by any
court or agency of competent jurisdiction or other legal restraint or
prohibition preventing the consummation of the Distribution shall be in effect
and no other event outside the control of C-Cube shall have occurred or failed
to occur that prevents the consummation of the Distribution; and

        (c) Transfer of Semiconductor II Stock. The transfer of all outstanding
shares of Common Stock of Semiconductor II to Semiconductor I shall have been
effected.

        SECTION 3.5 FRACTIONAL SHARES. As soon as practicable after the
Distribution Date, C-Cube shall direct the Distribution Agent to determine the
number of whole shares and fractional shares of common stock of Semiconductor I
allocable to each holder of record or beneficial owner of common stock of C-Cube
as of the Record Date, to aggregate all such fractional shares and sell the
whole shares obtained thereby at the direction of C-Cube, in open market
transactions, at then prevailing trading prices, and to cause to be distributed
to each such holder or for the benefit of each such beneficial owner to which a
fractional share shall be allocable such holder's or owner's ratable share of
the proceeds of such sale, after making appropriate deductions of the amount
required to be

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withheld for federal income tax purposes and after deducting an amount equal to
all brokerage charges, commissions and transfer taxes attributed to such sale.
C-Cube and the Distribution Agent shall use their reasonable commercial efforts
to aggregate the shares of common stock of C-Cube that may be held by any
beneficial owner thereof through more than one account in determining the
fractional share allocable to such beneficial owner.

                                   ARTICLE IV

                           COVENANTS AND OTHER MATTERS

        SECTION 4.1 OTHER AGREEMENTS. In addition to the specific agreements,
documents and instruments annexed to this Agreement, C-Cube and Semiconductor I
agree to execute or cause to be executed by the appropriate parties and deliver,
as appropriate, such other agreements, instruments and other documents as may be
necessary or desirable in order to effect the purposes of this Agreement and the
Ancillary Agreements.

        SECTION 4.2 FURTHER INSTRUMENTS. At the request of Semiconductor I or
Semiconductor II and without further consideration, C-Cube will execute and
deliver, and will cause its applicable Subsidiaries to execute and deliver, to
Semiconductor I or Semiconductor II or any of their Subsidiaries such other
instruments of transfer, conveyance, assignment, substitution and confirmation
and take such action as Semiconductor I or Semiconductor II may reasonably deem
necessary or desirable in order to more effectively transfer, convey and assign
to Semiconductor I or Semiconductor II or any of their Subsidiaries and confirm
Semiconductor I's, Semiconductor II's and their Subsidiaries' title to all of
the assets, rights and other things of value contemplated to be transferred to
Semiconductor I or Semiconductor II or any of their Subsidiaries pursuant to
this Agreement, the Ancillary Agreements, and any documents referred to therein,
to put Semiconductor I or Semiconductor II or any of their Subsidiaries in
actual possession and operating control thereof and to permit Semiconductor I or
Semiconductor II or any of their Subsidiaries to exercise all rights with
respect thereto (including, without limitation, rights under contracts and other
arrangements as to which the consent of any third party to the transfer thereof
shall not have previously been obtained). At the request of C-Cube and without
further consideration, Semiconductor I and Semiconductor II will execute and
deliver, and will cause their applicable Subsidiaries to execute and deliver, to
C-Cube and its Subsidiaries all instruments, assumptions, novations,
undertakings, substitutions or other documents and take such other action as
C-Cube may reasonably deem necessary or desirable in order to have Semiconductor
I and Semiconductor II fully and unconditionally assume and discharge the
liabilities contemplated to be assumed by Semiconductor I, Semiconductor II or
any of their Subsidiaries under this Agreement or any document in connection
herewith and to relieve the C-Cube or any of its Subsidiaries of any liability
or obligation with respect thereto and evidence the same to third parties. None
of C-Cube, Semiconductor I or Semiconductor II shall be obligated, in connection
with the foregoing, to expend money other than reasonable out-of-pocket
expenses, attorneys' fees and recording or similar fees. If any additional fees
arise for any reason, such fees shall be the responsibility of Semiconductor I.
Furthermore, each party, at the request of another party hereto, shall execute
and deliver such other

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instruments and do and perform such other acts and things as may be necessary or
desirable for effecting completely the consummation of the transactions
contemplated hereby.

        SECTION 4.3 TRANSITIONAL SERVICES AGREEMENT. C-Cube and Semiconductor I
and Semiconductor II will enter into a Transitional Services Agreement covering
the provisions of various transitional services, including telecommunications,
networks, enterprise applications and other services by Semiconductor I or
Semiconductor II to C-Cube or, in certain circumstances, vice versa. The
Transitional Services Agreement will generally provide for a term of two (2)
years.

        SECTION 4.4 AGREEMENT FOR EXCHANGE OF INFORMATION. Each of C-Cube,
Semiconductor I and Semiconductor II, for itself and on behalf of its
Subsidiaries, agrees to provide, or cause to be provided, to each other, at any
time before or after the Distribution Date, as soon as reasonably practicable
after written request therefor, any Information in the possession or under the
control of such party that the requesting party reasonably needs (i) to comply
with reporting, disclosure, filing or other requirements imposed on the
requesting party (including under applicable securities laws) by a Governmental
Authority having jurisdiction over the requesting party, (ii) for use in any
other judicial, regulatory, administrative or other proceeding or in order to
satisfy audit, accounting, claims, regulatory, litigation or other similar
requirements, (iii) to comply with its obligations under this Agreement or any
Ancillary Agreement or (iv) in connection with the ongoing businesses of C-Cube,
Semiconductor I or Semiconductor II, as the case may be; provided, however, that
in the event that any party determines that any such provision of Information
could be commercially detrimental, violate any law or agreement, or waive any
attorney-client privilege, the parties shall take all reasonable measures to
permit the compliance with such obligations in a manner that avoids any such
harm or consequence.

        (a) Internal Accounting Controls; Financial Information. After the
Separation Date, (i) each party shall maintain in effect at its own cost and
expense adequate systems and controls for its business to the extent necessary
to enable the other party to satisfy its reporting, accounting, audit and other
obligations, and (ii) each party shall provide, or cause to be provided, to the
other party and its Subsidiaries in such form as such requesting party shall
request, at no charge to the requesting party, all financial and other data and
information as the requesting party determines necessary or advisable in order
to prepare its financial statements and reports or filings with any Governmental
Authority.

        (b) Ownership of Information. Any Information owned by a party that is
provided to a requesting party pursuant to this SECTION 4.4 shall be deemed to
remain the property of the providing party. Unless specifically set forth
herein, nothing contained in this Agreement shall be construed as granting or
conferring rights of license or otherwise in any such Information.

        (c) Record Retention. (i) To facilitate the possible exchange of
Information pursuant to this SECTION 4.4 and other provisions of this Agreement
after the Distribution Date, each party agrees to use its reasonable commercial
efforts to retain all Information in their respective possession or control on
the Distribution Date. However, except as set forth in the Tax Sharing
Agreement, at any time after the Distribution Date, each party may amend their
respective record retention policies at such party's discretion; provided,
however, that if a party desires to effect the amendment within

                                      -8-
<PAGE>   14

three (3) years after the Distribution Date, the amending party must give thirty
(30) days prior written notice of such change in the policy to the other party
to this Agreement.

               (ii) No party will destroy, or permit any of its Subsidiaries to
destroy, any Information that exists on the Separation Date (other than
Information that is permitted to be destroyed under the current record retention
policy of such party) without first using its reasonable commercial efforts to
notify the other party of the proposed destruction and giving the other party
the opportunity to take possession of such Information prior to such
destruction.

        (d) Limitation of Liability. No party shall have any liability to any
other party in the event that any Information exchanged or provided pursuant to
this Section is found to be inaccurate, in the absence of willful misconduct by
the party providing such Information. No party shall have any liability to any
other party if any Information is destroyed or lost after reasonable commercial
efforts by such party to comply with the provisions of SECTION 4.4(C).

        (e) Other Agreements Providing For Exchange of Information. The rights
and obligations granted under this SECTION 4.4 are subject to any specific
limitations, qualifications or additional provisions on the sharing, exchange or
confidential treatment of Information set forth in this Agreement and any
Ancillary Agreement.

        (f) Production of Witnesses; Records; Cooperation. After the
Distribution Date, except in the case of a legal or other proceeding by one
party against another party (which shall be governed by such discovery rules as
may be applicable under SECTION 4.8 or otherwise), each party hereto shall use
its reasonable commercial efforts to make available to each other party, upon
written request, the former, current and future directors, officers, employees,
other personnel and agents of such party as witnesses and any books, records or
other documents within its control or which it otherwise has the ability to make
available, to the extent that any such person (giving consideration to business
demands of such directors, officers, employees, other personnel and agents) or
books, records or other documents may reasonably be required in connection with
any legal, administrative or other proceeding in which the requesting party may
from time to time be involved, regardless of whether such legal, administrative
or other proceeding is a matter with respect to which indemnification may be
sought hereunder. The requesting party shall bear all costs and expenses in
connection therewith.

        SECTION 4.5 PAYMENT OF EXPENSES. Except as otherwise provided in this
Agreement, the Ancillary Agreements or any other agreement between the parties
relating to the Separation or the Distribution, all costs and expenses of the
parties hereto in connection with the Distribution and certain costs and
expenses of the parties hereto in connection with the Separation shall be paid
by Semiconductor I or Semiconductor II.

        SECTION 4.6 DISPUTE RESOLUTION. Except as otherwise set forth in the
Ancillary Agreements, resolution of any and all disputes arising from or in
connection with this Agreement, whether based on contract, tort, or otherwise
(collectively, "DISPUTES"), shall be exclusively governed by and settled in
accordance with the provisions of this SECTION 4.7.

                                      -9-
<PAGE>   15

        (a) Negotiation. The parties shall make a good faith attempt to resolve
any Dispute arising out of or relating to this Agreement through negotiation.
Within thirty (30) days after notice of a Dispute is given by either party to
the other party, each party shall select a negotiating team comprised of vice
president level employees of such party and shall meet within thirty (30) days
after the end of the first thirty (30) day negotiating period to attempt to
resolve the matter. During the course of negotiations under this SECTION 4.7(A),
all reasonable requests made by one party to the other for information,
including requests for copies of relevant documents, will be honored. The
specific format for such negotiations will be left to the discretion of the
designated negotiating teams but may include the preparation of agreed upon
statements of fact or written statements of position furnished to the other
party.

        (b) Non-Binding Mediation. In the event that any Dispute arising out of
or related to this Agreement is not settled by the parties within fifteen (15)
days after the first meeting of the negotiating teams under SECTION 4.7(A), the
parties will attempt in good faith to resolve such Dispute by non-binding
mediation in accordance with the American Arbitration Association Commercial
Mediation Rules. The mediation shall be held within thirty (30) days of the end
of such fifteen (15) day negotiation period of the negotiating teams. Except as
provided below in SECTION 4.7(C), no litigation for the resolution of such
dispute may be commenced until the parties try in good faith to settle the
dispute by such mediation in accordance with such rules and either party has
concluded in good faith that amicable resolution through continued mediation of
the matter does not appear likely. The costs of mediation shall be shared
equally by the parties to the mediation. Any settlement reached by mediation
shall be recorded in writing, signed by the parties, and shall be binding on
them.

        (c) Proceedings. Nothing herein, however, shall prohibit either party
from initiating litigation or other judicial or administrative proceedings if
such party would be substantially harmed by a failure to act during the time
that such good faith efforts are being made to resolve the Dispute through
negotiation or mediation. In the event that litigation is commenced under this
SECTION 4.7(C), the parties agree to continue to attempt to resolve any Dispute
according to the terms of SECTIONS 4.7(A) and 4.7(B) during the course of such
litigation proceedings under this SECTION 4.7(C).

        (d) Pay and Dispute. Except as provided herein or in any Ancillary
Agreement, in the event of any dispute regarding payment of a third-party
invoice (subject to standard verification of receipt of products or services),
the party named in a third party's invoice must make timely payment to such
third party, even if the party named in the invoice desires to pursue the
dispute resolution procedures outlined in this SECTION 4.7. If the party that
paid the invoice is found pursuant to this SECTION 4.7 to not be responsible for
such payment, such paying party shall be entitled to reimbursement, with
interest accrued at a compound annual rate of the Prime Rate plus 2%, from the
party found responsible for such payment.

        SECTION 4.7 GOVERNMENTAL APPROVALS. To the extent that the Separation
requires any Governmental Approvals, the parties will use their reasonable
commercial efforts to obtain any such Governmental Approvals.

                                      -10-
<PAGE>   16
        SECTION 4.8 COOPERATION IN OBTAINING NEW AGREEMENTS. Each of C-Cube,
Semiconductor I and Semiconductor II understand that, prior to the Separation
Date, all parties have derived benefits under certain agreements amongst
themselves and third parties, which agreements are not being assigned to C-Cube,
Semiconductor I or Semiconductor II in connection with the Separation. Upon the
request of C-Cube, Semiconductor I or Semiconductor II, the other party agrees
to make introductions to appropriate personnel at such third parties, and agrees
to provide reasonable assistance to the other party at its own expense, so that
the other party may obtain agreements from such third parties under
substantially equivalent terms and conditions, including financial terms and
conditions, that apply to it. Such assistance may include, but is not limited
to, requesting and encouraging such third parties to enter into such
agreements. All parties also understand that there are certain agreements
between themselves and third parties, which agreements are being assigned to the
other party in connection with the Separation but which may require the consent
of the applicable third party. Upon request, one party agrees to assist the
other party in seeking and obtaining the consent of such third parties to such
assignment. The parties expect that the activities contemplated by this Section
will be substantially completed by the Distribution Date, but in no event will
either party have any obligations hereunder after the first anniversary of the
Distribution Date.

        SECTION 4.9 PROPERTY DAMAGE TO SEMICONDUCTOR ASSETS PRIOR TO THE
SEPARATION DATE. In the event of any property damage to any Semiconductor Assets
prior to the Separation Date, C-Cube shall repair or otherwise address such
damage in the ordinary course of business consistent with past practices;
provided, however, that nothing in this clause shall restrict C-Cube from
disposing of any Assets in the ordinary course of business consistent with past
practices.

                                   ARTICLE V

                                  MISCELLANEOUS

        SECTION 5.1 LIMITATION OF LIABILITY. IN NO EVENT SHALL C-CUBE OR ANY OF
ITS SUBSIDIARIES OR SEMICONDUCTOR I, SEMICONDUCTOR II OR ANY OF THEIR
SUBSIDIARIES BE LIABLE TO C-CUBE OR ANY OF ITS SUBSIDIARIES OR SEMICONDUCTOR I,
SEMICONDUCTOR II OR ANY OF THEIR SUBSIDIARIES FOR ANY SPECIAL, CONSEQUENTIAL,
INDIRECT, INCIDENTAL OR PUNITIVE DAMAGES OR LOST PROFITS, HOWEVER CAUSED AND ON
ANY THEORY OF LIABILITY (INCLUDING NEGLIGENCE) ARISING IN ANY WAY OUT OF THIS
AGREEMENT, WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES, EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT, THE RESTATED MERGER
AGREEMENT, THE ANCILLARY AGREEMENTS, AND THE EXHIBITS AND SCHEDULES REFERENCED
OR ATTACHED HERETO OR THERETO; PROVIDED, HOWEVER, THAT THE FOREGOING LIMITATIONS
SHALL NOT LIMIT EACH PARTY'S INDEMNIFICATION OBLIGATIONS FOR LIABILITIES TO
THIRD PARTIES AS SET FORTH IN THE INDEMNIFICATION AND INSURANCE MATTERS
AGREEMENT.

                                      -11-
<PAGE>   17

        SECTION 5.2 ENTIRE AGREEMENT. This Agreement, the Restated Merger
Agreement, the other Ancillary Agreements and the Exhibits and Schedules
referenced or attached hereto and thereto, constitute the entire agreement
between the parties with respect to the subject matter hereof and shall
supersede all prior written and oral and all contemporaneous oral agreements and
understandings with respect to the subject matter hereof. In the event any
provision of any agreement conflicts with a provision of the Restated Merger
Agreement, the Restated Merger Agreement will govern.

        SECTION 5.3 GOVERNING LAW. This Agreement shall be governed and
construed and enforced in accordance with the laws of the State of Delaware as
to all matters regardless of the laws that might otherwise govern under the
principles of conflicts of laws applicable thereto.

        SECTION 5.4 TERMINATION. This Agreement may be terminated at any time
before the Distribution Date by mutual consent of C-Cube, Semiconductor I and
Semiconductor II and in any event, shall terminate three years after the date
first referenced above. In the event of termination pursuant to this Section, no
party shall have any liability of any kind to the other party.

        SECTION 5.5 NOTICES. Any notice, demand, offer, request or other
communication required or permitted to be given by either party pursuant to the
terms of this Agreement shall be in writing and shall be deemed effectively
given the earlier of (i) when received, (ii) when delivered personally, (iii)
one (1) business day after being delivered by facsimile (with receipt of
appropriate confirmation), (iv) one (1) business day after being deposited with
an overnight courier service or (v) four (4) days after being deposited in the
U.S. mail, First Class with postage prepaid, and addressed to the attention of
the party's General Counsel at the address of its principal executive office or
such other address as a party may request by notifying the other in writing.

        SECTION 5.6 COUNTERPARTS. This Agreement, including the Schedules and
Exhibits hereto and the other documents referred to herein, may be executed in
counterparts, each of which shall be deemed to be an original but all of which
shall constitute one and the same agreement.

        SECTION 5.7 BINDING EFFECT; ASSIGNMENT. This Agreement shall inure to
the benefit of and be binding upon the parties hereto and their respective legal
representatives and successors, and nothing in this Agreement, express or
implied, is intended to confer upon any other Person any rights or remedies of
any nature whatsoever under or by reason of this Agreement. This Agreement may
not be assigned by any party hereto. This Agreement may be enforced separately
by C-Cube, Semiconductor I, Semiconductor II and any of their Subsidiaries.

        SECTION 5.8 SEVERABILITY. If any term or other provision of this
Agreement or the Schedules or Exhibits attached hereto is determined by a
nonappealable decision by a court, administrative agency or arbitrator to be
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner materially
adverse to either party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties

                                      -12-
<PAGE>   18
as closely as possible in an acceptable manner to the end that transactions
contemplated hereby are fulfilled to the fullest extent possible.

        SECTION 5.9 FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE. No
failure or delay on the part of either party hereto in the exercise of any right
hereunder shall impair such right or be construed to be a waiver of, or
acquiescence in, any breach of any representation, warranty or agreement herein,
nor shall any single or partial exercise of any such right preclude other or
further exercise thereof or of any other right. All rights and remedies existing
under this Agreement or the Schedules or Exhibits attached hereto are cumulative
to, and not exclusive of, any rights or remedies otherwise available.

        SECTION 5.10 AMENDMENT. No change or amendment will be made to this
Agreement except by an instrument in writing signed on behalf of each of the
parties to such agreement.

        SECTION 5.11 AUTHORITY. Each of the parties hereto represents to the
other that (a) it has the corporate or other requisite power and authority to
execute, deliver and perform this Agreement, (b) the execution, delivery and
performance of this Agreement by it have been duly authorized by all necessary
corporate or other actions, (c) it has duly and validly executed and delivered
this Agreement, and (d) this Agreement is a legal, valid and binding obligation,
enforceable against it in accordance with its terms subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally and general equity principles.

        SECTION 5.12 INTERPRETATION. The headings contained in this Agreement,
in any Exhibit or Schedule hereto and in the table of contents to this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Any capitalized term used in any Schedule or
Exhibit but not otherwise defined therein, shall have the meaning assigned to
such term in this Agreement. When a reference is made in this Agreement to an
Article or a Section, Exhibit or Schedule, such reference shall be to an Article
or Section of, or an Exhibit or Schedule to, this Agreement unless otherwise
indicated.

        SECTION 5.13 CONFLICTING AGREEMENTS. In the event of conflict between
this Agreement and any Ancillary Agreement or other agreement executed in
connection herewith, the provisions of such other agreement shall prevail.

                                   ARTICLE VI

                                   DEFINITIONS

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

                                      -13-
<PAGE>   19

        SECTION 6.2 ANCILLARY AGREEMENTS. "ANCILLARY AGREEMENTS" has the meaning
set forth in SECTION 2.1 hereof.

        SECTION 6.3 ASSIGNMENT AGREEMENT. "ASSIGNMENT AGREEMENT" has the meaning
set forth in SECTION 2.1(A) hereof.

        SECTION 6.4 BUSINESS DAY. "BUSINESS DAY" means a day other than a
Saturday, a Sunday or a day on which banking institutions located in the State
of California are authorized or obligated by law or executive order to close.

        SECTION 6.5 CODE. "CODE" means the Internal Revenue Code of 1986, as
amended from time to time.

        SECTION 6.6 COMMISSION. "COMMISSION" means the Securities and Exchange
Commission.

        SECTION 6.7 DISPUTES. "Disputes" has the meaning set forth in Section
4.6 hereof.

        SECTION 6.8 DISTRIBUTION. "Distribution" has the meaning set forth in
the Recitals hereof.

        SECTION 6.9 DISTRIBUTION AGENT. "Distribution Agent" has the meaning set
forth in Section 3.1 hereof.

        SECTION 6.10 DISTRIBUTION DATE. "Distribution Date" has the meaning set
forth in Section 3.1 hereof.

        SECTION 6.11 EXCHANGE ACT. "EXCHANGE ACT" means the Securities and
Exchange Act of 1934, as amended.

        SECTION 6.12 GOVERNMENTAL APPROVALS. "GOVERNMENTAL APPROVALS" means any
notices, reports or other filings to be made, or any consents, registrations,
approvals, permits or authorizations to be obtained from, any Governmental
Authority.

        SECTION 6.13 GOVERNMENTAL AUTHORITY. "GOVERNMENTAL AUTHORITY" shall mean
any federal, state, local, foreign or international court, government,
department, commission, board, bureau, agency, official or other regulatory,
administrative or governmental authority.

        SECTION 6.14 INFORMATION. "Information" means information, whether or
not patentable or copyrightable, in written, oral, electronic or other tangible
or intangible forms, stored in any medium, including studies, reports, records,
books, contracts, instruments, surveys, discoveries, ideas, concepts, know-how,
techniques, designs, specifications, drawings, blueprints, diagrams, models,
prototypes, samples, flow charts, data, computer data, disks, diskettes, tapes,
computer programs or other software, marketing plans, customer names,
communications by or to attorneys (including attorney-client privileged
communications), memos and other materials prepared by

                                      -14-
<PAGE>   20
attorneys or under their direction (including attorney work product), and other
technical, financial, employee or business information or data.

        SECTION 6.15 NASDAQ. "Nasdaq" means the Nasdaq National Market.

        SECTION 6.16 NYSE. "NYSE" means the New York Stock Exchange.

        SECTION 6.17 PERSON. "PERSON" means an individual, a partnership, a
corporation, a limited liability company, an association, a joint stock company,
a trust, a joint venture, an unincorporated organization and a governmental
entity or any department, agency or political subdivision thereof.

        SECTION 6.18 PRIME RATE. "PRIME RATE" means the prime rate as published
in the Wall Street Journal on the date of determination.

        SECTION 6.19 RECORD DATE. "RECORD DATE" means the close of business on
the date to be determined by the Board of Directors of C-Cube as the record date
for determining the stockholders of C-Cube entitled to receive shares of common
stock of Semiconductor in the Distribution.

        SECTION 6.20 SEMI SPIN TAXES. "SEMI SPIN TAXES" has the meaning set
forth in ARTICLE I of the Tax Sharing Agreement.

        SECTION 6.21 SEMICONDUCTOR ASSETS. "SEMICONDUCTOR ASSETS" has the
meaning set forth in SECTION 1.2 of the Assignment Agreement.

        SECTION 6.22 SEMICONDUCTOR BUSINESS. "SEMICONDUCTOR BUSINESS" means the
business and operations of C-Cube defined as the Semiconductor Business in the
Restated Merger Agreement.

        SECTION 6.23 SEMICONDUCTOR PRO FORMA BALANCE SHEET. "SEMICONDUCTOR PRO
FORMA BALANCE SHEET" means the unaudited pro forma condensed consolidated
balance sheet as set forth in C-Cube Semiconductor I's Registration Statement on
Form 10, filed on December 29, 1999, as amended.

        SECTION 6.24 SEPARATION. "Separation" has the meaning set forth in the
Recitals hereof.

        SECTION 6.25 SEPARATION DATE. "Separation Date" has the meaning set
forth in Section 1.1 hereof.

        SECTION 6.26 SUBSIDIARY. "SUBSIDIARY" means with respect to any
specified Person, any corporation, any limited liability company, any
partnership or other legal entity of which such Person or its Subsidiaries owns,
directly or indirectly, more than 50% of the stock or other equity interest
entitled to vote on the election of the members of the board of directors or
similar governing body. Unless context otherwise requires, reference to C-Cube
and its Subsidiaries shall not include the subsidiaries of C-Cube that will be
transferred to Semiconductor I or Semiconductor II after

                                      -15-
<PAGE>   21

giving effect to the Separation, and those subsidiaries will be treated as
Subsidiaries of Semiconductor I and Semiconductor II, as applicable.

        SECTION 6.27 WSGR. "WSGR" means Wilson Sonsini Goodrich & Rosati,
Professional Corporation.

                                      -16-
<PAGE>   22
        WHEREFORE, the parties have signed this Master Separation and
Distribution Agreement effective as of the date first set forth above.

C-CUBE MICROSYSTEMS INC.               C-CUBE SEMICONDUCTOR INC.

By:                                    By:
   -----------------------------          --------------------------------------

Name:                                  Name:
   -----------------------------            ------------------------------------

Title:                                 Title:
      --------------------------             -----------------------------------

C-CUBE SEMICONDUCTOR II INC.

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

<PAGE>   23
                                 SCHEDULE 2.1(b)

         SUBSIDIARIES AND OTHER HOLDINGS OF C-CUBE TO BE TRANSFERRED TO
                       SEMICONDUCTOR I OR SEMICONDUCTOR II

        C-Cube Microsystems International Ltd.
        C-Cube U.S. Inc.
        C-Cube Japan, Inc.
        C-Cube Technology Limited
        Media Computer Technologies, Inc.

<PAGE>   24
                                    EXHIBIT A

                         C-CUBE SECRETARY'S CERTIFICATE
<PAGE>   25
                                    EXHIBIT B

                      SEMICONDUCTOR I AND SEMICONDUCTOR II
                              SECRETARY CERTIFICATE<PAGE>   1
                                                                    EXHIBIT 10.2

                                    FORM OF
                             TAX SHARING AGREEMENT

        This TAX SHARING AGREEMENT ("Agreement") is made effective as of
_______________, 2000 by and among C-Cube Microsystems Inc. ("C-Cube"), a
Delaware corporation, on behalf of itself and the C-Cube Subgroup (as defined
below), C-Cube Semiconductor Inc. ("Semiconductor"), a Delaware corporation, and
Harmonic Inc., a Delaware corporation ("Harmonic"). Capitalized terms used and
not otherwise defined herein shall have the meanings assigned to them in Section
1 below.

                                    RECITALS

        WHEREAS, C-Cube is the common parent corporation of an affiliated group
of corporations (as defined in Section 1504(a) of the Code) which includes
Semiconductor;

        WHEREAS, C-Cube files Consolidated Group Returns on behalf of the
Affiliated Group and C-Cube files or causes to be filed Combined Returns and
other Returns on behalf of itself and its subsidiaries;

        WHEREAS, as set forth in the Reorganization Agreement and the Separation
Agreement, and subject to the terms and conditions thereof, C-Cube wishes to
transfer and assign to Semiconductor substantially all of the assets and
liabilities currently associated with the Semiconductor Business, including the
stock, investments and similar interests currently held by C-Cube in certain
subsidiaries and other entities that conduct such business (the "Separation");

        WHEREAS, following the Separation and in connection with the merger of
C-Cube and Harmonic (the "Merger"), C-Cube intends to distribute all of its
shares of Semiconductor Common Stock, on a pro rata basis, to the holders of the
common stock of C-Cube, subject to the terms and conditions of the Separation
Agreement (the "Public Distribution");

        WHEREAS, the Separation and Public Distribution are intended to cause
the recognition of gain by C-Cube, and Semiconductor has agreed to bear the
resulting tax liability; and

        WHEREAS, as a result of the Public Distribution, Semiconductor and its
domestic subsidiaries will cease to be members of the Affiliated Group, and the
parties hereto have determined to enter into this Agreement, setting forth their
agreement with respect to certain tax matters.

                                    AGREEMENT

        NOW THEREFORE, in consideration of the mutual covenants and promises
contained herein, the parties agree as follows:

        1. DEFINITIONS

        All terms not defined in this Agreement shall have the meaning set forth
in the Separation Agreement and the Reorganization Agreement.

<PAGE>   2

        "Adjustment" means an adjustment determined on an issue-by-issue or
transaction-by-transaction basis, as appropriate, made or proposed with respect
to any amount that previously formed the basis for the computation of an amount
due hereunder, whether such adjustment arises as a result of a Tax Contest or
otherwise.

        "Affiliated Group" means the group of corporations including C-Cube as
the common parent corporation and all other corporations which are eligible or
required to be included in a Consolidated Group Return with C-Cube as the common
parent corporation, which group shall include, for periods prior to the Public
Distribution, Semiconductor and its subsidiaries that are so eligible.

        "After-Tax Basis" in reference to an indemnity payment shall mean an
amount that, after (i) subtraction of the aggregate additional Taxes (if any)
incurred or to be incurred by the party receiving the indemnity payment as a
result of the receipt of a payment hereunder and (ii) addition of the tax
benefit (if any) to the party receiving the indemnity payment on account of the
Adjustment to which such payment relates, is equal to the amount of the Tax
Adjustment. "After-Tax Basis" in reference to a benefit payment, including a
refund, shall mean an amount that, after (i) addition of the aggregate
additional Taxes (if any) incurred or to be incurred by the party making the
benefit payment on account of the Tax benefit to which such benefit payment
relates and (ii) subtraction of the Tax benefit (if any) to the party making the
benefit payment as a result of the making of such payment, is equal to the
amount of the Tax benefit. For purpose of determining such additional Taxes
incurred or to be incurred and such Tax benefit, the following assumptions will
be used: (a) in the case of any income Tax, the highest marginal Tax rate or, in
the case of any other Tax, the highest applicable Tax rate, in each case in
effect with respect to that Tax for the Taxable period or any portion of the
Taxable period to which the indemnity payment or benefit payment relates; and
(b) such determination shall be made without regard to whether any actual
additional Taxes or Tax benefit will in fact be realized with respect to the
Return to which such payment relates, due to tax attributes of a party (or lack
thereof) unrelated to the item giving rise to such indemnity payment or benefit
payment.

        "Carryforward Tax Attribute" means a deductible or creditable
consolidated Federal tax attribute or state or local tax attribute that can be
carried forward from one tax period to subsequent tax periods, including, but
not limited to, (i) a consolidated net operating loss, a consolidated net
capital loss, a consolidated unused foreign investment credit, a consolidated
unused foreign tax credit, or a consolidated excess charitable contribution, and
(ii) the consolidated minimum tax credit, or other consolidated general business
credits.

        "C-Cube Separate Company Return" shall mean any Return of C-Cube or any
direct or indirect subsidiary of C-Cube other than a Consolidated Group Return,
a Combined Return, or a Semiconductor Separate Company Return.

        "C-Cube Straddle Period Return" shall mean any Return with respect to a
Straddle Period other than a Semiconductor Straddle Period Return.

                                      -2-
<PAGE>   3

        "C-Cube Subgroup" means C-Cube and its present and future subsidiaries
(other than Semiconductor and its present and future subsidiaries).

        "C-Cube Tax Adjustment" shall mean, with respect to any Taxable period
or portion of a Taxable period, and as computed separately with respect to each
Tax, the net increase in each such Tax equal to the sum of all Tax Adjustments
with respect to which a Final Determination has been made for each such Taxable
period or portion of a Taxable period that are attributable to the income,
assets and/or business of any member of the C-Cube Subgroup; provided, however,
Semiconductor Tax Adjustment shall not be treated as, and shall be excluded from
the definition of, C-Cube Tax Adjustment.

        "C-Cube Tax Benefit" shall mean, with respect to any Taxable period or
portion of a Taxable period, and as computed separately with respect to each
Tax, the net decrease in each such Tax equal to the sum of all Tax Adjustments
with respect to which a Final Determination has been made such Tax for each such
Taxable period or portion of a Taxable period that are attributable to the
income, assets and/or business of any member of the C-Cube Subgroup, the
Semiconductor Subgroup, and/or the Semiconductor Business; provided, however,
that any Semiconductor Tax Benefit shall not be a C-Cube Tax Benefit.

        "Code" means the U.S. Internal Revenue Code of 1986, as amended.

        "Combined Return" means the Return of state income or franchise Tax
required to be filed by a group of corporations on a unitary basis as opposed to
a separate company basis.

        "Consolidated Group Return" means a consolidated federal income Tax
Return filed pursuant to Section 1501 of the Code and the Regulations
thereunder.

        "Consolidated Period" means that period of time during which
Semiconductor is a member of the Affiliated Group.

        "Consolidated Return Year" means any taxable year or period with respect
to which C-Cube is required to file a Consolidated Group Return as the common
parent corporation.

        "Distribution Date" means the date on which the Public Distribution
occurs.

        "Divicom" means DiviCom Inc., which was a wholly-owned subsidiary of
C-Cube until it merged into C-Cube on January 28, 2000.

        "Divicom Merger Taxes" means all Taxes incurred by Divicom or C-Cube
prior to or upon the occurrence of the Merger that would not have been incurred
but for the merger of Divicom into C-Cube. Such Taxes shall not be reduced by
any amounts that could be mitigated by a restructuring of the ownership of all
or any portion of the assets owned by Divicom prior to such merger.

        "Final Determination" means (a) a decision, judgment, decree or other
order by any court of competent jurisdiction, which has become final and is
either no longer subject to appeal or for which

                                      -3-
<PAGE>   4

a determination not to appeal has been made; (b) a closing agreement made under
Section 7121 of the Code or any comparable foreign, state, local, municipal or
other Taxing statute; (c) a final disposition by any Taxing Authority of a claim
for refund; or (d) any other written agreement or state of facts which results
in an Adjustment becoming final and prohibits such Taxing Authority from seeking
any further legal or administrative remedies with respect to an Adjustment.

        "Group Refund Claim" means any claim filed by C-Cube on behalf of the
Affiliated Group for a refund of federal income Taxes or on behalf of the
Unitary Group for a refund of state income or franchise Taxes to the extent such
claim is either (a) filed prior to the Distribution Date, or (b) filed in
accordance with Section 2.5 or Section 5.

        "Initial Stock Price" has the meaning set forth in the definition of A
in Section 4.1(a) hereof.

        "IRS" means the United States Internal Revenue Service.

        "Mailing Date" has the meaning set forth in Section 4.1(a).

        "Merger Date" means the date on which the Merger occurs.

        "Pre-Semi Disposition Non-Semiconductor Tax Deficiency" means the sum of
(i) the excess, if any, of Pre-Semi Disposition Non-Semiconductor Taxes (other
than such Taxes that are attributable to an Adjustment) over the amount included
in the Tax Offset Amount attributable to Pre-Semi Disposition Non-Semiconductor
Taxes, and (ii) the amount of any Tax Adjustment attributable to any Pre-Semi
Disposition Non-Semiconductor Taxes with respect to which there has been a Final
Determination.

        "Pre-Semi Disposition Non-Semiconductor Taxes" shall mean Taxes
attributable to periods prior to the Distribution Date that are not Semi Spin
Taxes and are not otherwise attributable to the Semiconductor Business;
provided, however, that the term Pre-Semi Disposition Non-Semiconductor Taxes
shall not include Divicom Merger Taxes.

        "Pre-Semi Disposition Taxes" shall mean Taxes of C-Cube and its
subsidiaries attributable to periods through the Distribution Date but not
including (i) Semi Spin Taxes and (ii) except as provided in Section 6.3,
Pre-Semi Disposition Non-Semiconductor Taxes (or any reduction or refund
thereof) arising from an Adjustment. The parties agree that the Section 41
Credits shall not be taken into account as a credit in determining Pre-Semi
Disposition Taxes, but rather shall be treated as provided in Section 5 hereof.
Notwithstanding the foregoing, Pre-Semi Disposition Taxes shall also include all
Divicom Merger Taxes.

        "Public Distribution" has the meaning set forth in the recitals hereto.

        "Regulations" means the Regulations issued by the Secretary of the
Treasury interpreting the Code.

                                      -4-
<PAGE>   5

        "Reorganization Agreement" means the Amended and Restated Agreement and
Plan of Merger and Reorganization by and between C-Cube Microsystems Inc. and
Harmonic Inc. dated as of December 9, 1999.

        "Retained Cash" means cash retained by C-Cube pursuant to Sections
4.1(a) and 4.1(b) in order to pay Semi Spin Taxes and Pre-Semi Disposition
Taxes, respectively.

        "Return" means any return, report, form or similar statement or document
(including, without limitation, any related or supporting information or
schedule attached thereto and any information return, claim for, amended return
and declaration of estimated Tax) that has been or is required to be filed with
any Taxing Authority or that has been or is required to be furnished to any
Taxing Authority in connection with the determination, assessment or collection
of any Taxes or the administration of any laws, regulations or administrative
requirements relating to any Taxes.

        "Section 41 Credits" shall have the meaning set forth in Section 5
hereof.

        "Semi Spin Taxes" shall mean the corporate Tax liability incurred as a
direct result of the Semi Spin, and any Taxes incurred in any internal
restructuring undertaken in connection with the Separation and the Public
Distribution (including but not limited to all of the steps described the
Separation Agreement and Ancillary Agreements thereto, and including all
intercompany stock and asset transfers and related incorporations and issuances
of stock undertaken in preparation for the Separation and the Public
Distribution), and any Taxes and other amounts incurred by C-Cube, Semiconductor
or their affiliates as a result of a claim by any person arising from the tax
treatment of the Separation, the Public Distribution or any such internal
restructuring. The parties agree that the Section 41 Credits shall not be taken
into account as a credit in determining Semi Spin Taxes, but rather shall be
treated as provided in Section 5 hereof.

        "Semiconductor Business" shall have the meaning set forth in the
Separation Agreement.

        "Semiconductor Separate Company Return" shall mean any Return (including
but not limited to a Semiconductor Straddle Period Return) with respect to a
taxable period of any member of the Semiconductor Subgroup, other than any
Consolidated Group Return or Combined Return.

        "Semiconductor Straddle Period Return" shall mean any Return with
respect to a Straddle Period that is also a taxable period of a member of the
Semiconductor Subgroup or that relates principally to the Semiconductor
Business, and that is not a Consolidated Group Return or a Combined Return.

        "Semiconductor Subgroup" shall mean Semiconductor and its past, present
and future subsidiaries.

        "Semiconductor Tax Adjustment" shall mean, with respect to any Pre-Semi
Disposition Tax or a Semi Spin Tax for any Taxable period or portion of a
Taxable period, and as computed separately with respect to each Tax, the net
increase in each such Tax equal to the sum of all Tax Adjustments pertaining to
such Pre-Semi Disposition Tax and Semi Spin Tax with respect to which

                                      -5-
<PAGE>   6

a Final Determination has been made. In the event an Adjustment pertains to both
a Semiconductor Tax Adjustment and a C-Cube Tax Adjustment, the parties shall
equitably allocate such Tax Adjustment and treat it as a C-Cube Tax Adjustment
in part and a Semiconductor Tax Adjustment in part in a manner consistent with
the intent of this Agreement. If any portion of the item giving rise to the Tax
Adjustment can reasonably be allocated to each party based on such party's
contribution to the underlying Adjustment, such portion shall be so allocated,
and any portion that is not capable of being so allocated shall be allocated
based on any reasonable method, provided that in the event of a dispute the
dispute resolution provisions of Section 4.3 shall apply.

        "Semiconductor Tax Benefit" shall mean, with respect to any Pre-Semi
Disposition Tax or a Semi Spin Tax for any Taxable period or portion of a
Taxable period, and as computed separately with respect to each Tax, the net
decrease in each such Tax equal to the sum of all Tax Adjustments pertaining to
such Tax (i) attributable to the income, assets and/or business of any member of
the Semiconductor Subgroup or the Semiconductor Business and (ii) with respect
to which a Final Determination has been made for each such Taxable period or
portion of a Taxable period (including, but not limited to, periods prior to the
Public Distribution). In the event a net decrease in Tax is attributable to both
the Semiconductor Subgroup or the Semiconductor Business, on one hand, and to
the C-Cube Subgroup, on the other hand, the parties shall equitably allocate
such net decrease and treat it as a C-Cube Tax Benefit in part and a
Semiconductor Tax Benefit in part in a manner consistent with the intent of this
Agreement. If any portion of the item giving rise to the net decrease can
reasonably be allocated to each party based on such party's contribution to the
underlying Adjustment, such portion shall be so allocated, and any portion that
is not capable of being so allocated shall be allocated based on any reasonable
method, provided that in the event of a dispute the dispute resolution
provisions of Section 4.3 shall apply.

        "Separate Return Period" means that period of time following the
Distribution Date during which Semiconductor (or any member of the Semiconductor
Subgroup) is not a member of the Affiliated Group.

        "Separation Agreement" means the Master Separation and Distribution
Agreement, dated as of ____________________, 2000 by and among C-Cube,
Semiconductor, and C-Cube Semiconductor II Inc.

        "Straddle Period" shall mean any Taxable period that begins before and
ends after the Distribution Date.

        "Tax" (and, with correlative meanings, "Taxes" and "Taxable") means,
without limitation, and as determined on a jurisdiction-by-jurisdiction basis,
each foreign or U.S. federal, state, local or municipal income, alternative or
add-on minimum, gross receipts, sales, use, ad valorem, transfer, franchise,
profits, license, withholding, payroll, employment, excise, severance, stamp,
occupation, premium, property, value added or any other tax, custom, tariff,
impost, levy, duty, governmental fee or other like assessment or charge of any
kind whatsoever, together with any interest or penalty, addition to tax or
additional amount related thereto, imposed by any Taxing Authority.

                                      -6-
<PAGE>   7

        "Tax Adjustment" shall mean the increase or decrease in Tax (which for
the sake of clarity shall include all interest, penalties, additions to tax and
additional amounts related thereto), using the assumptions set forth in the next
sentence, resulting from an Adjustment. For purpose of determining such deemed
increase or decrease in Tax, the following assumptions will be used: (a) in the
case of any income Tax (or franchise tax based on income), the highest marginal
Tax rate or, in the case of any other Tax, the highest applicable Tax rate, in
each case in effect with respect to that Tax for the Taxable period or any
portion of the Taxable period to which the adjustment relates; and (b) such
determination shall be made without regard to whether any actual increase or
decrease in such Tax will in fact be realized with respect to the Return to
which such adjustment relates. Notwithstanding the foregoing sentence, a capital
loss Tax Adjustment shall be considered to result in a decrease in Tax only when
and to the extent such capital loss is utilized, and for this purpose a capital
loss shall be deemed utilized only if it would be utilized after taking account
of all other items of income, gain, loss, deduction or credit.

        "Tax Contest" means any audit, examination, claim, suit, action or other
proceeding relating to Taxes.

        "Tax Offset Amount" shall have the meaning given in Section 3.2.

        "Tax Retention Schedule" has the meaning set forth in Section 4.1(c).

        "Taxing Authority" means any governmental authority or any subdivision,
agency, commission or authority thereof, or any quasi-governmental or private
body having jurisdiction over the assessment, determination, collection or other
imposition of Taxes.

        "Unitary Group" means the group of corporations having C-Cube as the
common parent corporation that is eligible or required to be included in a
Combined Return with C-Cube.

        2. FILING OF CONSOLIDATED GROUP RETURNS

            2.1 Consent to File. Semiconductor hereby consents, on its behalf
and on behalf of every other member of the Semiconductor Subgroup, to the filing
of Consolidated Group Returns by C-Cube on behalf of the Affiliated Group, for
each Consolidated Return Year in which any member of the Semiconductor Subgroup
is included, and to any applications for extensions of time to file such Returns
which C-Cube in its sole judgment shall make to the IRS. Semiconductor hereby
consents, on its behalf and on behalf of every other member of the Semiconductor
Subgroup, to the filing of Combined Returns by C-Cube on behalf of the Unitary
Group in which any member of the Semiconductor Subgroup is included, and to any
applications for extensions of time to file such Returns which application
C-Cube in its sole judgment shall make to the applicable Taxing Authorities.

            2.2 Responsibility for Preparing and Filing Returns for Periods
Commencing Prior to the Distribution Date. Semiconductor shall be entitled to
prepare and shall be responsible for the preparation of all Consolidated Group
Returns for the Affiliated Group, all Combined Returns for the Unitary Group,
and all C-Cube Separate Company Returns and Semiconductor

                                      -7-
<PAGE>   8

Separate Company Returns for all the periods that commence prior to the
Distribution Date (including C-Cube Straddle Period Returns and Semiconductor
Straddle Period Returns), including but not limited to determining all Return
positions and making Tax elections relating to such Returns. Semiconductor shall
provide each such Return to C-Cube for its review at least 60 days prior to the
due date, including extensions, for filing such Return. C-Cube shall have the
right to review and approve those Returns provided that approval shall not be
unreasonably withheld. All Returns described in this Section 2.2 shall be filed
in accordance with the past practices consistently applied, provided that
Semiconductor shall provide C-Cube with reasonable notice of actions needed to
be taken by C-Cube in connection with such filing. Such Returns shall also be
prepared in a manner consistent with the final computation of Semi Spin Taxes
and Pre-Semi Disposition Taxes pursuant to Section 4.3. C-Cube and Semiconductor
agree to cooperate in connection with the filing of all Returns described in
this Section 2.2, including providing reasonably requested information and
taking the actions necessary to file such Returns. Semiconductor shall give to
C-Cube immediately upon request by C-Cube a copy of any Return that has been
prepared by Semiconductor. Notwithstanding the foregoing, Returns claiming the
Section 41 Credits shall be filed in accordance with Section 5.

            2.3 Responsibility for Preparing and Filing Returns for Periods
Commencing After the Distribution Date. C-Cube shall be responsible for the
preparation and filing of C-Cube Separate Company Returns with respect to any
member of the C-Cube Subgroup, all Consolidated Group Returns for members of the
Affiliated Group, and all Combined Returns for the Unitary Group, in each case
for all periods commencing on or after the Distribution Date. Semiconductor
shall be responsible for the preparation and filing of Semiconductor Separate
Company Returns with respect to any member of the Semiconductor Subgroup for all
periods commencing on or after the Distribution Date. C-Cube shall provide to
Semiconductor portions of the Returns that are prepared by it pursuant to this
Section 2.3 and that relates to Taxes for which Semiconductor is or could be
liable under this Agreement at least 60 days prior to the anticipated filing
date of such Returns and Semiconductor shall have the right to approve those
portions of the Returns, provided that approval may not be unreasonably
withheld.

            2.4 Further Action. Each of Semiconductor and C-Cube agrees, at
C-Cube's or Semiconductor's request, respectively, to furnish to the requesting
party and/or any Taxing Authority upon reasonable request any and all necessary
information (including but not limited to any Tax information relevant to
periods prior to the Public Distribution) and to execute all reasonably
requested elections and other documents which may be necessary or appropriate,
in the reasonable judgment of Semiconductor or C-Cube, to evidence
Semiconductor's or C-Cube's consent or to facilitate the preparing and filing of
such Returns and applications for extension of time to file the Returns
described in this Section 2. This obligation applies to Consolidated Group
Returns and Combined Returns that include any member of the Semiconductor
Subgroup even if such Return is filed after such member is no longer a member of
the Affiliated Group or the Unitary Group.

            2.5 Amended Returns. Semiconductor shall have the right to prepare
and to cause C-Cube to file any amended Return or claim for refund prepared by
Semiconductor relating to any Return or portion thereof that Semiconductor has
the right to prepare under this Section 2, provided

                                      -8-
<PAGE>   9

that no such amended Return shall be filed unless Semiconductor has paid to
C-Cube, on an After-Tax Basis, all costs (including Taxes and reasonable
out-of-pocket costs) that will be incurred by C-Cube in connection with or as a
result of the filing thereof; and, provided, further, that claims for refund of
Section 41 Credits may only be filed in accordance with Section 5. C-Cube shall
have the right to review and approve such amended Returns or claims for refund,
if any, provided that approval may not be unreasonably withheld. C-Cube agrees
to cooperate with Semiconductor in connection with the filing of any such
amended Returns or claims for refund, including providing reasonably requested
information and taking reasonably requested actions necessary to file such
Returns or claims for refund. C-Cube shall not have the right to file any
amended Return or claim for refund increasing the Taxes payable by Semiconductor
under this Agreement without the consent of Semiconductor (not to be
unreasonably withheld) or unless C-Cube reasonably determines that such Return
or claim is required by law to be filed or necessary in order to avoid any
material penalty amount with respect to which C-Cube is not indemnified by
Semiconductor under this Agreement.

        3. ALLOCATION AND PAYMENT OF LIABILITIES FOR TAXES

            3.1 Payment Responsibility.

                (a) Taxes for Which Semiconductor is Liable.

                    (i)Consolidated Group Returns, Combined Returns and C-Cube
Separate Company Returns. Semiconductor shall be responsible for, and shall pay
on a timely basis and indemnify and hold C-Cube harmless on an After-Tax Basis
from and against, all Pre-Semi Disposition Taxes and all Semi Spin Taxes, and to
the extent such amounts are required to be reflected in any Consolidated Group
Return, Combined Return and C-Cube Separate Company Return, such amounts shall
be paid to C-Cube no later than three days prior to the time C-Cube is required
to pay such Taxes without penalty or interest.

                    (ii) Semiconductor Separate Company Returns. Semiconductor
shall be responsible for, and shall pay on a timely basis and indemnify and hold
C-Cube harmless on an After-Tax Basis from and against, all Taxes required to be
reflected in any Semiconductor Separate Company Return or Semiconductor Straddle
Period Return.

                    (iii) Allocation in the Case of C-Cube Straddle Period
Return. For purposes of Section 3.1(a)(i), in the event of a C-Cube Separate
Company Return that is a C-Cube Straddle Period Return, the amount of Taxes that
will be treated as Pre-Semi Disposition Taxes will be determined as if the
relevant taxable period ended on the close of the Distribution Date (except that
Taxes imposed on a basis other than net or gross income, receipts, sales,
payroll or the like shall be prorated on a daily basis).

                (b) Taxes for Which C-Cube is Liable. Except as provided in
Section 3.1(a), C-Cube shall be responsible for, and shall pay on a timely basis
and indemnify and hold Semiconductor harmless on an After-Tax Basis, from and
against, (i) all Taxes required to be

                                      -9-
<PAGE>   10

reflected in a C-Cube Separate Company Return, and (ii) except as provided in
Section 6.3, Pre-Semi Disposition Non-Semiconductor Taxes attributable to an
amended Return (other than an amended Return prepared by or at the request of
Semiconductor) or to an Adjustment.

            3.2 Credit for Amounts Retained/Deficiencies in Amounts Retained.
Semiconductor's liability under Section 3.1(a) with respect to any Tax shall be
treated as having been paid to the extent of the amount set forth with respect
to such Tax on the Tax Retention Schedule and retained by C-Cube pursuant to
Section 4 hereof ("Tax Offset Amounts").

            3.3 Refunds. To the extent any Tax for which Semiconductor or C-Cube
is liable pursuant to this Agreement or the Reorganization Agreement is
subsequently refunded or credited to the other party by a Taxing Authority,
other than as a result of or in connection with an Adjustment governed by
Section 6, the receiving party shall reimburse the responsible party no later
than three (3) days following the receipt of such refund of Tax or reduction in
Tax otherwise payable, after subtracting the aggregate additional Taxes (if any)
incurred or to be incurred by the party receiving the refund or credit as a
result of the receipt of that refund or credit and any other amounts due from
the other party pursuant to this Agreement. For purposes of this Section 3.3,
C-Cube shall be treated as the party liable pursuant to this Agreement and the
Reorganization Agreement for Pre-Semi Disposition Non-Semiconductor Taxes.

            3.4 Separate Return Indemnity. C-Cube shall indemnify and hold
Semiconductor and the Semiconductor Subgroup harmless on an After-Tax Basis for
any Taxes of C-Cube or the C-Cube Subgroup attributable to any period (or
portion thereof) following the Distribution Date (other than any such Taxes that
are Pre-Semi Disposition Taxes or Semi Spin Taxes) and Semiconductor shall
indemnify and hold C-Cube and the C-Cube Subgroup harmless on an After-Tax Basis
for any Taxes relating to Semiconductor Separate Period Returns.

            3.5 Interest. To the extent any amount is not paid by the due date
set forth in this Agreement, interest shall accrue on such unpaid amount at a
rate of [__] %.

        4. RETENTION OF CASH BY C-CUBE; TAX LIABILITY CALCULATION.

            4.1 Retention of Cash. Under the Reorganization Agreement, C-Cube is
to retain cash sufficient to pay Semi Spin Taxes and Pre-Semi Disposition Taxes.
This Section 4 sets forth the mechanisms for (i) determining the amount of the
cash to be retained by C-Cube to pay such Taxes, and (ii) adjustments to such
retained cash.

                (a) Calculation of Amount Initially Retained to Pay Semi Spin
Taxes ("T").

        T = r (A- B - C - D + E) - F

                                      -10-
<PAGE>   11

        Where:

        r = C-Cube's estimated combined state and federal income tax rate. An
initial good-faith written estimate of r shall be communicated to Harmonic by
C-Cube no later than [10] days after the date on which the proxy materials
relating to the Merger and Distribution have been mailed to Harmonic and C-Cube
stockholders, as appropriate (the "Mailing Date"). Harmonic may comment up to
[20] days after the Mailing Date (or, if later, 10 days following receipt of
such written estimate from C-Cube), and C-Cube agrees to give careful
consideration to Harmonic's comments. In the event of a disagreement between
C-Cube and Harmonic, the provisions of Section 4.1(e) shall apply.

        A = the total implied market capitalization of Semiconductor on the
Distribution Date, which shall equal the number of shares of Semiconductor's
common stock to be distributed in the Public Distribution multiplied by the
closing trading price of Semiconductor's common stock (which will be trading on
a "when issued" basis) at 4:00 PM (the close of trading) on the third trading
day before the Distribution Date; provided, however, that the closing trading
price of the Semiconductor common stock on a date closer to the Distribution
Date shall be used if practicable (the "Initial Stock Price").

        B = the estimated tax basis of the Semiconductor stock immediately prior
to the Public Distribution, which basis shall include, pursuant to Regulations
Section 1.1502-32(b)(3)(iv)(D), an estimate of the Section 41 Credits to be
received from C-Cube pursuant to Section 5. An initial good-faith estimate of
the value of B shall be communicated to Harmonic by C-Cube no later than [10]
days after the the Mailing Date. Harmonic may comment up to [20] days after the
the Mailing Date (or, if later, 10 days following receipt of such written
estimate from C-Cube), and C-Cube agrees to give careful consideration to
Harmonic's comments. In the event of a disagreement between C-Cube and Harmonic,
the provisions of Section 4.1(e) shall apply.

        C = the estimated deductions attributable to the exercise of C-Cube
compensatory stock options exercised on or after October 27, 1999, and on or
before the record date for the Public Distribution (the "Exercise Period"),
based on C-Cube's option exercise records and assuming that "disqualifying
dispositions" occur with respect to 80% of all C-Cube stock acquired pursuant to
the exercise of C-Cube options that are "incentive stock options" under Section
422 of the Code, and provided that no deductions that offset Pre-Semi
Disposition Taxes shall be included in the calculation of C (it being the
intention of the parties that such deductions shall not factor into the
computations of Pre-Semi Disposition Taxes). To the extent that, as of the date
of determination of C, there are actual disqualifying dispositions of shares of
C-Cube stock that were acquired pursuant to the exercise of C-Cube "incentive
stock options" during the Exercise Period, and C-Cube has knowledge of the
actual amount realized from the disposition, the value of C shall be determined
by using the actual sales price of the stock for purposes of applying Section
422(c)(2) of the Code. Except as provided in the immediately preceding sentence,
the portion of the value of C attributable to the deemed disqualifying
disposition of shares acquired pursuant to the exercise of incentive stock
options shall be determined by assuming that the amount realized from the sale
is equal to the fair market value of the stock received upon exercise. An
initial good-faith written estimate of the value of C shall be communicated to
Harmonic by C-Cube no later than [10] days after the Mailing Date.

                                      -11-
<PAGE>   12

Harmonic may comment up to [20] days after the Mailing Date (or, if later, 10
days following receipt of such written estimate from C-Cube), and C-Cube agrees
to give careful consideration to Harmonic's comments. In the event of a
disagreement between C-Cube and Harmonic, the provisions of Section 4.1(e) shall
apply. C-Cube shall provide Harmonic with a revised written good-faith estimate
of C no later than 5 PM, Pacific Time, on the date that is three (3) business
days before the scheduled Distribution Date. Harmonic may comment up to 24 hours
following receipt of such revised estimate, and C-Cube agrees to give careful
consideration to Harmonic's comments. In the event of a disagreement between
C-Cube and Harmonic, the provisions of Section 4.1(e) shall apply.

        D = the estimated capitalized expenses, plus the estimated deductible
expenses (other than those covered or included in B and C), attributable to the
Separation and the Public Distribution that will reduce the amount of gain to be
recognized by C-Cube as a result of the Public Distribution, and provided that
no amounts that offset Pre-Semi Disposition Taxes shall be included in the
calculation of D (it being the intention of the parties that such deductions
shall not factor into the computation of Pre-Semi Disposition Taxes). An initial
good-faith estimate of D shall be communicated to Harmonic by C-Cube no later
than [10] days after the Mailing Date. Harmonic may comment up to [20] days
after the Mailing Date (or, if later, 10 days following receipt of such estimate
from C-Cube), and C-Cube agrees to give careful consideration to Harmonic's
comments. In the event of a disagreement between C-Cube and Harmonic, the
provisions of Section 4.1(e) shall apply.

        E = the taxable income arising from transfers of assets and other
transactions undertaken by C-Cube and its subsidiaries outside of the ordinary
course of business of C-Cube prior to and in contemplation of the Public
Distribution, including all such amounts arising from the internal restructuring
undertaken in connection with the Separation and Public Distribution but not
including taxable income, if any, arising from the merger of Divicom into
C-Cube, which taxable income, if any, shall be taken into account in determining
Pre-Semi Disposition Taxes to the extent provided elsewhere in this Agreement.
An initial good-faith estimate of E shall be communicated to Harmonic by C-Cube
no later than [10] days after the Mailing Date. Harmonic may comment up to [20]
days after the Mailing Date (or if later, 10 days following receipt of such
estimate from C-Cube), and C-Cube agrees to give careful consideration to
Harmonic's comments. In the event of a disagreement between C-Cube and Harmonic,
the provisions of Section 4.1(e) shall apply.

        F = any tax credits of the Affiliated Group attributable to periods (or
portions of periods) prior to the Distribution Date (but not including Section
41 Credits covered in Section 5) and estimated tax payments paid by C-Cube prior
to the Distribution Date which did not offset Pre-Semi Disposition Taxes (with
such credits and estimated tax payments applied first to Pre-Semi Disposition
Taxes). An initial estimate of F shall be communicated to Harmonic by C-Cube no
later [10] days after the Mailing Date. Harmonic may comment up to [20] days
after the Mailing Date (or, if later, 10 days following receipt of such estimate
from C-Cube), and C-Cube agrees to give careful consideration to Harmonic's
comments. In the event of a disagreement between C-Cube and Harmonic, the
provisions of Section 4.1(e) shall apply.

                                      -12-
<PAGE>   13

                (b) Calculation of Amount Retained to Pay Pre-Semi Disposition
Taxes. C-Cube shall provide Harmonic with an initial good-faith written estimate
of the Pre-Semi Disposition Taxes no later than [10] days after the Mailing
Date. Harmonic may comment up to [20] days after the Mailing Date (or, if later,
10 days following receipt of such written estimate from C-Cube), and C-Cube
agrees to give careful consideration to Harmonic's comments. In the event of a
disagreement between C-Cube and Harmonic, the provisions of Section 4.1(e) shall
apply.

                (c) Pursuant to Section 2.2 of the Separation Agreement, C-Cube
shall certify the amount of its cash reserve to Harmonic prior to the merger of
C-Cube and Harmonic, which schedule shall include a breakdown of the amount
retained for Pre-Semi Disposition Taxes, Semi Spin Taxes, and Pre-Semi
Disposition Non-Semiconductor Taxes (in each case on a Tax-by-Tax basis) (the
"Tax Retention Schedule").

                (d) All interest earned by C-Cube on the Retained Cash from the
Distribution Date to the date the underlying Taxes are paid or (if applicable)
returned to Semiconductor, after subtraction of the aggregate additional Taxes
incurred or to be incurred by C-Cube (if any) as a result of interest received
or accrued with respect to the Retained Cash, shall be paid to Semiconductor.

                (e) It is the intent of the parties that, at least 10 days prior
to the scheduled Distribution Date, the parties shall have agreed on the amount
of Retained Cash, including all amounts that are included in the computation of
Retained Cash other than the Initial Stock Price but computed using a nonbinding
estimate for the Initial Stock Price. If C-Cube and Harmonic fail to reach an
agreement by such time, either party shall be entitled to submit the matter to a
mutually acceptable arbitrator, provided that such arbitrator and its affiliates
shall not have had C-Cube, Harmonic or any affiliate thereof as a client within
two years of such time (and neither party reasonably objects to the independence
of such arbitrator on other grounds). If C-Cube and Harmonic are unable to
mutually agree upon an arbitrator within one week of a party's notification to
the other party of its desire to arbitrate such a dispute, then each party shall
select an arbitrator and such two arbitrators shall have one week to select a
third arbitrator who shall have final authority to resolve such dispute within
ten (10) days of such arbitrator's selection. C-Cube and Harmonic shall share
equally in the fees and expenses of such arbitrators. The determination by such
arbitrator shall be final and binding on the parties for purposes of applying
this Section 4.1, absent fraud or manifest error. Pursuant to Section 3.2(e) of
the Separation Agreement, the final determination of Retained Cash pursuant to
this Section 4.1 shall be a condition to the Distribution.

            4.2 Interim Recalculation of Taxes and True-Up.

                (a) Semi Spin Taxes.

                    (i) No later than twenty (20) days after the Public
Distribution, Semiconductor shall deliver to Harmonic a written recalculation of
the Semi Spin Taxes using the equation described in Section 4.1 above, and
submit the recalculation to weighted-average price Harmonic for review. In such
recalculation, Semiconductor shall use the weighted average price of

                                      -13-
<PAGE>   14

Semiconductor stock on the date on which Semiconductor Stock first trades
publicly (not including trading on a "when issued" basis), which the parties
anticipate will be the trading date immediately following the Distribution Date,
in lieu of the Initial Stock Price in the computation of A. In addition,
Semiconductor shall use the actual tax rate for each jurisdiction in which
C-Cube files a Return, actual tax basis, actual option deductions and actual
other capitalized and deductible expenses , and other actual amounts, each to
the extent available at such time, in calculating variables r, B, C, D, E and F,
respectively, in lieu of the estimates set forth above. Notwithstanding the
foregoing, in the event Semiconductor does not deliver such recalculation to
Harmonic within such time period, Harmonic shall have the right, but not the
obligation, to prepare such calculations and deliver the same to Semiconductor,
in which case references to Harmonic and Semiconductor in clause (ii) below
shall be read to refer to Semiconductor and Harmonic, respectively.

                    (ii) In the event that Harmonic disagrees with Semiconductor
as to the recalculation of the Semi Spin Taxes as provided in (i), Harmonic
shall notify Semiconductor no more than 20 days after Semiconductor submits its
recalculation to Harmonic. Semiconductor and Harmonic shall then discuss the
computation of the Semi Spin Taxes in a good faith effort to reach an agreement
as to the amount of the Semi Spin Taxes.

                    (iii) If Semiconductor and Harmonic fail to reach an
agreement by the day which is 60 days after the Distribution Date, either party
shall be entitled to submit the matter to a mutually acceptable third-party
arbitrator. If the parties are unable to mutually agree upon an arbitrator
within one week of a party's notification to the other party of its desire to
arbitrate such a dispute, then each party shall have one week to select an
arbitrator and such two arbitrators shall have one week to select a third
arbitrator who shall have final authority to resolve such dispute within twenty
(20) days of such arbitrator's selection. Semiconductor and Harmonic shall share
equally in the fees and expenses of such arbitrators.

                    (iv) If the recalculated Semi Spin Taxes (after completion
of any discussion or arbitration regarding said recalculation) exceed the
related Tax Offset Amounts, Semiconductor shall pay Harmonic such excess within
three (3) days of the completion of any discussion or arbitration regarding said
recalculation. If the recalculated Semi Spin Taxes (after completion of any
discussion or arbitration regarding said recalculation) are less than the
related Tax Offset Amounts, Harmonic shall pay Semiconductor such difference
within three (3) days of the completion of any discussion or arbitration
regarding said recalculation. Any such payments shall be reflected appropriately
on the Tax Retention Schedule.

                (b) Basis Adjustment. Unless otherwise determined by the
third-party arbitrator in accordance with this Section 4.2, or unless otherwise
required pursuant to the terms of any Final Determination, payments made by
Harmonic to Semiconductor under this Section 4.2 shall be treated as an increase
in the basis of Semiconductor stock, for purposes of calculating Semi Spin
Taxes. Payments made by Semiconductor to Harmonic under this Section 4.2 shall
be treated as a decrease in the basis of Semiconductor stock for purposes of
calculating Semi Spin Taxes.

            4.3 Recalculation of Semi Spin Taxes and Pre-Semi Disposition Taxes.

                                      -14-
<PAGE>   15

                (a) In connection with the preparation of the Returns for which
it is responsible under Sections 2.2 and 2.3 hereof, Semiconductor shall prepare
a final calculation of Semi Spin Taxes and Pre-Semi Disposition Taxes, based on
actual figures available for such taxable periods. Semiconductor shall submit
such written calculation to Harmonic no later than sixty (60) days prior to
filing the relevant Return with respect to the Tax involved, provided that
failure to deliver such calculation by such time shall not affect
Semiconductor's liability hereunder (but shall be taken into account in
determining whether Semiconductor owes any interest or penalties).
Notwithstanding the foregoing, in the event Semiconductor does not deliver such
final calculation to Harmonic within such time period, Harmonic shall have the
right, but not the obligation, to prepare such calculations and deliver the same
to Semiconductor, in which case references to Harmonic and Semiconductor in
subSection (b) below shall be read refer to Semiconductor and Harmonic,
respectively.

                (b) Harmonic shall have twenty (20) days after receiving such
written calculation to review the calculation. In the event that Harmonic
disagrees with Semiconductor as to the amount of the Semi Spin Taxes or Pre-Semi
Disposition Taxes to which such calculation relates, Harmonic shall notify
Semiconductor no more than 20 days after Semiconductor submits such
recalculation to Harmonic. Semiconductor and Harmonic shall then discuss the
computation of the Semi Spin Taxes and Pre-Semi Disposition Taxes in a good
faith effort to reach an agreement as to the amount of the Semi Spin Taxes and
Pre-Semi Disposition Taxes.

                (c) If Semiconductor and Harmonic fail to reach an agreement by
the day which is 60 days after the date Semiconductor provided its calculations
to Harmonic, either party shall be entitled to submit the matter to a mutually
acceptable third-party arbitrator. If the parties are unable to mutually agree
upon an arbitrator within one week of a party's notification to the other party
of its desire to arbitrate such a dispute, then each party shall have one week
to select an arbitrator and such two arbitrators shall have one week to select a
third arbitrator who shall have final authority to resolve such dispute within
twenty (20) days of such arbitrator's selection. Semiconductor and Harmonic
shall share equally in the fees and expenses of such arbitrators.

                (d) If the recalculated Semi Spin Taxes and Pre-Semi Disposition
Taxes (after completion of any discussion or arbitration regarding said
recalculation) exceed the related Tax Offset Amounts (adjusted for amounts paid
pursuant to Sections 3.1(a) and 4.2), Semiconductor shall pay Harmonic such
excess within three (3) days of the completion of any discussion or arbitration
regarding said recalculation. If the recalculated Semi Spin Taxes and Pre-Semi
Disposition Taxes (after completion of any discussion or arbitration regarding
said recalculation) are less than the related Tax Offset Amounts (adjusted for
amounts paid pursuant to Sections 3.1(a) and 4.2), Harmonic shall pay
Semiconductor such difference within three (3) days of the completion of any
discussion or arbitration regarding said recalculation.

                (e) Basis Adjustment. Unless otherwise determined by the
third-party arbitrator in accordance with this Section 4.3, or unless otherwise
required pursuant to the terms of any Final Determination, payments made by
Harmonic to Semiconductor under this Section 4.3 shall be treated as an increase
in the basis of Semiconductor stock, for purposes of calculating Semi Spin

                                      -15-
<PAGE>   16

Taxes. Unless otherwise required pursuant to the terms of any Final
Determination, payments made by Semiconductor to Harmonic under this Section 4.3
shall be treated as a decrease in the basis of Semiconductor stock for purposes
of calculating Semi Spin Taxes.

            4.4 Liability for the Divicom Merger Taxes. The liability for state
and local Taxes of Harmonic or the C-Cube Subgroup that would not have been
incurred but for the merger of Divicom into C-Cube shall be allocated by the
mutual agreement of the parties in accordance with Schedule 4.4, provided,
however, that the liability for the Divicom Merger Taxes shall be allocated as
provided elsewhere in this Agreement. Nothing in this Section 4 shall be deemed
to limit a party's liability under Section 3 or Section 6 hereof.

        5. SECTION 41 RESEARCH CREDITS

        In accordance with Section 502 of the Ticket to Work and Work Incentives
Improvement Act of 1999, Semiconductor shall prepare and submit to C-Cube U.S.
Federal Income Tax Returns on or after October 1, 2000, which Returns will
reflect claims for refund of all Section 41 research credits attributable to the
period commencing on July 1, 1999, and ending on the Distribution Date (the
"Section 41 Credits"). Harmonic shall review such Returns and have the right to
approve such Returns, provided that approval may not be unreasonably withheld.
If Harmonic approves of such Returns, Harmonic shall file such Returns within a
reasonable period after receiving such Returns from Semiconductor (but in no
event earlier than October 1, 2000). In the event of a disagreement regarding
such Returns, procedures similar to those described in Section 4.3(c) shall
apply. C-Cube shall pay to Semiconductor the portion of the refund of such
credits actually received to the extent such credits are attributable to the
period commencing on July 1, 1999, and ending on the Distribution Date, less any
Pre-Semi Disposition Non-Semiconductor Tax Deficiency.

        6. DISPUTES WITH TAXING AUTHORITIES

            6.1 Tax Contests.

                (a) Subject to Section 6.1(b), in the event of a Tax Contest
concerning the amount of any Tax liability for which Semiconductor is or could
be liable pursuant to this Agreement or refund due to or in respect of such Tax
liability (including but not limited to the Semi Spin Taxes), C-Cube hereby
expressly grants to Semiconductor the authority to act on behalf of C-Cube and
the Affiliated Group in matters related to such Tax liability. Subject to
Section 6.1(b), the parties hereby expressly appoint (subject to the consent of
the relevant Taxing Authority) Semiconductor to act as agent for the Affiliated
Group in any Tax Contest related to such Tax liability. Following receipt from
Harmonic of notice of the existence of such a Tax Contest and subject to Section
6.1(b), Semiconductor shall have the responsibility with respect to any such Tax
Contest and shall handle such Tax Contest in a prudent and diligent manner;
provided, however, that

                                      -16-
<PAGE>   17

Harmonic shall be given copies of all correspondence with the relevant Taxing
Authority promptly upon receipt or transmission of such correspondence, and
shall receive reasonable advance notice of and opportunity to participate in, at
its sole cost and expense, all meetings and proceedings pertaining to such Tax
Contest, and shall be consulted prior to the making or accepting (tentatively or
otherwise) of any offers to settle such Tax Contest. No decision to pursue,
settle, or appeal any Tax Contest, Group Refund Claim or other claim for refund
of Tax related shall be made by Semiconductor without the prior written approval
of C-Cube, which consent shall not be unreasonably withheld. Notwithstanding the
foregoing, until such time as C-Cube receives notice that the Taxing Authority
intends to raise issues with respect to which Semiconductor could have liability
hereunder, C-Cube shall be entitled to deal directly with such Taxing Authority.
Semiconductor and C-Cube shall each bear their own costs (including attorneys
and accountants fees) in carrying out their responsibilities under this Section
6.1(a).

                (b) Semiconductor shall, as a condition to exercising its
authority under Section 6.1(a) above, acknowledge in a writing reasonably
satisfactory to C-Cube its obligation to indemnify C-Cube on an After-Tax Basis
for any Tax liability arising from such Tax Contest and for which Semiconductor
is liable under this Agreement. Harmonic shall have the right to assume the
defense of any Tax Contest described in Section 6.1(a) in the event it
reasonably determines that cause exists for doing so, and Semiconductor shall
reimburse Harmonic for all reasonable out of pocket costs in assuming such
defense. Cause shall be deemed to exist if (i) Harmonic reasonably determines
that its interests would be jeopardized by a failure of Semiconductor to
adequately defend a Tax Contest in a prudent and diligent manner (including by
failure to make the acknowledgment in the first sentence of this Section
6.1(b)), (ii) Harmonic gives written notice of its determination, and (iii)
Semiconductor fails to act within 10 days of such notice to cure the defect
cited by Harmonic in such notice; provided, however, that clauses (ii) and (iii)
shall not apply if and to the extent that Harmonic reasonably determines that
providing such notice and awaiting Semiconductor's response would materially
jeopardize Harmonic's interests. In the event Harmonic has assumed the defense
of a Tax Contest for cause, Semiconductor shall reassume the defense of such Tax
Contest upon providing proof reasonably satisfactory to Harmonic that it shall
adequately defend such Tax Contest and payment to Harmonic of all reasonable
costs incurred in assuming such defense and defending such Tax Contest in the
interim; provided, however, that Semiconductor shall be given no more than one
opportunity to reassume the defense of any Tax Contest during any twelve-month
period.

            6.2 Agreement to Cooperate. Each of C-Cube and Semiconductor agrees
to cooperate and cause their affiliates to cooperate fully and in a timely
manner in connection with the preparation of Returns, the pursuit of any Group
Refund Claim or other claim for refund of Taxes or the conduct of any Tax
Contest. The parties will bear their own expenses in connection with such
cooperation except as otherwise provided herein. This agreement to cooperate
extends beyond the date after which Semiconductor is no longer a member of the
Affiliated Group.

            6.3 Adjustments.

                                      -17-
<PAGE>   18

                (a) In the event there is a C-Cube Tax Adjustment, Semiconductor
Tax Adjustment, C-Cube Tax Benefit, or Semiconductor Tax Benefit:

                    (i)Semiconductor shall be liable for, and shall indemnify
and hold the C-Cube Subgroup harmless on an After-Tax Basis, against any and all
Semiconductor Tax Adjustments (and any reasonable fees and other out-of-pocket
costs incurred by C-Cube in connection with such Semiconductor Tax Adjustments);

                    (ii) Subject to Section 6.3(d), Semiconductor shall be
entitled to any Semiconductor Tax Benefits on an After-Tax Basis;

                    (iii) Subject to Section 6.3(d), C-Cube shall be liable for,
and shall indemnify and hold Semiconductor harmless, on an After-Tax Basis
against any and all C-Cube Tax Adjustments (and any reasonable fees and other
out-of pocket costs incurred by Semiconductor in connection with such
Semiconductor Tax Adjustments); and

                    (iv) C-Cube shall be entitled to receive on an After-Tax
Basis the amount of any C-Cube Tax Benefits.

                (b) C-Cube and Semiconductor shall share the amount of any Tax
Adjustment if, and to the extent, each party is liable for and/or has an
obligation to make, or has the right to receive, as the case may be, an
indemnity payment, or other payment with respect to such Tax Adjustment under
Section 6.3(a), in proportion to the amounts of the underlying Adjustments
giving rise to such Tax Adjustment attributable to the C-Cube Subgroup
(excluding for this purpose the Semiconductor Business) and the Semiconductor
Subgroup (including for this purpose the Semiconductor Business), respectively.

                (c) Indemnity payments required by Section 6.3(a) and 6.3(b)
shall be paid within 30 days of the date of such Final Determination provided
that all payments shall include interest at the statutory underpayment rate (if
applicable) through the date of payment by the party obligated hereunder. Each
party shall provide the other with prompt written notice of each such Final
Determination.

                (d) Notwithstanding anything herein to the contrary, C-Cube
shall have the right to receive from Semiconductor on an After-Tax Basis the
amount of any Section 41 Credits theretofore paid to Semi in accordance with
Section 5 hereof to the extent of any Pre-Semi Disposition Non-Semiconductor Tax
Deficiency, regardless of whether such deficiency arises from an Adjustment.
Such amount shall be paid to C-Cube no later than five (5) days following notice
from C-Cube that such Pre-Semi Disposition Non-Semiconductor Tax Deficiency has
been paid or incurred. Any amount not paid by Semi when due shall bear interest
at the rate provided in Section 3.5.

            6.4 State Sales Tax Responsibilities. Schedule A hereto sets forth a
list of states to which C-Cube has made commitments relating to sales taxes,
including but not limited to commitments to register to do business, and the
nature of such commitments with each of those states. Harmonic shall assume
C-Cube's responsibilities and commitments in connection with

                                      -18-
<PAGE>   19

ongoing discussions with state sales tax authorities to the extent set forth on
Schedule A, subject to Semiconductor's obligations to indemnify C-Cube hereunder
for all Pre-Semi Disposition Taxes and Semi Spin Taxes. Harmonic agrees to
register to do business in those states where C-Cube has committed to register
to do business, as set forth on Schedule A.

        7. TAX ATTRIBUTE CARRYOVERS

            7.1 Carryforward Tax Attributes. C-Cube and Semiconductor shall
reasonably cooperate to allocate Carryover Tax Attributes among the members of
the C-Cube Subgroup and the Semiconductor Subgroup in a manner that enables such
members to succeed to such attributes attributable to C-Cube (other than the
Semiconductor Business) and the Semiconductor Business, respectively; provided,
however, that any such attribute that may not be so allocated under applicable
law shall remain the property of the member entitled to such attribute under
applicable law, and there shall be no obligation of such member or its
affiliates to compensate any other member for the use of such Carryforward Tax
Attribute.

            7.2 Carryback Items from Separate Return Tax Periods. With respect
to carrybacks of Semiconductor or net operating losses, net capital losses,
unused tax credits and other deductible or creditable Tax attributes to a
Consolidated Period from a Separate Return Period which would be permitted under
the Code and the Regulations (or state law or state regulations), Semiconductor
shall make an irrevocable election under Regulations Section 1.1502-21(b)(3)(i)
(or comparable state law or state regulations), to relinquish any carryback
period which would include the Consolidated Period. In cases where Semiconductor
cannot relinquish the carryback period (other than by reason of Semiconductor
failing to make such irrevocable election) or, if the parties otherwise agree,
C-Cube shall cooperate with Semiconductor in seeking Tax refunds from the
appropriate Taxing Authority, at Semiconductor's expense, and Semiconductor
shall be entitled to such refund on an After-Tax Basis, including interest paid
by the Taxing Authority in connection with such refund, less any reasonable out
of pocket costs incurred by C-Cube in connection with such refund; provided
however, that Semiconductor shall indemnify and hold C-Cube harmless from and
against any and all collateral Tax consequences resulting from or caused by the
carryback of deductible or creditable Tax attributes by Semiconductor from a
Separate Return Period to a Consolidated Period, including but not limited to,
Tax attributes of C-Cube that expire unused (including Tax attributes that
expire during a Tax period subsequent to the Tax period during which the
Semiconductor Tax attribute carried back was generated or taxes paid that are no
longer available for refund) and which would have been used but for
Semiconductor's carryback. The amount of such indemnity shall be limited to the
actual Tax benefits to which C-Cube would have been entitled in the absence of
the carryback of the deductible or creditable Tax attribute of Semiconductor,
plus interest at the rate of [__] % from the date any additional tax cost or
lost benefit was incurred by C-Cube. Semiconductor shall have the right to
review the collateral Tax consequences being indemnified. The amount of the
refund due to Semiconductor from C-Cube shall be reduced and offset by the
amount of the indemnification, if any, to which C-Cube is entitled.

        8. RECORDS

                                      -19-
<PAGE>   20

            8.1 Retention by C-Cube. C-Cube shall, until the end of the
applicable statute of limitations for each Tax year (giving effect to any
extensions thereof), retain all material, including but not limited to, returns,
supporting schedules, workpapers, correspondence, and other documents relating
to the Affiliated Group and the Unitary Group in which any member of the
Semiconductor Subgroup was a member, to the extent such materials are in
C-Cube's possession and transferred to Harmonic in the Merger, and shall make
such items available to Semiconductor for inspection or copying (at
Semiconductor's expense) during C-Cube's regular business hours.

            8.2 Retention by Semiconductor. Semiconductor shall, until the end
of the applicable statute of limitations for each Tax year (giving effect to any
extensions thereof), retain all material, supporting schedules, workpapers,
correspondence, and other documents relating to the Affiliated Group and any
Unitary Group and shall make such items available to C-Cube for inspection or
copying (at C-Cube's expense) during Semiconductor's regular business hours.

        9. TERM AND TERMINATION

            9.1 Term. This Agreement shall be effective as of the date hereof
and shall apply to and govern all subsequent Taxable periods, unless the parties
hereto each agree in writing to terminate this Agreement. Notwithstanding any
such termination, this Agreement shall continue in effect with respect to any
payment due from one party to the other with respect to any Taxable period
occurring prior to the effective date of the termination of this Agreement.

        10. MISCELLANEOUS

            10.1 Except as otherwise provided in this Agreement, in no event
shall any member of the C-Cube Group or the Semiconductor Group be liable to any
other member of the C-Cube Group or the Semiconductor Group for any special,
consequential, indirect, incidental or punitive damages or lost profits, however
caused and on any theory of liability (including negligence) arising in any way
out of this Agreement, whether or not such party has been advised of the
possibility of such damages.

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

            10.3 Governing Law. This Agreement shall be governed and construed
and enforced in accordance with the laws of the State of Delaware as to all
matters regardless of the laws that might otherwise govern under the principles
of conflicts of laws applicable thereto.

            10.4 Assignment; Binding Upon Successors and Assigns. This Agreement
shall inure to the benefit of and be binding upon the parties hereto and their
respective legal

                                      -20-
<PAGE>   21

representatives and successors, and nothing in this Agreement, express or
implied, is intended to confer upon any other Person any rights or remedies of
any nature whatsoever under or by reason of this Agreement. This Agreement may
not be assigned by any party hereto. Any member corporation which leaves the
Affiliated Group shall be bound by this Agreement.

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

            10.6 Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original but all of which shall
constitute one and the same agreement.

            10.7 Failure or Indulgence Not Waiver; Remedies Cumulative. No
failure or delay on the part of either party hereto in the exercise of any right
hereunder shall impair such right or be construed to be a waiver of, or
acquiescence in, any breach of any representation, warranty or agreement herein,
nor shall any single or partial exercise of any such right preclude other or
further exercise thereof or of any other right. All rights and remedies existing
under this Agreement are cumulative to, and not exclusive of, any rights or
remedies otherwise available.

            10.8 Amendment and Waivers. No change or amendment will be made to
this Agreement and no waiver will be made under this Agreement except by an
instrument in writing signed on behalf of each of the parties to such agreement.

            10.9 Expenses. Unless otherwise provided, all fees and expenses
incurred in connection with this Agreement will be paid by the party incurring
such fees or expenses.

            10.10 Dispute Resolution. In the event of any dispute arising under
this Agreement, the dispute resolution procedure provided for such dispute in
this Agreement, if any, shall control. If no dispute resolution procedure is
provided for such dispute, the dispute resolution provisions of Section 4.6 of
the Separation Agreement shall control.

            10.11 Notices. Any notice, demand, offer, request or other
communication required or permitted to be given by either party pursuant to the
terms of this Agreement shall be in writing and shall be deemed effectively
given the earlier of (i) when received, (ii) when delivered personally, (iii)
one (1) business day after being delivered by facsimile (with receipt of
appropriate confirmation), (iv) one (1) business day after being deposited with
an overnight courier service or (v) four (4) days after being deposited in the
U.S. mail, First Class with postage prepaid, and

                                      -21-
<PAGE>   22

addressed to the attention of the party's General Counsel at the address of its
principal executive office or such other address as a party may request by
notifying the other in writing.

            10.12 Construction of Agreement. A reference to a Section will mean
a Section in this Agreement unless otherwise explicitly set forth. The titles
and headings herein are for reference purposes only and will not in any manner
limit the construction of this Agreement which will be considered as a whole.

            10.13 Jurisdiction and Venue. The parties hereto irrevocably consent
to and agree that any litigation or other dispute resolution proceeding among
the parties relating to this Agreement will take place in Santa Clara County,
California. The parties hereby irrevocably consent to the personal jurisdiction
or and the venue in the state and federal court within such county.

            10.14 Further Assurances. Each party agrees to cooperate fully with
the other parties and to execute such further instruments, documents and
agreements and to give such further written assurances as may be reasonably
requested by any other party to evidence and reflect the transactions
contemplated hereby and to carry into effect the intents and purposes of this
Agreement.

            10.15 Intention of the Parties. It is the intention of the parties
that Semiconductor shall make C-Cube whole, on an After-Tax Basis, for (i) any
Pre-Semi Disposition Taxes, (ii) Semi Spin Taxes, (iii) any increase in those
Taxes as a result of Adjustments, except for any Adjustments with respect to
Pre-Semi Disposition Non-Semiconductor Taxes (other than as provided in Section
6.3). It is also the intention of the parties to avoid double payment,
double-crediting or other double-counting of any items (including items set
forth in Section 4) which would result in an inequitable and unintended benefit
to one party or parties to the detriment of the other party or parties. The
parties agree that the provisions of this Agreement shall be interpreted in
accordance with the intent stated in this paragraph, and if there are other
issues not addressed by this Agreement, the parties agree to pay to each other
such other amounts as are consistent with the intent stated in this paragraph.

            10.16 References to and Obligations of C-Cube. The parties agree
that Semiconductor shall indemnify and hold Harmonic harmless from and against
any breach of this Agreement by C-Cube prior to the Merger (or after the Merger
if such breach is a result of actions or inaction of C-Cube or Semiconductor
prior to the Merger), and that following the Merger, references in this
Agreement shall be deemed where appropriate, including where consistent with
Semiconductor's obligation to indemnify C-Cube as specified in this Agreement,
to constitute references to Harmonic as the successor to C-Cube.

            10.17 Semiconductor Authorization. Semiconductor hereby represents
and warrants that it has received the necessary authorization to execute this
Agreement on behalf of itself and its subsidiaries, including all members of the
Semiconductor Subgroup.

                                      -22-
<PAGE>   23

        IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers.

C-CUBE MICROSYSTEMS INC.                   C-CUBE SEMICONDUCTOR INC.
ON ITS OWN BEHALF AND ON BEHALF THE
C-CUBE SUBGROUP

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

HAROMONIC INC.

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

                                      -23-
<PAGE>   24
                                  SCHEDULE 4.4

                                      -24-
<PAGE>   25

                       SCHEDULE A TO TAX SHARING AGREEMENT
                BY AND AMONG C-CUBE, SEMICONDUCTOR, AND HARMONIC

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------
   STATE/LOCALITY       SALES TAX REGISTRATION REQUIREMENTS                       AGREEMENTS RELATING
                                                                          TO SALES TAXES (NONE UNLESS NOTED)
----------------------------------------------------------------------------------------------------------------
<S>                    <C>                                             <C>
Arizona                                                                 Negotiated agreement with respect to
                                                                        past taxes with commitment to file
                       Registration required in all listed states.      returns for 8-year future period.
---------------------                                                   ----------------------------------------
California
---------------------                                                   ----------------------------------------
Colorado
---------------------                                                   ----------------------------------------
Colorado (Boulder)
---------------------                                                   ----------------------------------------
Florida                                                                 Negotiated agreement with respect to past
                                                                        taxes with commitment to file returns for
                                                                        8-year future period.
---------------------                                                   ----------------------------------------
Georgia                                                                 Negotiated agreement with respect to past
                                                                        taxes with indefinite commitment to file
                                                                        future returns.
---------------------                                                   ----------------------------------------
Hawaii                                                                  Negotiated agreement with respect to past
                                                                        taxes with commitment to file returns for
                                                                        8-year future period.
---------------------                                                   ----------------------------------------
Illinois                                                                Negotiated agreement with respect to past
                                                                        taxes with indefinite commitment to file
                                                                        future returns.
---------------------                                                   ----------------------------------------
Louisiana
---------------------                                                   ----------------------------------------
Maryland                                                                Negotiated agreement with respect to past
                                                                        taxes with commitment to file returns for
                                                                        8-year future period.
---------------------                                                   ----------------------------------------
Massachusetts                                                           Negotiated agreement with respect to past
                                                                        taxes with commitment to file returns for
                                                                        8-year future period.
---------------------                                                   ----------------------------------------
Minnesota
---------------------                                                   ----------------------------------------
Nevada
---------------------                                                   ----------------------------------------
New Jersey
---------------------                                                   ----------------------------------------
New Mexico
---------------------                                                   ----------------------------------------
New York                                                                Negotiated agreement with respect to
                                                                        past taxes with indefinite commitment to
                                                                        file future returns.
---------------------                                                   ----------------------------------------
North Carolina                                                          Negotiated agreement with respect
                                                                        to past taxes with commitment to file
                                                                        returns for 8-year future period.
---------------------                                                   ----------------------------------------
Pennsylvania                                                            Negotiated agreement with respect to past
                                                                        taxes with indefinite commitment to file
                                                                        future returns.
---------------------                                                   ----------------------------------------
Rhode Island
---------------------                                                   ----------------------------------------
Texas                                                                   Negotiated agreement with respect to past
                                                                        taxes with commitment to file returns for
                                                                        8-year future period.
---------------------                                                   ----------------------------------------
Virginia
---------------------                                                   ----------------------------------------
Washington
---------------------                                                   ----------------------------------------
Wyoming                                                                 Verbal commitment to file in the future.
----------------------------------------------------------------------------------------------------------------
</TABLE>

                                      -25-

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