<PAGE>

                                                                    EXHIBIT 2.1


                  MASTER SEPARATION AND DISTRIBUTION AGREEMENT


                                     BETWEEN



                                3COM CORPORATION



                                       AND



                              PALM COMPUTING, INC.





                                 EFFECTIVE AS OF



                                DECEMBER 13, 1999


<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                                   PAGE
                                                                                                                   ----
<S>                                                                                                                <C>
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 3Com..........................................................2
         Section 2.2       Documents to Be Delivered by Palm..........................................................3

ARTICLE III THE IPO AND ACTIONS PENDING THE IPO.......................................................................3
         Section 3.1       Transactions Prior to the IPO..............................................................3
         Section 3.2       Cooperation................................................................................4
         Section 3.3       Conditions Precedent to Consummation of the IPO............................................4

ARTICLE IV THE DISTRIBUTION...........................................................................................5
         Section 4.1       The Distribution...........................................................................5
         Section 4.2       Actions Prior to the Distribution..........................................................6
         Section 4.3       Sole Discretion of 3Com....................................................................6
         Section 4.4       Conditions Precedent to Distribution.......................................................6
         Section 4.5       Fractional Shares..........................................................................7

ARTICLE V COVENANTS AND OTHER MATTERS.................................................................................8
         Section 5.1       Other Agreements...........................................................................8
         Section 5.2       Further Instruments........................................................................8
         Section 5.3       Additional Transitional Services Agreements................................................8
         Section 5.4       Agreement for Exchange of Information......................................................8
         Section 5.5       Auditors and Audits; Annual and Quarterly Statements and Accounting.......................10
         Section 5.6       Consistency with Past Practices...........................................................12
         Section 5.7       Payment of Expenses.......................................................................12
         Section 5.8       Foreign Subsidiaries......................................................................12
         Section 5.9       Dispute Resolution........................................................................12
         Section 5.10      Governmental Approvals....................................................................13
         Section 5.11      No Representation or Warranty.............................................................13
         Section 5.12      Non-Solicitation of Employees.............................................................14
         Section 5.13      Employee Agreements.......................................................................14
         Section 5.14      Cooperation in Obtaining New Agreements...................................................15
         Section 5.15      Property Damage to Palm Assets Prior to the Separation Date...............................16

ARTICLE VI MISCELLANEOUS.............................................................................................16
         Section 6.1       Limitation of Liability...................................................................16
         Section 6.2       Entire Agreement..........................................................................16

<PAGE>

         Section 6.3       Governing Law.............................................................................17
         Section 6.4       Termination...............................................................................17
         Section 6.5       Notices...................................................................................17
         Section 6.6       Counterparts..............................................................................17
         Section 6.7       Binding Effect; Assignment................................................................17
         Section 6.8       Severability..............................................................................18
         Section 6.9       Failure or Indulgence Not Waiver; Remedies Cumulative.....................................18
         Section 6.10      Amendment.................................................................................18
         Section 6.11      Authority.................................................................................18
         Section 6.12      Interpretation............................................................................18
         Section 6.13      Conflicting Agreements....................................................................19

ARTICLE VII DEFINITIONS..............................................................................................19
         Section 7.1       Affiliated Company........................................................................19
         Section 7.2       Governmental Approvals....................................................................19
         Section 7.3       Governmental Authority....................................................................19
         Section 7.4       Information...............................................................................19
         Section 7.5       IPO Closing Date..........................................................................19
         Section 7.6       Palm Assets...............................................................................19
         Section 7.7       Palm Group................................................................................19
         Section 7.8       Palm's Auditors...........................................................................19
         Section 7.9       Person....................................................................................20
         Section 7.10      Record Date...............................................................................20
         Section 7.11      Subsidiary................................................................................20
         Section 7.12      3Com Group................................................................................20
         Section 7.13      3Com's Auditors...........................................................................20
</TABLE>

<PAGE>

                                    EXHIBITS
<TABLE>
<S>               <C>
Exhibit A         Certificate of Secretary of 3Com

Exhibit B         Certificate of Secretary of Palm

Exhibit C         General Assignment and Assumption Agreement

Exhibit D-1       Master Technology Ownership and License Agreement

Exhibit D-2       Master Patent Ownership and License Agreement

Exhibit D-3       Master Trademark Ownership and License Agreement

Exhibit E         Employee Matters Agreement

Exhibit F         Tax Sharing Agreement

Exhibit G         Master Transitional Services Agreement

Exhibit H         Real Estate Matters Agreement

Exhibit I         Master Confidential Disclosure Agreement

Exhibit J         Indemnification and Insurance Matters Agreement

Exhibit K         Reorganization of Operations Outside the US (the Non-US Plan)
</TABLE>

<PAGE>

                  MASTER SEPARATION AND DISTRIBUTION AGREEMENT

         This Master Separation and Distribution Agreement (this "AGREEMENT") is
entered into as of December 13, 1999, between 3Com Corporation ("3COM "), a
Delaware corporation, and Palm Computing, Inc. ("PALM"), a California
corporation. Capitalized terms used herein and not otherwise defined shall have
the meanings ascribed to such terms in ARTICLE VII hereof.


                                    RECITALS

         WHEREAS, 3Com currently owns all of the issued and outstanding common
stock of Palm;

         WHEREAS, Palm is engaged in the handheld computing business and related
businesses as described in the IPO Registration Statement (the "PALM BUSINESS");

         WHEREAS, the Boards of Directors of 3Com and Palm have each determined
that it would be appropriate and desirable for 3Com to contribute and transfer
to Palm, and for Palm to receive and assume, directly or indirectly, assets and
liabilities currently held by 3Com and associated with the Palm Business (the
"SEPARATION");

         WHEREAS, 3Com and Palm currently contemplate that, following the
contribution and assumption of assets and liabilities, Palm will make an initial
public offering ("IPO") of an amount of its common stock pursuant to a
registration statement on Form S-1 pursuant to the Securities Act of 1933, as
amended (the "IPO REGISTRATION STATEMENT"), that will reduce 3Com's ownership of
Palm after the IPO and any private placements of securities of Palm concluded
prior to or concurrent with the IPO to not less than 80.1%;

         WHEREAS, 3Com and Palm currently contemplate that in conjunction with
the IPO, Palm will reincorporate from the State of California to the State of
Delaware, and will change its name to Palm, Inc.;

         WHEREAS, 3Com currently contemplates that, several months following
such IPO, 3Com will distribute, pro rata, to the holders of its common stock,
$0.001 par value, all of the shares of Palm common stock owned by 3Com (the
"DISTRIBUTION");

         WHEREAS, 3Com and Palm intend that the Separation and the Distribution
will qualify as a tax-free reorganization under Sections 368(a)(1)(D) and 355 of
the Internal Revenue Code of 1986, as amended (the "CODE"), and that this
Agreement is intended to be, and is hereby adopted as, a plan of reorganization
under Section 368 of the Code; and

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

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

<PAGE>

                                    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, February 26, 2000 or
such other date as may be fixed by the Board of Directors of 3Com (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
("WSGR"), 650 Page Mill Road, Palo Alto, California 94304, to be held in
escrow for delivery as provided in SECTION 1.3.

         SECTION 1.3  EXCHANGE OF SECRETARY'S CERTIFICATES. Upon receipt of a
certificate of the Secretary or an Assistant Secretary of 3Com in the form
attached to this Agreement as EXHIBIT A, WSGR shall deliver to Palm on behalf
of 3Com all of the items required to be delivered by 3Com hereunder pursuant
to SECTION 2.1 and each such item shall be deemed to be delivered to Palm as
of the Separation Date upon delivery of such certificate. Upon receipt of a
certificate of the Secretary or an Assistant Secretary of Palm in the form
attached to this Agreement as EXHIBIT B, WSGR shall deliver to 3Com on behalf
of Palm all of the items required to be delivered by Palm pursuant to SECTION
2.2 hereunder and each such item shall be deemed to be delivered to 3Com 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 3COM . On the Separation
Date or such other date as agreed in connection with the Non-US Plan (as
defined in SECTION 5.8), 3Com will deliver, or will cause its appropriate
Subsidiaries to deliver, to Palm all of the following items and agreements
(collectively, together with all agreements and documents contemplated by
such agreements, the "ANCILLARY AGREEMENTS"):

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

                  (b) A duly executed Master Technology Ownership and License
Agreement substantially in the form attached hereto as EXHIBIT D-1, a duly
executed Master Patent Ownership and License Agreement substantially in the form
attached hereto as EXHIBIT D-2 and a duly executed Master Trademark Ownership
and License Agreement substantially in the form attached as EXHIBIT D-3;

                                     -2-

<PAGE>

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

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

                  (e) A duly executed Master Transitional Services Agreement
substantially in the form attached hereto as EXHIBIT G;

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

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

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

                  (i) A plan of Reorganization of Operations Outside the US, as
described in EXHIBIT K;

                  (j) Resignations of each person who is an officer or director
of 3Com or its Subsidiaries, immediately prior to the Separation Date, and who
will be employees of Palm 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.

         SECTION 2.2  DOCUMENTS TO BE DELIVERED BY PALM. As of the Separation
Date, Palm will deliver to 3Com all of the following:

                  (a) In each case where Palm 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 Palm, immediately prior to the Separation Date, and who will be an employee
of 3Com from and after the Separation Date.


                                   ARTICLE III

                       THE IPO AND ACTIONS PENDING THE IPO

         SECTION 3.1  TRANSACTIONS PRIOR TO THE IPO. Subject to the
conditions specified in SECTION 3.3, 3Com and Palm shall use their reasonable
commercial efforts to consummate the IPO. Such efforts shall include, but not
necessarily be limited to, those specified in this SECTION 3.1

                                     -3-

<PAGE>

                  (a) REGISTRATION STATEMENT. Palm shall file the IPO
Registration Statement, and such amendments or supplements thereto as may be
necessary in order to cause the same to become and remain effective as required
by law or by the managing underwriters for the IPO (the "UNDERWRITERS"),
including, but not limited to, filing such amendments to the IPO Registration
Statement as may be required by the underwriting agreement to be entered into
between Palm and the Underwriters (the "UNDERWRITING AGREEMENT"), the Securities
and Exchange Commission (the "COMMISSION") or federal, state or foreign
securities laws. 3Com and Palm shall also cooperate in preparing, filing with
the Securities and Exchange Commission and causing to become effective a
registration statement registering the common stock of Palm under the Securities
and Exchange Act of 1934, as amended (the "EXCHANGE ACT"), and any registration
statements or amendments thereof which are required to reflect the establishment
of, or amendments to, any employee benefit and other plans necessary or
appropriate in connection with the IPO, the Separation, the Distribution or the
other transactions contemplated by this Agreement.

                  (b) UNDERWRITING AGREEMENT. Palm shall enter into the
Underwriting Agreement, in form and substance reasonably satisfactory to Palm,
and shall comply with its obligations thereunder.

                  (c) NASDAQ LISTING. Palm shall prepare, file and use
reasonable commercial efforts to seek to make effective, an application for
listing of the common stock of Palm issued in the IPO on the Nasdaq National
Market ("NASDAQ"), subject to official notice of issuance.

         SECTION 3.2  COOPERATION. Palm shall consult with, and cooperate in
all respects with, 3Com in connection with the pricing of the common stock of
Palm to be offered in the IPO and shall, at 3Com's direction, promptly take
any and all actions necessary or desirable to consummate the IPO as
contemplated by the IPO Registration Statement and the Underwriting Agreement.

         SECTION 3.3  CONDITIONS PRECEDENT TO CONSUMMATION OF THE IPO. The
IPO closing is currently scheduled to occur on or before June 2, 2000 (the
"IPO CLOSING DATE"). The obligations of the parties to use their reasonable
commercial efforts to consummate the IPO shall be conditioned on the
satisfaction of the following conditions:

                  (a) REGISTRATION STATEMENT. The IPO Registration Statement
shall have been filed and declared effective by the Commission, and there shall
be no stop-order in effect with respect thereto.

                  (b) BLUE SKY. The actions and filings with regard to state
securities and blue sky laws of the United States (and any comparable laws under
any foreign jurisdictions) shall have been taken and, where applicable, have
become effective or been accepted.

                  (c) NASDAQ LISTING. The common stock of Palm to be issued in
the IPO shall have been accepted for listing on the Nasdaq, on official notice
of issuance.

                  (d) UNDERWRITING AGREEMENT. Palm shall have entered into the
Underwriting Agreement and all conditions to the obligations of Palm and the
Underwriters shall have been satisfied or waived.

                                     -4-

<PAGE>

                  (e) COMMON STOCK OWNERSHIP. 3Com shall be satisfied in its
sole discretion that it will own at least 80.1% of the outstanding common stock
of Palm following the IPO and any private placements of securities of Palm
concluded prior to or concurrent with the IPO. All other conditions to permit
the Distribution to qualify as a tax-free distribution to 3Com, Palm and 3Com's
stockholders shall, to the extent applicable as of the time of the IPO, be
satisfied. There shall be no event or condition that is likely to cause any of
such conditions not to be satisfied as of the time of the Distribution or
thereafter.

                  (f) 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 Separation or the IPO or any of
the other transactions contemplated by this Agreement shall be in effect.

                  (g) SEPARATION. The Separation shall have become effective by
execution of this Agreement and the Ancillary Agreements.

                  (h) OTHER ACTIONS. Such other actions as the parties hereto
may, based upon the advice of counsel, reasonably request to be taken prior to
the IPO in order to assure the successful completion of the IPO shall have been
taken.

                  (i) NO TERMINATION. This Agreement shall not have been
terminated.


                                   ARTICLE IV

                                THE DISTRIBUTION

          SECTION 4.1  THE DISTRIBUTION.

                  (a) DELIVERY OF SHARES FOR DISTRIBUTION. Subject to SECTION
4.4 hereof, on or prior to the date the Distribution is effective (the
"DISTRIBUTION DATE"), 3Com will deliver to the distribution agent (the
"DISTRIBUTION AGENT") to be appointed by 3Com to distribute to the
stockholders of 3Com the shares of common stock of Palm held by 3Com pursuant
to the Distribution for the benefit of holders of record of common stock of
3Com on the Record Date, a single stock certificate, endorsed by 3Com,
representing all of the outstanding shares of common stock of Palm then owned
by 3Com, and shall cause the transfer agent for the shares of common stock of
3Com to instruct the Distribution Agent to distribute on the Distribution
Date the appropriate number of such shares of common stock of Palm to each
such holder or designated transferee or transferees of such holder.

                  (b) SHARES RECEIVED. Subject to SECTIONS 4.4 and 4.5, each
holder of common stock of 3Com 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 Palm equal to the number
of shares of common stock of 3Com 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 Palm beneficially owned by 3Com on the Record Date and the
denominator of which is the number of shares of common stock of 3Com
outstanding on the Record Date.

                                     -5-

<PAGE>


                  (c) OBLIGATION TO PROVIDE INFORMATION. Palm and 3Com, 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 4.2   ACTIONS PRIOR TO THE DISTRIBUTION.

                  (a) INFORMATION STATEMENT. 3Com and Palm shall prepare and
mail, prior to the Distribution Date, to the holders of common stock of 3Com,
such information concerning Palm and the Distribution and such other matters
as 3Com shall reasonably determine are necessary and as may be required by
law. 3Com and Palm will prepare, and Palm will, to the extent required under
applicable law, file with the Commission any such documentation which 3Com
and Palm determine is necessary or desirable to effectuate the Distribution,
and 3Com and Palm shall each use its reasonable commercial efforts to obtain
all necessary approvals from the Commission with respect thereto as soon as
practicable.

                  (b) BLUE SKY. 3Com and Palm shall 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.

                  (c) NASDAQ LISTING. Palm shall prepare and file, and shall
use its reasonable commercial efforts to have approved, an application for
the additional listing of the common stock of Palm to be distributed in the
Distribution on the Nasdaq, subject to official notice of distribution.

                  (d) CONDITIONS. 3Com and Palm shall take all reasonable
steps necessary and appropriate to cause the conditions set forth in SECTION
4.4 to be satisfied and to effect the Distribution on the Distribution Date.

          SECTION 4.3   SOLE DISCRETION OF 3COM. 3Com currently intends,
following the consummation of the IPO, to complete the Distribution by
December 1, 2000. 3Com 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, 3Com 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. Palm shall cooperate with
3Com in all respects to accomplish the Distribution and shall, at 3Com's
direction, promptly take any and all actions necessary or desirable to effect
the Distribution, including, without limitation, the registration under the
Securities Act of the common stock of Palm on an appropriate registration
form or forms to be designated by 3Com. 3Com shall select any investment
banker(s) and manager(s) in connection with the Distribution, as well as any
financial printer, solicitation and/or exchange agent and outside counsel for
3Com; PROVIDED, HOWEVER, that nothing herein shall prohibit Palm from
engaging (at its own expense) its own financial, legal, accounting and other
advisors in connection with the Distribution.

          SECTION 4.4   CONDITIONS PRECEDENT TO DISTRIBUTION. The following
are conditions that must take place prior to the consummation of the
Distribution. The conditions are for the sole benefit of


                                      -6-


<PAGE>


3Com and shall not give rise to or create any duty on the part of 3Com or the
3Com Board of Directors to waive or not waive any such condition.

                  (a) IRS RULING. 3Com shall have obtained a private letter
ruling from the Internal Revenue Service in form and substance satisfactory
to 3Com (in its sole discretion), and such ruling shall remain in effect as
of the Distribution Date, to the effect that (i) the transfer by the 3Com
Group to the Palm Group of the property, subject to liabilities, held by 3Com
of the Palm Business, and Palm's assumption of liabilities held by 3Com
related to the Palm Business, followed by the distribution by 3Com of all of
its Palm stock to the stockholders of 3Com, will qualify as a reorganization
under Sections 368(a)(1)(D) and 355 of the Code; (ii) no gain or loss will be
recognized by 3Com on its transfer of property of the Palm Business to Palm;
(iii) no gain or loss will be recognized by Palm on its receipt of property
of the Palm Business from 3Com; and (iv) no gain or loss will be recognized
by (and no amount will otherwise be included in the income of) the
stockholders of 3Com upon their receipt of Palm common stock pursuant to the
Distribution.

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

                  (c) 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 3Com shall have
occurred or failed to occur that prevents the consummation of the
Distribution; and

                  (d) NO MATERIAL ADVERSE EFFECT. No other events or
developments shall have occurred subsequent to the IPO Closing Date that, in
the judgment of the Board of Directors of 3Com, would result in the
Distribution having a material adverse effect on 3Com or on the stockholders
of 3Com.

          SECTION 4.5   FRACTIONAL SHARES. As soon as practicable after the
Distribution Date, 3Com shall direct the Distribution Agent to determine the
number of whole shares and fractional shares of common stock of Palm
allocable to each holder of record or beneficial owner of common stock of
3Com as of the Record Date, to aggregate all such fractional shares and sell
the whole shares obtained thereby at the direction of 3Com, 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 withheld for federal income tax
purposes and after deducting an amount equal to all brokerage charges,
commissions and transfer taxes attributed to such sale. 3Com and the
Distribution Agent shall use their reasonable commercial efforts to aggregate
the shares of common stock of 3Com that may be held by any beneficial owner
thereof through more than one account in determining the fractional share
allocable to such beneficial owner.


                                      -7-


<PAGE>

                                    ARTICLE V

                           COVENANTS AND OTHER MATTERS

          SECTION 5.1   OTHER AGREEMENTS. 3Com and Palm 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 5.2   FURTHER INSTRUMENTS. At the request of Palm, and
without further consideration, 3Com will execute and deliver, and will cause
its applicable Subsidiaries to execute and deliver, to Palm and its
Subsidiaries such other instruments of transfer, conveyance, assignment,
substitution and confirmation and take such action as Palm may reasonably
deem necessary or desirable in order more effectively to transfer, convey and
assign to Palm and its Subsidiaries and confirm Palm's and its Subsidiaries'
title to all of the assets, rights and other things of value contemplated to
be transferred to Palm and its Subsidiaries pursuant to this Agreement, the
Ancillary Agreements, and any documents referred to therein, to put Palm and
its Subsidiaries in actual possession and operating control thereof and to
permit Palm and its 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 3Com and without further
consideration, Palm will execute and deliver, and will cause its applicable
Subsidiaries to execute and deliver, to 3Com and its Subsidiaries all
instruments, assumptions, novations, undertakings, substitutions or other
documents and take such other action as 3Com may reasonably deem necessary or
desirable in order to have Palm fully and unconditionally assume and
discharge the liabilities contemplated to be assumed by Palm under this
Agreement or any document in connection herewith and to relieve the 3Com
Group of any liability or obligation with respect thereto and evidence the
same to third parties. Neither 3Com nor Palm 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.
Furthermore, each party, at the request of the other party hereto, shall
execute and deliver such other 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 5.3   ADDITIONAL TRANSITIONAL SERVICES AGREEMENTS. 3Com and
its Subsidiaries and Palm and its Subsidiaries will enter into transitional
services agreements covering the provision of various transitional services,
including financial, accounting, real estate and site services, sales,
customer support, human resources, supply chain services and information
technology services by 3Com (and its Subsidiaries) to Palm (and its
Subsidiaries) or, in certain circumstances, vice versa. Such services will
generally be provided for a fee equal to the direct costs and indirect costs
of providing such services plus five percent (5.0%). The transitional
services agreements will generally provide for a term of one year or less.
However, some transitional services agreements may be extended beyond the
initial one year term, in which case the fee for such services shall,
generally, be increased to the direct costs and indirect costs of providing
such services plus ten percent (10.0%).

          SECTION 5.4   AGREEMENT FOR EXCHANGE OF INFORMATION.


                                      -8-


<PAGE>


                  (a) GENERALLY. Each of 3Com and Palm 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
3Com or Palm, 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.

                  (b) 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.

                  (c) OWNERSHIP OF INFORMATION. Any Information owned by a
party that is provided to a requesting party pursuant to this SECTION 5.4
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.

                  (d) RECORD RETENTION. To facilitate the possible exchange
of Information pursuant to this SECTION 5.4 and other provisions of this
Agreement after the Distribution Date, each party agrees to use its
reasonable commercial efforts to retain all Information in its respective
possession or control on the Distribution Date substantially in accordance
with the policies of 3Com as in effect on the Separation Date. However,
except as set forth in the Tax Sharing Agreement, at any time after the
Distribution Date, each party may amend its respective record retention
policies at such party's discretion; PROVIDED, HOWEVER, that if a party
desires to effect the amendment within 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.

                           (i) 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 policies of 3Com) and that falls under the categories listed
in SECTION 5.4(a), 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.


                                      -9-


<PAGE>


                  (e) 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 5.4 is found to be inaccurate, in the
absence of gross negligence or 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 5.4(d).

                  (f) OTHER AGREEMENTS PROVIDING FOR EXCHANGE OF INFORMATION.
The rights and obligations granted under this SECTION 5.4 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.

                  (g) 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 5.9 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 5.5   AUDITORS AND AUDITS; ANNUAL AND QUARTERLY STATEMENTS
AND ACCOUNTING. Each party agrees that, for so long as 3Com is required in
accordance with United States generally accepted accounting principles to
consolidate Palm's results of operations and financial position:

                  (a) SELECTION OF AUDITORS. Palm shall not select a
different accounting firm from that used by 3Com to serve as its (and its
Subsidiaries') independent certified public accountants ("PALM'S AUDITORS")
for purposes of providing an opinion on its consolidated financial statements
without 3Com's prior written consent (which shall not be unreasonably
withheld).

                  (b) DATE OF AUDITORS' OPINION AND QUARTERLY REVIEWS. Palm
shall use its reasonable commercial efforts to enable the Palm Auditors to
complete their audit such that they will date their opinion on Palm's audited
annual financial statements on the same date that 3Com's independent
certified public accountants ("3COM'S AUDITORS") date their opinion on 3Com's
audited annual financial statements, and to enable 3Com to meet its timetable
for the printing, filing and public dissemination of 3Com's annual financial
statements. Palm shall use its reasonable commercial efforts to enable the
Palm Auditors to complete their quarterly review procedures such that they
will provide clearance on Palm's quarterly financial statements on the same
date that 3Com's Auditors provide clearance on 3Com's quarterly financial
statements.


                                      -10-


<PAGE>


                  (c) ANNUAL AND QUARTERLY FINANCIAL STATEMENTS. Palm shall
provide to 3Com on a timely basis all Information that 3Com reasonably
requires to meet its schedule for the preparation, printing, filing, and
public dissemination of 3Com's annual and quarterly financial statements.
Without limiting the generality of the foregoing, Palm will provide all
required financial Information with respect to Palm and its Subsidiaries to
Palm's Auditors in a sufficient and reasonable time and in sufficient detail
to permit Palm's Auditors to take all steps and perform all reviews necessary
to provide sufficient assistance to 3Com's Auditors with respect to financial
Information to be included or contained in 3Com's annual and quarterly
financial statements. Similarly, 3Com shall provide to Palm on a timely basis
all financial Information that Palm reasonably requires to meet its schedule
for the preparation, printing, filing, and public dissemination of Palm's
annual and quarterly financial statements. Without limiting the generality of
the foregoing, 3Com will provide all required financial Information with
respect to 3Com and its Subsidiaries to 3Com's Auditors in a sufficient and
reasonable time and in sufficient detail to permit 3Com's Auditors to take
all steps and perform all reviews necessary to provide sufficient assistance
to Palm's Auditors with respect to Information to be included or contained in
Palm's annual and quarterly financial statements.

                  (d) IDENTITY OF PERSONNEL PERFORMING THE ANNUAL AUDIT AND
QUARTERLY REVIEWS. Palm shall authorize Palm's Auditors to make available to
3Com's Auditors both the personnel who performed or will perform the annual
audits and quarterly reviews of Palm and work papers related to the annual
audits and quarterly reviews of Palm, in all cases within a reasonable time
prior to Palm's Auditors' opinion date, so that 3Com's Auditors are able to
perform the procedures they consider necessary to take responsibility for the
work of Palm's Auditors as it relates to 3Com's Auditors' report on 3Com's
financial statements, all within sufficient time to enable 3Com to meet its
timetable for the printing, filing and public dissemination of 3Com's annual
and quarterly statements. Similarly, 3Com shall authorize 3Com's Auditors to
make available to Palm's Auditors both the personnel who performed or will
perform the annual audits and quarterly reviews of 3Com and work papers
related to the annual audits and quarterly reviews of 3Com, in all cases
within a reasonable time prior to 3Com's Auditors' opinion date, so that
Palm's Auditors are able to perform the procedures they consider necessary to
take responsibility for the work of 3Com's Auditors as it relates to Palm's
Auditors' report on Palm's statements, all within sufficient time to enable
Palm to meet its timetable for the printing, filing and public dissemination
of Palm's annual and quarterly financial statements.

                  (e) ACCESS TO BOOKS AND RECORDS. Palm shall provide 3Com's
internal auditors and their designees access to Palm's and its Subsidiaries'
books and records so that 3Com may conduct reasonable audits relating to the
financial statements provided by Palm pursuant hereto as well as to the
internal accounting controls and operations of Palm and its Subsidiaries.
Similarly, 3Com shall provide Palm's internal auditors and their designees
access to 3Com's and its Subsidiaries' books and records so that Palm may
conduct reasonable audits relating to the financial statements provided by
3Com pursuant hereto as well as to the internal accounting controls and
operations of 3Com and its Subsidiaries

                  (f) NOTICE OF CHANGE IN ACCOUNTING PRINCIPLES. Palm shall
give 3Com as much prior notice as reasonably practical of any proposed
determination of, or any significant changes in, its accounting estimates or
accounting principles from those in effect on the Separation Date. Palm will
consult with 3Com and, if requested by 3Com, Palm will consult with 3Com's
independent public


                                      -11-


<PAGE>


accountants with respect thereto. 3Com shall give Palm as much prior notice
as reasonably practical of any proposed determination of, or any significant
changes in, its accounting estimates or accounting principles from those in
effect on the Separation Date.

                  (g) CONFLICT WITH THIRD-PARTY AGREEMENTS. Nothing in
SECTIONS 5.4 and 5.5 shall require Palm to violate any agreement with any
third party regarding the confidentiality of confidential and proprietary
information relating to that third party or its business; PROVIDED, HOWEVER,
that in the event that Palm is required under SECTIONS 5.4 and 5.5 to
disclose any such Information, Palm shall use all commercially reasonable
efforts to seek to obtain such third party's consent to the disclosure of
such information.

          SECTION 5.6   CONSISTENCY WITH PAST PRACTICES. At all times, 3Com
and Palm will conduct the Palm Business before the Separation Date in the
ordinary course, consistent with past practices.

          SECTION 5.7   PAYMENT OF EXPENSES. Except as otherwise provided in
this Agreement, the Ancillary Agreements or any other agreement between the
parties relating to the Separation, the IPO or the Distribution, all costs
and expenses of the parties hereto in connection with the Separation, the IPO
(including underwriting discounts and commissions) and the Distribution and
costs and expenses of the parties hereto in connection with the Separation
shall be allocated between Palm and 3Com. Palm and 3Com shall each be
responsible for their own internal fees, costs and expenses incurred in
connection with the Separation, the IPO and the Distribution.

          SECTION 5.8   FOREIGN SUBSIDIARIES. 3Com and Palm shall cause each
of their foreign subsidiaries to execute such local transfer agreements,
assignments, assumptions, novations and other documents as shall be necessary
to carry out the plan described in EXHIBIT K (the "NON-US PLAN") hereto to
effect the purposes of this Agreement with respect to their respective
operations outside the United States.

          SECTION 5.9   DISPUTE RESOLUTION.

                  (a) If a dispute, controversy or claim ("Dispute") arises
between the parties relating to the interpretation or performance of this
Agreement or the Ancillary Agreements, 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 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


                                      -12-


<PAGE>


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.

                  (b) 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
reasonable 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.

                  (c) 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.

                  (d) Continuity of Service and Performance. Unless otherwise
agreed in writing, the parties will continue to provide service and honor all
other commitments under this Agreement and each Ancillary Agreement during
the course of dispute resolution pursuant to the provisions of this SECTION
5.9 with respect to all matters not subject to such dispute, controversy or
claim.

          SECTION 5.10   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.

          SECTION 5.11   NO REPRESENTATION OR WARRANTY. 3Com does not, in
this Agreement or any other agreement, instrument or document contemplated by
this Agreement, make any representation as to, warranty of or covenant with
respect to:

                  (a) the value of any asset or thing of value to be
transferred to Palm;

                  (b) the freedom from encumbrance of any asset or thing of
value to be transferred to Palm;

                  (c) the absence of defenses or freedom from counterclaims
with respect to any claim to be transferred to Palm; or


                                      -13-


<PAGE>


                  (d) the legal sufficiency of any assignment, document or
instrument delivered hereunder to convey title to any asset or thing of value
upon its execution, deliver and filing.

         Except as may expressly be set forth herein or in any Ancillary
Agreement, all assets to be transferred to Palm shall be transferred "AS IS,
WHERE IS" and Palm shall bear the economic and legal risk that any conveyance
shall prove to be insufficient to vest in Palm good and marketable title,
free and clear of any lien, claim, equity or other encumbrance.

          SECTION 5.12   NON-SOLICITATION OF EMPLOYEES. 3Com and Palm each
agree not to solicit or recruit, without the other party's express written
consent, the other party's employees for a period of two (2) years following
the Distribution Date. To the extent this prohibition is waived, any
recruitment efforts by either 3Com or Palm during the period of one (1) year
after the Distribution Date shall be coordinated with each party's Senior
Vice President of Human Resources or his or her designate and appropriate
management. Notwithstanding the foregoing, this prohibition on solicitation
does not apply to actions taken by a party either: (a) solely as a result of
an employee's affirmative response to a general recruitment effort carried
out through a public solicitation or general solicitation, or (b) as a result
of an employee's initiative.

          SECTION 5.13   EMPLOYEE AGREEMENTS. DEFINITION. As used in this
SECTION 5.13, "EMPLOYEE AGREEMENT" means the Conflicts, Confidential
Information and Assignment of Inventions Agreement and corresponding
agreements in foreign countries executed by each 3Com employee.

                  (a) SURVIVAL OF 3COM EMPLOYEE AGREEMENT OBLIGATIONS AND
3COM'S COMMON LAW RIGHTS. The 3Com Employee Agreements of all former 3Com
employees transferred to Palm as of the Distribution Date shall remain in
full force and effect according to their terms; PROVIDED, HOWEVER, that none
of the following acts committed by former 3Com employees within the scope of
their Palm employment shall constitute a breach of such 3Com Employee
Agreements: (i) the use or disclosure of Confidential Information (as that
term is defined in the former 3Com employee's 3Com Employee Agreement) for or
on behalf of Palm, if such disclosure is consistent with the rights granted
to Palm and restrictions imposed on Palm under this Agreement, any Ancillary
Agreement or any other agreement between the parties; (ii) the disclosure and
assignment to Palm of rights in proprietary developments authored or
conceived by the former 3Com employee after the Separation Date and resulting
from the use of, or based upon intellectual property (whether patented or
not) which is retained by 3Com; PROVIDED, HOWEVER, that in no event shall
such disclosure and assignment be regarded as assigning the underlying
intellectual property to Palm; (iii) the rendering of any services, directly
or indirectly, to Palm to the extent such services are consistent with the
assignment or license of rights granted to Palm and the restrictions imposed
on Palm under this Agreement, any Ancillary Agreement or any other agreement
between the parties; and (iv) solicitation of the employees of one party by
the other party prior to the Distribution Date (so long as such solicitation
does not violate SECTION 5.12 hereof). Further, 3Com retains any rights it
has under statute or common law with respect to actions by its former
employees to the extent such actions are inconsistent with the rights granted
to Palm and restrictions imposed on Palm under this Agreement, any Ancillary
Agreement or any other agreement between the parties.


                                      -14-


<PAGE>

                  (b) ASSIGNMENT, COOPERATION FOR COMPLIANCE AND ENFORCEMENT.

                                    (i) 3Com retains all rights under the
3Com Employee Agreements of all former 3Com employees necessary to permit
3Com to protect the rights and interests of 3Com, but hereby transfers and
assigns to Palm its rights under the 3Com Employee Agreements of all former
3Com employees to the extent required to permit Palm to enjoin, restrain,
recover damages from or obtain specific performance of the 3Com Employee
Agreements or obtain other remedies against any employee who breaches his/her
3Com Employee Agreement.

                                    (ii) 3Com and Palm agree, at their own
respective cost and expense, to use their reasonable efforts to cooperate as
follows: (A) Palm shall advise 3Com of: (1) any violation(s) of the 3Com
Employee Agreement by former 3Com employees, and (2) any violation(s) of the
Palm Employee Agreement which affect 3Com's rights; and (B) 3Com shall advise
Palm of any violations of the 3Com Employee Agreement by current or former
3Com employees which affect Palm's rights; PROVIDED, HOWEVER, that the
foregoing obligations shall only apply to violations which become known to an
attorney within the legal department of the party obligated to provide notice
thereof.

                                    (iii) 3Com and Palm each may separately
enforce the 3Com Employee Agreements of former 3Com employees to the extent
necessary to reasonably protect their respective interests, PROVIDED,
HOWEVER, that (i) Palm shall not commence any legal action relating thereto
without first consulting with 3Com's General Counsel or his/her designee and
(ii) 3Com shall not commence any legal action relating thereto against any
former 3Com employee who is at the time an Palm employee without first
consulting with Palm's General Counsel or his/her designee. If either party,
in seeking to enforce any 3Com Employee Agreement, notifies the other party
that it requires, or desires, such party to join in such action, then the
other party shall do so. In addition, if either party commences or becomes a
party to any action to enforce a 3Com Employee Agreement of a former 3Com
employee, the other party shall, whether or not it becomes a party to the
action, cooperate with the other party by making available its files and
employees who have information or knowledge relevant to the dispute, subject
to appropriate measures to protect the confidentiality of any proprietary or
confidential information that may be disclosed in the course of such
cooperation or action and subject to any relevant privacy laws and
regulations. Any such action shall be conducted at the expense of the party
bringing the action and the parties shall agree on a case by case basis on
compensation, if any, of the other party for the value of the time of such
other party's employees as reasonably required in connection with the action.

                                    (iv) 3Com and Palm understand and
acknowledge that matters relating to the making, performance, enforcement,
assignment and termination of employee agreements are typically governed by
the laws and regulations of the national, federal, state or local
governmental unit where an employee resides, or where an employee's services
are rendered, and that such laws and regulations may supersede or limit the
applicability or enforceability of this SECTION 5.13. In such circumstances,
3Com and Palm agree to take action with respect to the employee agreements
that best accomplishes the parties' objectives as set forth in this SECTION
5.13 and that is consistent with applicable law.

         SECTION 5.14  COOPERATION IN OBTAINING NEW AGREEMENTS. 3Com
understands that, prior to the Separation Date, Palm has derived benefits
under certain agreements and relationships between

                                     -15-

<PAGE>

3Com and third parties, which agreements and relationships are not being
assigned or transferred to Palm in connection with the Separation. Upon the
request of Palm, 3Com agrees to make introductions of appropriate Palm
personnel to 3Com's contacts at such third parties, and agrees to provide
reasonable assistance to Palm, at 3Com's own expense, so that Palm may enter
into agreements or relationships with such third parties under substantially
equivalent terms and conditions, including financial terms and conditions,
that apply to 3Com. Such assistance may include, but is not limited to, (i)
requesting and encouraging such third parties to enter into such agreements
or relationships with Palm, (ii) attending meetings and negotiating sessions
with Palm and such third parties, and (iii) participating in buying
consortiums with Palm. 3Com also understands that certain agreements between
3Com and third parties which are being assigned to Palm in connection with
the Separation may require the consent of the applicable third party. 3Com
shall assist Palm in seeking and obtaining the consent of such third parties
to such assignment. The parties expect that the activities contemplated by
this SECTION 5.14 will be substantially completed by the Distribution Date,
but in no event will 3Com have any obligations hereunder after the first
anniversary of the Distribution Date.

         SECTION 5.15  PROPERTY DAMAGE TO PALM ASSETS PRIOR TO THE SEPARATION
DATE. In the event of any property damage, other than ordinary wear and tear,
to any Palm Assets held by 3Com which occurs prior to the Separation Date,
3Com 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 3Com from disposing of any Assets in the ordinary
course of business consistent with past practices.

                                   ARTICLE VI

                                  MISCELLANEOUS

         SECTION 6.1  LIMITATION OF LIABILITY. IN NO EVENT SHALL ANY MEMBER
OF THE 3COM GROUP OR PALM GROUP BE LIABLE TO ANY OTHER MEMBER OF THE 3COM
GROUP OR PALM 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; PROVIDED, HOWEVER, THAT THE FOREGOING LIMITATIONS SHALL NOT LIMIT
EACH PARTY'S INDEMNIFICATION OBLIGATIONS FOR LIABILITIES AS SET FORTH IN THE
INDEMNIFICATION AND INSURANCE MATTERS AGREEMENT.

         SECTION 6.2  ENTIRE AGREEMENT. This Agreement, the 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 thereof and shall supersede all prior written
and oral and all contemporaneous oral agreements and understandings with
respect to the subject matter hereof and thereof.

                                     -16-

<PAGE>

         SECTION 6.3  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 5.9 above.

         SECTION 6.4  TERMINATION. This Agreement and all Ancillary
Agreements may be terminated and the Distribution abandoned at any time prior
to the IPO Closing Date by and in the sole discretion of 3Com without the
approval of Palm. This Agreement may be terminated at any time after the IPO
Closing Date and before the Distribution Date by mutual consent of 3Com and
Palm. In the event of termination pursuant to this SECTION 6.4, no party
shall have any liability of any kind to the other party.

         SECTION 6.5  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:
                                    Palm Computing, Inc.
                                    5400 Bayfront Plaza
                                    Santa Clara, California 95052
                                    Attention:  General Counsel
                                    Fax: (408) 326-6434

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 6.6  COUNTERPARTS. This Agreement, including the Ancillary
Agreement and the Exhibits and Schedules hereto and thereto and the other
documents referred to herein or therein, 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 6.7  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

                                     -17-

<PAGE>

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 6.8  SEVERABILITY. If any term or other provision of this
Agreement or the Exhibits or Schedules attached hereto is determined 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.

         SECTION 6.9  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 Exhibits or Schedules attached
hereto are cumulative to, and not exclusive of, any rights or remedies
otherwise available.

         SECTION 6.10  AMENDMENT. No change or amendment will be made to this
Agreement or the Exhibits or Schedules attached hereto except by an
instrument in writing signed on behalf of each of the parties to such
agreement.

         SECTION 6.11  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 6.12  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 Exhibit or Schedule 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.

                                     -18-

<PAGE>

         SECTION 6.13  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 VII

                                   DEFINITIONS

         SECTION 7.1  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 7.2  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 7.3  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 7.4  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 attorneys or under their direction (including attorney work
product), and other technical, financial, employee or business information or
data.

         SECTION 7.5  IPO CLOSING DATE. "IPO Closing Date" has the meaning
set forth in the SECTION 3.3 hereof.

         SECTION 7.6  PALM ASSETS. "PALM ASSETS" has the meaning set forth in
SECTION 1.2 of the Assignment Agreement.

         SECTION 7.7  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 7.8  PALM'S AUDITORS. "PALM'S AUDITORS" means Palm's
independent certified public accountants.

                                     -19-

<PAGE>

         SECTION 7.9  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 7.10  RECORD DATE. "RECORD DATE" means the close of business
on the date to be determined by the Board of Directors of 3Com as the record
date for determining the stockholders of 3Com entitled to receive shares of
common stock of Palm in the Distribution.

         SECTION 7.11  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 7.12  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 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 7.13  3COM'S AUDITORS. "3COM'S AUDITORS" means 3Com's
independent certified public accountants.

                                     -20-

<PAGE>

         WHEREFORE, the parties have signed this Master Separation and
Distribution Agreement effective as of the date first set forth above.

3COM CORPORATION                    PALM COMPUTING, INC.


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

<PAGE>

                                    EXHIBIT A

                        CERTIFICATE OF SECRETARY OF 3COM

<PAGE>

                             SECRETARY'S CERTIFICATE



         I, Mark Michael, Secretary of 3Com Corporation, a corporation organized
and existing under the laws of the State of Delaware (the "Company"), DO HEREBY
CERTIFY that attached hereto are true and correct copies of certain resolutions
adopted in a meeting of the 3Com Corporation Board of Directors on November 30,
1999, which resolutions have not been amended, modified, rescinded and remain in
full force and effect on the date hereof.

         IN WITNESS WHEREOF, I have hereunder set my hand this 25th day of
February, 2000.




                                  ---------------------------------
                                  Mark Michael, Secretary

<PAGE>

                                    EXHIBIT B

                        CERTIFICATE OF SECRETARY OF PALM

<PAGE>

                             SECRETARY'S CERTIFICATE



         I, Stephen Yu, Secretary of Palm Computing, Inc., a corporation
organized and existing under the laws of the State of California (the
"Company"), DO HEREBY CERTIFY that attached hereto are true and correct copies
of certain resolutions adopted in a meeting of the Palm Computing, Inc. Board of
Directors on November 30, 1999, which resolutions have not been amended,
modified, rescinded and remain in full force and effect on the date hereof.

         IN WITNESS WHEREOF, I have hereunder set my hand this 25th day of
February, 2000.





                                             ---------------------------------
                                             Stephen Yu, Secretary

<PAGE>

                                    EXHIBIT C

                   GENERAL ASSIGNMENT AND ASSUMPTION AGREEMENT

<PAGE>

                                   EXHIBIT D-1

                MASTER TECHNOLOGY OWNERSHIP AND LICENSE AGREEMENT

<PAGE>

                                   EXHIBIT D-2

                  MASTER PATENT OWNERSHIP AND LICENSE AGREEMENT

<PAGE>

                                   EXHIBIT D-3

                MASTER TRADEMARK OWNERSHIP AND LICENSE AGREEMENT

<PAGE>

                                    EXHIBIT E

                           EMPLOYEE MATTERS AGREEMENT

<PAGE>

                                    EXHIBIT F

                              TAX SHARING AGREEMENT

<PAGE>

                                    EXHIBIT G

                     MASTER TRANSITIONAL SERVICES AGREEMENT

<PAGE>

                                    EXHIBIT H

                          REAL ESTATE MATTERS AGREEMENT

<PAGE>

                                    EXHIBIT I

                    MASTER CONFIDENTIAL DISCLOSURE AGREEMENT

<PAGE>

                                    EXHIBIT J

                 INDEMNIFICATION AND INSURANCE MATTERS AGREEMENT

<PAGE>

                                    EXHIBIT K

                          REORGANIZATION OF OPERATIONS
                        OUTSIDE THE US (THE NON-US PLAN)