AMENDED AND RESTATED MASTER SEPARATION AGREEMENT

This Amended and Restated Master Separation Agreement (this ?Agreement?) is executed on July 23, 2003 and made effective as of December 3, 2001 (the ?Effective Date? with respect to all provisions of this Agreement other than the Recitals, Section 4.5 and Section 5.5 of this Agreement) with respect to all provisions of this Agreement other than the Recitals, Section 4.5 and Section 5.5 of this Agreement which such Recitals, Section 4.5 and Section 5.5 are made effective as of July 23, 2003 (the ?Effective Date? solely with respect to the Recitals, Section 4.5 and Section 5.5 of this Agreement), between Palm, Inc., a Delaware corporation (?Palm?), having an office at 400 N. McCarthy Blvd., Milpitas, California 95035, and PalmSource, Inc., a Delaware corporation (?PalmSource?), having an office at 1240 Crossman Avenue, Sunnyvale, California 94089.

RECITALS

WHEREAS, Palm is engaged in the handheld computing business and related businesses;

WHEREAS, the Board of Directors of Palm determined that it was in the best interest of Palm and its stockholders to separate Palm?s existing business into two independent businesses and have the current business of the Palm platform solutions group (the ?PalmSource Business,? as defined in Article 1) conducted through an internal subsidiary;

WHEREAS, the Boards of Directors of Palm and PalmSource each determined that it was appropriate and desirable for Palm to contribute and transfer to PalmSource, and for PalmSource to receive and assume, directly or indirectly, assets and liabilities currently held by Palm and associated with the PalmSource Business (the ?Separation?);

WHEREAS, Palm and PalmSource entered into that certain Master Separation Agreement effective as of December 3, 2001 (the ?Prior Agreement?) to effect the Separation;

WHEREAS, the parties contemplate that Palm will distribute to holders of its common stock all of the shares of PalmSource common stock held by Palm, upon which distribution Palm will be an independent publicly traded company and Palm will have no continuing ownership interest in PalmSource;

WHEREAS, the parties desire to amend and restate the Recitals, Section 4.5 and Section 5.5 of the Prior Agreement as set forth herein; 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 PalmSource Business.

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

ARTICLE 1

DEFINITIONS

1.1   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.

1.2   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.

1.3   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.

1.4   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.

1.5   PALM GROUP. ?Palm Group? means Palm, each Subsidiary and Affiliated Company of Palm immediately after the Separation Date, and each Person that becomes a Subsidiary or Affiliate Company of Palm after the Separation Date, all excluding any member of the PalmSource Group.

1.6   PALMSOURCE ASSETS. ?PalmSource Assets? has the meaning set forth in Section 2.2 of the Assignment Agreement.

1.7   PALMSOURCE BUSINESS. ?PalmSource Business? means the design, development, marketing and licensing of operating system platforms, basic applications, developer tools and other software products complementary to such platforms for mobile and handheld devices and, except as otherwise expressly provided herein, any terminated, divested or discontinued businesses or operations that at the time of termination, divestiture or discontinuation primarily related to the PalmSource Business as then conducted.

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