Document:

form8kex10_1.htm

     

    EXHIBIT
      10.1

    iPASS
      INC.

     

    EXECUTIVE
      CORPORATE TRANSACTION AND SEVERANCE BENEFIT PLAN

     

    
      	
              SECTION
                1.  

            	
              Introduction.

            

    

     

    The
      iPass
      Inc. Executive Corporate Transaction and Severance Benefit Plan (the
“Plan”) is hereby established effective August 9,
      2007  (the “Effective Date”).  The
      purpose of the Plan is to provide for the payment of severance benefits to
      certain eligible executive employees of iPass Inc. (the
“Company”) or its Affiliates (as such term is defined
      below) in the event that such employees are subject to qualifying employment
      terminations, and additional benefits if such qualifying employment terminations
      occur within eighteen (18) months following a Corporate Transaction (as such
      term is defined below).  In addition, Section 7 below provides certain
      benefits upon the consummation of a Corporate Transaction without regard to
      a
      qualifying employment termination.  This Plan shall supersede any
      generally applicable severance or change in control plan, policy, or practice,
      whether written or unwritten, with respect to each employee who becomes a
      Participant in the Plan.  For the purposes of the foregoing sentence,
      a generally applicable severance or change in control plan, policy or practice
      is a plan, policy or practice in which benefits are not conditioned upon (i)
      being designated a participant, (ii) receiving an award such as a stock option,
      or (iii) the employee electing to participate.  This Plan shall not
      supersede any individually negotiated employment contract or agreement, or
      any
      written plans that are not of general application, and, except as set forth
      in
      the Participation Notice, such Participant’s severance benefit, if any, shall be
      governed by the terms of such individually negotiated employment contract,
      agreement, or written plan, and shall be governed by this Plan only to the
      extent that the reduction pursuant to Section 5(b) below does not entirely
      eliminate benefits under this Plan.  This document also constitutes
      the Summary Plan Description for the Plan.

     

    
      	
              SECTION
                2.  

            	
              Definitions.

            

    

     

    For
      purposes of the Plan, except as set forth in an applicable Participation Notice,
      the following terms are defined as follows:

     

    (a)  “Affiliate”
      means a “parent corporation” of the Company or a “subsidiary corporation” of the
      Company (whether now or hereafter existing), as those terms are defined in
      Sections 424(e) and (f), respectively, of the Code.

     

    (b)  “Base
      Salary” means the Participant’s monthly base pay (excluding
      incentive pay, premium pay, commissions, overtime, bonuses and other forms
      of
      variable compensation).

     

    
      (c)  “Board”
        means the Board of Directors of iPass Inc.

    

     

    (d)  “Cause”
      shall mean the occurrence of any of the following (and only the following):
      (i)
      conviction of the Participant of any felony involving fraud or act of dishonesty
      against the Company or its Affiliates; (ii) conduct by the Participant which,
      based upon good faith and reasonable factual investigation and determination
      of
      the Board, demonstrates gross unfitness to serve; or (iii) intentional, material
      violation by the Participant of any contractual, statutory, or fiduciary duty
      of
      the Participant to the Company or its Affiliates.

     

    (e)  “COBRA”
      means the Consolidated Omnibus Budget Reconciliation Act of 1985, as
      amended.

     

    
      (f)  “Code” means
        the Internal Revenue Code of 1986, as
        amended.

    

     

    (g)  “Company”
      means iPass Inc. or, following a Corporate Transaction which is a sale of assets
      or a merger in which iPass Inc. is not the surviving entity, the entity to
      which
      the assets are sold or the surviving entity resulting from such transaction,
      respectively.

     

    (h)  “Constructive
      Termination” means a resignation of employment by a Participant no
      later than twelve (12) months after an action or event which constitutes Good
      Reason is undertaken by the Company or occurs.

     

    (i)  “Corporate
      Transaction” shall mean the occurrence of either of the following
      events:

     

    (i)  the
      sale
      of all or substantially all of the assets of the Company; or

     

    (ii)  a
      merger
      of the Company with or into another entity in which the stockholders of the
      Company immediately prior to the closing of the transaction own less than a
      majority of the ownership interest of the Company immediately following such
      closing; provided, however, for purposes of determining whether the
      stockholders of the Company prior to the occurrence of a transaction described
      above own less than fifty percent (50%) of the voting securities of the relevant
      entity afterwards, only the lesser of the voting power held by a person either
      before or after the transaction shall be counted in determining that person’s
      ownership afterwards.

     

    Once
      a
      Corporate Transaction has occurred, no future events shall constitute a
      Corporate Transaction for purposes of the Plan.

     

    (j)  “Corporate
      Transaction Termination” means a Covered Termination which occurs
      within eighteen (18) months after a Corporate Transaction.

     

    (k)  “Covered
      Termination” means either (i) an Involuntary Termination Without
      Cause, or (ii) a Constructive Termination.  Termination of employment
      of a Participant due to death or disability shall not constitute a Covered
      Termination unless a voluntary termination of employment by the Participant
      immediately prior to the Participant’s death or disability would have qualified
      as a Constructive Termination.   The foregoing notwithstanding,
      the following events shall not constitute a Covered Termination:  (i)
      the Participant resigns his or her employment with the Company in order to
      accept employment with another entity that is controlled (directly or
      indirectly) by the Company or is otherwise an Affiliate of the Company; (ii)
      the
      Participant’s employment is terminated, but the Participant is subsequently
      rehired within 32 days after such termination of employment by the Company
      or an
      Affiliate for a Substantially Equivalent or Comparable Position as the
      Participant’s last position with the Company or an Affiliate; and (iii) in
      connection with a Corporate Transaction, the Participant’s employment is
      terminated but prior to such termination the Participant is offered but does
      not
      accept a Substantially Equivalent or Comparable Position with the Company or
      an
      Affiliate of the Company or the entity acquiring the Company or its assets
      pursuant to the Corporate Transaction.

     

    (l)  “Eligible
      Employee” means an individual who is (i)
      employed by the Company or its Affiliates at the Vice President level and above
      (excluding the Chief Executive Officer), and (ii) has been designated an
      Eligible Employee by the Plan Administrator in its sole discretion (either
      by a
      specific designation or by virtue of being a member of a class of employees
      who
      have been so designated).

     

    (m)  “ERISA” means
      the Employee Retirement Income Security Act of 1974, as amended.

     

    (n)  “Good
      Reason” shall mean either of the following actions or events: (i)
      the Company requires that the Participant relocate to a worksite that is more
      than sixty (60) miles from its principal executive office as of the Effective
      Date; or (ii) the Company materially reduces the Participant’s Base Salary below
      its then-existing gross rate; provided however that, in order to
      qualify as “Good Reason,” the Participant must submit to the Company a written
      notice, within ninety (90) days after the occurrence of either of the actions
      or
      events described in (i) and (ii) above, describing the applicable actions or
      events, and provide the Company with at least thirty (30) days from its receipt
      of the Participant’s written notice in which to cure such actions or events
      prior to termination of the Participant’s employment, and provided further
      that, the Participant’s employment must terminate no later than twelve (12)
      months after the applicable actions or events described in (i) and (ii)
      above.

     

    (o)  “Involuntary
      Termination Without Cause” means a termination by the Company of a
      Participant’s employment relationship with the Company or an Affiliate of the
      Company for any reason other than for Cause.

     

    (p)  “Participant”
      means an individual (i) who is an Eligible Employee and (ii) who has received
      a
      Participation Notice from the Company and executed and returned such
      Participation Notice to the Company.  The Participation Notice
      shall designate the Participant as either a “Tier I Participant” or a “Tier II
      Participant,” provided that, in the absence of such specific
      designation, the Participant shall be deemed a Tier II Participant for purposes
      of the Plan.  The determination of whether an employee is a
      Participant, and the designation of either a Tier I Participant or a Tier II
      Participant, shall be made by the Plan Administrator, in its sole discretion,
      and such determination shall be binding and conclusive on all
      persons.

     

    (q)  “Participation
      Notice” means the latest notice delivered by the Company to a
      Participant informing the employee that the employee is a Participant in the
      Plan, substantially in the form of Annex I hereto.

     

    (r)  “Plan
      Administrator” means the Board or any committee duly authorized by
      the Board to administer the Plan.  The Plan Administrator may, but is
      not required to be, the Compensation Committee of the Board.  The
      Board may at any time administer the Plan, in whole or in part, notwithstanding
      that the Board has previously appointed a committee to act as the Plan
      Administrator.

     

    (s)  “Severance
      Period” means (i) in the case of a Covered Termination that is not
      a Corporate Transaction Termination, three (3) months for a Tier II Participant
      and six (6) months for a Tier I Participant, and (ii) in the case of a Corporate
      Transaction Termination, six (6) months for a Tier II Participant and nine
      (9)
      months for a Tier I Participant.

     

    (t)  “Substantially
      Equivalent or Comparable Position” is one that offers the
      Participant substantially the same Base Salary; provided, however, that
      a position shall not be considered to be a “Substantially Equivalent or
      Comparable Position” if a resignation of employment by the Participant would
      constitute a Constructive Termination.

     

    
      	
              SECTION
                3.  

            	
              Eligibility
                For Benefits.

            

    

     

    (a)  General
      Rules.  Subject to the limitations set forth in this Section
      3 and Section 5, in the event of a Covered Termination,
      the Company shall provide the severance benefits described in Section 4 to
      each
      affected Participant.  Upon the consummation of a Corporate
      Transaction, the Company shall provide each Participant the benefits described
      in Section 7.  For the avoidance of doubt, a person who is not (and
      was not) a Participant shall not be eligible for benefits pursuant to the Plan
      whether or not such person is (or was) an Eligible Employee.

     

    (b)  Exceptions
      to Benefit Entitlement.  A Participant will not receive
      benefits under the Plan (or will receive reduced benefits under the Plan) in
      the
      following circumstances, as determined by the Plan Administrator in its sole
      discretion:

     

    (i)  The
      Participant has executed an individually negotiated employment contract or
      agreement with the Company relating to severance or change in control benefits
      that is in effect on his or her termination date and which provides benefits
      that the Plan Administrator, in its sole discretion, determines to be of greater
      value than the benefits provided for in this Plan, in which case such
      Participant’s severance benefit, if any, shall be governed by the terms of such
      individually negotiated employment contract or agreement and shall be governed
      by this Plan only to the extent that the reduction pursuant to Section 5(b)
      below does not entirely eliminate benefits under this Plan.

     

    (ii)  The
      Participant is entitled to receive benefits under another severance benefit
      plan
      maintained by the Company (e.g., the iPass Inc. Severance Benefit Plan)
      on his or her termination date and which provides benefits that the Plan
      Administrator, in its sole discretion, determines to be of greater value than
      the benefits provided for in this Plan, in which case such Participant’s
      severance benefit, if any, shall be governed by the terms of such other
      severance benefit plan and shall be governed by this Plan only to the extent
      that the reduction pursuant to Section 5(b) below does not entirely eliminate
      benefits under this Plan.

     

    (iii)  The
      Participant’s employment terminates or is terminated for any reason other than a
      Covered Termination.

     

    (iv)  The
      Participant does not confirm in writing that he or she shall be subject to
      the
      Company’s Employee Proprietary Information and Inventions
      Agreement.

     

    (v)  The
      Participant has failed to execute or has revoked the release described in
      Section 5(a).

     

    (vi)  The
      Participant has failed to return all Company Property.  For this
      purpose, “Company Property” means all paper and
      electronic Company documents (and all copies thereof) created and/or received
      by
      the Participant during his or her period of employment with the Company and
      other Company materials and property which the Participant has in his or her
      possession or control, including, but not limited to, Company files, notes,
      drawings records, plans, forecasts, reports, studies, analyses, proposals,
      agreements, financial information, research and development information, sales
      and marketing information, operational and personnel information,
      specifications, code, software, databases, computer-recorded information,
      tangible property and equipment (including, but not limited to, leased vehicles,
      computers, computer equipment, software programs, facsimile machines, mobile
      telephones, servers), credit and calling cards, entry cards, identification
      badges and keys; and any materials of any kind which contain or embody any
      proprietary or confidential information of the Company (and all reproductions
      thereof in whole or in part).  As a condition to receiving benefits
      under the Plan, Participants must not make or retain copies, reproductions
      or
      summaries of any such Company documents, materials or
      property.  However, a Participant is not required to return his or her
      personal copies of documents evidencing the Participant’s hire, termination,
      compensation, benefits and stock options and any other documentation received
      as
      a shareholder of the Company.

     

    (c)  Termination
      of Benefits.  A Participant’s right to receive benefits under
      this Plan shall terminate immediately if, at any time prior to or during the
      period for which the Participant is receiving benefits hereunder, the
      Participant, without the prior written approval of the Plan
      Administrator:

     

    (i)  willfully
      breaches a material provision of the Company’s Employee Proprietary Information
      and Inventions Agreement;

     

    (ii)  encourages
      or solicits any of the Company’s then current employees to leave the Company’s
      employ for any reason or interferes in any other manner with employment
      relationships at the time existing between the Company and its then current
      employees; or

     

    (iii)  induces
      any of the Company’s then current clients, customers, suppliers, vendors,
      distributors, licensors, licensees or other third party to terminate their
      existing business relationship with the Company or interferes in any other
      manner with any existing business relationship between the Company and any
      then
      current client, customer, supplier, vendor, distributor, licensor, licensee
      or
      other third party.

     

    
      	
              SECTION
                4.  

            	
              Amount
                of Benefits.

            

    

    

    In
      the event of a Participant’s Covered
      Termination, the Participant shall be entitled to receive the benefits provided
      by this Section 4 except as may otherwise be provided in the Participant’s
      Participation Notice.

    

    (a)  Cash
      Severance Benefits.  The Company shall make a cash severance
      payment to the Participant in an amount equal to the product of (i) the
      Participant’s Base Salary, as in effect on the date of a Covered Termination,
      multiplied by (ii) the number of months in the Severance
      Period.   In addition, provided that the Participant received an
      overall performance rating equivalent to or greater than “Meets Expectations” in
      the most recent performance evaluation cycle preceding termination of the
      Participant’s employment, the Company shall make an additional cash severance
      payment to the Participant as follows:  (i) in the case of a Covered
      Termination that is not a Corporate Transaction Termination, in an amount equal
      to one quarter of the Participant’s target bonus amount under the Company’s
      annual bonus plan, and (ii) in the case of a Corporate Transaction
      Termination, in an amount to be determined by the Plan Administrator but no
      greater than the product of (i) one-twelfth (1/12th) of the
      Participant’s target bonus amount under the Company’s annual bonus plan,
      multiplied by (ii) the number of months in the Severance Period.  Such
      severance payments shall be paid in accordance with Section 6.

     

    
      (b)  Health
        Continuation Coverage.

       

    

    (i)  Provided
      that the Participant is eligible for, and has made an election at or timely
      after the Covered Termination pursuant to COBRA under a health, dental, or
      vision plan sponsored by the Company, each such Participant shall be entitled
      to
      payment by the Company of all of the applicable premiums (inclusive of premiums
      for the Participant’s dependents for such health, dental, or vision plan
      coverage as in effect immediately prior to the date of the Covered Termination)
      for such health, dental, or vision plan coverage for a period of months
      following the date of the Covered Termination equal to two times the Severance
      Period, with such coverage counted as coverage pursuant to COBRA.

     

    (ii)  No
      such
      premium payments (or any other payments for health, dental, or vision coverage
      by the Company) shall be made following the Participant’s death or the effective
      date of the Participant’s coverage by a health, dental, or vision insurance plan
      of a subsequent employer.  Each Participant shall be required to
      notify the Plan Administrator immediately if the Participant becomes covered
      by
      a health, dental, or vision insurance plan of a subsequent
      employer.  Upon the conclusion of such period of insurance premium
      payments made by the Company, the Participant will be responsible for the entire
      payment of premiums required under COBRA for the duration of the COBRA
      period.

     

    (iii)  For
      purposes of this Section 4(b), (i) references to COBRA shall be deemed to refer
      also to analogous provisions of state law, and (ii) any applicable insurance
      premiums that are paid by the Company shall not include any amounts payable
      by
      the Participant under an Internal Revenue Code Section 125 health care
      reimbursement plan, which amounts, if any, are the sole responsibility of the
      Participant.

     

    (c)  Option
      Grant and Restricted Stock Vesting Acceleration.  Upon a
      Corporate Transaction Termination, (i) the vesting and exercisability of all
      outstanding options to purchase the Company’s common stock and all restricted
      stock issued pursuant to any equity incentive plan of the Company that are
      held
      by the Participant on such date shall be accelerated in full, and (ii) any
      reacquisition or repurchase rights held by the Company with respect to common
      stock issued or issuable (or with respect to similar rights or other rights
      with
      respect to stock of the Company issued or issuable pursuant to any equity
      incentive plan of the Company) pursuant to any other stock award granted to
      the
      Participant by the Company shall lapse.  Notwithstanding the
      provisions of this Section 4(c), in the event that the provisions of this
      Section 4(c) regarding acceleration of vesting of a stock award would adversely
      affect a Participant’s stock award (including, without limitation, its status as
      an incentive stock option under Section 422 of the Code) that is outstanding
      on
      the date the Participant commences participation in the Plan, such acceleration
      of vesting shall be deemed null and void as to such option or other stock award
      unless the affected Participant consents in writing to such acceleration of
      vesting as to such option or other stock award within thirty (30) days after
      becoming a Participant in the Plan.

     

    (d)  Other
      Employee Benefits.  All other benefits (such as life
      insurance, disability coverage, and 401(k) plan coverage) shall terminate as
      of
      the Participant’s termination date (except to the extent that a conversion
      privilege may be available thereunder).

     

    (e)  Additional
      Benefits.  Notwithstanding the foregoing, the Plan
      Administrator may, in its sole discretion, provide benefits in addition to
      those
      pursuant to Sections 4(a), 4(b), and 4(c) to one or more Participants chosen
      by
      the Plan Administrator, in its sole discretion, and the provision of any such
      benefits to a Participant shall in no way obligate the Company to provide such
      benefits to any other Participant, even if similarly situated.

     

    
      	
              SECTION
                5.  

            	
              Limitations
                on Benefits.

            

    

     

    (a)  Release.  In
      order to be eligible to receive benefits under the Plan, a Participant must
      execute a general waiver and release in substantially the form attached hereto
      as Exhibit A, Exhibit B, or Exhibit
      C, as appropriate, and such release must become effective in accordance
      with its terms; provided, however, no such release shall require the
      Participant to forego any unpaid salary, any accrued but unpaid vacation pay
      or
      any benefits payable pursuant to this Plan.  With respect to any
      outstanding option held by the Participant, no provision set forth in this
      Plan
      granting the Participant additional rights to exercise the option can be
      exercised unless and until the release becomes effective.  Unless a
      Corporate Transaction has occurred, the Plan Administrator, in its sole
      discretion, may modify the form of the required release to comply with
      applicable law and shall determine the form of the required release, which
      may
      be incorporated into a termination agreement or other agreement with the
      Participant.

     

    (b)  Certain
      Reductions.  The Plan Administrator, in its sole discretion,
      shall have the authority to reduce a Participant’s severance benefits, in whole
      or in part, by any other severance benefits, pay in lieu of notice, or other
      similar benefits payable to the Participant by the Company that become payable
      in connection with the Participant’s termination of employment pursuant to
      (i) any applicable legal requirement, including, without limitation, the
      Worker Adjustment and Retraining Notification Act or comparable state law
      (collectively, the “WARN Act”), (ii) a written
      employment or severance agreement with the Company, or (iii) any Company policy
      or practice providing for the Participant to remain on the payroll for a limited
      period of time after being given notice of the termination of the Participant’s
      employment.  The benefits provided under this Plan are intended to
      satisfy, in whole or in part, any and all statutory obligations and other
      contractual obligations of the Company, including benefits provided by offer
      letter or employment agreements, that may arise out of a Participant’s
      termination of employment, and the Plan Administrator shall so construe and
      implement the terms of the Plan.  The Plan Administrator’s decision to
      apply such reductions to the severance benefits of one Participant and the
      amount of such reductions shall in no way obligate the Plan Administrator to
      apply the same reductions in the same amounts to the severance benefits of
      any
      other Participant, even if similarly situated.  In the Plan
      Administrator’s sole discretion, such reductions may be applied on a retroactive
      basis, with severance benefits previously paid being re-characterized as
      payments pursuant to the Company’s statutory or other contractual
      obligations.

     

    (c)  Parachute
      Payments.  Except as otherwise provided in an agreement
      between a Participant and the Company, if any payment or benefit the Participant
      would receive in connection with a Corporate Transaction from the Company or
      otherwise (“Payment”) would (i) constitute a
“parachute payment” within the meaning of Section 280G of the Code,
      and (ii) but
      for this sentence, be subject to the excise tax imposed by Section 4999 of
      the
      Code (the “Excise Tax”), then such Payment shall be
      equal to the Reduced Amount.  The “Reduced Amount” shall be either (x)
      the largest portion of the Payment that would result in no portion of the
      Payment being subject to the Excise Tax, or (y) the largest portion, up to
      and
      including the total, of the Payment, whichever amount, after taking into account
      all applicable federal, state and local employment taxes, income taxes, and
      the
      Excise Tax (all computed at the highest applicable marginal rate), results
      in
      the Participant’s receipt, on an after-tax basis, of the greater amount of the
      Payment notwithstanding that all or some portion of the Payment may be subject
      to the Excise Tax. If a reduction in payments or benefits constituting
“parachute payments” is necessary so that the Payment equals the Reduced Amount,
      reduction shall occur in the following order unless the Participant elects
      in
      writing a different order (provided, however, that such election shall
      be subject to Company approval if made on or after the date on which the event
      that triggers the Payment occurs): (1) reduction of cash payments; (2)
      cancellation of accelerated vesting of equity awards other than stock options;
      (3) cancellation of accelerated vesting of stock options; and (4) reduction
      of
      other benefits paid to a Participant. If acceleration of vesting of compensation
      from a Participant’s equity awards is to be reduced, such acceleration of
      vesting shall be cancelled by first canceling such acceleration for the vesting
      installment that will vest last and continuing by canceling as a first priority
      such acceleration for vesting installments with the latest vesting unless the
      Participant elects in writing a different order for cancellation prior to any
      Corporate Transaction.

     

    (d)  Mitigation.  Except
      as otherwise specifically provided herein, a Participant shall not be required
      to mitigate damages or the amount of any payment provided under this Plan by
      seeking other employment or otherwise, nor shall the amount of any payment
      provided for under this Plan be reduced by any compensation earned by a
      Participant as a result of employment by another employer or any retirement
      benefits received by such Participant after the date of the Participant’s
      termination of employment with the Company, except for health continuation
      coverage provided pursuant to Section 4(b).

     

    (e)  Non-Duplication
      of Benefits.  Except as otherwise specifically provided for
      herein, no Participant is eligible to receive benefits under this Plan or
      pursuant to other contractual obligations more than one time.  This
      Plan is designed to provide certain severance pay and change in control benefits
      to Participants pursuant to the terms and conditions set forth in this
      Plan.  The payments pursuant to this Plan are in addition to, and not
      in lieu of, any unpaid salary, bonuses or benefits to which a Participant may
      be
      entitled for the period ending with the Participant’s Covered
      Termination.

     

    
      	
              SECTION
                6.  

            	
              Time
                of Payment and Form Of
                Benefits.

            

    

     

    (a)  General
      Rules.  Except as otherwise set forth in this Plan, the cash
      severance benefits under Section 4(a) of the Plan, if any, shall be paid in
      a
      single lump sum payment on the first payroll date following the Participant’s
      Covered Termination.  In no event shall payment of any Plan benefit
      set forth in Section 4 be made prior to the effective date of the release
      described in Section 5(a).  For the avoidance of doubt, in the event
      of an acceleration of the exercisability of an option (or other award) pursuant
      to Section 4(c), such option (or other award) shall not be exercisable with
      respect to such acceleration of exercisability unless and until the effective
      date of the release described in Section 5(a).

     

    (b)  Application
      of Section 409A.  Any cash severance payment provided under
      Section 4(a) and any additional benefits provided under Section 4(e) shall
      be
      paid no later than the later of: (i) December 31st of the calendar year in
      which
      the Covered Termination occurs, or (ii) the fifteenth (15th) day of the third
      calendar month following the date of the Covered Termination.  It is
      the intention of the preceding sentence to apply the “short-term deferral” rule
      set forth in Treasury Regulation Section 1.409A-1(b)(4) to such
      payments.

     

    (c)  Withholding.  All
      payments under the Plan will be subject to all applicable withholding
      obligations of the Company, including, without limitation, obligations to
      withhold for federal, state and local income and employment taxes.

     

    (d)  Indebtedness
      of Participants.  If a Participant is indebted to the Company
      on the effective date of his or her Covered Termination, the Plan Administrator
      reserves the right to offset any severance payments under the Plan by the amount
      of such indebtedness.

     

    
      	
              SECTION
                7.  

            	
              Corporate
                Transaction Benefits

            

    

     

    Immediately
      upon the consummation of a Corporate Transaction, any specified performance
      target or vesting condition determined by reference to the operations of the
      Company or an Affiliate in any restricted stock award issued to a Participant
      pursuant to any equity incentive plan of the Company shall immediately be deemed
      satisfied.  Accordingly, such performance targets or conditions need
      not be satisfied following the Corporate Transaction in order for the
      Participant to remain eligible to vest in such restricted
      stock.  However, any requirement specified in such restricted stock
      award that such Participant continue to render services for the Company or
      an
      Affiliate following the Corporate Transaction shall remain in effect, and the
      Participant shall not vest in such restricted stock unless and until such
      post-Corporate Transaction service requirement has been satisfied.

     

    
      	
              SECTION
                8.  

            	
              Reemployment.

            

    

     

    In
      the
      event of a Participant’s reemployment by the Company during the period of time
      in respect of which severance benefits pursuant to Section 4(a), 4(b), 4(c)
      or
      4(e) have been paid, the Plan Administrator, in its sole and absolute
      discretion, may require such Participant to repay to the Company all or a
      portion of such severance benefits as a condition of reemployment.

     

    
      	
              SECTION
                9.  

            	
              Right
                To Interpret Plan; Amendment and
                Termination.

            

    

     

    (a)  Exclusive
      Discretion.  The Plan Administrator shall have the exclusive
      discretion and authority to establish rules, forms, and procedures for the
      administration of the Plan, and to construe and interpret the Plan and to decide
      any and all questions of fact, interpretation, definition, computation or
      administration arising in connection with the operation of the Plan, including,
      but not limited to, the eligibility to participate in the Plan and amount of
      benefits paid under the Plan.  The rules, interpretations,
      computations and other actions of the Plan Administrator shall be binding and
      conclusive on all persons.

     

    (b)  Amendment
      or Termination.  The Company reserves the right to amend or
      terminate this Plan, any Participation Notice issued pursuant to the Plan
      (including but not limited to changing the designation of any Participant as
      a
      Tier I Participant or a Tier II Participant), or the benefits provided hereunder
      at any time; provided, however, that no such amendment or termination
      shall occur following a Corporate Transaction or a Covered Termination as to
      any
      Participant who would be adversely affected by such amendment or termination
      unless such Participant consents in writing to such amendment or
      termination.  Any action amending or terminating the Plan or any
      Participation Notice shall be in writing and executed by a duly authorized
      officer of the Company.

     

    
      	
              SECTION
                10.  

            	
              No
                Implied Employment
                Contract.

            

    

     

    The
      Plan
      shall not be deemed (i) to give any employee or other person any right to
      be retained in the employ of the Company, or (ii) to interfere with the
      right of the Company to discharge any employee or other person at any time,
      with
      or without cause, and with or without advance notice, which right is hereby
      reserved.

     

    
      	
              SECTION
                11.  

            	
              Legal
                Construction.

            

    

     

    This
      Plan
      is intended to be governed by and shall be construed in accordance with ERISA
      and, to the extent not preempted by ERISA, the laws of the State of
      California.

     

    
      	
              SECTION
                12.  

            	
              Claims,
                Inquiries And Appeals.

            

    

     

    (a)  Applications
      for Benefits and Inquiries.  Any application for benefits,
      inquiries about the Plan or inquiries about present or future rights under
      the
      Plan must be submitted to the Plan Administrator in writing by an applicant
      (or
      his or her authorized representative).  The Plan Administrator is set
      forth in Section 14(d).

     

    (b)  Denial
      of Claims.  In the event that any application for benefits is
      denied in whole or in part, the Plan Administrator must provide the applicant
      with written or electronic notice of the denial of the application, and of
      the
      applicant’s right to review the denial.  Any electronic notice will
      comply with the regulations of the U.S. Department of Labor.  The
      notice of denial will be set forth in a manner designed to be understood by
      the
      applicant and will include the following:

     

    (i)  the
      specific reason or reasons for the denial;

     

    (ii)  references
      to the specific Plan provisions upon which the denial is based;

     

    (iii)  a
      description of any additional information or material that the Plan
      Administrator needs to complete the review and an explanation of why such
      information or material is necessary; and

     

    (iv)  an
      explanation of the Plan’s review procedures and the time limits applicable to
      such procedures, including a statement of the applicant’s right to bring a civil
      action under Section 502(a) of ERISA following a denial on review of the claim,
      as described in Section 12(d) below.

     

    This
      notice of denial will be given to the applicant within ninety (90) days after
      the Plan Administrator receives the application, unless special circumstances
      require an extension of time, in which case, the Plan Administrator has up
      to an
      additional ninety (90) days for processing the application.  If an
      extension of time for processing is required, written notice of the extension
      will be furnished to the applicant before the end of the initial ninety (90)
      day
      period.

     

    This
      notice of extension will describe the special circumstances necessitating the
      additional time and the date by which the Plan Administrator is to render its
      decision on the application.

     

    (c)  Request
      for a Review.  Any person (or that person’s authorized
      representative) for whom an application for benefits is denied, in whole or
      in
      part, may appeal the denial by submitting a request for a review to the Plan
      Administrator within sixty (60) days after the application is
      denied.  A request for a review shall be in writing and shall be
      addressed to:

     

    iPass
      Inc.

    Attn:
      Vice President of Human Resources

    3800
      Bridge Parkway

    Redwood
      Shares, CA 94065

     

    A
      request for review must set forth all
      of the grounds on which it is based, all facts in support of the request and
      any
      other matters that the applicant feels are pertinent.  The applicant
      (or his or her representative) shall have the opportunity to submit (or the
      Plan
      Administrator may require the applicant to submit) written comments, documents,
      records, and other information relating to his or her claim.  The
      applicant (or his or her representative) shall be provided, upon request and
      free of charge, reasonable access to, and copies of, all documents, records
      and
      other information relevant to his or her claim.  The review shall take
      into account all comments, documents, records and other information submitted
      by
      the applicant (or his or her representative) relating to the claim, without
      regard to whether such information was submitted or considered in the initial
      benefit determination.

     

    (d)  Decision
      on Review.  The Plan Administrator will act on each request
      for review within sixty (60) days after receipt of the request, unless special
      circumstances require an extension of time (not to exceed an additional sixty
      (60) days), for processing the request for a review.  If an extension
      for review is required, written notice of the extension will be furnished to
      the
      applicant within the initial sixty (60) day period.  This notice of
      extension will describe the special circumstances necessitating the additional
      time and the date by which the Plan Administrator is to render its decision
      on
      the review.  The Plan Administrator will give prompt, written or
      electronic notice of its decision to the applicant. Any electronic notice will
      comply with the regulations of the U.S. Department of Labor.  In the
      event that the Plan Administrator confirms the denial of the application for
      benefits in whole or in part, the notice will set forth, in a manner calculated
      to be understood by the applicant, the following:

     

    (i)  the
      specific reason or reasons for the denial;

     

    (ii)  references
      to the specific Plan provisions upon which the denial is based;

     

    (iii)  a
      statement that the applicant is entitled to receive, upon request and free
      of
      charge, reasonable access to, and copies of, all documents, records and other
      information relevant to his or her claim; and

     

    (iv)  a
      statement of the applicant’s right to bring a civil action under Section 502(a)
      of ERISA.

     

    (e)           Rules
      and Procedures.  The Plan Administrator will establish rules
      and procedures, consistent with the Plan and with ERISA, as necessary and
      appropriate in carrying out its responsibilities in reviewing benefit
      claims.  The Plan Administrator may require an applicant who wishes to
      submit additional information in connection with an appeal from the denial
      of
      benefits to do so at the applicant’s own expense.

     

    (f)           Exhaustion
      of Remedies.  No legal action for benefits under the Plan may
      be brought until the applicant (i) has submitted a written application for
      benefits in accordance with the procedures described by Section 12(a) above,
      (ii) has been notified by the Plan Administrator that the application is
      denied, (iii) has filed a written request for a review of the application
      in accordance with the appeal procedure described in Section 12(c) above, and
      (iv) has been notified that the Plan Administrator has denied the
      appeal.  Notwithstanding the foregoing, if the Plan Administrator does
      not respond to an applicant’s claim or appeal within the relevant time limits
      specified in this Section 12, the applicant may bring legal action for benefits
      under the Plan pursuant to Section 502(a) of ERISA.

     

    
      	
              SECTION
                13.  

            	
              Basis
                Of Payments To And From
                Plan.

            

    

     

    The
      Plan
      shall be unfunded, and all benefits hereunder shall be paid only from the
      general assets of the Company.

     

    
      	
              SECTION
                14.  

            	
              Other
                Plan Information.

            

    

     

    (a)  Employer
      and Plan Identification Numbers.  The Employer Identification
      Number assigned to the Company (which is the “Plan Sponsor” as that term is used
      in ERISA) by the Internal Revenue Service is 93-1214598.  The Plan
      Number assigned to the Plan by the Plan Sponsor pursuant to the instructions
      of
      the Internal Revenue Service is 503.

     

    (b)  Ending
      Date for Plan’s Fiscal Year.  The date of the end of the
      fiscal year for the purpose of maintaining the Plan’s records is December
      31.

     

    (c)  Agent
      for the Service of Legal Process.  The agent for the service
      of legal process with respect to the Plan is:

     

    iPass
      Inc.

    Attn:
      General Counsel

    3800
      Bridge Parkway

    Redwood
      Shares, CA 94065

     

    (d)  Plan
      Sponsor and Administrator.  The “Plan Sponsor” of the Plan
      is:

     

    iPass
      Inc.

    Attn:
      Vice President of Human Resources

    3800
      Bridge Parkway

    Redwood
      Shares, CA 94065

     

    The
“Plan
      Administrator” of the Plan is as set forth in Section 2(r).  The Plan
      Sponsor’s and Plan Administrator’s telephone number is (650)
      232-4100.  The Plan Administrator is the named fiduciary charged with
      the responsibility for administering the Plan.

     

    
      	
              SECTION
                15.  

            	
              Statement
                Of ERISA Rights.

            

    

     

    Participants
      in this Plan (which is a welfare benefit plan sponsored by iPass Inc.) are
      entitled to certain rights and protections under ERISA.  If you are a
      Participant, you are considered a participant in the Plan for the purposes
      of
      this Section 15 and, under ERISA, you are entitled to:

     

    
      (a)  Receive
        Information About Your Plan and
        Benefits. 

    

     

    (i)  Examine,
      without charge, at the Plan Administrator’s office and at other specified
      locations, such as worksites, all documents governing the Plan and a copy of
      the
      latest annual report (Form 5500 Series), if applicable, filed by the Plan with
      the U.S. Department of Labor and available at the Public Disclosure Room of
      the
      Employee Benefits Security Administration;

     

    (ii)  Obtain,
      upon written request to the Plan Administrator, copies of documents governing
      the operation of the Plan and copies of the latest annual report (Form 5500
      Series), if applicable, and an updated (as necessary) Summary Plan
      Description.  The Administrator may make a reasonable charge for the
      copies; and

     

    (iii)  Receive
      a
      summary of the Plan’s annual financial report, if applicable.  The
      Plan Administrator is required by law to furnish each participant with a copy
      of
      this summary annual report.

     

    (b)  Prudent
      Actions By Plan Fiduciaries.  In addition to creating rights
      for Plan participants, ERISA imposes duties upon the people who are responsible
      for the operation of the employee benefit plan.  The people who
      operate the Plan, called “fiduciaries” of the Plan, have a duty to do so
      prudently and in the interest of you and other Plan participants and
      beneficiaries.  No one, including your employer, your union or any
      other person, may fire you or otherwise discriminate against you in any way
      to
      prevent you from obtaining a Plan benefit or exercising your rights under
      ERISA.

     

    
      (c)  Enforce
        Your Rights. 

    

     

    (i)  If
      your
      claim for a Plan benefit is denied or ignored, in whole or in part, you have
      a
      right to know why this was done, to obtain copies of documents relating to
      the
      decision without charge, and to appeal any denial, all within certain time
      schedules.

     

    (ii)  Under
      ERISA, there are steps you can take to enforce the above rights.  For
      instance, if you request a copy of Plan documents or the latest annual report
      from the Plan, if applicable, and do not receive them within 30 days, you may
      file suit in a Federal court.  In such a case, the court may require
      the Plan Administrator to provide the materials and pay you up to $110 a day
      until you receive the materials, unless the materials were not sent because
      of
      reasons beyond the control of the Plan Administrator.

     

    (iii)  If
      you
      have a claim for benefits which is denied or ignored, in whole or in part,
      you
      may file suit in a state or Federal court.

     

    (iv)  If
      you
      are discriminated against for asserting your rights, you may seek assistance
      from the U.S. Department of Labor, or you may file suit in a Federal
      court.  The court will decide who should pay court costs and legal
      fees.  If you are successful, the court may order the person you have
      sued to pay these costs and fees.  If you lose, the court may order
      you to pay these costs and fees, for example, if it finds your claim is
      frivolous.

     

    (d)  Assistance
      With Your Questions.  If you have any questions about the
      Plan, you should contact the Plan Administrator.  If you have any
      questions about this statement or about your rights under ERISA, or if you
      need
      assistance in obtaining documents from the Plan Administrator, you should
      contact the nearest office of the Employee Benefits Security Administration,
      U.S. Department of Labor, listed in your telephone directory or the Division
      of
      Technical Assistance and Inquiries, Employee Benefits Security Administration,
      U.S. Department of Labor, 200 Constitution Avenue N.W., Washington, D.C.
      20210.  You may also obtain certain publications about your rights and
      responsibilities under ERISA by calling the publications hotline of the Employee
      Benefits Security Administration.

     

    
      	
              SECTION
                16.  

            	
              General
                Provisions.

            

    

     

    (a)  Notices.  Any
      notice, demand or request required or permitted to be given by either the
      Company or a Participant pursuant to the terms of this Plan shall be in writing
      and shall be deemed given when delivered personally or deposited in the U.S.
      mail, First Class with postage prepaid, and addressed to the parties, in the
      case of the Company, at the address set forth in Section 14(d) and, in the
      case
      of a Participant, at the address as set forth in the Company’s employment file
      maintained for the Participant as previously furnished by the Participant or
      such other address as a party may request by notifying the other in
      writing.

     

    (b)  Transfer
      and Assignment.  The rights and obligations of a Participant
      under this Plan may not be transferred or assigned without the prior written
      consent of the Company.  This Plan shall be binding upon any surviving
      entity resulting from a Corporate Transaction and upon any other person who
      is a
      successor by merger, acquisition, consolidation or otherwise to the business
      formerly carried on by the Company without regard to whether or not such person
      or entity actively assumes the obligations hereunder.

     

    (c)  Waiver.  Any
      Party’s failure to enforce any provision or provisions of this Plan shall not in
      any way be construed as a waiver of any such provision or provisions, nor
      prevent any Party from thereafter enforcing each and every other provision
      of
      this Plan.  The rights granted the Parties herein are cumulative and
      shall not constitute a waiver of any Party’s right to assert all other legal
      remedies available to it under the circumstances.

     

    (d)  Severability.  Should
      any provision of this Plan be declared or determined to be invalid, illegal
      or
      unenforceable, the validity, legality and enforceability of the remaining
      provisions shall not in any way be affected or impaired.

     

    (e)  Section
      Headings.  Section headings in this Plan are included for
      convenience of reference only and shall not be considered part of this Plan
      for
      any other purpose.

     

    
      	
              SECTION
                17.  

            	
              Execution.

            

    

     

    To
      record
      the adoption of the Plan as set forth herein, iPass Inc. has caused its duly
      authorized officer to execute the same as of the Effective Date.

     

    
      	 	iPass
              Inc.	 
	 	 	 	 
	
               

            	
              By:
                

            	 	 
	 	 	 	 
	 	Title: 	 	 
	 	 	 	 

    

    

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    ANNEX
      I

    

    IPASS
      INC. EXECUTIVE CORPORATE TRANSACTION AND SEVERANCE BENEFIT
      PLAN

     

    PARTICIPATION
      NOTICE

     

    

     

    

      
        	
                To:

              	 
	
                 

                Date:

              	 

      

       

    

    iPass
      Inc. (the “Company”) has adopted the iPass Inc.
      Executive Corporate Transaction and Severance Benefit Plan (the
“Plan”).  The Company is providing you with
      this Participation Notice to inform you that you have been designated as a
      Participant in the Plan.  You are designated as a [Tier I
      Participant] [Tier II Participant].

     

    A
      copy of
      the Plan document is attached to this Participation Notice. The terms and
      conditions of your participation in the Plan are as set forth in the Plan and
      this Participation Notice, which together also constitute a summary plan
      description of the Plan.

     

    [The
      Plan supersedes any and all severance or change in control benefits payable
      to
      you as set forth in any agreement, including offer letters, with the Company
      entered into prior to the date hereof.]

     

    Notwithstanding
      the terms of the Plan:

     

    ____________________________________________________________________

     

    ____________________________________________________________________

     

    

     

    Please
      return to [____] a copy of this Participation Notice signed by you and retain
      a
      copy of this Participation Notice, along with the Plan document, for your
      records.

    
       

      
        	 	iPass
                Inc.	 
	 	 	 	 
	
                 

              	
                By:
                  

              	 	 
	 	 	 	 
	 	Its:	 	 
	 	 	 	 

      

      

    

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    ACKNOWLEDGEMENT

     

    The
      undersigned Participant hereby acknowledges receipt of the foregoing
      Participation Notice.  In the event the undersigned holds outstanding
      stock options or restricted stock as of the date of this Participation Notice,
      the undersigned hereby:*

    

      
        	
                 ̈  

              	
                accepts
                  all of the benefits of Sections 4(c) and 7 of the Plan regardless
                  of any
                  potential adverse effects on any outstanding option, restricted
                  stock or
                  other stock award

              

      

      
        	
                 ̈  

              	
                accepts
                  the benefits of Section 4(c) and 7 of the Plan that have no adverse
                  effect
                  on outstanding options, restricted stock or other stock awards
                  and rejects
                  the benefits of Section 4(c) and 7 of the Plan as to those outstanding
                  options, restricted stock and other stock awards that would have
                  potential
                  adverse effects

              

      

      
        	
                 ̈  

              	
                other
                  (please describe):
                  ____________________________________________

                __________________________________________________________________

                __________________________________________________________________

                __________________________________________________________________

                __________________________________________________________________

              

      

The
      undersigned acknowledges that the undersigned has been advised to obtain tax
      and
      financial advice regarding the consequences of this election including the
      effect, if any, on the status of the stock options or restricted stock for
      tax
      purposes under Sections 409A and 422 of the Internal Revenue
      Code.

     

    
      
        	 
	 
	 
	
                Print
                  name

              

      

*  Please
      check one box; failure to check a box will be deemed the selection of the second
      alternative (i.e., accepting the benefits of Sections 4(c) and 7 of the
      Plan that have no adverse effect on outstanding options, restricted stock or
      other stock awards and rejecting the benefits of Sections 4(c) and 7 of the
      Plan
      as to those outstanding options, restricted stock and other stock awards that
      would have potential adverse effects).

     

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

                

                    For
              Employees Age 40 or
              Older      
      

                    Individual
              Termination      
    

        

      

    

    

    Exhibit
      A

     

    RELEASE
      AGREEMENT

     

    I
      understand and agree completely to the terms set forth in the iPass
      Inc.  Executive Corporate Transaction and Severance Benefit Plan (the
“Plan”).

     

    I
      understand that this Release, together with the Plan, constitutes the complete,
      final and exclusive embodiment of the entire agreement between the Company
      and
      me with regard to the subject matter hereof.  I am not relying on any
      promise or representation by the Company that is not expressly stated
      therein.  Certain capitalized terms used in this Release are defined
      in the Plan.

     

    I
      hereby
      confirm my obligations under the Company’s Employee Proprietary Information and
      Inventions Agreement.

     

    Except
      as
      otherwise set forth in this Release, I hereby generally and completely release
      iPass Inc. and its current and former directors, officers, employees,
      shareholders, partners, agents, attorneys, predecessors, successors, parent
      and
      subsidiary entities, insurers, affiliates, and assigns (collectively, the
“Released Parties”) from any and all claims,
      liabilities and obligations, both known and unknown, that arise out of or are
      in
      any way related to events, acts, conduct, or omissions occurring prior to my
      signing this Agreement (collectively, the “Released
      Claims”).  The Released Claims include, but are not
      limited to:  (1) all claims arising out of or in any way related
      to my employment with the Company, or the termination of that employment;
      (2) all claims related to my compensation or benefits from the Company,
      including salary, bonuses, commissions, vacation pay, expense reimbursements,
      severance pay, fringe benefits, stock, stock options, or any other ownership
      interests in the Company; (3) all claims for breach of contract, wrongful
      termination, and breach of the implied covenant of good faith and fair dealing;
      (4) all tort claims, including claims for fraud, defamation, emotional
      distress, and discharge in violation of public policy; and (5) all federal,
      state, and local statutory claims, including claims for discrimination,
      harassment, retaliation, attorneys’ fees, or other claims arising under the
      federal Civil Rights Act of 1964 (as amended), the federal Americans with
      Disabilities Act of 1990, the federal Age Discrimination in Employment Act
      of
      1967 (as amended) (“ADEA”), and the California Fair
      Employment and Housing Act (as amended).  Notwithstanding the
      foregoing, the following are not included in the Released Claims (the
“Excluded Claims”): (1) any rights or claims for
      indemnification I may have pursuant to any written indemnification agreement
      with the Company to which I am a party, the charter, bylaws, or operating
      agreements of the Company, or under applicable law;  or (2) any
      rights which are not waivable as a matter of law.  In addition,
      nothing in this Release prevents me from filing, cooperating with, or
      participating in any proceeding before the Equal Employment Opportunity
      Commission, the Department of Labor, or the California Department of Fair
      Employment and Housing, except that I hereby waive my right to any monetary
      benefits in connection with any such claim, charge or proceeding.  I
      hereby represent and warrant that, other than the Excluded Claims, I am not
      aware of any claims I have or might have against any of the Released Parties
      that are not included in the Released Claims.

     

    I
      acknowledge that I am knowingly and voluntarily waiving and releasing any rights
      I may have under the ADEA.  I also acknowledge that the consideration
      given for the Released Claims is in addition to anything of value to which
      I was
      already entitled.  I further acknowledge that I have been advised by
      this writing, as required by the ADEA, that: (a) the Released Claims do not
      apply to any rights or claims that arise after the date I sign this Release;
      (b)
      I should consult with an attorney prior to signing this Release (although I
      may
      choose voluntarily not to do so); (c) I have twenty-one (21) days to consider
      this Release (although I may choose to voluntarily to sign it sooner); (d)
      I
      have seven (7) days following the date I sign this Release to revoke the Release
      by providing written notice to an officer of the Company; and (e) the Release
      will not be effective until the date upon which the revocation period has
      expired unexercised, which will be the eighth day after I sign this Release
      (“Effective Date”).

     

    I
      acknowledge that I have read and understand Section 1542 of the California
      Civil
      Code which reads as follows: “A general release does not extend to
      claims which the creditor does not know or suspect to exist in his or her favor
      at the time of executing the release, which if known by him or her must have
      materially affected his or her settlement with the
      debtor.”  I hereby expressly waive and relinquish all rights
      and benefits under that section and any law of any jurisdiction of similar
      effect with respect to my release of any claims hereunder.

     

    I
      hereby
      represent that I have been paid all compensation owed and for all hours worked,
      I have received all the leave and leave benefits and protections for which
      I am
      eligible, and I have not suffered any on-the-job injury for which I have not
      already filed a workers’ compensation claim.

     

    I
      acknowledge that to become effective, I must sign and return this Release to
      the
      Company so that it is received not later than twenty-one (21) days following
      the
      date it is provided to me, and I must not revoke it thereafter.

     

    
      
        
          
            	
                    Employee

                     

                  	 
	
                    Name:

                  	
                     

                  
	
                     

                    Date:

                  	 

          

           

        

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

                

                    For
              Employees Age 40 or
              Older      
      

                    Group
              Termination      
    

        

      

      Exhibit
        B

       

      RELEASE
        AGREEMENT

       

      I
        understand and agree completely to the terms set forth in the iPass Inc.
        Executive Corporate Transaction and Severance Benefit Plan (the
“Plan”).

       

      I
        understand that this Release, together with the Plan, constitutes the complete,
        final and exclusive embodiment of the entire agreement between the Company
        and
        me with regard to the subject matter hereof.  I am not relying on any
        promise or representation by the Company that is not expressly stated
        therein.  Certain capitalized terms used in this Release are defined
        in the Plan.

       

      I
        hereby
        confirm my obligations under the Company’s Employee Proprietary Information and
        Inventions Agreement.

       

      Except
        as
        otherwise set forth in this Release, I hereby generally and completely release
        iPass Inc. and its current and former directors, officers, employees,
        shareholders, partners, agents, attorneys, predecessors, successors, parent
        and
        subsidiary entities, insurers, affiliates, and assigns (collectively, the
        “Released Parties”) from any and all claims,
        liabilities and obligations, both known and unknown, that arise out of or
        are in
        any way related to events, acts, conduct, or omissions occurring prior to
        my
        signing this Agreement (collectively, the “Released
        Claims”).  The Released Claims include, but are not
        limited to:  (1) all claims arising out of or in any way related
        to my employment with the Company, or the termination of that employment;
        (2) all claims related to my compensation or benefits from the Company,
        including salary, bonuses, commissions, vacation pay, expense reimbursements,
        severance pay, fringe benefits, stock, stock options, or any other ownership
        interests in the Company; (3) all claims for breach of contract, wrongful
        termination, and breach of the implied covenant of good faith and fair dealing;
        (4) all tort claims, including claims for fraud, defamation, emotional
        distress, and discharge in violation of public policy; and (5) all federal,
        state, and local statutory claims, including claims for discrimination,
        harassment, retaliation, attorneys’ fees, or other claims arising under the
        federal Civil Rights Act of 1964 (as amended), the federal Americans with
        Disabilities Act of 1990, the federal Age Discrimination in Employment Act
        of
        1967 (as amended) (“ADEA”), and the California Fair
        Employment and Housing Act (as amended).  Notwithstanding the
        foregoing, the following are not included in the Released Claims (the
“Excluded Claims”): (1) any rights or claims for
        indemnification I may have pursuant to any written indemnification agreement
        with the Company to which I am a party, the charter, bylaws, or operating
        agreements of the Company, or under applicable law;  or (2) any
        rights which are not waivable as a matter of law.  In addition,
        nothing in this Release prevents me from filing, cooperating with, or
        participating in any proceeding before the Equal Employment Opportunity
        Commission, the Department of Labor, or the California Department of Fair
        Employment and Housing, except that I hereby waive my right to any monetary
        benefits in connection with any such claim, charge or proceeding.  I
        hereby represent and warrant that, other than the Excluded Claims, I am not
        aware of any claims I have or might have against any of the Released Parties
        that are not included in the Released Claims.

       

      I
        acknowledge that I am knowingly and voluntarily waiving and releasing any
        rights
        I may have under the ADEA.  I also acknowledge that the consideration
        given for the Released Claims is in addition to anything of value to which
        I was
        already entitled.  I further acknowledge that I have been advised by
        this writing, as required by the ADEA, that: (a) the Released Claims do not
        apply to any rights or claims that arise after the date I sign this Release;
        (b)
        I should consult with an attorney prior to signing this Release (although
        I may
        choose voluntarily not to do so); (c) I have forty-five (45) days to consider
        this Release (although I may choose to voluntarily to sign it sooner); (d)
        I
        have seven (7) days following the date I sign this Release to revoke the
        Release
        by providing written notice to an officer of the Company; and (e) the Release
        will not be effective until the date upon which the revocation period has
        expired unexercised, which will be the eighth day after I sign this Release
        (“Effective Date”).

       

      I
        have
        received with this Release all of the information required by the ADEA,
        including without limitation a detailed list of the job titles and ages of
        all
        employees who were terminated in this group termination and the ages of all
        employees of the Company in the same job classification or organizational
        unit
        who were not terminated, along with information on the eligibility factors
        used
        to select employees for the group termination and any time limits applicable
        to
        this group termination program.

       

      I
        acknowledge that I have read and understand Section 1542 of the California
        Civil
        Code which reads as follows: “A general release does not extend to
        claims which the creditor does not know or suspect to exist in his or her
        favor
        at the time of executing the release, which if known by him or her must have
        materially affected his or her settlement with the
        debtor.”  I hereby expressly waive and relinquish all rights
        and benefits under that section and any law of any jurisdiction of similar
        effect with respect to my release of any claims hereunder.

       

      I
        hereby
        represent that I have been paid all compensation owed and for all hours worked,
        I have received all the leave and leave benefits and protections for which
        I am
        eligible, and I have not suffered any on-the-job injury for which I have
        not
        already filed a workers’ compensation claim.

       

      I
        acknowledge that to become effective, I must sign and return this Release
        to the
        Company so that it is received not later than forty-five (45) days following
        the
        date it is provided to me, and I must not revoke it thereafter.

       

      
        	
                Employee

                 

              	 
	
                Name:

              	
                 

              
	
                 

                Date:

              	 

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

                

                    For
              Employees Under Age
              40      
      

                    Individual
              and Group
              Termination      
    

        

      

      Exhibit
        C

       

      RELEASE
        AGREEMENT

       

      I
        understand and agree completely to the terms set forth in the iPass Inc.
        Executive Corporate Transaction and Severance Benefit Plan (the
“Plan”).

       

      I
        understand that this Release, together with the Plan, constitutes the complete,
        final and exclusive embodiment of the entire agreement between the Company
        and
        me with regard to the subject matter hereof.  I am not relying on any
        promise or representation by the Company that is not expressly stated
        therein.  Certain capitalized terms used in this Release are defined
        in the Plan.

       

      I
        hereby
        confirm my obligations under the Company’s Employee Proprietary Information and
        Inventions Agreement.

       

      Except
        as
        otherwise set forth in this Release, I hereby generally and completely release
        iPass Inc. and its current and former directors, officers, employees,
        shareholders, partners, agents, attorneys, predecessors, successors, parent
        and
        subsidiary entities, insurers, affiliates, and assigns (collectively, the
        “Released Parties”) from any and all claims,
        liabilities and obligations, both known and unknown, that arise out of or
        are in
        any way related to events, acts, conduct, or omissions occurring prior to
        my
        signing this Agreement (collectively, the “Released
        Claims”).  The Released Claims include, but are not
        limited to:  (1) all claims arising out of or in any way related
        to my employment with the Company, or the termination of that employment;
        (2) all claims related to my compensation or benefits from the Company,
        including salary, bonuses, commissions, vacation pay, expense reimbursements,
        severance pay, fringe benefits, stock, stock options, or any other ownership
        interests in the Company; (3) all claims for breach of contract, wrongful
        termination, and breach of the implied covenant of good faith and fair dealing;
        (4) all tort claims, including claims for fraud, defamation, emotional
        distress, and discharge in violation of public policy; and (5) all federal,
        state, and local statutory claims, including claims for discrimination,
        harassment, retaliation, attorneys’ fees, or other claims arising under the
        federal Civil Rights Act of 1964 (as amended), the federal Americans with
        Disabilities Act of 1990, and the California Fair Employment and Housing
        Act (as
        amended).  Notwithstanding the foregoing, the following are not
        included in the Released Claims (the “Excluded
        Claims”): (1) any rights or claims for indemnification I may
        have pursuant to any written indemnification agreement with the Company to
        which
        I am a party, the charter, bylaws, or operating agreements of the Company,
        or
        under applicable law;  or (2) any rights which are not waivable
        as a matter of law.  In addition, nothing in this Release prevents me
        from filing, cooperating with, or participating in any proceeding before
        the
        Equal Employment Opportunity Commission, the Department of Labor, or the
        California Department of Fair Employment and Housing, except that I hereby
        waive
        my right to any monetary benefits in connection with any such claim, charge
        or
        proceeding.  I hereby represent and warrant that, other than the
        Excluded Claims, I am not aware of any claims I have or might have against
        any
        of the Released Parties that are not included in the Released
        Claims.

       

      I
        acknowledge that I have read and
        understand Section 1542 of the California Civil Code which reads as follows:
        “A general release does not extend to claims which the creditor does
        not
        know or suspect to exist in his or her favor at the time of executing the
        release, which if known by him or her must have materially affected his or
        her
        settlement with the debtor.”  I hereby expressly waive and
        relinquish all rights and benefits under that section and any law of any
        jurisdiction of similar effect with respect to my release of any claims
        hereunder.

       

      I
        hereby represent that I have been
        paid all compensation owed and for all hours worked, I have received all
        the
        leave and leave benefits and protections for which I am eligible, and I have
        not
        suffered any on-the-job injury for which I have not already filed a workers’
compensation claim.

       

      I
        acknowledge that to become effective, I must sign and return this Release
        to the
        Company so that it is received not later than fourteen (14) days following
        the
        date it is provided to me.

       

      
        	
                Employee

                 

              	 
	
                Name:

              	
                 

              
	
                 

                Date:Filed by Automated Filing Services Inc. (604) 609-0244 - South Sea Energy Corporation - Exhibit 10.3

LEASE AGREEMENT 

THE STATE OF TEXAS § 
COUNTY OF HARRIS 

THIS LEASE AGREEMENT made the 16, day of July, 2007 between
Westfalia, a Texas Limited Partnership, herein called “Landlord” and South Sea
Energy Corporation, a Canadian Corporation. herein called "Tenant." 

WITNESSETH 

ARTICLE I PREMISES 

Landlord LEASES, DEMISES and LETS to Tenant and Tenant leases
from Landlord certain office space (the “Premises”) located at 3403 Marquart
Street, Room ___ Houston, Harris County, Texas 77027 (“the Building”) Such space
is located on the 1st floor of the building and is shown on the floor plan
attached Exhibit "A-. This Lease is made on and subject to all of the provisions
terms. covenants and conditions set out below. 

This lease is conditioned on the faithful performance of all
the following agreements, covenants, rules and regulations, herein set out and
agreed to by Tenant. 

ARTICLE II TERM OF LEASE 

Basic Rent: $1267.20 total base rent consideration for a six
(6) month term. Rent to he paid in monthly installments as follows: 

	7/03/07 	 
	7/01/07 	to 7/31/07 $ 204.16 
	  	 
	  	to 12/30/07 $211.20 each month

Permitted Use: General Office. 
Expense Stop: Basic Costs
per square foot of the Building in calendar year 2004. 
Rentable Area of the
Premises 128 square feet. 

Security Deposit: $ 211.20 

Notice Address for Landlord: 
3403 Marquart 
Houston, TX
77027

Notice Address for Tenant: 
3403 Marquart. Room 10 

Houston. TX 77027

Address of the Premises: 
3403 Marquart 
Houston. IA
77027

ADDENDUM 

The following Addenda are attached to and make a part of this
Lease for all purposes: 

Exhibit A – Floor Plan showing the Leased Premises 
Exhibit
B – Tenant Improvements 
Exhibit C – Rules and Regulations 
Exhibit D –
Special Provisions 
Exhibit E – Parking Rules and Regulations 
Exhibit F –
Security Notification 
Exhibit G – Guarantee of Lease 

ARTICLE III SUPPLEMENTAL TERMS, COVENANTS, AND CONDITIONS

Landlord leases the Premises to Tenant and Tenant accepts and
agrees to use and possess the Premises on the following Supplemental Terms,
Covenants and Conditions References below to the -Basic Lease Information- are
references to the information set out above. If a conflict exists between the
Basic Lease Information and the provision below, the provisions below will
control. 

	1. 	Rent 

Tenant will pay Landlord, without demand, setoff or deduction.
a net monthly rental (the “Base Rent”) as specified in the Basic Lease
Information. The Base Rent will be due in advance on the first day of each
calendar month during the Term. If the Term begins on a day other than the first
day of a calendar month on the or ends on a day other than the last day of a
calendar month, the Base Rent for such partial month will be prorated by
Landlord. The first installment of Base Rent, whether for all or only a portion
of a calendar month, must be paid contemporaneously with the execution of this
Lease. All amounts due under this Lease from time to time other than Base Rent
shall be additional rent (whether or not so designated in the following
provisions) and shall be due on demand if no time for payment is otherwise
specified below. Tenant will pay all amounts due to Landlord under this Lease at
the address of Landlord specified in the Basic Lease Information or elsewhere as
designated from time to time in notice from Landlord to Tenant. 

	2. 	Use of the Leased Premises

     (a) Tenant will use and occupy
the Premises continuously throughout the Term for the Permitted Use specified in
the Basic Lease Information and for no other purpose. Tenant must use and
maintain the Premises in a clean, careful, safe and proper manner and in 

compliance with all applicable laws. ordinances, orders, rules
and regulations of all governmental entities and regulatory agencies
(collectively, "Applicable Law"). Without limiting the foregoing, Tenant will be
responsible for obtaining any permits required for Tenant's use of the Premises
and for determining that such use complies with Applicable Laws. Tenant will
comply with all rules and regulations (the "Rules and Regulations-) adopted by
Landlord from time to time for the safety and convenience of tenants and others
in the Building. The present form of the Rules and Regulations are attached as
Exhibit C. Tenant will not in any manner deface or injure the Building or the
Land or overload the Floors of the Premises. Tenant must pay on demand for any
damage occurring to the Premises during the Term, however caused by Tenant,
except for damage proximately caused by the negligence or intentional misconduct
of Landlord or by structural defects in the Building. Tenant must also pay on
demand for any damage to any other part of the Building or the Land caused by
any negligence or willful act, misuse or abuse by Tenant or any of its agents,
employees, licensees, or invitees. Tenant will not use the Premises for retail,
lodging or sleeping purposes, and Tenant will not do any cooking or permit any
cooking odors or any other unusual or objectionable odors to emanate from the
Premises. Tenant will conduct its business and occupy the Premises and will
control its agents, employees, licensees and invitees in a manner that will not
create a nuisance or interfere with, annoy or disturb any of the other Tenants
in the Building. Tenant will not use the Premises or permit them to be used in
any way that will increase the rate of fire or other insurance for the building,
or its contents. Tenant will not place any sign, advertising matter, stand,
booth, or showcase in or upon the doorsteps, vestibules, corridors, doors. walls
or windows of the building (except for lettering on the door or doors to the
Premises as allowed by the Rules and Regulations forming, a part of this Lease)
without the prior written consent of Landlord. Tenant may use the Premises for:
(i) general office and administrative use: (ii) the installation and maintenance
of its telecommunications system and equipment; (iii) for any other lawful use
which is allowed in the Building in which the Premises are located and which is
consistent with the character of the Building. Tenant shall have access to the
Building, the Premises and the parking area twenty-four hours (24) per day,
seven (7) days per week, three hundred sixty five (365) days per year. Tenant's
agents, servants, employees, customers. invitees, or licensees shall have access
to the Building during normal business hours, which shall be Monday through
Friday, from 7:00 a.m. to 6:00 p.m. and on Saturday from 8:00 a.m. to 12:00 p.m.
exclusive of holidays. At the Lease Commencement Date, Landlord shall provide
one (1) key to the Premises Tenant shall pay Landlord a fee for any lost or
additional keys and card keys. 

     (b) The Premises do not include.
and Landlord reserves for its use. any and all mechanical, electrical, telephone
or similar rooms; janitor closets: elevator, pipe, and other vertical shafts and
ducts; flues: stairwells: any area above the acoustical ceiling: and any other
areas not specifically shown on Exhibit A as being part of the Premises. But
Tenant will have the non-exclusive right, subject to Paragraph 3 below, to use
corridors. lobbies and other areas in the Building that Landlord provides from
time to time for the common use of the tenants of the Building (collectively.
the "Common Areas"). 

	3. 	Condition and Acceptance of the Leased
      Premises 

     If for any reason the Premises are not
ready for occupancy by Tenant on the date of the commencement of the Term, this
Lease and the obligations of Tenant will nonetheless continue 

in full force and the Term will not he extended. However, if
the Premises are not ready for occupancy because of an omission, delay or
default on the part of Landlord, the Term of the Lease will not commence until
such omission, delay or default is corrected or the Premises are otherwise
substantiality ready for occupancy. Such delay in the commencement of the Term
and subsequent delay in Tenant's required payment of Base Rent will constitute
full settlement of all claims that Tenant might otherwise have against Landlord
because of the delay in making the Premises ready for occupancy. The taking of
possession of the Premises by Tenant will by conclusive evidence that: (i)
Tenant accepts the Premises as suitable for the purpose for which they arc
leased; (ii) Tenant accepts the Building and the Land and each and every part of
appurtenance as being in a satisfactory condition. 

	4. 	Services by Landlord

     (a) So long as Tenant has not
committed an uncured event of default under this Lease. Landlord agrees to
furnish for the occupied portion of the Premises. at Landlord's expense, the
following services during the Term; (i) heating and air conditioning in season
during normal business hours (as specified in the Rules and Regulations) at such
temperatures and in such amounts Landlord shall consider to he standard: (ii)
water for lavatory and toilet purposes at points of supply provided for the
general use of tenants of the Building; (iii) janitor and maid service on
weekdays other than holidays and such window washing and wall cleaning as may in
the judgment of Landlord be reasonably required (provided, however. if Tenant's
leasehold improvements are of different quality than is standard in the Building
and, therefore, the cost of janitor and maid service for the Premises exceed the
cost of janitor and maid service for other premises in the Building with
standard leasehold improvements, then Tenant will pay the excess cost as
additional rent upon receipt of a statement therefore): (iv) elevator service to
an from the floor(s) on which the Premises are located during normal business
hours (provided. however, that Landlord may limit the use of Building elevators
for freight service to times other than normal business hours and to such times
as are scheduled through the manager of the Building); and (v) electric lighting
and routine maintenance for the Common Areas in the manner and to the extent
Landlord deems reasonable and standard. The current charge for HVAC after normal
business hours is $35 per hour. 

     (b) So long as Tenant has not
committed an event of default under this Lease. Landlord will furnish sufficient
power to the Premises for lighting for typewriters, calculating machines and
other machines (including personal computers and peripheral equipment, a water
cooler, and, a microwave that draws no more than 500 watts) of similar low
electrical consumption, but not for computer and/or electronic data processing
equipment, special lighting in excess of lighting that is standard in the
Building, or any other item of electrical equipment which, singly, consumes more
than .25 kilowatts per hour at rated capacity or requires a nominal voltage of
more than 120 volts single phase. If Tenant requires electricity in excess
Landlord must furnish under the preceding sentence, Landlord, at Tenant's
expense, of that which will make a reasonable effort to meet Tenant's needs
through the then existing feeders servicing the Building. But Landlord reserves
the right to require Tenant to procure electricity, for such excess requirements
at Tenant's expense by arrangement with local utility companies approved by
Landlord. Landlord, not Tenant, will install any supplemental risers or wiring
to meet Tenant's excess electrical requirements. However, such installation is
not necessary or will cause 

permanent damage or injury to the Building or create a
hazardous condition or entail excessive or unreasonable alterations, repairs or
expense or interfere with or disturb other tenants, then Landlord will not be
required to install the supplemental risers or wiring. Landlord will not be
responsible or liable to Tenant for any failure or defect in the supply or
character of electricity furnished the Premises or the Building because of any
requirement, act or omission of the electric utility' company serving the
Building. All installations of electrical fixtures, appliances and equipment in
the Premises are subject to Landlord's prior written approval. Landlord agrees
to provide carpet cleaning/shampoo of Leased Premises one time annually at
Landlord's expense. 

     (c) The services described in
subparagraphs (a) and (h) above ("Building Services") may be curtailed or
interrupted as required by any Applicable Laws or because of the maintenance,
repair, replacement or improvement of the equipment involved in furnishing such
services or because of changes of the suppliers of services or because of labor
controversies. Accidents, acts of God or the elements or any other cause beyond
the reasonable control of Landlord. Notwithstanding anything to the contrary in
this Lease, any curtailment or interruption of Building Services covered by the
preceding sentence will not be construed as an eviction (actual or constructive)
of Tenant, nor cause any abatement of the rent payable under this Lease, nor
relieve Tenant from any of its obligations under this Lease, and Landlord will
not be liable for injury to persons or property. or be in default under this
Lease, as a result of such curtailment or interruption. However, Landlord agrees
to attempt in good faith to resume any curtailed or interrupted Building
Services after receipt of notice from Tenant advising Landlord of the affected
services. 

     (d) Landlord and 'landlord's
Mortgagee" (as defined in Paragraph 26 below) will have 90 days to cure any
failure to provide Building Service that amounts to a constructive eviction of
Tenant under applicable law (a "Serious Interruption") after receiving notice of
the Serious Interruption and of Tenant's intention to terminate this Lease
because of the Serious Interruption if it is not cured. If a Serious
Interruption occurs and is not cured within the 90 days allowed, the Tenant
shall, as its sole remedy, have the right to terminate the Lease. Any failure or
defect in Landlord's herein above described services shall not be construed as
an eviction of tenant nor entitle Tenant to any reductions. abatement. offset.
or refund of Rent or to any damages from Landlord. Landlord shall not be in
breach or default under this Lease, provided Landlord uses reasonable diligence
to restore any such failure or defect after Landlord receives written notice
thereof. Notwithstanding anything in Article 111 of the Lease Agreement to the
contrary, if there is an interruption or shortage in any essential service to
substantially all the Leased Premises (the essential services being defined as
air conditioning services and heating services, electrical services or elevator
service) and (i) such interruption is not the result of the negligence or
willful misconduct of Tenant, its agents or employees. (ii) restoration of such
essential services is within the reasonable control of Landlord. and (iii) such
interruption continues for a period of five (5) consecutive business days.
Tenant shall be entitled to an abatement of rent (commensurate with that portion
of the Leased Premises to which Landlord's services have been interrupted
calculated on a per square foot basis) tior the period commencing with the
expiration of such fifth (5`h) business day until such services are restored,
but only to the extent that such interruption interferes with the normal use of
the Leased Premises by the Tenant in the ordinary course of the business and
Tenant does not actually use such portion of the Leased Premises in the ordinary
course of business. If an interruption or shortage of essential 

services of the nature described in (i) and (ii) above
continues for a period of ninety (90) consecutive days after Landlord receives
notice from Tenant of such interruption or shortage, then Tenant shall have the
right to terminate this Lease upon written notice thereof to Landlord. 

     (e) Under no circumstances will
Landlord be liable for any indirect or consequential damages caused by the
curtailment or interruption of Building Services except for Landlord's
negligence causing any such curtailing or interruption. 

	5. 	Landlord's Repairs 

     Landlord will keep the roof,
foundation, exterior walls. exterior windows and exterior doors of the Building,
in good condition during the Term. Landlord will also make any repairs to the
Premises required because of Landlord's negligence or willful misconduct or
because of structural defects in the Building. For the purpose of this Lease.
repairs required because of movement of the soil under or around the Building as
a result of changes in moisture saturation shall be deemed not be caused by
"structural defects". Landlord's obligations under this Paragraph are expressly
subject to the other provisions of this Lease. 

	6. 	Repair of the Leased Premises
  

     Tenant. at Tenant's expense and under
Landlord's supervision. will keep the Premises in good and tenantable condition
and will promptly make all necessary non structural repairs to the Premises;
provided, however. Tenant will not have to make any repairs that are required
because of the negligence or intentional misconduct of Landlord. or because of
structural defects in the Building. If Tenant fails to make repairs required of
it within 30 days after Landlord directs Tenant to make such repairs, Landlord
shall be entitled. without notice to Tenant, to make the repairs and charge
Tenant for the cost of making them. 

	7. 	Alterations and Additions

     Tenant will not make or permit the
making of any alterations. improvements or additions in or to the Premises
without first obtaining the written consent of Landlord. All alterations,
additions and improvements made to or fixtures placed in the Premises (other
than movable office furniture and equipment not attached to the Building) will
be deemed a part of the Building and the property of Landlord when placed in the
Premises. Landlord may insist that Tenant's proposed alterations, improvements
and additions be made or built by Landlord or Landlord's contractor at Tenant's
expense. 

	8. 	Mechanics Liens 

     Tenant will not permit the placing of
any mechanic's liens against the Premises. the Building. the Parking Garage or
the Land caused by or resulting from any work performed. materials furnished or
obligation incurred by or at the request of Tenant. Nothing in this lease or in
any other agreement between Landlord and Tenant constitutes the consent or
request of Landlord. express or implied, to any contractor, subcontractor,
laborer or material-man for the performance of any labor or the furnishing of
any materials for any specific improvements. 

alteration or repair to the Building or the Land. Nor does
anything herein concerning the Premises give Tenant any right, power or
authority to contract for or permit the rendering of any services or the
furnishing of any materials that would give rise to the filing of any mechanic's
or other liens against the interest of Landlord in the Building, Parking Garage
or the Land. If any lien is filed against the interest of Landlord in the
Building, Parking Garage or the Land or against the interest of Tenant in the
Premises because of work performed, materials supplied or any obligation
incurred by or at the request of (or alleged request of) Tenant. then Tenant
will cause the same to he discharged of record within 20 days after filing. If
Tenant fails to discharge the lien within such period, then, in addition to any
other right or remedy of Landlord. Landlord may, but will not he obligated to,
discharge the same either by paying the amount claimed to be due or by procuring
the discharge by deposit in court or bonding. Any amount paid by Landlord to
discharge the lien, and all reasonable legal and other expenses of Landlord.
including reasonable attorney's fees, in defending any such action or in
procuring the discharge of the lien will be repaid by Tenant on demand. 

	9. 	Insurance, Indemnity and Exculpation
  

     (a) Tenant will procure and
maintain throughout the Term and any extensions or renewals of the Term
comprehensive general liability insurance (including blanket contractual
liability coverage), which shall cover any claims for bodily injury. death
and/or property damage occurring in or resulting from any occurrence in the
Premises. including injury. death and/or damage caused by the condition of or
any defect in the Premises. The policies evidencing such insurance must be in
broad form satisfactory to Landlord, must name the Landlord as an additional
insured. must be issued by insurance companies acceptable to Landlord. and must
afford immediate protection to the limit of not less than $250.000.00 per
accident. unless a greater or lesser minimum dollar amount of coverage is
specified in the Basic Lease Information. With respect to each policy evidencing
such liability insurance. Tenant will obtain any available endorsements required
by Landlord. Tenant will also deliver the policy or a certificate evidencing the
same to Landlord prior to occupying the Premises or commencing the construction
of any improvements therein, and Tenant will deliver a certificate of renewal
from the applicable insurer at least ten days prior to the expiration of the
policy. In addition, Tenant will obtain and deliver to Landlord a written
obligation on the part of each of its insurance companies to notify Landlord at
least 10 days prior to any cancellation of or material change to such insurance.

     (b) Tenant will indemnify and
hold Landlord harmless from all fines. suits, costs and liability of every kind
arising because of: (i) any violation or nonperformance by Tenant of any
representation or covenant contained in this lease; (ii) any bodily injury,
death and/or damage to property occurring in or resulting from any occurrence in
the Premises during the Term; and (iii) any bodily injury, death and/or property
damage that is incident to. arises out of, or is in any way caused by the acts
or negligent omissions of Tenant or any of its agents. employees. contractors.
licensees or invitees. 

     (c) Tenant accepts responsibility
for keeping all personal property and equipment in the Premises adequately
insured and for maintaining adequate business interruption insurance. T enant
waives for itself and its insurer all rights of Landlord, Landlord's agent, 

officers and employees, and the other tenants in the Building
an the other tenant's agents, officers and employees for any damage or loss,
whether caused by the negligence of such parties or otherwise. to the personal
property and equipment in the Premises and for any theft thereof and for direct
or consequential damages arising because of any interruption of Tenant's
business in the Premises. Because the preceding sentence will preclude any
recovery by Tenant or Tenant's insurers against Landlord and the other parties
listed in the preceding sentence for damage to or theft of Tenant's property in
the Premises or for any interruption of Tenant's business in the Premises,
Tenant agrees immediately to notify its insurers of the Terms of this Paragraph.
Landlord will not be liable to Tenant, its employees, agents, licensees,
invitees or insures for bodily injury, death or property damage occasioned by
the acts or omissions of any other tenant of the Building or of other tenant's
agents, employees, licensees. or invitees within the Building. Further. Landlord
will not be liable to Tenant for any property damage, bodily injury or
inconvenience caused by the condition. maintenance, repair or alteration of the
Building or Land, or the failure to provide maintenance or repairs, except to
the extent caused by Landlord's negligence or willful misconduct. 

	10. 	Casualty Damage 

     (a) Tenant will give Landlord
prompt written notice of any damage to the Premises. If during the Term the
Building is so damaged by fire or other casualty that substantial alteration or
reconstruction, is in Landlord's opinion, required (whether or not the Premises
are damaged by such casualty), or if any mortgagee of Landlord should require
that the insurance proceeds payable as a result of such a fire or other casualty
be applied to the Payment of debt secured by a lien on the Building or Land, or
if fire or other casualty results in any material uninsured damage to the
Building then and in any of these events. Landlord may, at its option, terminate
this Lease by notifying Tenant thereof within 60 days after Landlord is notified
of the fire or other casualty. If Landlord does not elect to terminate this
lease, Landlord will, within the 60 days after Landlord is notified of the fire
or other casualty commence and proceed with due diligence to restore the
Building shell and the leasehold improvements (but not the personal property)
located on the Premises. However, Landlord will not be obligated to spend more
for the restoration than the insurance proceeds and other compensation Landlord
actually receives because of the fire or other casualty. Rent shall abate during
any period premises are rendered un-tenantable by fire or other casualty, and
the Term shall be proportionately extended for every day of abatement. 

     (b) Landlord will not be liable
for any inconvenience or annoyance to Tenant or injury to the business of Tenant
resulting and any way from damage caused by fire or other casualty or the repair
of such damage. Nor will Base Rent or other charges abate because of fire or
other casualty unless Landlord terminates this Lease. 

     (c) Anything in this Lese to the
contrary notwithstanding. Landlord and Tenant each waive any right of recovery
against the other. and the other's agents, officers, or employees, for any
damage or loss to the Building or its contents resulting from fire or other
casualty covered by a valid and collectible insurance policy; provided, however,
such waiver shall be effective insofar, but only insofar, as compensation for
such damage or loss is actually recoverable by the waiving party (net of the
costs of collection) under the policy. 

	11. 	Eminent Domain 

     (a) If the whole or substantially
the of the Building. Parking Garage or the Premises is taken for any public or
quasi-public use by eminent domain or should be sold in lieu of such taking,
then this Lease will terminate as of the date when physical possession of the
Building. Parking Garage or the Premises is taken by the condemning authority.
If less than the whole or substantially the whole of the Building or the
Premises sold. Landlord (whether or not the Premises are affected) may terminate
this Lease by giving notice to Tenant. in which event this lease shall terminate
as of the date when the condemning authority takes physical possession of the
condemned or sold portion of the Building, Parking Garage or Premises. If a
substantial portion of the is so taken or sold. Tenant may terminate this Lease
by giving notice to Landlord, in which event this lease shall terminate as of
the date when the condemning authority takes physical possession of the
condemned or sold portion of the Premises. If a substantial portion of the
Building or Premises is so taken or sold, Tenant may terminate this Lease by
giving notice to Landlord, in which event this Lease shall terminate as of the
date when the condemning authority takes physical possession of the condemned or
sold portion of the Premises. Following any such taking or sale, if this Lease
is not terminated, the Base Rent payable by Tenant will be reduced in proportion
to the square footage of the Premises taken (if any) and Landlord will restore
the Building and the Premises to the extent feasible; provided, however,
Landlord will not be required to spend more for such restoration than the net
proceeds of the taking or sale available to Landlord. 

     (b) All damages awarded for any
taking of all or any part of the Premises by eminent domain and all proceeds
from any sale in lieu of such taking will be paid to Landlord, whether
designated as compensation for the diminution in value of Tenant's leasehold or
for the fee of the Premises. However, Landlord will not be entitled to any
separate award made to Tenant for loss or damage to Tenant's removable personal
property. Nor will Landlord be entitled to any award made to Tenant because of
the interruption of Tenant's business, unless the award is combined with or
reduces an award for the diminution in value of Tenant's leasehold. 

	12. 	Surrender Upon Termination

     (a) Upon the expiration or
termination to this lease. whether caused by lapse of time or otherwise, Tenant
will immediately surrender possession of the Premises to Landlord in good
condition, reasonable wear and tear excepted, Tenant will also deliver to
Landlord all keys to Premises. If possession is not immediately surrendered.
Landlord may enter and take control of the Premises and remove Tenant and any
other person who may be occupying them, without incurring any liability. 

     (b) All alterations, additions or
improvements made to the Premises by or on behalf of Tenant will remain on the
Premises without compensation to Tenant. However. Landlord may notify Tenant to
remove all alterations, additions or improvements made by Tenant during the Term
and to repair any damage caused to the Premises by such removal. If so notified,
Tenant agrees to comply within the later of 10 days following the date of such
notice or the date upon which this Lease expires or is terminated, whichever is
later. 

     (c) Tenant may remove any
furniture and any other equipment installed by it upon the termination of this
Lease. Such removal must be accomplished in a good and workmanlike manner as not
to damage the Premises or the Building. All furniture and equipment not promptly
removed when this Lease is terminated will be presumed abandoned by Tenant and
Landlord may, at its option, take possession of such property and either declare
it to be abandoned by notifying Tenant thereof. or remove it and store it or
dispose of it at Tenant's expense. 

	13. 	Holding Over 

     If Tenant continues to hold the
premises after the expiration or other termination of this Lease without written
consent of Landlord, Tenant must, throughout the entire holdover period: (i) pay
Base Rent for each calendar month or partial calendar month equal to 150% of the
highest Base Rent that became due for any calendar month during the Term, and
(ii) continue to perform every other obligation required of Tenant hereunder.
Nonetheless, holding over by Tenant after the expiration or other termination of
the Term will not be construed to extend the Term. Tenant agrees to indemnify
Landlord against all claims for damages resulting from any delay by Landlord in
delivering possession of the Premises to another Tenant or prospective Tenant
caused by Tenant's holding over. Any holding over with the written consent of
Landlord will convert this Lease to a lease from month-to-month, subject to all
the terms and conditions contained herein. 

	14. 	Assignment and Subletting

     (a) Tenant acknowledges that.
without the prior written consent of Landlord. Tenant does not have the right or
power under this Lease to assign or transfer this Lease or any estate or
interest hereunder without the expressed written consent of the Landlord, which
consent shall not be unreasonably withheld. conditioned or delayed in any
manner. Further, Tenant will not. without the prior written consent of Landlord:
(i) permit any assignment of this Lease or any estate or interest hereunder,
voluntarily or by operation of law: (ii) sublet the Premises or any part
thereof; (iii) grant any license, concession or other right of occupancy of any
portion of the Premises; or (iv) permit the Premises to be possessed by any
parties other than Tenant and its employees. Consent by Landlord to one or more
assignments or subletting will not operate as a waiver of Landlord's rights as
to any subsequent assignments and subletting. Notwithstanding any assignment or
subletting, Tenant and any guarantor of Tenant's obligations under this Lease
shall at ail times remain fully liable for the payment of the rent herein
specified and for compliance with all of Tenant's other obligations hereunder.
If an event of default should occur when this Lease is assigned or any part of
the Premises are sublet. Landlord, in addition to any other remedies provided in
this Lease or available at law, may at its option collect directly from any
assignee or subtenant all rents becoming due to Tenant and apply them against
any sums due from Tenant. Tenant hereby authorizes and directs any assignee or
subtenant to make such payments of rent directly to Landlord upon receipt of
notice from Landlord. No collection by Landlord from any assignee or subtenant
will constitute a release of Tenant or any guarantor of Tenant's obligations
from the further performance of Tenant's obligations. nor will Landlord's
receipt of rent from any assignee, subtenant, or occupant of the Premises
constitute a waiver of 

Tenant's covenant against assignment and subletting. 

     (b) With any request for
Landlord's consent to an assignment of this Lease or subletting of any part of
the Premises, Tenant will submit, in writing. the name of the proposed assignee
or subtenant, the commencement date of such assignment or subletting and the
nature and character of the business of the proposed assignee or subtenant.
Landlord will have the option (to be exercised by notifying Tenant within 30
days from the submission of Tenant's written request) to cancel this Lease with
respect to the portion of the Premises affected by Tenant's proposed assignment
or subletting. If Landlord chooses to cancel, the cancellation will be effective
as the proposed commencement date of the requested assignment or subletting and
the tenancy and occupancy of the affected portion of the Premises by Tenant
shall expire as if with respect to the affected portion the cancellation date
was the scheduled end of the Term, If the cancellation applies to less than all
of the Premises, this Lease will continue in full force with respect to the
unaffected portion, but Base Rent and all additional rentals will he reduced in
proportion to the reduction of the Rentable Area of the Premises. 

     (c) If Landlord grants any
request of Tenant to assign this lease or sublet any part of the Premises, such
assignment or subletting will be subject to all the terms and conditions of this
Lease, including conditions as to use and occupancy of the Premises. All cash or
other proceeds of any such assignment or subletting shall be paid to Landlord
even if such proceeds exceed rentals required under this Lease. Tenant assigns
all rights it may have or ever acquire in any such proceeds to Landlord. This
covenant and assignment shall run with the land and bind Tenant's personal
representatives, successors and assigns. Any assigned or sub-lessee of Tenant
will be liable to Landlord for any such proceeds not paid to Landlord as
required by this subparagraph. 

     (d) If Tenant is a corporation or
partnership any transfer of Tenant's outstanding voting stock or of the
partnership interest of Tenant with the result that a change occurs in the
present management or control of Tenant will be deemed an assignment subject to
this Paragraph, whether the transfer is by sale, assignment, request,
inheritance, operation of law, or other disposition. Any sale of all or a
substantial portion of Tenant's assets will also be deemed an assignment subject
to this Paragraph. unless the assets sold are immediately replaced with the
proceeds of the sale. 

	15. 	Transfers by Landlord

     Landlord retains the right to
transfer. in whole or in part. the Building under this Lease. Upon a transfer of
Landlord's entire interest in the Building. Landlord will be released from ally
further obligations under this lease, and Tenant agrees to look solely to the
successor in interest of Landlord for performance of Landlord's obligations.

	16. 	Estoppel Certificates and Financial
      Statements 

     Tenant will, at any, time and from
time to time during the Term within 10 days after requested by Landlord,
execute. acknowledge, and deliver a certificate in form satisfactory to Landlord
certifying: (i) that Tenant is in possession of the Premises under the terms of
this 

Lease; (ii) that Lease is unmodified and in full force (or, if
there have been modifications. that this Lease is in full force as modified and
setting forth the modifications): and (iii) the dates to which the rent has been
paid; (iv) that the knowledge of Tenant no default exists under this lease (or
specifying all defaults of which Tenant has knowledge); and (v) other matters as
may be reasonably requested by Landlord. 

	17. 	Quiet Enjoyment 

     Subject to the other provisions in
this Lease and, specifically, to the condition that Tenant pay all rent when due
and keep and fulfill all of the terms, covenants agreements and conditions to be
performed by Tenant, Tenant will peaceably and quietly enjoy the Premises during
the Term without any disturbance from Landlord or from any other person lawfully
claiming by, through or under Landlord. 

	18. 	Subordination 

     This Lease is subject and subordinate
to any mortgagee, deed of trust or ground lease which now or may in the future
affect the Land or any interest of Landlord in the Building, and to all
increases, renewals, modifications, consolidations, replacements, and extensions
thereof. This Paragraph is self-operative. No further instrument is required to
effect the subordination of this Lease to any such mortgagee, deed of trust or
ground lease. In confirmation of the subordination, however. Tenant agrees to
execute, acknowledge, and deliver promptly any certificate or instrument
requested by Landlord that evidences the subordination. Tenant hereby
irrevocably appoints Landlord its attorney-in-fact to execute, acknowledge and
deliver any such certificate or instrument for Tenant. Tenant agrees that if the
Building is sold at disclosure under any such mortgage or deed of trust or is
transferred in lieu of foreclosure, or if the lessor repossesses the Building
under any such ground lease. Tenant will attorn to the purchaser. transferee or
lessor (as the case may be, the "Applicable Successor") upon request. Tenant
will recognize such Applicable Successor as the Landlord under this Lease if the
Applicable Successor elects to keep this lease in effect. This Lease and all
rights of Tenant are further subject and subordinate to all other existing title
matters that affect the Building or the Land, including all utility easements
and agreements. However, Landlord shall request, but shall not be obligated to
obtain, a non-disturbance and attornment agreement in favor of Tenant from the
current mortgagee or lien-holder or any future mortgagees or lien-holders on the
Building. If any such Deed of Trust, mortgage, or other security instrument is
foreclosed, or the Project is sold under Deed in Lieu of Foreclosure. Tenant
shall, upon request, attorn to such purchase or grantee, as the case may be. and
execute instrument(s) confirming such attornment: provided however, that
Tenant's attornment shall be conditioned upon the agreement by such successor to
Landlord's interest not to disturb Tenant's possession hereunder during the Term
so long as Tenant performs its obligations under this Lease. 

	19. 	Certain Rights Reserved by Landlord
  

     Landlord has the following rights,
exercisable without notice and without liability to Tenant and without causing
an eviction (constructed or actual) or disturbance of Tenant's possession of the
Premises and without giving rise to any claim for setoff or abatement of
rent:

     (a) to change the Building's names or
street address:

     (b) to install signs on the exterior
and interior of the Building: 

     (c) to designate and approve,
prior to installation. all types of window shades. blinds, drapes. awnings,
window ventilators and other similar equipment. and to control all internal
lighting that may be visible from the exterior of the Building:

     (d) to enter upon the Premises at
reasonable hours to inspect clean or make repairs or alterations (without
implying any obligation to do so) and to show the Premises to prospective
lenders or purchasers or, during the last 6 months of the Term, prospective
tenants and, if the Premises are vacated, to prepare them for re-occupancy:

     (e) to retain and use in
appropriate instances keys to all doors into and within the Premises (Tenant
will not change or add locks without the prior written consent of Landlord):

     (f) to decorate and to make
repairs. alterations. additions or improvements (whether structural or
otherwise) to and about the Building and, for such purposes to enter upon the
Premises, to temporarily close doors, entryways, public space and corridors in
the building, to temporarily suspend Building Services and facilities and to
change the arrangement and location of entrances or passageways, doors and
doorways, corridors, elevators, stairs, toilets, or other Common Areas, all
without abatement of rent or impairing Tenant's obligations so long as the
Premises are reasonably accessible and fit for the use expressly permitted in
this lease:

     (g) to grant to anyone the
exclusive right to conduct any business or render any service in or to the
Building (including the exclusive right to sell any food or beverages), provided
such exclusive right does not exclude Tenant from the use expressly permitted in
this Lease:

     (h) to approve the weight, size
and location of safes and other heavy equipment and articles in the Premises and
to require that all such items and all furniture be moved into and out of the
Building and Premises at the times and in the manner directed by Landlord
(movements of Tenant's property into or out of the Building and within the
Building are entirely at the risk and responsibility of Tenant): and

     (i) to take any measures (without
implying any obligation to do so) Landlord deems advisable for the security of
the Building and its occupants. including the evacuation of the Building for
drill purposes and the closing of the building after normal business hours,
subject, however, to Tenant's right to admittance when the building is closed
under reasonable regulations prescribed by Landlord from time to time. 

	20. 	Default by Tenant 

     The occurrence of any of the following
events will be an event of default by Tenant under the Lease:

     (a) Tenant shall fail to pay
Landlord any rental or other sum of money due under this Lease or under any
other agreement with Landlord concerning the Premises.

     (b) Tenant shall fail to maintain
any insurance that the Lease requires Tenant to maintain.

     (c) Tenant shall fail to perform
or observe any term, covenant or condition of the Lease or any other agreement
with Landlord concerning the Premises (other that a failure to timely pay rent
or other chares or to maintain insurance) and Tenant shall not cure the failure
within 30 days after notice thereof is given by Landlord, but if the failure is
of a nature that it cannot he cured within such 30 day period. Tenant shall not
have committed an event of default if Tenant commences the curing of the failure
within such 30 day period and thereafter diligently pursues the curing of same
and completes the cure within 60 days: provided, however, that if Tenant fails
to perform or observe any such term. Condition, covenant or provision 2 or more
times in any Lease Year, then notwithstanding that such defaults have been cured
by Tenant, any further similar failure shall be deemed an event of default
without notice or opportunity to cure.

     (d) Tenant or any guarantor to
Tenant's obligations under this Lease shall become insolvent, or shall admit in
writing its inability to pay it debts when due, shall make a transfer in fraud
of its creditors, or shall make a general assignment or arrangement for the
benefit of creditors, or all or substantially all of Tenant's assets or the
assets of any guarantor of Tenant's obligation under this Lease or Tenant's
interest in this Lease are levied on by execution or other legal process.

     (e) A petition shall be filed by
Tenant or any guarantor of Tenant's obligations under this Lease to have Tenant
or such guarantor adjudged a bankrupt, or a petition for reorganization or
arrangement under any law relating to bankruptcy shall be filed by Tenant or
such guarantor, or any such petitions shall be filed against Tenant or such
guarantor and shall not he removed within 30 days. A receiver or trustee shall
be appointed for all or substantially all the assets of Tenant or of any
guarantor of Tenant's obligations under this Lease or for Tenant's interest in
this lease. 

     (f) Tenant shall abandon or
vacate any substantial portion of the Premises or shall fail to occupy the
premises within 30 days after the Term commences and the Premises are ready for
occupancy. 

	21. 	Remedies of Landlord

     (a) The various rights. election
and remedies of Landlord contained in this Lease are cumulative. Upon the
occurrence of any event of default by Tenant. Landlord shall have the option,
without any notice to Tenant (except as expressly provided below) and with or
without judicial process. to pursue one or more of the following remedies:

          (i)
Landlord may terminate this Lease in which event Tenant shall immediately
surrender the Premises to Landlord.

          (ii)
Landlord may enter upon and take custodial possession of the premises by picking
the locks if necessary, lock out or remove Tenant and any other person occupying
the Premises and alter the locks and other security devices at the Premises, all
without Landlord being deemed guilty of trespass or becoming liable for any
resulting loss or damage and without causing a termination or forfeiture of this
Lease or of the Tenant's obligation to pay rent.

          (iii)
Landlord may enter the Premises and take possession of and remove any and all
trade fixtures and personal property situated in the Premises. without liability
for trespass or conversion. Landlord may retain control over all such property
for the purpose of foreclosing the liens and security interest described in
Paragraph ___ below by public or private sale. If Landlord takes possession of
and removes personal property from the Premises, then prior to any disposition
of the property by sales or until Tenant reclaims the property if no foreclosure
by public or private sale is contemplated, Landlord may store it in a public
warehouse or elsewhere at the costs of and for the account of Tenant without the
resort to legal process and without becoming liable for any resulting loss or
damage.

          (iv)
Landlord may perform on behalf of Tenant any obligation of Tenant under this
lease which Tenant has failed to perform, and the cost of the performance will
be deemed additional rent and will be payable by Tenant to Landlord upon demand.
Landlord's pursuit of any remedy specified in this lease will not constitute an
election to pursue that remedy only. nor preclude Landlord from pursing any
other remedy available at law or in equity, nor constitute a forfeiture or
waiver of any rent or other amount due to Landlord as described below.

     (b) In the event Landlord enters
and takes possession of the Premises without causing a termination of this
Lease. Landlord will have the right to re-let the Premises for Tenant. in the
name of Tenant or Landlord or otherwise, on such terms as Landlord deems
advisable and Tenant hereby appoints Landlord its attorney-in-fact for such
purposes, Landlord will not be required to incur any expense to re-let the
Premises shall not reduce Tenant's liability for monthly rentals and other
charges due under this Lease or for damages. Landlord will not be obligated to
re-let for less than the then market value of the premises or to re-let the
Premise when other comparable rental space in the Building is available. Without
causing a termination or forfeiture of this Lease after an event of default by
Tenant. Landlord may: (i) re-let the premises for a term or terms that expire at
the same time as, earlier than, or subsequent to. the expiration of the Term;
(ii) remodel or change the use and character of the Premises; (iii) grant rent
concessions in re-letting the Premises, if necessary in Landlord's judgment,
without reducing Tenant's obligation for rental specified in this Lease: and
(iv) re-let all or any portion of the Premises as a part of a larger area.
Subject to the next subparagraph (c). Landlord may retain the excess, if any, of
the rent earned from re-letting the Premises over the rentals specified in this
Lease.

     (c) After any failure by Tenant
to pay rent. Landlord, may, whether or not it has chosen to re-enter and take
possession of the premise, but only if Landlord has not notified Tenant of
Landlord's election to terminate this Lease, collect from and require Tenant to
pay an amount (a “Rental Deposit”) equal to the then present value of all Base
Rent specified herein for 

the balance of the term. However, if Landlord has re-let the
premises or re-lets thereafter without first terminating this Lease, Landlord
will apply any future rentals from re-letting (but not rental representing
reimbursement for Basic Costs or rental allocable to any area outside the
Premises or rental allocable to the Period following the Term) in the following
manner: first. to reduce any amounts then due from Tenant, including but not
limited to attorneys' fees, brokerage commissions and other expense Landlord may
have incurred in connection with the collection of any rent, recovery of
possession, and redecoration, altering. dividing, consolidating with adjoining
Premises, or otherwise preparing the Premises for re-letting: and, second, to
the repayment of any Rental Deposit collected from Tenant. The balance, if any,
of the future rentals from re-letting shall be retained by Landlord as
compensation for re-letting the Premises. Tenant will not be entitled to any
repayment of the Rental Deposit except as provided herein. but Tenant will be
relieved of its obligation to make future payments of any Base Rent with respect
to which it has paid a Rental Deposit to Landlord. Landlord will notify Tenant
if Landlord elects to collect a Rental Deposit after an event of default by
Tenant, where upon the Rental Deposit will be immediately due and payable and
may be collected by Landlord by a suit to enforce payment. 

     (d) No re-entry or re-letting of
the Premises or any tiling or service of an unlawful retainer action or similar
action will be construed as an election by Landlord to terminate or accept a
forfeiture of this Lease or to accept a surrender of the Premises after an event
of default by Tenant, unless a written notice of such intention is given by
Landlord to Tenant; but notwithstanding any such action without such notice.
Landlord may at any time thereafter elect to terminate this lease by notifying
Tenant. In the event, however, Landlord terminates this lease after collecting a
Rental Deposit as provided in the preceding subparagraph (c). Landlord will
reimburse Tenant for the excess (if any) of, (1) that portion of the Rental
Deposit collected and attributable to the Base Rent for the period following
such termination, over (ii) the amount that, notwithstanding the termination.
Landlord would have been entitled to recover from Tenant with respect to such
period if Landlord had not collected the Rental Deposit.

     (e) Upon the termination of this
lease. Landlord will be entitled to recover all unpaid rentals that has accrued
through the date of termination plus the costs of performing any of Tenant's
obligations (other than the payment of rent) that should have been but were not
satisfied as of the date of such termination. In addition, Landlord will be
entitled to recover. not as rent or a penalty but as compensation for Landlord's
loss of the benefit of its bargain with Tenant, the difference between (i) an
amount equal to the present value of the rental and other sums that this lease
provides Tenant will pay for the remainder of the Term and for the balance of
any then effective extension of the Term, and (ii) the present value of the net
future rentals for such period that will be or with reasonable efforts could be
collected by Landlord by re-letting the Premise.

     (f) After an event of default by
Tenant. Landlord may recover from Tenant from time to time and Tenant shall pay
to Landlord upon demand, whether or not Landlord has re-let the Premises or
terminate this Lease, (1) such expenses as Landlord may incur in recovering
possession of the Premises, terminating this lease. placing the Premise in good
order and condition and altering or repairing the same for re-letting: (ii) all
other costs and expenses 

(including brokerage commissions and legal fees) paid or
incurred by Landlord in exercising any remedy or as a result of the event of
default by Tenant: and (iii) and other amount necessary to compensate Landlord
for all the detriment proximately caused by Tenant's failure to perform Tenant's
obligations under this Lease or which in the ordinary course of things would be
likely to result from such failure.

     (g) In the event that ally future
amount owing to Landlord or offsetting an amount owing to Landlord is to be
discounted to present value under this lease, the present value shall he
determined by discounting at the rate of ten (10%) percent per annum.

     (h) For the purposes of any suit
by Landlord brought or based on this lease, the Lease may, at Landlord's option,
be construed to be a divisible contract to the end that successive actions may
be maintained and successive periodic sums shall mature and become due
hereunder, and the failure to include in any suit or action any sum or sums the
matured shall not be bar to the maintenance of any suit or action or of the
recovery of the sum or sums so omitted.

     (i) This paragraph 23 shall be
enforceable to maximum extent not prohibited by applicable law. and the
unenforceable of any provision in this Paragraph shall not render any other
provision unenforceable. To the extent permitted by law, Tenant and Landlord
agree that paragraphs (a), (b), (e), (1), and (g) of Section 93.002 of the Texas
Property Code shall not apply to the lease. However, as provided in Section
93.002(d) of the Texas Property Code, Tenant will be presumed to have abandoned
the Premises if goods, equipment, or other property, in an amount substantial
enough to indicate a probable intent to abandon the Premises, is being or has
been removed from the Premises and the removal is not within the normal course
of Tenant's business. 

22. Late Payment Charge Tenant acknowledges that late
payment of Base Rent due under this lease will cause Landlord to incur costs,
the exact amounts of which are difficult to ascertain. Such costs include but
are to limited to. processing and account charges and late charges which may he
imposed upon Landlord by the terms of any liens covering the Building.
Accordingly, if Tenant fails to pay any Base Rent or additional rent specified
in this Lease when it is due. Tenant agrees to pay Landlord an amount equal to
five percent (5%) of the rent in arrears as a late charge. The parties agree
that such late charge does not represent interest, but rather represents a fair
and reasonable estimate of the costs Landlord will incur by reason of late
payment by Tenant. Acceptance of such late charge by Landlord shall not
constitute a waiver of Tenant's default with respect to such overdue rent, or
prevent Landlord from exercising any of the other rights and remedies Landlord
may have with respect to such default. No waiver by Landlord of any provision of
this Lease will be deemed a waiver of any other provision or of any subsequent
breach by Tenant. Landlord's consent to or approval of any act will not be
deemed to render unnecessary the obtaining of Landlord's consent to or approval
of any subsequent act by Tenant. Landlord's acceptance of rent will not
constitute a waiver of any preceding breach by Tenant of this lease, regardless
of Landlord's knowledge of the preceding breach at the time Landlord accepts the
rent. Any payment by Tenant or receipt by Landlord of a lesser amount than the
Base Rent and additional payment by Tenant or receipt by Landlord of a lesser
amount than the Base Rent and additional rental stipulated in this lease will he
deemed to be on account 

of the earliest stipulated rental. Notwithstanding any
endorsement or statement on any check or any letter accompanying any check or
payment of Base Rent, Landlord may accept such check or payment without
prejudice to Landlord's right to hold the Tenant in default and recover the
balance of any Base Rent or additional rental due and pursue any' other remedy
provided in this Lease. Landlord's failure to take any action in regard to
Tenant's default, regardless of how long, will not constitute a waiver of such
default. Any waiver of Tenant's default must be in writing and signed by
Landlord to be effective. Any written waiver by Landlord will constitute a
waiver only in the specific circumstances described in the waver. 

	23. 	Default by Landlord 

     (a) All covenants of Tenant in
this lease are independent covenants, not conditioned upon Landlord's
satisfaction of its obligations hereunder. except to the extent otherwise
specifically provided herein. 

     (b) If Landlord defaults in the
performance of any of its obligations under this Lease, it will have 30 days to
cure after Tenant notifies Landlord of the default: or if the default is of a
nature to require more than 30 days to remedy. Landlord will have the time
reasonably necessary to cure it. 

     (c) Whenever a period of time is
prescribed in this Lease for action to be taken by Landlord. Landlord will not
be liable or responsible for, and there shall be excluded from the computation
for any such period of time, any delays due to strikes, riots, acts of God,
shortages of labor or material, war, applicable laws or any other causes of any
kind whatsoever which are beyond the control of Landlord. 

     (d) Tenant agrees to serve a
notice of claimed default or breach by Landlord upon the lender holding a first
mortgage or deed of trust against the Premises (herein called “Landlord's
Mortgagee”) if Tenant has been made aware of the name and address of such
lender. Notwithstanding anything to the contrary contained herein. Tenant will
not exercise any right to terminate this Lease because of a default by Landlord
before allowing such lender the same period following such notice to cure the
default or breach as is allowed landlord. But this subparagraph (d) will not be
interpreted as creating or broadening any right of Tenant to terminate this
lease because of a default by landlord. 

     (e) The liability of Landlord to
Tenant for any default by Landlord under the terms of this lease is limited to
the interest of Landlord in the Building and the Land, and Tenant agrees to look
solely to Landlord's interest in the Building and the Land for the recovery of
any judgment from Landlord. it being intended that Landlord not be personally
liable for any judgment or deficiency. 

	24. 	Attorneys Fees 

     In the event either party defaults in
the performance of any of the terms. agreements or conditions contained in this
Lease and the other party places the enforcement of this Lease, or any part
thereof, or the collection of any rent due or to become due hereunder, or
recovery of the 

possession of the Lease Premises, in the hands of an attorney
who tiles suit upon the same, and should such non-defaulting party prevail in
the suit. the defaulting party agrees to pay the other party's reasonable
attorney fees and court costs. 

	25. 	Landlord's Lien 

     To secure the payment of all rental
and other sums of money due and to become due from Tenant under this lease and
the faithful performance of this Lease by Tenant. Tenant grants to Landlord an
express first contractual lien upon and security interest in all property
(including fixtures, equipment and chattels) which may he placed on the Premises
by Tenant and all proceeds of any insurance which may accrue to Tenant by reason
of the destruction of or damage to any such property. Such property shall not be
removed from the Premises without the written consent of Landlord until all
arrearages in rent and other sums of money then due to Landlord by Tenant have
been paid. Tenant waives all exemption laws in favor of such lien and security
interest. The lien and security interest created by this Paragraph are in
addition to. not in lieu of. Landlord's statutory lien. Upon the occurrence of
an event of default by Tenant, the lien and security interest created by this
paragraph may be foreclosed with or without court proceedings by public or
private sale., provided Landlord has given Tenant at least 15 days notice of the
time and place of the sale, and Landlord shall have the right to become the
purchaser, upon being the highest bidder at the sale. Upon request by Landlord,
Tenant will execute and deliver to Landlord Uniform Commercial Code Financing
Statements in sufficient form so that when properly filed, the security interest
hereby granted will be perfected. Tenant will also execute and deliver to
Landlord upon request Uniform Commercial Code Financing Statements change
instruments in sufficient form to reflect any property amendment or modification
in or extension of the security interest hereby granted. Landlord shall, in
addition to all of the remedies specified in this Paragraph. also have all of
the rights and remedies of a secured party under the Uniform Commercial Code as
adopted in the state in which the premises are located. Notwithstanding anything
herein to the contrary. Landlord agrees it shall have no lien, security interest
or right whatsoever with respect to any of Tenant's records. files or
work-papers or to any of Tenant's clients records. work-papers on files or to
any files cabinets or containers in which such materials are kept. The aforesaid
liens shall be automatically subordinate to any bona fide purchase money
security interest held by a third party vendor or lender in the ordinary course
of Tenant's business and to any lessor's security interest in the ordinary
course of Tenant's business and, further, upon written request of Tenant.
provided that Tenant is not in default hereunder. Landlord agrees to subordinate
its contractual lien and statutory Landlord lien to the lien of any other third
party vendor, lessor or lender and in connection therewith agrees to execute
such instrument to evidence such subordination as may be reasonable requested by
such third party vender, lessor or lender, subject to the approval by Landlord
of the form thereof which approval shall not be unreasonably withheld or
delayed. 

	26. 	Security Deposit 

     Contemporaneously with the execution
of this Lease, Tenant will deposit a security deposit (the "Security Deposit")
with landlord in the amount shown in the Basic Lease Information as security for
the performance of Tenants covenants and obligations. The Security Deposit will
not bear interest and will not be considered an advance payment of rental or a

measure of Landlord's damages in case of a default by Tenant.
If Tenant defaults in the performance of any of its covenants and obligations
under this lease, including but not limited to its obligations to pay all rent.
Landlord may, from time to time, without prejudice to any other remedy. apply
the Security Deposit to the extent necessary to any arrearages in rent or to any
other past due sum owing by Tenant or to any damage. injury, expense or
liability caused to Landlord by such default, whether such damages accrue before
or after termination of this Lease. Following any such application of the
Security Deposit, Tenant must pay Landlord on demand the amount so applied in
order to restore the Security Deposit to its original amount. Any remaining
balance of the Security Deposit will be returned to Tenant after the termination
of this Lease and after delivery of possession of the Premises to Landlord, if
Tenant is not then in whether actually received or not. upon first default under
this lease if Landlord assigns its' interest in the Premises during the Term,
Landlord may assign the Security Deposit to the assignee and thereafter Landlord
will have no liability for the return of the Security Deposit, it being agreed
that Tenant will look solely to the new Landlord for the return of the Security
Deposit. Regardless of any assignment of this Lease by Tenant, Landlord may
return the Security Deposit to the original Tenant unless Landlord receives
evidence satisfactory to it of an assignment of the right to receive the
Security Deposit. 

	27. 	Governing Law 

     This Lease will be construed and
enforced in accordance with the laws of the State of Texas and applicable
federal law. 

	28. 	Notices 

     Any notice or document required or
permitted to be delivered under this Lease must be in writing and will be deemed
to be delivered attempted delivery if postmarked by the U. S. Postal Service,
postage prepared, registered or certified mail, return receipt requested, or
sent by courier or Express Mail where evidence of delivery is retained,
addressed to the parties at their respective addresses as set out in the Basic
Lease information, or at such other address as they specify by written notice
delivered in accordance with this Paragraph. 

	29. 	Joint and Several Liability
  

     If the definition of Tenant above
includes more than one person or entity, all such persons or entities are
jointly and severally liable hereunder for the obligations of Tenant. 

	30. 	Time is of the Essence

     Time is of the essence with respect to
the performance by Tenant of every provision of this Lease in which time of
performance is specified. 

	31. 	Severability 

     A determination that any term of
provision of this Lease. or the application thereof to any person or
circumstance, is invalid or unenforceable, will not affect the remainder of his
Lease or 

the application of such term or circumstances other than this
as to which it is invalid or unenforceable. 

	32. 	Representations 

     Warranties and Covenants of Tenant.
Tenant represents, warrants and covenants that it is now in a solvent condition:
that no bankruptcy or insolvency proceedings are pending or contemplated by or
against Tenant or any guarantor or Tenant's obligation under this lease that all
reports. statements and other data furnished by Tenant to Landlord in connection
with this Lease are true and correct in all material respects; that the
execution and delivery of this Lease by Tenant does not contravene, result in a
breach of. or constitute a default under any contract or agreement to which
tenant is a party or by which Tenant may be bound and does not violate or
contravene any law, order, decree, rule or regulation to which Tenant is
subject, and that there are no judicial or administrative actions. suits, or
proceedings pending or threatened against or affecting Tenant's or any guarantor
of Tenant's obligations under this Lease. If Tenant is a corporation or
partnership, each of the persons executing this lease on behalf of Tenant
represents and warrants that Tenant is duly organized and existing, is qualified
to do business in the state in which the Premises are located. has full right
and authority to enter into this Lease, that the persons signing on behalf of
Tenant are authorized to do so by appropriate corporate or partnership action
and that the terms, conditions and covenants in this Lease are enforceable
against Tenant. If Tenant is a corporation, Tenant will deliver certified
resolutions to Landlord. upon request. evidencing that the execution and
delivery of this Lease has been duly authorized and properly executed. and will
deliver such other evidence of existence. authority and good standing as
Landlord shall require. 

	33. 	Recordation 

     Tenant agrees not to record this Lease
or any memorandum of this Lease without Landlord's consent. 

	34. 	Layout of the Land 

     This Lease does not guarantee, nor
does Landlord make any representation or warranty to Tenant as to the
configuration of the Land. the Building, the Parking Garage or the Common Areas.
However, so long as Tenant has not committed an event of default, the
configuration of the Building will not be modified in a manner that would deny
Tenant access to the Premises during the Term. 

	35. 	Successors and Assigns

     The conditions, covenants and
agreements contained in this Lease will be binding upon and, subject to the
provisions as to assignment and subletting, inure to the benefit of the parties,
their respective heirs, executors, administrators, successors and assigns. 

	36. 	
      Parking

	 	 
	37. 	
      Paragraph Headings

     The paragraph headings contained in
this lease are for convenience only and will in no way enlarge or limit the
scope or meaning of the various and several provisions. 

	38. 	No Merger 

     There shall be no merger of this Lease
or of Tenant's leasehold estate with the fee estate in the Premises by reason of
the fact that the same person may acquire or hold, directly or indirectly, both
all or any interest in this Lease or the Leasehold estate and all or any
interest in the fee estate. 

	39. 	Construction 

     Tenant acknowledges that it has read
and negotiated this lease in its entirety and is familiar with and understands
all its terms and provisions. Accordingly, Tenant agrees that if a dispute
arises, this Lease will not be construed in favor of either party, nor shall the
authorship of this Lease be a factor in any such construction. 

	40. 	Brokerage Fees 

     Tenant shall indemnify, defend and
hold Landlord harmless against any brokerage or leasing commission of finder's
fee claimed by any party in connection with this Lease, except for any such
claim made pursuant to a separate written agreement executed by Landlord and the
party making such claim. Tenant shall have the non-exclusive use of the Building
surface parking lot for its customers, invitees, and visitor's automobiles,
subject to rules and regulations for the use thereof as prescribed from time to
time by Landlord. During the initial Term of this Lease. Tenant shall be
permitted to use three (3) unreserved vehicle parking spaces in the Building's
parking areas and facilities at a charge of $0.00 per space per month, allowing
the parking of three (3) automobiles by Tenant. Tenant agrees to provide and
continually update the name and make. model, color and automobile license
numbers of each employee vehicle parked in the Building parking areas and
facilities. Tenant agrees to cooperate with any parking identification program,
including compelling its employees to display a “parking sticker” in a prominent
location as designated by Landlord. Landlord may make, modify, and enforce rules
and regulations relating to the parking of automobiles including without
limitation, rules respecting parking charges or fees applicable to all tenants
of the Building, and Tenant will abide by such rules and regulations. Landlord
shall have sole control over the parking of all vehicles (including but not
limited to cars, trucks. recreational vehicles, trailers, bicycles and
motorcycles) and shall designate parking areas and building service areas. A
copy of the current parking rules and regulations is attached to this Lease as
Exhibit E. 

	41. 	Entire Agreement: Amendments
  

     This Lease supersedes any and all
prior agreements with respect to the Premises between the parties and no oral
statements, representations or prior written matter will be binding. Nothing
contained in this Lease will give rise to duties or covenants on the part of the
Landlord, express or implied, other than the express duties and covenants set
forth herein. ANY 

REPRESENTATION OF LANDLORD'S AGENTS WHICH IS NOT INCORPORATED
IN THIS LEASE SHALL NOT BE BINDING UPON LANDLORD AND SHOULD BE CONSIDERED AS
UNAUTHORIZED. This Lease shall not be amended or added to in any way except by
written instruments executed by both parties or their respective successor in
interest. 

Submission of Lease THE SUBMISSION OF THIS LEASE FOR
EXAMINATION DOES NOT CONSTITUTE AN OFFER TO LEASE. AND THIS LEASE BECOMES
EFFECTIVE ONLY UPON EXECUTION BY TENANT AND BY AN OFFICER OF LANDLORD AUTHORIZED
TO EXECUTE THE LEASE. 

	TENANT: 	 	LANDLORD: 
	  	 	  
	South Sea Energy Corporation 	 	Westfalia, LP 
	 	 	 
	 	 	 
	By: Al Charuk 	 	By: Hermann Homann 
	Its: President 	 	Its: President 
	 	 	 
	 	 	 
	Tax ID Number 	 	  
	 	 	 
	 	 	 
	July 16, 2007

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