<PAGE>   1

                    SEPARATION AGREEMENT AND GENERAL RELEASE

This Separation Agreement and general Release (the "Agreement") is entered into
this 16th day of March, 1998, between Geoworks Corporation, a Delaware
corporation ("Company") and David Edward John Crisp ("Employee").

WHEREAS, Company and Employee desire to resolve any and all claims, demands,
rights or actions, arising out of or in connection with Employee's employment or
separation from employment with Company, whether legal, equitable, contractual,
statutory (federal, state, or local) or otherwise without litigation.

IN CONSIDERATION OF THE MUTUAL AGREEMENTS AND COVENANTS SET FORTH HEREIN, THE
PARTIES AGREE AS FOLLOWS:

1. Employee shall resign from the office of Vice President, Marketing and
Business Development, which resignation shall be deemed effective as of March
16, 1998 ("Resignation Date"). Employee will continue as an employee of the
company through November 16, 1998 ("Termination Date"). No further PTO will be
accrued during the period between Resignation Date and Termination Date.

2. Company shall pay Employee the sum of one hundred twenty thousand dollars
($120,000.00) ("Settlement Sum") to be paid on a semi-monthly basis. Said
payments shall be less withholdings required by law. Federal and state
withholding taxes on income, state disability insurance, FUTA and FICA
contributions will continue to be withheld on the same basis currently in
effect, subject to any changes in governmental regulations or general company
policy which may require adjustment to the current amounts. Payment of the
settlement sum shall be subject to and on condition that, as of the date of each
payment, Employee is in compliance with all material terms of this agreement.

3. The Company agrees to reimburse Employee for costs associated with one
scheduled trip to the UK in connection with on-going negotiations with the
Inland Revenue regarding the sale of Eden, Ltd. Such costs will be limited to
airfare, lodging and other transportation for a period of not more than three
days. The Company will continue to engage Ernst & Young in the effort to
successfully negotiate with the Inland Revenue. Lastly, Company will provide
Employee with Ernst & Young services relating to the satisfactory resolution of
hi 1997 income tax returns.

4. The Company hereby covenants and agrees to use its best efforts to assist,
to the extent permitted by law, Employee in his effort to obtain an immigration
status that allows Employee and family lawfully to continue to reside and work
in the United States. Said assistance shall include, but not be limited to,
paying for the services of an immigration lawyer to assist Employee. In
addition, Company representatives will refer to Employee as the Vice President
of Strategic Relationships (unofficial position) when dealing with immigration
issues. Lastly, the Company will continue the employee on the payroll after the
Termination Date (without any other benefits afforded by this Agreement) at a
pay rate of $1 per pay period, through May 30, 1999, should immigration issues
not be resolved by the Termination Date.

5. The Company agrees to reimburse Employee for relocation and tuition expenses,
as previously agreed upon between the parties and as set forth in the Geoworks
Employment Agreement ("Employment Agreement") executed by Employee on July 3,
1997. Moreover, the Company agrees to reimburse to Employee an amount sufficient
to ensure that Employee shall not suffer an actual loss after the taxes. For
those reimbursed expenses during 1997 as defined within (a) below, said amount
shall be calculated by using the 1997 tax rate actually paid by Employee: 36%
federal; 9.3% California; 1.45% FICA. For those reimbursed expense during 1998
as defined within (b) below, said amount shall be calculated by using rates
equal to 32.7% federal; 9.3% California; and 1.45% FICA (total marginal tax rate
of 43.45%).

        (a) Reimbursements made to Employee in 1997 for relocation from the
            United Kingdom to the United States in the total amount of twenty
            nine thousand twenty eight dollars and fifty nine cents ($29,028.59)
            and reimbursed tuition fees totaling nineteen thousand two hundred
            seven dollars 


                                       1
<PAGE>   2

            ($19,207.00). Said reimbursement shall be made no later than ten 
            (10) working days after the execution of the Agreement. 

        (b) All unclaimed tuition fees for the current 1997-1998 academic year.
            Said reimbursement shall be made no later than ten (10) working days
            after submission of the claimed expenses by Employee.

6. If, at any time during the period between Resignation Date and Termination
Date, Employee and family decide to move back to the United Kingdom, Company
will reimburse Employee for costs incurred which are directly associated to the
transportation of Employee, his family, and their belongings.

7. Employee agrees to cooperate with Company as necessary, to provide
information known to Employee concerning the operations of Company and Company's
customers, and to provide an orderly transition with respect to Employee's work
in progress.

8. Employee's stock options shall continue to vest up to and including the
Resignation Date, in accordance with the terms of the Stock Option Agreements
between Company and Employee. Said options may be exercised by Employee within
ninety (90) days of Termination Date.

9. As of the Termination Date, Company shall provide Employee (and eligible
dependents) with COBRA benefits as required by law, until the earlier of (i) May
30, 2000; or (ii) the date on which Company's statutory obligation to provide
Employee COBRA benefits terminates. So long as Company is providing COBRA
benefits, Employee shall provide Company advance written notice of (i) the
effective date of any subsequent employment; and (ii) the effective date of
coverage under any applicable benefit plan with such employer.

10. Employee and Company agree that the terms of this Agreement will be held in
confidence by both parties except to the extent that disclosures may be required
by government regulations or judicial process. Company will refrain from making
disparaging statements regarding Employee. Employee agrees that he shall refrain
from making disparaging statements regarding Company, its products, personnel or
operations and that he shall characterize the reason for his departure as
"resignation". Likewise, management and the Board of Directors shall
characterize Employee's departure as a voluntary resignation when addressing
Company employees, industry participants and others.

11. Employee agrees that, during the course of his employment, he has had access
to certain trade secrets and confidential and proprietary information of
Company. Employee agrees that he shall neither use nor disclose, either for his
own benefit or the benefit of any other person or entity other than Company, any
information which can be properly characterized as a trade secret or
confidential and proprietary information of Company including, without
limitation, customer lists, knowledge of the status of certain transactions,
development plans or schedules and any information concerning the financial
status of Company. Employee acknowledges his continuing obligations under the
terms of Employee's Invention Assignment, Proprietary Information and
Nondisclosure Agreement.

12. Employee shall return to Company all property of Company including, but not
limited to, all equipment, tangible proprietary information, documents, books,
records, reports, contracts, lists, computer disks or any other computer
generated files or data, or copies thereof, created on any medium, prepared or
obtained by Employee in the course of, or incident to, his employment with
Company no later than ten (10) working days after the execution of this
agreement. The above notwithstanding, Employee may retain use of Toshiba laptop
computer provided to him by Company until May 30, 1998 Employee may purchase the
Toshiba laptop computer currently in his use, from Company, for two thousand
dollars ($2,000.00).

13. During the period between Resignation Date and Termination Date, Employee
and his eligible dependents will continue to receive medical, dental, and vision
benefits as provided previously. Employee will also continue to have short-term
disability, long-term disability, life insurance, accidental death insurance,
and he will be eligible to participate in the 401(k) and Employee Stock Purchase
Plan. Employee may continue to use his voice mail box and e-mail account for
eight (8) months from Resignation Date.

14. Release. The Parties and their representatives, heirs, successors and
assigns do hereby irrevocably and unconditionally release and forever discharge
each other and each and all of their affiliates, and their present and 


                                       2
<PAGE>   3

former shareholders, officers, directors, agents, employees, attorneys,
successors and assigns (collectively, "Released Parties") from all claims,
rights, demands, actions, obligations and causes of action of every kind and
character, known and unknown, mature or unmatured, which Employee and Company
may now have or has ever had, whether based on tort, contract (express or
implied), or any federal, state, or local law, statute or regulation
(collectively, "Release Claims"). By way of example and not in limitation of the
foregoing, Released Claims shall include any claims arising under Title VII of
the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the
Americans with Disabilities Act and the California Fair Employment and Housing
Act, as well as any claim asserting wrongful termination, breach of contract,
breach of covenant of good faith and fair dealing, negligent or intentional
infliction of emotional distress, negligent or intentional misrepresentation,
negligent or intentional interference with contract or prospective economic
advantage, defamation, invasion of privacy and claims related to disability.
Released Claims shall also include, but not be limited to, claims for severance
pay, bonuses, sick leave, vacation pay, life or health insurance or any other
benefit. The Parties likewise release Released Parties from any and all
obligations for attorneys' fees incurred in regard to the above claims or
otherwise to the extent provided by law.

15. Section 1542 Waiver. The parties understand and agree that Released Claims
include not only claims presently known to them, but also include all unknown or
unanticipated claims, rights, demands, actions, obligations, liabilities and
causes of action of every kind and character that would otherwise come within
the scope of Released Claims as described in paragraph 14. The Parties further
understand that they may hereafter discover facts different from what they now
believe to be true, which if known, could have materially affected this
Agreement, but they nevertheless waive any claims or rights based on different
or additional facts. The parties knowingly and voluntarily waives any and all
rights or benefits that they may now have, or in the future may have, under the
terms of Section 1542 of the California Civil Code, which provides as follows:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF
KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.

16. Nonadmission. The parties understand and agree that this is a compromise
settlement of disputed claims and that the furnishing of the consideration for
this Agreement shall not be deemed or construed at any time or for any purpose
as an admission of liability by Company or Employee. The liability for any and
all claims is expressly denied by both parties.

17. Age Discrimination Claims. Employee understands and agrees that, by entering
into this Agreement, (i) he is waiving any rights or claims he might have under
Age Discrimination in Employment Act; (ii) he has received consideration beyond
that to which he was previously entitled; (iii) he has been advised to consult
with an attorney before signing this Agreement; and (iv) he has been offered the
opportunity to evaluate the terms of this Agreement for not less than twenty-one
(21) days prior to the execution of the Agreement. Employee may revoke this
Agreement (by written notice to Company) for a period of seven (7) days after
his execution of the Agreement, and it shall become enforceable upon the
expiration of this revocation period without prior revocation by Employee.

18. Arbitration. All claims that Employee may have against Company or any other
Released Party, or that Company may have against Employee, in any way related to
the interpretation or enforcement of this Agreement ("Arbitrable Claims") shall
be resolved by arbitration to the extent permitted by law. Arbitration shall be
in accordance with the National Rules for the Resolution of Employment Disputes
of the American Arbitration Association, as amended, and as augmented by this
Agreement. Either party may bring an action in court to compel arbitration under
this Agreement and to enforce an arbitration award. THE PARTIES HEREBY WAIVE ANY
RIGHTS THEY MAY HAVE TO TRIAL BY JURY IN REGARD TO ARBITRABLE CLAIMS.

19. Notices. Any notice under this Agreement must be in writing and shall be
effective upon delivery by hand, upon facsimile transmission, two (2) days after
deposit with a nationally recognized overnight courier service, or three (3)
business days after deposit in the United States mail, postage prepaid,
certified, or registered and addressed to Company or Employee at the
corresponding address or fax number (if any) below. Employee shall be obligated
to notify Company in writing of any change of his address. Notice of change of
address shall be effective only when done in accordance with this Section.


                                       3
<PAGE>   4

Company's Notice Address:

        Geoworks
        960 Atlantic Avenue
        Alameda, CA  94501

        Fax number: 510-814-4253


Employee's Notice Address:

        David Crisp
        86 St. Thomas Way
        Tiburon, CA  94920

        Fax number:  415-789-0874



20. Integration. The parties understand and agree that the preceding Sections
recite the sole consideration for this Agreement; that no representation or
promise has been made by Employee, Company or other Released Party on any
subject whatsoever, except as expressly set forth in this Agreement; and that
all agreements and understandings between the parties on any subject whatsoever
are embodied and expressed in this Agreement. This Agreement shall supersede all
prior or contemporaneous agreements and understandings among Employee, Company
and any other Released Party, whether written or oral, express or implied, with
respect to any subject whatsoever, including without limitation any
employment-related agreement or benefit plan, except to the extent that the
provisions of any such agreement or plan have been expressly referred to in this
Agreement as having continued effect.

21. Amendments; Waivers. This Agreement may not be amended except by an
instrument in writing, signed by each of the parties.

22. Assignments: Successors and Assigns. Employee agrees that he will not
assign, sell, transfer, delegate or otherwise dispose of, whether voluntarily or
involuntarily, or by operation of law, any rights or obligations under this
Agreement. Any such purported assignment, transfer or delegation shall be null
and void. Employee represents that he has not previously assigned or transferred
any claims or rights released by him pursuant to this Agreement.

23. Severability. If any provision of this Agreement, or its application to any
person, place or circumstance, is held by an arbitrator or a court of competent
jurisdiction to be invalid, unenforceable or void, such provision shall be
enforced to the greatest extent permitted by law, and the remainder of this
Agreement and such provision as applied to other persons, places and
circumstances shall remain in full force and effect.

24. Governing Law. This Agreement shall be governed and construed in accordance
with the law of the State of California.

25. Representation by Counsel. The parties acknowledge that (i) they have had
the opportunity to consult counsel in regard to this Agreement; (ii) they have
read and understand the Agreement and they are fully aware of its legal effect;
and (iii) they are entering into this Agreement freely and voluntarily, and
based on each party's own judgment and not on any representations or promises
made by the other party, other than those contained in this Agreement.


                                       4
<PAGE>   5

The parties have duly executed this Agreement as of the date first written
above.


<TABLE>
<S>                                                <C>
GEOWORKS:                                          EMPLOYEE:

By  /s/ David A. Thatcher                          /s/ David Edward John Crisp
    ------------------------------------           -----------------------------------

Title
     -----------------------------------           -----------------------------------
                                                   Date
Date
    ------------------------------------
</TABLE>


                                       5