<PAGE>


                 INDEMNIFICATION AND INSURANCE MATTERS AGREEMENT



                                     BETWEEN



                                3COM CORPORATION


                                       AND


                                   PALM, INC.




                                FEBRUARY 26, 2000

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                                TABLE OF CONTENTS

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ARTICLE I. MUTUAL RELEASES; INDEMNIFICATION...........................................................................1

      Section 1.1.        Release of Pre-Closing Claims...............................................................1
      Section 1.2.        Indemnification by Palm.....................................................................2
      Section 1.3.        Indemnification by 3Com.....................................................................2
      Section 1.4.        Indemnification With Respect to Environmental Actions and Conditions........................3
      Section 1.5.        Reductions for Insurance Proceeds and Other Recoveries......................................4
      Section 1.6.        Procedures for Defense, Settlement and Indemnification of Third Party Claims................4
      Section 1.7.        Additional Matters..........................................................................5
      Section 1.8.        Survival of Indemnities.....................................................................6

ARTICLE II. INSURANCE MATTERS.........................................................................................6

      Section 2.1.        Palm Insurance Coverage During the Transition Period........................................6
      Section 2.2.        Cooperation and Agreement Not to Release Carriers...........................................7
      Section 2.3.        Palm Insurance Coverage After the Insurance Transition Period...............................7
      Section 2.4.        Responsibilities for Deductibles and/or Self-insured Obligations............................7
      Section 2.5.        Procedures With Respect to Insured Palm Liabilities.........................................8
      Section 2.6.        Insufficient Limits of Liability for 3Com Liabilities and Palm Liabilities..................8
      Section 2.7.        Cooperation.................................................................................8
      Section 2.8.        No Assignment or Waiver.....................................................................8
      Section 2.9.        No Liability................................................................................8
      Section 2.10.       Additional or Alternate Insurance...........................................................9
      Section 2.11.       Further Agreements..........................................................................9
      Section 2.12.       Matters Governed by Employee Matters Agreement..............................................9

ARTICLE III. MISCELLANEOUS............................................................................................9

      Section 3.1.        Entire Agreement............................................................................9
      Section 3.2.        Governing Law...............................................................................9
      Section 3.3.        Dispute Resolution..........................................................................9
      Section 3.4.        Notices....................................................................................10
      Section 3.5.        Parties in Interest........................................................................11
      Section 3.6.        Other Agreements Evidencing Indemnification Obligations....................................11
      Section 3.7.        Counterparts...............................................................................11
      Section 3.8.        Assignment.................................................................................11
      Section 3.9.        Severability...............................................................................11
      Section 3.10.       Failure or Indulgence Not Waiver...........................................................12
      Section 3.11.       Amendment..................................................................................12
      Section 3.12.       Authority..................................................................................12
      Section 3.13.       Interpretation.............................................................................12

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                                TABLE OF CONTENTS
                                   (Continued)
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ARTICLE IV. DEFINITIONS..............................................................................................12

      Section 4.1.        3Com Business..............................................................................12
      Section 4.2.        3Com Facilities............................................................................12
      Section 4.3.        3Com Group.................................................................................12
      Section 4.4.        3Com Indemnitees...........................................................................13
      Section 4.5.        Action.....................................................................................13
      Section 4.6.        Affiliated Company.........................................................................13
      Section 4.7.        Assets.....................................................................................13
      Section 4.8.        Assignment Agreement.......................................................................13
      Section 4.9.        Coverage Amount............................................................................13
      Section 4.10.       Employee Matters Agreement.................................................................13
      Section 4.11.       Environmental Actions......................................................................13
      Section 4.12.       Environmental Conditions...................................................................13
      Section 4.13.       Environmental Laws.........................................................................14
      Section 4.14.       Hazardous Materials........................................................................14
      Section 4.15.       Indemnitee.................................................................................14
      Section 4.16.       Insurance Policies.........................................................................14
      Section 4.17.       Insurance Proceeds.........................................................................14
      Section 4.18.       Insurance Transition Period................................................................14
      Section 4.19.       Insured Palm Liability.....................................................................14
      Section 4.20.       IPO Date...................................................................................14
      Section 4.21.       IPO Liabilities............................................................................14
      Section 4.22.       IPO Registration Statement.................................................................14
      Section 4.23.       Liabilities................................................................................15
      Section 4.24.       Non-US Plan................................................................................15
      Section 4.25.       Palm Business..............................................................................15
      Section 4.26.       Palm Contracts.............................................................................15
      Section 4.27.       Palm Covered Parties.......................................................................15
      Section 4.28.       Palm Facilities............................................................................15
      Section 4.29.       Palm Group.................................................................................15
      Section 4.30.       Palm Indemnitees...........................................................................15
      Section 4.31.       Palm Liabilities...........................................................................15
      Section 4.32.       Person.....................................................................................15
      Section 4.33.       Pre-Separation Third Party Site Liabilities................................................15
      Section 4.34.       Release....................................................................................15
      Section 4.35.       Separation.................................................................................16
      Section 4.36.       Separation Agreement.......................................................................16
      Section 4.37.       Separation Date............................................................................16
      Section 4.38.       Shared 3Com Percentage.....................................................................16

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                                TABLE OF CONTENTS
                                   (Continued)

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      Section 4.39.       Shared Palm Percentage.....................................................................16
      Section 4.40.       Shared Percentage..........................................................................16
      Section 4.41.       Subsidiary.................................................................................16
      Section 4.42.       Tax Sharing Agreement......................................................................16
      Section 4.43.       Taxes......................................................................................16
      Section 4.44.       Third Party Claim..........................................................................16
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                                     -iii-
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                 INDEMNIFICATION AND INSURANCE MATTERS AGREEMENT

         This Indemnification and Insurance Matters Agreement (this
"AGREEMENT") is entered into on February 26, 2000 between 3Com Corporation, a
Delaware corporation ("3COM"), and Palm, Inc., a Delaware corporation
("PALM"). Capitalized terms used herein and not otherwise defined herein
shall have the meanings ascribed to such terms in the ARTICLE IV below.

                                    RECITALS

         WHEREAS, 3Com and its Subsidiaries have transferred or will transfer
to Palm and its Subsidiaries effective as of the Separation Date,
substantially all of the assets of the Palm Business in accordance with the
Master Separation and Distribution Agreement dated as of December 13, 1999
between 3Com and Palm's predecessor corporation, Palm Computing, Inc., a
California corporation (the "SEPARATION AGREEMENT").

         WHEREAS, the parties desire to set forth certain agreements
regarding indemnification and insurance.

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

                                   ARTICLE I.

                        MUTUAL RELEASES; INDEMNIFICATION

         SECTION 1.1.   RELEASE OF PRE-CLOSING CLAIMS.

         (a) PALM RELEASE. Except as provided in SECTION 1.1(c) and SCHEDULE
1.1 to this Agreement, effective as of the Separation Date, Palm does hereby,
for itself and as agent for each member of the Palm Group, remise, release
and forever discharge the 3Com Indemnitees from any and all Liabilities
whatsoever, whether at law or in equity (including any right of
contribution), whether arising under any contract or agreement, by operation
of law or otherwise, existing or arising from any acts or events occurring or
failing to occur or alleged to have occurred or to have failed to occur or
any conditions existing or alleged to have existed on or before the
Separation Date, including in connection with the transactions and all other
activities to implement any of the Separation, the IPO and the Distribution.

         (b) 3COM RELEASE. Except as provided in SECTION 1.1(c) and SCHEDULE
1.1 to this Agreement, effective as of the Separation Date, 3Com does hereby,
for itself and as agent for each member of the 3Com Group, remise, release
and forever discharge the Palm Indemnitees from any and all Liabilities
whatsoever, whether at law or in equity (including any right of
contribution), whether arising under any contract or agreement, by operation
of law or otherwise, existing or arising from any acts or events occurring or
failing to occur or alleged to have occurred or to have failed to occur or
any conditions existing or alleged to have existed on or before the
Separation Date,

                                      -1-

<PAGE>

including in connection with the transactions and all other activities to
implement any of the Separation, the IPO and the Distribution.

         (c) NO IMPAIRMENT. Nothing contained in Section 1.1(a) or (b) shall
impair any right of any Person to enforce the Separation Agreement or any
other Ancillary Agreement (including this Agreement), in each case in
accordance with its terms.

         (d) NO ACTIONS AS TO RELEASED CLAIMS. Palm agrees, for itself and as
agent for each member of the Palm Group, not to make any claim or demand, or
commence any Action asserting any claim or demand, including any claim of
contribution or any indemnification, against 3Com or any member of the 3Com
Group, or any other Person released pursuant to SECTION 1.1(A), with respect
to any Liabilities released pursuant to SECTION 1.1(A). 3Com agrees, for
itself and as agent for each member of the 3Com Group, not to make any claim
or demand, or commence any Action asserting any claim or demand, including
any claim of contribution or any indemnification, against Palm or any member
of the Palm Group, or any other Person released pursuant to SECTION 1.1(B),
with respect to any Liabilities released pursuant to SECTION 1.1(B).

         (e) FURTHER INSTRUMENTS. At any time, at the request of any other
party, each party shall cause each member of its respective Group to execute
and deliver releases reflecting the provisions hereof.

         SECTION 1.2.   INDEMNIFICATION BY PALM. Except as otherwise provided
in this Agreement, Palm shall, for itself and as agent for each member of the
Palm Group, indemnify, defend (or, where applicable, pay the defense costs
for) and hold harmless the 3Com Indemnitees from and against any and all
Liabilities that any third party seeks to impose upon the 3Com Indemnitees,
or which are imposed upon the 3Com Indemnitees, and that relate to, arise out
of or result from any of the following items (without duplication):

                    (i) the Palm Business, any Palm Liability or any Palm
Contract;

                   (ii) any breach by Palm or any member of the Palm Group of
the Separation Agreement or any of the Ancillary Agreements (including this
Agreement); and

                  (iii) any IPO Liabilities.

In the event that any member of the Palm Group makes a payment to the 3Com
Indemnitees hereunder, and any of the 3Com Indemnitees subsequently diminishes
the Liability on account of which such payment was made, either directly or
through a third-party recovery, 3Com will promptly repay (or will procure a 3Com
Indemnitee to promptly repay) such member of the Palm Group the amount by which
the payment made by such member of the Palm Group exceeds the actual cost of the
associated indemnified Liability. This SECTION 1.2 shall not apply to any
Liability indemnified under SECTION 1.4.

         SECTION 1.3.   INDEMNIFICATION BY 3COM. Except as otherwise provided
in this Agreement, 3Com shall, for itself and as agent for each member of the
3Com Group, indemnify, defend (or, where applicable, pay the defense costs
for) and hold harmless the Palm Indemnitees from and

                                     -2-
<PAGE>

against any and all Liabilities that any third party seeks to impose upon the
Palm Indemnitees, or which are imposed upon the Palm Indemnitees, and that
relate to, arise out of or result from any of the following items (without
duplication):

                  (i) the 3Com Business or any Liability of the 3Com Group
other than the Palm Liabilities; and

                  (ii) any breach by 3Com or any member of the 3Com Group of
the Separation Agreement or any of the Ancillary Agreements (including this
Agreement).

In the event that any member of the 3Com Group makes a payment to the Palm
Indemnitees hereunder, and any of the Palm Indemnitees subsequently
diminishes the Liability on account of which such payment was made, either
directly or through a third-party recovery, Palm will promptly repay (or will
procure a Palm Indemnitee to promptly repay) such member of the 3Com Group
the amount by which the payment made by such member of the 3Com Group exceeds
the actual cost of the indemnified Liability. This SECTION 1.3 shall not
apply to any Liability indemnified under SECTION 1.4.

         SECTION 1.4.   INDEMNIFICATION WITH RESPECT TO ENVIRONMENTAL ACTIONS
AND CONDITIONS.

         (a) INDEMNIFICATION BY PALM. Palm shall, for itself and as agent for
each member of the Palm Group, indemnify, defend and hold harmless the 3Com
Indemnitees from and against any and all Environmental Actions relating to,
arising out of or resulting from Environmental Conditions (i) arising out of
operations occurring on and after the Separation Date at any of the Palm
Facilities, or (ii) on any of the Palm Facilities arising from an event
causing contamination that first occurs on or after the Separation Date
(including any Release of Hazardous Materials occurring after the Separation
Date that migrates to any of the Palm Facilities), except to the extent that
such Environmental Conditions arise out of the operations of the 3Com Group
on and after the Separation Date.

         (b) INDEMNIFICATION BY 3COM. 3Com shall, for itself and as agent for
each member of the 3Com Group, indemnify, defend and hold harmless the Palm
Indemnitees from and against any and all Environmental Actions relating to,
arising out of or resulting from any of the following items:

                   (i) Environmental Conditions (x) existing on, under, about
or in the vicinity of any of the Palm Facilities prior to the Separation
Date, or (y) arising out of operations occurring on or before the Separation
Date at any of the Palm Facilities;

                  (ii) Except as arising out of the operations of the Palm
Group on and after the Separation Date, Environmental Conditions on, under,
about or arising out of operations occurring at any time, whether before or
after the Separation Date, at any of the 3Com Facilities; and

                 (iii) Pre-Separation Third Party Site Liabilities.

         (C) AGREEMENT REGARDING PAYMENTS TO INDEMNITEE. In the event an
Indemnifying Party makes any payment to or on behalf of an Indemnitee with
respect to an Environmental Action for

                                     -3-
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which the Indemnifying Party is obligated to indemnify under this SECTION
1.4, and the Indemnitee subsequently receives any payment from a third party
on account of the same financial obligation covered by the payment made by
the Indemnifying Party for that Environmental Action or otherwise diminishes
the financial obligation, the Indemnitee will promptly pay the Indemnifying
Party the amount by which the payment made by the Indemnifying Party, exceeds
the actual cost of the financial obligation.

         SECTION 1.5.   REDUCTIONS FOR INSURANCE PROCEEDS AND OTHER
RECOVERIES. The amount that any party (an "Indemnifying Party") is or may be
required to pay to any other Person (an "Indemnitee") pursuant to Section
1.2, 1.3 or 1.4, as applicable, shall be reduced (retroactively or
prospectively) by any Insurance Proceeds or other amounts actually recovered
from third parties by or on behalf of such Indemnitee in respect of the
related loss. The existence of a claim by an Indemnitee for monies from an
insurer or against a third party in respect of any indemnifiable loss shall
not, however, delay any payment pursuant to the indemnification provisions
contained herein and otherwise determined to be due and owing by an
Indemnifying Party. Rather the Indemnifying Party shall make payment in full
of the amount determined to be due and owing by it against an assignment by
the Indemnitee to the Indemnifying Party of the entire claim of the
Indemnitee for Insurance Proceeds or against such third party.
Notwithstanding any other provisions of this Agreement, it is the intention
of the parties that no insurer or any other third party shall be (i) entitled
to a benefit it would not be entitled to receive in the absence of the
foregoing indemnification provisions, or (ii) relieved of the responsibility
to pay any claims for which it is obligated. If an Indemnitee has received
the payment required by this Agreement from an Indemnifying Party in respect
of any indemnifiable loss and later receives Insurance Proceeds or other
amounts in respect of such indemnifiable loss, then such Indemnitee shall
hold such Insurance Proceeds or other amounts in trust for the benefit of the
Indemnifying Party (or Indemnifying Parties) and shall pay to the
Indemnifying Party, as promptly as practicable after receipt, a sum equal to
the amount of such Insurance Proceeds or other amounts received, up to the
aggregate amount of any payments received from the Indemnifying Party
pursuant to this Agreement in respect of such indemnifiable loss (or, if
there is more than one Indemnifying Party, the Indemnitee shall pay each
Indemnifying Party, its proportionate share (based on payments received from
the Indemnifying Parties) of such Insurance Proceeds).

         SECTION 1.6.   PROCEDURES FOR DEFENSE, SETTLEMENT AND
INDEMNIFICATION OF THIRD PARTY CLAIMS.

         (a) NOTICE OF CLAIMS. If a 3Com Indemnitee or a Palm Indemnitee (as
applicable) (an "INDEMNITEE") shall receive notice or otherwise learn of the
assertion by a Person (including any Governmental Authority) who is not a member
of the 3Com Group or the Palm Group of any claim or of the commencement by any
such Person of any Action (collectively, a "THIRD PARTY CLAIM") with respect to
which a party (an "INDEMNIFYING PARTY") may be obligated to provide
indemnification to such Indemnitee pursuant to SECTION 1.2, 1.3 or 1.4, or any
other section of the Separation Agreement or any Ancillary Agreement (including
this Agreement), 3Com and Palm (as applicable) will ensure that such Indemnitee
shall give such Indemnifying Party written notice thereof within 30 days after
becoming aware of such Third Party Claim. Any such notice shall describe the
Third Party Claim in reasonable detail. Notwithstanding the foregoing, the delay
or

                                     -4-
<PAGE>

failure of any Indemnitee or other Person to give notice as provided in this
SECTION 1.6(A) shall not relieve the related Indemnifying Party of its
obligations under this ARTICLE I, except to the extent that such Indemnifying
Party is actually and substantially prejudiced by such delay or failure to
give notice.

         (b) DEFENSE BY INDEMNIFYING PARTY. An Indemnifying Party will manage
the defense of and may settle or compromise any Third Party Claim. Within 30
days after the receipt of notice from an Indemnitee in accordance with
SECTION 1.6(A) (or sooner, if the nature of such Third Party Claim so
requires), the Indemnifying Party shall notify the Indemnitee that the
Indemnifying Party will assume responsibility for managing the defense of
such Third Party Claim, which notice shall specify any reservations or
exceptions.

         (c) DEFENSE BY INDEMNITEE. If an Indemnifying Party fails to assume
responsibility for managing the defense of a Third Party Claim, or fails to
notify an Indemnitee that it will assume responsibility as provided in
SECTION 1.6(A), such Indemnitee may manage the defense of such Third Party
Claim; PROVIDED, HOWEVER, that the Indemnifying Party shall reimburse all
such costs and expenses in the event it is ultimately determined that the
Indemnifying Party is obligated to indemnify the Indemnitee with respect to
such Third Party Claim.

         (d) NO SETTLEMENT BY INDEMNITEE WITHOUT CONSENT. Unless the
Indemnifying Party has failed to manage the defense of the Third Party Claim
in accordance with the terms of this Agreement, no Indemnitee may settle or
compromise any Third Party Claim without the consent of the Indemnifying
Party.

         (e) NO CONSENT TO CERTAIN JUDGMENTS OR SETTLEMENTS WITHOUT CONSENT.
Notwithstanding any provision of this SECTION 1.6, no party shall consent to
entry of any judgment or enter into any settlement of a Third Party Claim
without the consent of the other party (such consent not to be unreasonably
withheld) if the effect of such judgment or settlement is to (A) permit any
injunction, declaratory judgment, other order or other nonmonetary relief to
be entered, directly or indirectly, against the other party or (B) affect the
other party in a material fashion due to the allocation of Liabilities and
related indemnities set forth in the Separation Agreement, this Agreement or
any other Ancillary Agreement.

         SECTION 1.7.   ADDITIONAL MATTERS.

         (a) COOPERATION IN DEFENSE AND SETTLEMENT. With respect to any Third
Party Claim that implicates both Palm and 3Com in a material fashion due to
the allocation of Liabilities, responsibilities for management of defense and
related indemnities set forth in the Separation Agreement, this Agreement or
any of the Ancillary Agreements, the parties agree to cooperate fully and
maintain a joint defense (in a manner that will preserve the attorney-client
privilege with respect thereto) so as to minimize such Liabilities and
defense costs associated therewith. The party that is not responsible for
managing the defense of such Third Party Claims shall, upon reasonable
request, be consulted with respect to significant matters relating thereto
and may, if necessary or helpful, associate counsel to assist in the defense
of such claims.

                                     -5-
<PAGE>

         (b) SUBSTITUTION. In the event of an Action in which the Indemnifying
Party is not a named defendant, if either the Indemnitee or the Indemnifying
Party shall so request, the parties shall endeavor to substitute the
Indemnifying Party for the named defendant. If such substitution or addition
cannot be achieved for any reason or is not requested, the rights and
obligations of the parties regarding indemnification and the management of the
defense of claims as set forth in this ARTICLE I shall not be altered.

         (c) SUBROGATION. In the event of payment by or on behalf of any
Indemnifying Party to or on behalf of any Indemnitee in connection with any
Third Party Claim, such Indemnifying Party shall be subrogated to and shall
stand in the place of such Indemnitee, in whole or in part based upon whether
the Indemnifying Party has paid all or only part of the Indemnitee's Liability,
as to any events or circumstances in respect of which such Indemnitee may have
any right, defense or claim relating to such Third Party Claim against any
claimant or plaintiff asserting such Third Party Claim or against any other
person. Such Indemnitee shall cooperate with such Indemnifying Party in a
reasonable manner, and at the cost and expense of such Indemnifying Party, in
prosecuting any subrogated right, defense or claim.

         (d) NOT APPLICABLE TO TAXES. This Agreement shall not apply to Taxes
(which are covered by the Tax Sharing Agreement).

         SECTION 1.8.  SURVIVAL OF INDEMNITIES. Subject to SECTION 3.8, the
rights and obligations of the members of the 3Com Group and the Palm Group
under this ARTICLE I shall survive the sale or other transfer by any party of
any Assets or businesses or the assignment by it of any Liabilities or the
sale by any member of the 3Com Group or the Palm Group of the capital stock
or other equity interests of any Subsidiary to any Person.

                                   ARTICLE II.

                                INSURANCE MATTERS

         SECTION 2.1.  PALM INSURANCE COVERAGE DURING THE TRANSITION PERIOD.

         (a) MAINTAIN COMPARABLE INSURANCE. Throughout the period beginning on
the Separation Date and ending on the Distribution Date (i.e., the "INSURANCE
TRANSITION PERIOD"), 3Com shall, subject to insurance market conditions and
other factors beyond its control, maintain policies of insurance, including for
the benefit of Palm or any of its Subsidiaries, directors, officers, employees
or other covered parties (collectively, the "PALM COVERED PARTIES") which are
comparable to those maintained generally by 3Com; PROVIDED, HOWEVER, that if
3Com determines that (i) the amount or scope of such coverage will be reduced to
a level materially inferior to the level of coverage in existence immediately
prior to the Insurance Transition Period or (ii) the retention or deductible
level applicable to such coverage, if any, will be increased to a level
materially greater than the levels in existence immediately prior to the
Insurance Transition Period, 3Com shall give Palm notice of such determination
as promptly as practicable. Upon notice of such determination, Palm shall be
entitled to no less than 60 days to evaluate its options regarding continuance
of coverage hereunder and may cancel its interest in all or any portion of such
coverage as of any day within such 60 day period.

                                     -6-

<PAGE>

         (b) REIMBURSEMENT FOR PREMIUMS. Palm shall promptly pay or reimburse
3Com, as the case may be, for premium expenses, and Palm Covered Parties shall
promptly pay or reimburse 3Com for any costs and expenses which 3Com may incur
in connection with the insurance coverages maintained pursuant to this SECTION
2.1, including but not limited to any subsequent premium adjustments. All
payments and reimbursements by Palm and Palm Covered Parties to 3Com shall be
made within thirty (30) days after Palm's receipt of an invoice from 3Com.

         SECTION 2.2.  COOPERATION AND AGREEMENT NOT TO RELEASE CARRIERS.
Each of 3Com and Palm will share such information as is reasonably necessary
in order to permit the other to manage and conduct its insurance matters in
an orderly fashion. Each of 3Com and Palm, at the request of the other, shall
cooperate with and use commercially reasonable efforts to assist the other in
recoveries for claims made under any insurance policy for the benefit of any
insured party, and neither 3Com nor Palm, nor any of their Subsidiaries,
shall take any action which would intentionally jeopardize or otherwise
interfere with either party's ability to collect any proceeds payable
pursuant to any insurance policy. Except as otherwise contemplated by the
Separation Agreement, this Agreement or any Ancillary Agreement, after the
Separation Date, neither 3Com nor Palm shall (and shall ensure that no member
of their respective Groups shall), without the consent of the other, provide
any insurance carrier with a release, or amend, modify or waive any rights
under any such policy or agreement, if such release, amendment, modification
or waiver would adversely affect any rights or potential rights of any member
of the other Group thereunder. However, nothing in this SECTION 2.2 shall (A)
preclude any member of any Group from presenting any claim or from exhausting
any policy limit, (B) require any member of any Group to pay any premium or
other amount or to incur any Liability, or (C) require any member of any
Group to renew, extend or continue any policy in force.

         SECTION 2.3.  PALM INSURANCE COVERAGE AFTER THE INSURANCE TRANSITION
PERIOD. From and after expiration of the Insurance Transition Period, Palm
shall be responsible for obtaining and maintaining insurance programs for its
risk of loss and such insurance arrangements shall be separate and apart from
3Com's insurance programs. Notwithstanding the foregoing, 3Com, upon the
request of Palm, shall use all commercially reasonable efforts to assist Palm
in the transition to its own separate insurance programs from and after the
Insurance Transition Period, and shall provide Palm with any information that
is in the possession of 3Com and is reasonably available and necessary to
either obtain insurance coverages for Palm or to assist Palm in preventing
unintended self-insurance, in whatever form.

         SECTION 2.4.  RESPONSIBILITIES FOR DEDUCTIBLES AND/OR SELF-INSURED
OBLIGATIONS. Palm will reimburse 3Com for all amounts necessary to exhaust or
otherwise satisfy all applicable self-insured retentions, amounts for fronted
policies, deductibles and retrospective premium adjustments and similar
amounts not covered by Insurance Policies in connection with Palm Liabilities
and Insured Palm Liabilities.

                                     -7-

<PAGE>

         SECTION 2.5.  PROCEDURES WITH RESPECT TO INSURED PALM LIABILITIES.

         (a) REIMBURSEMENT. Palm will reimburse 3Com for all amounts incurred to
pursue insurance recoveries from Insurance Policies for Insured Palm
Liabilities.

         (b) MANAGEMENT OF CLAIMS. The defense of claims, suits or actions
giving rise to potential or actual Insured Palm Liabilities will be managed (in
conjunction with 3Com's insurers, as appropriate) by the party that would have
had responsibility for managing such claims, suits or actions had such Insured
Palm Liabilities been Palm Liabilities.

         SECTION 2.6.  INSUFFICIENT LIMITS OF LIABILITY FOR 3COM LIABILITIES
AND PALM LIABILITIES.

         In the event that there are insufficient limits of liability available
under 3Com's Insurance Policies in effect prior to the Distribution Date to
cover the Liabilities of 3Com and/or Palm that would otherwise be covered by
such Insurance Policies, then to the extent that other insurance is not
available to 3Com and/or Palm for such Liabilities an adjustment will be made in
accordance with the following procedures:

         (a) Each party will be allocated an amount equal to their Shared
Percentage of the lesser of (A) the available limits of liability available
under 3Com's Insurance Policies in effect prior to the Distribution Date net of
uncollectible amounts attributable to insurer insolvencies, and (B) the proceeds
received from 3Com's Insurance Policies if the Liabilities are the subject of
disputed coverage claims and, following consultation with each other, 3Com
and/or Palm agree to accept less than full policy limits from 3Com's and Palm's
insurers (the "COVERAGE AMOUNT").

         (b) A party who receives more than its share of the Coverage Amount
(the "OVERALLOCATED PARTY") agrees to reimburse the other party (the
"UNDERALLOCATED PARTY") to the extent that the Liabilities of the Underallocated
Party that would have been covered under such Insurance Policies is less than
the Underallocated Party's share of the Coverage Amount.

         (c) This SECTION 2.6(a) shall terminate ten years following the
Distribution Date.

         SECTION 2.7.  COOPERATION. 3Com and Palm will cooperate with each
other in all respects, and they shall execute any additional documents which
are reasonably necessary, to effectuate the provisions of this ARTICLE II.

         SECTION 2.8.  NO ASSIGNMENT OR WAIVER. This Agreement shall not be
considered as an attempted assignment of any policy of insurance or as a
contract of insurance and shall not be construed to waive any right or remedy
of any member of the 3Com Group in respect of any Insurance Policy or any
other contract or policy of insurance.

         SECTION 2.9.  NO LIABILITY. Palm does hereby, for itself and as
agent for each other member of the Palm Group, agree that no member of the
3Com Group or any 3Com Indemnitee shall have any Liability whatsoever as a
result of the insurance policies and practices of 3Com and its Subsidiaries
as in effect at any time prior to the Distribution Date, including as a
result of the level or scope of any such insurance, the creditworthiness of
any insurance carrier, the terms and conditions

                                     -8-

<PAGE>

of any policy, the adequacy or timeliness of any notice to any insurance
carrier with respect to any claim or potential claim or otherwise.

         SECTION 2.10.  ADDITIONAL OR ALTERNATE INSURANCE. Notwithstanding
any provision of this Agreement, during the Insurance Transition Period 3Com
and Palm shall work together to evaluate insurance options and secure
additional or alternate insurance for Palm and/or 3Com if desired and cost
effective. Nothing in this Agreement shall be deemed to restrict any member
of the Palm Group from acquiring at its own expense any other insurance
policy in respect of any Liabilities or covering any period.

         SECTION 2.11.  FURTHER AGREEMENTS. The Parties acknowledge that they
intend to allocate financial obligations without violating any laws regarding
insurance, self-insurance or other financial responsibility. If it is
determined that any action undertake pursuant to the Separation Agreement,
this Agreement or any Ancillary Agreement is violative of any insurance,
self-insurance or related financial responsibility law or regulation, the
parties agree to work together to do whatever is necessary to comply with
such law or regulation while trying to accomplish, as much as possible, the
allocation of financial obligations as intended in the Separation Agreement,
this Agreement and any Ancillary Agreement.

         SECTION 2.12.  MATTERS GOVERNED BY EMPLOYEE MATTERS AGREEMENT. This
ARTICLE II shall not apply to any insurance policies that are the subject of
the Employee Matters Agreement.

                                  ARTICLE III.

                                  MISCELLANEOUS

         SECTION 3.1.  ENTIRE AGREEMENT. This Agreement, the Master
Separation Agreement, the other Ancillary Agreements and the Exhibits and
Schedules attached hereto and thereto, constitutes the entire agreement
between the parties with respect to the subject matter hereof and shall
supersede all prior written and oral and all contemporaneous oral agreements
and understandings with respect to the subject matter hereof.

         SECTION 3.2.  GOVERNING LAW. This Agreement shall be construed in
accordance with and all Disputes hereunder shall be governed by the laws of
the State of California, excluding its conflict of law rules and the United
Nations Convention on Contracts for the International Sale of Goods. The
Superior Court of Santa Clara County and/or the United States District Court
for the Northern District of California shall have jurisdiction and venue
over all Disputes between the parties that are permitted to be brought in a
court of law pursuant to SECTION 3.3.

         SECTION 3.3.  DISPUTE RESOLUTION. If a dispute, controversy or claim
("Dispute") arises between the parties relating to the interpretation or
performance of this Agreement, or the grounds for the termination hereof,
appropriate senior executives (e.g. director or V.P. level) of each party who
shall have the authority to resolve the matter shall meet to attempt in good
faith to negotiate a resolution of the Dispute prior to pursuing other
available remedies. The initial meeting between the appropriate senior
executives shall be referred to herein as the "Dispute Resolution
Commencement Date." Discussions and correspondence relating to trying to
resolve such Dispute shall be treated as

                                     -9-

<PAGE>

confidential information developed for the purpose of settlement and shall be
exempt from discovery or production and shall not be admissible. If the
senior executives are unable to resolve the Dispute within thirty (30) days
from the Dispute Resolution Commencement Date, and either party wishes to
pursue its rights relating to such Dispute, then the Dispute will be mediated
by a mutually acceptable mediator appointed pursuant to the mediation rules
of JAMS/Endispute within thirty (30) days after written notice by one party
to the other demanding non-binding mediation. Neither party may unreasonably
withhold consent to the selection of a mediator or the location of the
mediation. Both parties will share the costs of the mediation equally, except
that each party shall bear its own costs and expenses, including attorney's
fees, witness fees, travel expenses, and preparation costs. The parties may
also agree to replace mediation with some other form of non-binding or
binding ADR.

         Any Dispute which the parties cannot resolve through mediation within
ninety (90) days of the Dispute Resolution Commencement Date, unless otherwise
mutually agreed, shall be submitted to final and binding arbitration under the
then current Commercial Arbitration Rules of the American Arbitration
Association ("AAA"), by three (3) arbitrators in Santa Clara County, California.
Such arbitrators shall be selected by the mutual agreement of the parties or,
failing such agreement, shall be selected according to the aforesaid AAA rules.
The arbitrators will be instructed to prepare and deliver a written, reasoned
opinion stating their decision within thirty (30) days of the completion of the
arbitration. The prevailing party in such arbitration shall be entitled to
expenses, including costs and attorneys' and other professional fees, incurred
in connection with the arbitration (but excluding any costs and fees associated
with prior negotiation or mediation). The decision of the arbitrator shall be
final and non-appealable and may be enforced in any court of competent
jurisdiction. The use of any ADR procedures will not be construed under the
doctrine of laches, waiver or estoppel to adversely affect the rights of either
party.

         Any Dispute regarding the following is not required to be negotiated,
mediated or arbitrated prior to seeking relief from a court of competent
jurisdiction: breach of any obligation of confidentiality; infringement,
misappropriation, or misuse of any intellectual property right; any other claim
where interim relief from the court is sought to prevent serious and irreparable
injury to one of the parties or to others. However, the parties to the Dispute
shall make a good faith effort to negotiate and mediate such Dispute, according
to the above procedures, while such court action is pending.

         SECTION 3.4.  NOTICES. Notices, offers, requests or other
communications required or permitted to be given by either party pursuant to
the terms of this Agreement shall be given in writing to the respective
parties to the following addresses:

                  if to 3Com:
                                    3Com Corporation
                                    5400 Bayfront Plaza
                                    Santa Clara, California 95052
                                    Attention:  General Counsel
                                    Fax:  (408) 326-6434

                  if to Palm:

                                     -10-

<PAGE>

                                    Palm, Inc.
                                    5470 Great America Parkway
                                    Santa Clara, California 95052
                                    Attention:  General Counsel

or to such other address as the party to whom notice is given may have
previously furnished to the other in writing as provided herein. Any notice
involving non-performance, termination, or renewal shall be sent by hand
delivery, recognized overnight courier or, within the United States, may also be
sent via certified mail, return receipt requested. All other notices may also be
sent by fax, confirmed by first class mail. All notices shall be deemed to have
been given and received on the earlier of actual delivery or three (3) days from
the date of postmark.

         SECTION 3.5.  PARTIES IN INTEREST. This Agreement, including the
Schedules and Exhibits hereto, and the other documents referred to herein,
shall be binding upon 3Com, 3Com's Subsidiaries, Palm and Palm's Subsidiaries
and inure solely to the benefit of the Palm Indemnitees and the 3Com
Indemnitees and their respective permitted assigns, and nothing in this
Agreement, express or implied, is intended to confer upon any other Person
any rights or remedies of any nature whatsoever under or by reason of this
Agreement.

         SECTION 3.6.  OTHER AGREEMENTS EVIDENCING INDEMNIFICATION
OBLIGATIONS. 3Com hereby agrees to execute, for the benefit of any Palm
Indemnitee, such documents as may be reasonably requested by such Palm
Indemnitee, evidencing 3Com's agreement that the indemnification obligations
of 3Com set forth in this Agreement inure to the benefit of and are
enforceable by such Palm Indemnitee. Palm hereby agrees to execute, for the
benefit of any 3Com Indemnitee, such documents as may be reasonably requested
by such 3Com Indemnitee, evidencing Palm's agreement that the indemnification
obligations of Palm set forth in this Agreement inure to the benefit of and
are enforceable by such 3Com Indemnitee.

         SECTION 3.7.  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 3.8.  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 be enforced separately by each member of the 3Com Group and each member
of the Palm Group. Neither party may assign this Agreement or any rights or
obligations hereunder, without the prior written consent of the other party,
and any such assignment shall be void; provided, however, either party may
assign this Agreement to a successor entity in conjunction with such party's
reincorporation.

         SECTION 3.9.  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

                                     -11-
<PAGE>

hereby is not affected in any manner materially adverse to any party. Upon
such determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate in good faith
to modify this Agreement so as to effect the original intent of the parties
as closely as possible in an acceptable manner to the end that transactions
contemplated hereby are fulfilled to the fullest extent possible.

         SECTION 3.10. FAILURE OR INDULGENCE NOT WAIVER. 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.

         SECTION 3.11. 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 this Agreement.

         SECTION 3.12. AUTHORITY. Each of the parties hereto represents to
the other that (a) it has the corporate or other requisite power and
authority to execute, deliver and perform this Agreement, (b) the execution,
delivery and performance of this Agreement by it have been duly authorized by
all necessary corporate or other action, (c) it has duly and validly executed
and delivered this Agreement, and (d) this Agreement is a legal, valid and
binding obligation, enforceable against it in accordance with its terms
subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting creditors' rights generally and general equity
principles.

         SECTION 3.13. INTERPRETATION. The headings contained in this
Agreement, in any Exhibit or Schedule hereto and in the table or 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.

                                   ARTICLE IV.

                                   DEFINITIONS

         SECTION 4.1.  3COM BUSINESS. "3COM BUSINESS" means any business of
3Com other than the Palm Business.

         SECTION 4.2.  3COM FACILITIES. "3COM FACILITIES" means all of the
real property and improvements thereon owned or occupied at any time on or
before the Separation Date by any member of the 3Com Group, whether for the
3Com Business or the Palm Business, excluding the Palm Facilities.

         SECTION 4.3.  3COM GROUP. "3COM GROUP" means 3Com, each Subsidiary
and Affiliated Company of 3Com (other than any member of the Palm Group)
immediately after the Separation


                                      -12-

<PAGE>

Date, after giving effect to the Non-US Plan and each Person that becomes a
Subsidiary or Affiliate Company of 3Com after the Separation Date.

         SECTION 4.4.  3COM INDEMNITEES. "3COM INDEMNITEES" means 3Com, each
member of the 3Com Group and each of their respective directors, officers and
employees.

         SECTION 4.5.  ACTION. "ACTION" means any demand, action, suit,
countersuit, arbitration, inquiry, proceeding or investigation by or before
any federal, state, local, foreign or international governmental authority or
any arbitration or mediation tribunal.

         SECTION 4.6.  AFFILIATED COMPANY. "AFFILIATED COMPANY" of any Person
means any entity that controls, is controlled by, or is under common control
with such Person. As used herein, "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management
and policies of such entity, whether through ownership of voting securities
or other interests, by contract or otherwise.

         SECTION 4.7.  ASSETS. "ASSETS" has the meaning set forth in SECTION
4.4 of the Assignment Agreement.

         SECTION 4.8.  ASSIGNMENT AGREEMENT. "ASSIGNMENT AGREEMENT" means the
General Assignment and Assumption Agreement attached as EXHIBIT C to the
Separation Agreement.

         SECTION 4.9.  COVERAGE AMOUNT. "COVERAGE AMOUNT" has the meaning set
forth in SECTION 2.6(a) of this Agreement.

         SECTION 4.10. EMPLOYEE MATTERS AGREEMENT. "EMPLOYEE MATTERS
AGREEMENT" means the Employee Matters Agreement attached as EXHIBIT E to the
Separation Agreement.

         SECTION 4.11. ENVIRONMENTAL ACTIONS. "ENVIRONMENTAL ACTIONS" means
any notice, claim, act, cause of action, order, decree or investigation by
any third party (including, without limitation, any Governmental Authority)
alleging potential liability (including potential liability for investigatory
costs, cleanup costs, governmental response costs, natural resources damages,
damage to flora or fauna caused by Environmental Conditions, real property
damages, personal injuries or penalties) arising out of, based on or
resulting from the Release of or exposure of any individual to any Hazardous
Materials.

         SECTION 4.12. ENVIRONMENTAL CONDITIONS. "ENVIRONMENTAL CONDITIONS"
means the presence in the environment, including the soil, groundwater,
surface water or ambient air, of any Hazardous Material at a level which
exceeds any applicable standard or threshold under any Environmental Law or
otherwise requires investigation or remediation (including, without
limitation, investigation, study, health or risk assessment, monitoring,
removal, treatment or transport) under any applicable Environmental Laws.


                                      -13-

<PAGE>

         SECTION 4.13. ENVIRONMENTAL LAWS. "ENVIRONMENTAL LAWS" means all
laws and regulations of any Governmental Authority with jurisdiction that
relate to the protection of the environment (including ambient air, surface
water, ground water, land surface or subsurface strata) including laws and
regulations relating to the Release of Hazardous Materials, or otherwise
relating to the treatment, storage, disposal, transport or handling of
Hazardous Materials, or to the exposure of any individual to a Release of
Hazardous Materials.

         SECTION 4.14. HAZARDOUS MATERIALS. "HAZARDOUS MATERIALS" means
chemicals, pollutants, contaminants, wastes, toxic substances, radioactive
and biological materials, hazardous substances, petroleum and petroleum
products or any fraction thereof.

         SECTION 4.15. INDEMNITEE. "INDEMNITEE" has the meaning set forth in
SECTION 1.5(a) hereof.

         SECTION 4.16. INSURANCE POLICIES. "INSURANCE POLICIES" means
insurance policies pursuant to which a Person makes a true risk transfer to
an insurer.

         SECTION 4.17. INSURANCE PROCEEDS. "INSURANCE PROCEEDS" means those
monies:

         (a)     received by an insured from an insurance carrier; or

         (b)     paid by an insurance carrier on behalf of the insured;

from Insurance Policies.

         SECTION 4.18. INSURANCE TRANSITION PERIOD. "INSURANCE TRANSITION
PERIOD" has the meaning set forth in SECTION 2.1 of this Agreement.

         SECTION 4.19. INSURED PALM LIABILITY. "Insured Palm Liability" means
any Palm Liability to the extent that (i) it is covered under the terms of
3Com's Insurance Policies in effect prior to the Distribution Date, and (ii)
Palm is not a named insured under, or otherwise entitled to the benefits of,
such Insurance Policies.

         SECTION 4.20. IPO DATE. "IPO DATE" means the date on which Palm
effects its initial public offering of common stock. Scheduled to occur on or
before June 2, 2000.

         SECTION 4.21. IPO LIABILITIES. "IPO LIABILITIES" means any
Liabilities relating to, arising out of or resulting from any untrue
statement or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, with respect to all
information contained in the IPO Registration Statement or any preliminary,
final or supplemental prospectus forming a part of a IPO Registration
Statement.

         SECTION 4.22. IPO REGISTRATION STATEMENT. "IPO REGISTRATION
STATEMENT" means the registration statement on Form S-1 pursuant to the
Securities Act to be filed with the SEC registering the shares of common
stock of Palm to be issued in the IPO, together with all amendments thereto.


                                      -14-

<PAGE>

         SECTION 4.23. LIABILITIES. "LIABILITIES" has the meaning set forth
in SECTION 4.15 of the Assignment Agreement.

         SECTION 4.24. NON-US PLAN. "NON-US PLAN" means the plan of
reorganization described in EXHIBIT K of the Separation Agreement.

         SECTION 4.25. PALM BUSINESS. "PALM BUSINESS" means the business and
operations of Palm, as described in the IPO Registration Statement and except
as otherwise expressly provided herein, any terminated, divested or
discontinued businesses or operations that at the time of termination,
divestiture or discontinuation primarily related to the Palm Business as then
conducted.

         SECTION 4.26. PALM CONTRACTS. "PALM CONTRACTS" has the meaning set
forth in SECTION 4.23 of the Assignment Agreement.

         SECTION 4.27. PALM COVERED PARTIES. "PALM COVERED PARTIES" shall
have the meaning set forth in SECTION 2.1(a) of this Agreement.

         SECTION 4.28. PALM FACILITIES. "PALM FACILITIES" means all of those
facilities to be transferred to Palm on the Separation Date as set forth on
Schedule 1 to the Real Estate Matters Agreement.

         SECTION 4.29. PALM GROUP. "PALM GROUP" means Palm, each Subsidiary
and Affiliated Company of Palm immediately after the Separation Date or that
is contemplated to be a Subsidiary or Affiliated Company of Palm pursuant to
the Non-US Plan and each Person that becomes a Subsidiary or Affiliate
Company of Palm after the Separation Date.

         SECTION 4.30. PALM INDEMNITEES. "PALM INDEMNITEES" means Palm, each
member of the Palm Group and each of their respective directors, officers and
employees.

         SECTION 4.31. PALM LIABILITIES. "PALM LIABILITIES" has the meaning
set forth in SECTION 1.3 of the Assignment Agreement.

         SECTION 4.32. 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 4.33. PRE-SEPARATION THIRD PARTY SITE LIABILITIES.
"PRE-SEPARATION THIRD PARTY SITE LIABILITIES" means any and all Environmental
Actions arising out of Hazardous Materials found on, under or about any
landfill any waste, storage, transfer or recycling site and resulting from or
arising out of Hazardous Materials stored, treated, recycled disposed or
otherwise handled at such site prior to the Separation Date (whether for the
operation of the Palm Business or for the operation of any past or presently
(as of the date hereof) existing 3Com Business as operated on or before the
Separation Date).

         SECTION 4.34. RELEASE. "RELEASE" means any release, spill, emission,
leaking, pumping, injection, deposit, disposal, discharge, dispersal,
leaching or migration into the indoor or outdoor


                                      -15-

<PAGE>

environment, including, without limitation, the movement of Hazardous
Materials through ambient air, soil, surface water, groundwater, wetlands,
land or subsurface strata.

         SECTION 4.35. SEPARATION. "SEPARATION" means the transfer and
contribution from 3Com to Palm, and Palm's receipt and assumption of,
directly or indirectly, substantially all of the Assets and Liabilities
currently associated with the Palm Business and the stock, investments or
similar interests currently held by 3Com in subsidiaries and other entities
that conduct such business.

         SECTION 4.36. SEPARATION AGREEMENT. "SEPARATION AGREEMENT" means the
Master Separation and Distribution Agreement dated as of December 13, 1999,
of which this is an Exhibit thereto.

         SECTION 4.37. SEPARATION DATE. "SEPARATION DATE" means the effective
date and time of each transfer of property, assumption of liability, license,
undertaking, or agreement in connection with the Separation, which shall be
12:01 a.m., Pacific Time, February 26, 2000, or such date as may be fixed by
the Board of Directors of 3Com.

         SECTION 4.38. SHARED 3COM PERCENTAGE. "SHARED 3COM PERCENTAGE" means
90%.

         SECTION 4.39. SHARED PALM PERCENTAGE. "SHARED PALM PERCENTAGE" means
10%.

         SECTION 4.40. SHARED PERCENTAGE. "SHARED PERCENTAGE" means the
Shared Palm Percentage or the Shared 3Com Percentage, as the case may be.

         SECTION 4.41. SUBSIDIARY. "SUBSIDIARY" of any Person means a
corporation or other organization whether incorporated or unincorporated of
which at least a majority of the securities or interests having by the terms
thereof ordinary voting power to elect at least a majority of the board of
directors or others performing similar functions with respect to such
corporation or other organization is directly or indirectly owned or
controlled by such Person or by any one or more of its Subsidiaries, or by
such Person and one or more of its Subsidiaries; provided, however, that no
Person that is not directly or indirectly wholly-owned by any other Person
shall be a Subsidiary of such other Person unless such other Person controls,
or has the right, power or ability to control, that Person.

         SECTION 4.42. TAX SHARING AGREEMENT. "TAX SHARING AGREEMENT" means
the Tax Sharing Agreement, attached as EXHIBIT F to the Separation Agreement.

         SECTION 4.43. TAXES. "TAXES" has the meaning set forth in the Tax
Sharing Agreement.

         SECTION 4.44. THIRD PARTY CLAIM. "THIRD PARTY CLAIM" has the meaning
set forth in SECTION 1.5(a) of this Agreement.

                       [SIGNATURES ON FOLLOWING PAGE]


                                      -16-

<PAGE>

         IN WITNESS WHEREOF, each of the parties has caused this
Indemnification and Insurance Matters Agreement to be executed on its behalf
by its officers thereunto duly authorized on the day and year first above
written.

3COM CORPORATION                          PALM, INC.


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

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

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

<PAGE>

                                  SCHEDULE 1.1



         Section 1.1, Release of Pre-Closing Claims, shall not include any
inter-company balances between Palm and 3Com existing as of the Separation
Date.