Re: Employment Offer Letter Agreement

October 31, 2008

Evan Kaplan

Re:           Employment Offer Letter Agreement

Dear Evan,

iPass Inc. (the “ Company ”) is pleased to offer you the positions of President and Chief Executive Officer of the Company, reporting to the Company’s Board of Directors (the “ Board ”).  The following letter agreement (the “ Agreement ”) provides the terms of our offer of employment.

I.           GENERAL TERMS OF EMPLOYMENT.

(1)             Duties and Position.   You will be employed in the positions of President and Chief Executive Officer of the Company (“ CEO ”), reporting to the Board.  You shall perform the duties of President and CEO as commonly associated with this position in the Company, as specified in the Bylaws of the Company, and as directed by the Board.   The Company will use its best efforts to have you elected to serve as a director on the Board.  If your employment with the Company terminates for any reason, you agree to promptly tender your resignation from the Board.

(2)             Start Date.   Your first date of employment will be November 3, 2008 (“ Start Date ”); provided, however, that you shall not assume the title or role of President and CEO until the first business day after the Company’s filing with the Securities Exchange Commission of a Form 10-Q for the quarter ended September 30, 2008.  You and the Company agree that your consulting relationship with the Company pursuant to our consulting agreement dated August 19, 2008 will terminate effective as of the Start Date by our mutual agreement, without the necessity for any other notice of termination, and that the remaining unpaid consulting fee payable to you will be paid in accordance with the terms of the consulting agreement.

(3)             Work Location and Other Activities.   You will work at the Company’s corporate headquarters which are currently located in Redwood Shores, California, subject to necessary business travel.  You will move to the San Francisco Bay Area as soon as is feasible. During your employment with the Company, you will devote your best efforts and substantially all of your business time and attention (except for vacation periods and reasonable periods of illness or other incapacity permitted by the Company’s general employment policies) to the business of the Company; provided, however, that you may serve as a director of one other corporation, provided that the name of this other corporation is disclosed in advance to the Board and the Board has determined that your director position with such other corporation will not present a conflict of interest with the Company.   You may also spend time on charitable and other such activities, so long as they do not materially impact your ability to perform your duties under this Agreement.

(4)             Company Policies and Procedures .  Your employment relationship with the Company also shall be governed by the general employment policies and procedures of the Company (including the Company’s Code of Conduct)(as may be changed from time to time in the discretion of the Company), and you agree to comply with these polices and procedures, except that if the terms of this Agreement differ from or are in conflict with the Company’s general employment policies or procedures, this Agreement will control.

II.           BASE SALARY AND BONUS.

(1)      Base Salary .  You will be paid an initial annual salary of $350,000 per year (or $14,583.33 semi-monthly), less standard deductions and withholdings.  Your cash compensation will next be reviewed by the Board for potential adjustment beginning in calendar year 2010, and will be reviewed annually thereafter in conjunction with the annual Board review of executive compensation, and will be based upon the Board’s assessment of both your performance and the Company’s performance.

(2)             Annual Bonus.   You also will be eligible to earn an annual bonus for each calendar year beginning with calendar year 2009 during your employment if you achieve the performance goals established each year as part of the management incentive plan.  The initial annual bonus target amount will be $250,000, less standard deductions and withholdings, and the performance goals for 2008 will be based upon short-term objectives.  The Board, in consultation with you, will set the performance goals for each year. The Board will have the sole discretion to determine whether the goals have been achieved and to determine the amount of any bonus.  The annual bonus will be paid to you on a quarterly basis for 2009 and 2010 (and thereafter on the same timing as the then current executive management program), with the final payment made no later than 30 days after the conclusion of the annual audit for the year in which the bonus was earned.  Effective January 1, 2010, your annual bonus target will be at least $350,000 if your performance meets the expectations of the Board.

(3)             2008 Guaranteed Bonus.   Notwithstanding the foregoing, if you remain an employee in good standing through the end of calendar year 2008, the Company will pay you a guaranteed 2008 annual performance bonus based on the target amount of $250,000 and prorated based on the Start Date to reflect your mid-year hire (the “ Guaranteed Bonus ”).  The Guaranteed Bonus will be paid to you at the time other members of management are paid their fourth quarter bonus.

III.           RELOCATION AND RELATED BENEFITS.

(1)             Monthly Reimbursement of Temporary Living Expenses.   The Company will reimburse your reasonable temporary living expenses incurred during the first six (6) months after the Start Date up to a maximum monthly reimbursement amount of $10,000, provided that these reimbursements will cease earlier if you close on the purchase of a residence in the San Francisco Bay Area prior to six (6) months after the Start Date.  The Company will consider and implement reasonable measures to minimize any adverse income tax effect to you of the reimbursements for temporary living expenses to be provided hereunder upon the advice of its tax advisors, which may include, for example, direct payment of expenses to third parties.  In addition, to the extent that you are required to recognize in taxable income any payments under this Section III(1) (the “ Taxable Living Expenses ”), you shall be entitled to receive an additional payment from the Company (the “ Taxable Living Expenses Gross-Up ”), such that after the payment of all federal and state income and employment taxes on the Taxable Living Expenses and the Taxable Living Expenses Gross-Up, you shall retain an amount equal to the Taxable Living Expenses.  For purposes of determining the amount of the Taxable Living Expenses Gross-Up, you shall be deemed to have (i) paid federal income taxes at the highest marginal rate of federal income taxation for the calendar year in which the Taxable Living Expenses Gross-Up is to be made; (ii) paid federal employment taxes at your actual marginal rate for the calendar year in which the Taxable Living Expenses Gross-Up is to be made; and (iii) paid applicable state and local income taxes at the highest rate of taxation for the calendar year in which the Taxable Living Expenses Gross-Up is to be made, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes.

(2)             Relocation-Related Expenses. The Company will either (as elected by the Company) pay directly to third parties or reimburse your reasonable expenses incurred for: (a) the reasonable and customary costs associated with moving your typical personal and household goods to the San Francisco Bay Area, including shipment of no more than two (2) automobiles, furniture, and personal effects, excluding any unusually large or expensive items such as pianos, work-out equipment, or the like; (b) airfare, rental car and hotel costs (covering you and your immediate family) for up to two (2)   house hunting trips to the San Francisco Bay Area; and (c) the reasonable and customary brokerage fee for the sale of your residence in Seattle, provided that such residence is sold no later than fifteen (15) months after the Start Date.  In the event you are able to sell your Seattle residence without incurring a brokerage fee, the Company will pay you an amount equivalent to the fee that would otherwise have been incurred. The Company will consider and implement reasonable measures to minimize any adverse income tax effect to you associated with payment of the brokerage fee hereunder upon the advice of its tax advisors, which may include, for example, direct payment of such fee to third parties.  In addition, to the extent that you are required to recognize in taxable income any payments under this Section III(2) (the “ Taxable Relocation Expenses ”), you shall be entitled to receive an additional payment from the Company (the “ Taxable Relocation Expenses Gross-Up ”), such that after the payment of all federal and state income and employment taxes on the Taxable Relocation Expenses and the Taxable Relocation Expenses Gross-Up, you shall retain an amount equal to the Taxable Relocation Expenses.  For purposes of determining the amount of the Taxable Relocation Expenses Gross-Up, you shall be deemed to have (i) paid federal income taxes at the highest marginal rate of federal income taxation for the calendar year in which the Taxable Relocation Expenses Gross-Up is to be made; (ii) paid federal employment taxes at your actual marginal rate for the calendar year in which the Taxable Relocation Expenses Gross-Up is to be made; and (iii) paid applicable state and local income taxes at the highest rate of taxation for the calendar year in which the Taxable Relocation Expenses Gross-Up is to be made, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes.

(3)             Additional Relocation-Related Reimbursements.   In addition to the above, the Company will reimburse you an additional amount of $12,000 to cover other ancillary reasonable expenses that may be incurred by you related to your relocation to the San Francisco Bay Area, such as additional temporary living expenses or expenses related to the sale of your current residence and purchase of a new residence in the San Francisco Bay Area.  No “tax gross-up” shall apply to this additional amount, regardless of whether or not any such expenses are taxed as income.

(4)             Moving Expenses for Return To Seattle.   In the event that the Company terminates your employment prior to November 1, 2012 other than for Cause, or if you resign for Good Reason, and no Corporate Transaction (as defined below) has been closed prior to your termination date, and you move to the Seattle Metropolitan Area within six months after such termination, the Company will either (as elected by the Company) pay directly to third parties or reimburse your reasonable expenses incurred solely for the reasonable and customary costs associated with moving your typical personal and household goods back to the Seattle Metropolitan Area, including shipment of no more than two (2) automobiles, furniture, and personal effects, excluding any unusually large or expensive items such as pianos, work-out equipment, or the like.   Such payments, if any, shall be paid no later than your second taxable year following termination of your employment.

(5)             General Terms For Relocation and Related Benefits.   To qualify for reimbursement or payment under this Agreement, all expenses incurred by you or costs must be fully documented (including receipts) on a properly completed expense reimbursement report and otherwise comply with the Company’s standard expense reimbursement policy and practice.  Other than with respect to expenses incurred prior to the Start Date and moving expenses incurred for your return to Seattle provided under Section III(4), you must remain an employee in good standing of the Company as of the date that the cost or expenses is incurred.

IV.           EQUITY AWARDS.

(1)             Stock Option Grant.   Subject to the approval of the Board, you will be granted an option to purchase 500,000 shares of Company common stock (the “ Option ”), with an exercise price equal to the fair market value of the Company’s common stock as of the date of grant, pursuant to the Company’s 2003 Equity Incentive Plan (the “ Plan ”).  The Option will be an incentive stock option to the fullest extent permissible, with the remainder being a nonstatutory stock option.  The Option will vest with respect to 25% of the shares subject to the Option on the first anniversary of the Start Date, and thereafter in a series of thirty-six (36) successive equal monthly installments over the three-year period measured from the first anniversary of the Start Date, so long as you remain in continuous service with the Company on each applicable vesting date.  The Option shall be governed by the terms and conditions set forth in the Plan, and in the applicable stock option agreement and grant document.

(2)             Performance Shares.   Subject to the approval of the Board, you will be granted performance shares covering 500,000 shares of Company common stock (the “ Performance Shares ”) pursuant to the Plan.  The Performance Shares will vest in five installments, as set forth on Annex A hereto.  In order to vest in any Performance Shares, you must remain in continuous service with the Company on each applicable vesting date.   The Performance Shares shall be governed by the terms and conditions set forth in the Plan, and in the applicable performance shares award agreement and grant document, and will contain a tax withholding right to permit the Company to pay the withholding tax in exchange for the return of shares to the Company to cover such withholding tax payment.

V.           EMPLOYEE BENEFITS AND VACATION.

You will be entitled to participate in the Company’s standard employee benefit plans pursuant to the terms and conditions of the benefit plans.  The Company currently offers its employees health, dental, vision, life, AD&D, short term and long term disability insurance, and 401(k) plan participation.  You will accrue vacation at an initial annual rate of four (4) weeks, subject to the terms and conditions of the Company’s vacation policy and practices.  The Company may modify benefits from time to time in its discretion.

VI.           CONFIDENTIALITY AND INVENTIONS ASSIGNMENT AGREEMENT.

As a condition of employment, you are required to sign and abide by the Company’s standard Employee Confidentiality and Inventions Assignment Agreement (the “ Confidentiality Agreement ”), a form of which is attached hereto as Exhibit A .

(1)             At-Will Employment Status. Your employment with the Company is at the will of each party, is not for a specific term and can be terminated by you or by the Company at any time, with or without Cause, and with or without advance notice.

(2)             Severance.   If: (i) the Company terminates your employment without Cause, you resign for Good Reason, and provided such termination or resignation, as applicable, qualifies as a “separation from service” within the meaning of Treasury Regulation 1.409A-1(h) (each, a “ Covered Termination ”); and (ii) you sign, date, return to the Company within forty-five (45) days following the Covered Termination and allow to become effective a general release of all known and unknown claims in the form as shall be provided to you by the Company (which may, at the Company’s election, be contained in a separation agreement) (the “ Release ”); and (iii) you promptly tender your resignation as a director on the Board; then you will be eligible to receive, as your sole severance benefits (the “ Severance Benefits ”):

(a)             Base Salary Severance. You will receive cash severance equal to twelve (12) months of your base salary in effect as of the date of the Covered Termination (the “ Termination Date ”), subject to required payroll deductions and withholdings, paid in a lump sum within ten (10) business days after the effective date of the Release.

(b)             Additional Lump Sum Severance Bonus Payment.   You will receive an additional lump sum cash severance payment, with the amount of such additional lump sum severance payment to be (i) the pro rata portion of the annual bonus for the year served to the Termination Date, less any amounts already paid for that year, such pro rata portion to be paid to be calculated using the same percentage of target bonus as average percentage of target bonus with respect to prior bonus amounts in that year (or if first quarter bonus has not yet been determined, the percentage target bonus paid for the prior year) plus (ii) target bonus for that year multiplied by the percentage equal to the actual bonus paid over the prior four quarters divided by target bonus for the prior four quarters (collectively, the “ Additional Severance Payment ”).  If paid, the Additional Severance Payment will be subject to required payroll deductions and withholdings and paid in a lump sum within ten (10) business days after the effective date of the Release.

(c)             Health Insurance. If you timely elect continued group health insurance coverage pursuant to federal COBRA law or comparable state insurance laws (collectively, “ COBRA ”), the Company will pay your COBRA premiums sufficient to continue group health insurance coverage for you and your covered dependents (if applicable) at the level of coverage in effect as of the Termination Date, through the earlier of either (i) eighteen (18) months after the Termination Date, or (ii) the date that you become eligible for group health insurance coverage through another employer.  In the event you receive the Severance Benefits, you must promptly notify the Company in writing if you become eligible for group health insurance coverage through another employer within eighteen (18) months after the Termination Date.

(d)             Equity Award Acceleration and Extended Exercisability.    Subject to Section VII(3) below, you will receive accelerated vesting of the time-based component of any equity awards (including but not limited to restricted stock which have time-based vesting) which are not fully vested as of the Termination Date (collectively, the “ Equity Awards ”), in the amount of twelve (12) months of vesting acceleration, effective as of the Termination Date, and with respect to Equity Awards that are stock options, each vested stock option shall remain exercisable for the lesser of (i) the maximum term provided in the option grant or (ii) the period ending nine (9) months following the Termination Date.

(3)             Additional Corporate Transaction Benefits.   In addition to the benefits provided in Section VII(2)(a-c) above, and in lieu of the benefits provided in Section VII (2)(d) above, immediately upon the closing of a Corporate Transaction, any specified performance