Document:

exv10w69

 

Exhibit
10.69 

April 19, 2007

HAND DELIVERED

Ken Constable

[Home Address]

Re: Separation Agreement and General Release

Dear Ken:

     This letter, upon your signature, will constitute the agreement (hereafter “Agreement”)
between you and RedEnvelope, Inc. (“Company”) on the terms of your separation from employment with
the Company.

     1. You resigned as President and Chief Executive Officer and as a member of the Board of
Directors of the Company effective at the start of business on March 29, 2007 (the “Separation
Date”). As of the Separation Date, you agree that you will not say or do anything purporting to
bind the Company, and you will no longer represent to anyone that you are still an employee of the
Company or a member of the Board of Directors of the Company.

     2. Following the Separation Date you received your final paycheck, including all salary and
other compensation due through March 29, 2007 and a check for your accrued but unused PTO and Float
Time.

     3. You agree that you shall return to the Company all property (including without limitation
all equipment, keys, cell phones, tangible proprietary information, documents, records, notes,
contracts and computer-generated materials) furnished to or created or prepared by you in
connection with your employment with the Company. You may retain for your personal use the
blackberry, with account and phone number transferred from the Company to you, and Dell Latitude X1
laptop computer, after the Company cleanses it of Company documents, provided for your use by the
Company. You shall be responsible for all monthly fees and personal usage charges for the
blackberry after April 30, 2007.

     4. In consideration for your promises and covenants in this Agreement, the Company will pay
you a severance amount of $375,000.00 (“Severance Amount”) as outlined in your Employment Agreement
with the Company dated February 18, 2006 (“Employment Agreement”). This Severance Amount will be
paid in biweekly installments, less applicable payroll deductions and all required withholdings, in
accordance with the Company’s regular payroll schedule, during the twelve (12) calendar months
following the Effective Date (as defined below), provided however that the first severance payment
shall be made to you on the first business day following the Effective Date and shall include the
aggregate amount of accrued severance as of the Effective
Date. Severance payments thereafter shall be made in accordance with the Company’s regular
payroll schedule. As additional consideration for such promises and covenants, the Company

 

 

Ken Constable

April 19, 2007

Page 2

will
pay for up to twelve (12) months of premiums to continue your and your eligible dependents’
healthcare insurance coverage under COBRA (as defined below), should you elect to continue such
coverage. These COBRA premium payments will be paid on a monthly basis following receipt of
confirmation of your continued participation in such insurance programs from the Company’s
insurance carrier during the twelve (12) calendar months following the Effective Date of this
Agreement. Any tax obligations which may arise out of these payments are your sole responsibility,
and you agree to indemnify and defend the Company from and against any and all taxes, interest,
penalties, claims or other liabilities of any kind arising from or related to your failure to pay
tax obligations owed by you as a result of these payments. You acknowledge and agree that you are
not entitled to payment of any portion of your incentive compensation target or any payments with
respect to your Incentive Plan (as defined in your Employment Agreement).

     5. As of the Separation Date, you were no longer eligible to participate in any of the
Company’s benefits or compensation plans, including but not limited to the Company’s disability,
pension and 401(k) plans, except as provided by law, under the terms of the applicable plans, or as
provided in this paragraph. Your existing coverage under the Company’s group health insurance plan
(and, if applicable, the existing group health coverage of your eligible dependents) will terminate
on April 30, 2007. Prior to that date, the Company will provide you information regarding your
rights to elect continuation of this health insurance coverage, at your own expense (except as set
forth in paragraph 4), under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”),
provided you make a timely election to do so. Nothing in this Agreement will impair any rights you
may have to elect continued health insurance coverage under COBRA.

     6. As of your Separation Date, 54,167 shares of common stock of the Company have vested under
your Restricted Stock Award Agreement dated March 1, 2006 (the “Stock Award Agreement”). In
addition, in accordance with your Employment Agreement, twenty-five percent (25%) of the then
unvested shares of restricted common stock of the Company (36,458 shares) under the Restricted
Stock Award Agreement shall immediately vest and become nonforfeitable as of your Separation Date,
so that in aggregate as of your Separation Date 90,625 shares of common stock of the Company have
vested. The remaining unvested shares (109,375 shares) shall be immediately and automatically
forfeited to the Company and within 30 days of the Separation Date, the Company shall pay you
$1,093.75 ($0.01 times the number of shares forfeited) for the forfeited shares pursuant to the
terms of your Restricted Stock Award Agreement. In addition, the Company shall withhold a whole
number of shares of common stock of the Company sufficient to satisfy the minimum applicable tax
withholding obligation with respect to the vesting of the restricted stock described above.

     7. As of your Separation Date, 2,916 shares of common stock of the Company subject to
outstanding options held by you have vested. The remaining unvested shares of common stock of the
Company subject to outstanding options held by you (17,084 shares) shall immediately vest and
become fully exercisable as of the Separation Date. The time periods and procedures for exercise
of such options, are governed by the terms of: (1) any existing Notice of Stock Option Grants and
Stock Option Agreements, signed by both you and the Company (collectively

 

 

Ken Constable

April 19, 2007

Page 3

“Stock Agreements”); and
(2) the Company’s 1999 Stock Plan (“Stock Plan”). Nothing in this Separation Agreement will affect
any existing, vested rights you may have under the Restricted Stock Award Agreement, Stock
Agreements or Stock Plan. All shares under outstanding options not exercised by the end of the
period specified in your Stock Agreements will be forfeited. You acknowledge and agree that any
incentive stock options that you hold will retain their status as incentive stock options for tax
purposes until the date that is three (3) months after the Separation Date, after which they will
be treated for tax purposes as nonstatutory stock options, subject to ordinary income realization
and required tax withholding at the time of exercise.

     8. You acknowledge and agree that you remain subject to certain restrictions on your ability
to purchase and sell shares of the Company’s stock following the Separation Date. Specifically,
you agree that you will not purchase, sell or otherwise transfer any shares of the Company’s stock
until the third business day after the Company releases its earnings for the fiscal year ended
March 25, 2007, which release the Company currently anticipates will occur in the middle of May.
You further agree that you will comply with all restrictions on the sale of your shares of Company
stock under applicable securities law.

     9. The Company agrees to reimburse you for up to $30,000 in outplacement support services
incurred within one year of the Separation Date upon the Company’s receipt of reasonable evidence
of payment. In addition, the Company agrees to reimburse you for up to $10,000 of legal fees that
you incur in the negotiation of this Agreement upon the Company’s receipt of an invoice or other
reasonable evidence of payment. The Company also agrees to reimburse you for any expense reports
submitted for business expenses incurred prior to the Separation Date in accordance with the
Company’s business expense reimbursement policy; provided that you submit such expense reports
within 60 days after the Separation Date.

     10. Except as otherwise provided in this Agreement, on behalf of yourself and your
representatives, agents, heirs and assigns, you waive, release, discharge and promise never to
assert any and all claims, liabilities or obligations of every kind and nature (hereinafter,
“Claims”), whether known or unknown, suspected or unsuspected, claimed or unclaimed, that you ever
had, now have or might have as of the date you sign this Agreement against the Company and/or any
of its past or present officers, directors, employees, shareholders, parents, subsidiaries,
affiliates, representatives, attorneys, fiduciaries, predecessors, successors, agents or assigns
(collectively “Released Parties”). The released Claims include, without limitation, any claims
arising from or related in any way to your hiring, employment, compensation or separation from
employment with the Company, any Company benefits or benefit plans, and/or the execution of this
Agreement. The released Claims also specifically include, without limitation, any Claims arising
under any federal, state and local statutory or common law, such as Title VII of the Civil Rights
Act, the Age Discrimination in Employment Act of 1967, the
Family and Medical Leave Act, the California Fair Employment and Housing Act, the California Family
Rights Act, the Americans With Disabilities Act, the Employee Retirement Income Security Act, the
Fair Labor Standards Act, the California Labor Code (including section 132a claims), the California
Government Code (all as amended), the law of contract and tort, and any Claim for recovery of costs
and/or attorney’s fees. The released Claims will not include any Claims for:

 

 

Ken Constable

April 19, 2007

Page 4

     (a) state unemployment insurance,

     (b) disability benefits,

     (c) workers’ compensation benefits,

     (d) benefit entitlements vested as of the Separation Date under any benefit plans maintained
by the Company for its officers or employees,

     (e) indemnity for your actions as an officer and director of the Company, to the full extent
permitted by the Company’s by-laws, by the Indemnification Agreement entered into between you and
the Company, and by the provisions of California law, and

     (f) unwaivable claims under the California Labor Code.

     In addition, nothing in this Agreement prevents you from filing, cooperating with, or participating
in any proceeding before the Equal Employment Opportunity Commission or the California Department
of Fair Employment and Housing or another state Fair Employment Practices Agency (except that you
acknowledge that you may not be able to recover any monetary benefits in connection with any such
claim, charge or proceeding).

     11. You understand that, as provided under the Age Discrimination in Employment Act of 1967,
you have twenty-one (21) days after receipt of this Agreement within which you may review and
consider, discuss with an attorney of your own choosing, and decide to execute or not execute it.
You also understand that for a period of seven (7) days after you sign this Agreement, you may
revoke this Agreement and that the Agreement will not become effective until seven (7) days after
you sign it, and only then if you do not revoke it (the “Effective Date”). In order to revoke this
Agreement, you must deliver to the Chairman of the Board of the Company, by no later than seven (7)
days after you execute this Agreement, a letter stating that you are revoking it.

     12. You also waive, release, discharge and promise never to assert any and all claims against
any of the Released Parties, even if you do not now know or believe that you have any such claims.
You therefore expressly waive the protection of California Civil Code section 1542, which provides
that: 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 to him or her must
have materially affected his or her settlement with the debtor.

     In short, you agree that you will not accept the benefits of any lawsuits or claims of any
kind brought on your behalf against the Company or any of the other Released Parties, except to
enforce any provision of this Agreement.

     13. Unless required by court order or lawfully issued subpoena, until such time as the terms
of this Agreement are publicly disclosed by the Company in accordance with applicable securities

 

 

Ken Constable

April 19, 2007

Page 5

laws, you will keep the terms of this Agreement strictly confidential and will not disclose to
anyone, without the prior written permission of the Chairman of the Board of the Company, any
information regarding the terms of this Agreement, the benefits provided to you under it, or the
fact that a payment was made to you; provided, however, that you may disclose this information to
your spouse or domestic partner, and to your attorneys, accountants or other professional advisors
as necessary for them to render professional services to you. Before making any disclosure to any
person(s) permitted under this paragraph you will advise such person(s) of this confidentiality
provision and require them to comply with it to the same extent as you must.

     14. All applicable terms of the Confidential Information and Invention Assignment Agreement
that you signed with the Company on February 21, 2006 (“Confidentiality Agreement”) will remain in
full force and effect. A copy of the Confidentiality Agreement is attached hereto as Exhibit A and
incorporated herein by reference. You also agree to sign the Termination Certificate attached as
Exhibit C to your Confidentiality Agreement.

     15. You shall not for a period of one (1) year after the Separation Date, directly or
indirectly, (a) solicit or endeavor to solicit, the services, as an employee, consultant, or in any
capacity, or solicit or entice to quit their employment with the Company, any of the Company’s
employees or other service providers; or (b) use the Company’s Confidential Information (as defined
in the Confidentiality Agreement”) to encourage, entice, or in any way influence any party to
diminish, cease, or refrain from any business relationship or arrangement of any kind with the
Company.

     16. You agree to cooperate with the Company’s reasonable requests in the defense of any action
brought by any third party against the Company that relates to your employment by the Company or
relates to any matter that occurred during your employment with the Company. The Company will
compensate you at the rate of $500 per day for your time spent in cooperating with the Company as
described in this paragraph 14.

     17. In the event that you breach any of your obligations to the Company under this Agreement
(including Exhibit A), the Company will have no further obligation or liability to you under this
Agreement and will be entitled to immediate return of any and all benefits provided to you under
this Agreement and to obtain injunctive and all other available relief provided at law or equity.
All other duties and obligations under the Agreement, however, including your waivers and releases,
shall remain in full force and effect.

     18. Except as specified below, to the fullest extent allowed by law, any and all disputes,
claims or controversies of any kind arising out of or related in any way to the interpretation or
enforcement of this Agreement, or any other matter (including any statutory or common law claims
against the Company or any of the other Released Parties) shall be fully and finally
resolved through binding arbitration, before a neutral arbitrator, in San Francisco, California, in
accordance with the then existing national rules of the American Arbitration Association for the
resolution of employment disputes, as modified in any respect necessary to comply with the
requirements of California law for enforcement of arbitration agreements regarding such disputes.
You and the Company therefore specifically waive any right to a jury trial on any such disputes,
claims or controversies. The Company shall pay for the costs of the arbitration,

 

 

Ken Constable

April 19, 2007

Page 6

including all
arbitrator fees. Except as may be inconsistent with applicable law, the prevailing party in any
arbitration shall be entitled to an award of its costs (excluding AAA administrative and arbitrator
fees) and reasonable attorneys fees, in addition to any other relief to which it is entitled. This
arbitration provision shall not apply to any claims for injunctive or other similar equitable
relief.

     19. This Agreement will in all respects be interpreted, enforced and governed under the laws
of the State of California, without regard to the conflicts of laws rules thereof. In interpreting
the language of this Separation Agreement, both parties shall be treated as having drafted the
Agreement after meaningful negotiations. If any provision of this Agreement is held to be invalid,
void or unenforceable, the remaining provisions shall remain in full force and effect to the
fullest extent permitted by law. This Agreement will inure to the benefit of and be binding upon
the heirs, representatives, successors and assigns of each of the parties.

     20. This Agreement (including any exhibits) and the Indemnification Agreement you executed
with the Company, a copy of which is attached hereto as Exhibit B and incorporated herein by
reference, which shall remain in effect following the Separation Date in accordance with its terms
constitute the entire agreement between the parties as to matters discussed herein and supersedes
any prior or contemporaneous negotiations, representations, promises, agreements, and/or
understandings of the parties with respect to such matters, whether written or oral, except as
specifically set forth in this Agreement. The parties acknowledge that they have not relied on any
promise, representation or warranty, expressed or implied, not contained in this Agreement. This
Agreement may only be modified, or any specific requirements waived, in a writing signed by you and
the Chairman of the Board of the Company.

To accept the Agreement, please date and sign this letter and return it to me.

The Company wishes you success in your future endeavors.

	 	 	 	 	 
	 

	 	RedEnvelope, Inc.	 	 
	 
	 	 	 	 
	 

	 	/s/ John Pound
 

Name John Pound
	 	 
	 

	 	Title Executive Chairman	 	 

Exhibit A — Confidential Information and Invention Assignment Agreement

Exhibit B — Indemnification Agreement

AGREED:

By signing this letter, I acknowledge that I have read and had the opportunity to carefully review
and consider this Separation Agreement (with an attorney of my choice if so desired); that I fully

 

 

Ken Constable

April 19, 2007

Page 7

understand all of the terms in the Separation Agreement (and in the attached exhibit); that I am
competent to enter into this Separation Agreement; and that I voluntarily agree to each of the
terms set forth above.

	 	 	 	 	 	 	 
	Date: April 19, 2007

	 	 	 	/s/ Ken Constable	 	 
	 

	 	 	 	 

Ken Constableexv10w70

 

Exhibit
10.70 

June 15, 2007

DELIVERED VIA UPS

Scott Loly

319 Arkansas Street

San Francisco, CA 94107

Re:      Separation Agreement and General Release

Dear Scott:

          This letter, upon your signature, will constitute the agreement (hereafter “Agreement”)
between you and RedEnvelope, Inc. (“Company”) on the terms of your separation from employment with
the Company.

          1. Your employment with the Company will end effective at the close of business on Friday,
June 15, 2007 (“Separation Date”). Accordingly, as of that date, you will no longer represent to
anyone that you are still an employee of the Company and will not say or do anything purporting to
bind the Company.

          2. On the Separation Date you will receive your final paycheck, including all salary and other
earned compensation due through June 15, 2007, including without limitation, all of your accrued
but unused Paid Time Off as of the Separation Date.

          3. You represent and agree that by no later than the Separation Date you will have returned to
the Company and not retained any Company, customer or vendor property or information that you
obtained in the course of your employment with the Company, including without limitation, (a) any
personal computers or computer equipment, fax modem, printer, keys to any Company building, office
or property, building pass, cellular telephone, pager, phone card, credit card, Blackberry,
electronic organizer and/or PDA device (collectively “Company Equipment”); (b) any Company
documents, files, records, data, employee records, confidential, proprietary or trade secret
information (“Company Information”); and (c) any documents, files, records, data or other
information of any kind, whether stored electronically or otherwise, pertaining to any of the
Company’s past, present or potential customers, vendors or suppliers that you obtained as a result
of your employment with the Company (“Customer Information”). You further specifically acknowledge
and agree that, in addition to any hard copy documents containing Company Information or Customer
Information, you have destroyed, deleted or returned to the Company any Company Information or
Customer Information that was previously maintained or stored by you on any laptop or other
computer or electronic storage device or media retained by you or used by you in connection with
your employment with the Company, including without limitation any computer or computer discs used
or maintained by you at any location outside of the Company’s premises.

          4. In consideration for your promises and covenants in this Agreement, within fifteen (15)
days after the Effective Date (as defined below), the Company will pay you a lump sum amount of
$120,750.00, equal to six months base salary, less applicable tax withholding and all other
required or authorized payroll deductions (“Severance Amount”). Any tax obligations, if any, which
may arise out of this payment are your sole responsibility and you agree to indemnify and defend
the Company and its officers, directors, employees, agents, affiliates and successors from and
against any and all taxes, interest, penalties, claims or other liabilities of any kind arising
from or related to this payment.

 

 

Scott Loly

June 13, 2007

Page 2

          5. You acknowledge and agree that as of the Separation Date, you will have received all earned
wages due from the Company as a result of your employment with the Company. In light of the
forgoing, you further acknowledge and agree that California Labor Code Section 206.5 is not
applicable to the release contained in this Agreement. That section provides in pertinent part
that: “No employer shall require the execution of any release of any claim or right on account of
wages due, or to become due, or made as an advance on wages to be earned, unless payment of such
wages has been made.”

          6. As of the Separation Date you will no longer be eligible to participate in any of the
Company’s benefits or compensation plans, except as provided by law, under the terms of the
applicable plans, or as provided in this paragraph. Your existing coverage under the Company’s
group health insurance plan (and, if applicable, the existing group health coverage of your
eligible dependents) will terminate on June 30, 2007 By letter dated June 12, 2007, you were
provided with information regarding your rights to elect continuation of this health insurance
coverage, at your own expense, under the Consolidated Omnibus Budget Reconciliation Act of 1985
(“COBRA”) or any similar state law, provided you make a timely election to do so. Nothing in this
Agreement will impair any rights you may have to elect continued health insurance coverage under
COBRA or any similar state law.

          7. All vesting of any existing grants to you of Company stock options will cease as of the
Separation Date. Any rights you may have to exercise any Company stock options that have vested as
of the Separation Date, and the time periods and procedures for such exercise, are governed by the
terms of: (1) any existing Notice of Stock Option Grants and Stock Option Agreements, signed by
both you and the Company (collectively “Stock Agreements”); and (2) the Company’s 1999 Stock Plan
(“Stock Plan”). Nothing in this Separation Agreement will affect any existing, vested rights you
may have under the Stock Agreements or Stock Plan. All vested shares not exercised by the end of
the period specified in your Stock Agreements will be forfeited. All unvested shares will expire
as of your Separation Date.

          8. In exchange for the Separation Amount payments and other benefits described herein, and
other valuable consideration, the receipt of which you hereby acknowledge, on behalf of yourself
and your representatives, agents, heirs and assigns, you waive, release, discharge and promise
never to assert any and all claims, liabilities or obligations of every kind and nature, whether
known or unknown, suspected or unsuspected, claimed or unclaimed, that you ever had, now have or
might have as of the Effective Date (as defined herein) against the Company and/or any of its past
or present officers, directors, employees, shareholders, parents, subsidiaries, affiliates,
representatives, attorneys, fiduciaries, predecessors, successors, agents or assigns (collectively
“Released Parties”). The released claims include, without limitation, any claims arising from or
related in any way to your hiring, employment, compensation or separation from employment with the
Company, any Company benefits or benefit plans, and/or the execution of this Agreement. The
released claims also specifically include, without limitation, any claims arising under any
federal, state and local statutory or common law, such as Title VII of the Civil Rights Act, the
federal Age Discrimination in Employment Act, the Family and Medical Leave Act, the California Fair
Employment and Housing Act, the California Family Rights Act, the Americans With Disabilities Act,
the Employee Retirement Income Security Act, the Fair Labor Standards Act, the California Labor
Code (including section 132a claims), the California Government Code (all as amended), the law of
contract and tort, and any claim for recovery of costs and/or attorney’s fees. The released claims
will not
include any claims for state unemployment insurance, disability or workers’ compensation
benefits, any claim for breach of this Agreement or any claims arising after the Effective Date of
this Agreement.

          9. You also waive, release, discharge and promise never to assert any and all claims against
any of the Released Parties, even if you do not now know or believe that you have any such claims.

 

 

Scott Loly

June 13, 2007

Page 3

You therefore expressly waive the protection of California Civil Code section 1542, which provides
that:

A general release does not extend the claims which the creditor does
not know or suspect to exist in his favor at the time of executing
the release, which if known to him must have materially affected his
settlement with the debtor.

          In short, you agree that you will not initiate any lawsuits, administrative proceedings or
legal actions of any kind against the Company or any of the other Released Parties, except to
enforce any provision of this Agreement, and will not accept the benefits of any lawsuits or claims
of any kind brought on your behalf against the Company or any of the other Released Parties, except
to enforce any provision of this Agreement.

          10. Unless required by court order, you will keep the terms of this Agreement strictly
confidential and will not disclose to anyone, without the prior written permission of the Chief
Executive Officer of the Company, any information regarding the terms of this Agreement, the
benefits provided to you under it, or the fact that a payment was made to you; provided, however,
that you may disclose this information to your spouse or domestic partner, and to your attorneys,
accountants or other professional advisors as necessary for them to render professional services to
you. Before making any disclosure to any person(s) permitted under this paragraph you will advise
such person(s) of this confidentiality provision and require them to comply with it to the same
extent as you must.

          11. You will not at any time after the Separation Date use, convert or disclose to any third
party or attempt to use, convert or disclose to any third party any confidential, proprietary,
trade secret or other business information of the Company without the prior written authorization
the Company’s Executive Chairman. Moreover, with the exception of any provisions applicable only
during employment, all of the provisions of your Confidential Information and Assignment Agreement
with the Company, dated August 13, 2006 (“Non-Disclosure Agreement”), shall remain in full force
and effect. You have been provided with a duplicate copy of the Non-Disclosure Agreement, which is
incorporated herein in full by this reference. You further acknowledge agree that all the
provisions in the Non-Disclosure Agreement are reasonable and necessary to protect the Company’s
valuable confidential, proprietary, trade secret and other business information.

          12. You will not disparage the Company or its business or any of the Company’s officers,
directors, employees, agents, representatives, products, services, methods or procedures and will
not say or do anything that would have a materially adverse impact on the Company or its business.

          13. In the event that you breach any of your obligations to the Company under this Agreement,
the Company will be entitled to (a) immediate return of any and all severance benefits provided to
you under this Agreement, including without limitation, the Severance Amount; and (b) obtain
injunctive and all other available relief provided at law or equity. All other duties and
obligations under the Agreement, however, including your waivers and releases, shall remain in full
force and effect.

          14. Except as specified below, to the fullest extent allowed by law, any and all disputes,
claims or controversies of any kind arising out of or related in any way to the interpretation or
enforcement of this Agreement, or any other matter (including any statutory or common law claims
against the Company or any of the other Released Parties) shall be fully and finally resolved
through binding arbitration, before a neutral arbitrator, in San Francisco, California, in
accordance with the then existing national rules of the American Arbitration Association for the
resolution of employment disputes, as

 

 

Scott Loly

June 13, 2007

Page 4

modified in any respect necessary to comply with the
requirements of California law for enforcement of arbitration agreements regarding such disputes.
You and the Company therefore specifically waive any right to a jury trial on any such disputes,
claims or controversies. The prevailing party in any arbitration or other action arising out of or
related to this Agreement shall be entitled to an award of its costs and reasonable attorneys’
fees, in addition to any other relief to which it is entitled. This arbitration provision shall
not apply to any claims for injunctive or other similar equitable relief.

          15. This Agreement will in all respects be interpreted, enforced and governed under the laws
of the State of California, without regard to the conflicts of laws rules thereof. In interpreting
the language of this Separation Agreement, both parties shall be treated as having drafted the
Agreement after meaningful negotiations. If any provision of this Agreement is held to be invalid,
void or unenforceable, the remaining provisions shall remain in full force and effect to the
fullest extent permitted by law. This Agreement will inure to the benefit of and be binding upon
the heirs, representatives, successors and assigns of each of the parties

          16 This Agreement (including any documents incorporated by reference) constitutes the entire
agreement between the parties as to matters discussed herein and supersedes any prior or
contemporaneous negotiations, representations, promises, agreements, and/or understandings of the
parties with respect to such matters, whether written or oral. The parties acknowledge that they
have not relied on any promise, representation or warranty, expressed or implied, not contained in
this Agreement. This Agreement may only be modified, or any specific requirements waived, in a
writing signed by you and the Executive Chairman of the Company.

          17. Pursuant to the Older Workers Benefit Protection Act (“OWBPA”), you acknowledge that you
were provided up to 21 days to consider and accept the terms of this Agreement (although you may
accept it at any time within those 21 days) and that you were advised to consult with an attorney
about the Agreement before signing it.

          To accept the Agreement, please date and sign this letter and return it to the undersigned
Company officer. Once you do so, you will still have an additional seven days in which to revoke
your acceptance. To revoke, you must deliver to the undersigned Company officer a written
statement of revocation that is received before the close of business on the seventh day after you
sign the Agreement. If you do not revoke, the eighth day after you sign will be the “Effective
Date” of the Agreement.

          Scott, I am pleased that you were able to part ways with Company on these amicable terms. The
Company and I wish you success in your future endeavors.

	 	 	 	 	 	 	 
	 	 	RedEnvelope	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Rob Montoya
 

Rob Montoya
	 	 
	 

	 	 	 	Vice President, Human Resources	 	 

 

 

Scott Loly

June 13, 2007

Page 5

AGREED:

By signing this letter, I acknowledge that I have read and had the opportunity to carefully review
and consider this Separation Agreement (with an attorney of my choice if so desired); that I fully
understand all of the terms in the Separation Agreement; that I am competent to enter into this
Agreement; and that I voluntarily agree to each of the terms set forth above.

	 	 	 	 	 	 	 
	Date:  
6/19/07

	 	 	 	/s/ Scott Loly	 	 
	 

	 	 	 	 

Scott Loly

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