SEPARATION AGREEMENT AND GENERAL RELEASE

 

RECITALS

 

This Separation Agreement and General Release (“Agreement”) is made by and
between David Rector (“Executive”) and ZipRealty Inc. (the “Company”) (jointly
referred to as the “Parties”):

 

WHEREAS, Executive was employed by the Company;

 

WHEREAS, the Company and Executive entered into a proprietary information
agreement (the “Confidentiality Agreement”);

 

WHEREAS, the Company and Executive have entered into a Stock Option Agreement(s)
granting Executive the option to purchase shares of the Company’s common stock
subject to the terms and conditions of the Company’s 2004 Equity Incentive Plan,
as applicable, and the Stock Option Agreements (the “Stock Option Agreements”);

 

WHEREAS, the Executive’s employment relationship with the Company terminated
effective August 16, 2012, (the “Termination Date”);

 

WHEREAS, the Parties wish to resolve any and all disputes, claims, complaints,
grievances, charges, actions, petitions and demands that the Executive may have
against the Company, including, but not limited to, any and all claims arising
from or in any way related to Executive’s employment with or separation from the
Company;

 

NOW THEREFORE, in consideration of the promises made herein, the Parties hereby
agree as follows:

 

COVENANTS

 

1.          Consideration. The Company agrees to pay Executive the lump sum
equivalent of SIX (6) months of his base salary, less applicable withholding, in
a lump sum payment within seven (7) business days following the Effective Date
of this Agreement. For the purposes of Section 409A of the Internal Revenue Code
of 1986, as amended (the “Code”), the payment made pursuant to this section is
hereby designated as intended to be exempt from Code Section 409A and
accordingly, will be paid in all events no later than the last day of
Executive’s 2nd taxable year following the taxable year in which Termination
date occurs.

 

2.          Stock. The Parties agree that for purposes of determining the number
of shares of the Company’s common stock which Executive is entitled to purchase
from the Company, pursuant to the exercise of outstanding options, the Executive
will be considered to have vested only up to the Termination Date. Executive
acknowledges that as of the Termination Date, he will have vested in 271,319
options and no more. Further, as set forth in the Agreement, Executive will have
a limited period of time following the Termination Date to exercise Executive’s
outstanding Options and such Options may expire earlier than this time pursuant
to the terms and conditions that are applicable to the Options as set forth in
the Plan and the applicable Stock Option Agreement(s). The Company shall not be
obligated to provide Executive with further notice of the expiration of
Executive’s Options. Subject to any earlier termination of the Options that may
be required by Section 13(c) of the 2004 Plan, as applicable, Executive shall be
permitted an extension of time to exercise all vested Options until the earlier
of (i) February 14, 2014, and (ii) the date that is 10 years less one day after
the option grant date.

 

 

 

 

3.          Benefits. Executive’s health insurance benefits will cease August
31, 2012, subject to Executive’s right to continue his health insurance under
COBRA. Executive’s participation in all other benefits and incidents of
employment ceased on the Termination Date. Executive ceased accruing employee
benefits, including, but not limited to, vacation time and paid time off, as of
the Termination Date.

 

4.          No Consideration Absent Employee’s Material Representations and
Promises. Executive understands and agrees that he would not receive the
severance benefits specified in paragraph "1" above, except for the
representations and promises made by him in this Agreement.

 

5.          Confidential Information and Return of Company Property. Executive
shall continue to maintain the confidentiality of all confidential and
proprietary information of the Company and shall continue to comply with the
terms and conditions of the Confidentiality Agreement between Executive and the
Company. Executive may retain his Company issued laptop computer and cellular
telephone. Except as provided herein, Executive shall return all of the
Company’s property and confidential and proprietary information in his
possession to the Company. By signing this Agreement, Executive represents and
declares that he has returned all Company property. Executive also affirms that
Executive has returned all of the Company’s property, documents, and/or any
confidential information in Executive’s possession or control, except the
following item which the Company has permitted Executive to retain following
termination: Lenovo laptop and company issued cellular telephone. Executive also
affirms that Executive is in possession of all of Executive’s property that
Executive had at the Company's premises and that the Company is not in
possession of any of Executive’s property

 

6.          Affirmations. Executive affirms he has, has been paid or has
received all leave (paid or unpaid), compensation, wages, bonuses, commissions,
or benefits to which he may be entitled and that no other leave (paid or
unpaid), compensation, wages, bonuses, commissions, or benefits are due to him.
Executive further affirms he has no known workplace injuries or occupational
diseases that have not already been disclosed to the Company in writing, or
submitted to or adjudicated by the California Workers’ Compensation Appeals
Board, and that he has been provided or has not been denied any leave requested
under the Family Medical Leave Act, the California Family Rights Act, or any
other arguably applicable law. Executive represents, affirms, and warrants that
he presently knows of no facts or circumstances that would support a claim for
retaliation based on the filing and conclusion of leave under the California
Workers’ Compensation and Insurance Codes. Executive also affirms he has not
divulged any proprietary or confidential information of the Company. Executive
will continue to keep confidential such information consistent with the
Company’s policies or applicable law. Executive further affirms that all of the
Company's decisions regarding Executive’s pay and benefits through the date of
Executive's execution of this Agreement were not discriminatory based on age,
disability, race, color, sex, religion, national origin or any other
classification protected by law.

 

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7.          General Release of Claims. Executive, on his own behalf, and on
behalf of his respective heirs, family members, executors, agents, and assigns,
hereby fully and forever releases the Company and its current and former
officers, directors, employees, agents, attorneys, insurers, reinsurers,
investors, shareholders, administrators, affiliates, divisions, subsidiaries,
predecessor and successor corporations, and assigns, and their employee benefit
plans and programs and their administrators and fiduciaries (“the Releasees”),
from, and agrees not to sue concerning, any claim, duty, obligation or cause of
action relating to any matters of any kind, whether presently known or unknown,
suspected or unsuspected, that Executive may possess arising from any omissions,
acts or facts that have occurred up until and including the Effective Date of
this Agreement including, without limitation:

 

(a)          any and all claims relating to or arising from Executive’s
employment relationship with the Company and the termination of that
relationship;

 

(b)          any and all claims relating to, or arising from, Executive’s right
to purchase, or actual purchase of shares of stock of the Company, including,
without limitation, any claims for fraud, misrepresentation, breach of fiduciary
duty, breach of duty under applicable state corporate law, and securities fraud
under any state or federal law;

 

(c)          any and all claims under the law of any jurisdiction including, but
not limited to, wrongful discharge of employment, constructive discharge from
employment, termination in violation of public policy, discrimination,
harassment, retaliation, breach of contract, both express and implied, breach of
a covenant of good faith and fair dealing, both express and implied; promissory
estoppel, negligent or intentional infliction of emotional distress, negligent
or intentional misrepresentation, negligent or intentional interference with
contract or prospective economic advantage, unfair business practices,
defamation, libel, slander, negligence, personal injury, assault, battery,
invasion of privacy, false imprisonment, conversion, and disability benefits;

 

(d)          any and all claims for violation of any federal, state or municipal
statute, including, but not limited to, Title VII of the Civil Rights Act of
1964, the Civil Rights Act of 1991, the Americans with Disabilities Act of 1990,
the Employee Retirement Income Security Act of 1974 (except for any vested
benefits under any tax qualified benefit plan), The Fair Credit Reporting Act,
The Family Medical Leave Act, The California Medical Leave Act, The Worker
Adjustment and Retraining Notification Act, the Older Workers Benefit Protection
Act; the California Fair Employment and Housing Act, any provisions of the
California Labor Code that may be waived, including, but not limited to Labor
Code sections 1400-1408, and any and all applicable laws, statutes or
regulations of the state of California;

 

(e)          any and all claims for violation of the federal, or any state,
constitution;

 

(f)          any and all claims arising out of any other laws and regulations
relating to employment or employment discrimination;

 

(g)          any claim for any loss, cost, damage, or expense arising out of any
dispute over the non-withholding or other tax treatment of any of the proceeds
received by Executive as a result of this Agreement; and

 

(h)          any and all claims for attorneys’ fees and costs.

 

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Notwithstanding the foregoing, this Agreement does not waive rights or claims
that may arise after the date the Agreement is executed by Executive and does
not restrict or limit Executive’s right to challenge the validity of this
Agreement. Nor does this Agreement waive rights or claims under federal or state
law that Executive cannot waive by private agreement, such as a right of
indemnification under Labor Code Section 2802. Additionally, nothing in this
Agreement precludes Executive from filing a charge or complaint with or
participating in any investigation or proceeding before any federal or state
agency, including the Equal Employment Opportunity Commission. However, while
Executive may file a charge and participate in any proceeding conducted by a
state or federal agency, by signing this Agreement, Executive waives Executive’s
right to bring a lawsuit against Releasees and waives Executive’s right to any
individual monetary recovery in any action or lawsuit initiated by a federal or
state agency, such as the Equal Employment Opportunity Commission.

 

The Company and Executive agree that the release set forth in this section shall
be and will remain in effect in all respects as a complete general release as to
the matters released.

 

8.          Acknowledgement of Waiver of Claims Under ADEA. Executive
acknowledges that he is waiving and releasing any rights he may have under the
Age Discrimination in Employment Act of 1967 (“ADEA”) and that this waiver and
release is knowing and voluntary. Executive and the Company agree that this
waiver and release does not apply to any rights or claims that may arise under
ADEA after the Effective Date of this Agreement. Executive acknowledges that the
consideration given for this waiver and release Agreement is in addition to
anything of value to which Executive was already entitled. Executive further
acknowledges that he has been advised by this writing that:

 

(a)          he should consult with an attorney prior to executing this
Agreement;

 

(b)          he has up to twenty-one (21) days within which to consider this
Agreement;

 

(c)          he agrees that any modifications, material or otherwise, made to
this Agreement and General Release do not restart or affect in any manner the
original up to twenty-one (21) day consideration period;

 

(d)          he has seven (7) days following his execution of this Agreement to
revoke the Agreement. Any revocation within this period must be submitted, in
writing, to ZipRealty President and CEO, Charles C. Baker, and state, “I hereby
revoke my acceptance of our Agreement and General Release.” The revocation must
be personally delivered to President and CEO, Charles C. Baker or his designee,
or mailed to ZipRealty President and CEO, Charles C. Baker and postmarked within
seven (7) calendar days after Executive signs this Agreement and General
Release;

 

(e)          this Agreement shall not be effective until the revocation period
has expired; and,

 

(f)          nothing in this Agreement prevents or precludes Executive from
challenging or seeking a determination in good faith of the validity of this
waiver under the ADEA, nor does it impose any condition precedent, penalties or
costs from doing so, unless specifically authorized by federal law.

 

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9.          Civil Code Section 1542. Executive represents that he is not aware
of any claim by him other than the claims that are released by this Agreement.
Executive waives any and all rights or benefits which he may now or in the
future have under the terms of California Civil Code Section 1542, which
provides 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.

 

Executive agrees that he has read this Agreement and General Release, including
the waiver of California Civil Code Section 1542. Executive further agrees that
he has had the opportunity to consult an attorney about the Agreement and
General Release and specifically about the waiver of Civil Code Section 1542.
Executive acknowledges that he understands this Agreement and General Release
and the Civil Code Section 1542 waiver. Executive also affirms that he freely
and knowingly enters into this Agreement and General Release. Executive
acknowledges that he may later discover facts different from or in addition to
those he knows or now believes to be true with respect to the matters released
or described in this Agreement and General Release. Executive agrees that the
releases and agreements set forth in this Agreement and General Release will
remain effective in all respects notwithstanding any later discovery by
Executive of any different or additional facts.

 

10.         No Pending Lawsuits. Executive represents that he has no lawsuits,
claims, or actions pending in his name, or on behalf of any other person or
entity, against the Company or any other person or entity referred to herein.
Executive also represents that he does not intend to bring any claims on his own
behalf or on behalf of any other person or entity against the Company or any
other person or entity referred to herein, now known or unknown which may have
arisen, or which may arise, from Executive’s employment with or separation from
the Company as described in this Agreement or otherwise.

 

11.         Confidentiality. The Parties acknowledge that Executive’s agreement
to keep the terms and conditions of this Agreement confidential was a material
factor on which all parties relied in entering into this Agreement. Executive
hereto agrees to use his best efforts to maintain in confidence the existence of
this Agreement, the contents and terms of this Agreement, and the consideration
for this Agreement (hereinafter collectively referred to as “Settlement
Information”). Executive agrees to take every reasonable precaution to prevent
disclosure of any Settlement Information to third parties, and agrees that there
will be no publicity, directly or indirectly, concerning any Settlement
Information. Executive agrees to take every precaution to disclose Settlement
Information only to those attorneys, accountants, governmental entities, and
family members who have a reasonable need to know of such Settlement
Information. Executive and Company acknowledge that the Company may disclose the
terms of this Agreement if in its judgment it is required to do so by law,
including by any SEC requirement.

 

12.         No-Defamation or Unlawful Interference. Executive agrees to refrain
from any defamation, libel or slander of the Releasees, and any tortious
interference with the contracts, relationships and prospective economic
advantage of the Releasees

 

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13.         Breach. Executive acknowledges and agrees that any material breach
of this Agreement including, but not limited to the breach of Paragraphs 11
and/or 12, shall entitle the Company immediately to recover and/or cease the
severance benefits provided to Executive under this Agreement.

 

14.         No Admission of Liability. Executive agrees that the consideration
is given and received purely to compromise all claims and because Executive and
Company desire to avoid litigation. Executive agrees that he is not to be
considered, for any purpose or by any person, to have been the “prevailing
party” with respect to any allegations, charges or causes of action which could
have been alleged in any claim covered by this Agreement.

 

15.         Costs. The Parties shall each bear their own costs, expert fees,
attorneys’ fees and other fees incurred in connection with this Agreement.

 

16.         Attorneys Fees. The Parties shall each bear their own costs, expert
fees, attorneys’ fees and other fees incurred in connection with this Agreement,
except as provided in Paragraph 15 below.

 

17.         Authority. The Company represents and warrants that the undersigned
has the authority to act on behalf of the Company and to bind the Company and
all who may claim through it to the terms and conditions of this Agreement.
Executive represents and warrants that he has the capacity to act on his own
behalf and on behalf of all who might claim through him to bind them to the
terms and conditions of this Agreement. Each party warrants and represents that
there are no liens or claims of lien or assignments in law or equity or
otherwise of or against any of the claims or causes of action released herein.

 

18.         No Representations. Each party represents that it has had the
opportunity to consult with an attorney, and has carefully read and understands
the scope and effect of the provisions of this Agreement. In entering into this
Agreement, neither party has relied upon any representations or statements made
by the other party hereto which are not specifically set forth in this
Agreement.

 

19.         Severability. In the event that any provision, or any portion
thereof, becomes or is declared by a court of competent jurisdiction to be
illegal, unenforceable or void, this Agreement shall continue in full force and
effect without said provision or portion of said provision.

 

20.         Entire Agreement. This Agreement represents the entire agreement and
understanding between the Company and Executive concerning the subject matter of
this Agreement and Executive’s relationship with the Company, and supersedes and
replaces any and all prior agreements and understandings between the Parties
concerning the subject matter of this Agreement and Employee’s relationship with
the Company, with the exception of the Confidentiality Agreement and the Stock
Option Agreements.

 

21.         No Waiver. The failure of the Company to insist upon the performance
of any of the terms and conditions in this Agreement, or the failure to
prosecute any breach of any of the terms and conditions of this Agreement, shall
not be construed thereafter as a waiver of any such terms or conditions. This
entire Agreement shall remain in full force and effect as if no such forbearance
or failure of performance had occurred.

 

22.         No Oral Modification. This Agreement may only be amended in a
writing signed by Executiveand the Chief Executive Officer of the Company.

 

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23.         Governing Law. This Agreement shall be construed, interpreted,
governed, and enforced in accordance with the laws of the State of California,
without regard to choice-of-law provisions. Executive hereby consents to
personal and exclusive jurisdiction and venue in the State of California.

 

24.         Effective Date. This Agreement is effective on the eighth day after
execution of the Agreement by Executive.

 

25.         Counterparts. This Agreement may be executed in counterparts, and
each counterpart shall have the same force and effect as an original and shall
constitute an effective, binding agreement on the part of each of the
undersigned.

 

26.         Voluntary Execution of Agreement. This Agreement is executed
voluntarily and without any duress or undue influence on the part or behalf of
the Parties hereto, with the full intent of releasing all claims. The Parties
acknowledge that:

 

(a)          They have read this Agreement;

 

(b)          They have been represented in the preparation, negotiation, and
execution of this Agreement by legal counsel of their own choice or that they
have voluntarily declined to seek such counsel;

 

(c)          They understand the terms and consequences of this Agreement and of
the releases it contains; and

 

(d)          They are fully aware of the legal and binding effect of this
Agreement.

 

IN WITNESS WHEREOF, the Parties have executed this Agreement on the respective
dates set forth below.

 

Dated: 21 Aug 2012     /s/ Charles C. Baker       Charles C. Baker      
President and CEO         Dated: 16 August 2012   By: /s/ David A. Rector      
David Rector

 

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