Document:

Amendment Number One to Loan Agreement

 EXHIBIT 10.23
 [ * ] = information redacted pursuant to a confidential treatment request. Such omitted information has been filed separately
with the Securities and Exchange Commission.
 AMENDMENT NUMBER ONE TO LOAN AGREEMENT
                    THIS AMENDMENT NUMBER ONE TO LOAN AGREEMENT (this “Amendment”), dated as of August 6, 2001, is entered into
between and among, on the one hand, the lenders identified on the signature pages hereof (such lenders, together with their respective successors and assigns, are referred to hereinafter each individually as a “Lender” and collectively as
the “Lenders”), FOOTHILL CAPITAL CORPORATION, a California corporation, as the arranger and administrative agent for the Lenders (“Agent”), HELLER FINANCIAL, INC., a Delaware corporation (“Heller”), and
THE CIT GROUP/BUSINESS CREDIT, INC., a New York corporation (“CITBC”) and, on the other hand, PALM, INC., a Delaware corporation (“Borrower”), in light of the following:
 W I T N E S S E T H
                    WHEREAS, the Borrower and the Lender Group are parties to that
certain Loan Agreement, dated as of June 25, 2001 (as amended, restated, supplemented, or modified from time to time, the “Loan Agreement”);  
                    WHEREAS, the Borrower has requested that the Lender Group consent to the amendments to the Loan Agreement set forth  in
Section 2 hereof; and
                     WHEREAS, subject to the satisfaction of the conditions set forth
herein, the Lender Group is willing to so consent to such amendments to the Loan Agreement.
                      NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties agree to amend the Loan Agreement as follows:
 1.      DEFINITIONS.    Capitalized terms used herein and not otherwise
defined herein shall have the meanings ascribed to them in the Loan Agreement, as amended hereby. 2.      AMENDMENTS TO LOAN AGREEMENT. 

          (a) Section 1.1 of the Loan Agreement hereby is amended by deleting the definitions of “Permitted Dispositions” and
“Permitted Investments” and inserting the following in lieu thereof:
           “Permitted Dispositions” means (a) sales or other dispositions by Borrower or its Material Subsidiaries of Equipment that is substantially worn, damaged, or obsolete in the ordinary course of business, (b) sales or other dispositions by Borrower or its
Material Subsidiaries prior to December 31, 2001 of [ * ] (c) sales by Borrower and
  

  its Material Subsidiaries of Inventory to buyers in the ordinary course of business, (d) the use or transfer of money or Cash Equivalents by Borrower and its Material
Subsidiaries in a manner that is not prohibited by the terms of this Agreement or the other Loan Documents, and (e) the sale, licensing, or other disposition for fair market value by Borrower or its Material Subsidiaries of patents, trademarks,
copyrights, and other intellectual property rights; provided, however, that prior to or concurrent with any such sale, license, or other disposition, Borrower or its Material Subsidiaries, as applicable, must retain or obtain
sufficient rights to use (as determined by Agent in its Permitted Discretion) the subject intellectual property as to enable Borrower or its Material Subsidiaries, as applicable, to continue to conduct its business in the ordinary course and such
rights shall assignable to Agent or inure to the benefit of Agent (as determined by Agents in their Permitted Discretion) in order to enable Agent to dispose of the Collateral in the event of an Event of Default.

           “Permitted Investments” means (a) Investments that are consistent with the Approved Investment Policies, (b) Investments in Cash Equivalents, (c)
Investments in negotiable instruments for collection, (d) advances made in connection with purchases of goods or services in the ordinary course of business, (e) Permitted Intercompany Advances, (f) Investments existing on the Closing Date disclosed
in Schedule P-2, (g) Investments made in connection with transactions otherwise permitted by this Agreement, (h) Investments consisting of (i) travel advances, employee relocation loans and other employee loans and advances in the ordinary
course of business and (ii) non-cash loans to employees, officers or directors relating to the purchase of equity securities of Borrower or pursuant to employee stock purchase plans or agreements approved by Borrower’s Board of Directors, (i)
Investments (including debt obligations) received in connection with the bankruptcy or reorganization of Account Debtors, (j) Investments consisting of notes receivable or of prepaid royalties and other credit extensions to, customers and suppliers
in the ordinary course of business, (k) Investments pursuant to or arising under currency agreements or interest rate agreements entered into in the ordinary course of business, (l) Investments in deposit accounts maintained by Borrower or its
Material Subsidiaries, (m) Permitted Non-Cash Acquisitions, and (n) Investments in an aggregate amount not to exceed $ [ * ] so long as such Investments are designed to foster an enhanced business relationship with the Person in which the Investment
is made.
         (b) Section 1.1 of the Loan Agreement hereby is amended by inserting the following defined term in the appropriate
alphabetical order:
                “Approved Investment Policies” shall mean the investment policies of Borrower delivered to
Agent by Borrower excluding the “Exceptions” provision of such investment policies.
 
                      (c) Section 3.1(c) of the Loan Agreement hereby is amended by deleting clause
(v) thereof and inserting the following in lieu thereof:   (v)      [Intentionally omitted],
 
 [ * ] = information
redacted pursuant to a confidential treatment request. Such omitted information has been filed separately with the Securities and Exchange Commission.
 
 2

      (d) Section 6.3 of the Loan Agreement hereby is amended by deleting the preamble thereof and subsection (a) thereof and inserting
the following in lieu thereof:                6.3 Financial Statements, Reports, Certificates. Deliver to Agent, which shall deliver copies to
each Lender:
                           (a)(i) prior to the occurrence of a
Triggering Event, unless the average of the sum of the Revolver Usage, Irish Loan Usage and UK Loan Usage (taken as a whole) over the immediately preceding 30 day period exceeds $75,000,000, as soon as possible, but in any event, within 45 days
after the end of each fiscal quarter, and (ii) if clause (i) is not applicable, as soon as available, but in any event within 30 days (45 days in the case of a fiscal month that is the end of one of the first 3 fiscal quarters in a fiscal year)
after the end of each fiscal month during each of Borrower’s fiscal years,                                     (i)  a company
prepared consolidated balance sheet, income statement, and statement of cash flow covering Borrower’s and  its  Subsidiaries’ operations during such period,
                                    (ii)   a
certificate signed by the chief financial officer of Borrower to the effect that:         
             (A)   the financial statements delivered hereunder have been prepared in accordance with GAAP (except for the lack of footnotes and being subject to year-end audit
adjustments) and fairly present in all material respects the financial condition of Borrower and its Subsidiaries,
           (B)   the representations and
warranties of Borrower contained in this Agreement and the other Loan Documents are true and correct in all material respects on and as of the date of such certificate, as though made on and as of such date (except to the extent that such
representations and warranties relate solely to an earlier date), and
           (C)   there does not exist any condition or event that constitutes a Default or
Event of Default (or, to the extent of any non-compliance, describing such non-compliance as to which he or she may have knowledge and what action Borrower has taken, is taking, or proposes to take with respect thereto), 
 

 
      (e) Section 7.3 of the Loan Agreement hereby is amended by (i) deleting the semi-colon at the end of subsection (a) thereof and
inserting in lieu thereof a period, and (ii) deleting subsection (c) thereof and inserting the following in lieu thereof: 3

                 (c) Except for Permitted Dispositions and Permitted IP Transactions, convey, sell, lease, license,
assign, transfer or otherwise dispose of, in one transaction or a series of transactions, all or any substantial part of its assets. 
         (f) Section 7.4 of the Loan Agreement hereby is amended and restated in its entirety as follows:                 Section 7.4
Disposal of Assets. Other than Permitted Dispositions and Permitted IP Transactions, convey, sell, lease, license, assign, transfer, or otherwise dispose of any of Borrower’s assets.
         (g) Section 7 of the Loan Agreement is hereby amended by adding the following as new Section 7.22 and new Section 7.23 after Section
7.21:                 Section 7.22 Raw Materials. Retain, at any time, a material amount of raw materials Inventory.

                Section 7.23 Approved Investment Policies. Borrower shall not amend or modify the Approved Investment Policies without the prior
written consent of the Agents, which consent shall not be unreasonably withheld.
        (h) Section 12 of the Loan Agreement hereby is amended
by inserting the following addresses after the address for Brobeck, Phleger & Harrison, LLP and before the final paragraph of such Section 12: 
  

	 If to Heller: 	 HELLER FINANCIAL, INC.
 71 Stevensen Street
 Suite 2000
 San Francisco, California 94105
 Attn: Samantha Farber
 Fax No.: 312.441.7367 
 
	 	 
	 If to CITBC: 	 THE CIT GROUP/BUSINESS CREDIT, INC.
 300 South Grand Avenue
 3rd Floor
 Los Angeles, California 90071
 Attn: Regional Credit Manager
 Fax No.:
213.613.2501 
 

       (i) Schedule 2.7 of the Loan Agreement hereby is amended and restated in its entirety in the form of
Amended and Restated Schedule 2.7 attached hereto. 
       (j) Schedule 5.5 of the Loan Agreement hereby is amended and restated in its entirety
in the form of Amended and Restated Schedule 5.5 attached hereto. 4

           (k) Schedule 7.6 of the Loan Agreement hereby is amended and restated in its entirety in the
form of Amended and Restated Schedule 7.6 attached hereto. 
 3.       CONDITIONS PRECEDENT TO AMENDMENT. The satisfaction of each of the
following shall constitute conditions precedent to the effectiveness of this Amendment and each and every provision hereof: 
           (a) The representations and warranties in the Loan Agreement and the other Loan Documents shall be true and correct in all respects on and as of the date hereof, as though made on such date (except to the extent that such representations and
warranties relate solely to an earlier date).
            (b) No Default or Event of Default shall have occurred and be continuing on
the date hereof or as of the date of the effectiveness of this Amendment. 
           (c) No injunction, writ, restraining order, or
other order of any nature prohibiting, directly or indirectly, the consummation of the transactions contemplated herein shall have been issued and remain in force by any Governmental Authority against the Borrower or the Lender Group. 
 4.       CONSTRUCTION. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE
OF CALIFORNIA APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN THE STATE OF CALIFORNIA. 
 5.       ENTIRE AMENDMENT; EFFECT OF
AMENDMENT.     This Amendment, and terms and provisions hereof, constitute the entire agreement among the parties pertaining to the subject matter hereof and supersedes any and all prior or contemporaneous amendments
relating to the subject matter hereof. Except for the amendments to the Loan Agreement expressly set forth in Section 2 hereof, the Loan Agreement and other Loan Documents shall remain unchanged and in full force and effect. To the extent any
terms or provisions of this Amendment conflict with those of the Loan Agreement or other Loan Documents, the terms and provisions of this Amendment shall control. This Amendment is a Loan Document. 
 6.      COUNTERPARTS; TELEFACSIMILE EXECUTION. This Amendment may be executed in any number of counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Amendment by signing any such counterpart. Delivery of an executed counterpart of this Amendment by telefacsimile shall be equally as effective as delivery of an original executed counterpart
of this Amendment. Any party delivering an executed counterpart of this Amendment by telefacsimile also shall deliver an original executed counterpart of this Amendment, but the failure to deliver an original executed counterpart shall not affect
the validity, enforceability, and binding effect of this Amendment. 
 7.      MISCELLANEOUS.
 5

              (a) Upon the effectiveness of this Amendment, each reference in the Loan Agreement to
“this Agreement”, “hereunder”, “herein”, “hereof” or words of like import referring to the Loan Agreement shall mean and refer to the Loan Agreement as amended by this Amendment. 
              (b) Upon the effectiveness of this Amendment, each reference in the Loan Documents to the “Loan Agreement”,
“thereunder”, “therein”, “thereof” or words of like import referring to the Loan Agreement shall mean and refer to the Loan Agreement as amended by this Amendment. 
              (c) Upon the effectiveness of this Amendment, each reference in the Loan Agreement to “Schedule 2.7” shall mean and
refer to “Amended and Restated Schedule 2.7” attached hereto. 
              (d) Upon the effectiveness
of this Amendment, each reference in the Loan Agreement to “Schedule 5.5” shall mean and refer to “Amended and Restated Schedule 5.5” attached hereto. 
              (e) Upon the effectiveness of this Amendment, each reference in the Loan Agreement to “Schedule 7.6” shall mean and
refer to “Amended and Restated Schedule 7.6” attached hereto. 
  
  
   
 [Signature page follows.]
 6

      IN WITNESS WHEREOF, the parties have caused this Amendment to be executed and delivered as of the date first written
above.

	 	  PALM, INC. 
 a Delaware corporation 
 
 By: /s/  Judy
Bruner                                       
         
 Name:
                                        
                             
 Title:
                                        
                              
         
                                        
                
  
 
 
	 	  FOOTHILL CAPITAL CORPORATION, 
 a California corporation, as
Agent and as a Lender
 
 By: /s/  John
Nocita                                       
        
 Name: John
Nocita                                       
          
 Title: Vice
President                                       
      
  
  
 
 
	 	  HELLER FINANCIAL, INC.,  
 a Delaware corporation, as
Syndication Agent and as a Lender
  
 By: /s/  Linda
Peddle                                       
        
 Name: Linda
Peddle                                       
         
 Title: Vice
President                                       
        
 
  
 
 
	 	 THE CIT GROUP/BUSINESS CREDIT, INC.,  
 a New York corporation, as
Documentation Agent and as a Lender 
 
 By: /s/  Adrian
Avalos                                       
      
 Name: Adrian
Avalos                                       
      
 Title: Vice
PresidentEmployment Offer Letter

  
 EXHIBIT 10.24
  
 September 13, 2001
  

Dave Nagel, Ph.D.
 66 Pennsylvania Avenue
 Los Gatos, CA 95030
 Dear Dave:
 This letter amends and restates in its entirety that certain letter dated August 10, 2001 between you and Palm. All terms of the prior letter are replaced by the
terms of this letter.
 It is my pleasure to extend a revised offer of employment to you with Newco, Inc. (“Newco”), an initially wholly-owned subsidiary of Palm to be formed as soon as
possible but in any case no later than December 31, 2001. You currently serve as Chairman of the recently formed Platform Solutions Group Committee of the Palm Board of Directors. In addition, you will become the CEO, President, and a director of
Newco, reporting to the Board of Directors of Newco. In that dual capacity, your duties will be two-fold: first, you will oversee the proposed separation of the Palm Solutions Group business from Palm, in a way that maximizes the interest of Palm
shareholders, reporting directly to the Palm Board of Directors. The separation process may include a legal separation, third party investments by strategic partners, sub-IPO and spin-off. To this end, Palm currently intends to complete the items
listed on Exhibit A by no later than December 31, 2001. Second, you will be responsible for Newco, reporting directly to the Newco Board of Directors, initially consisting of three members. 
 Your
starting salary will be $620,000.00 per year ($51,666.66 monthly) payable semi-monthly to be paid by Palm and/or Newco. You will also be eligible to participate in a Newco discretionary cash bonus plan. For purposes of this offer, the Newco
discretionary bonus plan shall be assumed no worse than the equivalent Palm bonus plan. As a point of reference, for fiscal 2002, the Palm bonus plan offers the opportunity to earn a bonus with a target amount of 70% of base salary; actual payments
being based on various factors, including company and individual performance, and paid semi-annually. Your individual performance targets will be set by the Board of Newco during the second quarter of FY 2002. Any bonus earned will be prorated and
paid depending upon targets achieved at the time Newco is fully established as an independent subsidiary.
 A stock option plan for Newco will be established promptly following Newco’s
formation, both of which shall occur as soon as possible but in any case no later than December 31, 2001. Upon establishing the plan and upon receipt of the required approval by Newco’s board of directors, you shall receive an option for a
number of shares equal to six point five percent (6.5%) of the shares of Newco (the “Newco Grant”) on the date the option is granted, calculated on a fully-
  

  
 Page 2
 diluted basis assuming convertibility of all other forms of security into common stock, including but not limited to the
shares owned or controlled by Palm and the amount expected to be set aside in the initial option pool for employees, directors and consultants. Such stock option shall provide for four-year vesting and other terms, all in accordance with Palm’s
standard policies and assuming your continued employment with Newco (but subject to the other provisions of this letter). Vesting will begin effective upon the date of grant of your option. The option’s per share exercise price will equal the
fair market value per share of Newco common stock on the date of grant, as determined by the Newco Board (and taking into consideration the value of the assets to be contributed to Newco by Palm). By mutual consent Palm and/or Newco will have the
right to repurchase the option (and any shares acquired upon exercise of the option) by paying you the fair market value (at the time of repurchase) of the stock covered by the option, minus the exercise price otherwise paid or payable. If necessary
or appropriate to preserve favorable tax treatment for the spin-off of Newco, changes may be made in the option terms described above (but without materially diminishing the potential value of the option). 
 You will also receive two restricted stock grants (“Restricted Stock Grants”) of Palm shares. The first grant of 50,000 shares will be scheduled to “cliff vest” two (2) years after grant and will accelerate
vesting upon the successful release to the market of the first Palm ARM-based OS, currently referred to as Hercules 1.0 or its equivalent. The second grant of 100,000 shares will be scheduled to vest annually at the rate of 50% per year. Except as
provided herein, vesting of such awards is dependent on your continued employment with Newco. Your purchase price for the shares will equal the par value of the shares ($0.001 per share). The Restricted Stock Grants shall vest in full on the date of
your involuntary termination for a reason other than Cause or death. Two years from your date of hire, we will calculate the value of your Restricted Stock Grants (150,000 shares in aggregate) based on the then current market price of Palm stock. If
the total fair market value of the 150,000 shares of Palm on such date is less than $2.0 million, you will receive a cash payment on September 15, 2003 equal to the difference between $2.0 million and the fair market value of the 150,000 shares.
Except as provided herein, this cash payment is also dependent on your continued employment with Newco.
 We are pleased to offer you a sign-on/retention bonus of $200,000.00, payable over the next
18 months, contingent upon your continued employment with Newco (“Sign-On/Retention Bonus”). You will receive $50,000.00 (25%) of this bonus within 30 days of commencing your position as CEO and President of Newco. You will receive the
next $50,000.00 (25%) six months after such commencement date; the next $50,000.00 (25%) one year after such commencement date, and the final $50,000.00 (25%) 18 months after such commencement date. By signing this letter below, except as provided
herein, you agree to repay the amount of the Sign-On/Retention Bonus received if you voluntarily leave Newco within one year of the effective date of your hire.
 Newco shall offer you the same
benefits it provides to its other senior executives. If Newco does not have its own benefit programs, you will participate in the Palm benefit plans on the same terms as Palm’s senior executives (but excluding incentive and equity compensation
programs.) You also shall receive 28 days of combined time off and holidays, and other benefits as

  
 Page 3
 established by Newco (including any sabbatical program). Your benefits will depend upon the terms of the benefit plans and
programs as they may exist from time to time. Until Newco establishes comparable benefits, you shall be covered by Palm’s benefit plans including medical coverage. 
 Your employment is
expressly contingent upon the acceptable results of a background check. Any falsification of an applicant’s employment history or educational background will result in withdrawal of the offer and or termination of employment, if
hired.
 As a condition of employment, you must sign a Conflicts, Confidential Information And Assignment Of Invention Agreement as provided by Newco and Palm stating, among other things, that you
will keep confidential company information of Newco and Palm throughout and beyond your employment. This offer of employment is also contingent upon receipt of satisfactory proof of identification and work authorization as required by the
Immigration Reform and Control Act of 1990, and the receipt of satisfactory references.
 The terms and conditions of your proposed employment with Newco in this letter supersede any contrary verbal
representations concerning conditions of employment. While we are confident that we will have a mutually beneficial employment relationship, employment with Newco is voluntary and at-will. This means that you are free to resign at any time.
Similarly, Newco is free to terminate your employment relationship, with or without Cause or notice, at any time. Exceptions to this employment-at-will policy may be made only by a written agreement signed by Newco’s Board of
Directors.
 If Palm or Newco terminates your employment relationship without cause, you shall be paid all base salary and your prorated bonus calculated at 100% of target or greater percentage if
then applicable through the date of termination in addition to any other amounts then earned, vested or due, including but not limited to stock, expenses, vacation, sabbatical and other benefits. In addition, you shall be paid an amount equal to two
hundred percent (200%) your then current annual salary and your then current annual bonus calculated at one hundred percent (100%) of target in a lump sum. Newco shall also accelerate the vesting of your initial Newco option grant as if you had
continued as an employee of Newco for two additional years following your termination, and shall continue all medical, dental and related benefits at active employee rates for two years from your termination. Furthermore, Palm shall accelerate the
vesting of your Stock Grant as if you had continued as an employee for two additional years following your date of termination and shall make any required cash payment if your Restricted Stock Grants are less than $2 million on the date of
termination, and such amount has not been paid. Finally, your obligation, if any, to repay the Sign-On/Retention Bonus shall be waived. The above amounts and benefits paid or extended to you upon Newco’s termination of your employment
relationship without Cause shall hereinafter be referred to as “Severance Benefits.”
 For purposes of this Agreement, “Cause” shall mean: 

  
 Page 4

	                       	1. 	  	failure to perform (other than due to mental or physical disability or death) the duties of your position (as they may exist from time to time) to the reasonable satisfaction of
Palm or Newco after receipt of a written warning and a reasonable opportunity to cure; 
	  			
		2.		any act of dishonesty taken in connection with your responsibilities as an employee that is intended to result in your substantial personal enrichment;
	  			
		3.		your conviction or plea of no contest to a crime that negatively reflects on your fitness to perform your duties or harms Palm’s or Newco’s reputation or business;

	  			
		4.		willful misconduct by you that is injurious to Palm’s or Newco’s reputation or business; or
	  			
		5. 		your willful violation of a material employment policy.

 For purposes of this definition, an act or
failure to act shall be deemed “willful” if effected not in good faith or without reasonable belief that such action or failure to act was in the best interests of Palm or Newco.
 Anything herein to the contrary notwithstanding, your employment shall not be terminated for Cause, unless written notice stating the basis for the termination is provided to you and you are given fifteen (15)
days after receipt of such notice to cure,, and you have had an opportunity to be heard by a quorum of the Board and, after such hearing, the Board votes to terminate you for Cause.
 You shall also have the right for “Good Reason” to resign from Newco and to receive the “Severance Benefits” provided herein. For the purposes of this Agreement, Good Reason shall mean without
your express written consent: 

	               	1. 	  	Any material reduction in your title, duties, authority or responsibilities; 
	  			
		2.		 Any change in reporting such that you do not report to the Board of Directors of your employer or the parent corporation of your employer;
	  			
		3.		The failure of Palm within six months to take all reasonably necessary actions to capitalize Newco sufficient to operate for one year as determined by Newco’s Board, including the actions
listed on Exhibit A; provided, however that you must have completed the actions described in Exhibit B by the specified deadlines and to the satisfaction of Newco’s Board;

 Page 5

	               	3. 	  	Reduction of your base salary other than reduction by Newco with respect to all executive officers as a part of a general readjustment of their compensation levels; 
	  			
		4.		Any material reduction, without good business reason, of facilities, assistance and perquisites (including office space and location) available to you immediately prior to such
reduction;
	  			
		5.		Palm’s or Newco’s failure to provide you with benefits at least equal to those provided to other senior executives of Newco;
	   			
		6.		The relocation of your office more than 50 miles from its then present location; or
	  			
		7.		Failure of Newco to obtain assumption of this Agreement by any successor in interest to all or substantially all of the assets or business of Newco upon merger, consolidation, sale or similar
transaction (unless you remain in a comparable position with Palm (or a successor) and your new employer assumes this Agreement).

 For the purpose of any determination regarding the
applicability of the immediately preceding events, the position taken by you shall be presumed to be correct unless Newco establishes by clear and convincing evidence that such position is not correct. Your continued employment shall not constitute
a consent to a waiver of your rights to assert Good Reason hereunder nor shall your death or disability terminate the right of your estate or heirs to assert Good Reason if such right exists at the time of your death or disability.

Palm currently is amending the form of Change of Control agreement provided to its senior executives. You also will receive one of those agreements. However, please be aware that benefits under your Change of
Control agreement will be offset by your benefits under this Agreement. Your severance benefits under this Agreement (whether or not a Change of Control has occurred) generally will be more favorable than under your Change of Control
agreement.
 In the event that the benefits provided for in this Agreement or otherwise payable to you constitute “parachute payments” within the meaning of Section 280G of the Internal
Revenue Code of 1986, as amended (the “Code”) and will be subject to the excise tax imposed by Section 4999 of the Code, then you shall receive (i) a payment from Newco or Palm sufficient to pay such excise tax, plus (ii) an additional
payment from Newco or Palm sufficient to pay the excise tax and federal and state income and employment taxes arising from the payments made to you pursuant to this sentence. Unless Newco or Palm and you otherwise agree in writing, the determination
of your excise tax liability and the amount required to be paid under this paragraph shall be made in writing by Newco or Palm’s independent auditors who are then primarily used by either such company as the case may be (the
“Accountants”). For purposes of making the calculations required by this paragraph, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith

 Page 6
 interpretations concerning the application of Sections 280G and 4999 of the Code. Newco or Palm shall furnish to the Accountants such
information and documents as the Accountants may reasonably request in order to make a determination under this paragraph. Newco or Palm shall bear all costs the Accountants may reasonably incur in connection with any calculations contemplated by
this paragraph.
 You shall not be required to mitigate the value of any of the benefits contemplated by this Agreement, nor shall such benefits be reduced by any earnings or benefits that you may
receive from any other source.
 Consent is given to your membership on the Board of Directors for Liberate, RespondTV and Arcsoft. Your activities on behalf of such Boards shall not interfere with
any your obligation to spend all or substantially all of your business time on behalf of Newco. If any term or provision of this Agreement shall be inconsistent or less favorable than any term or provision of any other agreement or document
including, but not limited to, Bonus Plan, Restricted Stock Agreement, Stock Option Agreement or other matter, the terms and provisions of this Agreement shall preempt such inconsistent or less favorable terms or provisions. 
 Newco or Palm shall pay your reasonable attorneys’ fees and expenses (not to exceed $7,500) in connection with the negotiation of this Agreement.
 This offer of
employment is open for a period of 5 working days from the date of this letter. Within this time period, I would appreciate your confirming your acceptance by singing on the space provided and returning this letter to me, indicating your proposed
start date.
 Let me close by reaffirming our belief that the skill and background you bring to Palm Inc. and Newco will be instrumental to the future success of the Company. It is the collective
belief of the Palm Board of Directors that your acceptance of this offer will be in the best interest of Palm shareholders. I look forward to working with you very soon.
 Sincerely,

 
 Eric Benhamou
 Chairman of the Board of Directors, Palm, Inc.
 I accept the offer of employment
at Palm Inc. based on the terms described in this offer letter. I propose a start date of September 14, 2001.

	Signature  /s/	David C. Nagel
 David C. Nagel	Date	Oct. 1, 2001

  
 
                                        
                     

 Page 7
 EXHIBIT A
  
 ACTIONS REQUIRED TO BE TAKEN BY PALM 
 CONCERNING SEPARATION OF NEWCO
  

	      	1.	     	Board Resolution authorizing separation of Newco from Palm
	 	2.	 	Public announcement required under Rule FD by the SEC 
	 	3.	 	Report of the PSG Committee of the Palm Board of Directors describing with particularity the nature of the assets/consideration/business operations intended to be spun-off 
	 	4. 	 	Establishment of schedule to take action on report of PSG Committee of the Palm Board of Directors, towards the establishment of Newco as an independent subsidiary 

 
  
 
 
 Page 8
 EXHIBIT B
  
 ACTIONS REQUIRED TO BE TAKEN BY DAVE NAGEL 
 CONCERNING SEPARATION OF NEWCO

	     	1.	     	Formulate an IP separation plan and obtain approval of the plan from the Palm PSG Committee by November 1, 2001.
	 	2.		Formulate an organizational and financial model for Newco and obtain approval of the plan from the Palm PSG Committee by September 17, 2001. 
	 	3.		Develop a PalmOS strategy and product roadmap for Newco and obtain approval of same by the Palm Board at its October 11, 2001 meeting.
	 	4.		Complete (to the reasonable satisfaction of the Palm Board) the integration of El Camino within two weeks of closing of the El Camino transaction.
	 	5.		Complete substantive face-to-face meetings with the top three prospective investors in Newco by November 1, 2001.

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