Document:

Exhibit 10-19

	

Exhibit 10.19

AGREEMENT

     This
AGREEMENT is made this __ day of May, 2001, by and between Group 1 Software, Inc., a
Delaware corporation (the “Company”) and Mr. Ronald F. Friedman (“Mr.
Friedman”), superseding all prior employment agreements between the parties hereto. 

     WHEREAS,
Mr. Friedman has served as an executive officer and a member of the Board of Directors of
the Company for a number of years; and 

     WHEREAS,
Mr. Friedman wishes to resign from his employment with and service as a Director of the
Company so as to enter into retirement; and 

     WHEREAS,
Mr. Friedman and the Company wish to set out the terms and conditions of Mr. Friedman’s
remaining employment and his retirement so as to, inter alia, facilitate the transition.

     NOW
THEREFORE, in consideration of the mutual promises contained herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
Company and Mr. Friedman hereby agree as follows: 

     1.  
TERM OF EMPLOYMENT. Mr. Friedman shall remain an employee of the Company through March
31, 2002 plus accrued but unused vacation (the “Employment Period”). At the
conclusion of the Employment Period, Mr. Friedman shall retire from the employ of the
Company. 

     2.  
PLACE OF EMPLOYMENT; OFFICE SUPPORT. 

     A.   Mr.
Friedman shall serve as a telecommuter from his primary residence in Boca Raton, Florida. 

     B.   Mr.
Friedman may continue to use the Company computer equipment currently used by him;
maintain the e-mail, voice mail and Internet services accounts currently provided by the
Company and shall have Group 1 administrative support and office space available to him
at the Lanham headquarters, as those services may be changed system-wide. 

     3.   
EMPLOYMENT AND DUTIES. 

     A.   Mr.
Friedman’s duties shall be assigned by the Chief Executive Officer of the Company or
his express designee and may include orienting the new Vice President of Sales for ESD,
conduct sales training classes, assisting in merger and acquisitions analyses and
negotiations and other appropriate assignments. 

     B.   Mr.
Friedman will serve Company faithfully and will use his best efforts in devoting his
professional attention to the performance of his duties. 

     4.  
COMPLIANCE WITH COMPANY POLICIES. Mr. Friedman agrees that in all aspects of his
employment, he will comply with the policies, standards and regulations that may be
established by Company from time to time. 

     5.  
COMPENSATION. 

     A.   As
compensation for all the services to be rendered by Mr. Friedman to Company, Company will
pay Mr. Friedman a salary of $165,000 annualized, payable in equal bi-weekly installments. 

     B.   As
compensation for complying with all Mr. Friedman’s obligations under Section 9 of
this Agreement, Company will pay Mr. Friedman an additional $35,000 annualized, payable
in equal bi-weekly installments. 

     6.  
EXPENSES. Mr. Friedman is authorized to incur such expenses as are ordinary and necessary
for the reasonable and proper conduct of Company’s business, and Company will
reimburse him for such expenses upon submission (and approval by Company’s Chief
Executive Officer) of a detailed accounting thereof, with appropriate substantiation. 

     7.  
EMPLOYEE BENEFITS. 

     A.   Mr.
Friedman will be entitled to participate in such employee benefit programs that are
offered generally to other employees who serve Company. Any payments to Mr. Friedman
under any Company disability or salary continuation programs (including any Company-paid
disability or salary continuation insurance policies) shall be in complete satisfaction
of Company’s obligations to Mr. Friedman pursuant to Section 5, above. 

	

     B.  
Company will pay Mr. Friedman an automobile allowance of $975 per month. 

     C.   The
Incentive Stock Options and Non-Qualified Stock Options issued by the Company to Mr.
Friedman are listed on Exhibit 1, hereto. The options are subject to the governing plans
for the respective options. Among the provisions in such plans, as amended, is a
provision that upon retirement of a plan participant, the issued and outstanding options
on the date of retirement that have not vested, vest in full for the remainder of the
term during which they may be exercised.  

     8.  
BONUS. In addition to any other compensation to which Mr. Friedman may be entitled under
this Agreement, for the period from April 1, 2001 through March 31, 2002, Company will
pay Mr. Friedman a bonus in accordance with the Compensation Program for that period that
is attached hereto as Exhibit 2. 

     A.  
Upon Mr. Friedman’s death, his total and permanent disability prior to the end of
the Employment Period or if Mr. Friedman voluntarily terminates his employment prior to
the end of the Employment Period other than under circumstances described in Section
8(C), below, Mr. Friedman shall receive all unpaid salary, auto allowance, eligible but
not yet reimbursed expenses hereunder and all unpaid FY 2001 and FY 2002 bonus paid as
scheduled. 

     B.  
INTENTIONALLY DELETED. 

     C.   If
Mr. Friedman is terminated for cause or resigns under circumstances which would justify
termination for cause, all unpaid bonus installments shall be forfeited and shall no
longer be payable. For purposes of this Agreement, Company may determine that Mr.
Friedman has been terminated or has resigned for cause if Mr. Friedman, in relation to
his employment (i) knowingly engages in any conduct which violates or reasonably appears
to violate any criminal law of the United States or any state (whether or not such
conduct is or becomes the subject of criminal prosecution), or (ii) refuses to perform
any reasonable and proper duty or assignment after being requested to do so, or (iii)
engages in any conduct contrary to any established and declared lawful policy of Company,
or (iv) otherwise deliberately acts or conducts himself in a manner which injures or is
likely to injure the competitive position of Company. Such determination shall be made in
accordance with procedures established by Company, whose decision shall be final. 

     D.  
INTENTIONALLY DELETED. 

     E.   If
Mr. Friedman at any time after the termination or expiration of this Agreement, (i)
engages or participates in the operation or management of a business or as consultant to
a business which at such time is in competition with either Company or a company in which
Company’s ownership is at least five percent (5%), or (ii) discloses to any person
other than an employee of the Company any information (other than publicly available
information) relative to the business of Company or any company that is in part owned by
Company, or (iii) otherwise deliberately acts, or conducts himself, in a manner which
injures or is likely to injure the competitive position of Company, then Company may
determine that all such unpaid bonus shall be forfeited. Such determination shall be made
in accordance with procedures established by Company, whose decision shall be final. 

     9.  
DEVELOPMENTS, CONFIDENTIAL INFORMATION AND RELATED MATTERS. 

     A.  
“Confidential Information” shall mean all information of Company not generally
known in the computer software industry, whether or not discovered or developed by Mr.
Friedman, that is known by Mr. Friedman as a consequence of his employment by Company at
any time as an employee, agent or otherwise, including information entrusted to Company
by others. Without limiting the generality of the foregoing, “Confidential
Information” shall include: (i) customer lists and details of agreements with
customers; (ii) acquisition, expansion, marketing, financial and other business
information and plans of Company and its customers; (iii) research and development
information; (iv) computer programs; (v) information as to sources of supply; (vi)
identity of special sources of supply, specialized consultants and contractors and
Confidential Information developed by them for Company; (vii) purchasing, operating and
other cost data; (viii) special customer needs, cost and pricing data; and (ix) employee
compensation and effectiveness information. 

     B.  
“Developments” shall mean those discoveries, developments, concepts and ideas,
whether or not patentable, relating to the present, future and prospective activities and
the Products and Services (as hereinafter defined) of Company and its customers, which
activities and Products and Services are known to Mr. Friedman by virtue of his
employment by Company. “Developments” shall also include all computer programs
(completed or in progress) whether they or any of them relate to the present, future, or
prospective activities or the Products or Services of Company and its customers. 

	

     C.  
“Products and Services” shall mean all products or services sold, rendered or
otherwise made available to customers by Company or otherwise the subject of the business
of Company, or products and services in any stage of development by Company although not
yet commercialized. 

     D.   All
Developments which are at any time (whether during Mr. Friedman’s normal working
hours or during evenings, weekends, holidays or vacations) made by Mr. Friedman, acting
alone or in conjunction with others, during the Term of Employment period or during the
year after the termination of Mr. Friedman’s employment with Company, will be the
property of Company, free of any reserved or other rights of any kind on Mr. Friedman’s
part. During Mr. Friedman’s employment and thereafter, Mr. Friedman will promptly
make full disclosure of any such Developments to Company and, at Company’s cost and
expense, do all acts and things (including, among others, the execution and delivery
under oath of patent and copyright applications and instruments of assignment) deemed by
Company to be necessary or desirable at any time in order to effect the full assignment
to Company of Mr. Friedman’s right and title to such Developments. However, Group 1
acknowledges and agrees that Mr. Friedman owns the materials described in Exhibit 4
notwithstanding the refinements to the materials that were made during Mr. Friedman’s
employment with the Company. 

     E.   Mr.
Friedman acknowledges that the Confidential Information is valuable and proprietary to
Company (or to third parties which have entrusted Confidential Information to Company)
and, except as required by Mr. Friedman’s duties hereunder, Mr. Friedman will not,
during the Employment Period and for a period of one year following termination of Mr.
Friedman’s employment with Company, directly or indirectly, use, publish,
disseminate or otherwise disclose any Confidential Information or Developments without
the prior written consent of the Board of Directors of Company. Confidential Information
shall not include any information which (i) is publicly available other than through the
fault or negligence of Mr. Friedman or (ii) has been released by Company without
restriction. Nothing in this Section 9(E) shall prevent disclosure of any information
that has been completely disclosed in a published patent. 

     F.  
Upon termination of Mr. Friedman’s employment with Company, Mr. Friedman shall
forthwith deliver to Company all plans, designs, drawings, specifications, listings,
manuals, records, notebooks and similar repositories of or containing Confidential
Information and Developments, including all copies then in Mr. Friedman’s possession
or control, whether prepared by Mr. Friedman or others. Upon such termination, Mr.
Friedman shall retain no copies of any such documents. 

     G.   Mr.
Friedman acknowledges that, in fulfilling his duties under this Agreement, he will become
privy to confidential technical, sales and marketing information of Company and will
become identified in the minds of customers with Company’s goodwill and business
reputation. Accordingly, to avoid any possible misuse of that information or
misappropriation of that goodwill, Mr. Friedman agrees that during the period of
Employment and until 24 months thereafter, without Company’s prior written approval,
he will not (as principal, agent, employee, consultant or otherwise) directly or
indirectly engage in activities with, nor render services to, any firm or business
identified on Exhibit 3, hereto, as such Exhibit may be updated by Group 1 from
time-to-time upon written notice to Mr. Friedman. Notwithstanding the above, Company may,
in its sole discretion, give Mr. Friedman written approval to engage in activities or
render services otherwise prohibited by this Section 9G if it secures written assurance,
satisfactory to Company in its sole discretion, from Mr. Friedman and from the
prospective employer that the integrity of the Confidential Information and Developments
will not in any way be jeopardized by such employment. 

     H.  
During the Employment Period and until 24 months thereafter, Mr. Friedman will not,
directly or indirectly (i) induce or attempt to influence any employees or agents or
consultants of or to Company to do anything from which Mr. Friedman is restricted by
reason of Sections 9(E) through 9(G); (ii) offer or aid others to offer employment to any
Company employees, agents or consultants; (iii) solicit or request any customers of
Company or of any parent, subsidiary, or affiliate of Company to transfer their business
from Company or any such parent, subsidiary, or affiliate to any other person,
corporation, or other organization; or (iv) disclose to any person, corporation, or other
organization, or use for his own benefit or for the benefit of others, the identity,
nature, or requirements of any person, corporation, or other organization which shall
have been a customer of Company or of any parent, subsidiary, or affiliate of Company
during the year preceding termination of Mr. Friedman’s employment by Company or
which, to Mr. Friedman’s knowledge, shall have been solicited by or on behalf of
Company during such time for the purpose of developing such person, firm, or corporation
as a customer of Company or of any parent, subsidiary, or affiliate of Company.  

     I.  
These restrictive covenants on the part of Mr. Friedman shall be construed as an
agreement independent of any other provision in this Employment Agreement, and the
existence of any claim or cause of action of Mr. Friedman against Company, whether
predicated on this Employment Agreement or otherwise, shall not constitute a defense to
the enforcement by Company of said restrictive covenants. 

     J.   If
any court of competent jurisdiction shall hold that the restrictions contained in this
Section 9 are unreasonable as to time or geographical area, said restrictions shall be
automatically reduced to the extent necessary, in the opinion of such court, to make them
reasonable. Any remedies afforded to Company with respect to Mr. Friedman’s breach
of the non-compete covenants contained in this Section 9 are intended to be in addition
to and not in lieu any remedies afforded to Company under Section 8, above, with regard
to any breach of any covenant not to compete. 

	

     K.   The
rights reserved to Company under this Section 9 are necessarily of a special, unique and
extraordinary nature which gives them a significant value, the loss of which cannot
reasonably or adequately be compensated for by money damages in an action at law, and the
breach by Mr. Friedman of any of the provisions of this Section 9 will cause Company to
suffer irreparable injury and damage. Therefore, as a matter of right and without further
notice to Mr. Friedman, Company shall be entitled to injunctive or other equitable relief
in any court of competent jurisdiction to prevent the violation by Mr. Friedman of any of
the provisions of this Section 9. Mr. Friedman acknowledges and warrants that he will be
fully able to earn an adequate livelihood for himself and his dependents if this Section
9 should be specifically enforced against him. Neither this provision nor the exercise by
Company of any of its rights hereunder will constitute a waiver by Company of any other
rights which it may have to damages or to any other remedy. 

     L.  
Sections 9(D) through 9(K) shall survive the termination of this Agreement. 

     10.  
INTENTIONALLY DELETED. 

     11.  
INTENTIONALLY DELETED. 

     12.  
FURTHER ASSURANCES. Each party agrees at any time, and from time to time, to execute,
acknowledge, deliver and perform, and/or cause to be executed, acknowledged, delivered
and performed, all such further acts, deeds, assignments, transfers, conveyances, powers
of attorney and/or assurances that may be necessary and/or proper to carry out the
provisions and/or intent of this Agreement. 

     13.  
TERMINATION. 

     A.  
Company may terminate this Agreement for cause by giving Mr. Friedman thirty (30) days
written notice of termination upon the occurrence of any of the following events: (i) if
Mr. Friedman fails to fully perform his duties as contemplated by this Agreement except
because of illness, disability or authorized vacation; or (ii) if Mr. Friedman violates
any of the terms of this Agreement, or Company has grounds for cause as set out in
Section 8(C), above, or is found addicted to drugs or is a chronic alcoholic. 

     B.  
Company may terminate this Agreement by giving Mr. Friedman five days written notice of
termination upon the occurrence of any of the following events. No such termination shall
reduce Company’s obligation to pay Mr. Friedman’s salary up to the date of
termination or earned bonus to which he would be otherwise entitled in accordance with
Sections 5 and 8 of this Agreement. 

     (i)   if
Company: (w) files a petition in bankruptcy court or is adjudicated a bankrupt; or (x)
institutes or allows to be instituted any procedure in bankruptcy court for
reorganization or rearrangement of its financial affairs; or (y) has a receiver of its
assets or property appointed because of insolvency; or (z) makes a general assignment for
the benefit of creditors.  

     (ii)  
if Mr. Friedman becomes ill, disabled, or otherwise incapacitated so as to be unable
regularly to perform the duties of his position for a period in excess of 90 consecutive
days or more than 120 days in any consecutive 12 month period.  

     C.  
This Agreement shall automatically terminate: (i) upon Mr. Friedman’s death or (ii)
at the end of the Period of Employment. 

     14.  
RESTRICTION OF ALIENATION. The payments which shall become due and payable to Mr.
Friedman pursuant to this Agreement shall not be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, or charge, and any attempt
to so anticipate, alienate, sell, transfer, assign, pledge, encumber, or charge the same
shall be void. Such payments shall not in any manner be subject to seizure for the
payments of any debts or judgments of Mr. Friedman. 

     15.  
ASSIGNMENT. 

     A.  
This Agreement and all rights and obligations hereunder are personal to Mr. Friedman and
may not be assigned by him. 

	

     B.  
This Agreement may be assigned by Company to any entity which is, at the time of such
assignment, a parent, subsidiary, partner, or affiliate of Company. In the event of any
such assignment, all rights and obligations of Company under this Agreement shall be
binding upon the assignee. 

     16.  
NOTICES. 

     A.   Any
notices or other communications contemplated by this Agreement shall be in writing and
shall be deemed to have been duly given if personally delivered or mailed by certified or
registered mail, postage prepaid with return receipt requested 

			(i)		if
to Company, directed to 

	 	Chief
Executive Officer
Group 1 Software, Inc. 
4200 Parliament Place
Lanham, MD 20706-1844 

			(ii) 		if
to Mr. Friedman, directed to 

	 	Ronald
F. Friedman
 6630 Patio Lane 
Boca Raton, Florida 33433 

	

     B.  
Either party may change the address to which such notices and communications shall be
sent by written notice to the other party. 

     C.  
Notices delivered personally shall be deemed to have been given as of actual receipt;
mailed notices shall be deemed to have been given as of two days after mailing. 

     17.  
SECTION HEADINGS. The headings of the Paragraphs in this Agreement are inserted as a
matter of convenience to the parties and shall not affect the construction of this
Agreement. 

     18.  
ARBITRATION. Any claim, controversy, or dispute concerning questions of fact or law
arising out of or relating to this Agreement, its performance, or alleged breach shall be
submitted to binding arbitration by a single arbitrator in the Washington, D.C.
Metropolitan Area in accordance with the then-existing rules of the American Arbitration
Association. The arbitrator may award any relief that shall seem just and proper in the
circumstances, including the relief of specific performance. In the disposition of any
dispute hereunder the arbitrator shall be guided by the laws of the State of Maryland.
The decision of the arbitrator shall be final and conclusive upon the parties, and
judgment upon an award rendered by the arbitrator may be entered in any court of
competent jurisdiction. The costs and expenses of such arbitration shall be paid in
accordance with the determination of the arbitrator. Until the decision of the arbitrator
has been rendered, no action taken by either party hereto shall be binding upon the other
if such action is the subject of an arbitration hereunder. Nothing contained herein shall
in any way deprive Company of its right to obtain injunctive or other equitable relief. 

     19.  
COMPLETE AGREEMENT. This Agreement supersedes all other agreements (including the
Employment Agreement between Mr. Friedman and the Company dated October 31, 1990, as
amended by Amendments First through Seventh, of various dates), whether either oral or
written, between the parties hereto with respect to the employment of Mr. Friedman by
Company and, together with the compensation plan and standard personnel policies and
procedures applicable to Mr. Friedman, contain all of the covenants and agreement between
the parties with respect to such employment. No modification of this Agreement shall be
binding on either party unless in writing and signed by both parties hereto. 

     20.  
WAIVER OF BREACH. The failure of either party at any time to require performance by the
other party of any provision hereof shall not affect that party’s right thereafter
to enforce the same, nor shall the waiver by either party of any breach of any provision
hereof be taken or held to be a waiver of any succeeding breach of any provision or as a
waiver of the provision itself. 

     21.  
SEVERABILITY. If any provision herein shall, by competent legal authority (that is, by
judicial or quasi-judicial proceedings) be determined invalid, unenforceable, or contrary
to law, then that provision alone shall be deemed deleted herefrom and the remainder
hereof shall survive. 

     22.  
GOVERNING LAW. This Agreement shall be governed by and construed in accordance laws of
the State of Maryland, conflicts of laws principles notwithstanding. 

	

     23.  
COUNTERPARTS. This Agreement may be executed in two (2) counterparts, each of which shall
be deemed an original, and together shall constitute one (1) fully executed Agreement. 

     IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first above
written. 

			Group
1 Software, Inc.

By: 
      ——————————————

Title:
      ——————————————

      ——————————————
     Ronald F. FriedmanEXHIBIT 10.4 - FORM OF STOCK OPTION AGREEMENT UNDER THE 1994 STOCK PLAN

                             STOCK OPTION AGREEMENT
                 GRANTED UNDER GEOWORKS' 1994 STOCK OPTION PLAN

     Unless otherwise defined herein, the terms defined in the 1994 Stock Option
Plan (the "Plan") shall have the same defined meanings in this Option Agreement.

I.   NOTICE OF STOCK OPTION GRANT

OPTIONEE NAME ("Optionee")

     You have been  granted an option to purchase  Common  Stock of the Company,
subject to the terms and  conditions of the Plan and this Option  Agreement,  as
follows:

     Grant Number                               000000

     Date of Grant                              0/0/00

     Vesting Commencement Date                  0/0/00

     Exercise Price per Share                   $0.000

     Total Number of Shares Granted             0

     Total Exercise Price                       $000.000

     Type of Option:                            Non-Qualified Stock Option

     Term/Expiration Date:                      0/0/10

     Vesting Schedule:

     This Option may be exercised,  in whole or in part, in accordance  with the
following schedule:

     1/48TH of the  Shares  subject to the  Option  shall  vest on each  monthly
anniversary  beginning with the month  following the Vesting  Commencement  Date
over a period of forty-eight (48) months.

<PAGE>

     Termination Period:

     This  Option  may  be  exercised  for  90  days  after  termination  of the
Optionee's  employment or  consulting  relationship  with the Company.  Upon the
death  or  disability  (as  defined  in  Section  22(a)(3)  of the  Code) of the
Optionee, this Option may be exercised for such longer period as provided in the
Plan.  In the  event  of the  Optionee's  change  in  status  from  Employee  to
Consultant  or  Consultant to Employee,  this Option  Agreement  shall remain in
effect.   In  no  event   shall  this  Option  be   exercised   later  than  the
Term/Expiration Date as provided above.

II.  AGREEMENT

     1. Grant of Option.  The Administrator  hereby grants to the Optionee named
in the Notice of Grant attached as Part I of this Agreement (the "Optionee"), an
option  (the  "Option")  to purchase  the number of Shares,  as set forth in the
Notice  of Grant,  at the  exercise  price per share set forth in the  Notice of
Grant (the "Exercise  Price"),  subject to the terms and conditions of the Plan,
which is incorporated herein by reference. Subject to Section 15 of the Plan, in
the event of a conflict  between the terms and  conditions of the Plan the terms
and  conditions of this Option  Agreement,  the terms and conditions of the Plan
shall prevail.

     If designated in the Notice of Grant as an Incentive  Stock Option ("ISO"),
this Option is intended to qualify as an Incentive  Stock  Option under  Section
422 of the Code.  However,  if this Option is intended to be an Incentive  Stock
Option,  to the extent that it exceeds the $100,000 rule of Code Section  422(d)
such excess shall be treated as if it were a Nonstatutory Stock Option ("NSO").

     2. Exercise of Option

          (a) Right to Exercise.  This Option is exercisable  during its term in
     accordance with the Vesting Schedule set out in the Notice of Grant and the
     applicable  provisions of the Plan and this Option Agreement.  In the event
     of  Optionee's  death,   disability  or  other  termination  of  Optionee's
     employment or consulting relationship,  the exercisability of the Option is
     governed  by  the  applicable  provisions  of  the  Plan  and  this  Option
     Agreement.

          (b) Method of Exercise.  This Option is  exercisable by delivery of an
     exercise  notice,  in the  form  approved  by the  Company  (the  "Exercise
     Notice"), which shall state the election to exercise the Option, the number
     of Shares in respect of which the Option is being exercised (the "Exercised
     Shares"),  and such other representations and agreements as may be required
     by the Company  pursuant to the provisions of the Plan. The Exercise Notice
     shall be signed by the  Optionee  and  shall be  delivered  in person or by
     certified mail to the Secretary of the Company.  The Exercise  Notice shall
     be  accompanied  by  payment  of the  aggregate  Exercise  Price  as to all
     Exercised Shares.  This Option shall be deemed to be exercised upon receipt
     by the Company of such fully executed  Exercise Notice  accompanied by such
     aggregate Exercise Price.

          No Shares  shall be issued  pursuant  to the  exercise  of this Option
     unless such issuance and exercise complies with all relevant  provisions of
     law and the  requirements  of

                                       2
<PAGE>

     any stock  exchange  or  quotation  service  upon which the Shares are then
     listed.  Assuming  such  compliance,  for income tax purposes the Exercised
     Shares  shall be  considered  transferred  to the  Optionee on the date the
     Option is exercised with respect to such Exercised Shares.

     3. Method of Payment.  Payment of the aggregate  Exercise Price shall be by
any of the following, or a combination thereof, at the election of the Optionee:

          (a) cash;

          (b) check; or

          (c) delivery of a properly executed Exercise Notice together with such
     other  documentation  as the  Administrator  and the Optionee's  broker (if
     applicable)  may require in order for the Exercise Price to be paid through
     proceeds from the sale of a portion of the shares issued upon such exercise
     (or through a loan in anticipation of the receipt of such proceeds).

     4. Non-Transferability of the Option. This Option may not be transferred in
any manner  otherwise than by will or by the laws of descent or distribution and
may be exercised  during the lifetime of the Optionee only by the Optionee.  The
terms of the Plan and this Option Agreement shall be binding upon the executors,
administrators, heirs, successors and assigns of the Optionee.

     5. Term of Option.  This Option may be  exercised  only within the term set
out in the  Notice  of  Grant,  and may be  exercised  during  such term only in
accordance with the Plan and the terms of this Option Agreement.

     6.  Tax  Consequences.  Some  of  the  federal  and  California  state  tax
consequences  relating to this Option,  as of the date of this  Option,  are set
forth  below.  THIS  SUMMARY  IS  NECESSARILY  INCOMPLETE,  AND THE TAX LAWS AND
REGULATIONS  ARE SUBJECT TO CHANGE.  THE OPTIONEE  SHOULD  CONSULT A TAX ADVISER
BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.

          (a) Exercising the Option.

               (i)  Nonstatutory  Stock  Option.  The Optionee may incur regular
          federal  income tax and  California  state income tax  liability  upon
          exercise of an NSO.  The Optionee  will be treated as having  received
          compensation  income  (taxable at ordinary  income tax rates) equal to
          the excess,  if any, of the Fair Market Value of the Exercised  Shares
          on the date of exercise over their  aggregate  Exercise  Price. If the
          Optionee  is an  Employee or a former  Employee,  the Company  will be
          required  to withhold  from his or her  compensation  or collect  from
          Optionee and pay to the  applicable  taxing  authorities  an amount in
          cash equal to a percentage of this compensation  income at the time of
          exercise,  and may refuse to honor the  exercise and refuse to deliver
          Shares if such  withholding  amounts are not  delivered at the time of
          exercise.

               (ii) Incentive Stock Option.  If this Option qualifies as an ISO,
          the Optionee  will have no regular  federal  income tax or  California
          state income tax liability upon

                                       3
<PAGE>

          its exercise, although the excess, if any, of the Fair Market Value of
          the  Exercised  Shares on the date of  exercise  over their  aggregate
          Exercise Price will be treated as an adjustment to alternative minimum
          taxable  income for federal  income tax  purposes  and may subject the
          Optionee to  alternative  minimum tax in the year of exercise.  In the
          event that the Optionee  undergoes a change of status from Employee to
          Consultant,  any  Incentive  Stock Option of the Optionee that remains
          unexercised  shall cease to qualify as an  Incentive  Stock Option and
          will be treated for tax purposes as a Nonstatutory Stock Option on the
          ninety-first (91st) day following such change in status.

          (b) Disposition of Shares.

               (i) NSO. If the Optionee  holds NSO Shares for at least one year,
          any gain realized on  disposition of the Shares over Fair Market Value
          of the  Exercised  Shares  at time of  exercise  will  be  treated  as
          long-term capital gain for federal income tax purposes.

               (ii) ISO. If the Optionee  holds ISO Shares for at least one year
          after  exercise and two years after the grant date,  any gain realized
          on disposition of the Shares will be treated as long-term capital gain
          for  federal  income tax  purposes.  If the  Optionee  disposes of ISO
          Shares  within one year after  exercise  or two years  after the grant
          date,  any  gain  realized  on such  disposition  will be  treated  as
          compensation  income  (taxable at ordinary income rates) to the extent
          of the excess, if any, of the lesser of (A) the difference between the
          Fair Market  Value of the Shares  acquired on the date of exercise and
          the aggregate  Exercise Price, or (B) the difference  between the sale
          price of such Shares and the aggregate Exercise Price.

          (c) Notice of Disqualifying Disposition of ISO Shares. If the Optionee
     sells or otherwise  disposes of any of the Shares  acquired  pursuant to an
     ISO on or before the later of (i) two years after the grant  date,  or (ii)
     one year after the exercise date, the Optionee shall immediately notify the
     Company in writing of such disposition.  The Optionee agrees that he or she
     may be subject to income tax withholding by the Company on the compensation
     income  recognized from such early  disposition of ISO Shares by payment in
     cash or out of the current earnings paid to the Optionee.

     7. Entire  Agreement;  Governing  Law. The Plan is  incorporated  herein by
reference. The Plan and this Option Agreement constitute the entire agreement of
the parties with  respect to the subject  matter  hereof and  supersede in their
entirety all prior  undertakings and agreements of the Company and Optionee with
respect to the subject matter hereof,  and may not be modified  adversely to the
Optionee's  interest  except by means of a writing  signed  by the  Company  and
Optionee.  This  agreement is governed by California law except for that body of
law pertaining to conflict of laws.

     By your signature and the signature of the Company's  representative below,
you and the Company  agree that this Option is granted under and governed by the
terms  and  conditions  of the Plan  and this  Option  Agreement.  Optionee  has
reviewed  the Plan and  this  Option  Agreement  in their  entirety,  has had an
opportunity  to obtain the  advice of counsel  prior to  executing  this  Option
Agreement and fully understands all provisions of the Plan and

                                       4
<PAGE>
Option  Agreement.  Optionee hereby agrees to accept as binding,  conclusive and
final all decisions or  interpretations  of the Administrator upon any questions
relating to the Plan and Option Agreement. Optionee further agrees to notify the
Company upon any change in the residence indicated below.

OPTIONEE                                        GEOWORKS

----------------------------                    ----------------------------
Signature                                       Signature
                                                David L. Grannan
----------------------------                    Chief Executive Officer
Type or Print Name

----------------------------                    960 Atlantic Avenue
Residence Address                               Alameda, CA 94501-1074

----------------------------

----------------------------

                                       5
<PAGE>

                                CONSENT OF SPOUSE

The  undersigned  souse of Optionee  has read and hereby  approves the terms and
conditions  of the Plan and  this  Option  Agreement.  In  consideration  of the
Company's  granting his or her spouse the right to purchase  Shares as set forth
in the Plan and this  Option  Agreement,  the  undersigned  hereby  agrees to be
irrevocably  bound by the  terms  and  conditions  of the  Plan and this  Option
Agreement  and further  agrees that any  community  property  interest  shall be
similarly bound.  The undersigned  hereby appoints the  undersigned's  spouse as
attorney-in-fact  for the undersigned  with respect to any amendment or exercise
of rights under the Plan or this Option Agreement.

---------------------------------
Signature of Spouse of Optionee

---------------------------------
Type or Print Name

---------------------------------
Date

                                       6
<PAGE>

                                    EXHIBIT A
                                 1994 STOCK PLAN
                                 EXERCISE NOTICE

Geoworks
960 Atlantic Avenue
Alameda, CA 94501

Attention:  Corporate Secretary

     1. Exercise of Option.  Effective as of today  ______________,  19___,  the
undersigned  ("Purchaser")  hereby elects to purchase  ____________  shares (the
"Shares") of the Common Stock of Geoworks (the "Company")  under and pursuant to
the  1994  Stock  Plan  (the  "Plan")  and  the  Stock  Option  Agreement  dated
_____________,  19___, with Grant Number _____________ (the "Option Agreement").
The purchase price for the Shares shall be  $______________,  as required by the
Option Agreement.

     2. Delivery of Payment. Purchaser herewith delivers to the Company the full
purchase price for the Shares in the form of:

        [ ]  Cash;

        [ ]  Check; or

        [ ]  Proceeds  from the sale of a portion  of the  Shares  (or a loan in
     anticipation  of the  receipt of such  proceeds),  subject to such  further
     documentation  and  conditions  as the  Administrator  and the  Purchaser's
     broker (if applicable) may require.

     3. Representations of Purchaser.  Purchaser acknowledges that Purchaser has
received,  read and understood  the Plan and the Option  Agreement and agrees to
abide by any be bound by their terms and conditions.

     4.  Rights  as  Shareholder.  Until  the  issuance  (as  evidenced  by  the
appropriate  entry on the books of the Company or of a duly authorized  transfer
agent of the Company) of the stock certificate  evidencing such Shares, no right
to vote or receive  dividends or any other rights as a  shareholder  shall exist
with respect to the Optioned Stock,  notwithstanding the exercise of the Option.
A share  certificate for the number of Shares so acquired shall be issued to the
Optionee as soon as  practicable  after  exercise of the Option.  No adjustments
will be made for a dividend or other right for which the record date is prior to
the date the stock  certificate  is issued,  except as provided in Section 12 of
the Plan.

     5. Tax  Consultation.  Purchaser  understands  that  Purchaser  may  suffer
adverse tax  consequences as a result of Purchaser's  purchase or disposition of
the Shares.  Purchaser  represents  that  Purchaser has  consulted  with any tax
consultants  Purchaser  deems  advisable  in  connection  with the  purchase  or
disposition  of the Shares and that  Purchaser is not relying on the Company for
any tax advice.

                                       7
<PAGE>

     6. Entire  Agreement;  Governing  Law.  The Plan and Option  Agreement  are
incorporated  herein by  reference.  This  Agreement,  the Plan,  and the Option
Agreement  constitute  the entire  agreement  of the parties with respect to the
subject matter hereof and supersede in their entirety all prior undertakings and
agreements  of the  Company and  Purchaser  with  respect to the subject  matter
hereof, and may not be modified adversely to the Purchaser's  interest except by
means of a writing  signed by the  Company  and  Purchaser.  This  agreement  is
governed by California law except for that body of law pertaining to conflict of
laws.

Submitted by:                               Accepted by:
PURCHASER                                   GEOWORKS

--------------------------------            ------------------------------------
Signature                                   Signature

--------------------------------            ------------------------------------
Type or Print Name                          Type or Print Name

--------------------------------            ------------------------------------
Residence Address                           Title: _____________________________

                                            960 Atlantic Avenue
--------------------------------            Alameda, CA 94501-1074

                                       8

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