EXHIBIT 10.49

SEPARATION AGREEMENT AND RELEASE OF ALL CLAIMS

This Separation Agreement and Release of All Claims (the “Agreement”) is between
Howard Tong (“Executive”) and U.S. Auto Parts Network, Inc., its foreign and
domestic subsidiaries (whether or not wholly-owned), parent corporations,
brother-sister corporations, benefit plans and plan administrators, affiliated
entities, joint ventures, successors and/or assigns (collectively referred to as
“Company” or “USAP”).

RECITALS

A. Executive was employed by the Company as its Chief Operating Officer.
Executive’s employment was terminated by the Company effective December 10, 2007
(“Separation Date”), and Executive will not provide services to the Company
after this date. Executive and the Company mutually desire to end their
relationship as amicably as possible and eliminate any future disputes. The
Company has elected to offer Executive compensation and benefits to which
Executive would not otherwise be entitled. The Company and the Executive (“the
Parties”) expressly disclaim any wrongdoing or any liability to the other. This
Agreement and compliance with it shall not be construed as an admission by the
Company or Executive of any liability or violation to the rights of either of
the Parties or any other person or as a violation of any order, law, statute
duty or contract whatsoever as to either of the Parties or any person.

AGREEMENTS

Based upon the foregoing, and in consideration of the mutual promises contained
in this Agreement, Executive and the Company (for its benefit and the benefit of
the other Company Parties as defined below) agree, effective upon the date of
execution by Executive, as follows:

1. Acknowledgment. Executive acknowledges that he has been paid all regular
salary, expenses, commissions, distributions, earned but unused vacation,
bonuses and Company benefits duty and owing as of the Separation Date, less
appropriate withholdings and is not owed any monies allowed, including but not
limited to those required under the California Labor Code, as of the Separation
Date. This sum is not consideration for this Agreement. Information regarding
the transfer or distribution of Executive’s 401(k) Retirement Plan Account,
while employed with the Company, will be or has been provided to Executive under
a separate cover by the Principal Financial Group.

 

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2. Consideration & Effective Date. The Parties recognize that, apart from this
Agreement, the Company is not obligated to provide Executive with any of the
benefits set forth hereunder. The “Effective Date” of this Agreement shall be
three (3) business days after receipt of this original fully executed Agreement
from the Executive. Subject to Executive’s compliance with the terms and
conditions of this Agreement, the Company agrees to provide Executive the
following consideration on the dates specified below:

(a) Severance. The Company will pay Executive a total of six (6) months
severance to be paid in monthly installments, in the gross monthly amount of
$20,833.22, less all applicable state and federal withholdings and other lawful
deductions (“Severance Payment”). The monthly Severance Payment will be paid to
the Executive subject to the terms of this Agreement, and after the Effective
Date, as follows: 1) Executive will receive equivalent to three (3) months
severance on first payroll period (consistent with the Company’s regular payroll
schedule) following the Effective Date; and 2) Executive will then receive the
remaining three (3) months of the Severance Payment in three (3) monthly
payments for three (3) consecutive months, to be paid on the first day of each
month, starting with the second month after the Effective Date, until fully paid
out.

(b) COBRA. Executive acknowledges and agrees it is his obligation and discretion
to timely enroll and qualify for the benefits under COBRA. Executive further
acknowledges and agrees that if he properly and timely enrolls for COBRA
benefits it is his obligation to reimburse the Company for the COBRA benefits.
As further consideration for this Agreement the Company agrees that upon
Executive’s timely and proper election of COBRA continuation coverage under the
Company’s health plan and proof provided by Executive of his timely and proper
enrollment and qualification for COBRA benefits, the Company will pay
Executive’s monthly COBRA premiums, for a maximum of six months, as specified in
this paragraph. The Company’s obligation to pay such premium reimbursements will
begin only after the Effective Date, to be paid until the earlier of (i) a
maximum of six (6) months following the Effective Date, for the period of
January through June of 2008, or (ii) until such time as Executive subsequently
becomes covered by another group health plan or gains employment with an
employer that offers a group health plan. Executive agrees to notify the Company
immediately if he becomes eligible for or covered by another group health plan.
Executive understands and agrees he is responsible for reimbursing the Company
for all other COBRA premiums aside from what has been specified in this
paragraph.

(c) Additional Payments. Executive understands he has been paid all expenses and
has received all reimbursements owed to him and that such sum is not
consideration for this Agreement. In further consideration for this Agreement,
the Company agrees to pay Executive a lump sum monthly payment of $850 per
month, for a total of six (6) months (hereinafter “Allowance Payment”). The
Company agrees to provide the Executive with the Allowance Payment on the first
day of each month, starting with the first month following the Effective Date,
for a total of six payments paid to the Executive, subject to the terms of this
Agreement and as specified herein, in six consecutive months.

 

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(d) Confirmation. Executive understands and acknowledges that he is not entitled
to and would not receive the consideration specified in Paragraphs 2(a), (b),
and (c) (referred to hereinafter collectively as the “Consideration”), including
the Payment and Severance Payment, but for compliance with the terms and
conditions of this Agreement. Executive further acknowledge that said
Consideration does not include any wages, accrued but unused vacation or any
other money or income to which the Executive is otherwise entitled.

3. Taxes. Not withstanding the tax deductions set forth in Paragraph 2 above,
Executive shall pay in full when due, and shall be solely responsible for, any
and all federal, state, or local income taxes or other taxes that are or may be
assessed against him relating to the Consideration provided, including the
Severance Payment and Payment received pursuant to this Agreement, as specified
in Paragraph 2, as well as all interest or penalties that may be owed in
connection with such taxes. Executive is not relying on any representations or
conduct of the Company with respect to the adequacy of the withholdings.

4. Release.

(a) Executive. Executive, hereby forever relieves, releases, and discharges the
Company as well as its past, present and officers, directors, administrators,
shareholders, employees, agents, attorneys, insurers, divisions, successors,
subsidiaries, parents, assigns, representatives, brother/sister corporations,
and all other affiliated or related corporations, all benefit plans sponsored by
the Company, and entities, and each of their respective present and former
agents, employees, or representatives, insurers, partners, associates,
successors, and assigns, and any entity owned by or affiliated with any of the
above (all of the foregoing are collectively referred to as the “Company
Parties”), from any and all claims, debts, liabilities, demands, obligations,
liens, promises, acts, agreements, costs and expenses (including but not limited
to attorneys’ fees), damages, actions, and causes of action, of whatever kind or
nature, including but not limited to any statutory, civil, administrative, or
common law claims, whether known or unknown, suspected or unsuspected, fixed or
contingent, apparent or concealed, arising out of any act or omission occurring
before Executive’s execution of this Agreement, including but not limited to any
claims based on, arising out of, or related to Executive’s employment with, or
the ending of Executive’s employment with the Company, any claims arising from
rights under federal, state, and local laws relating to the regulation of
federal or state tax payments or accounting; federal, state or local laws that
prohibit harassment or discrimination on the basis of race, national origin,
religion, sex, gender, age, marital status, bankruptcy status, disability,
perceived disability, ancestry, sexual orientation, family and medical leave, or
any other form of harassment or discrimination or related cause of action
(including but not limited to failure to maintain an environment free from
harassment and retaliation, inappropriate comments or touching and/or “off-duty”
conduct of other Company employees); statutory or common law claims of any kind,
including but not limited to, any alleged violation of Title VII of the Civil
Rights Act of 1964, The Civil Rights Act of 1991, Sections 1981 through 1988 of
Title 42 of the United States Code, as amended; The Employee Retirement Income
Security Act of 1971, as amended, The Americans with Disability Act of 1990, as
amended, the Workers Adjustment and Retraining Notification Act, as amended; the
Occupational Safety and Health Act, as amended, the Sarbanes-Oxley Act of 2002,
the California Family Rights Act (Cal. Govt. Code § 12945.2 et seq.), the
California Fair Employment and Housing

 

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Act (Cal. Govt. Code § 12900 et. seq.), statutory provision regarding
retaliation/discrimination for filing a workers’ compensation claim under Cal.
Labor Code § 132a, California Unruh Civil Rights Act, California Sexual
Orientation Bias Law (Cal. Lab. Code § 1101 et. seq.), California AIDS Testing
and Confidentiality Law, California Confidentiality of Medical Information (Cal.
Civ. Code § 56 et. seq.), contract, tort, and property rights, breach of
contract, breach of implied-in-fact contract, breach of the implied covenant of
good faith and fair dealing, tortious interference with contract or current or
prospective economic advantage, fraud, deceit, invasion of privacy, unfair
competition, misrepresentation, defamation, wrongful termination, tortious
infliction of emotional distress (whether intentional or negligent), breach of
fiduciary duty, violation of public policy, or any other common law claim of any
kind whatsoever; any claims for severance pay, sick leave, family leave,
liability pay, overtime pay, vacation, life insurance, health insurance,
continuation of health benefits, disability or medical insurance, or Executive’s
401(k) rights or any other fringe benefit or compensation, including but not
limited to stock options; any claim for damages or declaratory or injunctive
relief of any kind. The Parties agree and acknowledge that the release contained
in this Paragraph 4 does not apply to any vested rights Executive may have,
including those under any 401(k) Savings Plan with the Company. Executive
represents that at the time of the execution of this Agreement, he suffers from
no work-related injuries and has no disability or medical condition as defined
by the Family Medical Leave Act. Executive represents that he has no workers’
compensation claims that he intends to bring against the Company. Executive
understands that nothing contained in this Agreement, including, but not limited
to, this Paragraph 4, will be interpreted to prevent him from filing a charge
with a governmental agency or participating in or cooperating with an
investigation conducted by a governmental agency. However, Executive agrees he
is waiving the right to monetary damages or other individual legal or equitable
relief awarded as a result of any such proceeding. Executive further
acknowledges that he has been paid all wages, vacation, bonuses or other income
owed to him and thus this release also releases the Company for all claims of
unpaid wages, including unpaid overtime wages, related to his employment with
the Company and subject to the terms specified in Paragraph 2 of this Agreement.
Excluded from this Release are claims that by law cannot be released in this
Agreement.

(b) The Company. The Company, on behalf of itself, its officers, and directors,
hereby forever relieves, releases, and discharges Executive from any and all
known claims, debts, liabilities, demands, obligations, liens, promises, acts,
agreements, costs and expenses (including but not limited to attorneys’ fees),
damages, actions, and causes of action, of whatever kind or nature, including
but not limited to any statutory, civil, administrative, or common law claims,
suspected or unsuspected, fixed or contingent, arising out of any act or
omission occurring before the Effective Date of this Agreement, including but
not limited to any claims based on, arising out of, or related to Executive’s
employment with, or the ending of the Executive’s employment with, the Company.
The Parties agree however, that this release does not encompass (i) claims for
violation of the federal or state securities laws, including but not limited to
any claims related to the Executive’s alleged participation in insider trading,
or (ii) any other claims that by law cannot be excluded by a release.

 

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(c) Mistakes in Fact; Voluntary Consent. Executive expressly and knowingly
acknowledges that, after the execution of this Agreement, Executive may discover
facts different from or in addition to those that he now knows or believes to be
true with respect to the claims released in this Agreement. Nonetheless, this
Agreement shall be and remain in full force and effect in all respects,
notwithstanding such different or additional facts and Executive intends to
fully, finally, and forever settle and release those claims released in this
Agreement. In furtherance of such intention, the release given in this Agreement
shall be and remain in effect as a full and complete release of such claims,
notwithstanding the discovery and existence of any additional or different
claims and Executive assumes the risk of misrepresentations, concealments, or
mistakes, and if Executive should subsequently discover that any fact relied
upon in entering into this Agreement was untrue, that any fact was concealed, or
that his understanding of the facts or law was incorrect, he shall not be
entitled to set aside this Agreement or the settlement reflected in this
Agreement or be entitled to recover any damages on that account.

(d) Section 1542 of the California Civil Code. Executive expressly waives any
and all rights and benefits conferred upon the Parties by Section 1542 of the
California Civil Code, which states 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.

(e) No Lawsuits. Executive represents that he has not filed any claims, charges,
complaints or actions against the Company or any Company Parties, or assigned to
anyone any charges, complaints, claims or actions against the Company or any
Company Parties. Executive agrees to take any and all steps reasonably necessary
to insure that no lawsuit arising out of any claim released herein shall ever be
prosecuted by Executive or on his behalf in any forum, and hereby warrants and
covenants that no such action has been filed or shall ever be filed or
prosecuted. Executive also agrees that if any claim is prosecuted in his name
before any court or administrative agency that he waives and agrees not to take
any award or other damages from such suit to the extent permissible under
applicable law. Executive further agrees to cooperate fully with the Company in
the event of a lawsuit or threat of lawsuit arising out of acts and events
occurred during Executive’s employment with the Company. In the event there is
need for cooperation from the Executive, the Company agrees that any request for
cooperation under this paragraph will be reasonable and that the Company will a
make good faith effort to accommodate Executive’s schedule.

(f) Confidentiality / Nondisparagment. The Parties agree that, except to the
extent required by law, subpoena or by the Company’s independent auditors, they
will not disclose to others (i) the fact or terms of this Agreement, (ii) the
amounts referenced in this Agreement, including the Consideration specified in
Paragraph 2, or (iii) the fact

 

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of the payment of these amounts. Executive agrees that, except to the extent
required by law or subpoena, he will not disclose to others any disparaging or
derogatory information pertaining to or relating to (A) the Company or the
Company’s business, products, services, officers, directors, agents, attorneys,
employees; or (B) Executive’s employment with the Company, or the ending of
Executive’s employment with the Company, except that he may disclose such facts
to his attorneys, accountants, insurers, spouse, or licensed physician or other
professional advisors to whom the disclosure is necessary to effect the purpose
for which the professional has been consulted, provided that the professional
agrees to be bound by his confidentiality provision. Except as otherwise
specifically provided herein, Executive agrees that if ever asked to disclose
any fact covered by this Paragraph, he must state words to the effect of “I
cannot comment.” Nothing contained in this Paragraph shall preclude Executive
from revealing or describing his employment with the Company to his prospective
employers; provided however, such disclosure shall be limited to the fact that
he was employed by the Company, the dates of his employment, his job title and
position with the Company, and the nature of his duties with the Company.
Executive agrees to direct all requests for references to Michael McClane, Chief
Financial Officer, U.S. Auto Parts Network, Inc., at (310) 735-0085. The Company
acknowledges that in describing Executive’s employment with the Company to his
prospective employer, it will follow its regular practice of limiting any such
disclosure to the fact that he was employed by the Company, the dates of his
employment with the Company, his job title and position with the Company, and
any other information the Company has been required to disclose by the state or
federal securities laws and filings. The Company further agrees that its
officers or directors will not knowingly make any derogatory or disparaging
statements to any third party about Executive or his separation from the Company
unless otherwise required by law or subpoena, and Company shall respond
accurately and fully to any question, inquiry, or request for information
required by legal process. The confidentiality obligations contained in this
Paragraph shall be in addition to any other confidentiality agreements between
the Parties. Notwithstanding the foregoing, nothing in this Agreement shall be
construed as precluding disclosure where such disclosure is required and
compelled by law. In the event that Executive is required and compelled by law
to disclose any such matters, he will first give fifteen (15) days advance
written notice (or, in the event that it is not possible to provide fifteen
(15) days written notice, as much written notice as is possible under the
circumstances) to the Company so that the Company may present and preserve any
objections that it may have to such disclosure and/or seek an appropriate
protective order. Executive acknowledges and agrees that this paragraph is a
material inducement to the Company’s entering into this Agreement, and further
acknowledges and agrees that any breach of this paragraph shall be subject to a
claim for damages or equitable relief (or both), including but not limited to
injunctive relief. The Company agrees that should it be required by law to
disclose this Agreement (or provisions thereof), or through the SEC filings, or
some other means, the Company will provide Executive notice of such obligation,
as specified in this paragraph.

5. Proprietary Information and Return of Company Property. Executive agrees to
continue to abide by the terms and provisions of the U.S. Auto Parts Network,
Inc.’s Confidentiality and Non-Disclosure Agreement, which he executed during
his employment with

 

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the Company, and have been attached hereto and incorporated by reference as
Exhibit A to this Agreement. Executive further agrees to immediately return all
Company property in his possession, including but not limited to all materials,
documents, photographs, handbooks, manuals, electronic records, files, laptop
computer, blackberry, cellular telephones, keys and access cards, no later than
two days after his execution of this Agreement.

6. Remedies. Executive understands that in the event he violates any provision
of this Agreement, including the provisions set forth in Paragraphs 4 or 5,
then: (a) the Company shall have the right to apply for and receive an
injunction to restrain any violation of this Agreement; (b) the Company shall
have the right to immediately discontinue any enhanced benefits or Consideration
provided to him under this Agreement; (c) Executive will be obligated to
reimburse the Company its cost and expenses incurred in defending his lawsuit
and enforcing this Agreement, including the Company’s court costs and reasonable
attorneys fees; and (d) as an alternative to (c),at the Company’s option,
Executive shall be obligated upon written demand by the Company, to repay the
Company the cost of all but $500 of the enhanced benefits paid under this
Agreement, including the Consideration. Executive acknowledges and agrees that
the covenants contained in this Paragraph 6 shall not affect the validity of
this Agreement and shall not be deemed to be a penalty or forfeiture. The
remedies available to the Company pursuant to this Paragraph 6 are in addition
to, and not in lieu of, any remedies which may be available under statutory
and/or common law relating to trade secrets and the protection of the Company’s
business interest generally.

7. Nonassignment. Executive represents and warrants that he has not assigned or
transferred any portion of any claim or rights he has or may have to any other
person, firm, corporation or any other entity, and that no other person, firm,
corporation, or other entity has any lien or interest in any such claim.

8. Miscellaneous Provisions

(a) Integration. This Agreement constitutes a single, integrated written
contract expressing the entire Agreement of the parties concerning the subject
matter referred to in this Agreement. No covenants, agreements, representations,
or warranties of any kind whatsoever, whether express or implied in law or fact,
have been made by any party to this Agreement, except as specifically set forth
in this Agreement. All prior and contemporaneous discussions, negotiations, and
agreements have been and are merged and integrated into, and are superseded by,
this Agreement.

(b) Modifications. No modification, amendment, or waiver of any of the
provisions contained in this Agreement shall be binding upon the Parties to this
Agreement unless made in writing and signed by both Parties.

(c) Severability. Whenever possible, each provision of this Agreement shall be
interpreted in such a manner as to be effective and valid under applicable law
and to carry out each provision herein to the greatest extent possible, but if
any provision of this Agreement is held to be void, voidable, invalid, illegal
or for any other reason unenforceable, the validity, legality and enforceability
of the other provisions of this Agreement will not be affected or impaired
thereby.

 

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(d) Non-Reliance on Other Parties. Except for statements expressly set forth in
this Agreement, neither of the Parties has made any statement or representation
to any other Party regarding a fact relied on by the other Party in entering
into this Agreement, and no Party has relied on any statement, representation,
or promise of any other party, or of any representative or attorney for any
other Party, in executing this Agreement or in making the settlement provided
for in this Agreement.

(e) Negotiated Agreement. The terms of this Agreement are contractual, not a
mere recital, and are the result of negotiations between the Parties.
Accordingly, neither of the Parties shall be deemed to be the drafter of this
Agreement.

(f) Successors and Assigns. This Agreement shall inure to the benefit of and
shall be binding upon the heirs, successors, and assigns of the Parties hereto
and each of them. In the case of the Company, this Agreement is intended to
release and inure to the benefit of the Company and the Company Parties.

(g) Applicable Law. This Agreement shall be construed in accordance with, and
governed by, the laws of the State of California without taking into account
conflict of law principles.

(h) This Agreement may be executed via facsimile and in one or more
counterparts, each of which shall be deemed an original, but all of which
together constitute one and the same instrument, binding on the parties.

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EXECUTIVE ACKNOWLEDGES AND AGREES THAT EXECUTIVE

HAS CAREFULLY READ AND VOLUNTARILY SIGNED THIS

AGREEMENT, THAT EXECUTIVE HAS HAD AN OPPORTUNITY TO

CONSULT WITH AN ATTORNEY OF EXECUTIVE’S CHOICE, AND

THAT EXECUTIVE SIGNS THIS AGREEMENT WITH THE INTENT OF

RELEASING THE COMPANY AND THE COMPANY PARTIES FROM

ANY AND ALL CLAIMS.

ACCEPTED AND AGREED TO:

 

March 11, 2008     March 5, 2008 U.S. AUTO PARTS NETWORK, INC.     EXECUTIVE By:
  /s/ SHANE EVANGELIST     /s/ HOWARD TONG   Name:   Shane Evangelist     Name:
  Howard Tong   Its:   CEO     Address:*************

 

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